Article 11.5. Rules of Origin
For the sole purpose of determining customs duties applicable to goods imported for purposes of government procurement, the Parties shall apply the same rules of origin that are used to determine customs duties applicable to imports of goods for other purposes.
Article 11.6. Prohibition of Offsets
Each Party shall ensure that its entities do not consider, seek or impose offsets at any stage of a procurement.
Article 11.7. Non-Disclosure of Information
1. The Parties, their entities and their review authorities shall not, except to the extent required by law, disclose confidential information that would prejudice legitimate commercial interests of a particular supplier or might prejudice fair competition between suppliers without the written authorisation of the supplier that provided the information.
2. Nothing in this Chapter shall be construed as requiring a Party or its entities to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest.
Article 11.8. Publication of Information on Procurement Measures
Each Party shall promptly publish:
(a) its measures relating to government procurement covered by this Chapter; and
(b) any modifications to such measures in the same manner as the original publication.
Article 11.9. Technical Specifications
1. Each Party shall ensure that its entities do not prepare, adopt or apply any technical specification with the purpose or the effect of creating unnecessary
obstacles to trade among the Parties.
2. Any technical specifications prescribed by an entity shall, where appropriate:
(a) be specified in terms of performance and functional requirements, rather than design or descriptive characteristics; and
(b) be based on international standards, where applicable, or otherwise on national technical regulations, recognised national standards, or building codes.
3. Each Party shall ensure that its entities do not prescribe technical specifications that require or refer to a particular trademark or trade name, patent, design or type, specific origin or producer or supplier, unless there is no sufficiently precise or intelligible way of describing the procurement requirements and provided that, in such cases, words such as "or equivalent" are included in the tender documentation.
4. Each Party shall ensure that an entity shall not seek or accept advice to be used in the preparation or adoption of any technical specification for a specific procurement from a person that may have a commercial interest in that procurement, if to do so would prejudice fair competition.
Article 11.10. Valuation of Contracts
In calculating the value of contracts for the purposes of implementing this Chapter entities shall base their valuation on the maximum total estimated value of the procurement over its entire duration including optional purchases, premiums, fees, commissions, interests and revenue streams or other forms of remuneration provided for in such contracts.
Article 11.11. Tendering Procedures
Except as provided for in Article 11.18 entities shall award contracts by means of open tendering procedures, in the course of which any interested supplier may submit a tender or apply to meet conditions for participation in a procurement. (1)
Article 11.12. Notice of Intended Procurement
1. For each procurement covered by this Chapter, entities shall publish in advance a notice of intended procurement inviting interested suppliers to submit a
' The Parties understand that further procurements under contracts, which are awarded consistently with this Chapter, in particular Article 11.10, that provide that goods and services will be available to entities on the same terms and conditions as the original contract are considered consistent with this Chapter.
tender or apply to meet conditions for participation in the procurement, except as provided for in Article 11.18.
2. The information in each notice of intended procurement shall include a description of the intended procurement; any conditions that suppliers must fulfil to participate in the procurement, including the time limits for submission of tenders; and contact details for obtaining of all relevant documenis.
3. Entities shall publish the notices in a timely manner through means which offer the widest possible and non-discriminatory access to the interested suppliers of the Parties. These means shall be accessible free of charge, during the entire period established for tendering, through a single electronic point of access specified in Annex 11.B.
4. Where an entity, during the course of a procurement, modifies the criteria referred to in the notice of intended procurement, it shall publish or transmit all such modifications in writing:
(a) to all suppliers that are participating in the procurement at the time the criteria are modified, if the identities of such suppliers are known, and in all other cases, in the same manner as the original information was transmitted; and
(b) in adequate time to allow such suppliers to modify and resubmit their tenders, as appropriate.
5. Each notice of intended procurement under Paragraph 1 shall be published sufficiently in advance to provide interested suppliers of all Parties with a reasonable period of time in light of the nature, circumstances and complexity of the procurement, to obtain the full tender documentation and to prepare and submit responsive tenders by the closing date, or to apply for participation in the procurement where applicable.
6. Notwithstanding Paragraph 5, entities shall provide no less than 10 days between the date on which the notice of intended procurement is published and the final date for the submission of tenders.
Article 11.13. Tender Documentation
1. Tender documentation provided to suppliers shall contain all information necessary to permit them to prepare and submit responsive tenders, including the essential requirements and evaluation criteria for the award of the procurement contract.
2. Where contracting entities do not offer direct access to the entire tender documents and any supporting documents by electronic means, entities shall promptly make available the tender documentation at the request of any supplier of the Parties.
3. An entity shall endeavour to reply promptly to any reasonable request for explanation or relevant information made by a supplier, provided that such information does not give that supplier an advantage over its competitors in the procedure for the award of the contract. The explanation or information provided to a supplier may be provided to all suppliers that are invited to tender.
4. Where an entity, during the course of a procurement, modifies the essential requirements and evaluation criteria of the tender documentation, it shall publish or transmit all such modifications in writing:
(a) to all suppliers who have requested tender documentation at the time the criteria are modified, and in the same manner the original information was transmitted; and
(b) in adequate time to allow such suppliers to modify and resubmit their tenders, as appropriate.
Article 11.14. Awarding of Contracts
1. The Parties shall ensure that its entities receive, open and evaluate all tenders under procedures that guarantee the fairness and impartiality of the procurement process.
2. To be considered for award, a tender must, at the time of opening, conform to the essential requirements of the notice of intended procurement or tender documentation and be submitted by a supplier who complies with the conditions for participation.
3. Unless an entity determines that it is not in the public interest to award a contract, it shall award the contract to the supplier that has been determined to be fully capable of undertaking the contract and whose tender is determined to offer the best value for money or be the most advantageous in terms of the essential requirements and evaluation criteria set forth in the tender documentation.
4. An entity shall not cancel a procurement covered by this Chapter, or terminate or modify awarded contracts in order to circumvent the requirements of this Chapter.
Article 11.15. Post-Award Information
1. Entities shall promptly publish or inform suppliers that have submitted a tender of the contract award decision.
2. Entities shall, on request from an unsuccessful supplier, promptly provide pertinent information concerning reasons for the rejection of its tender or the relative advantages of the tender the entity selected.
3. Entities shall, promptly after the award of a contract for a procurement covered by this Chapter, publish a notice containing at least the following information:
(a) the name and address of the successful supplier; (b) a description of the goods or services supplied; and
(c) the value of the contract award.
Article 11.16. Conditions for Participation
1. Where an entity requires suppliers to satisfy registration, qualification, or any other conditions before being permitted to participate in a procurement, each Party shall ensure that a notice inviting suppliers to apply for registration, qualification or demonstration of the suppliersâ satisfaction of any other conditions for participation is published sufficiently in advance for interested suppliers to prepare and submit responsive applications and for entities to evaluate and make their determinations based on such applications.
2. Entities shall consider for a particular procurement those suppliers of another Party that request to participate in the procurement and that are not yet registered or qualified, provided there is sufficient time to complete the registration or qualification procedures before the award of the contract.
3. Any conditions for participation in the procurement, including financial guarantees, technical qualifications and information necessary for establishing the financial, commercial and technical capacity of suppliers, as well as the verification of qualifications, shall be limited to those which are essential to ensure the firm's capability to fulfil the contract in question. The financial, commercial and technical capacity of a supplier shall be judged both on the basis of that supplier's global business activity and its activity in the territory of the procuring entity, taking due account of the legal relationship between the supply organisations.
4. Nothing in this Article shall preclude an entity from excluding a supplier from a procurement on grounds such as bankruptcy, liquidation or insolvency, false declarations relating to a procurement, or significant deficiency in the performance of any obligation under a prior contract.
Article 11.17. Lists of Registered or Qualified Suppliers
1. An entity may establish for continuing use a list of suppliers registered or qualified to participate in procurements. A current updated list of registered or qualified suppliers shall be publicly available. The entity shall ensure that suppliers may apply for participation in the list of registered or qualified suppliers at any time, and that all qualifying applicants are included within a reasonable period of time, taking into account the conditions for participation and the need for verification. Where an entity requires suppliers to qualify for such a list before being permitted to participate in a procurement, and a supplier that has not previously satisfied such requirements or conditions submits an application, the entity shall promptly start the registration or qualification procedures and shall allow such supplier to participate in the procurement, provided there is sufficient time to complete the registration or procurement procedures within the time period established for the award.
2. The entity shall publish annually or otherwise make available continuously in electronic form a notice inviting interested suppliers to apply for inclusion on the list. The notice shall include:
(a) a description of the goods and services for which the list of suppliers may be used; and
(b) the conditions to be satisfied by suppliers for inclusion on the list of registered or qualified suppliers.
3. Entities shall notify qualified suppliers of the termination of, or of their removal from a list of registered or qualified suppliers and state the reason for this action.
Article 11.18. Exceptions to Open Tendering
1. Provided that the tendering procedure is not used to avoid competition or to protect domestic suppliers, entities may award contracts by means other than open tendering procedures in any of the following circumstances:
(a) where, in response to a prior notice, invitation to participate, or invitation to tender under open tendering procedures
(i) no tenders were submitted,
(ii) no tenders were submitted that conform to the essential requirements in the tender documentation, or
(iii) no suppliers satisfied the conditions for participation, and
the entity does not substantially modify the essential requirements of the procurement in the contract as awarded;
(b) where, for works of art, or for reasons connected with the protection of exclusive rights, such as patents or copyrights, or where there is an absence of competition for technical reasons, the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute exists;
(c) for additional deliveries by the original supplier which are intended either as replacement parts, extensions or continuing services for or upgrades of existing equipment, software, services or installations, where a change of supplier would compel the procuring entity to procure goods or services not meeting requirements of interchangeability with existing equipment, software, services or installations, or conditions under original supplier warranties;
(d) for goods purchased on a commodity market;
(e) when an entity procures a prototype or a first good or service that is developed at its request in the course of, and for, a particular contract for research, experiment, study or original development. When such contracts have been fulfilled, subsequent procurements of such goods or services shall be subject to the principles and procedures laid down in this Chapter;
(f) when additional construction services which were not included in the initial contract but which were within the objectives of the original tender documentation have, due to unforeseeable circumstances, become necessary to complete the construction services described therein, provided that the total value of contracts awarded for additional construction services does not exceed 50 percent of the amount of the main contract;
in so far as it is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the entity, the goods or services could not be obtained in time by means of an open tendering procedure, and the use of such procedure would result in serious injury to the entity, the entity's programme responsibilities or the Party. For purposes of this Subparagraph, lack of advance planning by an entity or
its concerns relating to the amount of funds available to it do not constitute unforeseeable events;
(h) for purchases made under exceptionally advantageous conditions that only arise in the very short term, including public auction or unusual disposals, such as those resulting from liquidation, bankruptcy or receivership. This provision is not intended to cover routine purchases from regular suppliers; or
(i) in the case of a contract awarded to the winner of a design contest provided that the contest has been organised in a manner which is consistent with the principles of this Chapter and that the contest is judged by an independent jury with a view to a design contract being awarded to the winner.
2. The Parties shall ensure that, whenever it is necessary for entities to resort to a procedure other than open tendering procedures based on the circumstances set forth in Paragraph 1, the entities shall maintain a record or prepare a written report providing specific justification for the contract.
Article 11.19. Ensuring Integrity In Procurement Practices
Each Party shall ensure that criminal or administrative penalties exist to address corruption in its government procurement, and that its entities have in place policies and procedures to eliminate any potential conflict of interest on the part of those engaged in or having influence over a procurement.
Article 11.20. Domestic Review of Supplier Complaints
1. Each Party shall ensure that its entities accord impartial and timely consideration to any complaints from suppliers regarding an alleged breach of measures implementing this Chapter arising in the context of a procurement in which they have, or have had, an interest. Where appropriate, a Party may encourage suppliers to seek clarification from its entities with a view to facilitating the resolution of any such complaints.
2. Each Party shall provide suppliers of any one of the other Parties with non- discriminatory, timely, transparent and effective access to an administrative or judicial body competent to hear or review complaints of alleged breaches of the procuring Party's laws, regulations, procedures and practices regarding procurement in the context of procurements in which they have, or have had, an interest.
3. Each Party shall make information on complaint mechanisms generally available.
4. Compensation for any breach of measures implementing this Chapter may be limited to the costs for tender preparation reasonably incurred by the supplier for the purpose of the procurement.
Article 11.21. Encouraging Use of Electronic Communications In Procurement
1. The Parties shall seek to provide opportunities for government procurement to be undertaken through the Internet or a comparable computer-based telecommunications network.
2. In order to facilitate commercial opportunities for their suppliers under this Chapter, each Party shall maintain a single electronic portal for access, to comprehensive information on government procurement supply opportunities in its territory, and information on measures relating to government procurement shall be available. The contact point or points from whom suppliers can obtain information on government procurement shall either be specified in Annex 11.B, or be set out in the information on the single electronic portal.
3. The Parties shall encourage, to the extent possible, the use of electronic means for the provision of tender documents and receipt of tenders.
4. The Parties shall endeavour to ensure policies and procedures for the use of electronic means in procurement are adopted that:
(a) protect documentation from unauthorised and undetected alteration; and
(b) provide appropriate levels of security for data on, and passing through, the procuring entityâs network.
5. Each Party shall encourage its entities to publish as early as possible in the fiscal year information regarding the "entities" indicative procurement plans in the electronic portal referred to in Paragraph 2.
Article 11.22. Exceptions
1. Nothing in this Chapter shall be construed to prevent any Party from taking any action or not disclosing any information which it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
2. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining measures:
(a) necessary to protect public morals, order, or safety; (b) necessary to protect human, animal or plant life or health; (c) necessary to protect intellectual property; or
(d) relating to goods or services of handicapped persons, of philanthropic or not for profit institutions, or of prison labour.
3. The Parties understand that Subparagraph 2(b) includes environmental measures necessary to protect human, animal or plant life or health.
Article 11.23. Modifications and Rectifications of Annexes
1. A Party may modify its coverage under this Chapter in conformity with Article 17.2 (Functions of the Commission), provided that it:
(a) notifies the other Parties of the modification; and
(b) provides the other Parties, within 30 days following the date of such notification, appropriate compensatory adjustments to its coverage in order to maintain a level of coverage comparable to that existing prior to the modification.
2. Notwithstanding Subparagraph 1(b), no compensatory adjustments shall be provided to the other Parties where the modification by a Party of its coverage under this Chapter concerns:
(a) the situation where the business or commercial operations or functions of any of its entities or part thereof are constituted or established as an enterprise with a legal entity separate and distinct from the government of a Party, regardless of whether or not the government holds any shares or interest in such a legal entity; or
(b) rectifications of a purely formal nature and minor amendments to Annex 11.A or Annex 11.B, including those under Subparagraph (a), made through an Implementing Arrangement in accordance with Article 17.2 (Functions of the Commission).
Chapter 12. TRADE IN SERVICES
Article 12.1. Definitions for the Purposes of this Chapter:
Commercial presence means any type of business or professional establishment, including through:
(a) the constitution, acquisition or maintenance of a legal person; or
(b) the creation or maintenance of a branch or a representative office, within the territory of a Party for the purpose of supplying a service;
enterprise means an enterprise as defined in Article 2.1 (Definitions of General Application), and a branch of an enterprise;
measures adopted or maintained by a Party means measures adopted or maintained by:
(a) central or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central or local governments or authorities.
Such measures include measures affecting: (a) the production, distribution, marketing, sale, and delivery of a service; (b) the purchase or use of, or payment for, a service;
(c) the access to and use of distribution, transport, or telecommunications networks and services in connection with the supply of a service;
(d) the presence, including commercial presence in its territory of a service supplier of another Party; and
(e) the provision of a bond or other form of financial security as a condition for the supply of a service;
service supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;
service supplier of a Party means a person of a Party that seeks to supply or supplies a service;
specialty air services means any non-transportation air services, such as aerial fire fighting, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial, and inspection services;
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party;
trade in services or supply of services means the supply of a service:
(a) from the territory of one Party into the territory of another Party (”cross- border mode“);
(b) in the territory of one Party by a person of that Party to a person of another Party (”consumption abroad mode“);
(c) by a service supplier of one Party, through commercial presence in the territory of another Party （”commercial presence mode“); or
(d) by a national of a Party in the territory of another Party (“presence of natural persons mode”).
Article 12.2 . Objectives
The objectives of this Chapter are to facilitate expansion of trade in services on a mutually advantageous basis, under conditions of transparency and progressive liberalisation, while recognising the rights of Parties to regulate services, including to introduce new regulations, and the role of governments in providing and funding public services, giving due respect to national policy objectives including where these reflect local circumstances.
Article 12.3. Scope
(b) government procurement, which means any law, regulation, policy, or procedure of general application governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale; (1)
(c) services supplied in the exercise of governmental authority;
(d) subsidies or grants provided by a Party or a state enterprise, (2) or any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service consumers or service suppliers;
(e) measures affecting natural persons seeking access to the employment market of a Party; or
(f) measures regarding citizenship, nationality, residence or employment on a permanent basis.
3. This Chapter shall not apply to air transport services, whether scheduled or non-scheduled, or to related services in support of air services, (3) other than the following:
(a) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(b) the selling and marketing of air transport services;
(c) computer reservation system services;
(d) speciality air services; and
(e) international air transportation services as set out in the Multilateral Agreement on the Liberalisation of International Air Transportation (MALIAT), and, to the extent that there are any inconsistencies between this Agreement and those of the MALIAT, the rights and obligations under the MALIAT at any given time shall prevail.
4. Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons of another Party into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to that other Party under the terms of this Chapter. The sole fact of requiring a visa for natural persons of certain countries and not for those of others shall not be regarded as nullifying benefits under this Chapter.
(2) This includes government supported loans, guarantees, and insurance.
(3) For example, ground handling services.
Article 12.4. National Treatment
Each Party shall accord to services and service suppliers of another Party, treatment no less favourable than that it accords, in like circumstances, to its own services and service suppliers.