(a) whether the measure at issue is inconsistent with the obligations of this Agreement;
(b) whether a Party has otherwise failed to carry out its obligations under this Agreement, or
(c) whether a Party's measure is causing nullification or impairment in the sense of Article 21.2(c); and
(d) any other matter that the Parties have jointly requested that the Panel address, as well as reasons for its findings and determinations.
2. The panel shall consider this Agreement in accordance with applicable rules of interpretation under international law as reflected in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (1969). It shall base its report on the relevant provisions of the Agreement and the submissions and arguments of the Parties. The panel may, at the request of the Parties, make recommendations for the resolution of the dispute.
3. After considering any written comments by the Parties on the initial report, the panel may modify its report and make any further examination it considers appropriate.
4. The panel shall present a final report to the Parties within 45 days of presentation of the initial report, unless the Parties otherwise agree. The Parties shall release the final report to the public within 15 days thereafter, subject to the protection of confidential information.
Article 21.10. Implementation of the Final Report
1. On receipt of the final report of a panel, the Parties shall agree on the resolution of the dispute, which normally shall conform with the determinations and recommendations, if any, of the panel.
2. If, in its final report, the panel determines that a Party has not conformed with its obligations under this Agreement or that a Party's measure is causing nullification or impairment in the sense of Article 21.2(c), the resolution, whenever possible, shall be to eliminate the non- conformity or the nullification or impairment.
Article 21.11. Non-implementation
1. If a panel has made a determination of the type described in Article 21.10.2, and the Parties are unable to reach agreement on a resolution pursuant to Article 21.10.1 within 45 days of receiving the final report, or such other period as the Parties agree, the Party complained against shall enter into negotiations with the other Party with a view to developing mutually acceptable compensation.
2. If the Parties:
(a) are unable to agree on compensation within 30 days after the period for developing such compensation has begun, or
(b) have agreed on compensation or on a resolution pursuant to Article 21.10 and the complaining Party considers that the other Party has failed to observe the terms of such agreement,
the complaining Party may at any time thereafter provide written notice to the office designated by the other Party pursuant to Article 21.3 that it intends to suspend the application to the other Party of benefits of equivalent effect. The notice shall specify the level of benefits that the Party proposes to suspend. Subject to paragraph 5, the complaining Party may begin suspending benefits 30 days after the later of the date on which it provides notice to the other Party's designated office under this paragraph or the panel issues its determination under paragraph 3, as the case may be.
3. If the Party complained against considers that:
(a) the level of benefits that the other Party has proposed to be suspended is manifestly excessive; or
(b) it has eliminated the non-conformity or the nullification or impairment that the panel has found,
it may, within 30 days after the complaining Party provides notice under paragraph 2, request that the panel be reconvened to consider the matter. The Party complained against shall deliver its request in writing to the office designated by the other Party pursuant to Article 21.3. The panel shall reconvene as soon as possible after delivery of the request to the designated office and shall present its determination to the Parties within 90 days after it reconvenes to review a request under cither subparagraph (a) or (b), or within 120 days for a request under both subparagraphs (a) and (b). If the panel determines that the level of benefits proposed to be suspended is manifestly excessive, it shall determine the level of benefits it considers to be of equivalent effect.
4. The complaining Party may suspend benefits up to the level the panel has determined under paragraph 3 or, if the panel has not determined the level, the level the Party has proposed to suspend under paragraph 2, unless the panel has determined that the Party complained against has eliminated the non-conformity, or the nullification or impairment.
5. The complaining Party may not suspend benefits if, within 30 days after it provides written notice of intent to suspend benefits or, if the panel is reconvened under paragraph 3, within 20 days after the panel provides its determination, the Party complained against provides written notice to the other Party's office designated pursuant to Article 21.3 that it will pay an annual monetary assessment. The Parties shall consult, beginning no later than ten days after the Party complained against provides notice, with a view to reaching agreement on the amount of the assessment. If the Parties are unable to reach an agreement within 30 days after consultations begin, the amount of the assessment shall be set at a level, in U.S. dollars, equal to 50 percent of the level of the benefits the panel has determined under paragraph 3 to be of equivalent effect or, if the panel has not determined the level, 50 percent of the level that the complaining Party has proposed to suspend under paragraph 2.
6. Unless the Joint Committee decides otherwise, a monetary assessment shall be paid to the complaining Party in U.S. currency, or in an equivalent amount of Australian currency, in equal, quarterly instalments beginning 60 days after the Party complained against gives notice that it intends to pay an assessment. Where the circumstances warrant, the Joint Committee may decide that an assessment shall be paid into a fund established by the Joint Committee and expended at the direction of the Joint Committee for appropriate initiatives to facilitate trade between the Parties, including by further reducing unreasonable trade barriers or by assisting a Party in carrying out its obligations under the Agreement.
7. If the Party complained against fails to pay a monetary assessment, the complaining Party may suspend the application to the Party complained against of benefits in accordance with paragraph 4.
8. This Article shall not apply with respect to a matter described in Article 21.12.1.
Article 21.12. Non-implementation In Certain Disputes
1. If, in its final report, a panel determines that a Party has not conformed with its obligations under Article 18.2.1(a) or Article 19.2.1(a), and the Parties:
(a) are unable to reach agreement on a resolution pursuant to Article 21.10.1 within 45 days of receiving the final report; or
(b) have agreed on a resolution pursuant to Article 21.10.1 and the complaining Party considers that the other Party has failed to observe the terms of the agreement,
the complaining Party may at any time thereafter request that the panel be reconvened to impose an annual monetary assessment on the other Party. The complaining Party shall deliver its request in writing to the office designated by the other Party pursuant to Article 21.3. The panel shall reconvene as soon as possible after delivery of the request to the designated office.
2. The panel shall determine the amount of the monetary assessment in U.S. dollars within 90 days after it reconvenes under paragraph 1. In determining the amount of the assessment, the panel shall take into account:
(a) the bilateral trade effects of the Party's failure to effectively enforce the relevant law;
(b) the pervasiveness and duration of the Party's failure to effectively enforce the relevant law;
(c) the reasons for the Party's failure to effectively enforce the relevant law;
d) the level of enforcement that could reasonably be expected of the Party given its resource constraints;
(e) the efforts made by the Party to begin remedying the non-enforcement after the final report of the panel; and
(f) any other relevant factors.
The amount of the assessment determined by the Panel shall not exceed 15 million U.S. dollars annually, adjusted for inflation as specified in Annex 21-A.
3. On the date on which the panel determines the amount of the monetary assessment under paragraph 2, or at any other time thereafter, the complaining Party may provide notice in writing to the office designated by the Party complained against pursuant to Article 21.3 demanding payment of the monetary assessment. The monetary assessment shall be payable in U.S. currency, or in an equivalent amount of Australian currency, in equal, quarterly instalments beginning 60 days after the complaining Party provides such notice. Each of the first four quarterly instalments shall be equal to one quarter of the monetary assessment determined by the panel under Article 21.12.2. The fifth quarterly instalment and subsequent quarterly instalments shall be adjusted for inflation as specified in Annex 21-A.
4. Assessments shall be paid into a fund established by the Joint Committee and shall be expended at the direction of the Joint Committee for appropriate labour or environmental initiatives, including efforts to improve or enhance labour or environmental law enforcement, as the case may be, in the territory of the Party complained against, consistent with its law. In deciding how to expend monies paid into the fund, the Joint Committee shall consider the views of interested persons in each Party's territory.
5. If the Party complained against fails to pay a monetary assessment, and if the Party has created and funded an escrow account to ensure payment of any assessments against it, the other Party shall, before having recourse to any other measure, seck to obtain the funds from the account.
6. If the complaining Party cannot obtain the funds from the other Party's escrow account within 30 days of the date on which payment is due, or if the other Party has not created an escrow account, the complaining Party may take other appropriate steps to collect the assessment or otherwise secure compliance. These steps may include suspending tariff benefits under the Agreement as necessary to collect the assessment, while bearing in mind the Agreement's objective of eliminating barriers to bilateral trade and while secking to avoid unduly affecting parties or interests not party to the dispute.
Article 21.13. Compliance Review
1. Without prejudice to the procedures set out in Article 21.11.3, if the Party complained against considers that it has eliminated the non-conformity or the nullification or impairment that the panel has found, it may refer the matter to the panel by providing written notice to the office designated by the other Party pursuant to Article 21.3. The panel shall issue its report on the matter within 90 days after the Party complained against provides notice.
2. If the panel decides that the Party complained against has eliminated the non-conformity or the nullification or impairment, the complaining Party shall promptly reinstate any benefits it has suspended under Article 21.11 or 21.12, and the Party complained against shall no longer be required to pay any monetary assessment it has agreed to pay under Article 21.11.5 or that has been imposed on it under Article 21.12.
Article 21.14. Five-year Review
The Joint Committee shall review the operation and effectiveness of Articles 21.11 and 21.12 not later than five years after the Agreement enters into force, or within six months after benefits have been suspended or monetary assessments have been imposed in five proceedings initiated under this Chapter, whichever occurs first.
Article 21.15. Private Rights
Neither Party may provide for a right of action under its domestic law against the other Party on the ground that a measure of the other Party is inconsistent with this Agreement.
Chapter TWENTY-TWO. General Provisions and Exceptions
Article 22.1. General Exceptions
1. For the purposes of Chapters Two through Eight (National Treatment and Market Access for Goods, Agriculture, Textiles, Rules of Origin, Customs Administration, Sanitary and Phytosanitary Measures, and Technical Barriers to Trade), GATT 1994 Article XX and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in GATT 1994 Article XX(b) include environmental measures necessary to protect human, animal, or plant life or health, and that GATT 1994 Article XX(g) applies to measures relating to the conservation of living and non- living exhaustible natural resources.
2. For the purposes of Chapters Ten, Twelve, and Sixteen (Cross Border Trade in Services, Telecommunications, and Electronic Commerce),GATS Article XIV (including its footnotes) is incorporated into and made part of this Agreement, mutatis mutandis. The Parties understand that the measures referred to in GATS Article XI V(b) include environmental measures necessary to protect human, animal, or plant life or health.
Article 22.2. Essential Security
Nothing in this Agreement shall be construed:
(a) to require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests; or
(b) to preclude a Party from applying measures that it considers necessary for the fulfilment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.
Article 22.3. Taxation
1. Except as set out in this Article, nothing in this Agreement shall apply to taxation measures.
2. (a) Nothing in this Agreement shall affect the rights and obligations of either Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
(b) In the case of a tax convention between the Parties the competent authorities under that convention shall have sole responsibility for determining whether any inconsistency exists between this Agreement and that convention.
3. Notwithstanding paragraph 2:
(a) Article 2.2 (National Treatment) and such other provisions of this Agreement as are necessary to give effect to that Article shall apply to taxation measures to the same extent as does GATT 1994 Article III; and
(b) Article 2.11 (Export Taxes) shall apply to taxation measures.
4. Subject to paragraph 2:
(a) Article 10.2 (National Treatment), Article 13.2 (National Treatment), and Article 13.5.1 (Cross-Border Trade) shall apply to taxation measures on income, capital gains, or on the taxable capital of corporations that relate to the purchase or consumption of particular services, except that nothing in this sub-paragraph shall prevent a Party from conditioning the receipt or continued receipt of an advantage relating to the purchase or consumption of particular services on requirements to provide the service in its territory; (22-1) and
(b) Articles 11.3, 11.4 (Most-Favoured-Nation Treatment), 10.2 (National Treatment), 10.3 (Most-Favoured-Nation Treatment), 13.2, 13.3 (Most-FavouredNation Treatment), and 13.5.1 shall apply to all taxation measures, other than those on income, capital gains, or on the taxable capital of corporations, taxes on estates, inheritances, gifts, and generation-skipping transfers;
except that nothing in those Articles shall apply:
(c) any most-favoured-nation obligation in this Agreement with respect to an advantage accorded by a Party pursuant to a tax convention;
(d) to a non-conforming provision of any existing taxation measure;
(e) to the continuation or prompt renewal of a non-conforming provision of any existing taxation measure;
(f) to an amendment to a non-conforming provision of any existing taxation measure to the extent that the amendment does not decrease its conformity, at the time of the amendment, with any of those Articles;
(g) to the adoption or enforcement of any taxation measure aimed at ensuring the equitable or effective imposition or collection of taxes (as permitted by GATS Article XIV(d) without regard to the limitation in Article XTV(d) to direct taxes); or
(h) to a provision that conditions the receipt, or continued receipt of an advantage relating to the contributions to, or income of, a pension trust, superannuation fund, or other arrangement to provide pension, superannuation, or similar benefits on a requirement that the Party maintain continuous jurisdiction, regulation, or supervision over such trust, fund, or other arrangement.
5. Subject to paragraph 2 and without prejudice to the rights and obligations of the Parties under paragraph 3, paragraphs 2, 3, and 4 of Article 11.9 (Performance Requirements) shall apply to taxation measures.
6. (a) Article 11.7 (Expropriation and Compensation) shall apply to taxation measures.
(b) Where a Party alleges in writing that a taxation measure of the other Party is an expropriation, that other Party's designated authority may request in writing consultations between the designated authorities regarding whether a determination that the taxation measure is an expropriation under this Agreement would give rise to an inconsistency with any tax convention between the Parties. Unless the designated authorities agree within sixty days after receipt of the request for consultations (which period may be extended by mutual agreement of such designated authorities) that an inconsistency would arise in case of such determination, the Party alleging an expropriation may pursue the matter under Section B of Chapter 21 (Dispute Settlement Procedures). Notwithstanding sub- paragraph 2(b), the designated authorities shall have sole responsibility with respect to this issue of whether a determination that a taxation measure alleged by a Party to be an expropriation under this Agreement would give rise to an inconsistency with any tax convention between the Parties.
(c) For the purposes of this paragraph, designated authority means:
(i) in the case of Australia, the Secretary to the Treasury or his authorised representative; and
(ii) in the case of the United States, the Assistant Secretary of the Treasury (Tax Policy).
7. For the purposes of this Article, taxes and taxation measures do not include any import or customs duties.
Article 22.4. Disclosure of Information
1. Nothing in this Agreement shall be construed as requiring a Party to furnish or allow access to confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest (22-2) or which would prejudice the legitimate commercial interests of particular enterprises, public or private.
2. When a Party provides written information pursuant to a request or a requirement under this Agreement and informs the other Party that it considers the information to be of the type described in paragraph 1, the Party receiving the information shall not disclose or use the information for a purpose other than that for which it was requested or required, except where the disclosure or use is required or authorised pursuant to the receiving Party's law and regulations or with the prior consent of the Party providing the information.
Article 22.5. Anti-corruption
The Parties shall cooperate in seeking to eliminate bribery and corruption and to promote transparency in international trade. They are committed to secking avenues in relevant international fora to address bribery, corruption, and transparency and to build on anti-corruption efforts in these fora.
Chapter TWENTY-THREE. Final Provisions
Article 23.1. Accession
1. Any country or group of countries may accede to this Agreement subject to such terms and conditions as may be agreed between such country or countries and the Parties and following approval in accordance with the applicable legal procedures of each country.
2. This Agreement shall not apply as between any Party and any acceding country or group of countries if, at the time of the accession, either Party does not consent to such application.
Article 23.2. Annexes
The Annexes to this Agreement constitute an integral part of this Agreement.
Article 23.3. Amendments
1. The Parties may agree, in writing, to amend this Agreement. An amendment shall enter into force after the Parties complete any necessary internal requirements and on such date as the Parties may agree.
2. If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended, the Parties will consult on whether to amend this Agreement.
Article 23.4. Entry Into Force and Termination
1. This Agreement shall enter into force 60 days after the date on which the Parties exchange written notifications certifying that they have completed respective necessary internal requirements, or on such other date as the Parties may agree.
2. A Party may terminate this Agreement by written notification to the other Party, and such termination shall take effect six months after the date of the notification.
3. Within 30 days of delivery of a notification under paragraph 2, either Party may request consultations regarding whether any provision of this Agreement should terminate on a date later than that provided under paragraph 2. Consultations shall commence within 30 days after the Party delivers such a request.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.
Done at Washington, D.C., in duplicate, this 18th day of May 2004.
FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:
/s/ Robert B. Zoellick
FOR THE GOVERNMENT OF AUSTRALIA:
/s/ Mark Vaile
Attachments
ANNEX I.
1. The Schedule of a Party to this Annex sets out, pursuant to Articles 10.6 (Non- Conforming Measures) and 11.13 (Non-Conforming Measures), a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 10.2 (National Treatment) or 11.3 (National Treatment);
(b) Article10.3 (Most-Favoured-Nation Treatment) or 11.4 (Most-Favoured-Nation Treatment);
(c) Article 10.4 (Market Access);
(d) Article 10.5 (Local Presence);
(e) Article 11.9 (Performance Requirements); or
(f) Article 11.10 (Senior Management and Boards of Directors).
2. Each Schedule entry sets out the following elements:
(a) Sector refers to the sector for which the entry is made;
(b) Obligations Concerned specifies the obligation(s) referred to in paragraph 1 that, pursuant to Articles 10.6.1(a) and 11.13.1(a), do not apply to the listed measure(s);
(c) Level of Government indicates the level of government maintaining the listed measure(s);
(d) For the United States, Measures identifies the laws, regulations, or other measures for which the entry is made. For Australia, Source of Measure means the laws, regulations, or other measures that are the source of the non-conforming measure for which the entry is made. A measure cited in the Measures or Source of Measure element:
(i) means the measure as amended, continued, or renewed as of the date of entry into force of this Agreement, and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure;
(e) Description, for Australia, sets out the non-conforming measure for which the entry is made; and Description, for the United States, provides a general, nonbinding, description of the Measures.
3. In accordance with Article 10.6.1(a) and 11.13.1(a), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply, in the case of Australia, to the non-conforming measure identified in the Description element of that entry or, in the case of the United States, to the law, regulation, or other measure identified in the Measures element of that entry. Local Presence and National Treatment are separate disciplines and a measure that is only inconsistent with Local Presence need not be reserved against National Treatment.
4. Where a Party maintains a measure that requires that a service supplier be a citizen, permanent resident, or resident of its territory as a condition to the supply of a service in its territory, a Schedule entry for that measure taken with respect to Article 10.2, 10.3, or 10.5 shall operate as a Schedule entry with respect to Article 11.3, 11.4, or 11.9 to the extent of that measure.
ANNEX I. Schedule of australia
Sector: All Sectors
Obligations Concerned: National Treatment (Articles 10.2 and 11.3) Most-Favoured-Nation Treatment (Articles 10.3 and 11.4) Local Presence (Article 10.5) Performance Requirements (Article 11.9) Senior Management and Boards of Directors (Article 11.10)
Level of Government: Regional
Source of Measure: All existing non-conforming measures at the regional level of government.
Description: Cross-Border Trade in Services and Investment
All existing non-conforming measures at the regional level of government.
Sector: All Sectors
Obligations Concerned: National Treatment (Article 11.3) Senior Management and Boards of Directors (Article 11.10)
Level of Government: Central
Source of Measure: Australia's Foreign Investment Policy, which comprises the Foreign Acquisitions and Takeovers Act 1975 (FATA); Foreign Acquisitions and Takeovers Regulations 1989; Financial Sector (Shareholdings) Act 1998 and Ministerial Statements on foreign investment policy including the Treasurer's Press Release No.28 of 9 April 1997.
Description: Investment
A. The following investments may be subject to objections by the Australian Government and may also require notification to the Government (1):
(a) Investments by foreign persons (2) in existing (3) Australian businesses in the media sector as follows:
(a) Direct (i.e., non-portfolio) investment irrespective of size; and
(ii) Portfolio investments of 5 per cent or more;
(b) Investments by foreign persons in existing Australian businesses, or prescribed corporations, (4) the value of whose total assets exceeds $A50 million (5) in the following sectors:
(i) The telecommunications sector;
(ii) The transport sector, including airports, portfacilities, rail infrastructure, international and. domestic aviation and shipping services provided either within, or to and from, Australia;
(iii) The supply of training or human resources, or the manufacture or supply of military goods, equipment or technology, to the Australian or other defence forces;
(iv) The manufacture or supply of goods, equipment or technologies able to be used for a military purpose;
(v) The development, manufacture or supply of, or provision of services relating to, encryption and security technologies and communication systems; and