1. Each competition authority shall notify the competition authority of the other Party of an enforcement activity if it:
(a) is liable to substantially affect the other Party's important interests;
(b) relates to restrictions on competition which are liable to have a direct and substantial effect in the territory of the other Party; or
(c) concerns anti-competitive acts taking place principally in the territory of the other Party.
2. Provided that this is not contrary to the Parties' competition laws and does not affect any investigation being carried out, notification shall take place at an early stage of the procedure. The opinions received may be taken into consideration by the other competition authority when taking decisions.
3. The notifications provided for in paragraph 1 should be detailed enough to permit an evaluation in the light of the interests of the other Party.
4. The Parties undertake to use their best efforts to ensure that notifications are made in the circumstances set out above, taking into account the administrative resources available to them.
Article 175. Co-ordination of Enforcement Activities
The competition authority of one Party may notify the other Party's competition authority of its willingness to coordinate enforcement activities with respect to a specific case. This coordination shall not prevent the Parties from taking autonomous decisions.
Article 176. Consultations When the Important Interests of One Party Are Adversely Affected In the Territory of the other Party
1. Each Party shall, in accordance with its laws, take into consideration, as necessary, the important interests of the other Party in the course of its enforcement activities. If the competition authority of a Party considers that an investigation or proceeding being conducted by the competition authority of the other Party may adversely affect such Party's important interests it may transmit its views on the matter to, or request consultation with, the other competition authority. Without prejudice to the continuation of any action under its competition laws and to its full freedom of ultimate decision, the competition authority so addressed should give full and sympathetic consideration to the views expressed by the requesting competition authority.
2. The competition authority of a Party which considers that the interests of that Party are being substantially and adversely affected by anti-competitive practices of whatever origin that are or have been engaged in by one or more enterprises situated in the other Party may request consultations with the competition authority of that Party. Such consultations are without prejudice to the full freedom of ultimate decision of the competition authority concerned. A competition authority so consulted may take whatever corrective measures under its competition laws it deems appropriate, consistent with its own domestic law, and without prejudice to its full enforcement discretion.
Article 177. Exchange of Information and Confidentiality
1. With a view to facilitating the effective application of their respective competition laws, the competition authorities may exchange non-confidential information.
2. For the purpose of improving transparency, and without prejudice to the rules and standards of confidentiality applicable in each Party, the Parties hereby undertake to exchange information regarding sanctions and remedies applied in the cases that, according to the competition authority concerned, are significantly affecting important interests of the other Party and to provide the grounds on which those actions were taken, when requested by the competition authority of the other Party.
3. Each Party shall provide to the other Party information on state aid on an annual basis, including the overall amount of aid and, if possible, the segregation by sector. Each Party may request information on individual cases affecting trade between the Parties. The requested Party will use its best efforts to provide non-confidential information.
4. All exchange of information shall be subject to the standards of confidentiality applicable in each Party. Confidential information whose dissemination is expressly prohibited or which, if disseminated, could adversely affect the interest of the Parties, shall not be provided without the express consent of the source of the information.
5. Each competition authority shall maintain the confidentiality of any information provided to it in confidence by the other competition authority, and oppose any application for disclosure of such information by a third party that is not authorised by the competition authority that supplied the information.
6. In particular, where the laws of a Party so provides, confidential information may be provided to their respective courts of justice, subject to maintaining its confidentiality by the respective courts.
Article 178. Technical Assistance
The Parties may provide each other technical assistance in order to take advantage of their respective experience and to strengthen the implementation of their competition laws and policies.
Article 179. Public Enterprises and Enterprises Entrusted with Special or Exclusive Rights, Including Designated Monopolies
1. Nothing in this Title prevents a Party from designating or maintaining public or private monopolies according to their respective laws.
2. With regard to public enterprises and enterprises to which special or exclusive rights have been granted, the Association Committee shall ensure that, following the date of entry into force of this Agreement, there is neither enacted nor maintained any measure distorting trade in goods or services between the Parties to an extent contrary to the Parties' interests and that such enterprises shall be subject to the rules of competition insofar as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.
Article 180. Dispute Settlement
Neither Party may have recourse to dispute settlement under this Agreement for any matter arising under this Title.
Title VIII. DISPUTE SETTLEMENT
Chapter I. Objective and Scope
Article 181. Objective
The objective of this Title is to avoid and settle disputes between the Parties concerning the good faith application of this Part of the Agreement and to arrive to a mutually satisfactory resolution of any matter that might affect its operation.
Article 182. Scope
The provisions of this Title shall apply with respect to any matter arising from the interpretation and application of this Part of the Agreement, except otherwise expressly provided.
Chapter II. Dispute Avoidance
Article 183. Consultations
1. The Parties shall at all times endeavour to agree on the interpretation and application of this Part of the Agreement and shall make every attempt through cooperation and consultations to avoid and settle disputes between them and to arrive at a mutually satisfactory resolution of any matter that might affect its operation.
2. Each Party may request consultations within the Association Committee with respect to an existing or proposed measure or any matter relating to the application or interpretation of this Part of the Agreement or any other matter that it considers might affect its operation. For the purposes of this Title, a "measure" shall also include a practice. The Party shall state in the request the measure or other matter complained of, indicate the provisions of this Agreement that it considers applicable and deliver the request to the other Party.
3. The Association Committee shall convene within 30 days of delivery of the request. Upon initiation of consultations, the Parties shall provide information to enable the examination of how the measure or any other matter might affect the operation and application of this Part of the Agreement, and give confidential treatment to the information exchanged during consultations. The Association Committee shall endeavour to resolve the dispute promptly by means of a decision. That decision shall specify the implementing measures to be taken by the Party concerned, and the timeframe for doing so.
Section CHAPTER III. Dispute Settlement Procedure
Article 184. Initiation of the Procedure
1. Parties shall at all times endeavour to reach a mutually satisfactory agreement on the dispute.
2. Where a Party considers that an existing measure of the other Party is in breach of an obligation under the provisions referred to in Article 182 and such matter has not been resolved within 15 days after the Association Committee has convened pursuant to Article 183(3) or 45 days after the delivery of the request for consultations within the Association Committee, whichever is earlier, it may request in writing the establishment of an arbitration panel.
3. The complaining Party shall state in the request the existing measure it considers to be in breach of this Part of the Agreement and indicate the provisions of this Agreement that it considers relevant, and shall deliver the request to the other Party and to the Association Committee.
Article 185. Appointment of Arbitrators
1. Arbitration panels shall consist of three arbitrators.
2. The Association Committee shall, no later than six months after the entry into force of this Agreement, establish a list of at least 15 individuals who are willing and able to serve as arbitrators, a third of whom must not be national of either Party and are identified as chairperson of arbitration panels. The Association Committee shall ensure that the list always contains 15 individuals at any point in time. Those individuals shall have specialised knowledge or experience in law, international trade or other matters relating to this Part of the Agreement or in the resolution of disputes deriving from international trade agreements, be independent, serve in their individual capacities and not be affiliated with, nor take instructions from, any Party or organisation and shall comply with the Code of Conduct set out in Annex XVI. Such list may be amended every three years.
3. Within three days of the request for the establishment of the arbitration panel, the three arbitrators shall be selected by lot by the chairperson of the Association Committee from the list referred to in paragraph 2, one among the individuals proposed to the Association Committee by the complaining Party, one among the individuals proposed to the Association Committee by the Party complained against and the chairperson among the individuals identified for that purpose under paragraph 2.
4. The date of establishment of the arbitration panel shall be the date on which the three arbitrators are selected by lot.
5. Where a Party considers that an arbitrator does not comply with the requirements of the Code of Conduct, the Parties shall consult and, if so agreed, they shall replace that arbitrator and select a new one pursuant to paragraph 6.
6. If an arbitrator is unable to participate in the proceeding, withdraws or is replaced, a replacement shall be selected within three days in accordance with the selection procedure followed to select that arbitrator. In such a case, any timeframe applicable to the arbitration panel proceeding shall be suspended for a period beginning on the date the arbitrator is unable to participate in the proceeding, withdraws or is replaced and ending on the date the replacement is selected.
Article 186. Information and Technical Advice
At the request of a Party or on its own initiative, the panel may obtain the information and technical advice of persons and bodies that it deems appropriate. Any information so obtained shall be submitted to the Parties for comments.
Article 187. Arbitration Panel Ruling
1. The arbitration panel shall transmit its ruling containing its findings and conclusions to the Parties and the Association Committee, as a general rule not later than three months from the date of establishment of the arbitration panel. In no case should it do so later than five months from this date. The arbitration panel shall base its ruling on the submissions and communications of the Parties and on any information it has received pursuant to Article 186. The ruling is final and shall be publicly available.
2. The ruling shall set out the findings of fact, the applicability of the relevant provisions of this Agreement and the basic rationale behind any findings and conclusions that it makes.
3. Arbitration panels shall interpret the provisions of this Agreement in accordance with customary rules of interpretation of public international law, due account being taken of the fact that the Parties must perform this Agreement in good faith and avoid circumvention of their obligations.
4. A Party asserting that a measure of the other Party is inconsistent with the provisions of this Part of the Agreement shall have the burden of establishing such inconsistency. A Party asserting that a measure is subject to an exception under this Part of the Agreement shall have the burden of establishing that the exception applies.
5. In cases of urgency, including those involving perishable goods, the arbitration panel shall make every effort to issue its ruling to the Parties within 75 days from the date of establishment of the arbitration panel. In no case should it do so later than four months from that date. The arbitration panel may give a preliminary ruling on whether a case is urgent.
6. All decisions of the arbitration panel, including the adoption of the ruling and of any preliminary ruling, shall be taken by majority vote.
7. The complaining Party may, with the agreement of the Party complained against, withdraw its complaint at any time before the ruling is transmitted to the Parties and the Association Committee. Such withdrawal is without prejudice to its right to introduce a new complaint regarding the same matter at a later point in time.
8. The arbitration panel may, with the agreement of the Party complained against, suspend its work at any time at the request of the complaining Party for a period not to exceed 12 months. In the event of such a suspension, the time-frame set out in paragraphs 1 and 5 shall be extended by the amount of time that the work was suspended. If the work of the panel has been suspended for more than 12 months, the authority for establishment of the panel shall lapse, without prejudice to the right of the complaining Party to request at a later stage the establishment of an arbitration panel on the same subject matter.
Article 188. Compliance
1. Each Party shall be bound to take the measures necessary to comply with the ruling of the arbitration panel.
2. The Parties shall endeavour to agree on the specific measures that are required for complying with the ruling.
3. Within 30 days after the ruling has been transmitted to the Parties and the Association Committee, the Party complained against shall notify the other Party:
(a) of the specific measures required for complying with the ruling;
(b) of the reasonable timeframe for doing so; and
(c) of a concrete proposal for a temporary compensation until the full implementation of the specific measures required for compliance with the ruling.
4. In the event of disagreement between the Parties on the content of such notification, the complaining Party shall request the original arbitration panel to rule on whether the proposed measures referred to under paragraph 3(a) would be consistent with this Part of the Agreement, on the duration of the timeframe and on whether the compensation proposal is manifestly disproportionate. The ruling shall be given within 45 days after that request.
5. The Party concerned shall notify to the other Party and to the Association Committee the implementing measures adopted in order to put an end to the violation of its obligations under this Part of the Agreement, before the expiry of the reasonable timeframe agreed by the Parties or determined in accordance with paragraph 4. Upon that notification, that other Party may request the original arbitration panel to rule on the conformity of those measures with this Part of the Agreement if they are not similar to the measures which the arbitration panel, acting under paragraph 4, has ruled that they would be consistent with this Part of the Agreement. The ruling of the arbitration panel shall be given within 45 days from that request.
6. If the Party concerned fails to notify the implementing measures before the expiry of the reasonable timeframe or if the arbitration panel rules that the implementing measures notified by the Party concerned are inconsistent with its obligations under this Part of the Agreement, the complaining Party shall, if no agreement on compensation has been found, be entitled to suspend the application of benefits granted under this Part of the Agreement equivalent to the level of nullification and impairment caused by the measure found to violate this Part of the Agreement.
7. In considering what benefits to suspend, a complaining Party should first seek to suspend benefits in the same Title or Titles of this Part of the Agreement as that affected by the measure that the arbitration panel has found to violate this Part of the Agreement. A complaining Party that considers that it is not practicable or effective to suspend benefits in the same Title or Titles may suspend benefits in other Titles, provided it submits written justification. In the selection of the benefits to suspend, priority must be given to those which least disturb the functioning of this Agreement.
8. The complaining Party shall notify the other Party and the Association Committee of the benefits which it intends to suspend. Within five days from that notification, the other Party may request the original arbitration panel to rule on whether the benefits which the complaining Party intends to suspend are equivalent to the level of nullification and impairment caused by the measure found to violate this Part of the Agreement, and whether the proposed suspension is in accordance with paragraph 7. The ruling of the arbitration panel shall be given within 45 days from that request. Benefits shall not be suspended until the arbitration panel has issued its ruling.
9. The suspension of benefits shall be temporary and shall only be applied by the complaining Party until the measure found to violate this Part of the Agreement has been withdrawn or amended so as to bring it into conformity with this Part of the Agreement, or the Parties have reached agreement on a resolution of the dispute.
10. At the request of any of the Parties, the original arbitration panel shall rule on the conformity with this Part of the Agreement of any implementing measures adopted after the suspension of benefits and, in the light of such ruling, whether the suspension of benefits should be terminated or modified. The ruling of the arbitration panel shall be given within 45 days from the date of that request.
11. The rulings provided for in this Article shall be final and binding. They shall be transmitted to the Association Committee and be publicly available.
Chapter IV. General Provisions
Article 189. General Provisions
1. Any time period mentioned in this Title may be modified by mutual agreement of the Parties.
2. Unless the Parties otherwise agree, the procedure before the arbitration panel shall be governed by the Model Rules of Procedure set out in Annex XV. The Association Committee may, whenever it considers necessary, amend the Model Rules of Procedure and the Code of Conduct set out in Annex XVI, by means of a decision.
3. The hearings of the arbitration panels shall be closed to the public, unless the Parties decide otherwise.
4. (a) When a Party seeks redress of a violation of an obligation under the WTO Agreement, it shall have recourse to the relevant rules and procedures of the WTO Agreement, which apply notwithstanding the provisions of this Agreement.
(b) When a Party seeks redress of a violation of an obligation under this Part of the Agreement, it shall have recourse to the rules and procedures of this Title.
(c) Unless the Parties otherwise agree, when a Party seeks redress of a violation of an obligation under this Part of the Agreement which is equivalent in substance to an obligation under the WTO, it shall have recourse to the relevant rules and procedures of the WTO Agreement, which apply notwithstanding the provisions of this Agreement.
(d) Once dispute settlement procedures have been initiated, the forum selected, if it has not declined its jurisdiction, shall be used to the exclusion of the other. Any question on the jurisdiction of the arbitration panels established under this Title shall be raised within 10 days of the establishment of the panel, and shall be settled by a preliminary ruling of the panel within 30 days of the establishment of the panel.
Title IX. Transparency
Article 190. Contact Points and Exchange of Information
1. In order to facilitate communication between the Parties on any trade matter covered by this Part of the Agreement, each Party shall designate a contact point. On the request of either Party, the contact point of the other Party shall indicate the office or official responsible for the matter and provide the required support to facilitate communication with the requesting Party.
2. On request of the other Party, and to the extent possible under its domestic laws and principles, each Party shall provide information and reply to any question from the other Party relating to an actual or proposed measure that might substantially affect the operation of this Part of the Agreement.
3. The information referred to under this Article shall be considered to have been provided when the information has been made available by appropriate notification to the WTO or when the information has been made available on the official, publicly and fee-free accessible website of the Party concerned.
Article 191. Cooperation on Increased Transparency
The Parties agree to cooperate in bilateral and multilateral fora on ways to increase transparency in trade matters.
Article 192. Publication
Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application relating to any trade matter covered by this Part of the Agreement are promptly published or made publicly available.
Title X. Specific Tasks In Trade Matters of the Bodies Established Under this Agreement
Article 193. Specific Tasks
1. When the Association Committee performs any of the tasks conferred upon it in this Part of the Agreement, it shall be composed of representatives of the Community and Chile with a responsibility for trade-related matters, normally at senior official level.
2. Notwithstanding the provisions of Article 6, the Association Committee shall have, in particular, the following functions:
(a) supervise the implementation and proper application of the provisions of this Part of the Agreement, as well as of any other instrument agreed by the Parties concerning trade-related matters, within the framework of this Agreement;
(b) oversee the further elaboration of the provisions of this Part of the Agreement and evaluate the results obtained in its application;
(c) resolve disputes that may arise regarding the interpretation or application of this Part of the Agreement, in accordance with the provisions of Article 183;
(d) assist the Association Council in the performance of its functions regarding trade related matters;
(e) supervise the work of all the special committees established under this Part of the Agreement;
(f) carry out any other function assigned to it under this Part of the Agreement or entrusted to it by the Association Council, concerning trade-related matters; and
(g) report annually to the Association Council.
3. In the performance of its duties under paragraph 2, the Association Committee may:
(a) set up any special committees or bodies to deal with matters falling within its competence, and determine their composition and duties, and their rules of procedure;
(b) meet at any time agreed by the Parties;
(c) consider any issues regarding trade-related matters, and take appropriate action in the exercise of its functions;
(d) take decisions or make recommendations on trade-related matters, in accordance with Article 6.
4. Pursuant to Articles 5 and 6(4), the Parties shall implement decisions resulting from the application of Articles 60(5) and 74 and Article 38 of Annex III in accordance with Annex XVII.
Title XI. Exceptions In the Area of Trade
Article 194. National Security Clause
1. Nothing in this Agreement shall be construed:
(a) to require a Party to furnish any information the disclosure of which it considers contrary to its essential security interests;
(b) to prevent a Party from taking any action which it considers necessary for the protection of its essential security interests
(i) relating to fissionable and fusionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials or relating to the supply of services, as carried on directly or indirectly for the purpose of supplying or provisioning a military establishment;
(iii) relating to government procurement indispensable for national security or for national defence purposes; or
(iv) taken in time of war or other emergency in international relations; or
(c) to prevent a Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
2. The Association Committee shall be informed to the fullest extent possible of measures taken under paragraphs 1(b) and (c) and of their termination.
Article 195. Balance of Payments Difficulties
1. Where a Party is in serious balance of payments and external financial difficulties, or under threat thereof, it may adopt or maintain restrictive measures with regard to trade in goods and in services and with regard to payments and capital movements, including those related to direct investment.
2. The Parties shall endeavour to avoid the application of the restrictive measures referred to in paragraph 1.
3. Any restrictive measure adopted or maintained under this Article shall be nondiscriminatory and of limited duration and shall not go beyond what is necessary to remedy the balance of payments and external financial situation. They shall be in accordance with the conditions established in the WTO Agreements and consistent with the Articles of Agreement of the International Monetary Fund, as applicable.
4. The Party maintaining or having adopted restrictive measures, or any changes thereto, shall promptly notify them to the other Party and present, as soon as possible, a time schedule for their removal.
5. The Party applying restrictive measures shall consult promptly within the Association Committee. Such consultations shall assess the balance of payments situation of the Party concerned and the restrictions adopted or maintained under this Article, taking into account, inter alia, such factors as:
(a) the nature and extent of the balance of payments and the external financial difficulties;
(b) the external economic and trading environment of the consulting Party;
(c) alternative corrective measures which may be available. The consultations shall address the compliance of any restrictive measures with paragraphs 3 and 4. All findings of statistical and other facts presented by the International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments shall be accepted and conclusions shall be based on the assessment by the Fund of the balance of payments and the external financial situation of the consulting Party.
Article 196. Taxation
1. Nothing in this Part of the Agreement or in any arrangement adopted under this Agreement shall be construed to prevent the Parties from distinguishing, in the application of the relevant provisions of their fiscal legislation, between taxpayers who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested.
2. Nothing in this Part of the Agreement or in any arrangement adopted under this Agreement shall be construed to prevent the adoption or enforcement of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation or other tax arrangements or domestic fiscal legislation.
3. Nothing in this Part of the 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.
Part V. FINAL PROVISIONS
Article 197. Definition of the Parties
For the purposes of this Agreement, "the Parties" shall mean the Community or its Member States or the Community and its Member States, within their respective areas of competence as derived from the Treaty establishing the European Community, on the one hand, and the Republic of Chile, on the other.
Article 198. Entry Into Force
1. This Agreement shall enter into force the first day of the month following that in which the Parties have notified each other of the completion of the procedures necessary for this purpose.
2. Notifications shall be sent to the Secretary General of the Council of the European Union, who shall be the depository of this Agreement.
3. Notwithstanding paragraph 1, Chile and the European Community agree to apply Articles 3 to 11, Article 18, Articles 24 to 27, Articles 48 to 54, Article 55 (a), (b), (f), (h), (i), Article 56 to 93, Articles 136 to 162, and Articles 172 to 206, from the first day of the month following the date on which Chile and the European Community have notified each other of the completion of the procedures necessary for this purpose.
4. Where a provision of this Agreement is applied by the Parties pending its entry into force, any reference in such provision to the date of entry into force of this Agreement shall be understood to be made to the date from which the Parties agree to apply that provision in accordance with paragraph 3.
5. From the date of its entry into force in accordance with paragraph 1, this Agreement shall replace the Framework Cooperation Agreement. By way of exception, the Protocol on Mutual Assistance in Customs matters to the Framework Cooperation Agreement of 13 June 2001, shall remain in force and become an integral part of this Agreement.
Article 199. Duration
1. This Agreement shall be valid indefinitely.
2. Either Party may give written notice to the other of its intention to denounce this Agreement.
3. Denunciation shall take effect six months after notification to the other Party.
Article 200. Fulfilment of the Obligations
1. The Parties shall adopt any general or specific measures required for them to fulfil their obligations under this Agreement and shall ensure that they comply with the objectives laid down in this Agreement.