1. Every two years, each Party shall notify the other Party of the legal basis, form, amount or budget and, where possible, the recipient of subsidies provided within the reporting period.
2. Such notification shall be deemed to have been fulfilled if the relevant information is made available by a Party or on its behalf on a publicly accessible website, by 31 December of the subsequent calendar year. The first notification shall be made available no later than two years after the entry into force of this Agreement.
3. For subsidies notified under the SCM Agreement, such notification shall be deemed to have been fulfilled whenever-a Party complies with its notification obligations under Article 25 of the SCM Agreement, provided that the notification contains all the information required under paragraph 1 of this Article.
Article 294. Consultations
1. If a Party considers that a subsidy granted by the other Party, which is not covered by Article 295, could negatively affect its interests, that Party may express its concern to the Party which granted the subsidy and request consultations on the matter. The requested Party shall accord full and sympathetic consideration to such a request.
2. Without prejudice to the transparency requirements set out in Article 293 and with a view to resolving the matter, the consultations shall in particular aim at establishing the policy objective or purpose for which the subsidies have been granted, the amount of the subsidy in question and data permitting an assessment of the negative effects of the subsidy on trade and investment.
3. To facilitate the consultations, the requested Party shall provide information on the subsidy in question within 60 days of the date of receipt of the request.
4. If, after receiving information on the subsidy in question, the requesting Party considers that that subsidy negatively affects or could negatively affect its trade or investment interests in a disproportionate manner, the requested Party will use its best endeavours to eliminate or minimise the negative effects on the requesting Party's trade and investment interests caused by that subsidy.
Article 295. Subsidies Subject to Conditions
Each Party shall apply conditions to the following subsidies in so far as they negatively affect trade or investment of the other Party, or are likely to do so:
(a) a legal arrangement whereby a government, directly or indirectly, is responsible for covering debts or liabilities of certain enterprises is allowed, provided that the coverage of the debts and liabilities is limited as regards the amount of those debts and liabilities or the duration of such responsibility;
(b) subsidies to insolvent or ailing enterprises in various forms (including loans and guarantees, cash grants, capital injections, the provision of assets below market prices, and tax exemptions) with a duration of more than one year are allowed, provided that a credible restructuring plan has been prepared on the basis of realistic assumptions with a view to ensuring the return of the insolvent or ailing enterprises to long-term viability within a reasonable time and with the enterprise contributing to the costs of restructuring. (1) (2)
Article 296. Use of Subsidies
Each Party shall ensure that enterprises use the subsidies provided by a Party only for the public policy objective for which the subsidies have been granted.
Section D. General Provisions
Article 297. Dispute Settlement
No Party shall have recourse to dispute settlement as provided for in Chapter 13 of this Agreement for any matter arising under Section B of this Chapter or under Article 294 paragraph 4.
Article 298. Confidentiality
1. When exchanging information under this Chapter, the Parties shall take into account the limitations imposed by their respective legislation concerning professional and business secrecy and shall ensure the protection of business secrets and other confidential information.
2. Any information communicated under this Chapter shall be treated by the receiving Party as confidential unless the other Party, in accordance with its domestic law, has authorised the disclosure or made that information available to the general public.
Article 299. Review Clause
The Parties shall keep the matters referred to in this Chapter under constant review. Each Party may refer such matters to the Partnership Committee. The Parties shall review the progress made in implementing this Chapter every five years after the entry into force of this Agreement, unless both Parties agree otherwise.
Chapter 11. State Owned Enterprises
Article 300. Delegated Authority
Unless otherwise provided, each Party shall ensure that any enterprise, including a State-owned enterprise, an enterprise granted special rights or privileges, or a designated monopoly, that has been delegated regulatory, administrative or other governmental authority by a Party at any level of government, acts in accordance with the Party's obligations as set out under this Agreement in the exercise of that authority.
Article 301. Definitions
For the purposes of this Chapter, the following definitions shall apply:
(a) "state-owned enterprise" means an enterprise, including any subsidiary, in which a Party, directly or indirectly:
(i) owns more than 50% of the enterprise's subscribed capital or controls more than 50% of the votes attached to the shares issued by the enterprise;
(ii) can appoint more than half of the members of the enterprise's board of directors or an equivalent body; or
(iii) can exercise control over the enterprise;
(b) "enterprise granted special rights or privileges" means any enterprise, including any subsidiary, public or private, that has been granted by a Party, in law or in fact, special rights or privileges. Special rights or privileges are granted by a Party when it designates or limits to two or more the number of enterprises authorised to supply a good or service, other than according to objective, proportional and non-discriminatory criteria, substantially affecting the ability of any other enterprise to supply the same good or service in the same geographical area under substantially equivalent conditions;
(c) "designated monopoly" means an entity engaged in a commercial activity, including a group of entities or a government agency, and any subsidiary thereof, that in a relevant market in the territory of a Party is designated as the sole supplier or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant;
(d) "commercial activities" means activities the end result of which is the production of a good or supply of a service which will be sold in the relevant market in quantities and at prices determined by the enterprise and which are undertaken with an orientation towards profit-making, but does not include activities undertaken by an enterprise which:
(i) operates on a not-for-profit basis;
(ii) operates on cost-recovery basis; or
(iii) provides public services;
(e) "commercial considerations" means price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale, or other factors that would normally be taken into account in the commercial decisions of an enterprise operating according to market-economy principles in the relevant business or industry;
(f) "designate" means to establish or authorise a monopoly, or to expand the scope of a monopoly to cover an additional good or service.
Article 302. Scope of Application
1. The Parties confirm their rights and obligations under Article XVII paragraphs 1 to 3 of GATT 1994, the Understanding on the Interpretation of Article XVII of GATT 1994, as well as under Article VII paragraphs 1, 2 and 5 of the GATS.
2. This Chapter applies to any enterprise specified in Article 300 engaged in a commercial activity. Where an enterprise combines commercial and non-commercial activities (1), only the commercial activities of that enterprise are covered by this Chapter.
3. This Chapter applies to all enterprises specified in Article 300 at central and sub-central levels of government.
4. This Chapter does not apply to procurement by a Party or its procuring entities within the meaning of the procurements covered under Articles 278 and 279.
5. This Chapter does not apply to any service supplied in the exercise of governmental authority within the meaning of the GATS.
6. Article 304 shall:
(a) not apply to the sectors set out in Articles 143 and 148;
(b) not apply to any measure of a State-owned enterprise, an enterprise granted special rights or privileges, or a designated monopoly, if a reservation of a Party, taken against a national treatment or most-favoured-nation treatment obligation under Article 144, as set out in that Party's Schedule provided in Annex VIII-A for the European Union or Annex VIII-E for the Republic of Armenia, would apply if the same measure had been adopted or maintained by that Party; and
(c) apply to commercial activities of a State-owned enterprise, enterprise granted special rights or privileges, or designated monopoly, if the same activity would affect trade in services with respect to which a Party has undertaken a commitment under Articles 149 and 150, subject to conditions or qualifications in that Party's Schedule set out in Annex VIII-B for the European Union and Annex VIII-F for the Republic of Armenia.
Article 303. General Provisions
1. Without prejudice to the Parties' rights and obligations under this Chapter, nothing in this Chapter prevents the Parties from establishing or maintaining State-owned enterprises, designating or maintaining monopolies or granting enterprises special rights or privileges.
2. Neither Party shall require or encourage enterprises which fall within the scope of application of this Chapter to act in a manner inconsistent with this Agreement.
Article 304. Non-discrimination and Commercial Considerations
1. Each Party shall ensure that its State-owned enterprises, designated monopolies and enterprises granted special rights or privileges when engaging in commercial activities:
(a) act in accordance with commercial considerations in their purchase or sale of goods or services, except to fulfil any terms of their public-service mandate that are not inconsistent with point (b);
(b) in their purchase of goods or services:
(i) accord to goods or services supplied by enterprise of the other Party treatment no less favourable than they accord to like goods or like services supplied by enterprises of the Party; and
(ii) accord to goods or services supplied by enterprises of the other Party established in its territory treatment no less favourable than they accord to like goods or like services supplied by enterprises in the relevant market in its territory that are established enterprises of that Party; and
(c) in their sales of goods or services:
(i) accord to enterprises of the other Party treatment no less favourable than they accord to enterprises of the Party; and
(ii) accord to enterprises of the other Party established in its territory treatment no less favourable than they accord to enterprises in the relevant market in its territory that are established enterprises of that Party.
2. Paragraph 1 does not preclude State-owned enterprises, enterprises granted special rights or privileges, or designated monopolies from:
(a) purchasing or supplying goods or services on different terms or conditions, including those relating to price, provided that such different terms or conditions are in accordance with commercial considerations; and
(b) refusing to purchase or supply goods or services, provided that such refusal is undertaken in accordance with commercial considerations.
Article 305. Regulatory Principles
1. Each Party shall endeavour to ensure that enterprises specified in Article 300 observe internationally recognised standards of corporate governance.
2. Each Party shall ensure that, in order to effectively and impartially perform its regulatory function in like circumstances with respect to all enterprises that it regulates, including State-owned enterprises, enterprises granted special rights or privileges and designated monopolies, any regulatory body that a Party establishes or maintains is not accountable to any of the enterprises that it regulates (1).
The impartiality with which the regulatory body exercises its regulatory functions is to be assessed by reference to a general pattern or practice of that regulatory body.
For those sectors in which the Parties have agreed to specific obligations relating to the regulatory body in other Chapters, the relevant provision in the other Chapters shall prevail.
3. Each Party shall ensure the consistent and non-discriminatory enforcement of laws and regulations, including its laws and regulations on enterprises specified in Article 300.
Article 306. Transparency
1. Where a Party has reason to believe that its interests under this Chapter are being adversely affected by the commercial activities of an enterprise specified in Article 300 of the other Party, and subject to the scope of this Chapter, it may request in writing that the other Party provide information about the operations of that enterprise related to the activities covered by this Chapter.
Requests for such information shall indicate the enterprise, the products or services and the markets concerned, and include indications that the enterprise is engaging in practices that hinder trade or investment between the Parties.
2. The information provided pursuant to paragraph 1 shall include:
(a) the ownership and the voting structure of the enterprise, indicating the percentage of shares and the percentage of voting rights that a Party or an enterprise specified in Article 300 cumulatively owns;
(b) a description of any special shares or special voting or other rights that a Party or an enterprise specified in Article 300 holds, where such rights differ from the rights attached to the general common shares of such entity;
(c) the organisational structure of the enterprise; the composition of its board of directors or of an equivalent body exercising direct or indirect control in such an enterprise; and cross- holdings and other links with different enterprises or groups of enterprises, as specified in Article 300;
(d) a description of which government departments or public bodies regulate or monitor the enterprise, a description of the reporting lines (1), and the rights and practices of the government or any public bodies in the appointment, dismissal or remuneration of managers;
(e) annual revenue or total assets, or both; and
(f) exemptions, non-conforming measures, immunities and any other measures, including more favourable treatment, applicable in the territory of the requested Party to any enterprise specified in Article 300.
3. Points (a) to (e) of paragraph 2 do not apply to SMEs, as defined by the Party's laws and regulations.
4. Nothing in paragraph 1 and 2 requires a Party to disclose confidential information which would be inconsistent with its laws and regulations, impede law enforcement or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises.
Chapter 12. Transparency
Article 307. Definitions
For the purposes of this Chapter:
(a) "measures of general application" include laws, regulations, decisions, procedures and administrative rulings of general application that may have an impact on any matter covered by this Agreement;
(b) "interested person" means any natural or legal person that may be affected by a measure of general application.
Article 308. Objective and Scope
Recognising the impact which their respective regulatory environment may have on trade and investment between them, the Parties shall provide a predictable regulatory environment and efficient procedures for economic operators, in particular for SMEs.
Article 309. Publication
1. Each Party shall ensure that measures of general application adopted after the entry into force of this Agreement:
(a) are promptly and readily available via an officially designated medium, including electronic means, in such a manner as to enable any person to become acquainted with them;
(b) clearly state to the extent possible, the objective of and rationale for such measures; and
(c) allow for a sufficient period of time between publication and entry into force of such measures, except in duly justified cases.
2. Each Party shall:
(a) endeavour to publish at an early appropriate stage any proposal to adopt or amend any measure of general application, including an explanation of the objective of, and rationale for, the proposal;
(b) provide reasonable opportunities for interested persons to comment on any proposal to adopt or amend any measure of general application, allowing, in particular, for sufficient time for such opportunities; and
(c) endeavour to take into consideration the comments received from interested persons with respect to any such proposal.
Article 310. Enquiries and Contact Points
1. Each Party shall, upon the entry into force of this Agreement, designate a contact point in order to ensure the effective implementation of this Agreement and to facilitate communication between the Parties on any matter covered by this Agreement.
2. Upon request of a Party, the contact point of the other Party shall identify the body or official responsible for the matter and assist, as necessary, in facilitating communication with the requesting Party.
3. Each Party shall establish or maintain appropriate mechanisms for responding to enquiries from any person regarding any measures of general application which are proposed or in force, including on the application of such measures. Enquiries may be addressed through contact points established under paragraph 1 or any other mechanism, as appropriate, unless a specific mechanism is established in this Agreement.
4. Each Party shall provide for procedures available to persons seeking a solution to problems that have arisen from the application of measures of general application under this Agreement. Those procedures shall be without prejudice to any appeal or review procedures which the Parties establish or maintain under this Agreement. They shall also be without prejudice to the Parties' rights and obligations under Chapter 13.
5. The Parties recognise that the response provided pursuant to this Article may not be definitive or legally binding but for information purposes only, unless otherwise provided for in their respective laws and regulations.
6. Upon request of a Party, the other Party shall without undue delay provide information and respond to questions pertaining to any measure of general application or any proposal to adopt or amend any measure of general application that the requesting Party considers might affect the operation of this Agreement, regardless of whether the requesting Party has been previously notified of that measure.
Article 311. Administration of Measures of General Application
Each Party shall administer in a uniform, objective, impartial and reasonable manner all measuresof general application. To that end, each Party, in applying such measures to particular persons, goods or services of the other Party in specific cases, shall:
(a) endeavour to provide interested persons, that are directly affected by proceedings with reasonable notice, in accordance with its domestic procedures, when proceedings are initiated, including a description of the nature of the proceedings, a statement of the legal authority under which the proceedings are initiated and a general description of any issues in disagreement;
(b) provide those interested persons with a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, in so far as time, the nature of the proceedings and the public interest permit; and
(c) ensure that its procedures are based on, and in accordance, with its domestic law.
Article 312. Review and Appeal
1. Each Party shall establish or maintain, in accordance with its domestic law, judicial, arbitral or administrative tribunals or procedures for the purpose of the prompt review and, where warranted, correction of administrative action relating to matters covered by this Agreement. Those tribunals or procedures shall be impartial and independent of the office or authority entrusted with administrative enforcement, and those responsible for them shall not have any substantial interest in the outcome of the matter.
2. Each Party shall ensure that, in any such tribunals procedures, the parties to the proceedings are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and submissions of record or, where required by its domestic law, the record compiled by the administrative authority.
3. Each Party shall ensure, subject to appeal or further review as provided for in its domestic law, that such decision shall be implemented by, and shall govern the practice of, the office or authority with respect to the administrative action at issue.
Article 313. Good Regulatory Practice and Administrative Behaviour
1. The Parties shall cooperate in promoting regulatory quality and performance, including through the exchange of information and best practices on their respective regulatory reform processes and regulatory impact assessments.
2. The Parties support the principles of good administrative behaviour, and agree to cooperate in promoting such principles, including through the exchange of information and best practices.
Article 314. Confidentiality
The provisions of this Chapter shall not require any Party to disclose confidential information which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.
prejudice the legitimate commercial interests of particular enterprises, public or private.
Article 315. Specific Provisions
The provisions of this Chapter apply without prejudice to any specific rules established in other Chapters of this Agreement.
Section B. Consultations and Mediation
Article 318. Consultations
1. The Parties shall endeavour to resolve any dispute by entering into consultations in good faith with the aim of reaching a mutually agreed solution.
2. A Party shall seek consultations by means of a written request delivered to the other Party, copied to the Partnership Committee, identifying the measure at issue and the provisions of this Title that it considers applicable.
3. Consultations shall be held within 30 days of the date of receipt of the request and take place, unless the Parties agree otherwise, in the territory of the Party to which the request is made. The consultations shall be deemed concluded within 30 days of the date of receipt of the request, unless both Parties agree to continue consultations. Consultations, and in particular all information disclosed and positions taken by the Parties during consultations, shall be confidential and without prejudice to the rights of either Party in any further proceedings.
4. Consultations on matters of urgency, including those regarding perishable goods, seasonal goods or services or energy-related matters shall be held within 15 days of receipt of the request by the requested Party, and shall be deemed concluded within those 15 days, unless both Parties agree to continue consultations.
5. A Party that seeks consultations may have recourse to arbitration in accordance with Article 319 if:
(a) the Party to which the request is made does not respond to the request for consultations within 10 days of its receipt;
(b) consultations are not held within the timeframes laid down in paragraph 3 or 4 of this Article;
(c) the Parties agree not to have consultations; or
(d) consultations have been concluded and no mutually agreed solution has been reached.
6. During consultations, each Party shall provide sufficient factual information, so as to allow a complete examination of the manner in which the measure at issue could affect the operation and application of the provisions of this Title. Each Party shall endeavour to ensure the participation of personnel of their competent governmental authorities who have expertise in the matter subject to the consultations.
Article 319. Mediation
1. Each Party may request at any time the other Party to enter into a mediation procedure with respect to any measure adversely affecting trade or investment between the Parties.
2. The mediation procedure shall be initiated, conducted and terminated in accordance with the Mediation Mechanism.
3. The Partnership Committee shall adopt by decision the Mediation Mechanism at its first meeting and may decide amendments thereto.
Section C. Dispute Settlement Procedures
Subsection I. Arbitration Procedure
Article 320. Initiation of the Arbitration Procedure
1. Where the Parties failed to resolve the dispute by recourse to consultations as provided for in Article 318, the Party that sought consultations may request the establishment of an arbitration panel in accordance with this Article.
2. The request for the establishment of an arbitration panel shall be made by means of a written request delivered to the other Party and the Partnership Committee. The complaining Party shall identify in its request the measure at issue, and it shall explain how such measure constitutes a breach of the provisions of this Title in such a manner as to clearly present the legal basis for the complaint.