h) requiring an applicant for precautionary or preventive measures to provide information necessary for the identification of the relevant assets by the authority that will carry out the precautionary or preventive measures.
2. When considering the issuance of the aforementioned measures, the judicial authorities shall take into account the need for proportionality between the seriousness of the infringement and the measures ordered, as well as the possible impact on the rights of third parties.
Article 18-29. Compensation and Costs.
1. Each Party shall empower its judicial authorities to order:
a) the payment to the aggrieved party of adequate compensation for the damages suffered as a result of the violation;
b) that the infringer shall pay the costs of the proceedings incurred by the plaintiff, in accordance with the applicable legislation;
c) the necessary measures to ensure that the goods constituting an infringement of the law are withdrawn from commerce, liquidated out of commercial channels, or destroyed, without compensation, in such a way as to minimize the risk of future infringements;
d) that the materials and instruments used predominantly in the production of the illicit goods are, without compensation, destroyed or placed out of the commercial circuits, in the terms provided for in its legislation.
2. Each Party may, at least with respect to copyrighted works and phonograms, authorize the judicial authorities to order the recovery of profits or the payment of pre-determined damages, or both, even if the infringer did not know or had no reasonable grounds to know that he was engaged in infringing activity.
Article 18-30. Administrative Procedures.
The principles contained in this section shall apply, as appropriate, if either Party provides in its legislation for administrative procedures for the protection of the rights recognized in this chapter.
Article 18-31. Criminal Proceedings.
1. The Parties shall provide in their legislation sufficient deterrent measures of imprisonment, fine or both, to punish infringements of the rights recognized in this Chapter, equivalent to the level of penalties that apply to offenses of similar magnitude. In any case, they shall establish criminal sanctions when there is fraudulent counterfeiting of trademarks or copies protected by copyright on a commercial scale.2
2. Criminal penalties shall include the seizure and confiscation of the goods that constitute an infringement of the law, as well as of the materials or instruments predominantly used in the production of the illicit goods, and these, without any compensation, shall be destroyed or placed out of commerce under the terms provided by the legislation of each Party.
Article 18-32. Enforcement of Intellectual Property Rights at the Border.
1. Each Party shall adopt procedures so that the holder of a right who has valid reasons to believe that the importation of goods identified with counterfeit trademarks or of unlawful copies protected by copyright or related rights is being prepared, may submit to the competent authorities, administrative or judicial, an application for the purpose of having the customs authorities order the suspension of the release of such goods for free circulation. No Party shall be obliged to apply such procedures to goods in transit.
2. Each Party may authorize the filing of an application referred to in paragraph 1 with respect to goods involving other infringements of intellectual property rights, provided that the requirements of this Chapter are met.
3. Each Party may establish similar procedures relating to the suspension by the customs authorities of the release of goods destined for export from its territory.
Article 18-33. Withholding Procedures Initiated Ex Officio.
Where a Party requires its competent authorities to act on its own initiative and suspend the release of goods for which those authorities have prima facie evidence that they infringe an intellectual property right:
a) the competent authorities may at any time request from the right holder any information that may assist them in the exercise of these powers;
b) the importer and the right holder shall be promptly notified by the competent authorities of the Party of the suspension. Where the importer has requested a review of the suspension before the competent authorities, the suspension shall be subject, with appropriate modifications, to Article 18-28, paragraph 1, subparagraph h), and paragraph 2;
c) The Party shall only exempt public authorities and officials from liability for appropriate remedial measures for acts performed or disposed of in good faith.
Article 18-34. Applicable Principles.
All enforcement provisions contained in this section, where applicable, are applicable to the enforcement of intellectual property rights at the border.
Each Party may exclude from the application of measures for the defense of intellectual property rights at the border, small quantities of goods that are not of a commercial nature and are part of the personal luggage of travelers or are sent in small, non-repeated consignments.
Chapter XIX. Settlement of Disputes.
Article 19-01. Cooperation.
The Parties shall always endeavor to reach agreement on the interpretation and application of this Agreement through cooperation and consultation and shall endeavor to reach a mutually satisfactory resolution of any matter that may affect its operation.
Article 19-02. Scope of Application.
1. Except as otherwise provided in this Agreement, this Chapter shall apply:
a) to the prevention or settlement of all disputes between the Parties concerning the application or interpretation of this Agreement; and
b) where a Party considers that a measure of another Party is inconsistent with the obligations of this Agreement, or would cause nullification or impairment within the meaning of the Annex to this Article.
2. If a Party increases an import tax, the Parties may negotiate an appropriate compensation mechanism before initiating a dispute settlement procedure.
Article 19-03. Dispute Settlement Under GATT.
1. Any dispute arising in connection with the provisions of both this Agreement and the GATT or the agreements negotiated thereunder may be settled in either forum at the option of the complaining Party.
2. Before the complaining Party initiates dispute settlement proceedings under the GATT against another Party on grounds substantially equivalent to those that it could invoke under this Agreement, the following rules shall apply:
a) the complaining Party shall communicate its intention to do so to the Party or Parties other than the Party against which it intends to initiate the proceeding; and
b) if one or more of the Parties that have received the respective communication wish to have recourse in respect of the same matter to the dispute settlement procedure of this chapter, they and the complainant shall endeavor to agree on a single forum.
3. Once a Party has initiated a dispute settlement proceeding under Article 19-06 or one under the GATT, it may not resort to the other forum with respect to the same matter.
4. For the purposes of this Article, dispute settlement procedures under the GATT shall be deemed to have been initiated when a Party requests:
a) the establishment of a panel in accordance with GATT Article XXIII:2; or
b) investigation by a Committee established in the agreements negotiated in accordance with the GATT.
Article 19-04. Dispute Settlement Under the Cartagena Agreement.
1. The Parties shall be subject to the following rules of jurisdiction:
a) disputes arising between Colombia and Venezuela in connection with the provisions of this Treaty and the legal system of the Cartagena Agreement shall be subject to the jurisdiction of the organs of the Cartagena Agreement;
b) disputes arising between Colombia and Venezuela in connection with the commitments undertaken exclusively in this Agreement shall be resolved in accordance with the provisions of this Chapter;
c) disputes arising between Mexico and any of the other Parties with respect to the provisions of this Agreement shall be resolved in accordance with the provisions of this Chapter; and
d) disputes arising between the three Parties in connection with the provisions of this Agreement shall be resolved in accordance with the provisions of this Chapter.
2. The submission of a dispute to the competence of the organs of the Cartagena Agreement shall not affect any rights Mexico may have under this Agreement.
Article 19-05. Consultations.
1. Any Party may request in writing to the other Parties consultations with respect to any measure or any other matter that it considers may affect the operation of this Agreement.
2. The Party initiating consultations pursuant to paragraph 1 shall deliver the request to the responsible national bodies of the other Parties.
3. The third Party that considers it has a substantial interest in the matter shall have the right to participate in the consultations by submitting a communication to the responsible national bodies of the other Parties.
4. The consulting Parties:
(a) provide such information as may permit consideration of how the measure or any other matter may affect the operation of this Agreement;
(b) shall endeavor to avoid any solution that adversely affects the interests of the third Party; and
(c) treat confidential information exchanged during consultations in the same manner as the Party that provided it.
Article 19-06. Intervention of the Commission, Good Offices, Conciliation and Mediation.
1. Any consulting Party may request in writing that the Commission be convened whenever a matter is not resolved pursuant to Article 19-05 within forty-five days of the delivery of the request for consultations.
2. A Party may also request in writing that the Commission be convened when consultations have been held pursuant to article 5-30 or article 14-18.
3. The Party initiating the procedure shall mention in the request the measure or any other matter that is the subject of the complaint, shall indicate the provisions of this Agreement that it considers applicable and shall deliver the request to the responsible national bodies of the other Parties.
4. The Commission shall meet within ten days of the delivery of the request and, with a view to reaching a mutually satisfactory resolution of the dispute, may:
a) to convene technical advisors or create such working groups or expert groups as it deems necessary;
b) resort to good offices, conciliation, mediation or other dispute resolution procedures; or c) to formulate recommendations.
5. The Commission shall have the authority to join two or more proceedings relating to the same measure that are submitted to it under this article. The Commission may join two or more proceedings relating to other matters before it under this article, when it considers it appropriate to examine them jointly.
Article 19-07. Recourse to the Arbitral Tribunal.
1. Any consulting Party may request in writing the constitution of an arbitral tribunal when the Commission has met in accordance with Article 19-06, paragraph 4, and the matter has not been resolved within the time limit:
a) forty-five days following the meeting; or
b) forty-five days following the day on which the Commission has met to deal with the most recent matter submitted to it, when several proceedings have been joined in accordance with article 19-06, paragraph 5.
2. The requesting Party shall deliver the request to the responsible national bodies of the other Parties. Upon delivery of the request, the Commission shall establish an arbitral tribunal.
3. Where the third Party considers that it has a substantial interest in the matter, it shall have the right to participate as a complaining Party upon communication of its intention to intervene to the responsible national bodies of the disputing Parties. The communication shall be delivered as soon as possible, but in no case later than seven days from the date on which one of the Parties has delivered the request for the establishment of the arbitral tribunal.
4. A third Party that decides not to intervene as a complaining Party under paragraph 3 shall, in respect of the same matter and in the absence of a significant change in economic or commercial circumstances, refrain from initiating dispute settlement proceedings under paragraph 3:
a) this Treaty; or
b) the GATT, by invoking grounds substantially equivalent to those that such Party may invoke under this Agreement.
Article 19-08. List of Arbitrators.
1. The Commission shall compile a list of up to thirty individuals with the necessary qualities and willingness to serve as arbitrators.
2. The members of the list:
a) have knowledge or experience in law, international trade, other matters relating to this Agreement, or the settlement of disputes arising under international trade agreements;
b) shall be appointed strictly on the basis of their objectivity, reliability and good judgment;
c) shall be independent of, and not bound by, and shall not receive instructions from the Parties; and
d) comply with the Code of Conduct established by the Commission.
Article 19-09. Constitution of the Arbitral Tribunal.
1. When there are two disputing Parties, the following procedure shall apply:
a) the arbitral tribunal shall be composed of five members;
b) the disputing Parties shall endeavor to designate the chairman of the arbitral tribunal within fifteen days of the delivery of the request for its composition. If the disputing Parties fail to reach agreement within this period, one of them, chosen by lot, shall designate the chairman within five days. The individual designated as chairman:
(i) may not be of the nationality of the designating Party; and
(ii) in the case of disputes referred to in Article 19-04, paragraph 1(c), may not be of the nationality of any Party to this Treaty;
c) within fifteen days after the election of the chairperson, each disputing Party shall select two arbitrators who are nationals of the other disputing Party; and
d) if a disputing Party fails to select an arbitrator within that period, the arbitrator shall be selected by lot from among the members of the list who are nationals of the other disputing Party.
2. When there are three disputing Parties, the following procedure shall apply:
a) the arbitral tribunal shall be composed of five members;
b) the disputing Parties shall endeavor to agree on the designation of the chairman of the arbitral tribunal within fifteen days of the delivery of the request for its composition. If the disputing Parties fail to reach agreement within this period, a choice shall be made by lot as to whether the respondent Party or the claimant Parties shall designate the chairperson, who shall be selected within ten days. The individual selected as chairperson may not be of the nationality of the Party or Parties appointing him/her;
c) within fifteen days after the selection of the chairperson, the Party complained against shall select two arbitrators, each of whom shall be a national of each of the complaining Parties. The Claimant Parties shall select two arbitrators who are nationals of the Party complained against; and
d) if any disputing Party fails to select an arbitrator within that period, the arbitrator shall be appointed by lot in accordance with the nationality criteria in c).
3. Arbitrators shall normally be chosen from the list referred to in Article 19-08.
Article 19-10. Challenge
Any disputing Party may, within fifteen days after the proposal is made, file a challenge without stating a reason against any individual not on the list referred to in Article 19-08 who is proposed as arbitrator.
Article 19-11. Remuneration and Payment of Costs.
1. The Commission shall fix the amounts of remuneration and expenses to be paid to the arbitrators.
2. The remuneration of the arbitrators, their transportation and lodging costs, and all general expenses of the arbitral tribunal shall be covered in equal proportions by the disputing Parties.
3. Each arbitrator shall keep a record and render a final account of his time and expenses, and the arbitral tribunal shall keep a similar record and render a final account of all general expenses.
Article 19-12. Rules of Procedure.
The Commission shall establish Rules of Procedure to be applied by arbitral tribunals constituted in accordance with this chapter. These rules shall include, among others, provisions regarding the Code of Conduct for arbitrators. In drawing up the rules, the Commission shall take into consideration the following principles:
a) the proceedings shall guarantee at least the right to a hearing before the arbitral tribunal, as well as the opportunity to present written pleadings and replies or answers; and
b) the hearings before the arbitral tribunal, the deliberations and the preliminary decision, as well as all writings and communications with the arbitral tribunal, shall be confidential.
Article 19-13. Participation of the Third Party.
The non-disputing Party, upon delivery of communications to the responsible national bodies of the disputing Parties, shall have the right to attend all hearings, to make written and oral submissions to the arbitral tribunal and to receive copies of the written submissions of the disputing Parties.
Article 19-14. Preliminary Decision.
1. Unless otherwise agreed by the disputing Parties, within ninety days after the appointment of the last arbitrator, the arbitral tribunal shall submit to the disputing Parties a preliminary decision containing:
a) findings of fact;
b) a determination as to whether the measure in question is inconsistent with the obligations under this Agreement, or is a cause of nullification or impairment within the meaning of the Annex to Article 19-02; and
c) the draft of the operative part.
2. The disputing Parties may submit written comments to the arbitral tribunal on the preliminary decision within fourteen days of its submission.
3. Inthe case referred to in paragraph 2, after examining the written observations, the arbitral tribunal may, on its own motion or at the request of a disputing Party:
a) to carry out any due diligence it deems appropriate;
b) request the comments of any disputing Party or of any Party that has provided the communication referred to in Article 19-13; and
c) reconsider its preliminary decision.
Article 19-15. Final Decision.
1. The arbitral tribunal shall submit to the Commission a final decision and, if applicable, the saved votes on the issues on which there has not been a unanimous decision, within thirty days from the submission of the preliminary decision.
2. Neither the preliminary decision nor the final decision shall disclose the identity of the arbitrators who voted with the majority or the minority.
3. The final decision of the arbitration tribunal shall be made known fifteen days after its communication to the Commission.
Article 19-16. Compliance with the Final Decision.
1. The final decision of the arbitral tribunal shall be binding on the disputing Parties under the terms and within the time limits ordered by the tribunal.
2. Where the final decision of the arbitral tribunal declares that the measure is incompatible with this Agreement, the Party complained against shall, whenever possible, refrain from implementing the measure or repeal it.
Where the decision of the arbitral tribunal finds that the measure is grounds for nullification and impairment within the meaning of the Annex to Article 19-02, it shall determine the level of nullification or impairment and may suggest adjustments mutually satisfactory to the disputing Parties.
Article 19-17. Suspension of Benefits.
1. The complaining Party may suspend the application of benefits of equivalent effect to the Party complained against if the arbitral tribunal rules:
a) that a measure is inconsistent with the obligations of this Agreement and the Party complained against fails to comply with the final determination within the period of time fixed by the arbitral tribunal; or
b) that a measure is a cause for annulment or impairment within the meaning of the Annex to Article 19-02 and the disputing Parties fail to reach a mutually satisfactory settlement of the dispute within the period of time fixed by the arbitral tribunal.
2. The suspension of benefits shall last until the Party complained against complies with the final decision of the arbitral tribunal or until the disputing Parties reach a mutually satisfactory settlement of the dispute, as the case may be.
3. In considering the benefits to be suspended pursuant to paragraph 1:
a) the complaining Party shall first seek to suspend benefits within the same sector or sectors that are affected by the measure, or by another matter that the arbitral tribunal has found to be inconsistent with the obligations under this Agreement, or that has been the cause of nullification or impairment within the meaning of the Annex to Article 19-02; and
b) the complaining Party that considers that it is not feasible or effective to suspend benefits in the same sector or sectors, may suspend benefits in other sectors.
4. At the written request of any disputing Party, communicated to the responsible national bodies of the other Parties, the Commission shall establish an arbitral tribunal to determine whether the level of benefits that a complaining Party has suspended pursuant to paragraph 1 is manifestly excessive. To the extent possible, the arbitral tribunal shall be composed of the same members as the tribunal that rendered the final decision referred to in Article 19-15.
5. The arbitral tribunal constituted for the purposes of paragraph 4 shall render its final decision within sixty days after the appointment of the last arbitrator, or within such other period of time as the Parties may agree.
Article 19-18. Interpretation by the Commission.
1. The Commission shall endeavor to agree, as soon as possible, on an appropriate interpretation or response when:
(a) a Party considers that a question of interpretation or application of this Agreement arising or arising in a judicial or administrative proceeding of another Party warrants interpretation by the Commission; or
(b) a Party receives a request for an opinion on a question of interpretation or application of this Agreement from a court or administrative body of a Party.
2. The Party in whose territory the court or administrative body is located shall submit to the latter any interpretation agreed upon by the Commission, in accordance with the procedures of that forum.
3. When the Commission is unable to reach an agreement, any Party may submit its own opinion to the court or administrative body, in accordance with the procedures of that forum.
Article 19-19. Alternative Means of Dispute Resolution.
1. To the extent possible, each Party shall promote and facilitate recourse to arbitration and other alternative means of settling international commercial disputes between private parties.
2. To this end, each Party shall provide for appropriate procedures to ensure the enforcement of arbitration agreements and the recognition and enforcement of arbitral awards rendered in such disputes. Such procedures shall take into consideration the provisions of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the 1975 Inter-American Convention on International Commercial Arbitration.
3. The Commission may establish an Advisory Committee on Private Commercial Disputes composed of persons having expertise or experience in the resolution of private international commercial disputes. The Committee shall submit reports and recommendations to the Commission on general questions referred to it by the Commission concerning the existence, use and effectiveness of arbitration and other procedures for the settlement of such disputes.
Annex to Article 19-02. Nullification and impairment
1. The Parties may have recourse to the dispute settlement mechanism of this Chapter when, by virtue of the application of a measure that does not contravene the Agreement, they consider that the benefits that they could reasonably have expected to receive from the application of Chapters III to IX are nullified or impaired, except as provided for in respect of automotive investment, Chapter X, Chapter XIV, Chapter XV or Chapter XVI.
2. Paragraph 1 shall apply even if the Party against which an appeal is made invokes a general exception provided for in Article 22-01, except in the case of a general exception applicable to cross- border trade in services.