1. This Chapter is based on the principles of cooperation, common values and interests, considering the differences in the level of development, as appropriate.
2. The Parties recognise that the various sectors of Islamic Economy include but are not limited to:
(a) raw materials;
(b) food and beverages;
(c) pharmaceuticals and nutraceuticals;
(d) cosmetics and personal care;
(e) modest fashion;
(f) tourism;
(g) media and recreation;
(h) logistics services; and
(i) Islamic finance.
3. The Parties recognise that all sectors of the Islamic Economy are interdependent and mutually reinforcing the industry's growth, promotion, and development. Both Parties recognise that promoting the development of the Islamic Economy can be an engine for sustainable economic growth and diversification.
4. The Parties shall strive to facilitate and promote investment, financing, trade-in, and dissemination of, goods and services that contribute to the development of the Islamic Economy.
5. The Parties shall endeavour to expand bilateral trade volumes, knowledge transfer, and investment of the Islamic Economy to achieve desired outcomes and fully tap the market potential of the Islamic Economy.
6. The Parties underline the importance of promoting inclusive economic growth through supporting the contribution of micro, small, and medium-sized enterprisesin the Islamic Economy.
7. The Parties agree that sectors related to Islamic Economy must be provided with capacitybuilding programs to support Islamic Economy development.
8. The Parties emphasise the importance of information, innovation, education, training, research, empowerment programs and digitalisation in multiple sectors of the Islamic Economy at all levels to contribute to Islamic Economy development.
9. The Parties agree to exchange views and cooperate in this area, either bilaterally, regionally or multilaterally.
10. Except as otherwise provided, this Chapter applies to various aspects of the Islamic Economy in all its multi-dimensions.
Article 15.3: Rights and Obligations
Each Party reserves the right to supervise its Islamic Economic sectors in accordance with its laws and regulations, and its national interests, consistent with the rights and obligations of both Parties under this Agreement.
Article 15.4: Cooperation on Mutual Recognition of Halal Certification
1. Subject to the Parties’ laws, regulations and national policies, the Parties recognise the importance of cooperation on mutual recognition of halal certification through the following means:
(a) strengthening and promoting the cooperation on shariah and technical procedures in halal certification between the Parties; and
(b) facilitating movement of local products from both countries through mutual recognition of halal certification of local products exported between the two countries.
2. The above means will be achieved through a memorandum of cooperation between the Parties.
Article 15.5: Cooperation in Halal Goods and Services
1. The Parties recognise the importance of developing sectors relating to halal goods and services in a manner consistent with Article 15.2.
2. Subject to laws and regulations enforced in the respective countries, the Parties shall cooperate to –
(a) promote and provide necessary support for economic cooperation between enterprises of halal products and Muslim-friendly services that operate in both Parties’ territories, in accordance with their respective laws and regulations;
(b) facilitate and promote cross-border investment between both Parties that contribute to the development of sectors related to halal products and Muslim-friendly services that include but are not limited to halal industrial parks or estates, halal ports, special economic zones for Muslim-friendly tourism and other supporting infrastructures for the halal industry;
(c) develop and implement the effective and integrated value chain of halal goods and Muslim-friendly services between both Parties’ territories;
(d) establish international halal hubs in regions of each Party to expand economic cooperation on the Islamic Economy with other Organisation of Islamic Cooperation member States;
(e) develop and promote a halal assurance system on a halal industrial estate for securing domestic needs and reaching the export potential market of both Parties; and
(f) develop guiding principles, technical guidance or best practices to advance halal products and Muslim-friendly services sectors.
Article 15.6: Islamic Finance
The Parties recognise the importance of developing sectors of Islamic finance, where they shall endeavour to –
(a) promote and facilitate the utilisation of Islamic finance for cross-border investments and activities within the Islamic Economy sectors;
(b) provide ease of doing business to Islamic financial institutions and related professional service providers, including facilitating license to operate and business process support, in compliance with the Parties’ laws and regulations; encourage integration of sustainable practices with Islamic finance and effective utilisation of Islamic social finance instruments such as zakat and waqf;
(c) promote greater cooperation between both Parties to foster greater harmonisation of practices especially for cross-border investments and activities;
(d) enhance the Parties’ global thought leadership and innovation in Islamic finance through collaboration in research and development, capacity building, knowledge sharing, events, publications, and any other manner deemed essential by the Parties; and
(e) examine other areas for mutual collaboration and cooperation as may be identified or agreed to by the Parties from time to time.
Article 15.7: Micro, Small and Medium Enterprises
The Parties recognise the importance of developing SMEs operating in sectors of the Islamic Economy, in accordance with the promotion of inclusive growth, where they agree to cooperate to:
(a) provide effective literacy and empowerment programs to strengthen and upscale SMEs of the Islamic Economy; and
(b) integrate SMEs into the global value chain of sectors of Islamic Economy between both Parties’ territories.
Article 15.8: Digital Islamic Economy
1. The Parties recognise the importance of digitalisation of Islamic Economy.
2. The Parties agree to cooperate in relation to expanding all aspects of the digital Islamic Economy between both Parties that include but are not limited to the centre of Islamic economy, integrated information system or digitalised value chain for halal traceability, digital Islamic Economy ecosystem, incubator facilities and Shariah-compliant venture capital for digital startups in Islamic Economy.
Article 15.9: Cooperation in Research, Innovation and Human Resources
1. The Parties agree to strengthen their cooperation on jointly enhancing human resource capabilities and collaborating on research and innovation to achieve a global competitive edge in sectors of the Islamic Economy.
2. For paragraph 1, the Parties agree to cooperate in initiatives that include but are not limited to, formulating competency standards for human resources in the Islamic Economy, cooperation of halal incubation centres for empowering micro and small enterprises and collaboration on halal research and development centres and universities for producing breakthrough innovation related to sectors of Islamic Economy.
Article 15.10: Cooperation in International Fora
The Parties agree to strengthen their cooperation on issues of mutual interest to jointly promote the Islamic Economy, including trade and investment-related aspects, standards development and best practices in relevant bilateral, regional and multilateral fora.
Article 15.11: Transparency and Exchange of Information in Islamic Economy
1. Each Party shall disclose its regulations and procedures for trade in products, services and processes under the Islamic Economy. Each Party shall endeavour to provide and update the information electronically and in English. Any additions, amendments or exclusions shall be communicated by each Party.
2. The Parties shall exchange information on promoting and disseminating halal and Islamic certification or accreditation, conformity assessment, conformity scheme, permissible commercial information related to the Islamic Economy, and other related areas of mutual interest to respective government bodies, government-owned and private business entities.
3. A Party may request another Party to provide permissible information on any matter arising under this Chapter. A Party receiving a request under this paragraph shall provide that information within a reasonable period no later than 60 days, and if possible, by electronic means addressed to the contact point as stated in Article 15.14.
4. For greater certainty, a Party may request technical discussions with the other Party regarding technical regulations and equivalency procedures, which may significantly affect trade.
5. The relevant Parties shall discuss the matter raised within 60 days of the date of the request. If a requesting Party considers the matter urgent, it may request that any discussions occur within a shorter time frame. The Parties shall attempt to obtain a satisfactory resolution of the matter as expeditiously as possible, recognising that the time required to resolve a matter will depend on various factors and that it may not be possible to resolve every matter through technical discussions.
Article 15.12: Islamic Economy Cooperation Committee
The Parties shall establish an Islamic Economy Cooperation Committee to further the trade of goods and services and the investment in the Islamic economy sector. At the discretion of the Islamic Economy Cooperation Committee, sub-committees and working groups may be formed on a long-term or temporary basis as needed. This Islamic Economy Cooperation Committee should meet once a year or at closer intervals as needed.
Article 15.13: Review
The Parties shall periodically review, in the Islamic Economy Cooperation Committee, the progress achieved in pursuing the implementation of all the provisions and outcomes of this Chapter and consider relevant international developments to identify areas where further action could promote these objectives.
Article 15.14: Contact Points
1. Within 60 days of the date of entry into force of this Agreement, each Party shall designate a contact point for matters arising under this Chapter.
2. A Party shall promptly notify the other Parties of any change of its contact point or the details of the relevant officials.
3. The responsibilities of each contact point shall include—
(a) communicating with the other Parties’ contact points, including facilitating discussions, requests and the timely exchange of information on matters arising under this Chapter;
(b) communicating with and coordinating the involvement of relevant government agencies, including regulatory authorities, in its territory on relevant matters pertaining to this Chapter;
(c) consulting and if appropriate, coordinating with interested persons in its territory on relevant matters pertaining to this Chapter; and
(d) carrying out any additional responsibilities specified by the Islamic Economy Cooperation Committee in this Chapter.
Article 15.15: Non-Application of Dispute Settlement
No Party shall have recourse to dispute settlement under Chapter 16 (Dispute Settlement) for any matter arising under this Chapter.
Chapter 16. DISPUTE SETTLEMENT
Article 16.1. Definitions
For the purposes of this Chapter, the following definitions shall apply unless the context otherwise requires:
(a) Complaining Party means a Party that requests the establishment of a panel under Article 16.8;
(b) Parties means collectively the Complaining Party and the Responding Party;
(c) Party means individually the Complaining Party or the Responding Party to the dispute; and
(d) Responding Party means a Party that receives the request for the establishment of a panel under Article 16.8.
Article 16.2: Objective
The objective of this Chapter is to establish an effective, efficient and transparent mechanism for settling disputes between the Parties concerning the interpretation and application of this Agreement with a view to reaching, where possible, a mutually agreed solution.
Article 16.3: Cooperation
The Parties shall endeavour to agree on the interpretation and application of this Agreement and shall make every attempt through cooperation to arrive at a mutually satisfactory resolution of any matter that might affect the operation of this Agreement.
Article 16.4: Scope
1. Except as provided in paragraphs 2 and 3, this Chapter shall apply with respect to the settlement of any dispute between the Parties concerning the interpretation or application of this Agreement (hereinafter referred to as “covered provisions”), wherever a Party considers that:
(a) a measure of the other Party is inconsistent with its obligations under this Agreement; or
(b) the other Party otherwise failed to carry out its obligations under this Agreement.
2. This Chapter shall not cover non-violation complaints and other situation complaints.
3. The Parties agree that neither Party shall have recourse to dispute settlement under this Chapter for any matter arising under the following Chapters of this Agreement:
(a) Trade Remedies, except section A (Bilateral Safeguard Measures);
(b) Sanitary and Phytosanitary Measures;
(c) Investment Facilitation;
(d) Government Procurement;
(e) Small and Medium-Sized Enterprises;
(f) Economic Cooperation; and
(g) Islamic Economy.
Article 16.5: Contact Points
1. Each Party shall designate a contact point to facilitate communications between the Parties with respect to any dispute initiated under this Chapter.
2. Any request, notification, written submission or other document made in accordance with this Chapter shall be delivered to the other Party through its designated contact point.
Article 16.6 : Consultations
1. The Parties shall endeavour to resolve any dispute referred to in Article 16.4 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 identifying the reasons for the request, including the measure at issue and a description of its factual basis and the legal basis specifying the covered provisions that it considers applicable.
3. The Party to which the request for consultations is made shall reply to the request promptly, but no later than 10 days after the date of receipt of the request. Consultations shall be held within 60 days after the date of receipt of the request. The consultations shall be deemed to be concluded within 60 days of the date of receipt of the request, unless the Parties agree otherwise.
4. Notwithstanding paragraph 3, consultations on matters of urgency including those which concern perishable goods or where appropriate, seasonal goods or seasonal services, shall be held within 10 days after the date of receipt of the request. The consultations shall be deemed to be concluded within 20 days of the date of receipt of the request unless the Parties agree otherwise.
5. During consultations, each Party shall provide sufficient information so as to allow a complete examination of the measure at issue including how that measure is affecting the operation and application of this Agreement.
6. Consultations, including 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.
7. Consultations may be held in person or by any other means of communication agreed by the Parties. Unless the Parties agree otherwise, consultations, if held in person, shall take place in the territory of the Party to which the request is made.
8. If the Party to which the request is made does not respond to the request for consultations within 10 days of the date of its receipt, or if consultations are not held within the timeframes laid down in paragraph 3 or in paragraph 4 respectively, or if the Parties agree not to have consultations, or if consultations have been concluded and no mutually agreed solution has been reached, the Party that sought consultations may have recourse to Article 16.8.
Article 16.7: Good Offices, Conciliation or Mediation
1. The Parties may at any time agree to enter into good offices, conciliation or mediation. They may begin at any time and be terminated by either Party at any time.
2. Proceedings involving good offices, conciliation or mediation and the particular positions taken by the Parties in these proceedings, shall be confidential and without prejudice to the rights of either Party in any further proceedings under this Chapter or any other proceedings before a forum selected by the Parties.
3. If the Parties agree, procedures for good offices, conciliation or mediation may continue while the panel procedures proceed.
Article 16.8: Establishment of a Panel
1. The Complaining Party may request the establishment of a panel if:
(a) the Responding Party does not reply to the request for consultations in accordance to the time frames referred in Article 16.6 ; or
(b) the consultations referred to in Article 16.6 are not held or fail to settle a dispute within 30 days or 20 days in relation to matter of urgency including those which concern perishable goods after the date of the receipt of the request for consultations by the Responding Party.
2. The request for the establishment of a panel shall be made by means of a written request delivered to the Responding Party and shall identify the measure at issue and indicate the factual basis of the complaint and the legal basis specifying the relevant covered provisions in a manner sufficient to present how such measure is inconsistent with those provisions.
3. When a request is made by the Complaining Party in accordance with paragraph 1, a panel shall be established.
Article 16.9: Composition of a Panel
1. Unless the Parties agree otherwise, a panel shall consist of three panellists.
2. Within 30 days after the request for the establishment of a panel is made in accordance with Article 16.8.2, each Party shall appoint a panellist and notify to the other Party of its appointment. The Parties shall, by common agreement, appoint the third panellist, who shall serve as the chairperson of the panel, within 45 days after the establishment of a panel in accordance with Article 16.8.3.
3. If Party fails to appoint a panellist within the period established in paragraph 2, the other Party, within a period of 20 days, may request the Director-General of the WTO to appoint the unappointed panellists within 20 days of that request.
4. If the Director-General of the WTO notifies the Parties to the dispute that he or she is unavailable or does not appoint the unappointed panellist within 20 days of the date of the request made pursuant to paragraph 3, any Party to the dispute may request the SecretaryGeneral of the Permanent Court of Arbitration to appoint the unappointed panellist within 20 days of that request.
5. If the Parties do not agree on the chairperson of the panel within the time period established in paragraph 2, they shall within the next 10 days, exchange their respective lists comprising three nominees each who shall not be nationals of either Party. The chairperson shall then be appointed by random selection from the lists within 10 days after the expiry of the time period during which the Parties shall exchange their respective lists of nominees. The random selection of the chairperson of the panel shall be made by the two appointed panellists with the presence of representatives of both Parties.
6. If a Party fails to submit its list of three nominees within the time period established in paragraph 5, the chairperson shall be appointed by random selection from the list submitted by the other Party.
7. The date of composition of the panel shall be the date on which the last of the three selected panellists has notified to the Parties the acceptance of his or her appointment.
Article 16.10: Decision on Urgency
If a Party so requests, the panel shall give a preliminary ruling, within 15 days of its composition, whether the dispute concerns matters of urgency.
Article 16.11: Requirements for Panellists
1. Each panellist including the chairperson shall:
(a) have demonstrated expertise in law, international trade and other matters covered by this Agreement;
(b) be independent of and not be affiliated with or take instructions from, either Party;
(c) serve in their individual capacities and not take instructions from any organisation or government with regard to matters related to the dispute;
(d) comply with the Code of Conduct established in Annex 16B (Code of Conduct for Panellists and Others Engaged in Dispute Settlement Proceedings under this Agreement);
(e) be chosen strictly on the basis of objectivity, reliability and sound judgment; and
(f) be a national of states having diplomatic relations with both Parties to the dispute.
2. The chairperson shall also have experience in dispute settlement procedures.
3. Persons who provided good offices, conciliation or mediation to the Parties, pursuant to Article 16.7 in relation to the same or a substantially equivalent matter, shall not be eligible to be appointed as panellists in that matter.
Article 16.12: Replacement of Panellists
If any of the panellists of the original panel becomes unable to act, withdraws or needs to be replaced because that panellist does not comply with the requirements of the code of conduct, a successor panellist shall be appointed in the same manner as prescribed for the appointment of the original panellist under Article 16.9 and the work of the panel shall be suspended during the appointment of the successor panellist.
Article 16.13: Functions of the Panel
Unless the Parties otherwise agree, the panel –
(a) shall make an objective assessment of the matter before it, including an objective assessment of:
(i) the facts of the case;
(ii) the applicability of the provisions of this Agreement cited by the Parties to the dispute; and
(iii) whether:
(A) the measure at issue is not in conformity with the obligations under this Agreement; or
(B) the Responding Party has otherwise failed to carry out its obligations under this Agreement.