(b) shall set out, in its decisions and reports, the rationale behind any findings and conclusions that it makes; and
(c) should consult regularly with the Parties and provide adequate opportunities for the development of a mutually satisfactory solution.
Article 16.14: Terms of Reference
1. Unless the Parties otherwise agree within 15 days after the date of establishment of the panel, the terms of reference of the panel shall be:
“to examine, in the light of the relevant covered provisions of this Agreement cited by the Parties, the matter referred to in the request for the establishment of the panel, to make findings of law and fact and determinations on the conformity of the measure at issue with the relevant covered provisions of this Agreement as well as recommendations, if any, on the means to resolve the dispute, and to deliver a report in accordance with Articles 16 .18 and 16.19”
2. If the Parties agree on other terms of reference than those referred to in paragraph 1 within the timeline specified therein, they shall notify the agreed terms of reference to the panel no later than 5 days after their agreement.
Article 16.15: Rules of Interpretation
1. The panel shall interpret the covered provisions in accordance with customary rules of interpretation of public international law.
2. When appropriate, the panel may also take into account relevant interpretations in reports of panels established under this Agreement and reports of panels and the Appellate Body adopted by the Dispute Settlement Body of the WTO.
3. The rulings of the panel cannot add to or diminish the rights and obligations of the Parties provided under this Agreement.
Article 16.16: Procedures of the Panel
1. Unless the Parties otherwise agree, the panel shall follow the model Rules of Procedure set out in Annex 16A (Rules of Procedure for the Panel).
2. Any time period or other rules and procedures for panels provided for in this Chapter may be modified by mutual consent of the Parties to the dispute. The Parties to the dispute may also agree at any time not to apply any provision of this Chapter.
3. There shall be no ex parte communications with the panel concerning matters under its consideration.
4. The deliberations of the panel and the documents submitted to it shall be kept confidential.
5. A Party asserting that a measure of the other Party is inconsistent with the provisions of this Agreement shall have the burden of establishing such inconsistency. A Party asserting that a measure is subject to an exception under this Agreement shall have the burden of establishing that the exception applies.
6. The panel should consult with the Parties as appropriate and provide adequate opportunities for the development of a mutually agreed solution.
7. The panel shall take its decisions, including its reports by consensus, but if consensus is not possible then by majority vote. Any panellist may furnish dissenting and separate opinions on matters not unanimously agreed and such opinions shall not be disclosed.
8. Decisions of the panel shall be binding on the Parties.
Article 16.17: Receipt of Information
1. Upon the request of a Party, or on its own initiative, the panel may seek from the Parties relevant information it considers necessary and appropriate. The Parties shall respond promptly and fully to any request by the panel for information.
2. Upon the request of a Party or on its own initiative, the panel may seek from any source any information it considers appropriate.
3. On request of a Party or on its own initiative, the panel may seek technical advice or expert opinion from any individual or body that it deems appropriate, and subject to any terms and conditions as the Parties agree.
4. Any information, advice or opinion obtained by the panel under this Article shall be made available to the Parties and the Parties may provide comments on that information.
Article 16.18: Interim Report
1. The panel shall deliver an interim report to the Parties within 90 days after the date of composition of the panel. When the panel considers that this deadline cannot be met, the chairperson of the panel shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its interim report. Under no circumstances shall the delay exceed 30 days after the deadline. The interim report shall not be made public.
2. The interim report shall set out a descriptive part and the panel’s findings and conclusions.
3. Each Party may submit to the panel written comments and a written request to review precise aspects of the interim report within 15 days of the date of issuance of the interim report. A Party may comment on the others Party’s request within 7 days of the delivery of the request.
4. After considering any written comments and requests by each Party on the interim report, the panel may modify the interim report and make any further examination it considers appropriate.
Article 16.19: Final Report
1. The panel shall deliver its final report to the Parties within 150 days of the date of composition of the panel. When the panel considers that this deadline cannot be met, the chairperson of the panel shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to deliver its final report. Under no circumstances shall the delay exceed 30 days after the deadline.
2. The final report shall include a discussion of any written comments and requests made by the Parties on the interim report. The panel may, in its final report, suggest ways in which the final report could be implemented.
3. The final report shall be made public within 15 days of its delivery to the Parties unless the Parties otherwise agree to publish the final report only in parts or not to publish the final report.
Article 16.20: Implementation of the Final Report
1. Where the panel finds that the Responding Party has acted inconsistently with a covered provision pursuant to Article 16.4, the Responding Party shall take any measure necessary to comply promptly and in good faith with the Panel ruling.
2. If it is impossible to comply immediately, the Responding Party shall, no later than 30 days after the delivery of the final report, notify the Complaining Party of the reasonable period of time necessary for compliance with the final report and the Parties shall endeavour to agree on the reasonable period of time required for compliance with the final report.
Article 16.21: Reasonable Period of Time for Compliance
1. If the Parties have not agreed on the length of the reasonable period of time, the Complaining Party shall, no later than 20 days after the date of receipt of the notification made by Responding Party in accordance with Article 16.20.2, request in writing the original panel to determine the length of the reasonable period of time. Such request shall be notified to the Responding Party. The 20-day period referred to in this paragraph may be extended by mutual agreement of the Parties.
2. The original panel shall deliver its decision to the Parties within 20 days from the relevant request.
3. The length of the reasonable period of time for compliance with the final report may be extended by mutual agreement of the Parties.
Article 16.22: Compliance Review
1. The Responding Party shall deliver a written notification of its progress in complying with the final report to the Complaining Party at least one month before the expiry of the reasonable period of time for compliance with the final report unless the Parties agree otherwise.
2. The Responding Party shall, no later than at the date of expiry of the reasonable period of time, deliver a notification to the Complaining Party of any measure that it has taken to comply with the final report along with a description on how the measure ensures compliance sufficient to allow the Complaining Party to assess the measure before the expiry of the reasonable period of time.
3. Where the Parties disagree on the existence of measures to comply with the final report, or their consistency with the covered provisions, the Complaining Party may request in writing the original panel to decide on the matter before compensation can be sought or suspension of benefits can be applied in accordance with Article 16.23.1(c). Such request shall be notified to the Responding Party.
4. The request shall provide the factual and legal basis for the complaint, including the identification of the specific measures at issue and an indication of why any measures taken by the Responding Party fail to comply with the final report or are otherwise inconsistent with the covered provisions.
5. The panel shall deliver its decision to the Parties within 60 days of the date of submission of the request.
Article 16.23: Temporary Remedies in Case of Non-Compliance
1. If the Responding Party:
(a) fails to notify any measure taken to comply with the final report before the expiry of the reasonable period of time; or
(b) notifies the Complaining Party in writing that it is not possible to comply with the final report within the reasonable period of time; or
(c) the original panel finds that no measure taken to comply exists or that the measure taken to comply with the final report as notified by the Responding Party is inconsistent with the covered provisions;
The Responding Party shall, on request of the Complaining Party, enter into consultations with a view to agreeing on mutually satisfactory compensation or any alternative arrangement.
2. If the Parties fail to reach a mutually satisfactory compensation or any alternative arrangement within 20 days after the date of receipt of the request made in accordance with paragraph 1, the Complaining Party may deliver a written notification to the Responding Party that it intends to suspend the application of concessions or other obligations under this Agreement. The notification shall specify the level of the intended suspension of concessions or other obligations and indicate the relevant sector or sectors in which the Complaining Party proposes to suspend such concessions or other obligations.
3. The Complaining Party may begin the suspension of concessions or other obligations referred to in the paragraph 2, 30 days after the date when it served notice on the Responding Party, unless the Responding Party made a request under paragraph 7.
4. The suspension of concessions or other obligations:
(a) shall be at a level equivalent to the nullification or impairment that is caused by the failure of the Responding Party to comply with the final report; and
(b) shall be restricted to benefits accruing to the Responding Party under this Agreement.
5. In considering what concessions or other obligations to suspend in accordance with paragraph 2, the Complaining Party shall apply the following principles:
(a) the Complaining Party should first seek to suspend the concessions or other obligations in the same sector or sectors as that affected by the measure that the panel has found to be inconsistent with this Agreement; and
(b) the Complaining Party may suspend concessions or other obligations in other sectors, if it considers that it is not practicable or effective to suspend concessions or other obligations in the same sector(s). The communication in which it notifies such a decision shall indicate the reasons on which it is based.
6. The suspension of concessions or other obligations or the mutually satisfactory agreement foreseen in the paragraph 1 shall be temporary and shall only apply until the inconsistency of the measure with the relevant covered provisions has been removed, or until the Parties have reached a mutually agreed solution pursuant to Article 16.28.
7. If the Responding Party considers that the suspension of concessions or other obligations does not comply with paragraphs 4 and 5, that Party may request in writing the original panel to examine the matter no later than 15 days after the date of receipt of the notification referred to in paragraph 2. That request shall be notified simultaneously to the Complaining Party. The original panel shall notify to the Parties its decision on the matter no later than 45 days of the receipt of the request from Responding Party, or if the original panel cannot be established with its original members, from the date on which the last panellist of the newly established panel is appointed pursuant to Article 16.9. Concessions or other obligations shall not be suspended until the panel has delivered its decision pursuant to this paragraph. The suspension of concessions or other obligations shall be consistent with this decision.
Article 16.24: Review of any Measure Taken to Comply After the Adoption of Temporary Remedies
1. Upon the notification by the Responding Party to the Complaining Party of the measure taken to comply with the final report panel decision:
(a) in a situation where the right to suspend concessions or other obligations has been exercised by the Complaining Party in accordance with Article 16.23, the Complaining Party shall terminate the suspension of concessions or other obligations no later than 30 days after the date of receipt of the notification, with the exception of the cases referred to in paragraph 2; or
(b) in a situation where necessary compensation has been agreed, the Responding Party may terminate the application of such compensation no later than 30 days after the date of receipt of the notification, with the exception of the cases referred to in paragraph 2.
2. If the Parties do not reach an agreement on whether the measure notified in accordance with paragraph 1 is consistent with the relevant covered provisions within 30 days after the date of receipt of the notification, the Complaining Party shall request in writing the original panel to examine the matter. That request shall be notified to the Responding Party. The decision of the panel shall be notified to the Parties no later than 30 days after the date of submission of the request. If the panel decides that the measure notified in accordance with paragraph 1 is consistent with the covered provisions, the suspension of concessions or other obligations, or the application of the compensation, as the case may be, shall be terminated no later than 15 days after the date of the decision. If the panel determines that the notified measure achieves only partial compliance with the covered provisions, the level of suspension of benefits or other obligations, or of the compensation, shall be adapted in light of the decision of the panel.
Article 16.25: Suspension and Termination of Proceedings
If both Parties so request in writing, the panel shall suspend for a period agreed by the Parties and not exceeding 12 consecutive months from such request. In the event of a suspension of the work of the panel, the relevant time periods under this Chapter shall be extended by the same period of time for which the work of the panel was suspended. The panel shall resume its work before the end of the suspension period at the written request of both Parties. If the work of the panel has been suspended for more than 12 consecutive months, the authority of the panel shall lapse and the dispute settlement procedure shall be terminated unless the Parties agree otherwise.
Article 16.26: Choice of Forum
1. Unless otherwise provided in this Article, this Chapter is without prejudice to the rights of the Parties to have recourse to dispute settlement procedures available under other international trade agreements to which they are both Parties.
2. If a dispute with regard to a particular measure arises under this Agreement and under another international trade agreement to which both Parties are party, including the WTO Agreement, the Complaining Party may select the forum in which to settle the dispute.
3. Once the Complaining Party has selected the forum and initiated dispute settlement proceedings under this Chapter or under the other international agreement with respect to the particular measure referred to in paragraph 2, the selected forum shall be used to the exclusion of other fora.
4. For the purpose of paragraph 3:
(a) dispute settlement proceedings under this Chapter are deemed to be initiated when a Party requests the establishment of a panel in accordance with Article 16.8;
(b) dispute settlement proceedings under the WTO Agreement are deemed to be initiated when a Party requests the establishment of a panel in accordance with Article 6 of the DSU; and
(c) dispute settlement proceedings under any other agreement are deemed to be initiated in accordance with the relevant provisions of that agreement.
Article 16.27: Costs
1. Unless the Parties otherwise agree, the costs of the chairperson of the panel and other expenses associated with the conduct of its proceedings shall be borne in equal parts by the Parties.
2. Each Party shall bear its appointed panellist and its own expenses and legal costs in the panel proceedings.
Article 16.28: Mutually Agreed Solution
1. The Parties may reach a mutually agreed solution at any time with respect to any dispute referred to in Article 16.3.
2. If a mutually agreed solution is reached during the panel procedure, the Parties shall jointly notify that solution to the chairperson of the panel. Upon such notification, the panel shall be terminated.
3. Each Party shall take measures necessary to implement the mutually agreed solution within the agreed time period.
4. No later than at the expiry of the agreed time period, the implementing Party shall inform the other Party, in writing, of any measure that it has taken to implement the mutually agreed solution.
Article 16.29: Time Periods
1. All time periods laid down in this Chapter shall be counted in calendar days from the day following the act or fact to which they refer, unless otherwise specified in this Chapter.
2. Any time period referred to in this Chapter may be modified by mutual agreement of the Parties.
3. All time periods laid down in this Chapter for cases of urgency shall be cut by half except as otherwise provided in this Chapter.
Article 16.30: Annexes
The Joint Committee may modify the Annexes 16A (Rules of Procedure for the Panel) and 16B (Code of Conduct for Panellists and Others Engaged in Dispute Settlement Proceedings under this Agreement).
ANNEX 16A. RULES OF PROCEDURE FOR THE PANEL
Timetable
1. After consulting the Parties, the panel shall, whenever possible within 10 days of the appointment of the final panellist, fix the timetable for the panel process.
2. The panel process shall, as a general rule, not exceed 150 days from the date of composition of the panel until the date of the final report, unless the Parties otherwise agree.
3. Should the panel consider there is a need to modify the timetable, it shall inform the Parties in writing of the proposed modification and the reason for it. In cases of urgency in accordance with Article 16.10, the panel, after consulting the Parties, shall adjust the timetable as appropriate and shall notify the Parties of such adjustment.
Written Submissions and other Documents
4. Unless the panel otherwise decides, the Complaining Party shall deliver its first written submission to the panel no later than 20 days after the date of composition of the panel. The Responding Party shall deliver its first written submission to the panel and to the Complaining Party no later than 20 days after the date of delivery of the Complaining Party’s first written submission unless the arbitral panel decides otherwise.
5. A Party shall provide a copy of its written submission to each of the panellists and to the other Party. The copy shall be delivered in electronic format against receipt or if agreed by the Parties, a copy of the documents shall also be provided by registered post, courier or facsimile.
6. Within 20 days of the conclusion of the hearing, each Party may deliver to the panel and the other Party a supplementary written submission responding to any matter that arose during the hearing.
7. The Parties shall transmit all information or written submissions, written versions of oral statements and responses to questions put by the panel to the other Party to the dispute at the same time as it is submitted to the panel.
8. All written documents provided to the panel or by one Party to the other Party shall be delivered in electronic format against receipt or if agreed by the Parties, a copy of the documents shall also be provided by registered post, courier or facsimile.
9. Minor errors of a clerical nature in any request, notice, written submission or other document related to the panel proceeding may be corrected by delivery of a new document clearly indicating the changes.
Operation of the Panel
10. The chairperson of the panel shall preside at all of its meetings and shall fix the date and time of the hearing in consultation with the Parties and other members of the panel. The panel may delegate to the chairperson the authority to make administrative and procedural decisions.
11. Panel deliberations shall be confidential. Only panellists may take part in the deliberations of the panel. The reports of panels shall be drafted without the presence of the Parties in the light of the information provided and the statements made.
12. Opinions expressed in the panel report by individual panellists shall be anonymous.
Hearings
13. The Parties shall be given the opportunity to attend hearings and meetings of the panel.
14. The panel shall provide for at least one hearing for the Parties to present their cases to the panel.
15. Unless the Party disagrees the Panel may decide to convene additional hearings or not to convene a hearing at all.
16. All panellists shall be present at hearings. Panel hearings shall be held in closed session with only the panellists and the Parties in attendance. However, in consultation with the Parties, assistants, translators or designated note takers may also be present at hearings to assist the panel in its work. Any such arrangements established by the panel may be modified with the agreement of the Parties.
17. The hearing shall be conducted by the panel in a manner ensuring that the Complaining Party and the Responding Party are afforded equal time to present their case. The panel shall, as a general rule, conduct the hearing in the following manner:
(a) argument of the Complaining Party;
(b) argument of the Responding Party;
(c) the reply of the Complaining Party;
(d) the counter-reply of the Responding Party;
(e) closing statement of the Complaining Party; and
(f) closing statement of the Responding Party.
18. The chairperson may set time limits for oral arguments to ensure that each Party is afforded equal time.
Written Questions
19. The panel may direct written questions to either Party at any time during the proceedings. A Party to whom the panel addresses a written question shall deliver a written reply to the panel and the other Party in accordance with the timetable established by the panel.
20. Each Party shall be given the opportunity to provide written comments on the response of the other Party within the timetable established by the panel.
Confidentiality
21. The panel’s hearings and the documents submitted to it shall be confidential. Each Party shall treat as confidential information submitted to the panel by the other Party which that Party has designated as confidential.
22. Where a Party designates its written submissions to the panel as confidential, it shall, on request of the other Party, provide the panel and the other Party with a non-confidential summary of the information contained in its written submissions that could be disclosed to the public no later than 10 days after the date of request. Nothing in these Rules shall prevent a Party from disclosing statements of its own positions to the public.
Working language
23. The working language of the panel proceedings, including for written submissions, oral arguments or presentations, the report of the panel and all written and oral communications between the Parties and with the panel, shall be English.
Venue
24. The venue for the hearings of the panel shall be decided by agreement between the Parties. If there is no agreement, the first hearing shall be held in the territory of the respondent Responding Party complained against, and any additional hearings shall alternate between the territories of the Parties.
Expenses
25. The panel shall keep a record and render a final account of all general expenses incurred in connection with the proceedings, including those paid to its assistants, designated note takers or other individuals that it retains.
Ex Parte Contacts
26. The panel shall not meet or contact a Party in the absence of the other Party.
27. No Party shall contact any panellist in relation to the dispute in the absence of the other Party or other panellists.
28. No panellist shall discuss any aspect of the subject-matter of the proceedings with a Party in the absence of the other Party and other panellists.
ANNEX 16B. CODE OF CONDUCT FOR PANELLISTS AND OTHERS ENGAGED IN DISPUTE SETTLEMENT PROCEEDINGS UNDER THIS AGREEMENT
Definitions
1. For the purposes of this Annex (1):
(a) assistant means a person who, under the terms of appointment of a panellist, conducts research or provides support for the panellist’s works, and under the direction and control of a panellist in assisting with case-specific task;
(b) candidate means a person who is under consideration for selection as a panellist;
(c) panellist means a member of a panel established under Article 16.8;
(d) proceeding means the proceeding of a panel under this Chapter, unless otherwise specified; and
(e) staff means, in respect of a panellist, persons under the direction and control of the panellist, other than assistant.
Responsibilities to the Process
2. Every panellist shall –
(a) avoid impropriety and the appearance of impropriety;
(b) be independent and impartial;
(c) avoid direct and indirect conflicts of interests; and