3. In the case of trade in goods, a Party may adopt or maintain restrictive measures in order to safeguard its external financial position or balance of payments. Those measures shall be in accordance with Article XII of GATT 1994 and the Understanding on the Balance of Payments Provisions of the General Agreement on Tariffs and Trade 1994.
4. In the case of trade in services, a Party may adopt or maintain restrictive measures in order to safeguard its external financial position or balance of payments. Those measures shall be in accordance with Article XII of GATS.
5. A Party shall endeavour not to adopt or maintain measures that take the form of tariff surcharges, quotas, licenses or similar measures. The Party shall explain the rationale for using these restrictive measures when it notifies the other Party of the measures.
6. A Party adopting or maintaining measures referred to in paragraph 1 shall promptly notify them to the other Party.
7. If restrictive measures are adopted or maintained pursuant to Article 20.4 or this Article, the Parties shall promptly hold consultations in the Sub-Committee on Services and Investment unless consultations are held in other international fora to which both Parties are members. The consultations shall assess the balance-of-payments or external financial difficulties that led to the respective measures, taking into account factors such as:
(a) the nature and extent of the difficulties;
(b) the external economic and trading environment; and
(c) alternative corrective measures which may be available.
8. The consultations referred to in paragraph 7 shall address the compliance of any restrictive measures with Article 20.4 or paragraphs 1 and 2 of this Article. The Parties shall accept all relevant findings of statistical or factual nature presented by the International Monetary Fund ("IMF"), where available, and their conclusions shall take into account the assessment by the IMF of the balance-of-payments and the external financial situation of the Party concerned.
Chapter 21. PUBLIC PROCUREMENT
Article 21.1. Definitions
For the purposes of this Chapter:
(a) "commercial goods or services" means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes;
(b) "construction services" means services that have as their objective the realisation by whatever means of civil or building works, based on Division 51 of the United Nations Provisional Central Product Classification (CPC);
(c) "covered procurement" means procurement for governmental purposes:
(i) of a good, a service, or any combination thereof:
(A) as specified for each Party in Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) respectively; and
(B) not procured with a view to commercial sale or resale, or for use in the production or supply of a good or a service for commercial sale or resale;
(ii) by any contractual means, including:
(A) purchase;
(B) lease; and
(C) rental or hire purchase, with or without an option to buy;
(iii) for which the value, as estimated in accordance with Article 21.2, equals or exceeds the relevant threshold specified for each Party in Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico) respectively at the time of publication of a notice in accordance with Article 21.6;
(iv) by a procuring entity; and
(v) that is not otherwise excluded from coverage by Article 21.2.2 or by Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico);
(d) "electronic auction" means an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting in a ranking or re‑ranking of tenders;
(e) "in writing" or "written" means any worded or numbered expression that can be read, reproduced and later communicated and may include electronically transmitted and stored information;
(f) "limited tendering" means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;
(g) "multi-use list" means a list of suppliers that a procuring entity has determined satisfy the conditions for participation in that list, and that the procuring entity intends to use more than once;
(h) "notice of intended procurement" means a notice published by a procuring entity inviting interested suppliers to submit a request for participation, a tender, or both;
(i) "offset" means any condition or undertaking that encourages local development or improves a Party's balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter-trade and similar action or requirement;
(j) "open tendering" means a procurement method whereby all interested suppliers may submit a tender;
(k) "procuring entity" means an entity covered under Sections A, B and C of Annexes 21-A (Covered Procurement of the European Union) and 21-B (Covered Procurement of Mexico);
(l) "qualified supplier" means a supplier that a procuring entity recognises as having satisfied the conditions for participation;
(m) "selective tendering" means a procurement method whereby only qualified suppliers are invited by the procuring entity to submit a tender;
(n) "services" includes construction services, unless otherwise specified;
(o) "standard" means a document approved by a recognised body that provides for common and repeated use, rules, guidelines or characteristics for goods or services, or related processes and production methods, with which compliance is not mandatory and may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a good, service, process or production method;
(p) "supplier" means a person or group of persons that provides or could provide goods or services; and
(q) "technical specification" means a tendering requirement that:
(i) lays down the characteristics of goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or
(ii) addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.
Article 21.2. Scope and Coverage
Application of the Chapter
1. This Chapter applies to any measure regarding covered procurement, whether or not it is conducted exclusively or partially by electronic means.
2. Except as otherwise provided for in Annexes 21-A (Covered Procurement of the European Union) and 21-B (Covered Procurement of Mexico), this Chapter does not apply to:
(a) the acquisition or rental of land, existing buildings or other immovable property, or the rights thereon;
(b) non-contractual agreements or any form of assistance that a Party provides, including cooperative agreements, grants, loans, equity infusions, guarantees and fiscal incentives;
(c) the procurement or acquisition of fiscal agency or depository services, liquidation and management services for regulated financial institutions or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities;
(d) public employment contracts;
(e) procurement conducted:
(i) for the specific purpose of providing international assistance, including development aid;
(ii) under the particular procedure or condition of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project; or
(iii) under the particular procedure or condition of an international organisation, or funded by international grants, loans or other assistance if the applicable procedure or condition would be inconsistent with this Chapter.
3. The commitments of each Party on covered procurement are set out in the Annexes 21-A (Covered Procurement of the European Union) and 21-B (Covered Procurement of Mexico) in accordance with the following structure:
(a) in Section A, the central government entities whose procurement is covered by this Chapter;
(b) in Section B, the sub-central government entities whose procurement is covered by this Chapter including, with regard to Mexico, other entities at sub-central level;
(c) in Section C, all other entities whose procurement is covered by this Chapter;
(d) in Section D, the goods covered by this Chapter;
(e) in Section E, the services, other than construction services, covered by this Chapter;
(f) in Section F, the construction services covered by this Chapter;
(g) in Section G, the public private partnership or works concessions covered by this Chapter;
(h) in Section H, any general notes and derogations; and
(i) in Section I, the media in which the Party publishes its procurement notices, award notices, and other information related to its public procurement system.
4. If the law of a Party allows a covered procurement to be carried out on behalf of the procuring entity by other entities or persons whose procurement is not covered with respect to the goods and services concerned, this Chapter shall also apply.
Valuation
5. In estimating the value of a procurement for the purpose of ascertaining whether it is a covered procurement, a procuring entity shall:
(a) neither divide a procurement into separate procurements nor select or use a particular valuation method for estimating the value of a procurement with the intention of totally or partially excluding it from the application of this Chapter; and
(b) include the estimated maximum total value of the procurement over its entire duration, whether awarded to one or more suppliers, taking into account all forms of remuneration, including:
(i) premiums, fees, commissions and interest; and
(ii) if the procurement provides for the possibility of options, the total value of such options.
6. If an individual requirement for a procurement results in the award of more than one contract or in the award of contracts in separate parts, (hereinafter referred to as "recurring contracts" the calculation of the estimated maximum total value shall be based on:
(a) the value of recurring contracts of the same type of good or service awarded during the preceding 12 months or the procuring entity's preceding fiscal year, adjusted, if possible, to take into account anticipated changes in the quantity or value of the good or service being procured over the following 12 months; or
(b) the estimated value of recurring contracts of the same type of good or service to be awarded during the 12 months following the initial contract award or the procuring entity's fiscal year.
7. In the case of procurement by lease, rental or hire purchase of goods or services, or procurement for which a total price is not specified, the basis for valuation shall be:
(a) in the case of a fixed-term contract:
(i) if the term of the contract is 12 months or less, the total estimated maximum value for its duration; or
(ii) if the term of the contract exceeds 12 months, the total estimated maximum value, including any estimated residual value;
(b) if the contract is for an indefinite period, the estimated monthly instalment multiplied by 48; and
(c) if it is not certain whether the contract is to be a fixed-term contract, subparagraph (b) applies.
Article 21.3. Security and General Exceptions
1. Nothing in this Chapter shall be construed to prevent a Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
2. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on international trade, nothing in this Chapter shall be construed to prevent a Party from imposing or enforcing measures:
(a) necessary to protect public morals, order or safety;
(b) necessary to protect human, animal or plant life or health;
(c) necessary to protect intellectual property; or
(d) relating to goods or services of persons with disabilities, of philanthropic institutions or of prison labour.
Article 21.4. General Principles
Non-Discrimination
1. Notwithstanding the scope of application in Article 21.2, an enterprise of a Party that is legally established through the constitution, acquisition or maintenance of a commercial presence in the territory of the other Party may participate in government procurement of that other Party under the same conditions as the enterprises of that other Party as provided for under the law of that other Party.
2. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and to the suppliers of the other Party offering such goods or services, treatment no less favourable than the treatment the Party, including its procuring entities, accords to its own goods, services and suppliers.
3. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:
(a) treat a locally established supplier less favourably than another locally established supplier on the basis of the degree of foreign affiliation or ownership; or
(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of the other Party.
Use of Electronic Means
4. When conducting covered procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using information technology systems and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available information technology systems and software;
(b) maintain mechanisms that ensure the integrity of requests for participation and tenders, including establishment of the time of receipt and the prevention of inappropriate access; and
(c) use electronic means of information and communication for the publication of notices and tender documentation in procurement procedures and, to the widest extent practicable, for the submission of tenders.
Conduct of Procurement
5. A procuring entity shall conduct covered procurement in a transparent and impartial manner that:
(a) is consistent with this Chapter, using one of the following methods: open tendering, selective tendering or limited tendering;
(b) prevents conflicts of interest and corrupt practices, in accordance with the law of the Party concerned.
Anti-corruption measures
6. Each Party shall ensure that it has appropriate measures in place to prevent corruption in its government procurement. Those measures shall include procedures to render ineligible for participation in the procurements of a Party, either indefinitely or for a stated period of time, suppliers that the judicial authorities of that Party have determined by final decision to have engaged in fraudulent or other illegal actions in relation to government procurement in the territory of that Party. Each Party shall also ensure that they have in place policies and procedures to eliminate to the extent possible or manage any potential conflict of interest on the part of those engaged in or having influence over a procurement.
Rules of Origin
7. A Party shall not apply rules of origin to goods imported or services supplied from the other Party for purposes of government procurement covered by this Chapter that are different from the rules of origin which that Party applies in the normal course of trade to imports or supplies of the same goods or services.
Denial of Benefits
8. A Party may deny the benefits of this Chapter to a service supplier of the other Party, subject to prior notification and consultation, where the Party establishes that the service is being provided by an enterprise that has no substantial business activities in the territory of either Party.
Offsets
9. With regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset.
Measures Not Specific to Procurement
10. Paragraphs 2 and 3 do not apply to:
(a) customs duties and charges of any kind imposed on, or in connection with, importation;
(b) the method of levying such duties and charges; and
(c) other import regulations or formalities and measures affecting trade in services other than measures governing covered procurement.
Article 21.5. Information on the Procurement System
1. Each Party shall:
(a) promptly publish any law, regulation, judicial decision, administrative ruling of general application, standard contract clause mandated by law or regulation and incorporated by reference in notices or tender documentation and procedure regarding covered procurement, and any modifications thereof, in an officially designated electronic or paper medium that is widely disseminated and remains readily accessible to the public; and
(b) provide an explanation thereof to the other Party, on request.
2. Each Party shall list in Section I of Annex 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico), respectively:
(a) the electronic or paper media in which the Party publishes the information described in paragraph 1(a);
(b) the electronic or paper media in which the Party publishes the notices required by Articles 21.6, 21.8.9 and 21.15.2; and
(c) the website address or addresses where the Party publishes:
(i) its procurement statistics referred to in Article 21.15.4; or
(ii) its notices concerning awarded contracts pursuant to Article 21.15.6.
3. Each Party shall promptly notify the Sub-Committee on Public Procurement of any modification to its information listed in Section I of Annexes 21-A (Covered Procurement of the European Union) or 21-B (Covered Procurement of Mexico).
Article 21.6. Notices
Notice of Intended Procurement
1. For each covered procurement, a procuring entity shall publish a notice of intended procurement, except in the circumstances described in Article 21.12.
2. Except as otherwise provided for in this Chapter, each notice of intended procurement shall include:
(a) the name and address of the procuring entity and other information necessary to contact the procuring entity and obtain all relevant documents relating to the procurement, and their cost and terms of payment, if any;
(b) a description of the procurement, including the nature and the quantity of the goods or services to be procured or, where the quantity is not known, the estimated quantity;
(c) for recurring contracts, an estimate, if possible, of the timing of subsequent notices of intended procurement;
(d) a description of any options;
(e) the timeframe for delivery of goods or services or the duration of the contract;
(f) the procurement method that will be used and whether it will involve negotiation or electronic auction;
(g) if applicable, the address and any final date for the submission of requests for participation in the procurement;
(h) the address and the final date for the submission of tenders;
(i) the language or languages in which tenders or requests for participation may be submitted, if they may be submitted in a language other than an official language of the Party of the procuring entity;
(j) a list and brief description of any conditions for participation of suppliers, including any requirements for specific documents or certifications to be provided by suppliers in connection with that participation, unless such requirements are included in tender documentation that is made available to all interested suppliers at the same time as the notice of intended procurement;
(k) if, pursuant to Article 21.8, a procuring entity intends to select a limited number of qualified suppliers to be invited to tender, the criteria that will be used to select them and, if applicable, any limitation on the number of suppliers that will be permitted to tender; and
(l) an indication that the procurement is covered by this Chapter.
Summary Notice
3. For each case of intended procurement, a procuring entity shall publish a summary notice that is readily accessible, at the same time as the publication of the notice of intended procurement, in one of the WTO languages.
The summary notice shall contain at least the following information:
(a) the subject matter of the procurement;
(b) the final date for the submission of tenders or, if applicable, any final date for the submission of requests for participation in the procurement or for inclusion on a multi-use list; and
(c) the address from which documents relating to the procurement may be requested.
Notice of Planned Procurement
4. Procuring entities are encouraged to publish as early as possible in each fiscal year a notice regarding their future procurement plans (hereinafter referred to as "notice of planned procurement"). The notice of planned procurement should include the subject matter of the procurement and the approximate date of the publication of the notice of intended procurement or the approximate period in which the procurement may be held.