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Document 52018PC0196

Proposal for a COUNCIL DECISION on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore

COM/2018/196 final - 2018/0093 (NLE)

No longer in force, Date of end of validity: 08/11/2019

Brussels, 18.4.2018

COM(2018) 196 final

2018/0093(NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore


EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

Reasons for and objectives of the proposal

The dynamically growing Southeast Asian economies, with their over 600 million consumers and a rapidly rising middle class, are key markets for European Union exporters and investors. With a total € 208 billion of trade in goods and € 77 billion of trade in services (2016), the Association of Southeast Asian Nations (ASEAN) taken as a whole is the EU’s third largest trading partner outside Europe, after the US and China. At the same time, a total € 263 billion foreign direct investment stock (2016) in the ASEAN makes the EU the first foreign direct investor in the ASEAN, while the ASEAN as a whole is in its turn the second largest Asian foreign direct investor in the EU – with a total foreign direct investment stock of € 116 billion (2016).

Within the ASEAN, Singapore is by far the EU’s largest partner, accounting for slightly under one-third of EU-ASEAN trade in goods and services, and roughly two-thirds of investments between the two regions. Over 10,000 EU companies are established in Singapore and use it as a hub to serve the whole Pacific Rim.

On 23 April 2007, the Council authorised the Commission to enter into negotiations for a region-to-region Free Trade Agreement (FTA) with Member States of the ASEAN. It being understood that the objective was to negotiate a region-to-region FTA, the authorisation provided however for the possibility of bilateral negotiations in the event that it was not possible to reach an agreement to negotiate jointly with a grouping of Member States of the ASEAN. In light of difficulties encountered in the region-to-region negotiations, both sides acknowledged that an impasse had been reached and agreed to pause these.

On 22 December 2009, the Council agreed on the principle of launching bilateral negotiations with individual ASEAN Member States, based on the authorisation and negotiating directives of 2007, whilst preserving the strategic objective of a region-to-region agreement. The Council also authorised the Commission to start bilateral negotiations on a free trade agreement with Singapore, which would serve as a first step towards the objective of the timely launch of such negotiations with other relevant ASEAN Member States. Bilateral negotiations with Singapore commenced in March 2010 and the EU has since opened bilateral FTA negotiations with other ASEAN Member States: Malaysia (2010), Vietnam (2012), Thailand (2013), the Philippines (2015) and Indonesia (2016).

On 12 September 2011 the Council authorised the Commission to extend the on-going negotiations with Singapore to cover also investment protection, based on a new EU competence under the Lisbon Treaty.

On the basis of the negotiating directives adopted by the Council in 2007, and supplemented in 2011 to include investment protection, the Commission has negotiated with the Republic of Singapore an ambitious and comprehensive FTA and an Investment Protection Agreement (IPA), with a view to creating new opportunities and legal certainty for trade and investment between both partners to develop. The legally reviewed texts of the agreements have been made public and can be found on the following link:

http://ec.europa.eu/trade/policy/countries-and-regions/countries/singapore/

The Commission is putting forward the following proposals for Council decisions:

Proposal for a Council Decision on the signing, on behalf of the European Union, of the Free Trade Agreement between the European Union and the Republic of Singapore;

Proposal for a Council Decision on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore;

Proposal for a Council Decision on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore of the other part;

Proposal for a Council Decision on the conclusion of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore of the other part.

In parallel to these proposals, the Commission will put forward a proposal for a horizontal safeguard regulation that will cover the EU-Singapore FTA among other agreements.

The European Commission will verify that a satisfactory outcome as regards the protection of EU geographical indications in Singapore prior to the entry into force of the Agreement has been achieved in accordance with the principles set out in the letter of the Minister of Trade and Industry of Singapore of 21 January 2013 1 and in light of the result of the informal public consultation undertaken by the Singaporean authorities in 2012.

The attached proposal for a Council Decision constitutes the legal instrument for the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore.

Consistency with existing policy provisions in the policy area

The negotiation of the FTA and the IPA was accompanied by the negotiation in parallel, by the European External Action Service, of a Partnership and Cooperation Agreement (PCA) between European Union and its Member States and the Republic of Singapore, which was initialled in October 2013. Once in force, the PCA will provide the legal framework to further develop the already longstanding and strong partnership between the EU and Singapore, in a broad range of areas, including political dialogue, trade, energy, transport, human rights, education, science and technology, justice asylum and migration.

The EU and Singapore’s longstanding trade and economic relationship has until now developed in the absence of a specific legal framework. The FTA and IPA that have been negotiated will constitute specific agreements giving effect to the trade and investment provisions of the PCA and will be an integral part of the overall bilateral relations between the EU and Singapore.

From the date of its entry into force, the EU-Singapore IPA will replace and supersede the bilateral investment treaties between the Republic of Singapore and EU Member States that are listed in Annex 5 (Agreements Referred to in Article 4.12) to the IPA.

Consistency with other Union policies

The EU-Singapore FTA and IPA are fully consistent with Union policies and will not require the EU to amend its rules, regulations or standards in any regulated area (e.g. technical rules and product standards, sanitary or phytosanitary rules, regulations on food and safety, health and safety standards, rules on GMO’s, environmental protection, consumer protection, etc.).

Furthermore, like all other trade and investment agreements the Commission has negotiated, the EU-Singapore FTA and IPA fully safeguard public services and ensure that governments’ right to regulate in the public interest is fully preserved by the agreements and constitutes a basic underlying principle to them.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

Legal basis

In July 2015, the Commission seized the Court of Justice of the EU for an Opinion under Article 218(11) TFEU on whether the Union had the necessary competence to sign and conclude alone the agreement that had been negotiated with Singapore, or whether the participation of the EU Member States would be necessary, or at least possible, in respect of certain matters.

In its Opinion 2/15 of 16 May 2017, the Court confirmed the EU’s exclusive competence with regard to all matters covered by the agreement that had been negotiated with Singapore, except for non-direct investment and investor-to-state dispute settlement where the Member States are defendants that the Court considered to be of shared competence of the EU and the Member States. The text on investor-to-state dispute settlement was subsequently replaced by the Investment Court System in the IPA. The Court drew the EU exclusive competence from the scope of the Common Commercial Policy under Article 207(1) TFEU and from Article 3(2) TFEU (based on the affectation of existing common rules contained in secondary legislation).

In view of the Court Opinion, and in light of the wide-ranging discussions on the architecture with the Council and the European Parliament following the Opinion, the initially negotiated text has been adjusted to create two self-standing agreements: an FTA and an IPA.

According to the Opinion 2/15, all the areas covered by the EU-Singapore FTA fall within the competence of the EU and, more particularly, within the scope of Articles 91, 100(2) and 207 TFEU. All substantive provisions on investment protection under the IPA, to the extent that these apply to foreign direct investment, are covered under Article 207 TFEU.

The EU-Singapore FTA is to be signed by the Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent.

In addition, Article 218(7) TFEU has been added as a legal basis as it is appropriate for the Council to authorise the Commission to approve the position of the Union on certain modifications to the FTA given that the FTA provides for expedited and/or simplified procedures to approve such modifications. Therefore, the Commission should be authorised to approve modifications or rectifications to be adopted by the Trade Committee pursuant to Article 9.18 (Modification and Rectification of Coverage) as regards Annexes 9-A to 9-I and pursuant to Article 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) of the FTA as regards Annexes 10-A and 10-B.

The EU-Singapore IPA is to be signed by the Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent and ratification by the Member States in accordance with their respective internal procedures.

Subsidiarity (for non-exclusive competence)

As confirmed by Opinion 2/15, the EU-Singapore FTA as presented to Council does not cover any matters that fall outside of the EU’s exclusive competence.

With regard to the IPA, the Court confirmed that, pursuant to Article 207 TFEU, the EU has exclusive competence with regard to all substantive provisions on investment protection, to the extent that these apply to foreign direct investment. The Court further confirmed the EUs exclusive competence with regard to the state-to-state dispute settlement mechanism in relation to investment protection. Finally, the Court stated that the EU has shared competence with regard to non-direct investment and investor-to-state dispute settlement (replaced later on by the Investment Court System in the IPA), where the Member States act as defendants. 2 These elements cannot be separated in any coherent way from the substantive provisions or the state-to-state dispute settlement and hence should be included in EU-level agreements.

Proportionality

This proposal is in line with the vision of the Europe 2020 strategy and contributes to the EUs trade and development objectives.

Choice of the instrument

This proposal is in accordance with Article 218 TFEU, which envisages the adoption by the Council of decisions on international agreements. There exists no other legal instrument that could be used in order to achieve the objective expressed in this proposal.

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

Ex-post evaluations/fitness checks of existing legislation

After negotiations with Singapore were for its most part completed, an in-house team led by DG Trade’s Chief Economist carried out a study of the economic benefits to be expected from the agreement. The analysis predicts that EU exports to Singapore could rise by some € 1.4 billion over a 10-year period, while Singapore’s exports to the EU could grow by € 3.5 billion – a figure which includes shipments from the many EU subsidiaries in Singapore back to the EU.

Given the large difference in size of the two economies, as well as the relative openness of Singapore’s economy, it is inevitable that the benefits of the agreement for the partners differ. The analysis predicts that EU real GDP could grow by around € 550 million over a 10-year period, whilst Singapore’s economy could grow by € 2.7 billion over the same period.

These estimates on the possible economic impact are deemed conservative given the difficulty to precisely quantify the effects of the removal of non-tariff barriers, which is a key component of the agreement.

In view of Singapore’s role as the hub for trade in goods and services between Europe and Southeast Asia, it is also likely that the gains from the agreement would grow further if and when the EU concludes agreements with other ASEAN Member States.

Moreover, estimates based on economic modelling cannot account for the strategic value of the EU-Singapore FTA and IPA for the EU as crucial agreements for the EU’s wider agenda in the ASEAN region, and in Asia as a whole. Following the EU-Korea FTA, the EU-Singapore FTA will be the EU’s second high calibre trade agreement with a key Asian partner, while the EU-Singapore IPA will be in its turn the first investment protection agreement the EU enters into with an Asian partner.

Stakeholder consultations

Prior to the launch of bilateral negotiations with Singapore, a Trade Sustainability Impact Assessment (TSIA) of the FTA between the EU and the ASEAN 3 was conducted by an external contractor to study the potential economic, social and environmental impact of a closer economic partnership between both regions.

In the framework of the preparation of the TSIA, the contractor consulted internal and external experts, organised public consultations in Brussels and in Bangkok, and held bilateral meetings and interviews with civil society in the EU and in ASEAN. Consultations in the framework of the TSIA provided a platform for the involvement of key stakeholders and the civil society in a dialogue on trade policy in relation to Southeast Asia.

Both, the TSIA report and the consultations held in the context of its preparation, provided the Commission with input that has been of great value in all bilateral trade and investment negotiations launched since with individual ASEAN Member States.

In addition, prior to the launch of bilateral negotiations with Singapore, the Commission conducted a public consultation on the future agreement that included a questionnaire prepared to obtain information from stakeholders that later helped the Commission in establishing priorities and taking decisions throughout the negotiating process. A summary of the results of the consultation was made public. 4

Also, prior and during negotiations, the EU Member States were regularly informed and consulted orally and in writing on the different aspects of the negotiation via the Council’s Trade Policy Committee. The European Parliament was also regularly informed and consulted via its Committee on International Trade (INTA), and notably its EU-Singapore FTA Monitoring Group. The texts progressively resulting from the negotiations were circulated throughout the process to both institutions.

Collection and use of expertise

A Trade Sustainability Impact Assessment of the FTA between the EU and ASEAN was carried out by the external contractor “Ecorys”.

Impact assessment

The TSIA, conducted by an external contractor and finalised in 2009, concluded that an ambitious EU-ASEAN FTA would deliver important positive impacts (in terms of GDP, income, trade and employment) for both the EU and Singapore. National income effects on the EU side were estimated at € 13 billion and for Singapore at € 7.5 billion. These figures could underestimate the impact, as they were based on trade patterns in 2007, and trade has grown substantially since (+32%).

Regulatory fitness and simplification

The EU-Singapore FTA and IPA are not subject to REFIT procedures. They nevertheless contain a number of provisions that will simplify trade and investment procedures, reduce export and investment related costs and will therefore enable more small firms to do business in both markets. Among the expected benefits are: less burdensome technical rules, compliance requirements, customs procedures and rules of origin, the protection of intellectual property rights, or the reduction in cost of litigation under the Investment Court System for claimants that are SMEs.

Fundamental rights

The proposal does not affect the protection of fundamental rights in the Union.

4.BUDGETARY IMPLICATIONS

The EU-Singapore FTA will have a financial impact on the EU budget on the side of the revenues. It is estimated that foregone duties could reach an amount of € 248.8 million upon full implementation of the agreement. The estimate is based on average imports projected for 2025 in the absence of an agreement and represents the annual loss in revenues resulting from the elimination of EU tariffs on imports from Singapore.

The EU-Singapore IPA is expected to have a financial impact on the EU budget on the side of the expenditures. The agreement will be the EU’s second (after the EU-Canada Comprehensive Economic and Trade Agreement) to incorporate the Investment Court System (ICS) for the resolution of disputes between investors and states. An amount of € 200,000 of additional yearly expenditure is foreseen from 2018 onwards (subject to the entry into force of the agreement) to finance the permanent structure comprising a First Instance and an Appeal Tribunal. At the same time, the agreement entails the use of administrative resources under budget line XX 01 01 01 (Expenditure related to officials and temporary staff working with the Institution), considering that it is estimated that one Administrator will be dedicated as full-time equivalent to the tasks inherent to this agreement. This is indicated in the Legislative Financial Statement and is subject to the conditions mentioned in it.

5.OTHER ELEMENTS

Implementation plans and monitoring, evaluation and reporting arrangements

The EU-Singapore FTA and IPA include institutional provisions that lay down an implementing bodies’ structure to continuously monitor the implementation, operation and impact of the agreements. The agreements being an integral part of the overall bilateral relation between the EU and Singapore as governed by the PCA, the mentioned structures will form part of a common institutional framework with the PCA.

The institutional chapter of the FTA establishes a Trade Committee that has as its main task to supervise and facilitate the implementation and application of the agreement. The Trade Committee is comprised of representatives of the EU and of Singapore who will meet every two years or at the request of either side. The Trade Committee will be in charge of supervising the work of all specialised committees established under the agreement (Committee on Trade in Goods; Committee on Sanitary and Phytosanitary Measures; Committee on Customs; and Committee on Trade in Services, Investment and Government Procurement).

The Trade Committee has also the task to communicate with all interested parties, including private sector and civil society, in relation to the functioning and implementation of the agreement. In the agreement, both sides recognise the importance of transparency and openness and commit to consider the views of members of the public in order to draw on a broad range of perspectives in the implementation of the agreement.

The institutional chapter of the IPA establishes a Committee with the main task to supervise and facilitate the implementation and application of the agreement. Among other tasks, the Committee may, subject to the completion of each side’s respective legal requirements and procedures, decide to appoint the Members of the ICS Tribunals, fix their monthly retainer and fees, and adopt binding interpretations of the agreement.

As emphasised in the “Trade for All” Communication, the Commission is dedicating increasing resources to the effective implementation and enforcement of trade and investment agreements. In 2017, the Commission published the first annual FTA Implementation Report. The main purpose of the report is to convey an objective picture on the implementation of EU FTAs, highlighting the progress made and the shortcomings that need to be addressed. The objective is for the report to serve as the basis for open debate and engagement with Member States, the European Parliament and the civil society at large on the functioning of the FTAs and their implementation. As an annual exercise, the publication of the report will allow regular monitoring of developments, registering also how identified priority issues have been addressed. The report will cover the EU-Singapore FTA as of its entry into force.

Explanatory documents (for directives)

Not applicable.

Detailed explanation of the specific provisions of the proposal

The EU-Singapore FTA establishes the conditions for EU economic operators to take full advantage of the opportunities created in Singapore as the business and transport hub of Southeast Asia.

In negotiating this agreement, the Commission pursued two principal objectives: first, to provide the best possible terms of access for EU operators to Singapore’s market; and, second, to set a valuable point of reference for the EU’s other negotiations in the region.

Both of these objectives have been fully met: the agreement goes beyond existing WTO commitments in many areas, such as services, procurement, non-tariff barriers and the protection of intellectual property including geographical indications (GI). In all of these areas Singapore also agreed to new commitments which go significantly above what Singapore has so far been willing to accept, including in its FTA with the United States.

The agreement satisfies the criteria of Article XXIV GATT (to eliminate duties and other restrictive regulations of commerce with respect to substantially all trade in goods between the parties) as well as of Article V GATS, which provides for a similar test with respect to services.

In line with the objectives set by the negotiating directives, the Commission secured:

(1)the comprehensive liberalisation of services and investment markets, including cross-cutting rules on licensing and for the mutual recognition of diplomas, and sector-specific rules designed to ensure a level playing field for EU businesses;

(2)new tendering opportunities for EU bidders, and especially in the utilities market where there are many leading EU suppliers;

(3)the removal of technical and regulatory trade barriers to trade in goods, such as duplicative testing, in particular by promoting the use of technical and regulatory standards familiar in the EU in the sectors of motor vehicles, electronics, pharmaceuticals and medical devices as well as green technologies;

(4)based on international standards, a more trade-facilitative regime for the approval of European meat exports to Singapore;

(5)Singapore’s commitment not to raise its tariffs (which are currently mostly not applied on a voluntary basis) on imports from the EU, as well as cheaper access of European businesses and consumers to products made in Singapore;

(6)a high level protection of intellectual property rights, including with regard to the enforcement of these rights, including at the border;

(7)a TRIPs-plus level of protection to EU GIs following their registration in Singapore once Singapore has established a GI register (which it has committed to do following the European Parliament’s consent to the FTA);

(8)a comprehensive chapter on trade and sustainable development, which aims at ensuring that trade supports environmental protection and social development and promotes the sustainable management of forests and fisheries. The chapter also sets out how social partners and civil society will be involved in its implementation and monitoring;

(9)a swift dispute resolution mechanisms through either panel arbitration or with the help of a mediator; and

(10)a comprehensive and novel chapter to promote new opportunities in the green growth sector”, in line with the EUs 2020 strategy.

The EU-Singapore IPA will ensure a high level of investment protection, while safeguarding the EU’s and Singapore’s rights to regulate and pursue legitimate public policy objectives such as the protection of public health, safety and the environment.

The agreement contains all the innovations of the EU’s new approach to investment protection and its enforcement mechanisms that are not present in the 12 existing bilateral investment treaties between Singapore and EU Member States. It is a very important feature of the IPA that it replaces and hence improves the 12 existing bilateral investment treaties.

In line with the objectives set by the negotiating directives, the Commission ensured that EU investors and their investments in Singapore will be granted fair and equitable treatment and not be discriminated against compared to Singaporean investments that are in like situations. At the same time, the IPA protects EU investors and their investments in Singapore from expropriation, unless it is for public purposes, in accordance with due process, on a non-discriminatory basis and against payment of prompt, adequate, and effective compensation according to fair market value of the expropriated investment.

Also in line with the negotiating directives, the IPA negotiated by the Commission will offer investors the option of a modern and reformed investment dispute resolution mechanism. This system ensures that investment protection rules are adhered to and seeks to strike a balance between protecting investors in a transparent manner and safeguarding the right of a State to regulate in order to pursue public policy objectives. The agreement sets up a standing international and fully independent dispute resolution system, consisting of permanent First Instance and Appeal Tribunals that will conduct dispute settlement proceedings in a transparent and impartial manner.

The Commission is mindful of the balance to be struck between moving forward with the reformed EU investment policy and the sensitivities of the Member States as regards the possible exercise of shared competence on these matters. The Commission has not, therefore made a proposal to provisionally apply the investment protection agreement. Nonetheless, should Member States wish to see a proposal for provisional application of the investment protection agreement, the Commission stands ready to make such a proposal.

2018/0093 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 91, 100(2), and 207, in conjunction with Article 218(6)(a)(v) and Article 218(7) thereof,

Having regard to the proposal from the European Commission,

Having regard to the consent of the European Parliament,

Whereas:

(1)In accordance with Council Decision No [XX], the Free Trade Agreement between the European Union and the Republic of Singapore (“Singapore”), hereinafter referred to as “the Agreement”, was signed on [XX XXX 2018].

(2)Pursuant to Article 218(7) of the TFEU, it is appropriate for the Council to authorise the Commission to approve on the Union’s behalf the position to be adopted in the Trade Committee on certain modifications to the Agreement that are to be adopted by a simplified procedure. The Commission should be authorised to approve modifications to be adopted by the Trade Committee pursuant to Article 9.18 (Modification and Rectification of Coverage) as regards Annexes 9-A to 9-I to the Agreement, and pursuant to Article 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) as regards Annexes 10-A and 10-B to the Agreement.

(3)The Agreement should be approved on behalf of the European Union.

(4)In accordance with Article 16.16 (No Direct Effect) of the Agreement, it should not confer rights or impose obligations on persons, other than those created between the Parties under public international law,

HAS ADOPTED THIS DECISION:

Article 1

The Free Trade Agreement between the European Union and the Republic of Singapore is hereby concluded.

Article 2

For the purposes of Article 9.18 (Modification and Rectification of Coverage), the position of the Union on the modifications or rectifications of Annexes 9-A to 9-I to the Agreement shall be approved by the Commission.

Article 3

For the purpose of Articles 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) of the Agreement, the position of the Union on the modifications of Annexes 10-A and 10-B to the Agreement shall be approved by the Commission.

Article 4

The President of the Council shall designate the person empowered to proceed, on behalf of the European Union, to send the notification provided for in Article 16.13(2) of the Agreement, in order to express the consent of the European Union to be bound by the Agreement. 5

Article 5

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

   For the Council

   The President

(1)     http://trade.ec.europa.eu/doclib/docs/2013/september/tradoc_151779.pdf  
(2)    See the clarification in the judgement of the Court of Justice of the European Union in Case C-600/14 Germany vs Council (Judgment of 5 December 2017) paragraph 69.
(3)     http://trade.ec.europa.eu/doclib/html/145989.htm
(4)     http://trade.ec.europa.eu/doclib/html/153666.htm
(5)    The date of entry into force of the Agreement will be published in the Official Journal of the European Union by the General Secretariat of the Council.
Top

Brussels, 18.4.2018

COM(2018) 196 final

ANNEX

to the

Proposal for a Council Decision

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore


FREE TRADE AGREEMENT

BETWEEN THE EUROPEAN UNION

AND THE REPUBLIC OF SINGAPORE

The European Union, hereinafter referred to as "the Union",

and

the Republic of Singapore, hereinafter referred to as "Singapore",

RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Partnership and Cooperation Agreement, and their important economic, trade and investment relationship;

DESIRING to further strengthen their relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new climate for the development of trade and investment between the Parties;

RECOGNISING that this Agreement will complement and promote regional economic integration efforts;

DETERMINED to strengthen their economic, trade, and investment relations in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote trade and investment in a manner mindful of high levels of environmental and labour protection and relevant internationally-recognised standards and agreements to which they are Parties;

DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promoting trade and investment liberalisation;


CONVINCED that this Agreement will create an expanded and secure market for goods and services, thus enhancing the competitiveness of their firms in global markets;

REAFFIRMING each Party's right to adopt and enforce measures necessary to pursue legitimate policy objectives such as social, environmental, security, public health and safety, promotion and protection of cultural diversity;

REAFFIRMING their commitment to the Charter of the United Nations signed in San Francisco on 26 June 1945 and having regard to the principles articulated in the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10 December 1948;

RECOGNISING the importance of transparency in international trade to the benefit of all stakeholders;

SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to mutual trade and investment;

RESOLVED to contribute to the harmonious development and expansion of international trade by removing obstacles to trade through this Agreement and to avoid creating new barriers to trade or investment between the Parties that could reduce the benefits of this Agreement;

BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral agreements and arrangements to which they are party,

HAVE AGREED AS FOLLOWS:


CHAPTER ONE

OBJECTIVES AND GENERAL DEFINITIONS

ARTICLE 1.1

Establishment of a Free Trade Area

The Parties to this Agreement hereby establish a free trade area, consistent with Article XXIV of GATT 1994 and Article V of GATS.

ARTICLE 1.2

Objectives

The objectives of this Agreement are to liberalise and facilitate trade and investment between the Parties in accordance with the provisions of this Agreement.

ARTICLE 1.3

Definitions of General Application

For purposes of this Agreement, unless otherwise specified:


"Agreement on Agriculture" means the Agreement on Agriculture contained in Annex 1A of the WTO Agreement;

"Agreement on Government Procurement" means the Agreement of Government Procurement contained in Annex 4 of the WTO Agreement;

"Agreement on Preshipment Inspection" means the Agreement on Preshipment Inspection contained in Annex 1A of the WTO Agreement;

"Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;

"Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;

"day" means a calendar day;

"DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes contained in Annex 2 of the WTO Agreement;

"GATS" means the General Agreement on Trade in Services contained in Annex 1B of the WTO Agreement;

"GATT 1994" means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;


"Harmonized System" means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto (hereinafter referred to as the "HS");

"IMF" means the International Monetary Fund;

"Import Licensing Agreement" means the Agreement on Import Licencing Procedures contained in Annex 1A of the WTO Agreement;

"measure" means any law, regulation, procedure, requirement or practice;

"natural person of a Party" means a national of Singapore, or of one of the Member States of the Union, according to their respective legislation;

"Partnership and Cooperation Agreement" means the Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part, signed on […];

"person" means a natural person or a juridical person;

"Safeguards Agreement" means the Agreement on Safeguards contained in Annex 1A of the WTO Agreement;

"SCM Agreement" means the Agreement on Subsidies and Countervailing Measures contained in Annex 1A of the WTO Agreement;


"SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures contained in Annex 1A of the WTO Agreement;

"TBT Agreement" means the Agreement on Technical Barriers to Trade contained in Annex 1A of the WTO Agreement;

"TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights contained in Annex 1C of the WTO Agreement;

"WIPO" means the World Intellectual Property Organization;

"WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization done at Marrakesh on 15 April 1994;

"WTO" means the World Trade Organization.


CHAPTER TWO

NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

SECTION A

COMMON PROVISIONS

ARTICLE 2.1

Objective

The Parties shall progressively and reciprocally liberalise trade in goods over a transitional period starting from the entry into force of this Agreement in accordance with this Agreement and in conformity with Article XXIV of GATT 1994.

ARTICLE 2.2

Scope

This Chapter shall apply to trade in goods between the Parties.


ARTICLE 2.3

National Treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its Notes and Supplementary Provisions. To this end, the obligations contained in Article III of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 2.4

Customs Duty

For the purposes of this Chapter, a customs duty includes any duty or charge of any kind imposed on or in connection with the importation or exportation of a good, including any form of surtax or surcharge imposed on or in connection with such importation or exportation.

A "customs duty" does not include any:

(a)    charge equivalent to an internal tax imposed consistently with Article 2.3 (National Treatment);

(b)    duty imposed consistently with Chapter Three (Trade Remedies);


(c)    duties applied consistently with Article VI, Article XVI, Article XIX of GATT 1994, the Anti-Dumping Agreement, the SCM Agreement, Article 5 of the Agreement on Agriculture and the DSU;

(d)    fee or other charge imposed consistently with Article 2.10 (Fees and Formalities Connected with Importation and Exportation).

ARTICLE 2.5

Classification of Goods

The classification of goods in trade between the Parties shall be governed by each Party's respective tariff nomenclature in conformity with the HS and its amendments.

SECTION B

REDUCTION AND/OR ELIMINATION OF CUSTOMS DUTIES

ARTICLE 2.6

Reduction and/or Elimination of Customs Duties on Imports

1.    Each Party shall reduce and/or eliminate its customs duties on imported goods originating in the other Party in accordance with the Schedules set out in Annex 2-A. For the purposes of this Chapter, "originating" means in accordance with the rules of origin set out in Protocol 1.


2.    The base rate of customs duties on imports, to which the successive reductions are to be applied under paragraph 1, shall be that specified in the Schedules in Annex 2-A.

3.    If at any moment a Party reduces its applied most favoured nation (hereinafter referred to as "MFN") customs duty rates on imports after the date of entry into force of this Agreement, that duty rate shall apply if and for as long as it is lower than the customs duty rate on imports calculated in accordance with its Schedule in Annex 2-A.

4.    Three years after the entry into force of this Agreement, on the request of either Party, the Parties shall consult to consider accelerating and broadening the scope of the reduction and elimination of customs duties on imports. A decision by the Parties in the Committee on Trade in Goods on such acceleration or broadening shall supersede any duty rate or staging category determined pursuant to their Schedules for that good.

ARTICLE 2.7

Elimination of Customs Duties and Taxes on Exports

Neither Party shall maintain or institute any customs duty or tax on or in connection with the exportation or sale for export of goods to the other Party, or any internal taxes on goods exported to the other Party that are in excess of those imposed on like goods destined for internal sale.


ARTICLE 2.8

Standstill

Upon the entry into force of the Agreement, neither Party shall increase any existing customs duty, or introduce any new customs duty, on the importation of a good originating in the other Party. This shall not preclude either Party from raising a customs duty to the level established in its Schedule in Annex 2-A following a unilateral reduction.

SECTION C

NON-TARIFF MEASURES

ARTICLE 2.9

Import and Export Restrictions

1.    Neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, in accordance with Article XI of GATT 1994, including its notes and supplementary provisions. To this end, Article XI of GATT 1994, its notes and supplementary provisions are incorporated into and made part of this Agreement, mutatis mutandis.


2.    The Parties understand that before taking any measures provided for in subparagraphs 2(a) and 2(c) of Article XI of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty days of supplying such information, the exporting Party may apply measures under this Article on the exportation of the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.

ARTICLE 2.10

Fees and Formalities Connected with Importation and Exportation

1.    Each Party shall ensure, in accordance with Article VIII of GATT 1994, including its notes and supplementary provisions, that all fees and charges of whatever character (other than customs duties, and measures listed in paragraphs (a), (b) and (c) of Article 2.4 (Customs Duty)) imposed on or in connection with importation or exportation of goods are limited in amount to the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, and shall not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.

2.    Each Party shall make available, via an officially designated medium including through the internet, fees and charges it imposes in connection with importation or exportation.


3.    No Party shall require consular transaction 1 , including related fees and charges, in connection with the importation of any good of another Party.

ARTICLE 2.11

Import and Export Licensing Procedures

1.    The Parties affirm their existing rights and obligations under the Import Licensing Agreement.

2.    The Parties shall introduce and administer any import or export licensing procedures 2 in accordance with:

(a)    Paragraphs 1 through 9 of Article 1 of the WTO Import Licensing Agreement;

(b)    Article 2 of the WTO Import Licensing Agreement;

(c)    Article 3 of the WTO Import Licensing Agreement.


To this end, the provisions referred to in subparagraphs (a), (b) and (c) of this paragraph are incorporated into and made part of this Agreement. The Parties shall apply those provisions, mutatis mutandis, for any export licensing procedures.

3.    The Parties shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner.

4.    The Parties shall only adopt or maintain licensing procedures as a condition for importation into its territory or exportation from its territory to the other Party when other appropriate procedures to achieve an administrative purpose are not reasonably available.

5.    The Parties shall not adopt or maintain non-automatic import or export licensing procedures unless necessary to implement a measure that is consistent with this Agreement. Any Party adopting non-automatic licensing procedures shall indicate clearly the measure being implemented through such licensing procedure.

6    Any Party introducing export licensing procedures or changes in these procedures shall notify the Committee on Trade in Goods sixty days in advance of the publication of those procedures. This notification shall contain the information required under Article 5 of the Import Licensing Agreement.

7.    Each Party shall respond within sixty days to enquiries from the other Party regarding any licensing procedures which the Party to which the request is addressed intends to adopt or has adopted or maintained, as well as the criteria for granting and/or allocating import or export licenses.


ARTICLE 2.12

State Trading Enterprises

1.    The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, its notes and supplementary provisions and the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994, contained in Annex 1-A to the WTO Agreement, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.

2.    The Parties may request information from the other Party bilaterally as foreseen in subparagraphs 4(c) and 4(d) of Article XVII of GATT 1994.

ARTICLE 2.13

Elimination of Sectoral Non-Tariff Measures

1.    The Parties shall undertake further commitments on sector-specific non-tariff measures on goods as set out in Annex 2-B and Annex 2-C (hereinafter referred to as "Sectoral Annexes"). To this end, the Parties may, by decision in the Committee on Trade in Goods, amend the Sectoral Annexes.

2.    Upon the request of either Party, the Parties shall enter into negotiations with the aim of broadening the scope of their commitments on sector-specific non-tariff measures on goods.


SECTION D

SPECIFIC EXCEPTIONS RELATED TO GOODS

ARTICLE 2.14

General Exceptions

1.    Nothing in this Chapter prevents the taking of measures in accordance with Article XX of GATT 1994, its Notes and Supplementary Provisions, which are hereby incorporated into and made part of this Agreement, mutatis mutandis.

2.    The Parties understand that before taking any measures provided for in paragraphs (i) and (j) of Article XX of GATT 1994, the exporting Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty days, the exporting Party may apply measures under this Article on the exportation of the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.


SECTION E

INSTITUTIONAL PROVISIONS

ARTICLE 2.15

Committee on Trade in Goods

1.    The Committee on Trade in Goods established pursuant to Article 16.2 (Specialised Committees) shall meet on the request of a Party or of the Trade Committee to consider any matter arising under this Chapter and comprise representatives of the Parties.

2.    The Committee's functions shall include:

(a)    monitoring the implementation of this Chapter and Annexes 2-A, 2-B and 2-C;

(b)    promoting trade in goods between the Parties, including through consultations on accelerating and broadening the scope of tariff elimination and broadening of the scope of commitments on non-tariff measures under this Agreement, and other issues as appropriate. As a result of these consultations, the Committee may, by decision, amend or expand the Annexes 2-A, 2-B and 2-C as required; and

(c)    addressing tariff and non-tariff measures to trade in goods between the Parties and, if appropriate, referring such matters to the Trade Committee for its consideration.


CHAPTER THREE

TRADE REMEDIES

SECTION A

ANTI-DUMPING AND COUNTERVAILING MEASURES

ARTICLE 3.1

General Provisions

1.    The Parties affirm their rights and obligations arising under Article VI of GATT 1994, the Anti-Dumping Agreement and the SCM Agreement and shall apply anti-dumping and countervailing measures in accordance with the provisions of this Chapter.

2.    The Parties, recognising that anti-dumping and countervailing measures can be abused to obstruct trade, agree that:

(a)    such measures should be used in full compliance with the relevant WTO requirements and should be based on a fair and transparent system; and

(b)    careful consideration should be given to the interests of the Party against which such a measure is to be imposed.


3.    For the purpose of this Section, origin shall be determined in accordance with the nonpreferential rules of origin of the Parties.

ARTICLE 3.2

Transparency and Information Exchange

1.    After receipt by a Party's competent authorities of a properly documented anti-dumping application with respect to imports from the other Party, and no later than fifteen days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application.

2.    After receipt by a Party's competent authorities of a properly documented countervailing duty application with respect to imports from the other Party, and no later than fifteen days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application and afford the other Party the possibility to consult with its competent authorities regarding the application with a view to clarifying the factual situation and to arriving at a mutually agreed solution. The Parties shall endeavour to hold these consultations as soon as possible thereafter.


3.    Both Parties shall ensure, immediately after any imposition of provisional measures and in any case before final determination is made, full and meaningful disclosure of all essential facts and considerations which form the basis for the decision to apply measures. This is without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Any disclosure shall be made in writing, and allow interested parties sufficient time to make their comments.

4.    Each interested party shall be granted the possibility to be heard in order to express their views during trade remedies investigations.

ARTICLE 3.3

Lesser Duty Rule

Should a Party decide to impose any anti-dumping or countervailing duty, the amount of such duty shall not exceed the margin of dumping or countervailable subsidies, and it should be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry.


ARTICLE 3.4

Consideration of Public Interest

Anti-dumping or countervailing measures shall not be applied by a Party where, on the basis of the information made available during the investigation, it can clearly be concluded that it is not in the public interest to apply such measures. Public interest shall take into account the situation of the domestic industry, importers and their representative associations, representative users and representative consumer organisations, to the extent they have provided relevant information to the investigating authorities.

ARTICLE 3.5

Exclusion from Bilateral Dispute Settlement and Mediation Mechanism

The provisions of this Section shall not be subject to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).


SECTION B

GLOBAL SAFEGUARD MEASURES

ARTICLE 3.6

General Provisions

1.    Each Party retains its rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture. Unless otherwise provided in this Section, this Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.

2.    No Party shall apply, with respect to the same good, at the same time:

(a)    a bilateral safeguard measure; and

(b)    a measure under Article XIX of GATT 1994 and the Safeguards Agreement.

3.    For the purposes of this Section, origin shall be determined in accordance with the nonpreferential rules of origin of the Parties.


ARTICLE 3.7

Transparency

1.    Notwithstanding Article 3.6 (General Provisions), at the request of the other Party and provided the latter has a substantial interest, the Party when initiating a safeguard investigation or when intending to take safeguard measures shall provide immediately, and at least seven days in advance of the date of such initiation or imposition, ad hoc written notification of all pertinent information leading to the initiation of a safeguard investigation or the imposition of safeguard measures including on the provisional findings and the final findings of the investigation, where relevant. This is without prejudice to Article 3.2 of the Safeguards Agreement.

2.    When imposing safeguard measures, the Parties shall endeavour to impose them in a way that least affects their bilateral trade.

3.    For the purposes of paragraph 2, if one Party considers that the legal requirements are met for the imposition of definitive safeguard measures, the Party intending to apply such measures shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within thirty days of the notification, the importing Party may adopt the definitive safeguard measures. The possibility for consultations should also be offered to the other Party in order to exchange views on the information referred to in paragraph 1.


ARTICLE 3.8

Exclusion from Bilateral Dispute Settlement and Mediation Mechanism

The provisions of this Section shall not be subject to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).

SECTION C

BILATERAL SAFEGUARD CLAUSE

ARTICLE 3.9

Definitions

For the purposes of this Section:

(a)    "serious injury" and "threat of serious injury" shall be understood in accordance with Articles 4.1(a) and (b) of the Safeguards Agreement. To this end, Articles 4.1(a) and (b) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis; and

(b)    "transition period" means a period of ten years from the entry into force of this Agreement.


ARTICLE 3.10

Application of Bilateral Safeguard Measure

1.    If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may, during the transition period only, adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section.

2.    The importing Party may take a bilateral safeguard measure which:

(a)    suspends further reduction of the rate of customs duty on the good concerned provided for under Annex 2-A; or

(b)    increases the rate of customs duty on the good concerned to a level which does not exceed the lesser of:

(i)    the MFN applied rate of customs duty on the good in effect at the time the measure is taken; or

(ii)    the base rate of customs duty specified in the Schedules included in Annex 2-A pursuant to paragraph 2 of Article 2.6 (Reduction and/or Elimination of Customs Duties on Imports).


ARTICLE 3.11

Conditions and Limitations

1.    A Party shall notify the other Party in writing of the initiation of an investigation described in paragraph 2 and consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to:

(a)    reviewing the information arising from the investigation and whether the conditions laid out in this Article are met;

(b)    exchanging views on the measure and its appropriateness in light of the objectives of this Section to remove serious injury or threat thereof to domestic industry caused by an increase in imports as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure); and

(c)    exchanging preliminary views on compensation as set out in Article 3.13 (Compensation).

2.    A Party shall apply a bilateral safeguard measure only following an investigation by its competent authorities in accordance with Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement and to this end, Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.


3.    The determination referred to in Article 3.10 (Application of Bilateral Safeguard Measure) shall not be made unless the investigation demonstrates on the basis of objective evidence the existence of a causal link between increased imports from the other party and serious injury or threat thereof. In this respect, due consideration shall be given to other factors, including imports of the same product from other countries.

4.    Each Party shall ensure that its competent authorities complete any such investigation within one year from the dates of its initiation.

5.    Neither Party may apply a bilateral safeguard measure as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure):

(a)    except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;

(b)    for a period exceeding two years, except that the period may be extended by up to two years if the competent authorities of the importing Party determine, in conformity with the procedures specified in this Article, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, shall not exceed four years; or

(b)    beyond the expiration of the transition period, except with the consent of the other Party.


6.    No measure shall be applied again to the import of the same good during the transition period, unless a period of time equal to half of the period during which the safeguard measure was applied previously has elapsed. In this case, paragraph 3 of Article 3.13 (Compensation) shall not apply.

7.    When a Party terminates a bilateral safeguard measure, the rate of customs duty shall be the rate that, according to its Schedule included in Annex 2-A, would have been in effect but for the measure.

ARTICLE 3.12

Provisional Measures

1.    In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of paragraphs 2 and 3 of Article 3.11 (Conditions and Limitations). The Party shall promptly refund any tariff increases if the investigation described in paragraph 2 of Article 3.11 (Conditions and Limitations) does not result in a finding that the requirements of Article 3.10 (Application of Bilateral Safeguard Measure) are met. The duration of any provisional measure shall be counted as part of the period prescribed by subparagraph 5(b) of Article 3.11 (Conditions and Limitations).


2.    If a Party takes a provisional measure pursuant to this Article, the Party shall notify the other Party in writing prior to taking such measure and shall initiate consultations with the other Party immediately after such measure is taken.

ARTICLE 3.13

Compensation

1.    A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. The Party shall provide an opportunity for such consultations no later than thirty days after the application of the bilateral safeguard measure.

2.    If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within thirty days after the consultations begin, the Party whose goods are subject to the safeguard measure may suspend the application of substantially equivalent concessions to the Party applying the safeguard measure. The exporting Party shall notify the other Party in writing at least thirty days before suspending concessions under this paragraph.

3.    The right of suspension referred to in paragraph 2 shall not be exercised for the first twenty-four months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.


CHAPTER FOUR

TECHNICAL BARRIERS TO TRADE

ARTICLE 4.1

Objectives

The objective of this Chapter is to facilitate and increase trade in goods between the Parties, by providing a framework to prevent, identify and eliminate unnecessary barriers to trade within the scope of the TBT Agreement.

ARTICLE 4.2

Scope and Definitions

1.    This Chapter applies to the preparation, adoption and application of all standards, technical regulations and conformity assessment procedures as defined in Annex 1 of the TBT Agreement, which may affect trade in goods between the Parties, regardless of the origin of those goods.

2.    Notwithstanding paragraph 1, this Chapter does not apply to:

(a)    purchasing specifications prepared by governmental bodies for production or consumption requirements of such bodies; or


(b)    sanitary and phytosanitary measures as defined in Annex A of the SPS Agreement which are covered by Chapter Five of this Agreement.

3.    For the purposes of this Chapter, the definitions of Annex 1 to the TBT Agreement shall apply.

ARTICLE 4.3

Affirmation of the TBT Agreement

The Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement which is incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 4.4

Joint Cooperation

1.    The Parties shall strengthen their cooperation in the field of standards, technical regulations and conformity assessment procedures with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets.

2.    The Parties shall seek to identify and develop regulatory cooperation initiatives appropriate for the particular issues or sectors which may include, but are not limited to:


(a)    exchanging information and experiences on the preparation and application of their technical regulations and the use of good regulatory practice;

(b)    where appropriate, simplifying technical regulations, standards and conformity assessment procedures;

(c)    avoiding unnecessary divergence in their approaches to technical regulations and conformity assessment procedures, and working towards the possibility of converging or aligning technical regulations with international standards;

(d)    encouraging cooperation between their respective bodies, public or private, responsible for metrology, standardisation, testing, certification and accreditation;

(e)    ensuring efficient interaction of regulatory authorities at national, regional and international levels, for instance, by referring enquiries from a Party to the    appropriate regulatory authorities; and

(f)    exchanging information on developments in relevant regional and multilateral fora related to standards, technical regulations and conformity assessment procedures.

3.    Upon request, a Party shall give appropriate consideration to proposals that the other Party makes for cooperation under the terms of this Chapter.


ARTICLE 4.5

Standards

1.    The Parties affirm their obligations under Article 4.1 of the TBT Agreement to ensure that their standardising bodies accept and comply with the Code of Good Practice for the Preparation, Adoption and Application of Standards in Annex 3 to the TBT Agreement.

2.    With a view to harmonising standards on as wide a basis as possible, the Parties shall encourage their standardising bodies, as well as the regional standardising bodies of which they or their standardising bodies are Members, to cooperate with the relevant standardisation bodies of the other Party in international standardisation activities.

3.    The Parties undertake to exchange information on:

(a)    their use of standards in support of technical regulations;

(b)    each other's standardisation processes, and the extent of use of international standards or regional standards as a base for their national standards; and

(c)    cooperation agreements implemented by either Party on standardisation, provided the information can be made available to the public.


ARTICLE 4.6

Technical Regulations

The Parties agree to make best use of good regulatory practice with regard to the preparation, adoption and application of technical regulations, as provided for in the TBT Agreement including:

(a)    when developing a technical regulation, to consider, inter alia, the impact of the envisaged technical regulation and the available regulatory and non-regulatory alternatives to the proposed technical regulation which may fulfil the Party's legitimate objectives;

(b)    consistent with Article 2.4 of the TBT Agreement, to use, to the maximum extent possible, relevant international standards as a basis for their technical regulations, except when such international standards would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued; where international standards have not been used as a basis, to explain upon request to the other Party the reasons why such standards have been considered inappropriate or ineffective for the aim pursued; and

(c)    consistent with Article 2.8 of the TBT Agreement, wherever appropriate, to specify technical regulations based on product requirements in terms of performance rather than design or descriptive characteristics.


ARTICLE 4.7

Conformity Assessment Procedures

1.    The Parties recognise that a broad range of mechanisms exist to facilitate the acceptance of the results of conformity assessment procedures, including:

(a)    the importing Party's reliance on a supplier's declaration of conformity;

(b)    agreements on mutual acceptance of the results of conformity assessment procedures with respect to specific technical regulations conducted by bodies located in the territory of the other Party;

(c)    use of accreditation procedures to qualify conformity assessment bodies;

(d)    government designation of conformity assessment bodies, including bodies located in the territory of the other Party;

(e)    unilateral recognition by a Party of the results of conformity assessment procedures conducted in the territory of the other Party;

(f)    voluntary arrangements between conformity assessment bodies in the respective territories of each Party; and


(g)    use of regional or international multilateral recognition agreements and arrangements of which the Parties are parties.

2.    Having regard in particular to those considerations, the Parties shall:

(a)    intensify their exchange of information on these and other mechanisms with a view to facilitating the acceptance of conformity assessment results;

(b)    exchange information on the criteria used to select appropriate conformity assessment procedures for specific products and, in line with Article 5.1.2 of the TBT Agreement, require that conformity assessment procedures are not more strict or applied more strictly than necessary to give the importing Party adequate confidence that products conform with the applicable technical regulations or standards, taking account of the risks non-conformity would create;

(c)    exchange information on accreditation policy and consider how to make the best use of international standards for accreditation and international agreements involving the Parties' accreditation bodies, for example through the mechanisms of the International Laboratory Accreditation Co-operation and the International Accreditation Forum; and

(d)    ensure that, insofar as two or more conformity assessment bodies are authorised by a Party to carry out conformity assessment procedures required for placing the product on the market, economic operators may choose among them.


3.    The Parties reaffirm their obligation under Article 5.2.5 of the TBT Agreement that fees imposed for mandatory conformity assessment of imported products shall be equitable in relation to any fees chargeable for assessing the conformity of like products of national origin or originating in any other country, taking into account communication, transportation and other costs arising from differences between location of facilities of the applicant and the conformity assessment body.

4.    Upon request by either Party, the Parties may decide to engage in consultations with a view to defining sectoral initiatives regarding the use of conformity assessment procedures or the facilitation of acceptance of conformity assessment results that are appropriate for the respective sectors. The Party making the request should substantiate it with relevant information on how this sectoral initiative would facilitate trade between the Parties. In these consultations, all mechanisms described in paragraph 1 may be considered. Where a Party declines such a request from the other Party, it shall, upon request, explain its reasons.

ARTICLE 4.8

Transparency

The Parties reaffirm their transparency obligations under the TBT Agreement with regard to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures, and agree:

(a)    where a part of the process of developing a technical regulation is open to public consultation, to take the other Party's views into account and, without discrimination, to provide reasonable opportunities for the other Party and its interested persons to make comments;


(b)    when making notifications in accordance with Article 2.9 of the TBT Agreement, to allow at least sixty days following the notification for the other Party to provide comments in writing on the proposal and where practicable, to give appropriate consideration to reasonable requests for extending the comment period;

(c)    to allow sufficient time between the publication of technical regulations and their entry into force for economic operators of the other Party to adapt, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise; and

(d)    to make available to the other Party or its economic operators relevant information (for example through a public website, if available) on technical regulations, standards and conformity assessment procedures in force and, as appropriate and available, written guidance on compliance with its technical regulations, upon request and without undue delay.

ARTICLE 4.9

Market Surveillance

The Parties undertake to exchange information on market surveillance and enforcement activities.


ARTICLE 4.10

Marking and Labelling

1.    The Parties note that, according to paragraph 1 of Annex 1 of the TBT Agreement, a technical regulation may include or deal exclusively with marking or labelling requirements, and they agree that, where their technical regulations contain mandatory marking or labelling, they will ensure that these are not prepared with a view to, or with the effect of, creating unnecessary obstacles to international trade, and should not be more trade restrictive than necessary to fulfil a legitimate objective, as referred to under Article 2.2 of the TBT Agreement.

2.    The Parties agree that where a Party requires mandatory marking or labelling of products:

(a)    the Party shall endeavour to restrict its requirements only to those which are relevant for consumers or users of the product or to indicate the product's conformity with the mandatory requirements;

(b)    the Party may specify the information to be provided on the label and may require compliance with certain regulatory requirements for the affixing of the label, but shall not require any prior approval or certification of labels and markings as a precondition for sale of the products on its market unless this is deemed necessary in the light of the risk of the product to human, animal or plant health or life;

(c)    where the Party requires the use of a unique identification number by economic operators, the Party shall ensure that such numbers are issued to the relevant economic operators without undue delay and on a non-discriminatory basis;


(d)    provided it is not misleading, contradictory or confusing in relation to the information required in the importing Party of the goods, the Party shall permit the following:

(i)    information in other languages in addition to the language required in the importing Party of the goods;

(ii)    internationally-accepted nomenclatures, pictograms, symbols or graphics;

(iii)    additional information to that required in the importing Party of the goods;

(e)    the Party shall accept that labelling, including re-labelling and corrections to labelling, take place, where relevant, in authorised premises (for example, in customs warehouses at the point of import) in the importing Party prior to the distribution and sale of the product as an alternative to labelling in the place of origin, unless such labelling is required to be carried out in the place of origin for reasons of public health or safety; and

(f)    the Party shall, in cases where it considers that legitimate objectives under the TBT Agreement are not compromised thereby, endeavour to accept non-permanent or detachable labels, or marking or labelling in the accompanying documentation rather than physically attached to the product.

3.    Without prejudice to the Parties' rights and obligations under the WTO Agreement, paragraph 2 shall apply to agricultural products, industrial products, and processed agricultural food products including beverages and spirits.


ARTICLE 4.11

Contact Points

The functions of the contact points designated in accordance with Article 13.4 (Enquiries and Contact Points) shall include:

(a)    monitoring the implementation and administration of this Chapter;

(b)    promptly addressing any issue that the other Party raises related to the development, adoption, application, or enforcement of standards, technical regulations or conformity assessment procedures;

(c)    enhancing cooperation in the development and improvement of standards, technical regulations, and conformity assessment procedures;

(d)    exchanging information on standards, technical regulations, and conformity assessment procedures;

(e)    facilitating cooperation activities, as appropriate, in accordance with paragraph 2 of Article 4.4 (Joint Cooperation); and

(f)    arranging the establishment of ad hoc working groups at the request of either Party, in order to explore ways to facilitate trade between the Parties.


ARTICLE 4.12

Final Provisions

1.    The Parties may discuss in the Committee on Trade in Goods established pursuant to Article 16.2 (Specialised Committees) any implementing arrangements arising from this Chapter. The Parties may, by decision in that Committee, adopt any implementing measure required to this effect.

2.    The Parties have undertaken further commitments on sector-specific non-tariff measures on goods as set out in Annex 4-A and the Appendices pertaining thereto.

CHAPTER FIVE

SANITARY AND PHYTOSANITARY MEASURES

ARTICLE 5.1

Objectives

The objectives of this Chapter are:

(a)    to protect human, animal or plant life or health in the respective territories of the Parties while facilitating trade between the Parties in the area of sanitary and phytosanitary measures (hereinafter referred to as "SPS measures");


(b)    to collaborate on the further implementation of the SPS Agreement; and

(c)    to provide a means to improve communication, cooperation and resolution of issues related to the implementation of SPS measures affecting trade between the Parties.

ARTICLE 5.2

Scope

1.    This Chapter applies to all SPS measures of a Party that may, directly or indirectly, affect trade between the Parties.

2.    This Chapter shall also apply to collaboration between the Parties on animal welfare matters of mutual interest to the Parties.

3.    Nothing in this Chapter shall affect the rights of the Parties under the TBT Agreement with respect to measures not within the scope of this Chapter.

ARTICLE 5.3

Definitions

For the purposes of this Chapter:

1.    The definitions contained in Annex A of the SPS Agreement shall apply.


2.    The Parties may agree on other definitions for the application of this Chapter taking into consideration the glossaries and definitions of relevant international organisations, such as the CODEX Alimentarius Commission (hereinafter referred to as "Codex Alimentarius"), the World Organisation for Animal Health (hereinafter referred to as "OIE") and under the International Plant Protection Convention (hereinafter referred to as "IPPC").

ARTICLE 5.4

Rights and Obligations

The Parties reaffirm their rights and obligations under the SPS Agreement.

ARTICLE 5.5

Competent Authorities

The competent authorities of the Parties responsible for the implementation of this Chapter set out in Annex 5-A. The Parties shall notify each other of any change of these competent authorities.


ARTICLE 5.6

General Principles

When implementing this Chapter, the Parties:

(a)    shall ensure consistency of SPS measures with the principles established by Article 3 of the SPS Agreement;

(b)    will not use SPS measures to create unjustified barriers to trade;

(c)    shall ensure that procedures established under this Chapter are undertaken and completed without undue delay and that such procedures are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party where identical or similar conditions exist; and

(d)    will neither use the procedures referred to in subparagraph (c) nor any requests for additional information to delay, without scientific and technical justification, access to their respective markets.

ARTICLE 5.7

Import Requirements

1.    The import requirements of a Party shall apply to the entire territory of the other Party.


2.    The exporting Party shall ensure that products exported to the importing Party meet the sanitary and phytosanitary requirements of the importing Party.

3.    The importing Party shall ensure that its import requirements are applied to products imported from the exporting Party in a proportional and non-discriminatory manner.

4.    Any fees imposed for the procedures on products imported from the exporting Party shall be equitable in relation to any fees charged on like domestic products and shall not be higher than the actual cost of the service.

5.    The importing Party shall have the right to carry out import checks on products imported from the exporting Party for the purposes of implementing SPS measures.

6.    The import checks carried out on products imported from the exporting Party shall be based on the sanitary and phytosanitary risk associated with such importations. They shall be carried out without undue delay and with minimum effect on trade between the Parties.

7.    The importing Party shall make available to the exporting Party, upon request by the latter Party, information about the frequency of import checks carried out on products from the latter Party. The importing Party may change the frequency of physical checks on consignments, as appropriate, as a consequence of (i) verifications, (ii) import checks, or (iii) a mutual agreement between the Parties, including following consultations provided for in this Chapter.


8.    In the event that the import checks demonstrate that products do not conform with the relevant import requirements of the importing Party, any action taken by the importing Party should be proportionate to the sanitary and phytosanitary risk associated with the import of the non-compliant product.

ARTICLE 5.8

Verifications

1.    In order to attain and maintain confidence in the effective implementation of this Chapter, the importing Party shall have the right to carry out verifications at any time, including:

(a)    through verification visits to the exporting Party, to verify all or part of the inspection and certification system of the exporting Party's competent authorities, in accordance with the relevant international standards, guidelines and recommendations of the Codex Alimentarius, OIE and IPPC; and

(b)    by requiring information from the exporting Party about its inspection and certification system and obtaining the results of the controls carried out thereunder.

2.    The importing Party shall share with the exporting Party the results and conclusions of the verifications carried out pursuant to paragraph 1. The importing Party may make these results publicly available.


3.    If the importing Party decides to carry out a verification visit to the exporting Party, the importing Party shall notify the exporting Party of this verification visit at least sixty calendar days before the verification visit is to be carried out, except in emergency cases or if the Parties agree otherwise. Any modification to such a visit shall be agreed by the Parties.

4.    The costs incurred in carrying out a verification of all or part of the other Party's competent authorities' inspection and certification systems and of any inspection of individual establishments, shall be borne by the importing Party.

5.    The importing Party shall provide information in writing of a verification to the exporting Party within sixty calendar days. The exporting Party shall have forty-five calendar days to comment on such information. Comments made by the exporting Party shall be attached to and, where appropriate, included in the final outcome document.

6.    Notwithstanding paragraph 5, where a significant human, animal or plant life or health risk has been identified during a verification, the importing Party shall inform the exporting Party as quickly as possible and in any case within ten calendar days following the end of the verification.

ARTICLE 5.9

Trade Facilitation

1.    In cases where the importing Party requires an on-the-spot verification to authorise imports of a certain category or categories of products of animal origin from the exporting Party, the following shall apply:


(a)    the verification shall evaluate the exporting Party's inspection and certification system in accordance with Article 5.8 (Verifications) and shall take into consideration any relevant written information provided by the exporting Party upon request; and

(b)    in case of a satisfactory outcome of the verification of the inspection and certification system, the importing Party shall inform, in writing, the exporting Party of the positive outcome of the verification. In this case, the information provided may include that the importing Party has authorised, or will authorise, imports of specific category or categories of products; or

(c)    if the outcome of the verification of the inspection and certification systems is not satisfactory, the importing Party shall inform, in writing, the exporting Party of the result of the verification. In this case, the information shall include one of the following:

(i)    the conditions, including those related to the inspection and certification system of the exporting Party, that still need to be put in place by the exporting Party to allow the importing Party to authorise imports of a specific category or categories of products of animal origin;

(ii)    a reference to the fact that specific establishments of products of animal origin may be allowed to export to the importing Party upon compliance with the relevant import requirements of Article 5.7 (Import Requirements); or

(iii)    a statement that the importing Party has not authorised the import of the specific category or categories of products from the exporting Party.


2.    In cases where the importing Party has authorised imports of a specific category or categories of products of animal origin referred to in paragraph 1(b), the exporting Party shall inform the importing Party of the list of individual establishments meeting the importing Party's requirements in accordance with, in particular, Article 5.7 (Import Requirements) and Article 5.8 (Verifications). Furthermore:

(a)    upon request of the exporting Party, the importing Party shall approve individual establishments referred to in paragraph 3 of Annex 5-B which are situated in the territory of the exporting Party, without prior inspection of individual establishments. When requesting the approval by the importing Party, the exporting Party shall provide any information required by the importing Party to guarantee the compliance with the relevant requirements, including those of Article 5.7 (Import Requirements). The approval by the importing Party shall be consistent with the conditions set out in Annex 5-B and it shall be limited to those categories of products for which imports are authorised;

(b)    upon approval of the individual establishments referred to in subparagraph 2(a), the importing Party shall take the necessary legislative or administrative measures in accordance with its applicable legal and administrative procedures to allow imports within forty calendar days of the receipt of the request of the exporting Party accompanied by the information required by the importing Party to guarantee the compliance with the relevant requirements, including those of Article 5.7 (Import Requirements); and

(c)    the importing Party shall notify the exporting Party of its acceptance or rejection of any individual establishments referred to in paragraph 2(a) and, if applicable, the reasons for any rejection.


ARTICLE 5.10

Measures Linked to Animal and Plant Health

1.    The Parties recognise the concept of pest- or disease-free areas and areas of low pest or disease prevalence, in accordance with the SPS Agreement, OIE and IPPC standards, guidelines or recommendations. The SPS Committee referred to in Article 5.15 (Committee on Sanitary and Phytosanitary Measures) may define further details for the procedure for the recognition of such areas, including procedures for the recognition of such areas when there has been an outbreak, taking into account any relevant SPS Agreement, OIE and IPPC standards, guidelines or recommendations.

2.    When determining pest- or disease-free areas and areas of low pest or disease prevalence, the Parties shall consider factors such as geographical location, ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary controls in such areas.

3.    The Parties shall establish close cooperation on the determination of pest- or disease-free areas and areas of low pest and disease prevalence with the objective of attaining confidence in the procedures followed by the other Party for the determination of such areas. When accepting the determination of such areas made by the exporting Party, the importing Party shall in principle base its determination of the animal or plant health status of the exporting Party or parts thereof on the information provided by the exporting Party in accordance with the SPS Agreement, OIE and IPPC standards, guidelines or recommendations.


4.    If the importing Party does not accept the determination made by the exporting Party, it shall explain the reasons and shall be ready to enter into consultations.

5.    The exporting Party claiming that areas within their territories are pest- or disease-free areas or areas of low pest or disease prevalence shall provide relevant evidence in order to objectively demonstrate to the importing Party that such areas are, and are likely to remain, pest- or disease-free areas or areas of low pest or disease prevalence, as the case may be. For these purposes, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures.

6.    The Parties recognise the principle of compartmentalisation of the OIE and pest-free production sites of the IPPC. The SPS Committee referred to in Article 5.15 (Committee on Sanitary and Phytosanitary Measures) will assess any OIE and IPPC recommendations that may be issued on this matter in the future and may issue recommendations accordingly.

ARTICLE 5.11

Transparency and Exchange of Information

1.    The Parties shall:

(a)    pursue transparency as regards SPS measures applicable to trade and, in particular, to those of Article 5.7 (Import Requirements) applied to imports from the other Party;


(b)    enhance mutual understanding of each Party's SPS measures and their application;

(c)    exchange information on matters related to the development and application of SPS measures, including the progress on new available scientific evidence, that affect, or may affect, trade between the Parties with a view to minimising their negative trade effects;

(d)    upon request of a Party, communicate the import requirements that apply for the import of specific products within fifteen calendar days; and

(e)    upon request of a Party, communicate progress on the application for the authorisation of specific products within fifteen calendar days.

2.    The contact points responsible for the information pursuant to paragraph 1 are those that are designated by the Parties in accordance with paragraph 1 of Article 13.4 (Enquiries and Contact Points). Information shall be sent by post, fax or e-mail. Information by e-mail may be signed electronically and shall only be sent between the contact points.

3.    When the information pursuant to paragraph 1 has been made available by notification to the WTO in accordance with its relevant rules and procedures or when the above information has been made available on the official, publicly accessible and fee-free web-sites of the Parties, the information exchange shall be considered to have taken place.

4.    All notifications under this Chapter shall be made to the contact points referred to under paragraph 2.


ARTICLE 5.12

Consultations

1.    Each Party shall notify in writing to the other Party within two calendar days, of any serious or significant human, animal or plant life or health risk, including any food emergencies.

2.    Where a Party has serious concerns regarding a risk to human, animal or plant life or health, affecting commodities for which trade takes place, consultations regarding the situation shall, upon request, take place as soon as possible. In this case, each Party shall endeavour to provide in due time all necessary information to avoid disruption in trade.

3.    Consultations referred to in paragraph 2 of this Article may be held by e-mail, video or telephone conference. The requesting Party shall ensure the preparation of the minutes of the consultation.

ARTICLE 5.13

Emergency Measures

1    In case of serious human, animal or plant life or health risk, the importing Party may take, without previous notification, measures necessary to protect human, animal or plant life or health. For consignments in transport between the Parties, the importing Party shall consider the most suitable and proportional solution in order to avoid unnecessary disruptions to trade.


2.    The Party taking the measures shall inform the other Party as soon as possible and in any case no later than twenty-four hours after the adoption of the measure. Either Party may request any information related to the sanitary and phytosanitary situation and any measures adopted. The other Party shall answer as soon as the requested information is available.

3.    Upon request of either Party and in accordance with the provisions of Article 5.12 (Consultations) the Parties shall hold consultations regarding the situation within fifteen calendar days of the notification. These consultations shall be carried out in order to avoid unnecessary disruptions to trade. The Parties may consider options for the facilitation of the implementation or the replacement of the measures.

ARTICLE 5.14

Equivalence

1.    The Parties may recognise equivalence of an individual measure and/or groups of measures and/or systems applicable to a sector or part of a sector in accordance with paragraphs 4 to 7. The recognition of equivalence shall be applied to trade between the Parties in animals and animal products, plants and plant products, or as appropriate to related goods.

2.    Where equivalence has not been recognised, trade shall take place under the conditions required by the importing Party to meet its appropriate level of protection.

3.    The recognition of equivalence requires an assessment and acceptance of:


(a)    existing SPS measures in legislation, standards and procedures, including controls related to inspection and certification systems to ensure that the SPS measures of the exporting Party and the importing Party are met;

(b)    the documented structure of the competent authorities, their powers, their chain of command, their modus operandi and the resources available to them; and

(c)    the performance of the competent authority in relation to the control programmes and assurances.

4.    In their assessment, the Parties shall take account of experience already acquired.

5.    The importing Party shall accept the sanitary or phytosanitary measure of the exporting Party as equivalent if the exporting Party objectively demonstrates that its measure achieves the importing Party's appropriate level of protection. For this purpose, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures.

6.    The Parties will take into account guidance of the Codex Alimentarius, OIE, IPPC and the WTO SPS Committee in recognising equivalence.

7.    Furthermore, where equivalence has been recognised, the Parties may agree on a simplified model for official sanitary or phytosanitary certificates necessary for each consignment of animals and animal products, plants and plant products, or other related goods intended for importation.


ARTICLE 5.15

Committee on Sanitary and Phytosanitary Measures

1.    The Committee on Sanitary and Phytosanitary Measures (hereinafter referred to as the "SPS Committee") established pursuant to Article 16.2 (Specialised Committees) shall include representatives of the competent authorities of the Parties.

2.    The SPS Committee shall meet within one year of the entry into force of this Agreement. Thereafter it shall meet at least once a year or as agreed by the Parties. The SPS Committee shall establish its rules of procedure at its first meeting. It shall meet in person, telephone conference, video-conference, or through any other means, as agreed by the Parties.

3.    The SPS Committee may agree to establish technical working groups consisting of experts of the Parties, which shall identify and address technical and scientific issues arising under this Chapter and explore opportunities for further collaboration on SPS matters of mutual interest. When additional expertise is needed, the membership of these groups may include persons other than representatives of the Parties.

4.    The SPS Committee may address any matter related to the effective functioning of this Chapter. In particular, it shall have the following responsibilities and functions:

(a)    develop the necessary procedures or arrangements for the implementation of this Chapter, including its Annexes;


(b)    monitor the implementation of this Chapter; and

(c)    provide a forum for discussion of problems arising from the application of certain SPS measures with a view to reaching mutually acceptable solutions. In this connection, the SPS Committee shall be convened as a matter of urgency, at the request of a Party, so as to carry out consultations. Such consultations are without prejudice to the rights and obligations of the Parties under Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).

5.    The SPS Committee will exchange information, expertise and experiences in the field of animal welfare in order to promote the collaboration on animal welfare between the Parties.

6.    The Parties may, by decision in the SPS Committee, adopt recommendations and decisions related to the authorisation of imports, exchange of information, transparency, recognition of regionalisation, equivalency and alternative measures, and any other matter referred to under paragraphs 4 and 5.

ARTICLE 5.16

Technical Consultations

1.    Where a Party considers that a measure of the other Party is or might be contrary to the obligations under this Chapter and causes or may cause an unjustified disruption to trade, it may request technical consultations in the SPS Committee with a view to reaching mutually acceptable solutions. The competent authorities set out in Annex 5-A will facilitate these consultations.


2.    Technical consultations in the SPS Committee shall be deemed concluded within thirty days following the date of submission of the request, unless the consulting Parties agree to continue with the consultations. The technical consultations may be made via telephone conference, video-conference, or any other mechanism agreed by the Parties.

CHAPTER SIX

CUSTOMS AND TRADE FACILITATION

ARTICLE 6.1

Objectives

1.    The Parties recognise the importance of customs and trade facilitation matters in the evolving global trading environment. The Parties agree to reinforce cooperation in this area with a view to ensuring that the relevant legislation and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objectives of promoting trade facilitation while ensuring effective customs control.

2.    To this end, the Parties agree that legislation shall be non-discriminatory and that customs procedures shall be based upon the use of modern methods and effective controls to combat fraud and to protect legitimate trade.


3.    The Parties recognise that legitimate public policy objectives, including in relation to security, safety and combating fraud, shall not be compromised in any way.

ARTICLE 6.2

Principles

1.    The Parties agree that their respective customs provisions and procedures shall be based upon:

(a)    international instruments and standards applicable in the area of customs and trade, which the respective Parties have accepted, including the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures, the International Convention on the Harmonized Commodity Description and Coding System, and the Framework of Standards to Secure and Facilitate Global Trade (hereinafter referred to as "SAFE Framework") of the World Customs Organization (hereinafter referred to as "WCO");

(b)    the protection of legitimate trade through effective enforcement and compliance of legislative requirements;

(c)    legislation that avoids unnecessary or discriminatory burdens on economic operators, that provides for further trade facilitation for economic operators with high levels of compliance, and that ensures safeguards against fraud and illicit or damageable activities; and


(d)    rules that ensure that any penalty imposed for breaches of customs regulations or procedural requirements is proportionate and non-discriminatory and that their application shall not unduly delay the release of goods.

2.    In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability of operations, the Parties shall:

(a)    simplify requirements and formalities wherever possible with respect to the rapid release and clearance of goods; and

(b)    work towards the further simplification and standardisation of data and documentation required by customs and other agencies.

ARTICLE 6.3

Customs Cooperation

1.    The Parties shall cooperate on customs matters between their respective authorities in order to ensure that the objectives set out in Article 6.1 (Objectives) are attained.

2.    In order to enhance cooperation on customs matters, the Parties shall, inter alia:

(a)    exchange information concerning their respective customs legislation, its implementation, and customs procedures, particularly in the following areas:


(i)    simplification and modernisation of customs procedures;

(ii)    border enforcement of intellectual property rights by the customs authorities;

(iii)    transit movements and transhipment; and

(iv)    relations with the business community;

(b)    consider developing joint initiatives relating to import, export and other customs procedures, as well as towards ensuring an effective service to the business community;

(c)    work together on customs-related aspects of securing and facilitating the international trade supply chain in accordance with the SAFE Framework;

(d)    establish, where appropriate, mutual recognition of their respective risk management techniques, risk standards, security controls and trade partnership programmes, including aspects such as data transmission and mutually agreed benefits; and

(e)    strengthen coordination in international organisations such as the WTO and the WCO.


ARTICLE 6.4

Transit and Transhipment

1.    The Parties shall ensure the facilitation and effective control of transhipment operations and transit movements through their respective territories.

2.    The Parties shall promote and implement regional transit arrangements with a view to facilitating trade.

3.    The Parties shall ensure cooperation and coordination between all concerned authorities and agencies in their respective territories to facilitate traffic in transit.

ARTICLE 6.5

Advance Rulings

Prior to the importation of goods into its territory and in accordance with its legislation and procedures, each Party shall, through its customs authorities or other competent authorities, issue written advance rulings to traders established in its territory concerning tariff classification, origin, and any other matters as the Party may decide.


ARTICLE 6.6

Simplified Customs Procedure

1.    Each Party shall provide simplified import and export procedures that are transparent and efficient, in order to reduce costs and increase predictability for economic operators, including for small and medium sized enterprises. Easier access to customs simplifications shall also be provided for authorised traders according to objective and non-discriminatory criteria.

2.    A single customs declaration document or its electronic equivalent shall be used for the purposes of completing the formalities required for placing the goods under a customs procedure.

3.    The Parties shall apply modern customs techniques, including risk assessment and postclearance audit methods, in order to simplify and facilitate the entry and the release of goods.

4.    The Parties shall promote the progressive development and use of systems, including those based upon information technology, to facilitate the electronic exchange of data between their respective traders, customs authorities and other related agencies.

ARTICLE 6.7

Release of Goods

Each Party shall ensure that its customs authorities, border agencies or other competent authorities shall apply requirements and procedures that:


(a)    provide for the prompt release of goods within a period no greater than that required to ensure compliance with its customs and other trade-related laws and formalities;

(b)    provide for pre-arrival processing (i.e. advance electronic submission and eventual processing of information before physical arrival of goods) to enable the release of goods on arrival; and

(c)    provide for the release of goods, without the payment of customs duties, subject to the provision of a guarantee, if required, according to the legislation of each Party, in order to secure the final payment of customs duties.

ARTICLE 6.8

Fees and Charges

1.    Fees and charges shall only be imposed for services provided in connection with the importation or exportation in question or for any formality required for undertaking such importation or exportation. They shall not exceed the approximate cost of the service provided and they shall not be calculated on an ad valorem basis.

2.    The information on fees and charges shall be published via an officially designated medium, including through the internet. This information shall include the reason for the fee or charge for the service provided, the responsible authority, the fee or charge that will be applied, and when and how payment is to be made.


3.    New or amended fees and charges shall not be imposed until information in accordance with paragraph 2 is published and made readily available.

ARTICLE 6.9

Customs Brokers

The Parties agree that their respective customs provisions and procedures shall not require the mandatory use of customs brokers. The Parties shall apply transparent, non-discriminatory and proportionate rules if and when licensing customs brokers.

ARTICLE 6.10

Pre-shipment Inspections

The Parties agree that their respective customs provisions and procedures shall not require the mandatory use of pre-shipment inspections as defined in the Agreement on Preshipment Inspection, or any other inspection activity performed at destination, before customs clearance, by private companies.


ARTICLE 6.11

Customs Valuations

1.    The Parties shall determine the customs value of goods in accordance with the Customs Valuation Agreement.

2.    The Parties shall cooperate with a view to reaching a common approach to issues relating to customs valuation.

ARTICLE 6.12

Risk Management

1.    Each Party shall base its examination and release procedures and its post-entry verification procedures on risk assessment principles and audits, rather than examining each shipment in a comprehensive manner for compliance with all import requirements.

2.    The Parties agree to adopt and apply their import, export, transit and transhipment control requirements and procedures for goods on the basis of risk management principles which shall be applied to focus compliance measures on transactions that merit attention.


ARTICLE 6.13

Single Window

Each Party shall endeavour to develop or maintain single window systems to facilitate a single, electronic submission of all information required by customs and other legislation for the exportation, importation and transit of goods.

ARTICLE 6.14

Appeal Procedures

1.    Each Party shall provide effective, prompt, non-discriminatory and easily accessible procedures to guarantee the right of appeal against the administrative actions, rulings and decisions of customs or other competent authorities affecting import or export of goods or goods in transit.

2.    Appeal procedures may include administrative review by the supervising authority and judicial review of decisions taken at the administrative level according to the legislation of the Parties.


ARTICLE 6.15

Transparency

1.    Each Party shall publish or otherwise make available, including through electronic means, their legislation, regulations, and administrative procedures and other requirements relating to customs and trade facilitation.

2.    Each Party shall designate or maintain one or more inquiry or information points to address inquiries by interested persons concerning customs and trade facilitation matters.

ARTICLE 6.16

Relations with the Business Community

The Parties agree:

(a)    on the importance of timely consultations with trade representatives when formulating legislative proposals and general procedures related to customs and trade facilitation issues. To that end, consultations shall be held between customs authorities and the business community as appropriate;


(b)    to publish or otherwise make available, as far as possible through electronic means, new legislation and general procedures related to customs and trade facilitation issues prior to the application of any such legislation and procedures, as well as changes to and interpretations of such legislation and procedures. They shall also make publicly available relevant notices of an administrative nature, including agency requirements and entry procedures, hours of operation and operating procedures for customs offices at ports and border crossing points, and points of contact for information enquiries;

(c)    on the need for a reasonable time period between the publication of new or amended legislation, procedures and fees or charges and their entry into force, without prejudice to legitimate public policy objectives (e.g. changes in duty rates); and

(d)    to ensure that their respective customs and related requirements and procedures continue to meet the needs of the trading community, follow best practices, and remain the least trade-restrictive possible.

ARTICLE 6.17

Committee on Customs

1.    The Committee on Customs established by Article 16.2 (Specialised Committees) shall consist of representatives of the customs and other competent authorities of the Parties. The Committee on Customs shall ensure the proper functioning of this Chapter, Protocol 1 and any additional customs-related provisions as agreed between the Parties. The Parties may examine and take decisions on, in the Committee on Customs, all issues arising thereunder.


2.    The Parties may in the Committee on Customs adopt recommendations and take decisions on mutual recognition of risk management techniques, risk standards, security controls and trade partnership programmes, including aspects such as data transmission and mutually agreed benefits and any other issue covered by paragraph 1.

3.    The Parties may agree to hold ad hoc meetings for any customs matter including rules of origin and any additional customs-related provisions as agreed between the Parties. They may also establish sub-groups for specific issues where appropriate.

CHAPTER SEVEN

NON-TARIFF BARRIERS TO TRADE AND INVESTMENT
IN RENEWABLE ENERGY GENERATION

ARTICLE 7.1

Objectives

In line with global efforts to reduce greenhouse gas emissions, the Parties share the objective of promoting, developing and increasing the generation of energy from renewable and sustainable non-fossil sources, particularly through facilitating trade and investment. To this effect, the Parties shall cooperate towards removing or reducing tariffs as well as non-tariff barriers and fostering regulatory convergence with or towards regional and international standards.


ARTICLE 7.2

Definitions

For the purposes of this Chapter:

(a)    "local content requirement" means

(i)    with respect to goods, a requirement for an enterprise to purchase or use goods of domestic origin or from a domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of a proportion of volume or value of its local production;

(ii)    with respect to services, a requirement which restricts the choice of the service supplier or the service supplied to the detriment of services or service suppliers from the other Party;

(b)    "measure" means any measure, within the scope of this Chapter, by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(c)    "offset" means any condition that encourages local development, such as the unjustified licensing of technology, investment, obligation to contract with a particular financial institution, counter-trade, and similar requirements;

(d)    "partnership" means any legal entity such as a corporation, trust, partnership, joint venture, association;


(e)    "service supplier" means as defined in paragraph (l) of Article 8.2 (Definitions).

ARTICLE 7.3

Scope

1.    This Chapter shall apply to measures which may affect trade and investment between the Parties related to the generation of energy from renewable and sustainable non-fossil sources, namely wind, solar, aerothermal, geothermal, hydrothermal and ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas and biogases, but not to the products from which energy is generated.

2.    This Chapter shall not apply to research and development projects, nor demonstration projects carried out on a non-commercial scale.

3.    This Chapter is without prejudice to the application of any other relevant provisions of this Agreement, including any exceptions, reservations or restrictions thereto, to the measures mentioned in paragraph 1, mutatis mutandis. For greater certainty, in the event of any inconsistency between this Chapter and other provisions of this Agreement, the other provisions of this Agreement shall prevail to the extent of the inconsistency.


ARTICLE 7.4

Principles

A Party shall:

(a)    refrain from adopting measures providing for local content requirements or any other offset affecting the other Party's products, service suppliers, entrepreneurs or establishments;

(b)    refrain from adopting measures requiring the formation of partnerships with local companies, unless such partnerships are deemed necessary for technical reasons and the Party can demonstrate such technical reasons upon request by the other Party;

(c)    ensure that any rules concerning the authorisation, certification and licensing procedures that are applied, in particular to equipment, plants and associated transmission network infrastructures, are objective, transparent, non-arbitrary and do not discriminate against applicants from the other Party;

(d)    ensure that administrative charges imposed on or in connection with the:

(i)    importation and use of goods originating in the other Party, or affecting the provision of goods by the other Party's suppliers, are subject to Article 2.10 (Fees and Formalities Connected with Importation and Exportation);


(ii)    provision of services by the other Party's suppliers are subject to Article 8.18 (Scope and Definitions), Article 8.19 (Conditions for Licensing and Qualification) and Article 8.20 (Licensing and Qualification Procedures); and

(e)    ensure that the terms, conditions and procedures for the connection and access to electricity transmission grids are transparent and do not discriminate against suppliers of the other Party.

ARTICLE 7.5

Standards, Technical Regulations and Conformity Assessment

1.    Where international or regional standards exist with respect to products for the generation of energy from renewable and sustainable non-fossil sources, the Parties shall use these standards, or their relevant parts, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued. For the purposes of applying this paragraph, the International Organization for Standardization (hereinafter referred to as "ISO") and the International Electrotechnical Commission (hereinafter referred to as "IEC") shall in particular be considered relevant international standard-setting bodies.

2.    Where appropriate, the Parties shall specify technical regulations based on product requirements in terms of performance, including environmental performance, rather than design or descriptive characteristics.


3.    With respect to products listed in Chapter 84 of the Harmonized System (except 8401) as well as in HS 850231 and 854140:

(a)    the Union will accept declarations of conformity from Singapore suppliers under the same terms as from Union suppliers for the purpose of placing such products on the market, without any further requirements; and

(b)    Singapore will accept EU declarations of conformity or test reports, for the purpose of placing such products on the market without any further requirements. Singapore may require mandatory third party testing or certification under the conditions set out in Article 5 (Safeguard Measures) of Annex 4-A.

For greater certainty, this paragraph is without prejudice to either Party applying requirements not related to the products referred to in this paragraph, such as zoning laws or building codes.

ARTICLE 7.6

Exceptions

1.    This Chapter is subject to the security and/or general exceptions set out in Article 2.14 (General Exceptions), Article 8.62 (General Exceptions), Article 9.3 (Security and General Exceptions) and, for greater certainty, the relevant provisions of Chapter Sixteen (Institutional, General and Final Provisions).


2.    For greater certainty, subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties' products, service suppliers or investors where the same conditions prevail, or a disguised restriction on trade and investment between the Parties, nothing in this Chapter shall be construed to prevent the adoption or enforcement by any of the Parties of measures necessary for the safe operation of the energy networks concerned, or the safety of energy supply.

ARTICLE 7.7

Implementation and Cooperation

1.    In the Trade Committee established pursuant to Article 16.1 (Trade Committee), the Parties shall cooperate and exchange information on any issues relevant for the implementation of this Chapter. The Parties may, by decision of the Trade Committee, adopt appropriate implementing measures to this effect, and update this Chapter as appropriate.

2.    Cooperation may include:

(a)    exchanging information, regulatory experiences and best practices in areas such as:

(i)    the design and non-discriminatory implementation of measures promoting the uptake of energy from renewable sources;

(ii)    carbon capture and storage;

(iii)    smart grids;


(iv)    energy efficiency; or

(v)    technical regulations, standards and conformity assessment procedures, such as those relating to grid code requirements;

(b)    promoting convergence, also in relevant regional fora, of their domestic or regional technical regulations, regulatory concepts, standards, requirements and conformity assessment procedures with international standards.

CHAPTER EIGHT

SERVICES, ESTABLISHMENT AND ELECTRONIC COMMERCE

SECTION A

GENERAL PROVISIONS

ARTICLE 8.1

Objective and Scope

1.    The Parties, reaffirming their respective commitments under the WTO Agreement, hereby lay down the necessary arrangements for the progressive reciprocal liberalisation of trade in services, establishment and electric commerce.


2.    Except as otherwise provided, this Chapter shall not:

(a)    apply to subsidies granted or grants provided by a Party, including government-supported loans, guarantees, and insurance;

(b)    apply to services supplied in the exercise of governmental authority within the respective territories of the Parties. For the purposes of this Chapter, a service supplied in the exercise of governmental authority means any service, except a service which is supplied on a commercial basis or in competition with one or more service suppliers;

(c)    require the privatisation of public undertakings; and/or

(d)    apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.

3.    Each Party retains the right to regulate and to introduce new regulations to meet legitimate policy objectives in a manner consistent with this Chapter.


4.    This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, or to measures regarding citizenship, residence or employment on a permanent basis. Nothing in this Chapter shall be construed to prevent a Party from applying measures to regulate the entry of natural persons of the other Party into, or their temporary stay in, its territory, including measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits 3 accruing to the other Party under the terms of this Chapter.

ARTICLE 8.2

Definitions

For the purposes of this Chapter:

(a)    "direct taxes" comprise all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation;

(b)    "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship, and association;


(c)    a "Union juridical person" or a "Singapore juridical person" means:

(i)    a juridical person set up in accordance with the laws of the Union and/or the Member States of the Union, or Singapore, respectively, and having its registered office, central administration 4 , or principal place of business in the territory of the Union or Singapore, respectively; or

(ii)    in the case of establishment in accordance with paragraph (d) of Article 8.8 (Definitions), a juridical person owned or controlled by natural persons of the Member States of the Union or of Singapore respectively, or by Union juridical persons or Singapore juridical persons respectively.

Should the juridical person have only its registered office or central administration in the territory of the Union or of Singapore respectively, it shall not be considered as a Union or Singapore juridical person respectively, unless it engages in substantive business operations 5 in the territory of the Union or of Singapore respectively.


A juridical person is:

(i)    "owned" by natural or juridical persons of the Union and/or any Member State of the Union, or of Singapore, if more than 50 per cent of the equity interest in it is beneficially owned by persons of the Union and/or any Member State of the Union, or of Singapore, respectively;

(ii)    "controlled" by natural or juridical persons of the Union and/or any Member State of the Union, or of Singapore, if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;

(iii)    "affiliated" with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;

(d)    notwithstanding subparagraph (c), shipping companies established outside the Union and controlled by nationals of a Member State of the Union, shall also be covered by this Agreement, if their vessels are registered in accordance with the respective legislation of that Member State of the Union and fly the flag of a Member State of the Union;

(e)    "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(f)    "measures adopted or maintained by a Party" means measures taken by:

(i)    central, regional or local governments and authorities; or


(ii)    non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

(g)    "measures adopted or maintained by a Party affecting trade in services" include measures in respect of:

(i)    the purchase, payment or use of a service;

(ii)    the access to and use of, in connection with the supply of a service, services which are required by a Party to be offered to the public generally; and

(iii)    the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of the other Party;

(h)    "Schedule of Specific Commitments" refers to, in the case of the Union, Annex 8-A and the Appendices thereto, and, in the case of Singapore, Annex 8-B and the Appendices thereto;

(i)    "service consumer" means any person that receives or uses a service;

(j)    "supply of a service" includes the production, distribution, marketing, sale and delivery of a service;


(k)    "service of the other Party" means a service which is supplied:

(i)    from or in the territory of the other Party, or in the case of maritime transport, by a vessel registered under the laws of the other Party, or by a person of the other Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or

(ii)    in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of the other Party;

(l)    "service supplier" means any person that supplies or seeks to supply a service, including through establishment;

(m)    "trade in services" means the supply of a service:

(i)    from the territory of a Party into the territory of the other Party ("cross-border");

(ii)    in the territory of a Party to a service consumer of the other Party ("consumption abroad");

(iii)    by a service supplier of a Party, through commercial presence, in the territory of the other Party ("commercial presence");

(iv)    by a service supplier of a Party, through presence of natural persons of that Party, in the territory of the other Party ("presence of natural persons").


SECTION B

CROSS-BORDER SUPPLY OF SERVICES

ARTICLE 8.3

Scope

This Section applies to measures of the Parties affecting the cross-border supply of all service sectors except:

(a)    audio-visual services;

(b)    national maritime cabotage 6 ; and

(c)    domestic and international air transport services, whether scheduled or nonscheduled, and services directly related to the exercise of traffic rights, other than:

(i)    aircraft repair and maintenance services during which an aircraft is withdrawn from service;


(ii)    the selling and marketing of air transport services; and

(iii)    computer reservation system services.

ARTICLE 8.4

Definitions

For the purposes of this Section, "cross-border supply of services" means the supply of a service:

(a)    from the territory of a Party into the territory of the other Party; and

(b)    in the territory of a Party to a service consumer of the other Party.

ARTICLE 8.5

Market Access

1.    With respect to market access through the cross-border supply of services, each Party shall accord services and service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments.


2.    In sectors where market access commitments are undertaken, the measures which a Party shall not adopt or maintain either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:

(a)    limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test 7 ;

(b)    limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test; and

(c)    limitations on the total number of service operations or on the total quantity of service output expressed in the terms of designated numerical units in the form of quotas or the requirement of an economic needs test 8 .


ARTICLE 8.6

National Treatment

1.    In the sectors inscribed in its Schedule of Specific Commitments and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the other Party, in respect of all measures affecting the crossborder supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.

2.    A Party may meet the requirement of paragraph 1 by according to services and service suppliers of the other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.

3.    Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of a Party compared to like services or service suppliers of the other Party.

4.    Specific commitments assumed under this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.


ARTICLE 8.7

Schedule of Specific Commitments

1.    The sectors liberalised by a Party pursuant to this Section and, by means of reservations, the market access and national treatment limitations applicable to services and service suppliers of the other Party in those sectors are set out in its Schedule of Specific Commitments.

2.    Neither Party may adopt new or more discriminatory measures with regard to services or service suppliers of the other Party in relation to the specific commitments undertaken in conformity with paragraph 1.

SECTION C

ESTABLISHMENT

ARTICLE 8.8

Definitions

For purposes of this Section:

(a)    "branch" of a juridical person means a place of business or a juridical person not having distinct legal personality and is the extension of a parent body;


(b)    "economic activity" includes any activities of an economic nature except activities carried out in the exercise of governmental authority, i.e., activities not carried out on a commercial basis or in competition with one or more economic operators;

(c)    "entrepreneur" means any person of a Party that seeks to perform or performs an economic activity through establishment 9 ;

(d)    "establishment" means:

(i)    the constitution, acquisition or maintenance of a juridical person; or

(ii)    the creation or maintenance of a branch or representative office,

with a view to establishing or maintaining lasting economic links within the territory of a Party for the purpose of performing an economic activity including, but not limited to, supplying a service;


(e)    "subsidiary" of a juridical person of a Party means a juridical person which is controlled by another juridical person of that Party, in accordance with its domestic law 10 .

ARTICLE 8.9

Scope

This Section applies to measures adopted or maintained by the Parties affecting establishment in all economic activities with the exception of:

(a)    mining, manufacturing and processing 11 of nuclear materials;

(b)    production of, or trade in, arms, munitions and war material;

(c)    audio-visual services;


(d)    national maritime cabotage 12 ; and

(e)    domestic and international air transport services, whether scheduled or non-scheduled, and services directly related to the exercise of traffic rights, other than:

(i)    aircraft repair and maintenance services during which an aircraft is withdrawn from service;

(ii)    the selling and marketing of air transport services; and

(iii)    computer reservation system services.

ARTICLE 8.10

Market Access

1.    With respect to market access through establishment, each Party shall accord establishments and entrepreneurs of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments.


2.    In sectors where market access commitments are undertaken, the measures which a Party shall not adopt or maintain either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:

(a)    limitations on the number of establishments whether in the form of numerical quotas, monopolies, exclusive rights or other establishment requirements such as an economic needs tests;

(b)    limitations on the total value of transactions or assets in the form of numerical quotas or the requirement of an economic needs test;

(c)    limitations on the total number of operations or on the total quantity of output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test 13 ;

(d)    limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment;

(e)    measures which restrict or require specific types of legal entity or joint venture through which an entrepreneur of the other Party may perform an economic activity; and


(f)    limitations on the total number of natural persons, other than key personnel and graduate trainees as defined in Article 8.13 (Scope and Definitions) 14 , that may be employed in a particular sector or that an entrepreneur may employ and who are necessary for, and directly related to, the performance of the economic activity in the form of numerical quotas or the requirement of an economic needs test.

ARTICLE 8.11

National Treatment

1.    In the sectors inscribed in its Schedule of Specific Commitments and subject to any conditions and qualifications set out therein, with respect to all measures affecting establishment 15 , each Party shall accord to establishments and entrepreneurs of the other Party treatment no less favourable than that it accords to its own like establishments and entrepreneurs.

2.    A Party may meet the requirement of paragraph 1 by according to establishments and entrepreneurs of the other Party, either formally identical treatment or formally different treatment to that it accords to its own like establishments and entrepreneurs.


3.    Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of establishments and entrepreneurs of the Party compared to like establishments and entrepreneurs of the other Party.

4.    Specific commitments assumed under this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant establishments or entrepreneurs.

ARTICLE 8.12

Schedule of Specific Commitments

1.    The sectors liberalised by a Party pursuant to this Section and, by means of reservations, the market access and national treatment limitations applicable to establishments and entrepreneurs of the other Party in those sectors are set out in the former Party's Schedule of Specific Commitments.

2.    Neither Party may adopt new or more discriminatory measures with regard to establishments and entrepreneurs of the other Party in relation to the specific commitments undertaken in conformity with paragraph 1.


SECTION D

TEMPORARY PRESENCE OF NATURAL PERSONS
FOR BUSINESS PURPOSES

ARTICLE 8.13

Scope and Definitions

1.    This Section applies to measures of the Parties concerning the entry into, and temporary stay in, their respective territories of key personnel, graduate trainees and business service sellers in accordance with paragraph 4 of Article 8.1 (Objective and Scope).

2.    For the purposes of this Section:

(a)    "key personnel" means natural persons employed within a juridical person of one Party other than a non-profit organisation and who are responsible for the setting up or the proper control, administration and operation of an establishment.

Key personnel comprises business visitors for establishment purposes responsible for setting up an establishment and intra-corporate transferees:


(i)    "business visitors for establishment purposes" means natural persons working in a senior position who are responsible for setting up an establishment. They do not engage in direct transactions with the general public and do not receive remuneration from a source located within the host Party; and

(ii)    "intra-corporate transferees" means natural persons who have been employed by a juridical person of one Party or, in the case of professionals providing business services, have been partners in it for at least one year and who are temporarily transferred to an establishment (that may be a subsidiary, branch or head company of the enterprise) in the territory of the other Party. The natural person concerned must belong to one of the following categories:

(1)    executives:

natural persons within a juridical person who direct the management of the establishment, exercise wide latitude in decision-making, and receive general supervision or direction from the board of directors, or stockholders of the business or their equivalent. Executives do not directly perform tasks related to the actual provision of the service or services of the juridical person;

(2)    managers:

natural persons working in a senior position within a juridical person, who primarily direct the management of the establishment, receiving general supervision or direction from high-level executives, the board of directors or stockholders of the business or their equivalent, including:


(aa)    directing the establishment or a department or sub-division thereof;

(bb)    supervising and controlling the work of other supervisory, professional or managerial employees; and

(cc)    having the authority personally to recruit and dismiss or recommend recruiting, dismissing or other personnel actions;

(3)    specialists:

natural persons working within a juridical person, who possess uncommon knowledge or expertise essential to the establishment's production, research equipment, techniques or management. In assessing such knowledge, account will be taken not only of knowledge specific to the establishment, but also, where relevant, of whether the person has a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;

(b)    "graduate trainees" means natural persons who have been employed by a juridical person of a Party for at least one year, who possess a university degree and who are temporarily transferred to an establishment in the territory of the other Party for career development purposes or to obtain training in business techniques or methods; 16


(c)    "business services sellers" means natural persons who are representatives of a service supplier of a Party seeking temporary entry into the territory of the other Party for the purpose of negotiating the sale of services or entering into agreements to sell services for that service supplier. They do not engage in making direct sales to the general public and do not receive remuneration from a source located within the host Party.

ARTICLE 8.14

Key Personnel and Graduate Trainees

1.    For every sector liberalised in accordance with Section C (Establishment) and subject to any reservations listed in its Schedule of Specific Commitments, each Party shall allow entrepreneurs of the other Party to temporarily employ in their establishment natural persons of that other Party provided that such employees are key personnel or graduate trainees as defined in Article 8.13 (Scope and Definitions). Their temporary entry and stay shall be permitted for a period of up to three years for intra-corporate transferees, ninety days in any twelve-month period for business visitors for establishment purposes, and one year for graduate trainees. For intra-corporate transferees, this period may be extended for up to two additional years, subject to domestic law. 17


2.    For every sector liberalised in accordance with Section C (Establishment), the measures which a Party shall not maintain or adopt, unless otherwise specified in its Schedule of Specific Commitments, are defined as limitations on the total number of natural persons that an entrepreneur may transfer as key personnel or graduate trainees in a specific sector in the form of numerical quotas or a requirement of an economic needs test and as discriminatory limitations.

ARTICLE 8.15

Business Services Sellers

For every sector liberalised in accordance with Section B (Cross-border Supply of Services) or Section C (Establishment) and subject to any reservations listed in its Schedule of Specific Commitments, each Party shall allow the temporary entry and stay of business service sellers for a period of up to ninety days in any twelve-month period. 18


SECTION E

REGULATORY FRAMEWORK

SUB-SECTION 1

PROVISIONS OF GENERAL APPLICATION

ARTICLE 8.16

Mutual Recognition of Professional Qualifications

1.    Nothing in this Article shall prevent a Party from requiring that natural persons possess the necessary qualifications and/or professional experience specified in the territory where the service is supplied, for the sector of activity concerned.

2.    The Parties shall encourage the relevant professional bodies in their respective territories to develop and provide a joint recommendation on mutual recognition to the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees). Such a recommendation shall be supported by evidence on:

(a)    the economic value of an envisaged an agreement on mutual recognition of professional qualifications (hereinafter referred to as "Mutual Recognition Agreement"); and


(b)    the compatibility of the respective regimes, i.e., the extent to which the criteria applied by each Party for the authorisation, licensing, operation and certification of entrepreneurs and service suppliers are compatible.

3.    On receipt of a joint recommendation, the Committee on Trade in Services, Investment and Government Procurement shall, within a reasonable time, review the joint recommendation with a view to determining whether it is consistent with this Agreement.

4.    When, on the basis of the information provided for in paragraph 2, the recommendation has been found to be consistent with this Agreement, the Parties shall take necessary steps to negotiate, through their competent authorities or designees authorised by a Party, a Mutual Recognition Agreement.

ARTICLE 8.17

Transparency

Each Party shall respond promptly to all requests by the other Party for specific information on any of its measures of general application or international agreements which pertain to or affect this Chapter. Each Party shall also establish one or more enquiry points pursuant to Article 13.4 (Enquiries and Contact Points) to provide specific information to entrepreneurs and service suppliers of the other Party, upon request, on all such matters.


SUB-SECTION 2

DOMESTIC REGULATION

ARTICLE 8.18

Scope and Definitions

1.    This Sub-Section applies to measures of the Parties relating to licensing requirements and procedures or qualification requirements and procedures that affect:

(a)    cross-border supply of services as defined in Article 8.4 (Definitions);

(b)    establishment in their territory of juridical and natural persons as defined in Article 8.8 (Definitions);

(c)    temporary stay of natural persons in their territory as referred to in Article 8.13 (Scope and Definitions).

2.    These disciplines shall only apply to sectors for which a Party has undertaken specific commitments and to the extent that these specific commitments apply.

3.    These disciplines do not apply to measures to the extent that the measures constitute limitations as scheduled in Articles 8.5 (Market Access) and 8.10 (Market Access) and/or Articles 8.6 (National Treatment) and 8.11 (National Treatment).


4.    For the purposes of this Sub-Section:

(a)    "competent authorities" are any central, regional or local government and authority or non-governmental body in the exercise of powers delegated by central or regional or local governments or authorities, which takes a decision concerning the authorisation to supply a service, including through establishment, or concerning the authorisation to establish in an economic activity other than services;

(b)    "licensing procedures" are administrative or procedural rules that a natural or a juridical person, seeking authorisation to supply a service or establish in an economic activity other than services, including the amendment or renewal of a licence, must adhere to in order to demonstrate compliance with licensing requirements;

(c)    "licensing requirements" are substantive requirements, other than qualification requirements, with which a natural or a juridical person is required to comply in order to obtain, amend or renew authorisation to supply a service or establish in an economic activity other than services;

(d)    "qualification procedures" are administrative or procedural rules that a natural person must adhere to in order to demonstrate compliance with qualification requirements for the purposes of obtaining authorisation to supply a service;

(e)    "qualification requirements" are substantive requirements relating to the competence of a natural person to supply a service, and which are required to be demonstrated for the purposes of obtaining authorisation to supply a service.


ARTICLE 8.19

Conditions for Licensing and Qualification

1.    Each Party shall ensure that measures relating to licensing requirements and procedures and qualification requirements and procedures are based on criteria which are:

(a)    clear;

(b)    objective and transparent; and

(c)    pre-established and accessible to the public and interested persons.

2.    An authorisation or a license shall, subject to availability, be granted as soon as it is established, in the light of an appropriate examination that the conditions have been met.

3.    Each Party shall maintain or institute judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected entrepreneur or service supplier, for a prompt review of, and where justified, appropriate remedies for, administrative decisions affecting establishment, cross-border supply of services or temporary stay of natural persons for business purposes. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, each Party shall ensure that the procedures in fact provide for an objective and impartial review.


This paragraph shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.

ARTICLE 8.20

Licensing and Qualification Procedures

1.    Each Party shall ensure that licensing and qualification procedures and formalities are as simple as possible and do not unduly complicate or delay the supply of the service. Any licensing fees 19 which the applicants may incur from their application should be reasonable and should not in themselves restrict the supply of the service.

2.    Each Party shall ensure that the procedures used by, and the decisions of, the competent authority in the licensing or authorisation process are impartial with respect to all applicants. The competent authority should reach its decision in an independent manner and not be accountable to any supplier of the services for which the licence or authorisation is required.

3.    Where specific time periods for applications exist, an applicant shall be allowed a reasonable period of time for the submission of an application. The competent authority shall initiate the processing of an application without undue delay. Where possible, applications should be accepted in electronic format under the same conditions of authenticity as paper submissions.


4.    Each Party shall ensure that the processing of an application, including reaching a final decision, is completed within a reasonable timeframe from the submission of a complete application. Each Party shall endeavour to establish a normal timeframe for the processing of an application.

5.    The competent authority shall, within a reasonable period of time after receipt of an application which it considers incomplete, inform the applicant, to the extent feasible identify the additional information required to complete the application, and provide the opportunity to correct deficiencies.

6.    Authenticated copies should be accepted, where possible, in place of original documents.

7.    If an application is rejected by the competent authority, the applicant shall be informed in writing and without undue delay. In principle, the applicant should, upon request, also be informed of the reasons for rejection of the application and of the timeframe for an appeal against the decision. Where applicable, an applicant should be permitted, within reasonable time limits, to resubmit an application.

8.    Each Party shall ensure that a licence or an authorisation, once granted, enters into effect without undue delay in accordance with the terms and conditions specified therein.


SUB-SECTION 3

COMPUTER SERVICES

ARTICLE 8.21

Computer Services

1.    The Parties subscribe to the understanding set out in the following paragraphs in respect of computer services liberalised in accordance with Section B (Cross-border Supply of Services), Section C (Establishment) and Section D (Temporary Presence of Natural Persons for Business Purposes).

2.    The Parties understand that CPC 20 84, the United Nations code used for describing computer and related services, covers all computer and related services. Technological developments have led to the increased offering of these services as a bundle or package of related services that can include some or all of the basic functions listed in paragraph 3. For example, services such as web or domain hosting, data mining services and grid computing each consist of a combination of basic computer services functions.


3.    Computer and related services, regardless of whether they are delivered via a network, including the Internet, include all services that provide any of the following or any combination thereof:

(a)    consulting, adaptation, strategy, analysis, planning, specification, design, development, installation, implementation, integration, testing, debugging, updating, support, technical assistance or management of or for computers or computer systems;

(b)    consulting, strategy, analysis, planning, specification, design, development, installation, implementation, integration, testing, debugging, updating, adaptation, maintenance, support, technical assistance, management or use of or for software 21 ;

(c)    data processing, data storage, data hosting or database services;

(d)    maintenance and repair services for office machinery and equipment, including computers; and

(e)    training services for staff of clients, related to software, computers or computer systems, and not elsewhere classified.


4.    The Parties understand that, in many cases, computer and related services enable the provision of other services 22 by both electronic and other means. However, in such cases, there is an important distinction between the computer and related service (e.g., webhosting or application hosting) and the other service 23 enabled by the computer and related service. The other service, regardless of whether it is enabled by a computer and related service, is not covered by CPC 84.

SUB-SECTION 4

POSTAL SERVICES

ARTICLE 8.22

Prevention of Anti-competitive Practices in the Postal Sector 24

Each Party shall introduce or maintain appropriate measures 25 for the purpose of preventing suppliers of postal services who, alone or together, are a major supplier in the relevant market for postal services from engaging in or continuing anti-competitive practices.


ARTICLE 8.23

Independence of Regulatory Bodies

Regulatory bodies shall be separate from, and not accountable to, any supplier of postal services. The decisions of and the procedures used by regulatory bodies shall be impartial with respect to all market participants.

SUB-SECTION 5

TELECOMMUNICATIONS SERVICES

ARTICLE 8.24

Scope

1.    This Sub-Section applies to measures affecting trade in telecommunications services and sets out the principles of the regulatory framework for telecommunications services, liberalised pursuant to Section B to Section D.

2.    This Sub-Section does not apply to any measure adopted or maintained by a Party relating to cable or broadcast distribution of radio or television programming.


3.    Nothing in this Sub-Section shall be construed to:

(a)    require a Party to authorise a service supplier of the other Party to establish, construct, acquire, lease, operate, or provide telecommunications transport networks or services other than as provided for in its Schedule of Specific Commitments; or

(b)    require a Party, or require a Party to compel any service supplier, to establish, construct, acquire, lease, operate, or provide telecommunications transport networks or services where such networks or services are not offered to the public generally.

4.    Each Party shall impose, maintain, amend or withdraw the rights and obligations of service suppliers provided for in the Article 8.26 (Access to and Use of Public Telecommunications Networks and Services), Article 8.28 (Interconnection), Article 8.29 (Interconnection with Major Suppliers), Article 8.30 (Conduct of Major Suppliers), Article 8.32 (Unbundled Network Elements), Article 8.33 (Co-location), Article 8.34 (Resale), Article 8.35 (Facility Sharing), Article 8.36 (Provisioning of Leased Circuits Services) and Article 8.38 (Submarine Cable Landing Stations) in a manner consistent with its domestic law and internal procedures regulating its telecommunications markets. For the Union such procedures will entail the analysis by the Union regulators of the relevant product and service markets provided for in the relevant Union legislation, the designation of a service supplier as having significant market power and the decision of regulators, based upon such analysis, to impose, maintain, amend or withdraw such rights and obligations.


ARTICLE 8.25

Definitions

For the purposes of this Sub-Section:

(a)    "broadcasting service" refers to the uninterrupted chain of transmission via wired or wireless means, regardless of the location of the originating transmission, required for the reception and/or display of aural and/or visual programme signals by all or any part of the public, but does not cover contribution links between operators;

(b)    "end-user" means a service consumer or a service supplier to whom a public telecommunications network or service is supplied, other than for use in the further supply of a public telecommunications network or service;

(c)    "essential facilities" mean facilities of a public telecommunications transport network or service that:

(i)    are exclusively or predominantly provided by a single or limited number of suppliers; and

(ii)    cannot feasibly be economically or technically substituted in order to provide a service;


(d)    "interconnection" means linking with suppliers providing public telecommunications transport networks or services in order to allow the users of one supplier to communicate with users of another supplier and to access services provided by another supplier;

(e)    "major supplier" means a supplier of public telecommunications networks or services that has the ability to materially affect the terms of participation, having regard to price and supply, in the relevant market for public telecommunications networks or services as a result of:

(i)    control over essential facilities; or

(ii)    use of its position in the market;

(f)    "non-discriminatory" means treatment no less favourable than that accorded to any other user of like public telecommunications transport networks or services in like circumstances;

(g)    "number portability" means the ability of end-users of public telecommunications networks or services to retain, at the same location, existing telephone numbers without impairment of quality, reliability or convenience when switching between like suppliers of public telecommunications networks or services;

(h)    "public telecommunications network" means a telecommunications network which a Party requires to provide public telecommunications services between defined network termination points;


(i)    "public telecommunications service" means any telecommunications service that a Party requires, explicitly or in effect, to be offered to the public generally;

(j)    "submarine cable landing station" means the premises and buildings where international submarine cables arrive and terminate and are connected to backhaul links;

(k)    "telecommunications" means the transmission and reception of signals by any electromagnetic means;

(l)    "telecommunications services" mean all services consisting of the transmission and reception of electro-magnetic signals but excludes the broadcasting service and the economic activity consisting of the provision of content which requires telecommunications for its transport; and

(m)    "telecommunications regulatory body" means the national body or bodies charged with the regulation of telecommunications.

ARTICLE 8.26

Access to and Use of Public Telecommunications Networks and Services

1.    Each Party shall ensure that all service suppliers of the other Party have access to and use of any public telecommunications network and service, including private leased circuits, offered in its territory or across its borders on reasonable, non-discriminatory and transparent terms and conditions, including as set out in paragraphs 2 and 3.


2.    Each Party shall ensure that such service suppliers are permitted to:

(a)    purchase or lease, and attach terminal or other equipment which interfaces with the public telecommunications network;

(b)    interconnect private leased or owned circuits with public telecommunications networks and services in its territory, or across its borders, or with circuits leased or owned by other service suppliers; and

(c)    use operating protocols of their choice, other than as necessary to ensure the availability of telecommunications networks and services to the public generally.

3.    Each Party shall ensure that all service suppliers of the other Party may use public telecommunications networks and services for the movement of information in its territory or across its borders, including for intra-corporate communications of such service suppliers and for access to information contained in databases or otherwise stored in machine-readable form in the territory of either Party. Any new or amended measures of a Party significantly affecting such use shall be notified to the other Party and shall be subject to consultations.

ARTICLE 8.27

Confidentiality of Information

Each Party shall ensure the confidentiality of telecommunications and related traffic data by means of any public telecommunications network or service without restricting trade in services.


ARTICLE 8.28

Interconnection 26

1.    Each Party shall ensure that any service supplier authorised to provide public telecommunications networks or services has the right and obligation to negotiate interconnection with other suppliers of public telecommunications networks or services. Interconnection should be agreed on the basis of commercial negotiations between the parties concerned.

2.    Regulatory authorities shall ensure that suppliers that acquire information from another undertaking during the process of negotiating interconnection arrangements use that information solely for the purpose for which it was supplied and respect at all times the confidentiality of information transmitted or stored.

ARTICLE 8.29

Interconnection with Major Suppliers

1.    Each Party shall ensure that any major supplier in its territory provides interconnection for the facilities and equipment of suppliers of public telecommunications networks or services of the other Party at any technically feasible point in the major supplier's network. Such interconnection shall be provided:


(a)    under non-discriminatory terms, conditions (including technical standards and specifications) and rates, and of a quality no less favourable than that provided for the own like services of such major supplier, or for like services of non-affiliated suppliers of public telecommunications networks or services, or for its subsidiaries or other affiliates;

(b)    in a timely fashion, on terms, conditions (including technical standards and specifications), and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and

(c)    upon request, at points in addition to the network termination points offered to the majority of suppliers of public telecommunications networks or services, subject to charges that reflect the cost of construction of necessary additional facilities.

2.    Each Party shall ensure that major suppliers in its territory make publicly available their interconnection agreements or a reference interconnection offer.

3.    The procedures applicable for interconnection to a major supplier shall be made publicly available.

4.    When suppliers of public telecommunications networks or services are unable to resolve disputes regarding the terms, conditions and rates on which interconnection is to be provided by a major supplier, they shall have recourse to the regulatory authority, which shall aim to resolve the disputes in the shortest possible timeframe and in any case within 180 days of the referral to it, provided that the resolution of complex disputes may take longer than 180 days.


ARTICLE 8.30

Conduct of Major Suppliers

1.    Each Party may impose obligations of non-discrimination on major suppliers in relation to interconnection and/or access.

2.    Obligations of non-discrimination shall ensure, in particular, that the major supplier applies equivalent conditions in equivalent circumstances to other suppliers providing equivalent services and provides services and information to others under equivalent conditions and of the same quality as it provides for its own services or for the services of its subsidiaries or partners.

ARTICLE 8.31

Competitive Safeguards on Major Suppliers

Each Party shall introduce or maintain appropriate measures 27 for the purpose of preventing suppliers of public telecommunications networks or services who, alone or together, are a major supplier in its territory from engaging in or continuing anticompetitive practices. These anticompetitive practices shall include in particular:

(a)    engaging in anti-competitive cross-subsidisation or margin squeeze;

(b)    using information obtained from competitors with anticompetitive results;


(c)    not making available to suppliers of public telecommunications networks or services, on a timely basis, technical information about essential facilities and commercially relevant information which are necessary for them to provide public telecommunications services;

(d)    pricing services in a manner that is likely to unreasonably restrict competition, such as predatory pricing.

ARTICLE 8.32

Unbundled Network Elements

1.    Each Party shall impose obligations on major suppliers to meet reasonable requests for access to, and use of, specific network elements and associated facilities at any technically feasible point, on an unbundled basis, in a timely fashion and on terms and conditions that are reasonable, transparent, and non-discriminatory, and in particular:

(a)    to give access to specified network elements and/or facilities, including access to network elements which are not active, and/or unbundled access to the local loop to, inter alia, allow subscriber line resale offers;

(b)    to grant open access to technical interfaces, protocols or other key technologies that are indispensable for the interoperability of services or virtual network services;

(c)    to provide co-location; and


(d)    to provide services required to ensure interoperability of end-to-end services to users.

2.    When a Party is considering the obligations referred in paragraph 1, it may take account of, inter alia, the following factors:

(a)    the technical and economic viability of using or installing competing facilities, taking into account the nature and type of interconnection and/or access involved, including the viability of other upstream access products such as access to ducts;

(b)    the feasibility of providing the access proposed, in relation to the capacity available;

(c)    the initial investment by the facility owner, taking into account the risks involved in making the investment; and

(d)    the need to safeguard effective and sustainable competition.

ARTICLE 8.33

Co-location

1.    Each Party shall ensure that major suppliers in its territory provide to suppliers of public telecommunications networks or services of the other Party physical co-location of equipment necessary for interconnection or access to unbundled network elements in a timely fashion and on terms and conditions that are reasonable and non-discriminatory.


2.    Each Party may determine in accordance with its domestic law the locations at which it requires major suppliers in its territory to provide co-location under paragraph 1.

ARTICLE 8.34

Resale

Each Party shall ensure that major suppliers in its territory offer for resale to suppliers of public telecommunications networks or services of the other Party, public telecommunications services that such major suppliers provide at retail to end-users in accordance with the provisions of this Sub-Section and, in particular, with Article 8.32 (Unbundled Network Elements).

ARTICLE 8.35

Facility Sharing

1.    Each Party shall be able, taking into account the principle of proportionality, to impose on any major supplier having the right to install facilities on, over or under public or private property, the sharing of such facilities or property, including buildings, entries to buildings, building wiring, masts, antennae, towers and other supporting constructions, poles, ducts, conduits, manholes and cabinets.


2.    Each Party may determine in accordance with its domestic law the facilities to which it requires major suppliers in its territory to provide access under paragraph 1, on the basis that such facilities cannot feasibly be economically or technically substituted in order to provide a competing service.

ARTICLE 8.36

Provisioning of Leased Circuits Services

Each Party shall ensure that major suppliers of leased circuits services in its territory provide juridical persons of the other Party leased circuits services that are public telecommunications services in a timely fashion on terms and conditions that are reasonable, non-discriminatory and transparent.

ARTICLE 8.37

Number Portability

Each Party shall ensure that suppliers of public telecommunications services in its territory provide number portability for those services designated by that Party, to the extent technically feasible, on a timely basis and on reasonable terms and conditions.


ARTICLE 8.38

Submarine Cable Landing Stations

Each Party shall ensure access to submarine cable systems, including landing facilities, in its territory, where a supplier is authorised to operate a submarine cable system as a public telecommunications service, on reasonable, non-discriminatory and transparent terms and conditions.

ARTICLE 8.39

Independent Regulatory Authority

1.    Each Party shall ensure that its telecommunications regulatory body is separate from, and not accountable to, any supplier of public telecommunications networks or services or telecommunications equipment. To this end, each Party shall ensure that its telecommunications regulatory body does not hold any financial interest or control in such a supplier.

2.    Each Party shall ensure that the decisions of, and procedures followed by, its telecommunications regulatory bodies are fair and impartial with respect to all market participants and that they are made and implemented without undue delay. To this end, each Party shall ensure that any financial interest that it holds in a supplier of public telecommunications networks or services does not influence the decisions of, and procedures followed by, its telecommunications regulatory body.


3.    The powers of the regulatory authorities shall be exercised transparently in accordance with the applicable domestic law.

4.    Regulatory authorities shall have the power to ensure that suppliers of telecommunications transport networks and services within their respective territories provide them, promptly upon request, with all the information, including financial information, which is necessary to enable the regulatory authorities to carry out their tasks in accordance with this Sub-Section. Information requested shall be reasonably proportionate to the performance of the regulatory authorities' tasks and treated in accordance with the requirements of confidentiality.

5.    The regulatory authority shall be sufficiently empowered to regulate the sector. The tasks to be undertaken by a regulatory authority shall be made public in an easily accessible and clear form, in particular where those tasks are assigned to more than one body.

ARTICLE 8.40

Universal Services

1.    Each Party has the right to define the kind of universal service obligations it wishes to maintain.

2.    Such obligations will not be regarded as anti-competitive per se, provided they are administered in a transparent, objective, non-discriminatory and competitively neutral manner and are not more burdensome than necessary for the kind of universal service defined by the Party.


3.    Where a Party requires a supplier of telecommunications services to provide directories of subscribers, the Party shall ensure that the supplier applies the principle of non-discrimination to the treatment of information that has been provided to them by other suppliers of such telecommunications services.

ARTICLE 8.41

Authorisation to Provide Telecommunications Services

1.    Each Party shall ensure that licensing procedures are as simple as possible and do not unduly complicate or delay the provisions of the service.

2.    Where a Party requires a supplier of public telecommunications networks or services to have a license, the Party shall make publicly available:

(a)    all the licensing criteria, terms, conditions and procedures it applies; and

(b)    a reasonable period of time normally required to reach a decision concerning an application for a license.

3.    Each Party shall ensure that an applicant receives in writing, upon request, the reasons for the denial of a license.

4.    The applicant for a licence shall be able to seek recourse before an appeal body in the case where a licence has been unduly denied.


5.    Any licensing fees 28 which the applicants may incur from their application should be reasonable and should not in themselves restrict the supply of the service.

ARTICLE 8.42

Allocation and Use of Scarce Resources

1.    Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, shall be carried out in an objective, timely, transparent and non-discriminatory manner. The current state of allocated frequency bands shall be made publicly available, but detailed identification of frequencies allocated for specific government uses is not required.

2.    The Parties understand that decisions on allocating and assigning spectrum and frequency management are not measures that are per se inconsistent with Articles 8.5 (Market Access) and 8.10 (Market Access). Accordingly, each Party retains the right to exercise its spectrum and frequency management policies, which may affect the number of suppliers of public telecommunications services, provided that this is done in a manner that is consistent with this Chapter. The Parties also retain the right to allocate frequency bands taking into account existing and future needs.


ARTICLE 8.43

Enforcement

1.    Each Party shall ensure that its telecommunications regulatory body maintains appropriate procedures and authority to enforce domestic measures relating to the obligations under this SubSection. Such procedures and authority shall include the ability to impose timely, proportionate and effective sanctions, or modification, suspension, and revocation of licenses.

2.    When a major supplier refuses the application of the rights and obligations provided for in Article 8.29 (Interconnection with Major Suppliers), Article 8.30 (Conduct of Major Suppliers), Article 8.31 (Competitive Safeguards on Major Suppliers), Article 8.32 (Unbundled Network Elements), Article 8.33 (Co-location), Article 8.34 (Resale), Article 8.35 (Facility Sharing) and Article 8.36 (Provisioning of Leased Circuit Services) the requesting service supplier may seek the intervention of the regulatory body which shall issue, in accordance with its domestic law, a binding decision in the shortest possible period of time and in any case within a reasonable period of time.

ARTICLE 8.44

Resolution of Telecommunications Disputes

1.    Each Party shall ensure that suppliers of public telecommunications networks or services of the other Party have timely recourse to a telecommunications regulatory body or other relevant body to resolve disputes arising under domestic measures addressing a matter set out in this Sub-Section.


2.    Each Party shall ensure that any supplier of public telecommunications networks or services of the other Party affected by a decision of its telecommunications regulatory body may appeal against such decision to a judicial or administrative authority independent of the parties involved.

3.    Where the appeal body is not judicial in character, written reasons for its decision shall be given and its decision shall be subject to review by an impartial and independent judicial authority.

4.    Decisions taken by appeal bodies shall be effectively implemented by the parties concerned in accordance with the applicable domestic law and internal procedures. An appeal shall not constitute grounds for non-compliance with the regulatory decision unless an appropriate authority stays that regulatory decision.

ARTICLE 8.45

Transparency

When regulatory bodies intend to take measures related to the provisions of this SubSection, they shall give interested parties the opportunity to comment on the draft measure within a reasonable period of time in accordance with their domestic law. Regulatory bodies shall make publicly available their consultation procedures for such draft measures. The results of the consultation procedure should be made publicly available by the regulatory body except in the case of confidential information in accordance with the domestic law on business confidentiality.


ARTICLE 8.46

Flexibility in the Choice of Technologies

A Party shall not prevent suppliers of public telecommunications services from having the flexibility to choose the technologies that they use to supply their services subject to the ability of each Party to take measures to ensure that end-users of different networks are able to communicate with each other.

ARTICLE 8.47

Relationship to other Sub-Sections, Sections and Chapters

In the event of any inconsistency between this Sub-Section and another Sub-Section or Section in this Chapter or another Chapter, this Sub-Section shall prevail to the extent of such inconsistency.

ARTICLE 8.48

Cooperation

1.    The Parties, recognising the rapid development of the telecommunications and information technology industry, both in the domestic and international contexts, shall cooperate to promote the development of such services with a view to obtaining the maximum benefit of the use of telecommunications and information technology for the Parties.


2.    The areas of cooperation may include the following:

(a)    exchange of views on policy issues such as the regulatory framework for high speed broadband networks and the reduction of international mobile roaming charges; and

(b)    promotion of the use by consumers, the public sector and the private sector, of telecommunications and information technology services, including newly emerging services.

3.    The forms of cooperation may include the following:

(a)    promoting dialogue on policy issues;

(b)    enhancing cooperation in international fora relating to telecommunications and information technology; and

(c)    other forms of cooperation activities.


SUB-SECTION 6

FINANCIAL SERVICES

ARTICLE 8.49

Scope and Definitions

1.    This Sub-Section sets out the principles of the regulatory framework for all financial services liberalised pursuant to Sections B (Cross-border Supply of Services), C (Establishment) and D (Temporary Presence of Natural Persons for Business Purposes).

2.    For the purposes of this Sub-Section:

(a)    "financial service" means any service of a financial nature, including a service incidental or auxiliary to a service of a financial nature, offered by a financial service supplier of a Party. Financial services include the following activities:

(i)    insurance and insurance-related services:

(1)    direct insurance (including co-insurance):

(aa)    life;

(bb)    non-life;


(2)    reinsurance and retrocession;

(3)    insurance inter-mediation, such as brokerage and agency; and

(4)    services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;

and

(ii)    banking and other financial services (excluding insurance):

(1)    acceptance of deposits and other repayable funds from the public;

(2)    lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;

(3)    financial leasing;

(4)    all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;

(5)    guarantees and commitments;


(6)    trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:

(aa)    money market instruments (including cheques, bills, certificates of deposits);

(bb)    foreign exchange;

(cc)    derivative products including, but not limited to, futures and options;

(dd)    exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;

(ee)    transferable securities;

(ff)    other negotiable instruments and financial assets, including bullion;

(7)    participation in issues of all kinds of securities, including underwriting and placement as agent, whether publicly or privately, and provision of services related to such issues;

(8)    money broking;

(9)    asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;


(10)    settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;

(11)    provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and

(12)    advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (1) to (11), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;

(b)    "financial service supplier" means any natural or juridical person of a Party that is engaged or is seeking to engage in the business of supplying financial services within the territory of that Party. The term "financial service supplier" does not include a public entity;

(c)    "new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, that is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party;

(d)    "public entity" means:

(i)    a government, a central bank or a monetary authority of a Party or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or


(ii)    a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions; and

(e)    "self-regulatory organisation" means any non-governmental body, including any securities or futures exchange or market, clearing agency, other organisation or association, that exercises regulatory or supervisory authority over financial service suppliers by statute or delegation from central, regional or local governments or authorities.

ARTICLE 8.50

Prudential Carve-out

1.    Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:

(a)    the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier;

(b)    the maintenance of the safety, soundness, integrity or financial responsibility of financial service suppliers; or

(c)    ensuring the integrity and stability of the Party's financial system.


2.    These measures shall not be more burdensome than necessary to achieve their aim and shall not constitute a means of arbitrary or unjustifiable discrimination against financial service suppliers of the other Party in comparison to its own like financial service suppliers or a disguised restriction on trade in services.

3.    Nothing in this Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual consumers or any confidential or proprietary information in the possession of public entities.

4.    Each Party shall make its best endeavours to ensure that the Basle Committee's "Core Principles for Effective Banking Supervision", the standards and principles of the International Association of Insurance Supervisors and the International Organisation of Securities Commissions' "Objectives and Principles of Securities Regulation" and the internationally agreed Standard for transparency and exchange of information for tax purposes as spelled out in the 2008 OECD Model Tax Convention on Income and on Capital are implemented and applied in its territory.

5.    Subject to Article 8.6 (National Treatment) and without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration or authorisation of cross-border financial service suppliers of the other Party and of financial instruments.


ARTICLE 8.51

Self-regulatory Organisations

When membership or participation in, or access to, any self-regulatory organisation is required by a Party in order for financial service suppliers of the other Party to supply financial services in or into the territory of the first Party, the Party shall ensure observance of the obligations under Article 8.6 (National Treatment) and Article 8.11 (National Treatment) by such self-regulatory organisation.

ARTICLE 8.52

Payment and Clearing Systems

Under terms and conditions that accord national treatment, each Party shall, as permitted by each Party's access criteria, grant to financial service suppliers of the other Party, established in its territory and regulated or supervised as financial service suppliers under its domestic law, access to payment and clearing systems operated by public entities and to official funding and refinancing facilities available in the normal course of ordinary business. This Article is not intended to confer access to a Party's lender of last resort facilities.


ARTICLE 8.53

New Financial Services

Each Party shall permit a financial service supplier of the other Party to supply any new financial service that the first Party would permit its own like financial service suppliers to supply without additional legislative action required by the first Party. A Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorisation for the supply of the service. Where such a Party requires such authorisation of the new financial service, a decision shall be made within a reasonable time and the authorisation may only be refused for prudential reasons under Article 8.50 (Prudential Carve-out).

ARTICLE 8.54

Data Processing

1.    Each Party shall, subject to appropriate safeguards on privacy and confidentiality, permit a financial service supplier of the other Party to transfer information in electronic or other form, into and out of its territory, for data processing where such processing is required in the ordinary course of business of such financial service supplier.


2.    Each Party shall, adopt or maintain appropriate safeguards to protect privacy and personal data, including individual records and accounts, as long as these safeguards are not used to circumvent the provisions of this Agreement.

ARTICLE 8.55

Specific Exceptions

1.    Nothing in this Chapter shall be construed to prevent a Party, including its public entities, from exclusively conducting or providing in its territory activities or services forming part of a public retirement plan or statutory system of social security, except when those activities may be carried out, as provided by the Party's domestic regulation, by financial service suppliers in competition with public entities or private institutions.

2.    Nothing in this Agreement applies to activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies.

3.    Nothing in this Chapter shall be construed as preventing a Party, including its public entities, from exclusively conducting or providing in its territory activities or services for the account or with the guarantee or using the financial resources of the Party, or its public entities except when those activities may be carried out, as provided by the Party's domestic regulation, by financial service suppliers in competition with public entities or private institutions.


SUB-SECTION 7

INTERNATIONAL MARITIME TRANSPORT SERVICES

ARTICLE 8.56

Scope, Definitions and Principles

1.    This Sub-Section sets out the principles regarding the liberalisation of international maritime transport services pursuant to Sections B (Cross-border Supply of Services), C (Establishment) and D (Temporary Presence of Natural Persons for Business Purposes).

2.    For the purposes of this Sub-Section, "international maritime transport" includes doortodoor and multi-modal transport operations, which is the carriage of goods using more than one mode of transport, involving a sealeg, under a single transport document, and to this effect the right to directly contract with providers of other modes of transport.

3.    As regards international maritime transport, the Parties agree to ensure effective application of the principles of unrestricted access to cargoes on a commercial basis, the freedom to supply international maritime transport services, as well as national treatment in the framework of the supply of such services.


In view of the existing levels of liberalisation between the Parties in international maritime transport:

(a)    the Parties shall effectively apply the principle of unrestricted access to the international maritime transport markets and trades on a commercial and non-discriminatory basis; and

(b)    each Party shall grant to ships flying the flag of the other Party or operated by service suppliers of the other Party treatment no less favourable than that accorded to its own ships or those of any third country, whichever are the better, with regard to, inter alia, access to ports, the use of infrastructure and auxiliary maritime services of the ports, as well as related fees and charges, customs facilities and access to berths and facilities for loading and unloading.

4.    In applying these principles, the Parties shall:

(a)    not introduce cargo-sharing arrangements in future agreements with third countries concerning maritime transport services, including dry and liquid bulk and liner trade, and terminate, within a reasonable period of time, such cargo-sharing arrangements in case they exist in previous agreements; and

(b)    upon the entry into force of this Agreement, abolish and abstain from introducing any unilateral measures 29 and administrative, technical and other obstacles which could constitute a disguised restriction or have discriminatory effects on the free supply of services in international maritime transport.


5.    Each Party shall permit international maritime transport service suppliers of the other Party to have an establishment in its territory under conditions of establishment and operation in accordance with the conditions inscribed in its Schedule of Specific Commitments.

6.    The Parties shall make available to international maritime transport suppliers of the other Party on reasonable and non-discriminatory terms and conditions the use of the following services at the port:

(a)    pilotage;

(b)    towing and tug assistance;

(c)    provisioning;

(d)    fuelling and watering;

(e)    garbage collecting and ballast waste disposal;

(f)    port captain's services;

(g)    navigation aids; and

(h)    shore-based operational services essential to ship operations, including communications, water and electrical supplies, emergency repair facilities, anchorage, berth and berthing services.


SECTION F

ELECTRONIC COMMERCE

ARTICLE 8.57

Objectives

1.    The Parties, recognising that electronic commerce increases trade opportunities in many sectors, agree on the importance of facilitating its use and development and the applicability of WTO rules to electronic commerce.

2.    The Parties agree to promote the development of electronic commerce between them, in particular by cooperating on the issues raised by electronic commerce under the provisions of this Chapter. Within this context both Parties should avoid imposing unnecessary regulations or restrictions on electronic commerce.

3.    The Parties recognise the importance of the free flow of information on the internet, while agreeing that this should not impair the rights of intellectual property owners given the importance of protecting intellectual property rights on the internet.

4.    The Parties agree that the development of electronic commerce must be fully compatible with international standards of data protection, in order to ensure the confidence of users of electronic commerce.


ARTICLE 8.58

Customs Duties

The Parties shall not impose customs duties on electronic transmissions.

ARTICLE 8.59

Electronic Supply of Services

For greater certainty, the Parties affirm that measures related to the supply of a service using electronic means falls within the scope of the obligations contained in the relevant provisions of this Chapter subject to any exceptions applicable to such obligations.

ARTICLE 8.60

Electronics Signatures

1.    The Parties shall take steps to facilitate the better understanding of each other's electronic signatures framework and, subject to relevant domestic conditions and legislation, to examine the feasibility of having in the future a mutual recognition agreement on electronic signatures.

2.    In achieving the objectives of paragraph 1, the Parties shall:


(a)    facilitate, as much as possible, the representation of the other Party to available fora organised formally or informally by its own competent authorities on electronic signatures by allowing the other Party to present its electronic signatures framework;

(b)    encourage, as much as possible, the exchange of views on electronic signatures through dedicated seminars and expert meetings in areas such as security and interoperability; and

(c)    contribute, as much as possible, to the other Party's efforts to study and analyse its own framework by making available relevant information.

ARTICLE 8.61

Regulatory Cooperation on Electronic Commerce

1.    The Parties shall maintain a dialogue on regulatory issues raised by electronic commerce, which will, inter alia, address the following issues:

(a)    the recognition of certificates of electronic signatures issued to the public and the facilitation of cross-border certification services;

(b)    the liability of intermediary service providers with respect to the transmission, or storage of information;

(c)    the treatment of unsolicited electronic commercial communications;


(d)    the protection of consumers; and

(e)    any other issue relevant for the development of electronic commerce.

2.    This cooperation may take the form of an exchange of information on the Parties' respective legislation on these issues as well as on the implementation of such legislation.

SECTION G

EXCEPTIONS

ARTICLE 8.62

General Exceptions

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination against the other Party where like conditions prevail, or a disguised restriction on establishment or crossborder supply of services, nothing in this Chapter shall be construed to prevent the adoption or enforcement by either Party of measures:

(a)    necessary to protect public security or public morals or to maintain public order 30 ;


(b)    necessary to protect human, animal or plant life or health;

(c)    relating to the conservation of exhaustible natural resources if such measures are applied in conjunction with restrictions on domestic entrepreneurs or on the domestic supply or consumption of services;

(d)    necessary for the protection of national treasures of artistic, historic or archaeological value;

(e)    necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Chapter including those relating to:

(i)    the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;

(ii)    the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;

(iii)    safety;


(f)    inconsistent with Article 8.6 (National Treatment) and Article 8.11 (National Treatment), provided that the difference in treatment is aimed at ensuring the effective or equitable imposition or collection of direct taxes in respect of economic activities, entrepreneurs or service suppliers of the other Party 31 .


ARTICLE 8.63

Review

With a view to further deepening liberalisation and eliminating remaining restrictions and ensuring an overall balance of rights and obligations, the Parties shall review this Chapter and their Schedules of Specific Commitments no later than three years after the entry into force of this Agreement and at regular intervals thereafter. As a result of such review, the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees) may decide to amend the relevant Schedules of Specific Commitments.

CHAPTER NINE

GOVERNMENT PROCUREMENT

ARTICLE 9.1

Definitions

For the purposes of this Chapter:

(a)    "commercial goods and services" means goods and services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, nongovernmental buyers for non-governmental purposes;


(b)    "competitive activity" means, for the Union:

(i)    an activity, performed within the territory of a Member State of the Union, which is directly exposed to competition in markets to which access is not restricted; and

(ii)    a competent authority in the Union has adopted a decision establishing the applicability of paragraph (i).

For the purposes of subparagraph (b)(i), the question of whether an activity is directly exposed to competition shall be decided on the basis of the characteristics of the goods or services concerned, the existence of alternative goods or services, and the prices and the actual or potential presence of more than one supplier of the goods or services in question;

(c)    "construction services" means a service that has as its objective the realisation by whatever means of civil or building works, based on Division 51 of the Provisional UN Central Product Classification (CPC);

(d)    "corrective action" means, in the context of domestic review procedures, either setting aside or ensuring the setting aside of decisions taken unlawfully by a procuring entity, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or any other document relating to the tendering procedure;

(e)    "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 reranking of tenders;


(f)    "in writing" or "written" means any worded or numbered expression that can be read, reproduced, and later communicated. It may include electronically transmitted and stored information;

(g)    "juridical person" is understood as provided for in paragraph (b) of Article 8.2 (Definitions);

(h)    a "Union juridical person" or a "Singapore juridical person" is understood as provided for in paragraph (c) of Article 8.2 (Definitions);

(i)    "limited tendering" means a procurement method where the procuring entity contacts a supplier or suppliers of its choice;

(j)    "locally established" means a juridical person established in one Party which is owned or controlled by natural or juridical persons of the other Party.

A juridical person is:

(i)    "owned" by natural or juridical persons of the other Party if more than 50 per cent of the equity interest in it is beneficially owned by persons of the other Party; and

(ii)    "controlled" by natural or juridical persons of the other Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;

(k)    "measure" means any law, regulation, procedure, administrative guidance or practice, or any action of a procuring entity relating to a covered procurement;


(l)    "multi-use list" means a list of suppliers that a procuring entity has determined satisfies the conditions for participation in that list, and that the procuring entity intends to use more than once;

(m)    "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;

(n)    "offsets" 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 actions or requirements;

(o)    "open tendering" means a procurement method where all interested suppliers may submit a tender;

(p)    "privatised" means, for Singapore, an entity that has been reconstituted from a procuring entity or part thereof to be a legal person acting in accordance with commercial considerations in the procurement of goods and that is no longer entitled to exercise governmental authority, even though the government possesses holdings thereof or appoints members of the Board of Directors thereto.

For greater certainty, where the government possesses holdings thereof or appoints a government official to the Board of Directors of a privatised entity, the entity is deemed to act in accordance with commercial considerations in its purchase of goods and services, such as with regard to the availability, price and quality of the goods and services, if the government or the Board of Directors so appointed does not, directly or indirectly, influence or direct the decisions of the Board in the entity's procurement of goods and services;


(q)    "procuring entity" means an entity covered under Annexes 9-A, 9-B or 9-C;

(r)    "qualified supplier" means a supplier that a procuring entity recognises as having satisfied the conditions for participation;

(s)    "Revised GPA" refers to the text of the Agreement on Government Procurement, as amended by the Decision on the Outcomes of the Negotiations under Article XXIV:7 of the GPA, made on 30 March 2012;

(t)    "selective tendering" means a procurement method where only qualified suppliers are invited by the procuring entity to submit a tender;

(u)    "services" includes construction services, unless otherwise specified;

(v)    "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. It 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;

(w)    "supplier" means a person or group of persons of either Party, as applicable, that provides or could provide goods or services;


(x)    "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 9.2

Scope and Coverage

Application of this Chapter

1.    This Chapter applies to any measure regarding covered procurement, whether or not it is conducted exclusively or partially by electronic means.

2.    For the purposes of this Chapter, covered procurement means procurement for governmental purposes:

(a)    of goods, services, or any combination thereof:

(i)    as specified in each Party's Annexes 9-A to 9-G; and


(ii)    not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;

(b)    by any contractual means, including purchase; lease; and rental or hire purchase, with or without an option to buy; and any public-private partnership contracts as defined in Annex 9-I;

(c)    for which the value, as estimated in accordance with paragraphs 6 to 8, equals or exceeds the relevant threshold specified in Annexes 9-A to 9-G, at the time of publication of a notice in accordance with Article 9.6 (Notices);

(d)    by a procuring entity; and

(e)    that is not otherwise excluded from coverage in paragraph 3 or in a Party's Annexes 9-A to 9-G.

3.    Except where provided otherwise in Annexes 9-A to 9-G, 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 where the applicable procedure or condition would be inconsistent with this Chapter.

4.    Each Party shall specify the following information in Annexes 9-A to 9-G:

(a)    in Annex 9-A the central government entities whose procurement is covered by this Chapter;

(b)    in Annex 9-B, the sub-central entities whose procurement is covered by this Chapter;


(c)    in Annex 9-C, all other entities whose procurement is covered by this Chapter;

(d)    in Annex 9-D, the goods covered by this Chapter;

(e)    in Annex 9-E, the services, other than construction services, covered by this Chapter;

(f)    in Annex 9-F, the construction services covered by this Chapter; and

(g)    in Annex 9-G, any General Notes.

5.    Where a procuring entity, in the context of covered procurement, requires persons not listed in Annexes 9-A to 9-C to procure in accordance with particular requirements, Article 9.4 (General Principles) shall apply mutatis mutandis to such requirements.

Valuation

6.    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)    where the procurement provides for the possibility of options, the total value of such options.

7.    Where an individual requirement for a procurement results in the award of more than one contract, or in the award of contracts in separate parts (hereafter referred to as "recurring procurements"), the calculation of the estimated maximum total value shall be based on:

(a)    the value of recurring procurements of the same type of good or service awarded during the preceding twelve months or the procuring entity's preceding fiscal year, adjusted where possible to take into account anticipated changes in the quantity or value of the good or service being procured over the subsequent twelve months; or

(b)    the estimated value of recurring procurements of the same type of good or service to be awarded during the twelve months subsequent to the initial contract award or the procuring entity's fiscal year.

8.    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)    where the term of the contract is twelve months or less, the total estimated maximum value for its duration; or


(ii)    where the term of the contract exceeds twelve months, the total estimated maximum value, including any estimated residual value;

(b)    where the contract is for an indefinite period, the estimated monthly instalment multiplied by forty-eight; and

(c)    where is it not certain whether the contract is to be a fixed-term contract, subparagraph (b) shall be used.

ARTICLE 9.3

Security and General Exceptions

1.    Nothing in this Chapter shall be construed to prevent any 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 any 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, philanthropic institutions, or prison labour.

ARTICLE 9.4

General Principles

National Treatment and Non-Discrimination

1.    With respect to any measure regarding covered procurement, each 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, treatment no less favourable than the treatment the Party, including its procuring entities, accords to domestic goods, services, and suppliers.

2.    With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:

(a)    treat a locally established supplier of the other Party less favourably than another locally established supplier on the basis of 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

3.    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; and

(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.

Conduct of Procurement

4.    A procuring entity shall conduct covered procurement in a transparent and impartial manner that:

(a)    is consistent with this Chapter, using methods such as open tendering, selective tendering, and limited tendering;

(b)    avoids conflicts of interest; and

(c)    prevents corrupt practices.


Rules of Origin

5.    For purposes of covered procurement, no Party may apply rules of origin to goods or services imported from or supplied from another Party that are different from the rules of origin the Party applies at the same time in the normal course of trade to imports or supplies of the same goods or services from the same Party.

Offsets

6.    With regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose, or enforce any offsets.

Measures Not Specific to Procurement

7.    Paragraphs 1 and 2 shall not apply to customs duties and charges of any kind imposed on, or in connection with, importation, the method of levying such duties and charges, other import regulations or formalities, and measures affecting trade in services other than measures governing covered procurement.

ARTICLE 9.5

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 Annex 9-H:

(a)    the electronic or paper media in which the Party publishes the information described in paragraph 1;

(b)    the electronic or paper media in which the Party publishes the notices required by Article 9.6 (Notices), paragraph 8 of Article 9.8 (Qualification of Suppliers), and paragraph 2 of Article 9.15 (Transparency of Procurement Information).

3.    Each Party shall promptly notify the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees) of any modification to the Party's information listed in Annex 9-H.


ARTICLE 9.6

Notices

Notice of Intended Procurement

1.    For each covered procurement, a procuring entity shall publish a notice of intended procurement, which shall be directly accessible by electronic means free of charge through a single point of access, except in circumstances described in Article 9.12 (Limited Tendering). The notice of intended procurement shall remain readily accessible to the public, at least, until the expiration of the time-period indicated in the notice. The appropriate electronic medium shall be listed by each party in Annex 9-H.

2.    Except as otherwise provided 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 time-frame 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)    where 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 therewith, 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)    where, pursuant to Article 9.8 (Qualification of Suppliers), 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, where 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 Agreement.

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 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, where 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 by electronic means through the single point of access used for the publication of notices of intended procurement as early as possible in each fiscal year a notice regarding their future procurement plans (hereinafter referred to as a "notice of planned procurement"). The notice should include the subject-matter of the procurement and the planned date of the publication of the notice of intended procurement.


5.    A procuring entity in Annex 9-B or Annex 9-C may use a notice of planned procurement as a notice of intended procurement provided that the notice of planned procurement includes as much of the information referred to in paragraph 2 as is available and a statement that interested suppliers should express their interest in the procurement to the procuring entity.

ARTICLE 9.7

Conditions for Participation

1.    A procuring entity shall limit any conditions for participation in a procurement to those that are essential to ensure that a supplier has the legal, commercial, technical, and financial abilities to undertake the relevant procurement.

2.    In establishing the conditions for participation, a procuring entity:

(a)    shall not impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by a procuring entity of a Party or that the supplier has prior experience in the territory of that Party; and

(b)    may require relevant prior experience where essential to meet the requirements of the procurement.

3.    In assessing whether a supplier satisfies the conditions for participation, a procuring entity:


(a)    shall evaluate the financial capacity and the commercial and technical abilities of a supplier on the basis of that supplier's business activities both inside and outside the territory of the Party of the procuring entity; and

(b)    shall base its evaluation on the conditions that the procuring entity has specified in advance in notices or tender documentation.

4.    Where there is supporting evidence, a Party, including its procuring entities, may exclude a supplier on grounds such as:

(a)    bankruptcy;

(b)    false declarations;

(c)    significant or persistent deficiencies in performance of any substantive requirement or obligation under a prior contract or contracts;

(d)    final judgments in respect of serious crimes or other serious offences;

(e)    professional misconduct or acts or omissions that adversely reflect upon the commercial integrity of the supplier; or

(f)    failure to pay taxes.


ARTICLE 9.8

Qualification of Suppliers

Registration Systems and Qualification Procedures

1.    A Party, including its procuring entities, may maintain a supplier registration system under which interested suppliers are required to register and provide certain information.

2.    Each Party shall ensure that:

(a)    its procuring entities make efforts to minimise differences in their qualification procedures; and

(b)    where its procuring entities maintain registration systems, the entities make efforts to minimise differences in their registration systems.

3.    A Party, including its procuring entities, shall not adopt or apply any registration system or qualification procedure with the purpose or the effect of creating unnecessary obstacles to the participation of suppliers of the other Party in its procurement.

Selective Tendering

4.    Where a procuring entity intends to use selective tendering, the entity shall:


(a)    in the notice of intended procurement include at least the information in subparagraphs 2(a), (b), (f), (g), (j), (k), and (l) of Article 9.6 (Notices) and invite suppliers to submit a request for participation; and

(b)    provide, by the commencement of the time period for tendering, at least the information in subparagraphs 2(c), (d), (e), (h), and (i) of Article 9.6 (Notices) to the qualified suppliers that it notifies in accordance with subparagraph 3(b) of Article 9.10 (Time Periods).

5.    A procuring entity shall allow all qualified suppliers to participate in a particular procurement, unless the procuring entity states in the notice of intended procurement any limitation on the number of suppliers that will be permitted to tender and the criteria for selecting the limited number of suppliers. In any case, the number of suppliers permitted to submit a tender shall be sufficient to ensuring competition without affecting the operational efficiency of the procurement system.

6.    Where the tender documentation is not made publicly available from the date of publication of the notice referred to in paragraph 4, a procuring entity shall ensure that those documents are made available at the same time to all the qualified suppliers selected in accordance with paragraph 5.

Multi-Use Lists

7.    A procuring entity may maintain a multi-use list of suppliers, provided that a notice inviting interested suppliers to apply for inclusion on the list is:

(a)    published annually; and


(b)    where published by electronic means, made available continuously, in the appropriate medium listed in Annex 9-H.

8.    The notice provided for in paragraph 7 shall include:

(a)    a description of the goods or services, or categories thereof, for which the list may be used;

(b)    the conditions for participation to be satisfied by suppliers for inclusion on the list and the methods that the procuring entity will use to verify that a supplier satisfies the conditions;

(c)    the name and address of the procuring entity and other information necessary to contact the entity and obtain all relevant documents relating to the list;

(d)    the period of validity of the list and the means for its renewal or termination, or where the period of validity is not provided, an indication of the method by which notice will be given of the termination of use of the list; and

(e)    an indication that the list may be used for procurement covered by this Agreement.

9.    Notwithstanding paragraph 7, where a multi-use list will be valid for three years or less, a procuring entity may publish the notice referred to in paragraph 7 only once, at the beginning of the period of validity of the list, provided that the notice:

(a)    states the period of validity and that further notices will not be published; and


(b)    is published by electronic means and is made available continuously during the period of its validity.

10.    A procuring entity shall allow suppliers to apply at any time for inclusion on a multiuse list and shall include on the list all qualified suppliers within a reasonably short time.

11.    Where a supplier that is not included on a multi-use list submits a request for participation in a procurement based on a multi-use list and all required documents relating thereto, within the time period provided for in paragraph 2 of Article 9.10 (Time Periods), a procuring entity shall examine the request. The procuring entity shall not exclude the supplier from consideration in respect of the procurement on the grounds that the entity has insufficient time to examine the request unless, in exceptional cases, due to the complexity of the procurement, the entity is not able to complete the examination of the request within the time period allowed for the submission of tenders.

Annex 9-C Entities

12.    A procuring entity listed in Annex 9-C may use a notice inviting suppliers to apply for inclusion on a multi-use list as a notice of intended procurement, provided that:

(a)    the notice is published in accordance with paragraph 7 and includes the information in paragraph 8, as much of the information in paragraph 2 of Article 9.6 (Notices) as is available, and a statement that it constitutes a notice of intended procurement or that only the suppliers on the multiuse list will receive further notices of procurement covered by the multi-use list; and


(b)    the entity promptly provides to suppliers that have expressed an interest to the entity in a given procurement, sufficient information to permit them to assess their interest in the procurement, including all remaining information required in paragraph 2 of Article 9.6 (Notices), to the extent such information is available.

13.    A procuring entity covered under Annex 9-C may allow a supplier that has applied for inclusion on a multi-use list in accordance with paragraph 10 to tender in a given procurement, where there is sufficient time for the procuring entity to examine whether the supplier satisfies the conditions for participation.

Information on Procuring Entity Decisions

14.    A procuring entity shall promptly inform any supplier that submits a request for participation or application for inclusion on a multi-use list of the procuring entity's decision with respect to the request.

15.    Where a procuring entity rejects a supplier's request for participation or application for inclusion on a multi-use list, ceases to recognise a supplier as qualified, or removes a supplier from a multi-use list, the entity shall promptly inform the supplier and, on request of the supplier, promptly provide the supplier with a written explanation of the reasons for its decision.


ARTICLE 9.9

Technical Specifications and Tender Documentation

Technical Specifications

1.    A procuring entity shall not prepare, adopt, or apply any technical specification or prescribe any conformity assessment procedure with the purpose or the effect of creating unnecessary obstacles to international trade.

2.    In prescribing the technical specifications for the goods or services being procured, a procuring entity shall, where appropriate:

(a)    set out the technical specification in terms of performance and functional requirements, rather than design or descriptive characteristics; and

(b)    base the technical specification on international standards, where such exist; otherwise, on national technical regulations, recognised national standards, or building codes.

3.    Where design or descriptive characteristics are used in the technical specifications, a procuring entity should indicate, where appropriate, that it will consider tenders of equivalent goods or services that demonstrably fulfil the requirements of the procurement by including words such as "or equivalent" in the tender documentation.


4.    A procuring entity shall not prescribe technical specifications that require or refer to a particular trademark or trade name, patent, copyright, design, type, specific origin, producer, or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement requirements and provided that, in such cases, the entity includes words such as "or equivalent" in the tender documentation.

5.    A procuring entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation or adoption of any technical specification for a specific procurement from a person that may have a commercial interest in the procurement.

6.    For greater certainty, a Party, including its procuring entities, may, in accordance with this Article, prepare, adopt, or apply technical specifications to promote the conservation of natural resources or protect the environment.

7.    When procuring entities lay down environmental characteristics in terms of performance or functional requirement, as referred to in paragraph 2(a), they may consider using the detailed specification or, if necessary, parts thereof, as defined by eco-labels existing within the Union and green labels existing in Singapore provided that:

(a)    those specifications are appropriate to define the characteristics of the supplies or services that are the object of the contract;

(b)    the requirements of the label are drawn up on the basis of scientific information; and


(c)    those specifications are accessible to all interested parties.

Tender Documentation

8.    A procuring entity shall provide to suppliers tender documentation that includes all information necessary to permit suppliers to prepare and submit responsive tenders. Unless already provided in the notice of intended procurement, such documentation shall include a complete description of:

(a)    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 and any requirements to be fulfilled, including any technical specifications, conformity assessment certification, plans, drawings, or instructional materials;

(b)    any conditions for participation of suppliers, including a list of information and documents that suppliers are required to submit in connection with the conditions for participation;

(c)    all evaluation criteria the entity will apply in the awarding of the contract and, except where price is the sole criterion, the relative importance of such criteria;

(d)    where the procuring entity will conduct the procurement by electronic means, any authentication and encryption requirements or other requirements related to the submission of information by electronic means;


(e)    where the procuring entity will hold an electronic auction, the rules, including identification of the elements of the tender related to the evaluation criteria, on which the auction will be conducted;

(f)    where there will be a public opening of tenders, the date, time, and place for the opening and, where appropriate, the persons authorised to be present;

(g)    any other terms or conditions, including terms of payment and any limitation on the means by which tenders may be submitted, such as whether on paper or by electronic means; and

(h)    any dates for the delivery of goods or the supply of services.

9.    In establishing any delivery date for the goods or services being procured, a procuring entity shall take into account such factors as the complexity of the procurement, the extent of subcontracting anticipated and the realistic time required for production, de-stocking and transport of goods from the point of supply or for supply of services.

10.    Procuring entities may lay down environmental conditions relating to the performance of a procurement, provided that these are compatible with the rules established by this Chapter and are indicated in the notice of intended procurement or in another notice used as a notice of intended procurement 32 or tender documentation.


11.    The evaluation criteria set out in the notice of intended procurement or in another notice used as a notice of intended procurement or tender documentation may include, among others, price and other cost factors, quality, technical merit, environmental characteristics, and terms of delivery.

12.    A procuring entity shall promptly:

(a)    make available tender documentation to ensure that interested suppliers have sufficient time to submit responsive tenders;

(b)    provide, on request, the tender documentation to any interested supplier; and

(c)    reply to any reasonable request for relevant information by any interested or participating supplier, provided that such information does not give that supplier an advantage over other suppliers.

Modifications

13.    Where, prior to the award of a contract, a procuring entity modifies the criteria or requirements set out in a notice of intended procurement or in another notice used as a notice of intended procurement or tender documentation provided to participating suppliers, or amends or reissues a notice or tender documentation, it shall transmit in writing all such modifications or amended or re-issued notice or tender documentation:


(a)    to all suppliers that are participating at the time of the modification, amendment or reissuance, where such suppliers are known to the entity, and in all other cases, in the same manner as the original information was made available; and

(b)    in adequate time to allow such suppliers to modify and re-submit amended tenders, as appropriate.

ARTICLE 9.10

Time Periods

General

1.    A procuring entity shall, consistent with its own reasonable needs, provide sufficient time for suppliers to prepare and submit requests for participation and responsive tenders, taking into account such factors as:

(a)    the nature and complexity of the procurement;

(b)    the extent of subcontracting anticipated; and

(c)    the time necessary for transmitting tenders by non-electronic means from foreign as well as domestic points where electronic means are not used.


Such time-periods, including any extension of the time periods, shall be the same for all interested or participating suppliers.

Deadlines

2.    A procuring entity that uses selective tendering shall establish that the final date for the submission of requests for participation shall not, in principle, be less than twenty-five days from the date of publication of the notice of intended procurement. Where a state of urgency duly substantiated by the procuring entity renders this time period impracticable, the time period may be reduced to not less than ten days.

3.    Except as provided for in paragraphs 4, 5, 7 and 8, a procuring entity shall establish that the final date for the submission of tenders shall not be less than forty days from the date on which:

(a)    in the case of open tendering, the notice of intended procurement is published; or

(b)    in the case of selective tendering, the entity notifies suppliers that they will be invited to submit tenders, whether or not it uses a multi-use list.

4.    A procuring entity may reduce the time-period for tendering set out in paragraph 3 to not less than ten days where:


(a)    the procuring entity published a notice of planned procurement under paragraph 4 of Article 9.6 (Notices) at least forty days and not more than twelve months in advance of the publication of the notice of intended procurement, and the notice of planned procurement contains:

(i)    a description of the procurement;

(ii)    the approximate final dates for the submission of tenders or requests for participation;

(iii)    a statement that interested suppliers should express their interest in the procurement to the procuring entity;

(iv)    the address from which documents relating to the procurement may be obtained; and

(v)    as much of the information that is required under paragraph 2 of Article 9.6 (Notices) for the notice of intended procurement, as is available;

(b)    the procuring entity, for procurements of a recurring nature, indicates in an initial notice of intended procurement that subsequent notices will provide time periods for tendering based on this paragraph; or

(c)    a state of urgency duly substantiated by the procuring entity renders the time period for tendering established in accordance with paragraph 3 impracticable.


5.    A procuring entity may reduce the time period for tendering set out in paragraph 3 by five days for each one of the following circumstances:

(a)    the notice of intended procurement is published by electronic means;

(b)    all the tender documentation is made available by electronic means from the date of the publication of the notice of intended procurement; and

(c)    the tenders can be received by electronic means by the procuring entity.

6.    The use of paragraph 5, in conjunction with paragraph 4, shall in no case result in the reduction of the time period for tendering set out in paragraph 3 to less than ten days from the date on which the notice of intended procurement is published.

7.    Notwithstanding any other provision in this Article, where a procuring entity purchases commercial goods or services, or any combination thereof, it may reduce the time period for tendering set out in paragraph 3 to not less than thirteen days, provided that it publishes by electronic means, at the same time, both the notice of intended procurement and the tender documentation. In addition, where the entity also accepts tenders for commercial goods and services by electronic means, it may reduce the time period set out in paragraph 3 to not less than ten days.

8.    Where a procuring entity covered under Annex 9-B or Annex 9-C has selected all or a limited number of qualified suppliers, the time period for tendering may be fixed by mutual agreement between the procuring entity and the selected suppliers. In the absence of agreement, the period shall not be less than ten days.


ARTICLE 9.11

Negotiations

1.    A Party may provide for its procuring entities to conduct negotiations:

(a)    where the entity has indicated its intent to conduct negotiations in the notice of intended procurement required under paragraph 2 of Article 9.6 (Notices); or

(b)    where it appears from the evaluation that no one tender is obviously the most advantageous in terms of the specific evaluation criteria set out in the notice of intended procurement or in another notice used as a notice of intended procurement or tender documentation.

2.    A procuring entity shall:

(a)    ensure that any elimination of suppliers participating in negotiations is carried out in accordance with the evaluation criteria set out in the notice of intended procurement or in another notice used as a notice of intended procurement or tender documentation; and

(b)    where negotiations are concluded, provide a common deadline for the remaining participating suppliers to submit any new or revised tenders.


ARTICLE 9.12

Limited Tendering

1.    Provided that it does not use this provision for the purpose of avoiding competition among suppliers or in a manner that discriminates against suppliers of the other Party or protects domestic suppliers, a procuring entity may use limited tendering and may choose not to apply Article 9.6 (Notices), Article 9.7 (Conditions for Participation), Article 9.8 (Qualification of Suppliers), paragraphs 8 to 13 of Article 9.9 (Technical Specifications and Tender Documentation), Article 9.10 (Time Periods), Article 9.11 (Negotiations), Article 9.13 (Electronic Auctions), and Article 9.14 (Treatment of Tenders and Awarding of Contracts) only under any of the following circumstances:

(a)    where:

(i)    no tenders were submitted or no suppliers requested participation;

(ii)    no tenders that conform to the essential requirements of the tender documentation were submitted;

(iii)    no suppliers satisfied the conditions for participation; or

(iv)    the tenders submitted have been collusive;

provided that the requirements of the tender documentation are not substantially modified.


(b)    where the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist for any of the following reasons:

(i)    the requirement is for a work of art;

(ii)    the protection of patents, copyrights or other exclusive rights; or

(iii)    due to an absence of competition for technical reasons;

(c)    for additional deliveries by the original supplier of goods and services that were not included in the initial procurement where a change of supplier for such additional goods and services:

(i)    cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services, or installations procured under the initial procurement; and

(ii)    would cause significant inconvenience or substantial duplication of costs for the procuring entity;

(d)    insofar as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering or selective tendering;

(e)    for goods purchased on a commodity market;


(f)    where a procuring entity procures a prototype or a first good or service that is developed at its request in the course of, and for, a particular contract for research, experiment, study or original development. Original development of a first good or service may include limited production or supply in order to incorporate the results of field testing and to demonstrate that the good or service is suitable for production or supply in quantity to acceptable quality standards, but does not include quantity production, or supply to establish commercial viability, or to recover research and development costs;

(g)    for purchases made under exceptionally advantageous conditions that only arise in the very short term in the case of unusual disposals such as those arising from liquidation, receivership, or bankruptcy, but not for routine purchases from regular suppliers; and

(h)    where a contract is awarded to a winner of a design contest provided that:

(i)    the contest has been organised in a manner that is consistent with the principles of this Chapter, in particular relating to the publication of a notice of intended procurement; and

(ii)    the participants are judged by an independent jury with a view to a design contract being awarded to a winner.

2.    A procuring entity shall prepare a report in writing on each contract awarded under paragraph 1. The report shall include the name of the procuring entity, the value and kind of goods or services procured, and a statement indicating the circumstances and conditions described in paragraph 1 that justified the use of limited tendering.


ARTICLE 9.13

Electronic Auctions

Where a procuring entity intends to conduct a covered procurement using an electronic auction, the entity shall provide each participant, before commencing the electronic auction, with:

(a)    the automatic evaluation method, including the mathematical formula, that is based on the evaluation criteria set out in the tender documentation and that will be used in the automatic ranking or re-ranking during the auction;

(b)    the results of any initial evaluation of the elements of its tender where the contract is to be awarded on the basis of the most advantageous tender; and

(c)    any other relevant information relating to the conduct of the auction.

ARTICLE 9.14

Treatment of Tenders and Awarding of Contracts

Treatment of Tenders

1.    A procuring entity shall receive, open, and treat all tenders in accordance with procedures that guarantee the fairness and impartiality of the procurement process, and the confidentiality of tenders.


2.    A procuring entity shall not penalise any supplier whose tender is received after the time specified for receiving tenders if the delay is due solely to mishandling on the part of the procuring entity.

3.    When a procuring entity provides a supplier with an opportunity to correct unintentional errors of form between the opening of tenders and the awarding of the contract, the procuring entity shall provide the same opportunity to all participating suppliers.

Awarding of Contracts

4.    To be considered for an award, a tender shall be submitted in writing and shall, at the time of opening, comply with the essential requirements set out in the notices and tender documentation and be from a supplier that satisfies the conditions for participation.

5.    Unless a procuring entity determines that it is not in the public interest to award a contract, the entity shall award the contract to the supplier that the entity has determined to be capable of fulfilling the terms of the contract and that, based solely on the evaluation criteria specified in the notices and tender documentation, has submitted:

(a)    the most advantageous tender; or

(b)    where price is the sole criterion, the lowest price.


6.    Where a procuring entity receives a tender with a price that is abnormally lower than the prices in other tenders submitted, it may verify with the supplier that it satisfies the conditions for participation and is capable of fulfilling the terms of the contract and/or whether the price takes into account the grant of subsidies.

7.    Where a procuring entity establishes that a tender is abnormally low because the supplier has obtained subsidies, the tender can be rejected on that ground alone only after consultations with the supplier where the latter is unable to prove, within a sufficient time fixed by the procuring entity, that the subsidy in question was granted in compliance with the disciplines relating to subsidies laid down in this Agreement.

8.    A procuring entity shall not use options, cancel a procurement, or modify awarded contracts in a manner that circumvents the obligations under this Chapter.

Article 9.15

Transparency of Procurement Information

Information Provided to Suppliers

1.    A procuring entity shall promptly inform participating suppliers of the entity's contract award decisions and, upon the request of a supplier, shall do so in writing. Subject to paragraphs 2 and 3 of Article 9.16 (Disclosure of Information), a procuring entity shall, upon request, provide an unsuccessful supplier with an explanation of the reasons why the entity did not select its tender and the relative advantages of the successful supplier's tender.


Publication of Award Information

2.    Not later than seventy-two days after the award of each contract covered by this Chapter, a procuring entity shall publish a notice in the appropriate paper or electronic medium listed in Annex 9-H. Where the entity publishes the notice only in an electronic medium, the information shall remain readily accessible for a reasonable period of time. The notice shall include at least the following information:

(a)    a description of the goods or services procured;

(b)    the name and address of the procuring entity;

(c)    the name and address of the successful supplier;

(d)    the value of the successful tender or the highest and lowest offers taken into account in the award of the contract;

(e)    the date of award; and

(f)    the type of procurement method used, and in cases where limited tendering was used pursuant to Article 9.12 (Limited Tendering), a description of the circumstances justifying the use of limited tendering.


Maintenance of Documentation, Reports, and Electronic Traceability

3.    Each procuring entity shall, for a period of at least three years from the date it awards a contract, maintain:

(a)    the documentation and reports of tendering procedures and contract awards relating to covered procurement, including the reports required under Article 9.12 (Limited Tendering); and

(b)    data that ensure the appropriate traceability of the conduct of covered procurement by electronic means.

Collection and Report of Statistics

4.    Each Party agrees to communicate to the other Party the available and comparable statistical data relevant to the procurement covered by this Chapter.


ARTICLE 9.16

Disclosure of Information

Provision of Information to Parties

1.    Upon the request of a Party, the other Party shall provide promptly any information necessary to determine whether a procurement was conducted fairly, impartially and in accordance with this Chapter, including information on the characteristics and relative advantages of the successful tender. In cases where release of the information would prejudice competition in future tenders, the Party that receives that information shall not disclose such information to any supplier, except after consultation with and agreement of, the Party that provided the information.

Non-Disclosure of Information

2.    Notwithstanding any other provision of this Chapter, a Party, including its procuring entities, shall not provide to any particular supplier information that might prejudice fair competition between suppliers.

3.    Nothing in this Chapter shall be construed to require a Party, including its procuring entities, authorities, and review bodies, to disclose confidential information where disclosure:

(a)    would impede law enforcement;

(b)    might prejudice fair competition between suppliers;


(c)    would prejudice the legitimate commercial interests of particular persons, including the protection of intellectual property; or

(d)    would otherwise be contrary to the public interest.

ARTICLE 9.17

Domestic Review Procedures

1.    Each Party shall provide a timely, effective, transparent, and non-discriminatory administrative or judicial review procedure through which a supplier may challenge:

(a)    a breach of this Chapter; or

(b)    where the supplier does not have a right to challenge directly a breach of this Chapter under the domestic law of a Party, a failure to comply with a Party's measures implementing this Chapter,

arising in the context of a covered procurement in which the supplier has, or has had, an interest. In any case, the Parties shall ensure that the review body, upon a challenge by a supplier, can examine decisions taken by their respective procuring entities on whether a particular procurement falls within the procurement that is covered by this Chapter.


The procedural rules for all challenges shall be in writing and made generally available through electronic means and/or a paper medium.

2.    In the event of a complaint by a supplier, arising in the context of covered procurement in which the supplier has, or has had, an interest, that there has been a breach or a failure as referred to in paragraph 1, the Party of the procuring entity conducting the procurement shall encourage the entity and the supplier to seek resolution of the complaint through consultations. The entity shall accord impartial and timely consideration to any such complaint in a manner that is not prejudicial to the supplier's participation in on-going or future procurement or its right to seek corrective measures under the administrative or judicial review procedure.

3.    Each supplier shall be allowed a sufficient period of time to prepare and submit a challenge, which in no case shall be less than ten days from the time when the basis of the challenge became known or reasonably should have become known to the supplier.

4.    Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge by a supplier arising in the context of a covered procurement.

5.    Where a body other than an authority referred to in paragraph 4 initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity whose procurement is the subject of the challenge.


6.    Each Party shall ensure that a review body that is not a court shall have its decision subject to judicial review or have procedures that provide that:

(a)    the procuring entity shall respond in writing to the challenge and disclose all relevant documents to the review body;

(b)    the participants to the proceedings (hereinafter referred to as "participants") shall have the right to be heard prior to a decision of the review body being made on the challenge;

(c)    the participants shall have the right to be represented and accompanied;

(d)    the participants shall have access to all proceedings;

(e)    the participants shall have the right to request that the proceedings take place in public and that witnesses may be presented; and

(f)    the review body shall make its decisions or recommendations, in a timely fashion, in writing, and shall include an explanation of the basis for each decision or recommendation.

7.    Each Party shall adopt or maintain procedures that provide for:

(a)    rapid interim measures to preserve the supplier's opportunity to participate in the procurement. Such interim measures may result in suspension of the procurement process. The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. Just cause for not acting shall be provided in writing; and


(b)    where a review body has determined that there has been a breach or a failure as referred to in paragraph 1, the review body may impose corrective action or grant compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs relating to the challenge. When a contract has already been awarded, the Parties may provide that the corrective action is not available.

ARTICLE 9.18

Modification and Rectification of Coverage

Notification of Proposed Modification

1.    A Party shall notify the other Party of any proposed rectification, transfer of an entity from one Annex to another, withdrawal of an entity, or other modification (hereinafter referred to as "modification") of Annexes 9-A to 9-I.

2.    For any proposed withdrawal of an entity from its Annexes 9-A to 9-G on the grounds that government control or influence over the entity's covered procurement has been effectively eliminated, the Party proposing the modification (hereinafter referred to as "modifying Party") shall include in the notification evidence that such government control or influence has been effectively eliminated. Government control or influence over the covered procurement of entities listed in Annex 9-C is deemed to be effectively eliminated if:

(a)    for the Union, the procuring entity performs a competitive activity; and


(b)    for Singapore, the entity has been privatised.

Where government control or influence over the covered procurement of an entity of a Party has been effectively eliminated, the other Party shall not be entitled to compensatory adjustments.

3.    For any other proposed modification, the modifying Party shall include in the notification information as to the likely consequences of the change for the coverage provided in this Chapter. Where the modifying Party proposes to make minor amendments or technical rectifications of a purely formal nature not affecting covered procurement, it shall notify these modifications at least every two years.

Resolution of Objection

4.    In case of objection by the other Party (hereinafter referred to as "objecting Party") to the notification by the modifying Party, the Parties shall seek to resolve the objection through bilateral consultations, including if necessary, consultations at the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees). In such consultations, the Parties shall consider:

(a)    evidence pertaining to the effective elimination of government control or influence over an entity's covered procurement in the case of a notification under paragraph 2;

(b)    evidence that the proposed modification does not affect coverage in the case of a notification under paragraph 3; and


(c)    any claims relating to the need for or level of compensatory adjustments, arising from modifications notified according to paragraph 1. The adjustments may consist of either compensatory expansion of coverage by the modifying Party or a withdrawal of equivalent coverage by the objecting Party, with a view to maintaining a balance of rights and obligations and a comparable level of mutually agreed coverage provided in this Chapter.

5.    Where the objecting Party, after bilateral consultations under paragraph 4, considers that one or more of the following situations exist:

(a)    in the case of subparagraph 4(a), government control or influence over an entity's covered procurement has not been effectively eliminated;

(b)    in the case of subparagraph 4(b), a modification does not meet the criteria in paragraph 3 and which affects coverage, and should be subject to compensatory adjustments; or

(c)    in the case of subparagraph 4(c), compensatory adjustments proposed during the consultation between the Parties are not adequate to maintain a comparable level of mutually agreed coverage,

the Parties may have recourse to the dispute settlement mechanism under Chapter Fourteen (Dispute Settlement).

Implementation

6.    A proposed modification shall become effective only where:


(a)    the other Party has not submitted to the modifying Party a written objection to the proposed modification within forty-five days from the date of the notification of the proposed modifications;

(b)    the objecting Party has notified the modifying Party of the withdrawal of its objection;

(c)    the Parties have reached an agreement after due consultations under paragraph 4; or

(d)    the objection has been resolved through the dispute settlement mechanism under paragraph 5.

ARTICLE 9.19

Responsibilities of the Committee

The Parties may, in the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees):

(a)    adopt modalities of the reporting of statistical data pursuant to paragraph 4 of Article 9.15 (Transparency of Procurement Information);

(b)    review pending notifications of modifications to coverage and endorse updates to the list of entities in Annexes 9-A to 9-C;

(c)    endorse compensatory adjustments resulting from modifications affecting coverage;


(d)    revise, when required, indicative criteria that demonstrate the effective elimination of government control or influence over an entity's covered procurement;

(e)    adopt criteria for deciding over the level of compensatory adjustments of coverage;

(f)    consider issues regarding government procurement that are referred to it by a Party;

(g)    exchange information relating to government procurement opportunities, including those at sub-central levels, in each Party; and

(h)    discuss any other matters related to the operation of this Chapter.

The Parties may, in the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees), take any decision required for the purposes of subparagraphs (a) to (h).

ARTICLE 9.20

Adjustment to GPA provisions

If the Revised GPA is amended or superseded by another agreement, the Parties shall, by decision in the Committee on Trade in Services, Investment and Government Procurement established pursuant to Article 16.2 (Specialised Committees), amend this Chapter, as appropriate.


CHAPTER TEN

Intellectual Property

ARTICLE 10.1

Objectives

1.    The objectives of this Chapter are to:

(a)    facilitate the production and commercialisation of innovative and creative products and the provision of services between the Parties; and

(b)    increase the benefits from trade and investment through the adequate and effective level of protection of intellectual property rights and the provision of measures for the effective enforcement of such rights.

2.    The objectives and principles set forth in Part I of the TRIPS Agreement, in particular in Article 7 (Objectives) and Article 8 (Principles) shall apply to this Chapter, mutatis mutandis.


SECTION A

PRINCIPLES

ARTICLE 10.2

Scope and Definitions

1.    The Parties recall the commitments under the international treaties dealing with intellectual property, including the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property (of March 20, 1883, as revised at Stockholm on July 15, 1967; hereinafter referred to as the "Paris Convention"). The provisions of this Chapter shall complement the rights and obligations of the Parties under the TRIPS Agreement and other international treaties in the field of intellectual property to which they both are parties.

2.    For the purposes of this Chapter, "intellectual property rights" means:

(a)    all categories of intellectual property that are the subject of Sections 1 through 7 of Part II of the TRIPS Agreement namely:

(i)    copyright and related rights;

(ii)    patents; 33


(iii)    trademarks;

(iv)    designs;

(v)    layout-designs (topographies) of integrated circuits;

(vi)    geographical indications;

(vii)    protection of undisclosed information; and

(b)    plant variety rights.

ARTICLE 10.3

Exhaustion

Each Party shall be free to establish its own regime for the exhaustion of intellectual property rights subject to the relevant provisions of the TRIPS Agreement.


SECTION B

STANDARDS CONCERNING INTELLECTUAL PROPERTY RIGHTS

SUB-SECTION A

COPYRIGHT AND RELATED RIGHTS

ARTICLE 10.4

Protection Granted

The Parties shall comply with the rights and obligations set out in the Berne Convention for the Protection of Literary and Artistic Works (of September 9, 1886, as last revised at Paris on July 24, 1971), the WIPO Copyright Treaty (adopted in Geneva on December 20, 1996), the WIPO Performances and Phonograms Treaty (adopted in Geneva on December 20, 1996), and the TRIPS Agreement. 34 The Parties may provide for protection of performers, producers of phonograms and broadcasting organisations in accordance with the relevant provisions of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (done at Rome on October 26, 1961).


ARTICLE 10.5

Term of Protection

1.    Each Party shall provide, where the term of protection of a work is to be calculated on the basis of the life of the author, that the term shall be not less than the life of the author and seventy years after the author's death.

2.    In the case of a work of joint authorship, the term referred to in paragraph 1 shall be calculated from the death of the last surviving author.

3.    The term of protection of cinematographic works 35 shall be not less than seventy years after the work has been made available to the public with the consent of the author or, failing such an event within fifty years from the making of such a work, at least seventy years after the making. 36

4.    The term of protection for rights in phonograms shall be not less than fifty years after the making and, if published within this period, no less than seventy years after the first lawful publication.


5.    The term of protection for rights in broadcasts shall be not less than fifty years after the first transmission or making of the broadcast.

6.    The terms laid down in this Article shall be calculated from the first of January of the year following the event which gives rise to them.

ARTICLE 10.6

Producers of Phonograms

Each Party shall provide producers of phonograms 37 with the right to a single equitable remuneration, if a phonogram published for commercial purposes or a reproduction of such phonogram is used for broadcasting by wireless means or public performance. 38 ,  39


ARTICLE 10.7

Resale Rights

The Parties agree to exchange views and information on practices and policies with regard to the resale rights of artists.

ARTICLE 10.8

Cooperation on Collective Management of Rights

The Parties shall endeavour to promote dialogue and cooperation among their respective collective management societies with the purpose of ensuring easier access and delivery of content between the territories of the Parties, and the transfer of royalties arising from the use of works or other copyright-protected subject matter.


ARTICLE 10.9

Protection of Technological Measures

1.    Each Party shall provide adequate legal protection and effective legal remedies against the circumvention of any effective technological measures 40 that are used by authors, performers or producers of phonograms in connection with the exercise of their rights in, and that restrict acts in respect of, their works, performances, and phonograms, which are not authorised by the authors, the performers or the producers of phonograms concerned or permitted by domestic law. 41


2.    In order to provide the adequate legal protection and effective legal remedies referred to in paragraph 1, each Party shall provide protection at least against:

(a)    to the extent provided by its domestic law:

(i)    the unauthorised circumvention of an effective technological measure carried out knowingly or with reasonable grounds to know; and

(ii)    the offering to the public by marketing of a device or product, including computer programs, or a service, as a means of circumventing an effective technological measure; and

(b)    the manufacture, importation, or distribution of a device or product, including computer programs, or provision of a service that:

(i)    is primarily designed or produced for the purpose of circumventing an effective technological measure; or

(ii)    has only a limited commercially significant purpose other than circumventing an effective technological measure. 42


3.    In providing adequate legal protection and effective legal remedies pursuant to paragraph 1, a Party may adopt or maintain appropriate limitations or exceptions to measures implementing paragraphs 1 and 2. The obligations under paragraphs 1 and 2 are without prejudice to the rights, limitations, exceptions, or defences to copyright or related rights infringement under each Party's domestic law.

ARTICLE 10.10

Protection of Rights Management Information

1.    To protect electronic rights management information, 43 each Party shall provide adequate legal protection and effective legal remedies against any person knowingly performing without authority any of the following acts knowing or, with respect to civil remedies, having reasonable grounds to know, that it will induce, enable, facilitate or conceal an infringement of any copyright or related rights. Such following acts are:


(a)    to remove or alter any electronic rights management information;

(b)    to distribute, import for distribution, broadcast, communicate, or make available to the public copies of works, performances, or phonograms, knowing that electronic rights management information has been removed or altered without authority.

2.    In providing adequate legal protection and effective legal remedies pursuant to paragraph 1, a Party may adopt or maintain appropriate limitations or exceptions to measures implementing paragraph 1. The obligations under paragraph 1 are without prejudice to the rights, limitations, exceptions or defences to copyright or related rights infringement under a Party's domestic law.

ARTICLE 10.11

Exceptions and Limitations

The Parties may provide for limitations or exceptions to the rights under Article 10.6 (Producers of Phonograms) only in certain special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the right holders.


SUB-SECTION B

TRADEMARKS

ARTICLE 10.12

International Agreements

Each Party shall make all reasonable efforts to comply with the Trademark Law Treaty (done at Geneva on October 27, 1994) and the Singapore Treaty on the Law of Trademarks (adopted in Singapore on March 27, 2006). 44

ARTICLE 10.13

Registration Procedure

Each Party shall provide for a system for the registration of trademarks in which the relevant trademark administration shall give reasons for a refusal to register a trademark in writing. The applicant shall have the opportunity to appeal against such refusal before a judicial authority. Each Party shall introduce the possibility for third parties to oppose trademark applications. Each Party shall provide a publicly available electronic database of trademark applications and trademark registrations.


ARTICLE 10.14

Well-Known Trademarks

The Parties shall protect well-known trademarks in accordance with the TRIPS Agreement. In determining whether a trademark is well-known, the Parties shall give consideration to the Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, adopted by the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of the WIPO at the ThirtyFourth Series of Meetings of the Assemblies of the Member States of WIPO on September 20 to 29, 1999.

ARTICLE 10.15

Exceptions to the Rights Conferred by a Trademark

Each Party:

(a)    shall provide for the fair use of descriptive terms 45 as a limited exception to the rights conferred by trademarks; and

(b)    may provide for other limited exceptions,

provided that these exceptions take account of the legitimate interests of the owners of the trademarks and of third parties.


SUB-SECTION C

GEOGRAPHICAL INDICATIONS 46

ARTICLE 10.16

Scope

1.    Sub-Section C (Geographical Indications) applies to the recognition and protection of geographical indications for wines, spirits, agricultural products and foodstuffs which are originating in the territories of the Parties.

2.    Geographical indications of a Party to be protected by the other Party shall only be subject to SubSection C (Geographical Indications) if they are recognised and declared as geographical indications in their country of origin.


ARTICLE 10.17

System of Protection of Geographical Indications

1.    Each Party shall, upon the entry into force of this Agreement, establish systems for the registration and protection of geographical indications in its territory, for such categories of wines and spirits and agricultural products and foodstuffs as it deems appropriate.

2.    The systems referred to in paragraph 1 shall contain elements such as:

(a)    a domestic register;

(b)    an administrative process to verify that the geographical indications entered, or to be entered, on the domestic register referred to in subparagraph 2(a), identify a good as originating in the territory of a Party, or a region or locality in that Party's territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin;

(c)    an objection procedure that allows the legitimate interests of third parties to be taken into account; and

(d)    legal means that permit the rectification and cancellation of entries on the domestic register referred to in subparagraph 2(a), that take into account the legitimate interests of third parties and the right holders of the registered geographical indications in question.


3.    The Parties shall, as soon as practicable after the procedures for protection of geographical indications in each Party 47 have been concluded for all the names listed in Annex 10-A, meet to adopt a decision in the Trade Committee referred to under Article 16.1 (Trade Committee) regarding the listing in Annex 10-B of the names from Annex 10-A of each Party that have been and remain protected as geographical indications under the respective Party's system as referred to in paragraph 2.

ARTICLE 10.18

Amendment of List of Geographical Indications

The Parties agree on the possibility of amending the list of geographical indications for wines, spirits, agricultural products and foodstuffs listed in Annex 10-B to be protected by each Party under Sub-Section C (Geographical Indications). Such amendments to Annex 10-B shall be subject to the geographical indications having been and remaining protected as geographical indications under the respective Party's system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications).


ARTICLE 10.19

Scope of Protection of Geographical Indications

1.    Subject to Article 10.22 (General Rules), each Party shall, in respect of geographical indications for wines, spirits, agricultural products and foodstuffs listed in Annex 10-B and remaining protected as geographical indications under its system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications), provide the legal means for interested parties to prevent:

(a)    the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good; and

(b)    any other use which constitutes an act of unfair competition within the meaning of Article 10bis (Unfair Competition) of the Paris Convention.

2.    Subject to Article 10.22 (General Rules), each Party shall, in respect of geographical indications for wines and spirits listed in Annex 10-B and remaining protected as geographical indications under its system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications), provide the legal means for interested parties to prevent the use of any such geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question, even where:

(a)    the true origin of the good is indicated;


(b)    the geographical indication is used in translation; or

(c)    the geographical indication is accompanied by expressions such as "kind", "type", "style", "imitation", or the like.

3.    Subject to Article 10.22 (General Rules), each Party shall, in respect of geographical indications for agricultural products and foodstuffs listed in Annex 10-B and remaining protected as geographical indications under its system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications), provide the legal means for interested parties to prevent the use of any such geographical indication identifying a good for a like good 48 not originating in the place indicated by the geographical indication in question, even where:

(a)    the true origin of the good is indicated;

(b)    the geographical indication is used in translation; 49 or


(c)    the geographical indication is accompanied by expressions such as "kind", "type", "style", "imitation", or the like.

4.    Nothing in Sub-Section C (Geographical Indications) shall require a Party to apply its provisions in respect of a geographical indication in the case of the failure of a right holder to:

(a)    renew the registration; or

(b)    maintain minimal commercial activity or interest, including commercialisation, promotion or market monitoring,

of the geographical indication in that Party's market.

5.    Without prejudice to paragraph 3 of Article 23 of the TRIPS Agreement, each Party shall determine the practical conditions under which homonymous geographical indications will be differentiated from each other in its territory, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

6.    Where a Party receives an application for registration or protection of a geographical indication that is homonymous with one of the geographical indications in Annex 10-B, that Party will take into consideration the views and submissions of the applicant and the producers concerned 50  in determining the conditions under which the geographical indications will be differentiated from each other.


ARTICLE 10.20

Right of Use of Geographical Indications

The person who may use a geographical indication protected under Sub-Section C (Geographical Indications) is not limited to the applicant, provided that such use is in relation to the goods as identified by that geographical indication.

ARTICLE 10.21

Relationship with Trademarks

1.    Subject to Article 10.22 (General Rules), in respect of geographical indications listed in Annex 10-B and remaining protected as geographical indications under a Party's system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications), the registration of a trademark for goods which contains, or consists of, a geographical indication identifying like goods shall be refused or invalidated ex officio if that Party's domestic law so permits, or at the request of an interested party, with respect to goods not having the origin of the geographical indication concerned, provided the application to register the trademark is submitted after the date of application for registration of the geographical indication in the territory concerned.


2.    Without prejudice to paragraph 4, the Parties acknowledge that the existence of a prior conflicting trademark in a Party would not completely preclude the registration of a subsequent geographical indication for like goods in that Party. 51

3.    Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith, if that possibility is provided by the Parties' respective domestic laws, either:

(a)    before the date of application for protection of the geographical indication in the territory concerned; or

(b)    before the geographical indication is protected in its country of origin,

measures adopted to implement Sub-Section C (Geographical Indications) shall not prejudice the eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.

4.    The Parties shall have no obligation to protect a geographical indication pursuant to SubSection C (Geographical Indications) where, in the light of a reputed or well-known trademark, protection is liable to mislead consumers as to the true identity of the product.


ARTICLE 10.22

General Rules

1.    Import, export and commercialisation of products referred to in Sub-Section C (Geographical Indications) in the territory of a Party shall be governed by the domestic law of that Party.

2.    For agricultural products and foodstuffs, nothing in Sub-Section C (Geographical Indications) shall require a Party to prevent continued and similar use of any geographical indication of the other Party in connection with goods or services by any of its nationals or domiciliaries, who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Party either:

(a)    for at least ten years preceding 1st January 2004; or

(b)    in good faith preceding that date.

3.    In relation to the geographical indications to be listed in Annex 10-B, where prior use has been determined pursuant to:

(a)    the opposition proceedings during the domestic registration procedures; or

(b)    any legal proceedings,


such prior use shall be listed in Annex 10-B in respect of the geographical indication in question:

(i)    in accordance with the mechanism established in paragraph 3 of Article 10.17 (System of Protection of Geographical Indications) in the case of subparagraph 3(a); and

(ii)    in accordance with the mechanism established in Article 10.18 (Amendment of List of Geographical Indications) in the case of subparagraph 3(b).

4.    Each Party may determine the practical conditions under which such prior use will be differentiated from the geographical indication in its territory, taking into account the need to ensure that consumers are not misled.

5.    Nothing in Sub-Section C (Geographical Indications) shall require a Party to apply its provisions in respect of a geographical indication of the other Party with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Party.

6.    Nothing in Sub-Section C (Geographical Indications) shall require a Party to apply its provisions in respect of any name contained in a geographical indication of the other Party with respect to goods or services for which the name is identical with the term customary in common language as the common name for such goods or services in the territory of that Party.


7.    Nothing in Sub-Section C (Geographical Indications) shall require a Party to apply its provisions in respect of a geographical indication of the other Party with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Party as of the date of entry into force of the WTO Agreement in that Party.

8.    Nothing in Sub-Section C (Geographical Indications) shall prevent a Party from protecting as a geographical indication, in accordance with its domestic law, a term that conflicts with the name of a plant variety or animal breed.

9.    A Party may provide that any request made under Sub-Section C (Geographical Indications) in connection with the use or registration of a trademark must be presented within five years after the adverse use of the protected indication has become generally known in that Party or after the date of registration of the trademark in that Party provided that the trademark has been published by that date, if such date is earlier than the date on which the adverse use became generally known in that Party, provided that the geographical indication is not used or registered in bad faith.

10.    Nothing in Sub-Section C (Geographical Indications) shall prejudice the right of any person to use, in the course of trade, that person's name or the name of that person's predecessor in business, except where such name is used in such a manner as to mislead the public.

11.    Nothing in Sub-Section C (Geographical Indications) shall oblige a Party to protect a geographical indication of the other Party which is not or ceases to be protected in accordance with the domestic law of its country of origin. The Parties shall notify each other if a geographical indication ceases to be protected in its country of origin.


ARTICLE 10.23

Relation to Trade Committee

The Trade Committee established pursuant to Article 16.1 (Trade Committee) shall have the authority to:

(a)    adopt a decision regarding the listing in Annex 10-B referred to in paragraph 3 of Article 10.17 (System of Protection of Geographical Indications); and

(b)    amend Annex 10-B in accordance with Article 10.18 (Amendment of List of Geographical Indications).


SUB-SECTION D

DESIGNS

ARTICLE 10.24

Requirements for Protection of Registered Designs 52

1.    The Parties shall provide for the protection of independently created designs that are new or original. 53 This protection shall be provided by registration and shall confer exclusive rights upon their holders in accordance with the provisions of Sub-Section D (Designs). 54


2.    Design protection shall not extend to designs dictated essentially by technical or functional considerations.

3.    A design right shall not subsist in a design which is contrary to public policy or to accepted principles of morality. 55

ARTICLE 10.25

Rights Conferred by Registration

The owner of a protected design shall have the right to prevent third parties, not having the owner's consent, from at least making, offering for sale, selling or importing articles bearing or embodying a design which is a copy, or substantially a copy, of the protected design, when such acts are undertaken for commercial purposes.

ARTICLE 10.26

Term of Protection

The term of protection available shall amount to at least ten years from the date of application.


ARTICLE 10.27

Exceptions

The Parties may provide limited exceptions to the protection of designs, provided that such exceptions do not unreasonably conflict with the normal exploitation of protected designs and do not unreasonably prejudice the legitimate interests of the owner of the protected design, taking account of the legitimate interests of third parties.

ARTICLE 10.28

Relationship to Copyright

The Parties shall offer the possibility that a design registered in a Party in accordance with SubSection D (Designs) is not completely precluded from enjoying protection under the domestic law of copyright of that Party. The extent to which, and the conditions under which, such protection is enjoyed shall be determined by that Party. 56


SUB-SECTION E

PATENTS

ARTICLE 10.29

International Agreements

The Parties recall the obligations under the Patent Cooperation Treaty (done at Washington on June 19, 1970, amended on September 28, 1979, modified on February 3, 1984). The Parties shall, where appropriate, make all reasonable efforts to comply with Article 1 to Article 16 of the Patent Law Treaty (adopted in Geneva on June 1, 2000) in a manner consistent with their domestic law and procedures.

ARTICLE 10.30

Patents and Public Health

1.    The Parties recognise the importance of the Declaration on the TRIPS Agreement and Public Health, adopted on 14 November, 2001 by the Ministerial Conference of the WTO, at Doha. In interpreting and implementing the rights and obligations under Sub-Section E (Patents) and SubSection F (Protection of Test Data Submitted to Obtain an Administrative Marketing Approval to put a Pharmaceutical Product on the Market), the Parties shall ensure consistency with this Declaration.


2.    The Parties shall respect the Decision of the WTO General Council of 30 August 2003 on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, as well as the Decision of the WTO General Council of 6 December 2005 on Amendment of the TRIPS Agreement, adopting the Protocol Amending the TRIPS Agreement.

ARTICLE 10.31

Extension of the Duration of the Rights Conferred by a Patent

The Parties recognise that pharmaceutical products 57 protected by a patent in their respective territories may be subject to an administrative marketing approval process before being put on their respective markets. The Parties shall make available an extension of the duration of the rights conferred by the patent protection to compensate the patent owner for the reduction in the effective patent life as a result of the administrative marketing approval process. 58 The extension of the duration of the rights conferred by the patent protection may not exceed five years. 59


ARTICLE 10.32

Cooperation

The Parties agree to cooperate on initiatives to facilitate:

(a)    the granting of patents on the basis of applications filed by applicants of a Party in the other Party; and

(b)    the qualification and recognition of patent agent professionals of a Party in the territory of the other Party.


SUB-SECTION F

PROTECTION OF TEST DATA

ARTICLE 10.33

Protection of Test Data Submitted
to Obtain an Administrative Marketing Approval

to put a Pharmaceutical Product on the Market

When a Party requires the submission of test data or studies concerning the safety and efficacy of a pharmaceutical product prior to granting approval for the marketing of such product, the Party shall not, for a period of at least five years from the date of approval in that Party, permit third parties to market the same or a similar product, on the basis of the marketing approval granted to the party which had provided the test data or studies, unless the party which had provided the test data or studies has given its consent. 60 ,  61 , 62


ARTICLE 10.34

Protection of Test Data Submitted
to Obtain an Administrative Marketing Approval

to put an Agricultural Chemical Product
63 on the Market

1.    When a Party requires the submission of test data or studies concerning the safety and efficacy of an agricultural chemical product prior to granting approval for the marketing of such product in that Party, the Party shall not, for a period of at least ten years from the date of approval, permit third parties to market the same or a similar product, on the basis of the marketing approval granted to the party which had provided the test data or studies, unless the party which had provided the test data or studies has given its consent.


2.    Where a Party provides for measures or procedures to avoid duplicative testing on vertebrate animals with respect to agricultural chemical products, that Party may provide for the conditions and circumstances under which third parties may market the same or similar product, on the basis of the marketing approval granted to the party which had provided the test data or studies.

3.    Where a Party requires the submission of test data or studies concerning the safety or efficacy of an agricultural chemical product prior granting an approval for the marketing of such product, the Party shall endeavour to make best efforts to process the application expeditiously with a view to avoiding unreasonable delays.

SUB-SECTION G

PLANT VARIETIES

ARTICLE 10.35

International Agreements

The Parties reaffirm their obligations under the International Convention for the Protection of New Varieties of Plants (adopted in Paris on December 2, 1961, as last revised in Geneva on March 19, 1991), including their ability to implement the optional exception to the breeder's right, as referred to in paragraph 2 of Article 15 of this Convention.


SECTION C

CIVIL ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

ARTICLE 10.36

General Obligations

1.    The Parties reaffirm their commitments under Articles 41 to 50 of the TRIPS Agreement and shall provide for the measures, procedures and remedies under their respective domestic law, against acts of infringement of intellectual property rights covered by this Chapter, that are in compliance with such commitments.

2.    In particular, the measures, procedures and remedies referred to in paragraph 1, and provided for by each Party under its domestic law, shall:

(a)    take into account, as appropriate, the need for proportionality between the seriousness of the infringement and the interests of third parties;

(b)    be fair and equitable;

(c)    not be unnecessarily complicated or costly, or entail unreasonable time limits or unwarranted delays; and


(d)    be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

3.    Nothing in this Chapter affects the capacity of either Party to enforce its domestic law in general or creates any obligation on either Party to amend its existing laws as they relate to the enforcement of intellectual property rights. Without prejudice to the foregoing general principles, nothing in this Chapter creates any obligation on either Party:

(a)    to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of law in general; or

(b)    with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general.

ARTICLE 10.37

Publication of Judicial Decisions

In civil judicial proceedings instituted for infringement of an intellectual property right, each Party shall take appropriate measures, pursuant to its domestic law and policies, to publish or make available to the public information on final judicial decisions. Nothing in this Article shall require a Party to disclose confidential information, the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private. The Parties may provide for other additional publicity measures which are appropriate to the particular circumstances, including prominent advertising.


ARTICLE 10.38

Availability of Civil Measures, Procedures and Remedies

1.    The Parties shall make available, in their respective domestic law and to right holders, the civil measures, procedures and remedies referred to in Section C (Civil Enforcement of Intellectual Property Rights) for the intellectual property rights as defined in paragraph 2.

2.    For the purposes of Section C (Civil Enforcement of Intellectual Property Rights), the following terms have the following meanings:

(a)    "right holders" shall include exclusive licensees as well as federations and associations 64 having the legal standing to assert such rights; and

(b)    "intellectual property rights" means all categories of intellectual property that are the subject of Sections 1 to 6 of Part II of the TRIPS Agreement. 65


ARTICLE 10.39

Measures for Preserving Evidence

1.    Each Party shall provide that its judicial authorities have the authority to order prompt and effective provisional measures:

(a)    against a party or, where appropriate, a third party over whom the relevant judicial authority exercises jurisdiction, to prevent an infringement of any intellectual property right from occurring, and in particular to prevent goods that involve the infringement of an intellectual property right from entering into the channels of commerce; and

(b)    to preserve relevant evidence in regard to the alleged infringement.

2.    Each Party shall provide that its judicial authorities have the authority to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder or where there is a demonstrable risk of evidence being destroyed. In proceedings conducted inaudita altera parte, each Party shall provide its judicial authorities with the authority to act expeditiously on requests for provisional measures and to make a decision without undue delay.

3.    At least in cases of copyright or related rights infringement and trademark counterfeiting, each Party shall provide that, in civil judicial proceedings, its judicial authorities have the authority to order the seizure or other taking into custody of suspect goods, and of materials and implements relevant to the act of infringement, and, at least for trademark counterfeiting, of documentary evidence, either originals or copies thereof, relevant to the infringement.


4.    Each Party shall provide that its authorities have the authority to require the applicant, with respect to provisional measures, to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the applicant's right is being infringed or that such infringement is imminent, and to order the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent abuse. Such security or equivalent assurance shall not unreasonably deter recourse to procedures for such provisional measures.

5.    Where the provisional measures are revoked, or where they lapse due to any act or omission by the applicant, or where it is subsequently found that there has been no infringement of an intellectual property right, the judicial authorities shall have the authority to order the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by those measures.

ARTICLE 10.40

Evidence and Right of Information

1.    Without prejudice to each Party's domestic law governing privilege, the protection of confidentiality or the processing of personal data, each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority, upon a justified request of the right holder, to order the infringer or, in the alternative, the alleged infringer, to provide, to the right holder or to the judicial authorities, at least for the purpose of collecting evidence, relevant information as provided for in its applicable laws and regulations that the infringer or alleged infringer possesses or controls.


2.    The relevant information referred to in paragraph 1 may include information regarding any person involved in any aspect of the infringement or alleged infringement and regarding the means of production or the channels of distribution of the infringing or allegedly infringing goods or services, including the identification of third persons alleged to be involved in the production and distribution of such goods or services and of their channels of distribution.

ARTICLE 10.41

Other Remedies

1.    Each Party shall provide that, in civil judicial proceedings where a judicial decision is taken finding an infringement of a right holder's intellectual property right, its judicial authorities shall, upon application by the right holder, have the authority to, at least with respect to pirated copyright goods and counterfeit trademark goods:

(a)    order that such infringing goods be:

(i)    destroyed, except in exceptional circumstances; or

(ii)    disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder,

without compensation of any sort; and


(b)    order that materials and implements, the predominant use of which has been in the manufacture or creation of such infringing goods, shall be, without undue delay and without compensation of any sort, destroyed or disposed of outside the channels of commerce in such a manner as to minimise the risks of further infringements.

2.    In considering any application by a right holder, as referred to in paragraph 1, the need for proportionality between the seriousness of the infringement and the remedies ordered as well as the interests of third parties shall be taken into account.

3.    The remedies under this Article may be carried out at the expense of the infringer.

ARTICLE 10.42

Injunctions

Each Party shall provide that, in civil judicial proceedings where a judicial decision is taken finding an infringement of a right holder's intellectual property right, its judicial authorities shall, upon application by the right holder, have the authority to issue against the infringer or, where appropriate, against a third party over whom the relevant judicial authority exercises jurisdiction, an injunction aimed at prohibiting the continuation of the infringement. Where provided for by the Party's domestic law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment with a view to ensuring compliance.


ARTICLE 10.43

Alternative Measures

Each Party may provide in its domestic law that, in civil judicial proceedings where a judicial decision is taken finding an infringement of a right holder's intellectual property right, in appropriate cases and on application by the person liable to be subject to the measures provided for in Article 10.41 (Other Remedies) and/or Article 10.42 (Injunctions), its judicial authorities have the authority to order pecuniary compensation to be paid to the injured party instead of applying the measures provided for in Article 10.41 (Other Remedies) and/or Article 10.42 (Injunctions), if that person acted unintentionally and without negligence, and if execution of the measures in question would cause him disproportionate harm and if pecuniary compensation to the injured party appears reasonably satisfactory. 66

ARTICLE 10.44

Damages

1.    Each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority to order the infringer who, knowingly or with reasonable grounds to know, engaged in infringing activity to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement.


2.    In determining the amount of damages for infringement of intellectual property rights, a Party's judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price. 67 At least in cases of copyright or related rights infringement and trademark counterfeiting, each Party shall provide that its judicial authorities have the authority to order the infringer to pay the right holder the infringer's profits that are attributable to the infringement, whether as an alternative to or in addition to or as part of the damages.

3.    As an alternative to paragraph 2, each Party may provide that its judicial authorities have the authority, in appropriate cases, to set the damages as a lump sum on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.

4.    Nothing in this Article precludes either Party from providing that where the infringer did not, knowingly or with reasonable grounds to know, engage in infringing activity, its judicial authorities may order the recovery of profits or the payment of damages which may be preestablished.


ARTICLE 10.45

Legal Costs

Each Party shall provide that its judicial authorities, where appropriate, have the authority to order, at the conclusion of civil judicial proceedings concerning infringement of intellectual property rights, that the prevailing party be awarded payment by the losing party of court costs or fees and appropriate attorney's fees, or any other expenses as provided for under that Party's domestic law.

ARTICLE 10.46

Presumptions Relating to Copyright and Related Rights

In civil proceedings involving copyright or related rights, each Party shall provide for a presumption that, at least with respect to a literary or artistic work, performance or phonogram, in the absence of proof to the contrary, the natural or legal person whose name appears on such work, performance or phonogram in the usual manner, is the right holder and is consequently entitled to institute infringement proceedings.


ARTICLE 10.47

Liability of Intermediary Service Providers

1.    Subject to paragraphs 2 to 6, each Party shall provide exemptions or limitations in its domestic law regarding the liability of, or scope of remedies available against, service providers for infringements of copyright or related rights or trademarks that take place through systems or networks controlled or operated by them or on their behalf.

2.    The exemptions or limitations referred to in paragraph 1:

(a)    shall cover the functions of:

(i)    transmitting, 68 or providing access for material without selection and/or modification of its content 69 ; and

(ii)    caching carried out through an automatic process; 70 and


(b)    may also cover the functions of:

(i)    storage at the direction of a user of material residing on a system or network controlled or operated by or for the service provider; and

(ii)    referring or linking users to an online location by using information location tools, including hyperlinks and directories.

3.    Eligibility for the exemptions or limitations in this Article may not be conditioned on the service provider monitoring its service, or affirmatively seeking facts indicating infringing activity, except to the extent consistent with such technical measures.

4.    Each Party may prescribe in its domestic law, conditions for service providers to qualify for the exemptions or limitations in this Article. Without prejudice to paragraphs 1 to 3, each Party may establish appropriate procedures for effective notifications of claimed infringement and effective counternotifications by those whose material is removed or disabled through mistake or misidentification.

5.    This Article is without prejudice to the availability of defences to the infringement of copyright or related rights, or trademarks, that are of general applicability. This Article shall not affect the possibility of a court or administrative authority, in accordance with each Party's legal system, requiring the service provider to terminate or prevent an infringement.

6.    Either Party may request consultations with the other Party to consider how to address future functions of a nature similar to those addressed in this Article.


SECTION D

BORDER MEASURES

ARTICLE 10.48

Definitions

For the purposes of this Section:

(a)    "counterfeit geographical indication goods" means any goods, including packaging, bearing, without authorisation, a sign which is identical to the geographical indication validly registered in respect of such goods in the territory where the goods are, or which cannot be distinguished in its essential aspects from such a geographical indication and which thereby infringes the rights of the owner or holder of the geographical indication in question under the domestic law of the Party where the goods are;

(b)    "counterfeit trademark goods" means any goods, including packaging bearing, without authorisation, a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark and which thereby infringes the rights of the owner of the trademark in question under the domestic law of the Party where the goods are;


(c)    "goods in transit" means goods the passage of which across the territory of a Party, with or without transhipment, whether or not landed in the territory of the Party, warehousing, breaking bulk, or change in the mode of transport or conveyance, is only a portion of a complete journey beginning and terminating beyond the frontier of the Party across which territory the traffic passes;

(d)    "pirated copyright goods" means any goods which are copies made without the consent of the right holder or of a person duly authorised by the right holder in the country of production, and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the domestic law of the Party where the goods are;

(e)    "pirated design goods" means any goods in respect of which the design is registered and to which that design or a design not substantially different from it has been applied without the consent of the right holder or of a person duly authorised by the right holder in the country of production, where the making of those goods would have constituted an infringement under the domestic law of the Party where the goods are.

ARTICLE 10.49

Scope of Border Measures

1.    Without prejudice to paragraph 3, each Party shall adopt or maintain procedures with respect to goods under customs control under which a right holder may request its competent authorities to suspend the release of suspect:


(a)    counterfeit trademark goods;

(b)    pirated copyright goods;

(c)    counterfeit geographical indication goods; and

(d)    pirated design goods.

2.    Each Party shall adopt or maintain procedures with respect to goods under customs control, under which its competent authorities may act upon their own initiative to suspend the release of suspect: 71

(a)    counterfeit trademark goods;

(b)    pirated copyright goods; and

(c)    counterfeit geographical indication goods.

3.    The Parties shall not have the obligation to provide for the procedures referred to in paragraphs 1 and 2 with regards to goods in transit. This is without prejudice to paragraph 2 of Article 10.51 (Cooperation).


4.    Singapore shall fully implement the obligations of paragraphs 1 and 2 ideally within two but no later than three years of the entry into force of this Agreement with regard to procedures with respect to:

(a)    counterfeit geographical indication goods; and

(b)    pirated design goods.

ARTICLE 10.50

Identification of Shipments

To facilitate the effective enforcement of intellectual property rights, the customs authorities shall adopt a range of approaches to identify shipments containing counterfeit trademark goods, pirated copyright goods, pirated design goods, and counterfeit geographical indication goods. These approaches include risk analysis techniques based, inter alia, on information provided by right holders, intelligence gathered and cargo inspections.


ARTICLE 10.51

Cooperation

1.    The Parties agree to cooperate with a view to eliminating international trade in goods infringing intellectual property rights. For this purpose, they shall, in particular, exchange information and arrange for cooperation, to be mutually agreed between their customs authorities, with regard to trade in counterfeit trademark goods, pirated copyright goods, pirated design goods, or counterfeit geographical indication goods.

2.    For shipments of goods transiting or transhipped through the territory of a Party and destined for the territory of the other Party, which are suspected of being counterfeit or pirated, the Parties shall, upon their own initiative or upon request of the other Party, provide available information to the other Party to enable effective enforcement against those shipments. The Parties may not provide information which is submitted confidentially by the shipper, shipping line or its agent.


SECTION E

COOPERATION

ARTICLE 10.52

Cooperation

1.    The Parties agree to cooperate with a view to supporting the implementation of the commitments and obligations undertaken under this Chapter. Areas of cooperation include, but are not limited to, the following activities:

(a)    exchange of information on legal frameworks concerning intellectual property rights, including implementation of intellectual property legislation and systems, aimed at promoting the efficient registration of intellectual property rights;

(b)    exchange, between respective authorities responsible for the enforcement of intellectual property rights, of their experiences and best practices concerning enforcement of intellectual property rights;

(c)    exchange of information and cooperation on public outreach and appropriate initiatives to promote awareness of the benefits of intellectual property rights and systems;


(d)    capacity-building and technical cooperation in relation, but not limited, to: management, licensing, valuation and exploitation of intellectual property rights; technology and market intelligence; facilitation of industry collaborations, including on intellectual property rights that may be applied towards environmental conservation or enhancement which may include establishing a platform or database; and public private partnerships to support culture and innovation;

(e)    exchange of information and cooperation on intellectual property issues, where appropriate and relevant to developments in environmentally friendly technology; and

(f)    any other areas of cooperation or activities as may be discussed and agreed between the Parties.

2.    Without prejudice to paragraph 1, the Parties agree to designate a contact point for the purpose of maintaining dialogue including, where useful, convening meetings on intellectual property issues between their respective technical experts on matters covered by this Chapter.

3.    Cooperation under this Article shall be carried out subject to each Party's laws, rules, regulations, directives or policies. Cooperation shall also be on mutually agreed terms and conditions and be subject to the availability of resources of each Party.


CHAPTER ELEVEN

COMPETITION AND RELATED MATTERS

SECTION A

ANTITRUST AND MERGERS

ARTICLE 11.1

Principles

1.    The Parties recognise the importance of free and undistorted competition in their trade relations. They acknowledge that anti-competitive business conduct or anti-competitive transactions have the potential to distort the proper functioning of their markets and undermine the benefits of trade liberalisation.

2.    To promote free and undistorted competition in all sectors of their economy, each Party shall maintain in their respective territories comprehensive legislation which effectively address:


(a)    horizontal and vertical agreements 72 between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in the territory of either Party as a whole or in a substantial part thereof;

(b)    abuses by one or more undertakings of a dominant position in the territory of either Party as a whole or in a substantial part thereof; and

(c)    concentrations between undertakings which result in a substantial lessening of competition or which significantly impede effective competition, in particular as a result of the creation or strengthening of a dominant position in the territory of either Party as a whole or in a substantial part thereof,

which affect trade between them.


ARTICLE 11.2

Implementation

1.    Each Party shall maintain its autonomy in developing and enforcing its law. The Parties undertake, however, to maintain authorities responsible and appropriately equipped for the effective enforcement of the legislation referred to in paragraph 2 of Article 11.1 (Principles).

2.    The Parties will apply their respective legislation referred to in paragraph 2 of Article 11.1 (Principles) in a transparent and non-discriminatory manner, respecting the principles of procedural fairness and rights of defence of the parties concerned, including the right of the parties concerned to be heard prior to deciding on a case.

SECTION B

PUBLIC UNDERTAKINGS,
UNDERTAKINGS ENTRUSTED WITH SPECIAL OR EXCLUSIVE RIGHTS

AND STATE MONOPOLIES

ARTICLE 11.3

Public Undertakings and Undertakings Entrusted with Special or Exclusive Rights

1.    Nothing in this Chapter prevents a Party from establishing or maintaining public undertakings, or entrusting undertakings with special or exclusive rights according to its respective law.


2.    Each Party shall ensure that public undertakings and undertakings entrusted with special or exclusive rights are subject to the legislation referred to in Section A (Antitrust and Mergers), in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.

3.    Each Party shall ensure that undertakings entrusted with special or exclusive rights do not use their special or exclusive rights to engage, either directly or indirectly, including through their dealings with their parents, subsidiaries, or other undertakings with common ownership, in anticompetitive practices in another market in respect of which such undertakings have no special or exclusive rights, that adversely affect investments, trade in goods or services of the other Party.

4.    Singapore shall ensure that any public undertaking or any undertaking entrusted with special or exclusive rights acts solely in accordance with commercial considerations in its purchase or sale of goods or services, such as with regard to price, quality, availability, marketability, transportation, and other terms and conditions of purchase or sale, and provides nondiscriminatory treatment to establishments of the Union, to goods of the Union, and to service suppliers of the Union, including with respect to its purchases or sales, in the case of an undertaking with special or exclusive rights, relating to the exercise of the special or exclusive rights.


ARTICLE 11.4

State Monopolies

While nothing in this Chapter shall be construed to prevent a Party from designating or maintaining state monopolies, each Party shall adjust state monopolies of a commercial character to ensure that no discrimination is exercised by such monopolies regarding the conditions under which goods and services are procured from and marketed to natural or legal persons of the other Party.

SECTION C

SUBSIDIES

ARTICLE 11.5

Definition and Scope

1.    For the purposes of this Agreement, a subsidy is a measure, which fulfils mutatis mutandis the conditions set out in Article 1.1 of the SCM Agreement, irrespective of whether the subsidy is granted in relation to the production of goods or of services. 73


2.    A subsidy shall be subject to this Chapter only if it is specific within the meaning of Article 2 of the SCM Agreement. Any subsidy falling under Article 11.7 (Prohibited Subsidies) shall be deemed to be specific.

3.    Articles 11.7 (Prohibited Subsidies), 11.8 (Other Subsidies) and 11.10 (Review Clause) and Annex 11-A shall not apply to fisheries subsidies, subsidies related to products covered by Annex 1 of the Agreement on Agriculture and other subsidies covered by the Agreement on Agriculture.

ARTICLE 11.6

Relationship with the WTO

The provisions in this Section are without prejudice to the rights and obligations of a Party under the WTO Agreement, in particular to apply trade remedies or to engage in dispute settlement proceedings or other appropriate action against a subsidy granted by the other Party.

ARTICLE 11.7

Prohibited Subsidies

1.    With respect to subsidies related to trade in goods, the Parties affirm their rights and obligations under Article 3 of the SCM Agreement, which is hereby incorporated into and made part of this Agreement, mutatis mutandis.


2.    The following subsidies related to trade in goods and services shall be prohibited:

(a)    any legal arrangement whereby a government or any public body is responsible to cover debts or liabilities of certain undertakings without any limitation, in law or in fact, as to the amount of those debts and liabilities or the duration of such responsibility; and

(b)    support to insolvent or ailing undertakings in whatever form (such as loans and guarantees, cash grants, capital injections, provision of assets below market prices, tax exemptions) without a credible restructuring plan based on realistic assumptions with the view to ensuring the return of the ailing undertaking within a reasonable time to long-term viability and without the undertaking significantly contributing itself to the costs of restructuring, 74

unless the subsidising Party upon request of the other Party has demonstrated that the subsidy in question does not affect trade of the other Party nor will be likely to do so.

3.    Subparagraphs 2(a) and 2(b) do not prevent a Party from providing subsidies that are granted to remedy a serious disturbance in its economy. A serious disturbance in the economy of a Party means an exceptional, temporary and significant crisis which affects the whole economy of the Party rather than a specific region or economic sector of a Party.

4.    Subparagraph 2(b) does not apply to subsidies granted as compensation for carrying out public service obligations and subsidies to the coal industry.


ARTICLE 11.8

Other Subsidies

1.    The Parties agree to use their best endeavours to remedy or remove through the application of their competition laws or otherwise, distortions of competition caused by other specific subsidies related to trade in goods and services which are not covered by Article 11.7 (Prohibited Subsidies), insofar as they affect or are likely to affect trade of either Party, and to prevent the occurrence of such situations. Annex 11-A contains guidance in particular on the types of subsidies which do not produce these effects.

2.    The Parties agree to exchange information upon the request of either Party and to hold a first dialogue within two years after the entry into force of this Agreement with a view to developing rules applicable to other subsidies, taking into account developments at multilateral level. To this end, the Parties may take a decision in the Trade Committee.

ARTICLE 11.9

Transparency

1.    Each Party shall ensure transparency in the area of subsidies related to trade in goods and the supply of services. To this end, each Party shall report every two years to the other Party on the legal basis, form, and to the extent possible, amount or budget, and the recipient of subsidies granted by its government or any public body.


2.    Such report is deemed to have been provided if the relevant information is made available by the Parties or on their behalf on a publicly accessible website, by June of the second calendar year after the subsidies were granted.

ARTICLE 11.10

Review Clause

The Parties shall keep under constant review the matters to which reference is made in this Section. Each Party may refer such matters to the Trade Committee. The Parties agree to review progress in implementing this Section every two years after the entry into force of this Agreement, unless both Parties agree otherwise.


SECTION D

GENERAL MATTERS

ARTICLE 11.11

Cooperation and Coordination in Law Enforcement

The Parties recognise the importance of cooperation and coordination to further enhance effective law enforcement. Their respective authorities shall endeavour to coordinate and cooperate in the enforcement of their respective laws to fulfil the objective of this Agreement of free and undistorted competition in their trade relations.

ARTICLE 11.12

Confidentiality

1.    When a Party communicates information under this Agreement, the Party shall ensure the protection of business secrets and other confidential information.

2.    When a Party communicates information in confidence under this Agreement, the receiving Party shall, consistent with its laws and regulations, maintain the confidentiality of the communicated information.


ARTICLE 11.13

Consultation

1.    To foster mutual understanding between the Parties or to address specific matters that arise under Section A (Antitrust and Mergers), Section B (Public Undertakings, Undertakings Entrusted with Special or Exclusive Rights and State Monopolies) or Section D (General Matters), each Party shall, upon the request of the other Party, enter into consultations regarding representations made by the other Party. In its requests, the Party shall indicate, if relevant, how the matter affects trade between the Parties.

2.    The Parties shall promptly discuss, upon the request of a Party, any questions arising from the interpretation or application of Section A (Antitrust and Mergers), Section B (Public Undertakings, Undertakings Entrusted with Special or Exclusive Rights and State Monopolies) or Section D (General Matters).

3.    To facilitate discussion of the matter that is the subject of the consultations, each Party shall endeavour to provide relevant non-confidential information to the other Party.

ARTICLE 11.14

Dispute Settlement and Mediation Mechanism

Neither Party may have recourse to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism) for any matter arising under this Chapter except for Article 11.7 (Prohibited Subsidies).


CHAPTER TWELVE

TRADE AND SUSTAINABLE DEVELOPMENT

SECTION A

INTRODUCTORY PROVISIONS

ARTICLE 12.1

Context and Objectives

1.    The Parties recall the Agenda 21 of the United Nations Conference on Environment and Development of 1992, the Preamble to the WTO Agreement, the Singapore Ministerial Declaration of the WTO of 1996, the Johannesburg Plan of Implementation on Sustainable Development of 2002, the Ministerial Declaration of the UN Economic and Social Council on Generating Full and Productive Employment and Decent Work for All of 2006, and the International Labour Organization (hereinafter referred to as "ILO") Declaration on Social Justice for a Fair Globalization of 2008. In view of these instruments, the Parties reaffirm their commitment to developing and promoting international trade and their bilateral trade and economic relationship in such a way as to contribute to sustainable development.


2.    The Parties recognise that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development. They underline the benefit of cooperation on trade-related social and environmental issues as part of a global approach to trade and sustainable development.

3.    The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in domestic labour and environment laws. At the same time, the Parties stress that environmental and labour standards should not be used for protectionist trade purposes.

4.    The Parties recognise that it is their aim to strengthen their trade relations and cooperation in ways that promote sustainable development in the context of paragraphs 1 and 2. In light of the specific circumstances of each Party, it is not their intention to harmonise the labour or environment standards of the Parties.

ARTICLE 12.2

Right to Regulate and Levels of Protection

1.    The Parties recognise the right of each Party to establish its own levels of environmental and labour protection, and to adopt or modify accordingly its relevant laws and policies, consistent with the principles of internationally recognised standards or agreements, to which it is a party, referred to in Articles 12.3 (Multilateral Labour Standards and Agreements) and 12.6 (Multilateral Environmental Standards and Agreements).


2.    The Parties shall continue to improve those laws and policies, and shall strive towards providing and encouraging high levels of environmental and labour protection.

SECTION B

TRADE AND SUSTAINABLE DEVELOPMENT –
LABOUR ASPECTS
75

ARTICLE 12.3

Multilateral Labour Standards and Agreements

1.    The Parties recognise the value of international cooperation and agreements on employment and labour affairs as a response of the international community to economic, employment and social challenges and opportunities resulting from globalisation. They commit to consulting and cooperating as appropriate on trade-related labour and employment issues of mutual interest.


2.    The Parties reaffirm their commitments, under the Ministerial Declaration of the UN Economic and Social Council on Generating Full and Productive Employment and Decent Work for All of 2006, to recognising full and productive employment and decent work for all as a key element of sustainable development for all countries and as a priority objective of international cooperation. The Parties resolve to promote the development of international trade in a way that is conducive to full and productive employment and decent work for all.

3.    In accordance with the obligations assumed under the ILO and the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up adopted by the International Labour Conference at its 86th Session in 1998, the Parties commit to respecting, promoting and effectively implementing the principles concerning the fundamental rights at work, namely:

(a)    freedom of association and the effective recognition of the right to collective bargaining;

(b)    the elimination of all forms of forced or compulsory labour;

(c)    the effective abolition of child labour; and

(d)    the elimination of discrimination in respect of employment and occupation.

The Parties reaffirm the commitments to effectively implementing the ILO Conventions that Singapore and the Member States of the Union have ratified respectively.


4.    The Parties will make continued and sustained efforts towards ratifying and effectively implementing the fundamental ILO conventions and they will exchange information in this regard. The Parties will also consider the ratification and effective implementation of other ILO conventions, taking into account domestic circumstances. The Parties will exchange information in this regard.

5.    The Parties recognise that the violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage.

ARTICLE 12.4

Labour Cooperation
in the Context of Trade and Sustainable Development

The Parties recognise the importance of working together on traderelated aspects of labour policies in order to achieve the objectives of this Agreement. The Parties may initiate cooperative activities of mutual benefit in areas including but not limited to:

(a)    cooperation in international fora addressing labour aspects of trade and sustainable development, including but not limited to the ILO and Asia-Europe Meeting;

(b)    information exchange and the sharing of good practices in areas such as labour laws and practices, compliance and enforcement systems, labour dispute management, labour consultation, labour-management cooperation and occupational safety and health;


(c)    exchange of views on the positive and negative impacts of the Agreement on labour aspects of sustainable development and ways to enhance, prevent or mitigate them, taking into account sustainability impact assessments carried out by either or both Parties;

(d)    exchange of views on the promotion of the ratification of fundamental ILO Conventions and other conventions of mutual interest, as well as on the effective implementation of ratified conventions;

(e)    cooperation on trade-related aspects of the ILO Decent Work Agenda, including on the interlinkages between trade and full and productive employment, labour market adjustment, core labour standards, labour statistics, human resources development and lifelong learning, social protection and social inclusion, social dialogue and gender equality; and

(f)    exchange of views on the trade impact of labour regulations, norms and standards.

ARTICLE 12.5

Scientific Information

Each Party shall, when preparing and implementing measures aimed at health and safety at work which may affect trade or investment between the Parties, take account of relevant scientific and technical information and related international standards, guidelines or recommendations if they exist, including the precautionary principle as enshrined in such international standards, guidelines or recommendations.


SECTION C

TRADE AND SUSTAINABLE DEVELOPMENT –
ENVIRONMENTAL ASPECTS

ARTICLE 12.6

Multilateral Environmental Standards and Agreements

1.    The Parties recognise the value of international environmental governance and agreements as a response of the international community to global or regional environmental problems and they stress the need to enhance the mutual supportiveness between trade and environment policies, rules and measures. In this context, they will consult and cooperate as appropriate with respect to negotiations on trade-related environmental issues of mutual interest.

2.    The Parties shall effectively implement in their respective laws, regulations or other measures and practices in their territories, the multilateral environmental agreements to which they are party. 76

3.    The Parties reaffirm their commitment to reaching the ultimate objective of the UN Framework Convention on Climate Change (hereinafter referred to as "UNFCCC"), and of its Kyoto Protocol in a manner consistent with the principles and provisions of the UNFCCC. They commit to work together to strengthen the multilateral, rulesbased regime under the UNFCCC building on the UNFCCC's agreed decisions, and to support efforts to develop a post2020 international climate change agreement under the UNFCCC applicable to all parties.


4.    Nothing in this Agreement shall prevent either Party from adopting or maintaining measures to implement the multilateral environmental agreements to which they are party, provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties or a disguised restriction on trade.

ARTICLE 12.7

Trade in Timber and Timber Products

The Parties recognise the importance of the global conservation and sustainable management of forests. To this end, the Parties undertake to:

(a)    exchange information on approaches to promote the trade in and consumption of timber and timber products from legally and sustainably managed forests, and to promote the awareness of such approaches;

(b)    promote global forest law enforcement and governance and address trade in illegally harvested timber and timber products through, for example, promoting the use of timber and timber products from legally and sustainably managed forests, including through verification and certification schemes;

(c)    cooperate to promote the effectiveness of measures or policies aimed at addressing the trade in illegally harvested timber and timber products; and


(d)    promote the effective use of Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) with regard to timber species whose conservation status is considered at risk.

ARTICLE 12.8

Trade in Fish Products

The Parties recognise the importance of ensuring the conservation and management of fish stocks in a sustainable manner. To this end, the Parties undertake to:

(a)    comply with long-term conservation measures and sustainable exploitation of fish stocks as defined in the international instruments ratified by the respective Parties and uphold the principles of the Food and Agriculture Organization of the UN (hereinafter referred to as "FAO") and relevant UN instruments relating to these issues;

(b)    introduce and implement effective measures to combat illegal, unreported and unregulated (hereinafter referred to as "IUU") fishing, including cooperating with Regional Fisheries Managements Organisations and implementing their Catch Documentation or Certification Schemes for the export of fish and fish products when required. The Parties shall also facilitate the prevention of IUU products from trade flows and the exchange of information on IUU activities;


(c)    adopt effective monitoring and control measures to ensure compliance with conservation measures, such as appropriate Port State Measures; and

(d)    uphold the principles of the FAO Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas and respect the relevant provisions of the FAO Agreement on Port State Measures to Prevent, Deter and Eliminate IUU Fishing.

ARTICLE 12.9

Scientific Information

Each Party shall, when preparing and implementing measures aimed at environmental protection which may affect trade or investment between the Parties, take account of scientific evidence and relevant international standards, guidelines or recommendations, if they exist, and of the precautionary principle.


ARTICLE 12.10

Cooperation on Environmental Aspects
in the Context of Trade and Sustainable Development

The Parties recognise the importance of working together on trade-related aspects of environmental policies in order to achieve the objectives of this Agreement. The Parties may initiate cooperative activities of mutual benefit in areas including but not limited to:

(a)    exchange of views on the positive and negative impacts of this Agreement on environmental aspects of sustainable development and ways to enhance, prevent or mitigate them, taking into account sustainability impact assessments carried out by either or both Parties;

(b)    cooperation in international fora addressing environmental aspects of trade and sustainable development, including in particular at the WTO, under the United Nations Environment Programme and under multilateral environmental agreements;

(c)    cooperation with a view to promoting the ratification and effective implementation of multilateral environmental agreements with relevance to trade;

(d)    information exchange and cooperation on private and public certification and labelling schemes including eco-labelling, and green public procurement;

(e)    exchange of views on the trade impact of environmental regulations, norms and standards;


(f)    cooperation on trade-related aspects of the current and future international climate change regime, including ways to address adverse effects of trade on climate, as well as means to promote low-carbon technologies and energy efficiency;

(g)    cooperation on trade related aspects of multilateral environmental agreements, including customs cooperation;

(h)    sustainable forest management to encourage effective measures for certification of sustainably produced timber;

(i)    exchange of views on the relationship between multilateral environmental agreements and international trade rules;

(j)    exchange of views on the liberalisation of environmental goods and services; and

(k)    exchange of views regarding conservation and management of the living marine resources.


SECTION D

GENERAL PROVISIONS

ARTICLE 12.11

Trade and Investment Promoting Sustainable Development

1.    The Parties resolve to make continuing special efforts to facilitate and promote trade and investment in environmental goods and services, including through addressing related non-tariff barriers. The Parties also recognise the usefulness of efforts to promote trade in goods that are the subject of voluntary or private sustainable development assurance schemes, such as ecolabelling, or fair and ethical trade.

2.    The Parties shall pay special attention to facilitating the removal of obstacles to trade or investment concerning climate-friendly goods and services, such as sustainable renewable energy goods and related services and energy efficient products and services, including through the adoption of policy frameworks conducive to the deployment of best available technologies and through the promotion of standards that respond to environmental and economic needs and minimise technical obstacles to trade.


3.    The Parties recognise the need to ensure that, when developing public support systems for fossils fuels, proper account is taken of the need to reduce greenhouse gas emissions and to limit distortions of trade as much as possible. While subparagraph (2)(b) of Article 11.7 (Prohibited Subsidies) does not apply to subsidies to the coal industry, the Parties share the goal of progressively reducing subsidies for fossil fuels. Such a reduction may be accompanied by measures to alleviate the social consequences associated with the transition to low carbon fuels. In addition, both Parties will actively promote the development of a sustainable and safe lowcarbon economy, such as investment in renewable energies and energy efficient solutions.

4.    When promoting trade and investment, the Parties should make special efforts to promote corporate social responsibility practices which are adopted on a voluntary basis. In this regard, each Party shall refer to relevant internationally accepted principles, standards or guidelines that it has agreed or acceded to, such as the Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises, the UN Global Compact, and the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy. The Parties commit to exchanging information and cooperating on promoting corporate social responsibility.

ARTICLE 12.12

Upholding Levels of Protection

1.    A Party shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from, its environmental and labour laws, in a manner affecting trade or investment between the Parties.


2.    A Party shall not fail to effectively enforce its environmental and labour laws, through a sustained or recurring course of action or inaction, in a manner affecting trade or investment between the Parties.

ARTICLE 12.13

Transparency

Each Party shall ensure that any measure of general application aimed at protecting the environment or labour conditions which may affect trade and investment between the Parties is developed, introduced and administered in a transparent manner and with due notice and opportunities for interested persons to submit their views, in accordance with its domestic law and Chapter Thirteen (Transparency).

ARTICLE 12.14

Review of Impact on Sustainable Development

1.    Each Party undertakes to monitor, assess and review the impact of the implementation of this Agreement on sustainable development, jointly or independently, through its relevant participative processes and institutions, in accordance with its existing practices.


2.    The Parties will exchange views on methodologies and indicators for trade sustainability impact assessments.

ARTICLE 12.15

Institutional Set up and Monitoring Mechanism

1.    Each Party shall designate an office within its administration that shall serve as contact point with the other Party for purposes of implementing this Chapter.

2.    The Parties shall establish a Board on Trade and Sustainable Development (hereinafter referred to as the "Board"). The Board shall comprise senior officials from within the administrations of each Party.

3.    The Board shall meet within the first two years after the date this Agreement enters into force and thereafter as necessary, to oversee the implementation of this Chapter.

4.    Each meeting of the Board shall include a public session with stakeholders to exchange views on issues related to the implementation of this Chapter. The Parties shall promote a balanced representation of relevant interests, including independent representative organisations of employers, workers, environmental interests and business groups, as well as other relevant stakeholders as appropriate.


5.    Each Party shall establish new or make use of existing consultative mechanisms to seek advice from relevant domestic stakeholders on the implementation of this Chapter, such as domestic advisory groups. Such mechanisms shall include balanced representation of independent economic, social and environmental stakeholders. These stakeholders include employers and workers organisations, and non-governmental organisations. These stakeholders may, on their own initiative, submit views or recommendations to their respective Parties on the implementation of this Chapter.

ARTICLE 12.16

Government Consultations

1.    In case of disagreement on any matter arising under this Chapter, the Parties shall only have recourse to the procedures provided for in Article 12.16 (Government Consultations) and Article 12.17 (Panel of Experts). Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism) do not apply to this Chapter.

2.    In case of any disagreement referred to in paragraph 1, a Party may request consultations with the other Party by delivering a written request to the contact point of the other Party. Consultations shall commence promptly after a Party delivers a request for consultations.


3.    The Parties shall make every attempt to arrive at a mutually satisfactory resolution of the matter. The Parties shall take into account the activities of the ILO or relevant multilateral environmental organisations or bodies so as to promote greater cooperation and coherence between the work of the Parties and these organisations. Where relevant the Parties may, subject to mutual agreement, seek the views of these organisations or bodies, or of any person or body they deem appropriate in order to fully examine the matter.

4.    If a Party considers that the matter needs further discussion that Party may request that the Board be convened to consider the matter by delivering a written request to the contact point of the other Party. The Board shall convene promptly and endeavour to agree on a resolution of the matter.

5.    Where appropriate, the Board may consult relevant stakeholders.

6.    Any resolution reached by the Board on the matter shall be made public unless it otherwise decides.

ARTICLE 12.17

Panel of Experts

1.    For any matter that has not been satisfactorily addressed by the Board within 120 days from the delivery of a request for the Board to convene to consider the matter pursuant to paragraph 4 of Article 12.16 (Government Consultations), or a longer period as agreed by both Parties, a Party may request, by delivering a written request to the contact point of the other Party, that a Panel of Experts be established to examine that matter.


2.    At its first meeting after the entry into force of this Agreement, the Board shall establish the rules of procedure of the Panel of Experts, taking reference from the relevant Rules of Procedure in Annex 14-A. The principles in Annex 14-B shall apply to this Article.

3.    The Board shall, at its first meeting after the entry into force of this Agreement, establish a list of at least twelve individuals who are willing and able to serve on the Panel of Experts. This list shall be composed of three sub-lists: one sub-list for each Party and one sub-list of individuals who are not nationals of either Party to act as Chairpersons of the Panel of Experts. Each Party shall propose at least four individuals to serve as experts on its own sub-list. Each Party shall also propose at least two individuals to serve, upon agreement by both Parties, on the sub-list of Chairpersons. At its meetings, the Board will review the list and ensure that it is maintained at least at this level.

4.    The list referred to in paragraph 3 shall comprise individuals with specialised knowledge of or expertise in issues addressed in this Chapter, labour or environmental law or the resolution of disputes arising under international agreements. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government with regard to issues related to the matter at stake, or be affiliated with the government of Singapore, of any Member State of the Union, or the Union.


5.    A Panel of Experts shall be composed of three members, unless the Parties agree otherwise. Within thirty days of the date of receipt by the responding Party of the request for the establishment of a Panel of Experts, the Parties shall consult in order to reach an agreement on its composition. In the event that the Parties are unable to agree on the composition of the Panel of Experts within this time-frame, they shall select the chairperson from the relevant sub-list referred to in paragraph 3, by mutual agreement or, in case they cannot agree within another seven days, by lot. Each Party shall select one expert complying with the requirements under paragraph 4 within fourteen days after the end of the 30 days. The Parties may agree on any other expert complying with the requirements under paragraph 4 to sit on the Panel of Experts. In the event that the composition of the Panel of Experts has not been completed within this time-frame of forty-four days from the date of receipt by the responding Party of the request for the establishment of a Panel of Experts, the remaining expert(s) shall be selected within seven days by lot from the sub-list(s) referred to in paragraph 3 among the individuals proposed by the Party or Parties who has or have not completed the procedure. In case such list has not yet been established, the experts shall be selected by lot from the individuals which have been formally proposed by one or both of the Parties. The date of establishment of the Panel of Experts shall be the date on which the last of the three experts is selected.

6.    Unless the Parties agree otherwise within seven days from the date of establishment of the Panel of Experts, the terms of reference of the Panel of Experts shall be:

"to examine, in the light of the relevant provisions of the Trade and Sustainable Development Chapter, the matter referred to in the request for the establishment of the Panel of Experts, and to issue a report, in accordance with paragraph 8 of Article 12.17 (Panel of Experts), making recommendations for the solution of the matter".


7.    The Panel of Experts may obtain information from any source it deems appropriate. In matters related to the respect of multilateral agreements as set out in Articles 12.3 (Multilateral Labour Standards and Agreements) and 12.6 (Multilateral Environmental Standards and Agreements), the Panel of Experts should seek information and advice from the ILO or Multilateral Environmental Agreement bodies. Any information obtained under this paragraph shall be disclosed to both Parties and submitted to them for their comments.

8.    The Panel of Experts shall issue an interim and a final report to the Parties. These reports shall set out the findings of facts, the applicability of the relevant provisions and the basic rationale behind any findings and recommendations. The Panel of Experts shall issue the interim report to the Parties not later than ninety days from its date of establishment. Any Party may submit written comments to the Panel of Experts on the interim report. After considering any such written comments, the Panel of Experts may modify the report and make any further examination it considers appropriate. The Panel of Experts shall issue the final report to the Parties no later than 150 days from its date of establishment. Where it considers that the deadlines set in this paragraph cannot be met, the chairperson of the Panel of Experts shall notify the Parties in writing, stating the reasons for the delay and the date on which the panel plans to issue its interim or final report. The Panel of Experts shall issue the final report no later than 180 days after the date of its establishment, unless the Parties agree otherwise. This final report shall be made publicly available unless the Parties decide otherwise.


9.    The Parties shall discuss appropriate measures to be implemented taking into account the report and recommendations of the Panel of Experts. The Party concerned shall inform its stakeholders, through the consultative mechanisms referred to in paragraph 5 of Article 12.15 (Institutional Set Up and Monitoring Mechanism), and the other Party of its decisions on any actions or measures to be implemented no later than three months after the report has been submitted to the Parties. The follow-up to the report and the recommendations of the Panel of Experts shall be monitored by the Board. Stakeholders may submit observations to the Board in this regard.

CHAPTER THIRTEEN

TRANSPARENCY

ARTICLE 13.1

Definitions

For the purposes of this Chapter:

(a)    "measure of general application" means laws, regulations, judicial decisions, procedures and administrative rulings that may have an impact on any matter covered by this Agreement. It does not include a ruling that applies to a particular person;


(b)    "interested person" means any natural or legal person that may be subject to any rights or obligations under measures of general application.

ARTICLE 13.2

Objectives and Scope

1.    Recognising the impact which their respective regulatory environments may have on trade and investment between them, the Parties shall pursue a transparent and predictable regulatory environment for economic operators, including small and medium-sized enterprises, doing business in their territories.

2.    The Parties, reaffirming their respective commitments under the WTO Agreement, hereby lay down clarifications and improved arrangements for transparency, consultation and better administration of measures of general application.

ARTICLE 13.3

Publication regarding Measures of General Application

1.    Each Party shall ensure that in respect of measures of general application:

(a)    such measures are readily available to interested persons, in a non-discriminatory manner, via an officially designated medium, and where feasible and possible, via electronic means, in such a manner as to enable interested persons and the other Party to become acquainted with them;


(b)    an explanation of the objective of, and rationale for, such measures, shall be provided to the extent possible; and

(c)    there shall be sufficient time between the publication and entry into force of such measures, except where not possible on grounds of urgency.

2.    Each Party shall:

(a)    endeavour to publish in advance any proposal to adopt or to amend any measure of general application, including an explanation of the objective of and rationale for the proposal;

(b)    provide reasonable opportunities for interested persons to comment on such proposed measures, allowing, in particular, for sufficient time for such opportunities; and

(c)    endeavour to take into account the comments received from interested persons with respect to such proposed measure.

ARTICLE 13.4

Enquiries and Contact Points

1.    In order to facilitate the effective implementation of this Agreement and communication between the Parties on any matter covered by this Agreement, each Party shall designate a contact point upon the entry into force of this Agreement.


2.    Upon the request of either Party, the contact point of the other Party shall indicate the office or the official responsible for any matter pertaining to the implementation of this Agreement and assist, as necessary, in facilitating communication with the requesting Party.

3.    Each Party shall establish or maintain appropriate mechanisms for responding to enquiries from any interested person of the other Party regarding any measures of general application which are proposed or in force, and their application. Enquiries may be addressed through contact points established under paragraph 1 or any other mechanism, as appropriate.

4.    The Parties recognise that any response provided for in paragraph 3 may not be definitive or legally binding but for information purposes only, unless otherwise provided for in their laws and regulations.

5.    Request or information under this Article shall be conveyed to the other Party through the relevant contact points provided for in paragraph 1.

6.    Upon request of either Party, the other Party shall promptly provide information and respond to questions pertaining to any actual or proposed measure of general application that the requesting Party considers might affect the operation of this Agreement, regardless of whether the requesting Party has been previously notified of that measure.


7.    Each Party shall establish or maintain appropriate mechanisms with the task of seeking to effectively resolve problems for interested persons of the other Party that may arise from the application of any measure of general application. Such processes should be easily accessible, time-bound, result-oriented and transparent. They shall be without prejudice to any appeal or review procedures which the Parties establish or maintain. They shall also be without prejudice to the Parties' rights and obligations under Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).

8.    Any information provided under this Article shall be without prejudice as to whether the measure is consistent with this Agreement.

ARTICLE 13.5

Administrative Proceedings

With a view to administering in a consistent, impartial and reasonable manner all measures of general application, each Party, in applying such measures to particular persons, goods or services of the other Party in specific cases, shall:

(a)    endeavour to provide interested persons of the other Party, who are directly affected by a proceeding, with reasonable notice, in accordance with its procedures, when a proceeding is initiated, including a description of the nature of the proceeding, a statement of the legal authority under which the proceeding is initiated and a general description of any issues in controversy;


(b)    afford such interested persons a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, insofar as time, the nature of the proceeding and the public interest permit; and

(c)    ensure that its procedures are based on and in accordance with its law.

ARTICLE 13.6

Review of Administrative Actions

1.    Each Party shall, subject to its domestic law, establish or maintain judicial, quasijudicial or administrative tribunals or procedures for the purposes of the prompt review and, where warranted, correction of administrative actions 77 relating to matters covered by this Agreement. Such tribunals shall be impartial and independent of the office or authority entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter.

2.    Each Party shall ensure that, in any such tribunals or procedures, the parties to the proceeding are provided with the right to:

(a)    a reasonable opportunity to support or defend their respective positions; and


(b)    a decision based on the evidence and submissions of record or, where required by its law, the record compiled by the administrative authority.

3.    Each Party shall ensure, subject to appeal or further review as provided for in its law, that such decision shall be implemented by, and shall govern the practice of, the office or authority with respect to the administrative action at issue.

ARTICLE 13.7

Regulatory Quality and Performance
and Good Administrative Behaviour

1.    The Parties agree to cooperate in promoting regulatory quality and performance in their respective regulatory policies through exchange of information and best practices.

2.    The Parties subscribe to the principles of good administrative behaviour, and agree to cooperate in promoting it in their respective administrations through exchange of information and best practices.


ARTICLE 13.8

Specific Rules

Specific rules in other Chapters of this Agreement regarding the subject matter of this Chapter shall prevail to the extent that they differ from the provisions of this Chapter.

CHAPTER FOURTEEN

DISPUTE SETTLEMENT

SECTION A

OBJECTIVE AND SCOPE

ARTICLE 14.1

Objective

The objective of this Chapter is to avoid and settle any difference between the Parties concerning the interpretation and application of this Agreement with a view to arrive at, where possible, a mutually acceptable solution.


ARTICLE 14.2

Scope

This Chapter shall apply with respect to any difference concerning the interpretation and application of the provisions of this Agreement, except as otherwise expressly provided.

SECTION B

CONSULTATIONS

ARTICLE 14.3

Consultations

1.    The Parties shall endeavour to resolve any difference regarding the interpretation and application of the provisions referred to in Article 14.2 (Scope) 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 to the other Party copied to the Trade Committee, and shall give the reasons for the request, including identification of the measures at issue, the applicable provisions referred to in Article 14.2 (Scope), and the reasons for the applicability of such provisions.


3.    Consultations shall be held within thirty days of the date of receipt of the request and take place, unless the Parties agree otherwise, on the territory of the Party complained against. The consultations shall be deemed concluded within sixty days of the date of receipt of the request, unless the Parties agree otherwise. Consultations shall be confidential, and without prejudice to the rights of either Party in any further proceedings.

4.    Consultations on matters of urgency, including those regarding perishable goods or, where appropriate, seasonal goods or services shall be held within fifteen days of the date of receipt of the request, and shall be deemed concluded within thirty days of the date of receipt of the request, unless the Parties agree otherwise.

5.    If the Party to which the request is made does not respond to the request for consultations within ten 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 consultations have been concluded and no mutually agreed solution has been reached, the complaining Party may request the establishment of an arbitration panel in accordance with Article 14.4 (Initiation of Arbitration Procedure).


SECTION C

DISPUTE SETTLEMENT PROCEDURES

SUB-SECTION A

ARBITRATION PROCEDURES

ARTICLE 14.4

Initiation of Arbitration Procedure

1.    Where the Parties have failed to resolve the dispute by recourse to consultations as provided for in Article 14.3 (Consultations), the complaining Party may request the establishment of an arbitration panel in accordance with this Article.

2.    The request for the establishment of an arbitration panel shall be made in writing to the Party complained against and the Trade Committee. The complaining Party shall identify in its request the specific measure at issue, and it shall explain how such measure constitutes a breach of the provisions referred to in Article 14.2 (Scope) in a manner sufficient to present the legal basis for the complaint clearly.


ARTICLE 14.5

Establishment of the Arbitration Panel

1.    An arbitration panel shall be composed of three arbitrators.

2.    Within five days of the date of receipt by the Party complained against of the request referred to in paragraph 1 of Article 14.4 (Initiation of Arbitration Procedure), the Parties shall enter into consultations in order to agree on the composition of the arbitration panel.

3.    In the event that the Parties are unable to agree, within ten days of entering into the consultations referred to in paragraph 2, on the chairperson of the arbitration panel, the chair of the Trade Committee, or the chair's delegate, shall, within twenty days of entering into consultations referred to in paragraph 2, select one arbitrator who will serve as a chairperson by lot from the list referred to under paragraph 1 of Article 14.20 (Lists of Arbitrators).

4.    In the event that the Parties are unable to agree, within ten days of entering into the consultations referred to in paragraph 2, on the arbitrators:

(a)    each Party may select one arbitrator, who will not act as a chairperson, from the individuals on the list established under paragraph 2 of Article 14.20 (Lists of Arbitrators), within fifteen days of entering into the consultations referred to in paragraph 2; and


(b)    if either Party fails to select an arbitrator under subparagraph 4(a), the chair of the Trade Committee, or the chair's delegate, shall select any remaining arbitrator by lot from among the individuals proposed by the Party pursuant to paragraph 2 of Article 14.20 (Lists of Arbitrators), within twenty days of entering into consultations referred to in paragraph 2.

5.    Should the list provided for in paragraph 2 of Article 14.20 (Lists of Arbitrators) not be established at the time required pursuant to paragraph 4:

(a)    where both Parties have proposed individuals pursuant to paragraph 2 of Article 14.20 (Lists of Arbitrators), each Party may select one arbitrator, who will not act as a chairperson, from among the individuals proposed, within fifteen days of entering into the consultations referred to in paragraph 2. If a Party fails to select an arbitrator, the chair of the Trade Committee, or the chair's delegate, shall select the arbitrator by lot from among the individuals proposed by the Party which failed to select its arbitrator; or

(b)    where only one Party has proposed individuals pursuant to paragraph 2 of Article 14.20 (Lists of Arbitrators), each Party may select one arbitrator, who will not act as a chairperson, from among the individuals proposed, within fifteen days of entering into the consultations referred to in paragraph 2. If a Party fails to select an arbitrator, the chair of the Trade Committee, or the chair's delegate, shall select the arbitrator by lot from among the individuals proposed.

6.    Should the list provided for in paragraph 1 of Article 14.20 (Lists of Arbitrators) not be established at the time required pursuant to paragraph 3, the chairperson shall be selected by lot from among former Members of the WTO Appellate Body, who shall not be a person of either Party.


7.    The date of establishment of the arbitration panel shall be the date on which the last of the three arbitrators is selected.

8.    Replacement of arbitrators shall take place only for the reasons and according to the procedures detailed in Rules 19 to 25 of Annex 14-A.

ARTICLE 14.6

Preliminary Ruling on Urgency

If a Party so requests, the arbitration panel shall give a preliminary ruling within ten days of its establishment on whether it deems the case to be urgent.

ARTICLE 14.7

Interim Panel Report

1.    The arbitration panel shall issue an interim report to the Parties setting out the findings of fact, the applicability of relevant provisions and the basic rationale behind any findings and recommendations, not later than ninety days from the date of establishment of the arbitration panel. Where it considers that this deadline cannot be met, the chairperson of the arbitration panel must notify the Parties and the Trade Committee in writing, stating the reasons for the delay and the date on which the arbitration panel plans to issue its interim report. Under no circumstances should the arbitration panel issue its interim report later than 120 days after the date of its establishment.


2.
   Any Party may submit a written request for the arbitration panel to review precise aspects of the interim report within thirty days of its notification.

3.    In cases of urgency, including those involving perishable goods or, where appropriate, seasonal goods or services, the arbitration panel shall make every effort to issue its interim report and any Party may submit a written request for the arbitration panel to review precise aspects of the interim report, within half of the respective time frames under paragraphs 1 and 2.

4.    After considering any written comments by the Parties on the interim report, the arbitration panel may modify its report and make any further examination it considers appropriate. The findings of the final panel ruling shall include a sufficient discussion of the arguments made at the interim review stage, and shall answer clearly to the written comments of the two Parties.

ARTICLE 14.8

Arbitration Panel Ruling

1.    The arbitration panel shall issue its ruling to the Parties and to the Trade Committee within 150 days from the date of the establishment of the arbitration panel. Where it considers that this deadline cannot be met, the chairperson of the arbitration panel shall notify the Parties and the Trade Committee in writing, stating the reasons for the delay and the date on which the arbitration panel plans to issue its ruling. Under no circumstances should the arbitration panel issue its ruling later than 180 days after the date of its establishment.


2.    In cases of urgency, including those involving perishable goods or, where appropriate, seasonal goods or services, the arbitration panel shall make every effort to issue its ruling within seventyfive days from the date of its establishment. Under no circumstances should the arbitration panel issue its ruling later than ninety days after the date of its establishment.

SUB-SECTION B

COMPLIANCE

ARTICLE 14.9

Compliance with the Arbitration Panel Ruling

Each Party shall take any measure necessary to comply in good faith with the arbitration panel ruling, and the Parties shall endeavour to agree on the period of time to comply with the ruling.

ARTICLE 14.10

Reasonable Period of Time for Compliance

1.    No later than thirty days after the receipt of the notification of the arbitration panel ruling to the Parties, the Party complained against shall notify the complaining Party and the Trade Committee of the time it will require for compliance (hereinafter referred to as "reasonable period of time"), if immediate compliance is not possible.


2.    If there is disagreement between the Parties on the reasonable period of time to comply with the arbitration panel ruling, the complaining Party shall, within twenty days of the receipt of the notification made under paragraph 1 by the Party complained against, request in writing the original arbitration panel to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the other Party and to the Trade Committee. The original arbitration panel shall issue its ruling to the Parties and notify the Trade Committee within twenty days from the date of the submission of the request.

3.    In the event that any member of the original arbitration panel is no longer available, the procedures set out in Article 14.5 (Establishment of the Arbitration Panel) shall apply. The time limit for issuing the ruling shall be thirty-five days from the date of the submission of the request referred to in paragraph 2.

4.    The Party complained against shall inform the complaining Party in writing of its progress to comply with the arbitration panel ruling at least one month before the expiry of the reasonable period of time.

5.    The reasonable period of time may be extended by mutual agreement of the Parties.


ARTICLE 14.11

Review of Any Measure Taken
to Comply with the Arbitration Panel Ruling

1.    The Party complained against shall notify the complaining Party and the Trade Committee before the end of the reasonable period of time of any measure that it has taken to comply with the arbitration panel ruling.

2.    In the event that there is disagreement between the Parties concerning the existence or the consistency of any measure notified under paragraph 1 with the provisions referred to in Article 14.2 (Scope), the complaining Party may request in writing the original arbitration panel to rule on the matter. Such request shall identify the specific measure at issue and the provisions referred to in Article 14.2 (Scope) with which it considers that measure to be inconsistent, in a manner sufficient to present the legal basis for the complaint clearly, and it shall explain how such measure is inconsistent with the provisions referred to in Article 14.2 (Scope). The original arbitration panel shall notify its ruling within forty-five days of the date of the submission of the request.

3.    In the event that any member of the original arbitration panel is no longer available, the procedures set out in Article 14.5 (Establishment of the Arbitration Panel) shall apply. The time limit for issuing the ruling shall be sixty days from the date of the submission of the request referred to in paragraph 2.


ARTICLE 14.12

Temporary Remedies in Case of Non-compliance

1.    If the Party complained against fails to notify any measure taken to comply with the arbitration panel ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that no measure taken to comply exists or that the measure notified under paragraph 1 of Article 14.11 (Review of Any Measure Taken to Comply with the Arbitration Panel Ruling) is inconsistent with that Party's obligations under the provisions referred to in Article 14.2 (Scope), the Party complained against shall enter into negotiations with the complaining Party with a view to developing mutually acceptable agreement on compensation.

2.    If no agreement on compensation is reached within thirty days after the end of the reasonable period of time or of the issuance of the arbitration panel ruling under Article 14.11 (Review of Any Measure Taken to Comply with the Arbitration Panel Ruling) that no measure taken to comply exists or that a measure taken to comply is inconsistent with the provisions referred to in Article 14.2 (Scope), the complaining Party shall be entitled, upon notification to the other Party and to the Trade Committee, to suspend obligations arising from any provision referred to in Article 14.2 (Scope) at a level equivalent to the nullification or impairment caused by the violation. The notification shall specify the level of obligations that the complaining Party intends to suspend. The complaining Party may implement the suspension at any moment after the expiry of ten days after the date of receipt of the notification by the Party complained against, unless the Party complained against has requested arbitration under paragraph 3.


3.    If the Party complained against considers that the level of suspension is not equivalent to the nullification or impairment caused by the violation, it may request in writing the original arbitration panel to rule on the matter. Such request shall be notified to the complaining Party and to the Trade Committee before the expiry of the ten-day period referred to in paragraph 2. The original arbitration panel, having sought, if appropriate, the opinion of experts, shall notify its ruling on the level of the suspension of obligations to the Parties and to the Trade Committee within thirty days of the date of the submission of the request. Obligations shall not be suspended until the original arbitration panel has notified its ruling, and any suspension shall be consistent with the arbitration panel ruling.

4.    In the event that any member of the original arbitration panel is no longer available, the procedures laid down in Article 14.5 (Establishment of the Arbitration Panel) shall apply. The period for issuing the ruling shall be fortyfive days from the date of the submission of the request referred to in paragraph 3.

5.    The suspension of obligations shall be temporary and shall not be applied after:

(a)    the Parties have reached a mutually agreed solution pursuant to Article 14.15 (Mutually Agreed Solution); or

(b)    the Parties have reached an agreement on whether the measure notified under paragraph 1 of Article 14.13 (Review of Any Measure Taken to Comply After the Suspension of Obligations) brings the Party complained against into conformity with the provisions referred to in Article 14.2 (Scope); or


(c)    any measure found to be inconsistent with the provisions referred to in Article 14.2 (Scope) has been withdrawn or amended so as to bring it into conformity with those provisions, as ruled under paragraph 2 of Article 14.13 (Review of Any Measure Taken to Comply After the Suspension of Obligations).

ARTICLE 14.13

Review of Any Measure Taken
to Comply After the Suspension of Obligations

1.    The Party complained against shall notify the complaining Party and the Trade Committee of any measure it has taken to comply with the ruling of the arbitration panel and of its request for the termination of the suspension of obligations applied by the complaining Party.

2.    If the Parties do not reach an agreement on whether the notified measure brings the Party complained against into conformity with the provisions referred to in Article 14.2 (Scope) within thirty days of the date of receipt of the notification, the complaining Party shall request in writing the original arbitration panel to rule on the matter. Such request shall be notified simultaneously to the other Party and to the Trade Committee. The arbitration panel ruling shall be notified to the Parties and to the Trade Committee within forty-five days of the date of the submission of the request. If the arbitration panel rules that any measure taken to comply is in conformity with the provisions referred to in Article 14.2 (Scope), the suspension of obligations shall be terminated.


SUB-SECTION C

COMMON PROVISIONS

ARTICLE 14.14

Suspension and Termination of Arbitration Procedures

1.    The arbitration panel shall, at the written request of both Parties, suspend its work at any time for a period agreed by the Parties not exceeding twelve months and shall resume its work at the end of this agreed period at the written request of the complaining Party, or before the end of this agreed period at the written request of both Parties. If the complaining Party does not request the resumption of the arbitration panel's work before the expiry of the agreed suspension period, the dispute settlement procedures initiated pursuant to this Section shall be deemed terminated. Subject to Article 14.21 (Relation with WTO Obligations), the suspension and termination of the arbitration panel's work are without prejudice to the rights of either Party in another proceeding.

2.    The Parties may, at any time, agree in writing to terminate the dispute settlement procedures initiated pursuant to this Section.


ARTICLE 14.15

Mutually Agreed Solution

The Parties may reach a mutually agreed solution to a dispute under this Chapter at any time. They shall notify the Trade Committee and the arbitration panel, if any, of such a solution. If the solution requires approval pursuant to the relevant domestic procedures of either Party, the notification shall refer to this requirement, and the dispute settlement procedures initiated pursuant to this Section shall be suspended. If such approval is not required, or upon notification of the completion of any such domestic procedures, the procedure shall be terminated.

ARTICLE 14.16

Rules of Procedure

1.    Dispute settlement procedures under this Chapter shall be governed by Annex 14-A.

2.    Any meeting of the arbitration panel shall be open to the public in accordance with Annex 14-A.


ARTICLE 14.17

Submission of Information

1.    At the request of a Party, or upon its own initiative, the arbitration panel may obtain information from any source, including the Parties involved in the dispute, it deems appropriate for the arbitration panel proceeding. The arbitration panel also has the right to seek the relevant opinion of experts as it deems appropriate. The arbitration panel shall consult the Parties before choosing such experts. Any information obtained in this manner must be disclosed to the Parties and submitted for their comments.

2.    Interested natural or legal persons of the Parties are authorised to submit amicus curiae briefs to the arbitration panel in accordance with Annex 14-A.

ARTICLE 14.18

Rules of Interpretation

The arbitration panel shall interpret the provisions referred to in Article 14.2 (Scope) in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties. Where an obligation under this Agreement is identical to an obligation under the WTO Agreement, the arbitration panel shall take into account any relevant interpretation established in rulings of the WTO Dispute Settlement Body (hereinafter referred to as "DSB"). The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided in the provisions referred to in Article 14.2 (Scope).


ARTICLE 14.19

Arbitration Panel Decisions and Rulings

1.    The arbitration panel shall make every effort to take any decision by consensus. Where, nevertheless, a decision cannot be arrived at by consensus, the matter at issue shall be decided by majority vote.

2.    Any ruling of the arbitration panel shall be binding on the Parties and shall not create any rights or obligations to physical or legal persons. The ruling shall set out the findings of fact, the applicability of the relevant provisions referred to in Article 14.2 (Scope) and the rationale behind any findings and conclusions that it makes. The Trade Committee shall make the arbitration panel ruling publicly available in its entirety, unless it decides not to do so in order to ensure the confidentiality of any information designated by either Party as confidential.

SECTION D

GENERAL PROVISIONS

ARTICLE 14.20

Lists of Arbitrators

1.    The Parties shall establish, upon the entry into force of this Agreement, a list of five individuals who are willing and able to serve as the chairperson of an arbitration panel referred to in Article 14.5 (Establishment of the Arbitration Panel).


2.    The Trade Committee shall, no later than six months after the entry into force of this Agreement, establish a list of at least ten individuals who are willing and able to serve as arbitrators. Each of the Parties shall propose upon the entry into force of this Agreement at least five individuals to serve as arbitrators.

3.    The Trade Committee will ensure that the list of individuals to serve as chairpersons or arbitrators, established pursuant to paragraphs 1 and 2 respectively, are maintained.

4.    Arbitrators shall have specialised knowledge of or experience in law and international trade or in the settlement of disputes arising under international trade agreements. They shall be independent, serve in their individual capacities and not be affiliated with the government of either of the Parties, and shall comply with Annex 14-B.

ARTICLE 14.21

Relation with WTO Obligations

1.    Recourse to the dispute settlement provisions of this Chapter shall be without prejudice to any action in the WTO framework, including dispute settlement proceedings.


2.    Notwithstanding paragraph 1, where a Party has, with regard to a particular measure, initiated a dispute settlement proceeding, either under this Chapter or under the WTO Agreement, it may not institute a dispute settlement proceeding regarding the same measure in the other forum until the first proceeding has ended. Moreover, a Party shall not initiate dispute settlement proceedings under this Chapter and under the WTO Agreement, unless substantially different obligations under both agreements are in dispute, or unless the forum selected fails for procedural or jurisdictional reasons to make findings on the claim seeking redress of that obligation, provided that the failure of the forum is not the result of a failure of a disputing Party to act diligently.

3.    For the purposes of paragraph 2:

(a)    dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party's request for the establishment of a panel under Article 6 of the DSU and are deemed to be ended when the DSB adopts the Panel's report, and the Appellate Body's report as the case may be, under Articles 16 and 17(14) of the DSU; and

(b)    dispute settlement proceedings under this Chapter are deemed to be initiated by a Party's request for the establishment of an arbitration panel under paragraph 1 of Article 14.4 (Initiation of Arbitration Procedure) and are deemed to be ended when the arbitration panel issues its ruling to the Parties and to the Trade Committee under paragraph 2 of Article 14.8 (Arbitration Panel Ruling) or when the parties have reached a mutually agreed solution under Article 14.15 (Mutually Agreed Solution).

4.    Nothing in this Chapter shall preclude a Party from implementing the suspension of obligations authorised by the DSB. The WTO Agreement shall not be invoked to preclude a Party from suspending obligations as provided for under this Chapter.


ARTICLE 14.22

Time Limits

1.    All time limits laid down in this Chapter, including the limits for the arbitration panels to notify their rulings, shall be counted in calendar days, the first day being the day following the act or fact to which they refer, unless otherwise specified.

2.    Any time limit referred to in this Chapter may be modified by mutual agreement of the Parties.

ARTICLE 14.23

Review and Modification of the Chapter

The Parties may, by decision in the Trade Committee, modify this Chapter and its Annexes.


CHAPTER FIFTEEN

MEDIATION MECHANISM

ARTICLE 15.1

Objective and Scope

1.    The objective of this Chapter is to facilitate the finding of a mutually agreed solution through a comprehensive and expeditious procedure with the assistance of a mediator.

2.    This Chapter shall apply to any measure under the scope of this Agreement adversely affecting trade or investment between the Parties, except as otherwise provided.

SECTION A

PROCEDURE UNDER THE MEDIATION MECHANISM

ARTICLE 15.2

Request for Information

1.    Before the initiation of the mediation procedure, a Party may request at any time in writing information regarding a measure adversely affecting trade or investment between the Parties. The Party to which such request is made shall provide, within twenty days, a written response.


2.    Where the responding Party considers that a response within twenty days is not practicable, it shall inform the requesting Party of the reasons for the delay, together with an estimate of the shortest period within which it will be able to provide its response.

ARTICLE 15.3

Initiation of the Procedure

1.    A Party may request, at any time, that the Parties enter into a mediation procedure. Such request shall be addressed to the other Party in writing. The request shall be sufficiently detailed to present clearly the concerns of the requesting Party and shall:

(a)    identify the specific measure at issue;

(b)    provide a statement of the alleged adverse effects that the requesting Party believes the measure has, or will have, on trade or investment between the Parties; and

(c)    explain how the requesting Party considers that those effects are linked to the measure.

2.    The Party to which such request is addressed shall give sympathetic consideration to the request and reply by accepting or rejecting it in writing within ten days of its receipt.


ARTICLE 15.4

Selection of the Mediator

1.    The Parties shall endeavour to agree on a mediator no later than fifteen days after the receipt of the reply to the request referred to in paragraph 2 of Article 15.3 (Initiation of the Procedure).

2.    If the Parties cannot agree on the mediator within the established time frame, either Party may request the chair of the Trade Committee, or the chair's delegate, to draw the mediator by lot from the list established under paragraph 2 of Article 14.20 (Lists of Arbitrators). Representatives of both Parties are entitled to be present when the lots are drawn.

3.    The chair of the Trade Committee, or the chair's delegate, shall select the mediator within five working days of the request referred to in paragraph 2.

4.    A mediator shall not be a national of either Party, unless the Parties agree otherwise.

5.    The mediator shall assist, in an impartial and transparent manner, the Parties in bringing clarity to the measure and its possible adverse effects on trade and investment, and in reaching a mutually agreed solution. Annex 14-B shall apply to mediators, mutatis mutandis. Rules 4 to 9 and Rules 46 to 49 of Annex 14-A shall also apply, mutatis mutandis.


ARTICLE 15.5

Rules of the Mediation Procedure

1.    Within ten days after the appointment of the mediator, the Party having invoked the mediation procedure shall present, in writing, a detailed description of the problem to the mediator and to the other Party, in particular of the operation of the measure at issue and its adverse effects on trade and investment. Within twenty days after the date of delivery of this submission, the other Party may provide, in writing, its comments to the description of the problem. Either Party may include in its description or comments any information that it deems relevant.

2.    The mediator may decide on the most appropriate way of bringing clarity to the measure concerned and its possible adverse effects on trade and investment. In particular, the mediator may organise meetings between the Parties, consult the Parties jointly or individually, seek the assistance of or consult with relevant experts and stakeholders and provide any additional support requested by the Parties. However, before seeking the assistance of or consulting with relevant experts and stakeholders, the mediator shall consult with the Parties.

3.    The mediator may offer advice and propose a solution for consideration of the Parties who may accept or reject the proposed solution or may agree on a different solution. However, the mediator shall not advise or give comments on the consistency of the measure at issue with this Agreement.


4.    The procedure shall take place in the territory of the Party to which the request was addressed or, by mutual agreement, in any other location or by any other means.

5.    The Parties shall endeavour to reach a mutually agreed solution within sixty days from the appointment of the mediator. Pending a final agreement, the Parties may consider possible interim solutions, especially if the measure relates to perishable goods.

6.    The solution may be adopted by means of a decision of the Trade Committee. Either Party may make such solution subject to the completion of any necessary internal procedures. Mutually agreed solutions shall be made publicly available. However, the version disclosed to the public may not contain any information that a Party has designated as confidential.

7.    The procedure shall be terminated:

(a)    by the adoption of a mutually agreed solution by the Parties, on the date of adoption;

(b)    by a mutual agreement of the Parties at any stage of the procedure, on the date of that agreement;

(c)    by a written declaration of the mediator, after consultation with the Parties, that further efforts at mediation would be to no avail, on the date of that declaration; or

(d)    by a written declaration of a Party after exploring mutually agreed solutions under the mediation procedure and after having considered any advice and proposed solutions by the mediator, on the date of that declaration.


SECTION B

IMPLEMENTATION

ARTICLE 15.6

Implementation of a Mutually Agreed Solution

1.    Where the Parties have agreed to a solution, each Party shall take the measures necessary to implement the mutually agreed solution within the agreed timeframe.

2.    The implementing Party shall inform the other Party in writing of any steps or measures taken to implement the mutually agreed solution.

3.    On request of the Parties, the mediator shall issue to the Parties, in writing, a draft factual report, providing a brief summary of (i) the measure at issue in these procedures; (ii) the procedures followed; and (iii) any mutually agreed solution reached as the final outcome of these procedures, including possible interim solutions. The mediator shall provide the Parties fifteen days to comment on the draft report. After considering the comments of the Parties submitted within the period, the mediator shall submit, in writing, a final factual report to the Parties within fifteen days. The factual report shall not include any interpretation of this Agreement.


SECTION C

GENERAL PROVISIONS

ARTICLE 15.7

Relationship to Dispute Settlement

1.    The mediation procedure is without prejudice to the Parties' rights and obligations under Chapter Fourteen (Dispute Settlement).

2.    The mediation procedure is not intended to serve as a basis for dispute settlement procedures under this Agreement or any other agreement. A Party shall not rely on or introduce as evidence in such dispute settlement procedures, nor shall a panel take into consideration:

(a)    positions taken by the other Party in the course of the mediation procedure;

(b)    the fact that the other Party has indicated its willingness to accept a solution to the measure subject to mediation; or

(c)    advice given or proposals made by the mediator.


3.    Without prejudice to paragraph 6 of Article 15.5 (Rules of the Mediation Procedure) and unless the Parties agree otherwise, all steps of the procedure, including any advice or proposed solution, are confidential. However, either Party may disclose to the public that mediation is taking place.

ARTICLE 15.8

Time Limits

Any time limit referred to in this Chapter may be modified by mutual agreement between the Parties.

ARTICLE 15.9

Costs

1.    Each Party shall bear its own expenses derived from the participation in the mediation procedure.

2.    The Parties shall share equally the expenses derived from organisational matters, including the remuneration and expenses of the mediator. Remuneration of the mediator shall be in accordance with that foreseen in Rule 10(b) of Annex 14-A.


ARTICLE 15.10

Review

Five years after the date of entry into force of this Agreement, the Parties shall consult each other on the need to modify the mediation procedure in light of the experience gained and the development of a corresponding mechanism in the WTO.

CHAPTER SIXTEEN

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

ARTICLE 16.1

Trade Committee

1.    The Parties hereby establish a Trade Committee comprising representatives of the Union and Singapore.

2.    The Trade Committee shall meet every two years in the Union or Singapore alternately or without undue delay at the request of either Party. The Trade Committee shall be co-chaired by the Minister for Trade and Industry of Singapore and the Member of the European Commission responsible for Trade, or their respective delegates. The Trade Committee shall agree on its meeting schedule and set its agenda.


3.    The Trade Committee shall:

(a)    ensure that this Agreement operates properly;

(b)    supervise and facilitate the implementation and application of this Agreement, and further its general aims;

(c)    supervise the work of all specialised committees, working groups and other bodies established under this Agreement;

(d)    consider ways to further enhance trade relations between the Parties;

(e)    without prejudice to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism), seek to solve problems which might arise in areas covered by this Agreement, or resolve disputes that may arise regarding the interpretation or application of this Agreement; and

(f)    consider any other matter of interest relating to an area covered by this Agreement.

4.    The Trade Committee may:

(a)    decide to establish or dissolve specialised committees, or allocate responsibilities to them, except that powers granted to specialised committees to adopt legally binding decisions or adopt amendments can only be modified pursuant to the procedure for amendments set out in Article 16.5 (Amendments);


(b)    communicate with all interested parties including private sector and civil society organisations;

(c)    consider amendments to this Agreement or amend provisions of this Agreement in cases specifically provided for in this Agreement;

(d)    adopt interpretations of the provisions of this Agreement, which shall be binding on the Parties and all bodies set up under this Agreement, including arbitration panels referred to under Chapter Fourteen (Dispute Settlement);

(e)    adopt decisions or make recommendations as envisaged by this Agreement;

(f)    adopt its own rules of procedure; and

(g)    take any other action in the exercise of its functions as the Parties may agree.

5.    The Trade Committee shall inform the Joint Committee set up under the PCA on its activities and those of its specialised committees, as relevant, at regular meetings of the Joint Committee.

6.    Recognising the importance of transparency and openness, the Parties affirm their respective practices of considering the views of members of the public in order to draw on a broad range of perspectives in the implementation of this Agreement.


ARTICLE 16.2

Specialised Committees

1.    The following specialised committees are hereby established under the auspices of the Trade Committee:

(a)    the Committee on Trade in Goods;

(b)    the Committee on Sanitary and Phytosanitary Measures (the "SPS Committee");

(c)    the Committee on Customs; and

(d)    the Committee on Trade in Services, Investment and Government Procurement.

2.    The composition, remit, tasks and, as the case may be, functioning of the specialised committees shall be as defined in the relevant provisions of this Agreement or by the Trade Committee.

3.    Unless otherwise provided for in this Agreement, the specialised committees shall normally meet every two years, at an appropriate level, alternately in the Union or Singapore, or without undue delay at the request of either Party or of the Trade Committee. They shall be co-chaired by representatives of Singapore and the Union. The specialised committees shall agree on their meeting schedule and set their agenda.


4.    The specialised committees shall inform the Trade Committee of their schedule and agenda sufficiently in advance of their meetings. They shall report to the Trade Committee on their activities at each regular meeting of the Trade Committee. The creation or existence of a specialised committee shall not prevent either Party from bringing any matter directly to the Trade Committee.

ARTICLE 16.3

Evolving WTO Law

If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended, the Parties shall consult with each other, via the Trade Committee, with a view to finding a mutually satisfactory solution, where necessary. As a result of such a review, the Parties may, by decision in the Trade Committee, amend this Agreement accordingly.

ARTICLE 16.4

Decision-making

1.    The Parties may take decisions in the Trade Committee or a specialised committee, where provided for in this Agreement. The decisions taken shall be binding on the Parties, which shall take the measures necessary to implement the decisions taken.


2.    The Trade Committee or a specialised committee may make appropriate recommendations, where provided for in this Agreement.

3.    The Trade Committee or a specialised committee shall draw up its decisions and recommendations by agreement between the Parties.

ARTICLE 16.5

Amendments

1.    The Parties may agree to amend this Agreement. An amendment shall enter into force after the Parties exchange written notifications certifying that they have completed their respective applicable legal requirements and procedures, as set out in the instrument of amendment.

2.    Notwithstanding paragraph 1, the Parties may, in the Trade Committee or a specialised committee, adopt a decision amending this Agreement where provided for in this Agreement.

ARTICLE 16.6

Taxation

1.    This Agreement shall only apply to taxation measures insofar as such application is necessary to give effect to the provisions of this Agreement.


2.    Nothing in this Agreement shall affect the rights and obligations of either Singapore, or the Union or any of its Member States, under any tax agreement between Singapore and the Union or any of its Member States. In the event of any inconsistency between this Agreement and any such agreement, that agreement shall prevail to the extent of the inconsistency. In the case of a tax agreement between Singapore and the Union or one of its Member States, the competent authorities under that agreement shall have sole responsibility for determining whether any inconsistency exists between this Agreement and that agreement.

3.    Nothing in this Agreement shall prevent either Party from adopting or maintaining any taxation measure which differentiates between taxpayers based on rational criteria, such as taxpayers who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested. 78

4.    Nothing in this Agreement shall prevent the adoption or maintenance of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation or other tax arrangements or domestic fiscal legislation.


5.
   (a)    Nothing in this Agreement shall prevent Singapore from adopting or maintaining taxation measures which are needed to protect Singapore's overriding public policy interests arising out of its specific constraints of space.

(b)    Singapore will notify the Union immediately upon taking such measures which will be, without delay, the object of consultations in the Trade Committee with a view to reaching a mutual understanding.

(c)    Where such measures affect the overall balance of commitments agreed between the Parties in this Agreement, the Parties may, by decision in the Trade Committee, alter the Parties' schedules of specific commitments on account of such measures.

ARTICLE 16.7

Current Account and Capital Movements

1.    The Parties shall authorise, in freely convertible currency 79 and in accordance with the provisions of Article VIII of the Articles of Agreement of the International Monetary Fund, any payments and transfers on the current account of the balance-of-payments between the Parties with regard to the transactions which fall within the scope of this Agreement.


2.    The Parties shall consult each other with a view to facilitating the movement of capital between them within the scope of this Agreement, in particular the progressive liberalisation of the capital and financial account with the aim to support a stable and secure framework for long term investment.

ARTICLE 16.8

Sovereign Wealth Funds

Each Party shall encourage its sovereign wealth funds to respect the Generally Accepted Principles and Practices – Santiago Principles.

ARTICLE 16.9

Restrictions to Safeguard the Balance-of-Payments

1.    Where a Party is in serious balance-of-payments and external financial difficulties, or under threat thereof, it may adopt or maintain restrictive measures with regard to capital movements, payments or transfers relating to trade in goods, services and establishment.


2.    The Parties shall endeavour to avoid the application of the restrictive measures referred to in paragraph 1. Any restrictive measures adopted or maintained under this Article shall be non-discriminatory, of a limited duration, and not go beyond what is necessary to remedy the balance-of-payments and external financial situation. They shall be in accordance with the conditions established in the WTO Agreement and consistent with the Articles of Agreement of the International Monetary Fund, as applicable.

3.    Any Party maintaining or having adopted restrictive measures, or any changes thereto, shall promptly notify the other Party of them.

4.    Where the restrictions are adopted or maintained, consultations shall be held promptly in the Trade Committee. Such consultations shall assess the balance-of-payments situation of the Party concerned and the restrictions adopted or maintained under this Article, taking into account, inter alia, such factors as:

(a)    the nature and extent of the balance-of-payments and the external financial difficulties;

(b)    the external economic and trading environment; or

(c)    alternative corrective measures which may be available.

The consultations shall address the compliance of any restrictive measures with paragraphs 1 and 2. All findings of statistical and other facts presented by the IMF relating to foreign exchange, monetary reserves and balance-of-payments shall be accepted and conclusions shall be based on the assessment by the IMF of the balance-of-payments and the external financial situation of the Party concerned.


ARTICLE 16.10

Temporary Safeguard Measures on Capital Movements and Payments

1.    When in exceptional circumstances of serious difficulties, or threat thereof, for the operation of the economic and monetary policy or exchange rate policy in either Party, safeguard measures with regard to capital movements, payments or transfers may temporarily be taken by the Party concerned. Such measures shall be strictly necessary, shall not exceed in any case a period of six months 80 , and shall not constitute a means of arbitrary or unjustified discrimination between a Party and a non-Party in like situations.

2.    The Party adopting the safeguard measures shall inform the other Party forthwith and present, as soon as possible, a time schedule for their removal.

ARTICLE 16.11

Security Exceptions

Nothing in this Agreement shall be construed to:

(a)    require either Party to furnish any information, the disclosure of which it considers contrary to its essential security interests;


(b)    prevent either Party from taking any action which it considers necessary for the protection of its essential security interests:

(i)    connected with the production of or trade in arms, munitions and war materials and related to traffic in other goods and materials and to economic activities carried out directly or indirectly for the purpose of provisioning a military establishment;

(ii)    relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;

(iii)    relating to fissionable and fusionable materials or the materials from which they are derived; or

(iv)    taken in time of war or other emergency in international relations, or to protect critical public infrastructure (this relates to communications, power or water infrastructure providing essential goods or services to the general public) from deliberate attempts to disable or disrupt it;

(c)    prevent either Party from taking any action for the purpose of maintaining international peace and security.


ARTICLE 16.12

Disclosure of Information

1.    Nothing in this Agreement shall be construed to require a Party to make available confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private.

2.    When a Party submits information to the Trade Committee or to specialised committees which is considered as confidential under its laws and regulations, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.

ARTICLE 16.13

Entry into Force

1.    This Agreement shall be approved by the Parties in accordance with their own procedures.

2.    This Agreement shall enter into force on the first day of the second month following that in which the Parties exchange written notifications certifying that they have completed their respective applicable legal requirements and procedures for the entry into force of this Agreement. The Parties may by agreement fix another date.


3.    Notifications shall be sent to the Secretary General of the Council of the Union and to the Director, North America and Europe Division, Singapore Ministry of Trade and Industry, or their respective successors.

ARTICLE 16.14

Duration

1.    This Agreement shall be valid indefinitely.

2.    Either Party may notify in writing the other Party of its intention to terminate this Agreement.

3.    This Agreement shall be terminated six months after the notification under paragraph 2.

4.    Within 30 days of delivery of a notification under paragraph 2, either Party may request consultations regarding whether the termination of any provision of this Agreement should take effect at a later date than provided under paragraph 2. Such consultations shall commence within 30 days of a Party's delivery of such request.


ARTICLE 16.15

Fulfilment of Obligations

The Parties shall take any general or specific measures required to fulfil their obligations under this Agreement. They shall see to it that the objectives set out in this Agreement are attained.

ARTICLE 16.16

No Direct Effect

For greater certainty, nothing in this Agreement shall be construed as conferring rights or imposing obligations on persons, other than those created between the Parties under public international law.

ARTICLE 16.17

Annexes, Appendices, Joint Declarations,
Protocols and Understandings

The Annexes, Appendices, Joint Declarations, Protocols and Understandings to this Agreement shall form an integral part thereof.


ARTICLE 16.18

Relations with Other Agreements

1.    This Agreement shall be an integral part of the overall bilateral relations as governed by the Partnership and Cooperation Agreement and shall form part of a common institutional framework. It constitutes a specific agreement giving effect to the trade provisions of the Partnership and Cooperation Agreement.

2.    For greater certainty, the Parties agree that nothing in this Agreement requires them to act in a manner inconsistent with their obligations under the WTO Agreement.

ARTICLE 16.19

Future Accessions to the Union

1.    The Union shall notify Singapore without undue delay of any request for accession of a third country to the Union.

2.    During the negotiations between the Union and the candidate country seeking accession, the Union shall endeavour to:

(a)    provide, upon request of Singapore, and to the extent possible, any information regarding any matter covered by this Agreement; and


(b)    take into account any concerns expressed.

3.    The Union shall inform Singapore as soon as feasible about the outcome of accession negotiations with a candidate country, and notify Singapore of the entry into force of any accession to the Union.

4.    In the context of the Trade Committee, and sufficiently in advance to the date of accession of a third country to the Union, the Parties shall examine any effects of such accession on this Agreement. The Parties may, by decision in the Trade Committee, put in place any necessary adjustments or transition arrangements.

ARTICLE 16.20

Territorial Application

1.    This Agreement shall apply:

(a)    with respect to the Union, to the territories in which the Treaty on European Union and the Treaty on the Functioning of the European Union are applied and under the conditions laid down in those Treaties; and

(b)    with respect to Singapore, to its territory.


References to "territory" in this Agreement shall be understood in this sense, except as otherwise expressly provided.

2.    As regards those provisions concerning the tariff treatment of goods, this Agreement shall also apply to those areas of the Union customs territory not covered by subparagraph 1(a).

ARTICLE 16.21

Authentic Texts

This Agreement is drawn up in duplicate in the Bulgarian, Croatian, Czech, Estonian, Danish, Dutch, English, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages, each of these texts being equally authentic.


LIST OF ANNEXES

Annexes and Appendices to Chapter Two

Annex 2-A

Elimination of Customs Duties

Appendix 2-A-1

Tariff Schedule of Singapore

Appendix 2-A-2

Tariff Schedule of the Union

Attachment to Appendix 2-A-2

Tariff Schedule of the Union – Tariff lines

Annex 2-B

Motor Vehicles and Parts thereof

Annex 2-C

Pharmaceutical Products and Medical Devices

Annex and Appendices to Chapter Four

Annex 4-A

Electronics

Appendix 4-A-1

Scope

Appendix 4-A-2

Product Categories

Appendix 4-A-3

Definitions

Annexes to Chapter Five

Annex 5-A

Competent Authorities

Annex 5-B

Requirements and Provisions for Approval of Establishments for Products of Animal Origin

Annexes and Appendices to Chapter Eight

Annex 8-A

The Union's Schedule of Specific Commitments

Appendix 8-A-1

Union - Schedule of Specific Commitments in Conformity with Article 8.7 (Schedule of Specific Commitments)

Appendix 8-A-2

Union - Schedule of Specific Commitments in Conformity with Article 8.12 (Schedule of Specific Commitments)

Appendix 8-A-3

Union - Schedule of Specific Commitments in Conformity with Articles 8.15 (Key Personnel and Graduate Trainees) and 8.16 (Business Services Sellers)

Annex 8-B

Singapore's Schedule of Specific Commitments

Appendix 8-B-1

Singapore - Schedule of Specific Commitments

Appendix 8-B-2

Singapore - Schedule of Specific Commitments – Appendix on Financial Services

Annexes to Chapter Nine

Annex 9-A

Central Entities which procure in accordance with the provisions of this Agreement

Annex 9-B

Sub-central entities which procure in accordance with the provisions of this Agreement

Annex 9-C

Utilities and other entities which procure in accordance with the provisions of this Agreement

Annex 9-D

Goods

Annex 9-E

Services

Annex 9-F

Construction Services and Works Concessions

Annex 9-G

General Notes and Derogations from the provisions of Article 9.4 (General Principles)

Annex 9-H

Means of Publication

Annex 9-I

Public-Private-Partnerships

Annexes to Chapter Ten

Annex 10-A

List of Names to be Applied for Protection as Geographical Indications in the Territory of the Parties

Annex 10-B

Protected Geographical Indications

Annex to Chapter Eleven

Annex 11-A

Principles Applicable to other Subsidies

Annexes to Chapter Fourteen

Annex 14-A

Rules of Procedure for Arbitration

Annex 14-B

Code of Conduct for Arbitrators and Mediators

Protocol

Protocol 1

Concerning the definition of the concept of "originating products" and methods of administrative co-operation (includes Annexes and Joint Declarations)

Understandings

Understanding 1

In relation to Article 16.6 (Taxation)

Understanding 2

In relation to the Remuneration of Arbitrators

Understanding 3

Additional Customs-Related Provisions

Understanding 4

Mutual Recognition of Authorised Economic Operators (AEO) Programmes

Joint Declaration

concerning Customs Unions

(1)    "Consular transactions" means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shippers' export declaration or any other customs documentation in connection with the importation of the good.
(2)    For the purposes of this Article, "non-automatic licensing procedures" means licensing procedures where approval of the application is not granted for all legal and natural persons who fulfil the requirements of the Party concerned for engaging in import or export operations involving the goods subject to licensing procedures.
(3)    The sole fact of requiring a visa for natural persons of certain countries and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.
(4)    "Central administration" means the head office where ultimate decision-making takes place.
(5)    The Union understands that the concept of "effective and continuous link" with the economy of a Member State of the Union enshrined in Article 54 of the Treaty on the Functioning of the European Union (hereinafter referred to as "TFEU") is equivalent to the concept of "substantive business operations". Accordingly, for a juridical person set up in accordance with the laws of Singapore and having only its registered office or central administration in the territory of Singapore, the Union shall only extend the benefits of this Agreement if that juridical person possesses an effective and continuous economic link with the economy of Singapore.
(6)    Without prejudice to the scope of activities which may be considered as cabotage under the relevant national legislation, national maritime cabotage under this Chapter covers transportation of passengers or goods between a port or point located in a Member State of the Union and another port or point located in the same Member State of the Union, including on its continental shelf, as provided in the United Nations Convention on the Law of the Sea (hereinafter referred to as "UNCLOS"), and traffic originating and terminating in the same port or point located in a Member State of the Union.
(7)    Subparagraph 2(a) includes measures which require a service supplier of the other Party to have an establishment within the meaning of paragraph (d) of Article 8.8 (Definitions) or to be resident in a Party's territory as a condition for the cross-border supply of a service.
(8)    This subparagraph does not cover measures of a Party which limit inputs for the supply of services.
(9)    Where the economic activity is not performed directly by a juridical person but through other forms of establishment such as a branch or a representative office, the entrepreneur (i.e. the juridical person) shall, nonetheless, through such establishment be accorded the treatment provided for entrepreneurs under this Agreement. Such treatment shall be extended to the establishment through which the economic activity is performed and need not be extended to any other parts of the entrepreneur located outside the territory where the economic activity is performed.
(10)    For further clarity, a subsidiary of a juridical person of a Party may also refer to a juridical person which is a subsidiary of another subsidiary of a juridical person of that Party.
(11)    For greater certainty, processing of nuclear materials includes all the activities contained in the International Standard Industrial Classification of all Economic Activities, as set out in Statistical Office of the United Nations, Statistical Papers, Series M, N 4, ISIC REV 3.1, 2002 code 2330.
(12)    Without prejudice to the scope of activities which may be considered as cabotage under the relevant national legislation, national maritime cabotage under this Chapter covers transportation of passengers or goods between a port or point located in a Member State of the Union and another port or point located in the same Member State of the Union, including on its continental shelf, as provided in the UNCLOS, and traffic originating and terminating in the same port or point located in a Member State of the Union.
(13)    Subparagraphs 2(a), 2(b) and 2(c) do not cover measures taken in order to limit the production of an agricultural product.
(14)    For greater certainty, measures or limitations relating specifically to key personnel and graduate trainees shall be subject to Article 8.14 (Key Personnel and Graduate Trainees).
(15)    The obligations in this Article apply also to measures governing the composition of boards of directors of an establishment, such as nationality and residency requirements.
(16)    The recipient establishment may be required to submit a training programme covering the duration of stay for prior approval, demonstrating that the purpose of the stay is for training. The competent authorities may require that training be linked to the university degree which has been obtained.
(17)    For greater certainty and without prejudice to paragraph 4 of Article 8.1 (Objective and Scope), the stay in the territory of a Party under these provisions does not entitle the intracorporate transferee to apply for permanent residency or citizenship in that Party.
(18)    This Article is without prejudice to the rights and obligations deriving from bilateral visa waiver agreements between Singapore and one of the Member States of the Union.
(19)    Licensing or authorisation fees do not include payments for auction, tendering or other non-discriminatory means of awarding concessions, or mandated contributions to universal service provision.
(20)    CPC means the Central Products Classification as set out in Statistical Office of the United Nations, Statistical Papers, Series M, N° 77, CPC prov, 1991.
(21)    The term "software" means the sets of instructions required to make computers work and communicate. A number of different programmes may be developed for specific applications (application software), and the customer may have a choice of using ready-made programmes off the shelf (packaged software), developing specific programmes for particular requirements (customised software) or using a combination of the two.
(22)    E.g.,W/120.1.A.b. (accounting, auditing and bookkeeping services), W/120.1.A.d. (architectural services), W/120.1.A.h. (medical and dental services), W/120.2.D (audiovisual services), W/120.5. (educational services).
(23)    See previous footnote.
(24)    For greater certainty, only measures relating to basic letter services shall be subject to Article 8.22 (Prevention of Anti-Competitive Practices in the Postal Sector).
(25)    The maintenance of appropriate measures includes the effective enforcement of such measures.
(26)    For the purposes of this Article and Article 8.30 (Conduct of Major Suppliers), designation of a supplier of public telecommunications networks and services as a major supplier shall be in accordance with the domestic law and procedures of each Party.
(27)    The maintenance of appropriate measures includes the effective enforcement of such measures.
(28)    Licensing or authorisation fees do not include payments for auction, tendering or other nondiscriminatory means of awarding concessions, or mandated contributions to universal service provision.
(29)    For the purposes of this subparagraph, the term "measures" shall comprise only measures that adversely discriminate based on the nationality or geographic area(s) of origin of the natural or juridical person to which the measure is applied.
(30)    The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.
(31)    Measures that are aimed at ensuring the effective or equitable imposition or collection of direct taxes include measures taken by a Party under its taxation system which:(a)    apply to non-resident entrepreneurs and service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Party's territory;(b)    apply to non-residents in order to ensure the imposition or collection of taxes in the Party's territory;(c)    apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures;(d)    apply to consumers of services supplied in or from the territory of the other Party in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Party's territory;(e)    distinguish entrepreneurs and service suppliers subject to tax on worldwide taxable items from other entrepreneurs and service suppliers, in recognition of the difference in the nature of the tax base between them; or(f)    determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Party's tax base.Tax terms or concepts in subparagraph (f) and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Party taking the measure.
(32)    For the purposes of paragraphs 10, 11 and 13 of this Article and paragraph 2 of Article 9.11 (Negotiations), "another notice used as a notice of intended procurement" means a notice of planned procurement falling within paragraph 5 of Article 9.6 (Notices) and a notice inviting suppliers to apply for inclusion on a multi-use list falling within paragraph 12 of Article 9.8 (Qualification of Suppliers).
(33)    In the case of the Union, for the purposes of this Chapter, "patents" include rights derived from supplementary protection certificates.
(34)    Without prejudice to Article 10.6 (Producers of Phonograms), the Parties recognise that references to these international agreements are subject to the reservations which each Party has formulated in relation thereto.
(35)    For the Union, the term "cinematographic works" also includes audiovisual works.
(36)    In the case of the Union, the term of protection expires seventy years after the death of the last person designated as author under its domestic law, which will not in any case be shorter than the minimum duration of protection provided under paragraph 3 of Article 10.5 (Term of Protection).
(37)    "Producer of a phonogram" means the person or the legal entity, who or which takes the initiative and has the responsibility for the first fixation of the sounds of a performance or other sounds, or the representations of sounds.
(38)    "Public performance" means, in relation to a phonogram, any mode of aural presentation to the public of sounds or representations of sounds fixed in a phonogram.
(39)    Singapore shall fully implement the obligations of this Article within two years of the entry into force of this Agreement.
(40)    For the purposes of this Article, "technological measures" means any technology, device or component that, in the normal course of its operation, is designed to prevent or restrict acts, in respect of works, performances, or phonograms, which are not authorised by authors, performers or producers of phonograms, as provided for by each Party's domestic law. Without prejudice to the scope of copyright or related rights contained in each Party's domestic law, technological measures shall be deemed effective where the use of protected works, performances, or phonograms is controlled by authors, performers or producers of phonograms through the application of a relevant access control or protection process, such as encryption or scrambling, or a copy control mechanism, which achieves the objective of protection.
(41)    Nothing in this Chapter shall require Singapore to restrict the importation or domestic sale of a device that does not render effective a technological measure which sole purpose is to control market segmentation for legitimate copies of motion pictures, and is not otherwise a violation of its domestic law.
(42)    In implementing paragraphs 1 and 2 of this Article, neither Party shall be obligated to require that the design of, or the design and selection of parts and components for, a consumer electronics product, telecommunications product or computing product, provide for a response to any particular technological measure, so long as the product does not otherwise contravene its measures implementing these paragraphs.
(43)    For the purposes of this Article, "rights management information" means:(a)    information that identifies the work, the performance, or the phonogram; the author of the work, the performer of the performance, or the producer of the phonogram; or the owner of any right in the work, performance or phonogram;(b)    information about the terms and conditions of use of the work, performance, or phonogram; or(c)    any number or codes that represent the information described in subparagraphs (a) and (b),when any of these items of information is attached to a copy of a work, performance, or phonogram, or appears in connection with the communication or making available of a work, performance or phonogram to the public.
(44)    Singapore is a party to the Singapore Treaty on the Law of Trademarks, while the Union shall make all reasonable efforts to facilitate accession to the Singapore Treaty on the Law of Trademarks.
(45)    The fair use of descriptive terms includes the use of a sign to indicate the geographic origin of the goods or services, and where such use is in accordance with honest practices in industrial or commercial matters.
(46)    For the purposes of this Chapter, "geographical indications" means indications which identify a good as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.
(47)    For the purposes of Sub-Section C (Geographical Indications), in the case of Singapore, the procedure for protection of geographical indications refers to the domestic registration procedure under the system established by Singapore pursuant to paragraph 2 of Article 10.17 (System of Protection of Geographical Indications).
(48)    For the purposes of this paragraph and paragraph 1 of Article 10.21 (Relationship with Trademarks), the term "like good", in relation to a good for which a geographical indication has been protected in a Party's system as referred to in paragraph 2 of Article 10.17 (System of Protection of Geographical Indications), means a good that would fall within the same category of good in that Party's register as the good for which a geographical indication has been registered.
(49)    For greater certainty, it is understood that this is assessed on a case-by-case basis. This provision does not apply where evidence is provided that there is no link between the protected geographical indication and the translated term. It is further understood that this provision applies without prejudice to the general rules of Sub-Section C (Geographical Indications).
(50)    In the case of Singapore, "the producers concerned" refers to the right holders in question.
(51)    In the case of Singapore, a geographical indication which conflicts with a prior existing trademark is capable of being registered with the consent of the prior existing trademark rights holder. In the case of the Union, such consent is not a prerequisite to the registration of a geographical indication which conflicts with a prior existing trademark.
(52)    For the purposes of Sub-Section (Designs), the Union also grants protection to the unregistered design when it meets the requirements of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs, as last amended by Council Regulation (EC) No 1891/2006 of 18 December 2006.
(53)    The Parties agree that when the domestic law of a Party so provides, individual character of designs can also be required. This refers to designs that significantly differ from known designs or combinations of known designs' features. The Union considers designs to have individual character if the overall impression it produces on the informed users differs from the overall impression produced on such a user by any design which has been made available to the public.
(54)    It is understood that designs are not excluded from protection simply on the basis that they constitute a part of an article or product, provided that they are visible, fulfil the criteria of this paragraph, and:
(a)
   fulfil any other criteria for design protection; and
(b)
   are not otherwise excluded from design protection,
under the Parties' respective domestic law.
(55)    Nothing in this Article precludes either Party from providing other specified exclusions from design protection under its domestic law. The Parties understand that such exclusions shall not be extensive.
(56)    In the case of Singapore, the extent to which, and the conditions under which, such protection is enjoyed include the circumstances under section 74 of Singapore's Copyright Act.
(57)    For the purposes of this Article and Article 10.33 (Protection of Test Data Submitted to Obtain an Administrative Marketing Approval to put a Pharmaceutical Product on the Market), the term "pharmaceutical product" shall be defined for each Party, by the respective legislations of the Parties as at the date of signature of this Agreement. In the case of the Union, the term "pharmaceutical product" refers to "medicinal product".
(58)    Singapore undertakes to make available an extension of the duration of the rights conferred by patent protection to compensate the patent owner for the reduction in the effective patent life as the result of the administrative marketing approval process to substances for diagnosis or testing and authorised as a medicinal product.
(59)    The conditions and procedures for the provision of the extension of the patent term shall be determined by the respective legislations of the Parties. This is without prejudice to a possible extension for paediatric purposes, if provided for by either Party.
(60)    The conditions and procedures for the provision of the protection contemplated under this Article shall be determined by the respective legislations of the Parties.
(61)    The Parties shall, five years after the entry into force of this Agreement, initiate without prejudice discussions on the possible extension of the duration of the protection of test data submitted to obtain an administrative marketing approval to put a pharmaceutical product on the market.
(62)    In the context of this Article, it is understood that such confidential supporting test data or studies shall not be used for the purposes of determining whether to grant any other application for a period of at least five years:
(a)
   in the case of Singapore, from the date that the first application is received;
(b)
   in the case of the Union, from the date of approval of the first application,
unless the party which had provided the test data or studies has given his consent.
(63)    In the case of the Union, for the purposes of this Article, "agricultural chemical products" means active substances and preparations containing one or more active substances, put up in the form in which they are supplied to the user, intended to:(a)    protect plants or plant products against all harmful organisms or prevent the action of such organisms, in so far as such substances or preparations are not otherwise defined in subparagraphs (b) to (e);(b)    influence the life processes of plants, other than as a nutrient (e.g. plant growth regulators);(c)    preserve plant products, in so far as such substances or products are not subject to special Council or Commission provisions on preservatives;(d)    destroy undesirable plants; or    (e)    destroy parts of plants, check or prevent undesirable growth of plants.
(64)    In so far as permitted by and in accordance with the provisions of the applicable law, it is understood that the phrase "federations and associations" includes collective rights management bodies and, in the Union context, professional defence bodies which are regularly recognised as having a right to represent holders of intellectual property rights.
(65)    A Party may exclude patents from the scope of Section C (Civil Enforcement of Intellectual Property Rights).
(66)    It is understood that, in the case of Singapore, Singapore may provide that its judicial authorities have the authority to order pecuniary compensation if that person acted unintentionally and without negligence, or if execution of the measures in question would cause him disproportionate harm and if pecuniary compensation to the injured party appears reasonably satisfactory.
(67)    In the case of the Union, this would also include, in appropriate cases, elements other than economic factors such as the moral prejudice caused to the right holder by the infringement.
(68)    It is understood that the function of transmission includes the function of routing.
(69)    It is understood that the function of providing access for material without selection and/or modification of the content also refers to any means that is used to access the communication network and includes instances where connections are provided for the material.
(70)    It is understood that the process of caching carried out through an automatic process may refer to the intermediate and temporary storage of material in the course of transmission or providing access to such material.
(71)    The Parties will review the possibility of including pirated design goods within the scope of paragraph 2 of this Article within three years after the entry into force of this Agreement. The Parties may, by decision in the Trade Committee, amend paragraph 2 of this Article as a result of such review.
(72)    Where the competent authority in Singapore assesses that according to the prohibition laid down in section 34 of the Competition Act (Chapter 50B), the anti-competitive effects of a vertical agreement will likely outweigh its pro-competitive effects, the competent authority will refer the matter to the Minister. The Minister shall decide on the applicability of section 34 of the Competition Act to the vertical agreement in question. This is without prejudice to the possibility of the competent authority in Singapore applying section 47 of the Competition Act, which is applicable to vertical agreements concluded by a dominant firm.
(73)    This paragraph does not prejudice the outcome of future discussions in the WTO on the definition of subsidies for services. The Parties shall give positive consideration to the adoption of a possible decision by the Trade Committee to update this Agreement to reflect the agreement reached at the WTO on the definition of subsidies for services.
(74)    This does not prevent the Parties from providing temporary liquidity support in the form of loan guarantees or loans limited to the amount needed to merely to keep an ailing undertaking in business for the time necessary to work out a restructuring or liquidation plan.
(75)    When labour is referred to in this Chapter, it includes the issues relevant to the Decent Work Agenda as agreed on in the ILO and in the Ministerial Declaration of the UN Economic and Social Council on Generating Full and Productive Employment and Decent Work for All of 2006.
(76)    The multilateral environmental agreements referred to shall encompass those protocols, amendments, annexes and adjustments binding on the Parties.
(77)    For greater certainty, the review of administrative actions can take the form of common law judicial review, and the correction of administrative actions may include a referral back to the body that took such action for corrective action.
(78)    For greater certainty, the Parties share an understanding that nothing in this Agreement shall prevent any taxation measure aimed at social welfare, public health or other sociocommunity objectives, or at macroeconomic stability; or tax benefits linked to place of incorporation and not the nationality of the person owning the company. Taxation measures aimed at macroeconomic stability are measures in reaction to movements and trends in the national economy to address or to prevent systemic imbalances which seriously threaten the stability of the national economy.
(79)    "Freely convertible currency" means a currency which is widely traded in international foreign exchange markets and widely used in international transactions.
(80)    The application of safeguard measures may be extended through their formal reintroduction in case of continuing exceptional circumstances and after having notified the other Party regarding the implementation of any proposed formal reintroduction.
Top

Brussels, 18.4.2018

COM(2018) 196 final

ANNEX

to the

Proposal for a Council Decision

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore


ANNEX 2-A

ELIMINATION OF CUSTOMS DUTIES

1.    All customs duties by a Party on goods originating in the other Party shall be eliminated as from the date of the entry into force of this Agreement, except as otherwise provided in the respective Party's Schedules included in this Annex.

2.    The following staging categories apply to the elimination of customs duties by each Party pursuant to Article 2.6 (Reduction and/or Elimination of Customs Duties on Imports) for those customs duties not eliminated at the entry into force of this Agreement:

(a)    customs duties on originating goods provided for in the items in staging category "3" in a Party's Schedule shall be removed in four equal annual stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty;

(b)    customs duties on originating goods provided for in the items in staging category "5" in a Party's Schedule shall be removed in six equal annual stages beginning on the date this Agreement enters into force, and such goods shall thereafter be free of any customs duty;

(c)    no obligations under this Agreement regarding customs duties shall apply with respect to items in staging category "X".



3.    In relation to goods under a particular tariff code, the base rate of the customs duty and the staging category for determining the interim rate of the customs duty at each stage of reduction are indicated for that tariff code in each Party's Schedule.

4.    For the purposes of paragraph 2, rates of customs duties in the interim stages shall be rounded down, at least to the nearest tenth of a percentage point and/or, in the case of the Union, to the nearest euro cent, where applicable.

5.    For the purposes of this Annex and a Party's Schedule, each annual reduction shall take effect on the first day of the relevant year as defined in paragraph 6 of this Annex.

6.    For the purposes of this Annex:

(a)    "year one" means the twelve-month period beginning on the date this Agreement enters into force;

(b)    "year two" means the twelve-month period beginning on the first anniversary of the entry into force of this Agreement;

(c)    "year three" means the twelve-month period beginning on the second anniversary of the entry into force of this Agreement;

(d)    "year four" means the twelve-month period beginning on the third anniversary of the entry into force of this Agreement;



(e)    "year five" means the twelve-month period beginning on the fourth anniversary of the entry into force of this Agreement.

7.    Appendices 2-A-1 and 2-A-2 form an integral part of this Annex.



TARIFF SCHEDULE OF SINGAPORE

Appendix 2-A-1

Customs Duties Elimination Schedule – Singapore

1.    The provisions of this Schedule are expressed in terms of the Singapore Trade Classification, Customs and Excise Duties (hereinafter referred to as "STCCE"), and the interpretation of the provisions of this Schedule, including the product coverage of subheadings of this Schedule, shall be governed by the General Notes, Section Notes, Chapter Notes and subheading notes of the STCCE. To the extent that provisions of this Schedule are identical to the corresponding provisions of the STCCE, the provisions of this Schedule shall have the same meaning as the corresponding provisions of the STCCE.

2.    Pursuant to Article 2.6 (Reduction and/or Elimination of Customs Duties on Imports), Singapore shall eliminate customs duties on all originating goods of the Union as of the date of entry into force of this Agreement.



TARIFF SCHEDULE OF THE UNION

Appendix 2-A-2

Customs Duties Elimination Schedule - The Union

General notes

1.    Relation to the Combined Nomenclature (hereinafter referred to as "CN") of the Union: the provisions of this Schedule are generally expressed in terms of the CN, and the interpretation of the provisions of this Schedule, including the product coverage of subheadings of this Schedule, shall be governed by the General Notes, Section Notes, and Chapter Notes of the CN. To the extent that provisions of this Schedule are identical to the corresponding provisions of the CN, the provisions of this Schedule shall have the same meaning as the corresponding provisions of the CN.

2.    Base Rates of Customs Duty: the base rates of customs duty set forth in this Schedule reflect the European Community's Common Customs Tariff rates of duty in effect on 1 January 2010.

3.    Pursuant to Article 2.6 (Reduction and/or Elimination of Customs Duties on Imports), the Union shall eliminate customs duties on all originating goods of Singapore under this Agreement, as from the date of entry into force of this Agreement except for those listed in the Union tariff schedule.



Entry price system

4.    Paragraph 5 to 7 of this Annex sets out modifications to the entry price scheme that the Union applies to certain fruits and vegetables in accordance with the Common Customs Tariff provided for in Commission Regulation (EC) No 927/2012 of 9 October 2012 (and successor acts) and Union WTO Schedule CXL. In particular, originating goods of Singapore included under this Annex shall be subject to the entry price scheme set out in this Annex in lieu of the entry price scheme specified in the Common Customs Tariff provided for in Commission Regulation (EC) No 927/2012 of 9 October 2012 (and successor acts) and Union WTO Schedule CXL.

5.    For originating goods of Singapore to which the Union applies its entry price scheme in accordance with Commission Regulation (EC) No 927/2012 of 9 October 2012 and Union WTO Schedule CXL, the ad valorem customs duties on such goods shall be removed in accordance with the staging categories as set out in the Union's Schedule.

6.    The specific customs duties provided for in Commission Regulation (EC) No 948/2009 of 30 September 2009 on the goods under paragraph 5 shall not be subject to the elimination of customs duties in accordance with the staging categories as set out in the Union's Schedule. Instead, the specific customs duties shall be maintained for the following goods:



CN 2013 code

Description

0702 00 00

Tomatoes, fresh or chilled

0707 00 05

-Cucumbers

0709 91 00

--Globe artichokes

0709 93 10

---Courgettes

0805 10 20

--Sweet oranges, fresh

0805 20 10

--Clementines

0805 20 30

--Monreales and satsumas

0805 20 50

--Mandarins and wilkings

0805 20 70

--Tangerines

0805 20 90

--Other

0805 50 10

--Lemons (Citrus limon, Citrus limonum)

0806 10 10

--Table grapes

0808 10 80

--Other

0808 30 90

--Other

0809 10 00

-Apricots

0809 21 00

--Sour cherries (Prunus cerasus)

0809 29 00

--Other

0809 30 10

--Nectarines

0809 30 90

--Other

0809 40 05

--Plums

2009 61 10

---Of a value exceeding € 18 per 100 kg net weight

2009 69 19

----Other

2009 69 51

-----Concentrated

2009 69 59

-----Other

2204 30 92

----Concentrated

2204 30 94

----Other

2204 30 96

----Concentrated

2204 30 98

----Other



7.    The specific duty under paragraph 6 shall not exceed the lesser specific duty of the prevailing MFN applied rate, or the MFN applied rate of duty in effect on the day immediately preceding the date this Agreement enters into force.

Top

Brussels, 18.4.2018

COM(2018) 196 final

ANNEX

to the

Proposal for a Council Decision

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore


ANNEX 4-A

ELECTRONICS

ARTICLE 1

General Provisions

1.    The Parties confirm the following shared objectives and principles:

(a)    eliminating and preventing non-tariff barriers to bilateral trade;

(b)    basing their standards, technical regulations and conformity assessment procedures, wherever appropriate, on relevant international standards;

(c)    eliminating duplicative and unnecessarily burdensome conformity assessment procedures; and

(d)    enhancing cooperation to foster development in their bilateral trade in electronics.

2.    This Annex shall apply only to standards, technical regulations and conformity assessment procedures of either Party related to the safety and electromagnetic compatibility (hereinafter referred to as "EMC") of electrical and electronic equipment, electrical household appliances and consumer electronics as defined in Appendix 4-A-1 (hereinafter referred to as "covered products").



ARTICLE 2

International Standards and Standard-setting Bodies

1.