EUROPEAN COMMISSION

Brussels, 17.10.2018

COM(2018) 691 final

2018/0356(NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

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 Socialist Republic of Viet Nam;

–Proposal for a Council Decision on the conclusion of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam;

–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 Socialist Republic of Viet Nam, of the other part; and

–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 Socialist Republic of Viet Nam, of the other part.

Earlier, the Commission had put forward a proposal for a horizontal safeguard regulation that will be of application among other agreements to the FTA between the EU and Vietnam.

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 Socialist Republic of Viet Nam.

•Consistency with existing policy provisions in the policy area

•Consistency with other Union policies

The EU-Vietnam 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. Furthermore, like all other trade and investment agreements the Commission has negotiated, the EU-Vietnam 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

•Subsidiarity (for non-exclusive competence)

•Proportionality

This proposal is in line with the vision of Europe 2020 strategy and contributes to the Union's 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

•Stakeholder consultations

Prior to the launch of bilateral negotiations with Vietnam, a Trade Sustainability Impact Assessment (TSIA) of the FTA between the EU and the ASEAN 2 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 countries.

In addition, in June 2012, the Commission conducted a public consultation on the future bilateral agreement with Vietnam that included a questionnaire prepared to obtain information from stakeholder that later helped the Commission in establishing priorities and taking decisions throughout the negotiating process. 62 replies were received, of which 43 from industry federations and associations, 16 from individual companies and three from Member States. Replies covered a wide range of sectors, including agri-food, ICT, textiles, services, pharmaceuticals, chemicals, metals, green energy, automotive, machinery and wood-paper. The written consultation was followed with meetings with a selected number of respondents to the questionnaire identified as representing the most sensitive sectors for the negotiations with Vietnam (textile, alcoholic beverages, pharmaceuticals, automotive and ICT).

A roundtable with stakeholders on human rights and sustainable development in the context of bilateral relations between the EU and Vietnam was held in May 2015 3 . The Commission then carried out a dedicated analysis 4 addressing the possible impact of the FTA on human rights and sustainable development.

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-Vietnam FTA Monitoring Group. The texts progressively resulting from the negotiations were circulated throughout the process to both institutions.

•Collection and use of expertise

•Impact assessment

•Regulatory fitness and simplification

The EU-Vietnam 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-Vietnam 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 third (after the EU-Canada Comprehensive Economic and Trade Agreement, and the EU-Singapore) to incorporate the Investment Court System (ICS) for the resolution of disputes between investors and states. An amount of € 700,000 of additional yearly expenditure is foreseen from 2019 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-Vietnam 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 Vietnam 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 Vietnam who will meet every year or at the request of either side. The Trade Committee will be in charge of supervising the work of all specialised committees and working groups established under the agreement (Committee on Trade in Goods; Committee on Customs; Committee on Sanitary and Phytosanitary Measures; Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement; Committee on Trade and Sustainable Development; Working Group on Intellectual Property Rights, including Geographical Indications; and Working Group on Motor Vehicles and Parts).

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 remuneration, 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-Vietnam FTA as of its entry into force.

•Implementation in the EU

Certain actions will need to be taken in order to ensure implementation of the Agreement. These will be put in place in time for the application of the Agreement. These are a Commission implementing regulation to be adopted pursuant to Article 58(1) of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code opening the tariff rate quotas provided for by the Agreement.

•Explanatory documents (for directives)

•Detailed explanation of the specific provisions of the proposal

(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 in Vietnam, who is not a member of the WTO Agreement on Government Procurement;

(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, pharmaceuticals and medical devices, as well as green technologies;

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

(5)Vietnam’s commitment to reduce or eliminate its tariffs on imports from the EU, and a cheaper access of European businesses and consumers to products originating in Vietnam;

(6)a high level protection of intellectual property rights, including with regard to the enforcement of these rights, also at the border, and a TRIPs-plus level of protection of EU GIs;

(7)a comprehensive chapter on trade and sustainable development, which aims at ensuring that trade supports labour rights, environmental protection and social development and promotes the sustainable management of forests and fisheries. It includes commitments on effective application of international standards and on efforts towards ratification of a number of international conventions. The chapter also sets out how social partners and civil society will be involved in its implementation and monitoring; and

(8)a swift dispute resolution mechanisms through either panel arbitration or with the help of a mediator.

2018/0356 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 91(1), Article 100(2), and the first subparagraph of Article 207(4), 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] 5 , the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam (the 'Agreement') was signed on [XX XXX 2019], subject to its conclusion at a later date.

(2)Pursuant to Article 218(7) of the Treaty on the Functioning of the European Union, it is appropriate to authorise the Commission to approve on the Union’s behalf the position to be taken on certain modifications to the Agreement that are to be adopted by a simplified procedure pursuant to Article 9.20 of the Agreement or, as regards the list of entities in Sections A to C of Annexes 9-A and 9-B to the Agreement, pursuant to Article 9.23 of the Agreement in the Committee on Investment, Services, Electronic Commerce and Government Procurment.

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

(4)The Agreement, in accordance with its Article 17.20, does not, within the Union, 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 Socialist Republic of Viet Nam (the 'Agreement') is hereby approved on behalf of the Union.

The text of the Agreement is attached to this Decision.

Article 2

For the purposes of Articles 9.20 and 9.23 of the Agreement, the modifications or rectifications as regards Sections A to D and F of Annexes 9-A and 9-B to the Agreement shall be approved by the Commission on behalf of the Union.

Article 3

The President of the Council shall designate the person empowered to proceed, on behalf of the Union, to the notification provided for in Article 17.16(2) of the Agreement, in order to express the consent of the Union to be bound by the Agreement 6 .

Article 4

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

Done at Brussels,

(1)    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.

(2)     http://trade.ec.europa.eu/doclib/html/145989.htm  

(3)     http://trade.ec.europa.eu/doclib/events/index.cfm?id=1288  

(4)     http://trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154236.pdf

(5)    [Reference to be inserted]

(6)    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.

EUROPEAN COMMISSION

Brussels, 17.10.2018

COM(2018) 691 final

ANNEX

to the

Proposal for a Council Decision

on the conclusion of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam

FREE TRADE AGREEMENT
BETWEEN THE EUROPEAN UNION
AND THE SOCIALIST REPUBLIC OF VIET NAM

PREAMBLE

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

and

the Socialist Republic of Viet Nam, hereinafter referred to as "Viet Nam",

hereinafter jointly referred to as "the Parties" or individually referred to as "Party",

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 economic 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 relationship in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote trade and investment under this Agreement in a manner mindful of high levels of environmental and labour protection and relevant internationally recognised standards and agreements;

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 and a stable and predictable environment for trade and investment, thus enhancing the competitiveness of their firms in global markets;

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;

DESIRING to promote the competitiveness of their companies by providing them with a predictable legal framework for their trade and investment relations,

HAVE AGREED AS FOLLOWS:

CHAPTER 1

OBJECTIVES AND GENERAL DEFINITIONS

ARTICLE 1.1

Establishment of a Free Trade Area

The Parties hereby establish a free trade area, in conformity 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

Partnership and Cooperation Agreement

For the purposes of this Agreement "Partnership and Cooperation Agreement" means the Framework Agreement on Comprehensive Partnership and Cooperation between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part, signed in Brussels on 27 June 2012.

ARTICLE 1.4

WTO Agreements

For the purposes of this Agreement:

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

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

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

(d)    "Agreement on Rules of Origin" means the Agreement on Rules of Origin contained in Annex 1A of the WTO Agreement;

(e)    "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;

(f)    "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;

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

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

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

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

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

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

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

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

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

(p)    "WTO Agreement" means the Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.

ARTICLE 1.5

General Definitions

For the purposes of this Agreement, unless otherwise specified:

(a)    "day" means a calendar day;

(b)    "domestic" means with regard to legislation, law or laws and regulations for the Union and its Member States and for Viet Nam 1 , respectively, legislation, law or laws and regulations at central, regional or local level;

(c)    "goods" means products as understood in GATT 1994, unless otherwise provided for in this Agreement;

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

(e)    "IMF" means the International Monetary Fund;

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

(g)    "natural person of a Party" means a national of one of the Member States of the Union or of Viet Nam, according to their respective legislation; 2

(h)    "person" means a natural person or a legal person;

(i)    "third country" means a country or territory outside the scope of territorial application of this Agreement as defined in Article 17.24 (Territorial Application);

(j)    "UNCLOS" means the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982;

(k)    "WIPO" means the World Intellectual Property Organization; and

(l)    "WTO" means the World Trade Organization.

CHAPTER 2

NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

ARTICLE 2.1

Objective

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

ARTICLE 2.2

Scope

Except as otherwise provided for in this Agreement, this Chapter applies to trade in goods between the Parties.

ARTICLE 2.3

Definitions

For the purposes of this Chapter:

(a)    "agricultural export subsidies" means subsidies as defined in paragraph (e) of Article 1 of the Agreement on Agriculture, including any amendment of that Article;

(b)    "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;

(c)    "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, shipper's export declaration or any other customs documentation in connection with the importation of the goods;

(d)    "customs duty" includes any duty or charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge imposed on or in connection with such importation, and does not include any:

(i)    charge equivalent to an internal tax imposed in accordance with Article 2.4 (National Treatment);

(ii)    duty imposed in accordance with Chapter 3 (Trade Remedies);

(iii)    duties applied in accordance with Articles VI, XVI and XIX of GATT 1994, the AntiDumping Agreement, the SCM Agreement, the Safeguards Agreement, Article 5 of the Agreement on Agriculture and the DSU; and

(iv)    fee or other charge imposed in accordance with Article 2.18 (Administrative Fees, Other Charges and Formalities on Imports and Exports);

(e)    "export licensing procedures" means administrative procedures 3 used for the operation of export licensing regimes requiring the submission of an application or other documentation, other than that required for customs purposes, to the relevant administrative body as a prior condition for exportation from the territory of the exporting Party;

(f)    "import licensing procedures" means administrative procedures 4 used for the operation of import licensing regimes requiring the submission of an application or other documentation, other than that required for customs purposes, to the relevant administrative body as a prior condition for importation into the territory of the importing Party;

(g)    "non-automatic export licensing procedures" means export 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 export operations involving the products subject to export licensing procedures;

(h)    "non-automatic import licensing procedures" means import 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 operations involving the products subject to import licensing procedures;

(i)    "originating" refers to the origin of a good as determined in accordance with the rules of origin set out in Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation);

(j)    "performance requirement" means a requirement that:

(i)    a given quantity, value or percentage of goods be exported;

(ii)    goods of the Party granting an import license be substituted for imported goods;

(iii)    a person benefiting from an import license purchase other goods in the territory of the Party granting the import licence, or accord a preference to domestically produced goods;

(iv)    a person benefiting from an import licence produce goods in the territory of the Party granting the import licence, with a given quantity, value or percentage of domestic content; or

(v)    relates in whatever form to the volume or value of imports, to the volume or value of exports or to the amount of foreign exchange inflows; and

(k)    "remanufactured good" means a good classified in HS Chapter 84, 85, 87, 90 or 9402, except those listed in Appendix 2-A-5 (Goods excluded from the Definition of Remanufactured Goods), which:

(i)    is entirely or partially comprised of parts obtained from goods that have been used beforehand; and

(ii)    has similar performance and working conditions as well as life expectancy compared to the original new good and is given the same warranty as the original new good.

ARTICLE 2.4

National Treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its Notes and Supplementary Provisions. To that 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 2.5

Classification of Goods

The classification of goods in trade between the Parties shall be in accordance with each Party's respective tariff nomenclature in conformity with the HS.

ARTICLE 2.6

Remanufactured Goods

The Parties shall accord to remanufactured goods the same treatment as that accorded to new like goods. A Party may require specific labelling of remanufactured goods in order to prevent deception of consumers. Each Party shall implement this Article within a transitional period of no longer than three years from the date of entry into force of this Agreement.

ARTICLE 2.7

Reduction or Elimination of Customs Duties

1.    Except as otherwise provided for in this Agreement, each Party shall reduce or eliminate its customs duties on goods originating in the other Party in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties).

2.    For the calculation of the successive reductions under paragraph 1, the base rate for customs duties of each good shall be the one specified in the schedules included in Appendices 2A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties). The tariff elimination established under Appendix 2-A-2 (Tariff Schedule of Viet Nam) does not apply to used motor-vehicles under HS codes 8702, 8703 and 8704.

3.    If a Party reduces an applied most favoured nation customs duty rate below the rate of customs duty applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties), the good originating in the other Party shall be eligible for that lower duty rate.

4.    Except as otherwise provided in this Agreement, a Party shall not increase any existing customs duty applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties), or adopt any new customs duty, on a good originating in the other Party.

5.    A Party may unilaterally accelerate the reduction or elimination of customs duties on originating goods of the other Party applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties). When a Party considers such an acceleration it shall inform the other Party as early as possible before the new rate of customs duty takes effect. A unilateral acceleration shall not preclude the Party from raising a customs duty to the prevailing rate at each stage of reduction or elimination in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties).

6.    Upon request of a Party, the Parties shall consult to consider accelerating or broadening the scope of the reduction or elimination of customs duties applied in accordance with their respective schedules included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties). If the Parties agree to amend this Agreement in order to accelerate or broaden such scope, such agreement shall supersede any duty rate or staging category for such good determined pursuant to their Schedules. Such an amendment shall come into effect in accordance with Article 17.5 (Amendments).

ARTICLE 2.8

Management of Administrative Errors

In the event of an error by the competent authorities in the proper management of the preferential system at export, and in particular in the application of Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation), where this error leads to consequences in terms of import duties, the importing Party may request the Trade Committee established pursuant to Article 17.1 (Trade Committee) to examine the possibilities of adopting appropriate measures with a view to resolving the situation.

ARTICLE 2.9

Specific Measures concerning the Preferential Tariff Treatment

1.    The Parties shall cooperate on combating customs violations relating to the preferential tariff treatment granted under this Chapter.

2.    For the purpose of paragraph 1, each Party shall offer the other Party administrative cooperation and mutual administrative assistance in customs and related matters as part of the implementation and control of the preferential tariff treatment, which shall include the following obligations:

(a)    verifying the originating status of the product or products concerned;

(b)    carrying out the subsequent verification of the proof of origin and providing the results of that verification to the other Party; and

(c)    granting authorisation to the importing Party to conduct enquiry visits in order to determine the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.

3.    Where, in accordance with the provisions on administrative cooperation or mutual administrative assistance in customs and related matters referred to in paragraph 2, the importing Party establishes that a proof of origin was unduly issued because the requirements provided for in Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation) were not fulfilled, that Party may deny a preferential tariff treatment to a declarant who claimed it with regard to goods for which the proof of origin was issued in the exporting Party.

4.    If the importing Party considers that the denial of preferential tariff treatment for individual consignments referred to in paragraph 3 is insufficient to implement and control the preferential tariff treatment of a given product, that Party may, in accordance with the procedure laid down in paragraph 5, temporarily suspend the relevant preferential tariff treatment of the products concerned in the following cases:

(a)    when that Party finds that there has been a systematic customs violation regarding claims of preferential tariff treatment under this Agreement; or

(b)    when that Party finds that the exporting Party has systematically failed to comply with the obligations under paragraph 2.

5.    The competent authority of the importing Party shall, without undue delay, notify its finding to the competent authority of the exporting Party, provide verifiable information upon which the finding was based and engage in consultations with the competent authority of the exporting Party with a view to achieving a mutually acceptable solution.

6.    If the competent authorities have not achieved a mutually acceptable solution after 30 days following the notification referred to in paragraph 5, the importing Party shall, without undue delay, refer the matter to the Trade Committee.

7.    If the Trade Committee has failed to agree on an acceptable solution within 60 days following the referral, the importing Party may temporarily suspend the preferential tariff treatment for the products concerned.

The importing Party may apply the temporary suspension of preferential tariff treatment under this paragraph only for a period necessary to protect its financial interests and until the exporting Party provides convincing evidence of its ability to comply with the obligations referred to in paragraph 2 and to provide sufficient control of the fulfilment of those obligations.

The temporary suspension shall not exceed a period of three months. If the conditions that gave rise to the initial suspension persist after the expiry of the three-month period, the importing Party may decide to renew the suspension for another period of three months. Any suspension shall be subject to periodic consultations within the Trade Committee.

8.    The importing Party shall publish, in accordance with its internal procedures, notices to importers about any notification and decision concerning the temporary suspension referred to in paragraph 4. The importing Party shall, without undue delay, notify the exporting Party and the Trade Committee.

ARTICLE 2.10

Repaired Goods

1.    A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its territory after the good has been temporarily exported from its territory to the territory of the other Party for repair, regardless of whether such repair could be performed in the territory of the Party from which the good was temporarily exported.

2.    Paragraph 1 does not apply to a good imported in bond, into a free trade zone, or in similar status, that is exported for repair and is not re-imported in bond, into a free trade zone, or in similar status.

3.    A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair.

4.    For the purposes of this Article, the term "repair" means any processing operation which is undertaken on a good to remedy operating defects or material damage and entailing the re-establishment of a good to its original function or to ensure its compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended. Repair of a good includes restoring and maintenance. It shall not include an operation or process that:

(a)    destroys the essential characteristics of the good or creates a new or commercially different good;

(b)    transforms an unfinished good into a finished good; or

(c)    is used to improve or upgrade the technical performance of a good.

ARTICLE 2.11

Export Duties, Taxes or Other Charges

1.    A Party shall not maintain or adopt any duties, taxes, or other charges of any kind imposed on, or in connection with, the exportation of a good to the territory of the other Party that are in excess of those imposed on like goods destined for domestic consumption, other than in accordance with the schedule included in Appendix 2-A-3 (Export Duties Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties).

2.    If a Party applies a lower rate of duty, tax or charge on, or in connection with, the exportation of a good and for as long as it is lower than the rate calculated in accordance with the schedule included in Appendix 2-A-3 (Export Duties Schedule of Viet Nam) of Annex 2-A (Reduction or Elimination of Customs Duties), that lower rate shall apply. This paragraph shall not apply to more favourable treatment granted to any other third party pursuant to a preferential trade agreement.

3.    At the request of either Party, the Trade Committee shall review any duties, taxes, or other charges of any kind imposed on, or in connection with, the exportation of goods to the territory of the other Party, when a Party has granted more favourable treatment to any other third party pursuant to a preferential trade agreement.

ARTICLE 2.12

Agricultural Export Subsidies

1.    In the multilateral context, the Parties share the objective of the parallel elimination and prevention of the reintroduction of all forms of export subsidies and disciplines on all export measures with equivalent effect for agricultural goods. To that end, they shall work together with the aim of enhancing multilateral disciplines on agricultural exporting state enterprises, international food aid and export financing support.

2.    Upon the entry into force of this Agreement, the exporting Party shall not introduce or maintain any export subsidies or other measures having equivalent effect on any agricultural good which is subject to the elimination or reduction of customs duties by the importing Party in accordance with Annex 2-A (Reduction or Elimination of Customs Duties) and which is destined for the territory of the importing Party.

ARTICLE 2.13

Administration of Trade Regulations

In accordance with Article X of GATT 1994, each Party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, judicial decisions and administrative rulings pertaining to:

(a)    the classification or the valuation of goods for customs purposes;

(b)    rates of duty, taxes or other charges;

(c)    requirements, restrictions or prohibitions on imports or exports;

(d)    the transfer of payments; and

(e)    issues affecting sale, distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use of goods for customs purposes.

ARTICLE 2.14

Import and Export Restrictions

1.    Except as otherwise provided for in this Agreement, a Party shall not 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 that end, Article XI of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.

2.    Paragraph 1 prohibits a Party from adopting or maintaining:

(a)    import licensing conditioned on the fulfilment of a performance requirement; or

(b)    voluntary export restraints.

3.    Paragraphs 1 and 2 do not apply to the goods listed in Appendix 2-A-4 (Specific Measures by Viet Nam governing the Importation and Exportation of Goods). Any amendment of Viet Nam's laws and regulations that reduces the scope of the goods listed in Appendix 2-A-4 (Specific Measures by Viet Nam governing the Importation and Exportation of Goods) shall automatically apply under this Agreement. Any preference accorded by Viet Nam regarding the scope of the goods listed in Appendix 2-A-4 (Specific Measures by Viet Nam governing the Importation and Exportation of Goods) to any other trading partner shall automatically apply under this Agreement. Viet Nam shall notify the Union of any amendment or preference referred to in this paragraph.

4.    In accordance with the WTO Agreement, a Party may implement any measure authorised by the Dispute Settlement Body of the WTO against the other Party.

5.    When a Party adopts or maintains an import or export prohibition or restriction it shall ensure full transparency thereof.

ARTICLE 2.15

Trading Rights and Related Rights for Pharmaceuticals

1.    Viet Nam shall adopt and maintain appropriate legal instruments allowing foreign pharmaceutical companies to establish foreign-invested enterprises for the purposes of importing pharmaceuticals which have obtained a marketing authorisation by Viet Nam's competent authorities. Without prejudice to Viet Nam's schedules included in Annex 8-B (Viet Nam's Schedule of Specific Commitments), such foreign-invested enterprises are allowed to sell pharmaceuticals which they have legally imported to distributors or wholesalers who have the right to distribute pharmaceuticals in Viet Nam.

2.    Foreign-invested enterprises referred to in paragraph 1 are allowed to:

(a)    build their own warehouses to store pharmaceuticals which they have legally imported into Viet Nam in accordance with the regulations issued by the Ministry of Health, or its successor;

(b)    provide information relating to pharmaceuticals, which they have legally imported into Viet Nam, to health care professionals in accordance with the regulations issued by the Ministry of Health, or its successor, and Viet Nam's other competent authorities; and

(c)    carry out clinical study and testing pursuant to Article 3 (International Standards) of Annex 2C (Pharmaceutical/Medicinal Products and Medical Devices) and in accordance with the regulations issued by the Ministry of Health, or its successor, to ensure that the pharmaceuticals which they have legally imported into Viet Nam are suitable for domestic consumption.

ARTICLE 2.16

Import Licensing Procedures

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

2.    Each Party shall notify the other Party of its existing import licensing procedures, including the legal basis and the relevant official website, within 30 days of the entry into force of this Agreement unless they were already notified or provided under Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement. The notification shall contain the same information as referred to in Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement.

3.    Each Party shall notify the other Party of any introduction or modification of any import licensing procedure which it intends to adopt no later than 45 days before the new procedure or modification takes effect. In no case shall a Party provide such notification later than 60 days following the date of the publication of the introduction or modification unless this was already notified in accordance with Article 5 of the Import Licensing Agreement. The notification shall contain the same information as referred to in Article 5 of the Import Licensing Agreement.

4.    Each Party shall publish on an official website any information that it is required to publish under subparagraph 4(a) of Article 1 of the Import Licensing Agreement.

5.    Upon request of a Party, the other Party shall respond within 60 days to a reasonable enquiry regarding any import licensing procedure which it intends to adopt or has adopted or maintained, as well as the criteria for granting or for allocating import licenses, including the eligibility of persons, firms, and institutions to make such an application, the administrative body or bodies to be approached and the list of products subject to the import licensing requirement.

6.    The Parties shall introduce and administer import licensing procedures in accordance with:

(a)    paragraphs 1 to 9 of Article 1 of the Import Licensing Agreement;

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

(c)    Article 3 of the Import Licensing Agreement.

To that end, the provisions referred to in subparagraphs (a), (b) and (c) are incorporated into and made part of this Agreement, mutatis mutandis.

7.    A Party shall only adopt or maintain automatic import licensing procedures as a condition for importation into its territory in order to fulfil legitimate objectives after having conducted an appropriate impact assessment.

8.    A Party shall grant import licences for an appropriate length of time which shall not be shorter than set out in the domestic legislation providing for the import licensing requirements and which shall not preclude imports.

9.    Where a Party has denied an import licence application with respect to a good of the other Party, it shall, upon request of the applicant and promptly after receiving the request, provide the applicant with a written explanation of the reasons for the denial. The applicant shall have the right of appeal or review in accordance with the domestic legislation or procedures of the importing Party.

10.    The Parties shall only adopt or maintain non-automatic import licensing procedures in order to implement a measure that is not inconsistent with this Agreement, including with Article 2.22 (General Exceptions). A Party adopting non-automatic import licensing procedures shall indicate clearly the purpose of such licensing procedures.

ARTICLE 2.17

Export Licensing Procedures

1.    Each Party shall notify the other Party of its existing export licensing procedures, including the legal basis and the relevant official website, within 30 days of the entry into force of this Agreement.

2.    Each Party shall notify the other Party of any introduction or modification of an export licensing procedure which it intends to adopt no later than 45 days before the new procedure or modification takes effect. In no case shall a Party provide such notification later than 60 days following the date of the publication of the introduction or modification.

3.    The notification referred to in paragraphs 1 and 2 shall contain the following information:

(a)    the texts of its export licensing procedures, including any modifications;

(b)    the products subject to each export licensing procedure;

(c)    for each export licensing procedure, a description of:

(i)    the process for applying for an export licence; and

(ii)    criteria which an applicant must meet to be eligible to apply for an export licence;

(d)    the contact point or points from which interested persons can obtain further information on the conditions for obtaining an export licence;

(e)    the administrative body or bodies to which an application or other relevant documentation shall be submitted;

(f)    the period during which each export licensing procedure will be in effect;

(g)    if the Party intends to use an export licensing procedure to administer an export quota, the overall quantity and, where practicable, value of the quota and the opening and closing dates of the quota; and

(h)    any exceptions or derogations from an export licensing requirement, how to request those exceptions or derogations, and the criteria for granting them.

4.    Each Party shall publish any export licensing procedure, including the legal basis and a reference to the relevant official website. Each Party shall also publish any new export licensing procedure, or any modification to its export licensing procedures, as soon as possible but in any case no later than 45 days after its adoption and at least 25 working days before its entry into force.

5.    Upon request of a Party, the other Party shall respond within 60 days to a reasonable enquiry regarding any export licensing procedures which it intends to adopt or which it has adopted or maintained as well as the criteria for granting or for allocating export licenses, including the eligibility of persons, firms, and institutions to make such an application, the administrative body or bodies to be approached, and the list of products subject to the export licensing requirement.

6.    The Parties shall introduce and administer any export licensing procedures in accordance with:

(a)    paragraphs 1 to 9 of Article 1 of the Import Licensing Agreement;

(b)    Article 2 of the Import Licensing Agreement;

(c)    Article 3 of the Import Licensing Agreement with the exception of subparagraphs 5(a), (c), (j) and (k).

To that end, the provisions referred to in subparagraphs (a), (b) and (c) are incorporated into and made part of this Agreement, mutatis mutandis.

7.    Each Party shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner.

8.    A Party shall grant export licences for an appropriate length of time which shall not be shorter than set out in the domestic legislation providing for the export licensing requirement and which shall not preclude exports.

9.    When a Party has denied an export licence application with respect to a good of the other Party, it shall, upon request of the applicant and promptly after receiving the request, provide the applicant with a written explanation of the reasons for the denial. The applicant shall have the right of appeal or review in accordance with the domestic legislation or procedures of the exporting Party.

10.    A Party shall only adopt or maintain automatic export licensing procedures as a condition for exportation from its territory in order to fulfil legitimate objectives after having conducted an appropriate impact assessment.

11.    The Parties shall only adopt or maintain non-automatic export licensing procedures in order to implement a measure that is not inconsistent with this Agreement, including with Article 2.22 (General Exceptions). A Party adopting non-automatic export licensing procedures shall indicate clearly the purpose of such licensing procedures.

ARTICLE 2.18

Administrative Fees, Other Charges and Formalities on Imports and Exports

1.    Each Party shall ensure that fees, charges, formalities and requirements, other than import and export customs duties and measures listed in subparagraphs (i), (ii) and (iii) of paragraph (d) of Article 2.3 (Definitions), are consistent with the Parties' obligations under Article VIII of GATT 1994, including its Notes and Supplementary Provisions.

2.    A Party shall only impose fees and charges for services provided in connection with importation and exportation of goods. Fees and charges shall not be levied on an ad valorem basis and shall not exceed the approximate cost of the service provided. Each Party shall publish information on fees and charges it imposes in connection with the importation and exportation of goods in accordance with Article 4.10 (Fees and Charges).

3.    A Party shall not require consular transactions, including related fees and charges, in connection with the importation or exportation of goods. After three years from the date of entry into force of this Agreement, a Party shall not require consular authentication for the importation of goods covered by this Agreement.

ARTICLE 2.19

Origin Marking

Except as otherwise provided for in this Agreement, when Viet Nam applies mandatory country of origin marking requirements to non-agricultural products of the Union, Viet Nam shall accept the marking "Made in EU", or a similar marking in the local language, as fulfilling such requirements.

ARTICLE 2.20

State Trading Enterprises

1.    The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, including its Notes and Supplementary Provisions, and the WTO Understanding on the Interpretation of Article XVII of GATT 1994, which are incorporated into and made part of this Agreement, mutatis mutandis.

2.    When a Party requests information from the other Party on individual cases of state trading enterprises and on their operations, including information on their bilateral trade, the requested Party shall ensure transparency subject to subparagraph 4(d) of Article XVII of GATT 1994.

ARTICLE 2.21

Elimination of Sector-Specific Non-Tariff Measures

1.    The Parties shall implement their commitments on sector-specific non-tariff measures on goods as set out in Annexes 2-B (Motor Vehicles and Motor Vehicles Parts and Equipment) and 2C (Pharmaceutical/Medicinal Products and Medical Devices).

2.    Except as otherwise provided for in this Agreement, 10 years after the entry into force of this Agreement and upon request of either Party, the Parties shall, in accordance with their internal procedures, enter into negotiations with the aim of broadening the scope of their commitments on sector-specific non-tariff measures on goods.

ARTICLE 2.22

General Exceptions

1.    Nothing in this Chapter prevents either Party from taking measures in accordance with Article XX of GATT 1994, including its Notes and Supplementary Provisions, which are 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 such measures shall provide the other Party with all relevant information. Upon request, the Parties shall consult with a view to seeking an acceptable solution. The Parties may agree on any means needed to resolve the difficulties. If prior information or examination is impossible due to exceptional and critical circumstances requiring immediate action, the exporting Party may apply the necessary precautionary measures and shall immediately inform the other Party thereof.

ARTICLE 2.23

Committee on Trade in Goods

1.    The Committee on Trade in Goods established pursuant to Article 17.2 (Specialised Committees) shall comprise representatives of the Parties.

2.    The Committee on Trade in Goods shall consider any matter arising under this Chapter and Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation).

3.    The Committee on Trade in Goods shall carry out the following tasks in accordance with Article 17.2 (Specialised Committees):

(a)    reviewing and monitoring the implementation and operation of the provisions referred to in paragraph 2;

(b)    identifying and recommending measures to resolve any difference that may arise, and to promote, facilitate and improve market access, including any acceleration of tariff commitments under Article 2.7 (Reduction or Elimination of Customs Duties);

(c)    recommending the Trade Committee to establish working groups, as it deems necessary;

(d)    undertaking any additional work that the Trade Committee may assign; and

(e)    proposing decisions to be adopted by the Trade Committee for amending the list of fragrant rice varieties included in subparagraph 5(c) of Sub-Section 1 (Union Tariff Rate Quotas) of Section B (Tariff Rate Quotas) of Annex 2-A (Reduction or Elimination of Customs Duties).

CHAPTER 3

TRADE REMEDIES

SECTION A

ANTI-DUMPING AND COUNTERVAILING DUTIES

ARTICLE 3.1

General Provisions

1.    The Parties affirm their rights and obligations under Article VI of GATT 1994, the AntiDumping Agreement, and the SCM Agreement.

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

(a)    trade remedies 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 other Party when a Party considers imposing such measures.

3.    For the purposes of this Section, origin shall be determined in accordance with Article 1 of the Agreement on Rules of Origin.

ARTICLE 3.2

Transparency

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

2.    Provided it does not unnecessarily delay the conduct of the investigation, interested parties shall be granted the possibility to be heard in order to express their views during trade remedies investigations.

ARTICLE 3.3

Consideration of Public Interest

A Party shall not impose anti-dumping or countervailing measures 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. In determining the public interest, the Party shall take into account the situation of the domestic industry, importers and their representative associations, representative users and representative consumer organisations, based on the relevant information provided to the investigating authorities.

ARTICLE 3.4

Lesser Duty Rule

An anti-dumping or countervailing duty imposed by a Party shall not exceed the margin of dumping or countervailable subsidy, and the Party shall endeavour to ensure that the amount of this duty is less than that margin if such lesser duty would be adequate to remove the injury to the domestic industry.

ARTICLE 3.5

Exclusion from Dispute Settlement

The provisions of this Section shall not be subject to Chapter 15 (Dispute Settlement).

SECTION B

GLOBAL SAFEGUARD MEASURES

ARTICLE 3.6

General Provisions

1.    The Parties affirm their rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture.

2.    A Party shall not apply with respect to the same good at the same time:

(a)    a bilateral safeguard measure under Section C (Bilateral Safeguard Clause) of this Chapter; 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 Article 1 of the Agreement on Rules of Origin.

ARTICLE 3.7

Transparency

1.    Notwithstanding Article 3.6 (General Provisions), the Party initiating a global safeguard investigation or intending to impose global safeguard measures shall immediately provide, at the request of the other Party and provided that it has a substantial interest, ad hoc written notification of all pertinent information leading to the initiation of a global safeguard investigation and, as the case may be, the proposal to impose the global safeguard measures, including on the provisional findings, where relevant. This is without prejudice to Article 3.2 of the Safeguards Agreement.

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

3.    For the purposes of paragraph 2, if a Party considers that the legal requirements for the imposition of definitive safeguard measures are met, it shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within 30 days of the notification, the Party may adopt the definitive global safeguard measures. The possibility to hold consultations should be offered to the other Party in order to exchange views on the information referred to in paragraph 1.

ARTICLE 3.8

Exclusion from Dispute Settlement

The provisions of this Section referring to WTO rights and obligations shall not be subject to Chapter 15 (Dispute Settlement).

SECTION C

BILATERAL SAFEGUARD CLAUSE

ARTICLE 3.9

Definitions

For the purposes of this Section:

(a)    "domestic industry" shall be understood in accordance with subparagraph 1(c) of Article 4 of the Safeguards Agreement. To that end, subparagraph 1(c) of Article 4 of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis;

(b)    "serious injury" and "threat of serious injury" shall be understood in accordance with subparagraphs 1(a) and 1(b) of Article 4 of the Safeguards Agreement; to that end subparagraphs 1(a) and 1(b) of Article 4 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis; and

(c)    "transition period" means a period of 10 years from the entry into force of this Agreement.

ARTICLE 3.10

Application of a Bilateral Safeguard Measure

1.    If, as a result of the reduction or elimination of a customs duty under this Agreement, any good originating in the territory of a Party is 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 adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section during the transition period only, except as otherwise provided for in subparagraph 6(c) of Article 3.11 (Conditions and Limitations).

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

(a)    suspends the further reduction of the rate of customs duty on the good concerned as provided for in Annex 2-A (Elimination of Customs Duties); or

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

(i)    the most-favoured-nation 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 (Elimination of Customs Duties) pursuant to Article 2.6 (Reduction 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 the investigation referred to in paragraph 2 and consult with the other Party as far as practicable in advance of applying a bilateral safeguard measure, with a view to reviewing the information arising from the investigation and exchanging views on the measure.

2.    A Party shall only apply a bilateral safeguard measure following an investigation by its competent authorities in accordance with Article 3 and subparagraph 2(c) of Article 4 of the Safeguards Agreement. To that end, Article 3 and subparagraph 2(c) of Article 4 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.

3.    In the investigation referred to in paragraph 2, the Party shall comply with the requirements of subparagraph 2(a) of Article 4 of the Safeguards Agreement. To that end, subparagraph 2(a) of Article 4 of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis.

4.    The investigation shall also demonstrate, on the basis of objective evidence, the existence of a causal link between increased imports and the serious injury or threat thereof. The investigation shall also take into consideration the existence of any factor other than increased imports which may also cause injury at the same time.

5.    Each Party shall ensure that its competent authorities complete the investigation referred to in paragraph 2 within one year of the date of its initiation.

6.    A Party shall not apply a bilateral safeguard measure:

(a)    except to the extent, and for such time, as it is 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 set out 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, does not exceed four years; or

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

7.    In order to facilitate adjustment in a situation where the expected duration of a bilateral safeguard measure is more than two years, the Party applying the measure shall progressively liberalise the measure at regular intervals during the period of application.

8.    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 (Elimination of Customs Duties), would have been in effect but for the measure.

ARTICLE 3.12

Provisional Measures

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 that 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 referred to in paragraph 2 of Article 3.11 (Conditions and Limitations) does not result in a finding that the requirements of paragraph 1 of Article 3.10 (Application of a 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).

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 in the form of concessions equivalent to the value of the additional duties expected to result from the safeguard measure. The Party applying a bilateral safeguard measure shall provide an opportunity for such consultations no later than 30 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 30 days after the consultations begin, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of concessions, with respect to originating goods of the Party applying the bilateral safeguard measure, which have trade effects substantially equivalent to the bilateral safeguard measure. The obligation to provide compensation, incumbent on the Party applying the bilateral safeguard measure, and the other Party's right to suspend concessions under this paragraph shall terminate on the same date as the bilateral safeguard measure terminates.

3.    The right of suspension referred to in paragraph 2 shall not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.

ARTICLE 3.14

Use of the English Language

In order to ensure the maximum efficiency for the application of the trade remedy rules under this Chapter, the investigating authorities of the Parties shall use the English language as a basis for communications and documents exchanged in the context of trade remedy investigations between the Parties.

CHAPTER 4

CUSTOMS AND TRADE FACILITATION

ARTICLE 4.1

Objectives

1.    The Parties recognise the importance of customs and trade facilitation matters in the evolving global trading environment. The Parties shall reinforce cooperation in this area with a view to ensuring that their respective customs legislation and procedures fulfil the objectives of promoting trade facilitation while ensuring effective customs control.

2.    The Parties agree that their legislation shall be non-discriminatory and that customs procedures shall be based on the use of modern methods and effective controls to combat fraud and to promote legitimate trade.

3.    The Parties recognise that legitimate public policy objectives, including those in relation to security, safety and the fight against fraud, shall not be compromised.

ARTICLE 4.2

Customs Cooperation and Mutual Administrative Assistance

1.    The respective authorities of the Parties shall cooperate on customs matters in order to ensure that the objectives set out in Article 4.1 (Objectives) are attained.

2.    The Parties shall enhance customs cooperation, inter alia, by:

(a)    exchanging information concerning customs legislation, its implementation, and customs procedures, in particular in the following areas:

(i)    simplification and modernisation of customs procedures;

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

(iii)    facilitation of transit movements and transhipment; and

(iv)    relations with the business community;

(b)    exploring joint initiatives relating to import, export and other customs procedures, including technical assistance, in order to ensure effective services to the business community;

(c)    strengthening their cooperation in the field of customs in international organisations such as the WTO and the World Customs Organization (hereinafter referred to as "WCO"); and

(d)    establishing, where relevant and appropriate, mutual recognition of trade partnership programmes and customs controls, including equivalent trade facilitation measures.

3.    The Parties shall provide each other with mutual administrative assistance in customs matters in accordance with Protocol 2 (Mutual Administrative Assistance in Customs Matters).

ARTICLE 4.3

Customs Legislation and Procedures

1.    The Parties shall base their respective customs legislation and procedures on international instruments and standards applicable in the area of customs and trade, including the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures, done at Brussels on 26 June 1999, the International Convention on the Harmonized Commodity Description and Coding System (hereinafter referred to as "HS Convention"), the Framework of Standards to Secure and Facilitate Global Trade and the Customs Data Model of the WCO.

2.    The customs legislation and procedures of the Parties shall:

(a)    aim at the protection of legitimate trade through effective enforcement and compliance with legislative requirements;

(b)    avoid unnecessary or discriminatory burdens on economic operators, and provide for further facilitation for operators with high levels of compliance; and

(c)    ensure safeguards against fraud and illicit or damaging activities.

3.    The Parties agree that their respective customs legislation and procedures, including remedies shall be proportionate and non-discriminatory and that their application shall not unduly delay the release of goods.

4.    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 and review requirements and formalities, wherever possible, with respect to the rapid release and clearance of goods; and

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

ARTICLE 4.4

Release of Goods

1.    Each Party shall ensure that its customs authorities apply requirements and procedures that provide for the release of goods within a period no longer than that required to ensure compliance with its customs and other trade-related laws and formalities. Each Party shall work towards further reducing this period and releasing the goods without undue delay.

2.    The Parties shall allow, inter alia, the release of goods without the payment of customs duties, subject to the provision of a guarantee if required in accordance with their legislation in order to secure the final payment of customs duties.

3.    Each Party shall ensure that its customs authorities provide for advance electronic submission and further processing of information before the physical arrival of goods (pre-arrival processing) to enable the release of goods on arrival.

ARTICLE 4.5

Simplified Customs Procedures

1.    Each Party shall provide for simplified customs 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 administrative document or 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 on information technology, to facilitate the electronic exchange of data between traders, customs administrations and other related agencies.

ARTICLE 4.6

Transit and Transhipment

1.    Each Party shall ensure the facilitation and effective control of transhipment operations and transit movements through its territory.

2.    To facilitate traffic in transit each Party shall ensure cooperation and coordination between all authorities and agencies concerned in its territory.

ARTICLE 4.7

Risk Management

1.    Each Party shall base its examination and release procedures and its post-clearance audit 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 shall 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 4.8

Transparency

1.    Each Party shall ensure that its customs and other trade-related laws, regulations and general administrative procedures and other requirements, including fees and charges, are readily available to interested parties and, where feasible and possible, on an official website.

2.    Each Party shall designate or maintain one or more inquiry or information points to address, within a reasonable time, inquiries by interested parties concerning customs and other trade-related matters.

ARTICLE 4.9

Advance Rulings

1.    Upon written request from traders, the customs authorities of each Party shall issue, in accordance with its laws and regulations, prior to the importation of a good into its territory, written advance rulings on tariff classification or on any other matter as the Parties may agree upon.

2.    Subject to any confidentiality requirements in each Party's laws and regulations, each Party shall publish, for example on an official website, its advance rulings on tariff classification and on any matters as the Parties may agree upon.

3.    With a view to facilitating trade, the Parties shall include in their bilateral dialogue regular updates on changes in their respective laws and regulations on advance rulings.

ARTICLE 4.10

Fees and Charges

1.    Each Party shall publish information on fees and charges via an officially designated medium, and where feasible and possible, on an official website. This information shall include the fees and charges that will be applied, the reason for the fees or charges for the service provided, the responsible authority, and when and how payment is to be made.

2.    Each Party shall not impose new or amended fees and charges until the information in accordance with paragraph 1 is published and made readily available.

ARTICLE 4.11

Customs Brokers

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

ARTICLE 4.12

Customs Valuation

1.    The Parties shall determine the customs value of goods in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement.

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

ARTICLE 4.13

Preshipment Inspections

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

ARTICLE 4.14

Review and Appeal

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

ARTICLE 4.15

Relations with the Business Community

The Parties agree:

(a)    on the need for timely consultations with trade representatives on legislative proposals and general procedures related to customs and trade facilitation matters. To that end, appropriate consultations between administrations and the business community shall be held by each Party;

(b)    to publish or otherwise make available, as far as possible through electronic means, any new legislation and general procedures related to customs and trade facilitation matters 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 contact points 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; and

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

ARTICLE 4.16

Committee on Customs

1.    The Committee on Customs established by Article 17.2 (Specialised Committees) shall be composed of representatives of the Parties.

2.    The Committee on Customs shall ensure the proper functioning of this Chapter, the enforcement of intellectual property rights by customs in Sub-Section 4 (Border Enforcement) of Section C (Enforcement of Intellectual Property Rights) of Chapter 12 (Intellectual Property), Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation), Protocol 2 (Mutual Administrative Assistance in Customs Matters) and any additional provisions relating to customs that the Parties may agree upon.

3.    The Committee on Customs shall examine the need for, and adopt, decisions, opinions, proposals or recommendations on all issues arising from the implementation of the provisions referred to in paragraph 2. It shall have the power to adopt decisions on mutual recognition of risk management techniques, risk criteria and standards, security controls and trade partnership programmes, including aspects such as data transmission and mutually agreed benefits.

CHAPTER 5

TECHNICAL BARRIERS TO TRADE

ARTICLE 5.1

Affirmation of the TBT Agreement

The Parties affirm their 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 5.2

Objectives

1.    The objectives of this Chapter are to facilitate and increase bilateral trade in goods by preventing, identifying and eliminating unnecessary obstacles to trade within the scope of the TBT Agreement, and to enhance bilateral cooperation between the Parties.

2.    The Parties shall establish and enhance technical capabilities and institutional infrastructure on matters concerning technical barriers to trade.

ARTICLE 5.3

Scope and Definitions

1.    This Chapter applies to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures, as defined in Annex 1 to the TBT Agreement, that may affect trade in goods between the Parties, except for:

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

(b)    sanitary and phytosanitary measures as defined in Annex A to the SPS Agreement.

2.    Each Party has the right to prepare, adopt and apply standards, technical regulations and conformity assessment procedures in accordance with this Chapter and the TBT Agreement.

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

ARTICLE 5.4

Technical Regulations

1.    Each Party shall make best use of good regulatory practice, as provided for in the TBT Agreement and in this Chapter, in particular, by:

(a)    assessing the available regulatory and non-regulatory alternatives to a proposed technical regulation that would fulfil the Party's legitimate objectives, in accordance with Article 2.2 of the TBT Agreement; endeavouring to assess, inter alia, the impact of a proposed technical regulation by means of a regulatory impact assessment, as recommended by the Committee on Technical Barriers to Trade established under Article 13 of the TBT Agreement;

(b)    using relevant international standards, such as those developed by the International Organization for Standardization, the International Electrotechnical Commission, the International Telecommunication Union and the Codex Alimentarius Commission, as a basis for their technical regulations, except when such international standards would be ineffective or inappropriate for the fulfilment of the legitimate objectives pursued by a Party. When a Party has not used international standards as a basis for its technical regulations, it shall, upon request of the other Party, identify any substantial deviation from the relevant international standards and explain the reasons why those standards have been judged inappropriate or ineffective for the objective pursued;

(c)    reviewing, without prejudice to Article 2.3 of the TBT Agreement, technical regulations with a view to increasing their convergence with relevant international standards. In undertaking this review, the Parties shall, inter alia, take into account any new development in the relevant international standards and whether the circumstances that have given rise to divergences from any relevant international standard continue to exist;

(d)    specifying technical regulations based on product performance requirements, rather than on design or descriptive characteristics.

2.    In accordance with Article 2.7 of the TBT Agreement, a Party shall give favourable consideration to accepting as equivalent technical regulations of the other Party, even if those regulations differ from its own, provided it is satisfied that those regulations adequately fulfil the objectives of its own regulations.

3.    A Party that has prepared a technical regulation that it considers to be equivalent to a technical regulation of the other Party because it has a compatible objective and product scope may request in writing that the other Party recognise it as equivalent. That request shall be made in writing and set out in detail the reasons why the technical regulations should be considered to be equivalent, including reasons with respect to product scope. A Party which does not agree that the technical regulations are equivalent shall provide to the other Party, upon request, the reasons for its decision.

ARTICLE 5.5

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. The Parties further affirm their adherence to the principles set out in Decisions and Recommendations adopted by the WTO Committee on Technical Barriers to Trade since 1 January 1995, G/TBT/1/rev.12, of 21 January 2015, (hereinafter referred to as "the document"), including the Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement, referred to in the Annexes to Part 1 of the document.

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:

(a)    participate, within the limits of their resources, in the preparation of international standards by relevant international standardising bodies;

(b)    use relevant international standards as a basis for the standards they develop, except where those international standards would be ineffective or inappropriate for the fulfilment of the legitimate objectives pursued by a Party, for instance because of an insufficient level of protection, fundamental climatic or geographical factors, or fundamental technological problems;

(c)    avoid duplication of, or overlap with, the work of international standardising bodies;

(d)    review national and regional standards not based on relevant international standards at regular intervals, with a view to increasing their convergence with relevant international standards; and

(e)    cooperate with the relevant standardisation bodies of the other Party in international standardisation activities. That cooperation may be undertaken in international standardising bodies or at regional level.

3.    The Parties shall exchange information on:

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

(b)    their standardisation processes, and the extent of their use of international or regional standards as basis for their national standards; and

(c)    cooperation agreements on standardisation implemented by either Party, including on standardisation issues in international agreements with third parties, to the extent this is not explicitly prohibited by those agreements.

4.    The Parties recognise that in accordance with Annex 1 to the TBT Agreement, compliance with standards is voluntary. When a Party makes compliance with standards mandatory, through incorporation or referencing in technical regulations or conformity assessment procedures, Article 5.7 (Transparency) applies.

ARTICLE 5.6

Conformity Assessment Procedures

1.    In respect of mandatory conformity assessment procedures the Parties shall apply paragraph 1 of Article 5.4 (Technical Regulations), mutatis mutandis, with a view to avoiding unnecessary obstacles to trade and ensuring transparency and non-discrimination.

2.    In line with Article 5.1.2 of the TBT Agreement, when an importing Party requires positive assurance of conformity with its applicable technical regulations or standards, its conformity assessment procedures shall neither be stricter nor applied more strictly than necessary to give this Party adequate confidence that products conform with its applicable technical regulations or standards, taking account of the risks non-conformity would create.

3.    The Parties recognise that a broad range of mechanisms exists to facilitate the acceptance of the results of conformity assessment procedures conducted in the territory of the other Party, 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 to qualify conformity assessment bodies located in the territory of either Party;

(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 located in the territory of either Party; and

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

4.    Having regard in particular to the considerations referred to in paragraph 3, the Parties shall:

(a)    intensify their exchange of information on the mechanism referred to in paragraph 3 and on similar mechanisms with a view to facilitating the acceptance of conformity assessment results;

(b)    exchange information on conformity assessment procedures and, in particular, on the criteria used to select appropriate conformity assessment procedures for specific products;

(c)    consider a supplier's declaration of conformity as one of the assurances of conformity with domestic law;

(d)    consider arrangements on mutual acceptance of the results of conformity assessment procedures according to the procedure set out in paragraph 5;

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

(f)    consider joining or, as applicable, to encourage their testing, inspection and certification bodies to join any operative international agreements or arrangements for harmonisation or facilitation of acceptance of conformity assessment results;

(g)    ensure that economic operators have a choice amongst conformity assessment facilities designated by the authorities to perform the tasks required by domestic law to assure compliance;

(h)    endeavour to use accreditation to qualify conformity assessment bodies; and

(i)    ensure independence of, and absence of conflict of interest between, accreditation bodies and conformity assessment bodies.

5.    Upon request from a Party, the other Party may decide to enter into 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 provide relevant information on how the sectoral initiative would facilitate trade. If the other Party declines that request it shall, upon request, provide its reasons.

6.    The Parties affirm their obligations 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 domestic 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.

ARTICLE 5.7

Transparency

The Parties acknowledge the importance of transparency with regard to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures. In that regard, the Parties affirm their transparency obligations under the TBT Agreement. Each Party shall:

(a)    take the other Party's comments into account where a part of the process of developing a technical regulation is open to public consultation, and provide, upon request, written responses in a timely manner to the comments made by the other Party;

(b)    ensure that economic operators and other interested persons of the other Party are allowed to participate in any formal public consultation process concerning the development of technical regulations, on terms no less favourable than those accorded to its own legal or natural persons;

(c)    further to subparagraph 1(a) of Article 5.4 (Technical Regulations), in cases where impact assessments are carried out, inform the other Party, upon request, of the outcome of the impact assessment of the proposed technical regulation;

(d)    when making notifications in accordance with Article 2.9.2 or 5.6.2 of the TBT Agreement:

(i)    allow at least a period of 60 days, following the notification, for the other Party to provide comments in writing to the proposal and, where practicable, give due consideration to reasonable requests for extending that period;

(ii)    provide the electronic version of the notified text;

(iii)    provide, in case the notified text is not in one of the official WTO languages, a detailed and comprehensive description of the content of the measure in the WTO notification format;

(iv)    reply in writing to written comments received from the other Party on the proposal, no later than the date of publication of the final technical regulation or conformity assessment procedure; and

(v)    provide information on the adoption and the entry into force of the notified measure and the adopted final text through an addendum to the original notification;

(e)    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;

(f)    ensure that all technical regulations and mandatory conformity assessment procedures adopted and in force are publicly available on official websites and free of charge; and

(g)    ensure that the enquiry point, established in accordance with Article 10.1 of the TBT Agreement, provides information and answers in one of the official WTO languages to reasonable enquiries from the other Party or from interested persons of the other Party on adopted technical regulations, conformity assessment procedures and standards.

ARTICLE 5.8

Market Surveillance

The Parties shall:

(a)    exchange views on market surveillance and enforcement activities;

(b)    ensure that market surveillance functions are carried out by the competent authorities and that no conflicts of interest exist between the market surveillance function and the conformity assessment function; and

(c)    ensure that there are no conflicts of interest between market surveillance bodies and the economic operators subject to control or supervision.

ARTICLE 5.9

Marking and Labelling

1.    The Parties note that a technical regulation may include or deal exclusively with marking or labelling requirements. When a Party's technical regulations contain mandatory marking or labelling requirements, that Party shall observe the principles of Article 2.2 of the TBT Agreement, in particular, that technical regulations shall not be prepared with a view to, or with the effect of, creating unnecessary obstacles to international trade, and that they shall not be more trade restrictive than necessary to fulfil a legitimate objective.

2.    When requiring mandatory marking or labelling of products, a Party shall:

(a)    only require information which is relevant for consumers or users of the product or which indicates the product's conformity with the mandatory technical requirements;

(b)    not require any prior approval, registration or certification of the labels or markings of products as a precondition for placing on its market products that otherwise comply with its mandatory technical requirements, unless it is necessary in view of the risk of the products to human, animal or plant health or life, the environment or national security; this provision is without prejudice to the right of the Party to require prior approval of the specific information to be provided on the label or marking in light of the relevant domestic regulations;

(c)    in the event that it requires the use of a unique identification number by economic operators, issue that number to the economic operators of the other Party 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 Party importing the goods, permit the following:

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

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

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

(e)    accept that labelling, including supplementary labelling or corrections to labelling, take place, where relevant, in authorised premises, such as in customs or bonded licensed warehouses at the point of import, in the importing Party prior to the distribution and sale of the product; the Party may require that the original labelling is not removed;

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

ARTICLE 5.10

Cooperation and Trade Facilitation

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 to facilitating trade between them. To that end, they may establish regulatory dialogues at both horizontal and sectoral levels.

2.    The Parties shall aim to identify, develop and promote bilateral initiatives regarding standards, technical regulations and conformity assessment procedures that are appropriate for particular issues or sectors and which facilitate trade. Those initiatives may include:

(a)    promoting good regulatory practices through regulatory cooperation, including the exchange of information, experiences and data, with a view to improving the quality and effectiveness of their standards, technical regulations and conformity assessment procedures and making efficient use of regulatory resources;

(b)    using a risk-based approach to conformity assessment such as relying on a supplier's declaration of conformity for low-risk products and, where appropriate, reducing the complexity of technical regulations, standards and conformity assessment procedures;

(c)    increasing the convergence of their standards, technical regulations and conformity assessment procedures with relevant international standards, guides or recommendations;

(d)    avoiding unnecessary divergence of approach in standards, technical regulations and conformity assessment procedures where no international standards, guides or recommendations exist;

(e)    promoting or enhancing cooperation between the Parties' respective organisations, public or private, responsible for standardisation, conformity assessment and metrology;

(f)    ensuring efficient interaction and cooperation between regulatory authorities at regional or international level; and

(g)    exchanging information, to the extent possible, about agreements and arrangement related to technical barriers to trade subscribed to at international level.

3.    Upon request, a Party shall give due consideration to proposals for cooperation from the other Party under this Chapter. This cooperation shall be undertaken, inter alia, through dialogue in appropriate fora, joint projects, technical assistance and capacity-building programmes on standards, technical regulations and conformity assessment procedures in selected industrial areas, as mutually agreed.

ARTICLE 5.11

Consultations

1.    A Party shall give prompt and favourable consideration to any request for consultations from the other Party on issues relating to the implementation of this Chapter.

2.    In order to clarify or resolve issues referred to in paragraph 1, the Trade Committee may establish a working group with a view to identifying a workable and practical solution to facilitate trade. The working group shall comprise representatives of the Parties.

ARTICLE 5.12

Implementation

1.    Each Party shall designate a contact point in the Ministry of Science and Technology of Viet Nam and the European Commission, respectively, and provide the other Party with the contact details of the office or official responsible for matters covered under this Chapter, including information on telephone, facsimile, e-mail and other relevant details.

2.    Each Party shall promptly notify the other Party of any change of its contact point and amendments to the information referred to in paragraph 1.

3.    The contact points shall, inter alia:

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

(b)    facilitate cooperation activities, as appropriate, in accordance with Article 5.10 (Joint Cooperation and Trade Facilitation);

(c)    promptly address any issue that a Party raises in relation to the development, adoption, application or enforcement of standards, technical regulations and conformity assessment procedures;

(d)    consult, upon a Party's request, on matters arising under this Chapter;

(e)    take any other actions which may assist the Parties in implementing this Chapter; and

(f)    carry out other functions as may be delegated by the Committee on Trade in Goods.

4.    The enquiry points, established in accordance with Article 10.1 of the TBT Agreement, shall:

(a)    facilitate the exchange of information between the Parties on standards, technical regulations and conformity assessment procedures, in response to all reasonable requests for such information from the other Party; and

(b)    refer enquiries from the other Party to the appropriate regulatory authorities.

CHAPTER 6

SANITARY AND PHYTOSANITARY MEASURES

ARTICLE 6.1

Scope

1.    This Chapter applies to the preparation, adoption and application of all sanitary and phytosanitary (hereinafter referred to as "SPS") measures of a Party which may, directly or indirectly affect trade between the Parties.

2.    This Chapter does not affect the rights of the Parties under Chapter 5 (Technical Barriers to Trade) with respect to measures not within the scope of this Chapter.

ARTICLE 6.2

Objectives

The objectives of this Chapter are to:

(a)    enhance the effective implementation of the principles and disciplines of the SPS Agreement and international standards, guidelines and recommendations developed by relevant international organisations;

(b)    protect human, animal or plant life or health in the territory of each Party while facilitating trade between the Parties and to ensure that SPS measures adopted by each Party do not create unnecessary obstacles to trade;

(c)    strengthen communication and cooperation on, and resolution of SPS matters that affect trade between the Parties and other agreed matters of mutual interest; and

(d)    promote greater transparency and understanding in the application of each Party's SPS measures.

ARTICLE 6.3

Definitions

1.    For the purposes of this Chapter:

(a)    the definitions contained in Annex A of the SPS Agreement apply;

(b)    "competent authorities" means each Party's authorities responsible for developing, implementing and administering SPS measures within its territory; and

(c)    "SPS Committee" means the Committee on Sanitary and Phytosanitary Measures referred to in Article 6.11 (Committee on Sanitary and Phytosanitary Measures) established pursuant to Article 17.2 (Specialised Committees).

2.    The Parties may agree on other definitions for the application of this Chapter taking into consideration the glossaries and definitions of the 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 the International Plant Protection Convention (hereinafter referred to as "IPPC").

ARTICLE 6.4

General Provisions

1.    The Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement.

2.    Each Party shall apply the SPS Agreement in the development, application or recognition of any SPS measure with the aim of facilitating trade between the Parties while protecting human, animal or plant life or health in its territory.

ARTICLE 6.5

Competent Authorities and Contact Points

1.    To ensure close and effective working relationships between the Parties in achieving the objectives of this Chapter, the competent authorities are:

(a)    in the case of Viet Nam, responsibility for SPS matters is shared between governmental agencies as follows:

(i)    the Ministry of Agriculture and Rural Development, or its successor, is responsible for animal and plant health; it administers surveillance and control measures to prevent the introduction of diseases which negatively affect human and animal health; it also administers a comprehensive program to control and prevent the incursion of diseases and pests which negatively affect plant health and the economy; and, for animal and plant products destined for exportation, it is also responsible for inspection, for quarantine and for the issuance of certifications attesting to the agreed standards and requirements of the Union; and

(ii)    the Ministry of Health, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade, or their respective successors, are, in accordance with their respective competences, responsible for the safety of food destined for human consumption; for the importation of food, they administer surveillance and control measures, including the development of national technical regulations and approval procedures, the conduct of risk assessment of products and inspections of establishments, to ensure the compliance with the agreed standards and requirements of Viet Nam; for the exportation of food, they are also responsible for inspection and for the issuance of health certifications;

(b)    in the case of the Union, responsibility is shared between the administrations of the Member States and the European Commission as follows:

(i)    as regards exports to Viet Nam, the Member States are responsible for the control of the production conditions and requirements, including statutory inspections and issuing health and animal welfare certifications attesting to compliance with Viet Nam's standards and requirements;

(ii)    as regards imports from Viet Nam, the Member States are responsible for controlling compliance of imports with the Union's import conditions;

(iii)    the European Commission is responsible for overall coordination, inspection and audits of inspection systems and the necessary legislative action to ensure uniform application of standards and requirements within the Union's internal market.

2.    As of the date of entry into force of this Agreement, the competent authorities of each Party shall provide each other with a contact point for communication on all matters arising under this Chapter. The contact points' functions shall include:

(a)    enhancing communication among the Parties' agencies and ministries responsible for SPS matters; and

(b)    facilitating information exchange in order to enhance mutual understanding of each Party's SPS measures, the regulatory processes that relate to those measures and their impact on trade in the products concerned between the Parties.

3.    The Parties shall ensure that the information provided under paragraphs 1 and 2 is kept up to date.

ARTICLE 6.6

Import Requirements and Procedures

1.    The general import requirements of a Party shall be applicable to the entire territory of the exporting Party, without prejudice to the ability of the importing Party to take decisions and measures in accordance with the criteria set out in Article 6.9 (Measures linked to Animal and Plant Health).

2.    Each Party shall adopt only measures that are scientifically justified, consistent with the risk involved and that represent the least restrictive measures available and result in minimum impediment to trade.

3.    The importing Party shall ensure that its import requirements and procedures are applied in a proportional and non-discriminatory manner.

4.    The import procedures shall aim at minimising negative trade effects and expedite the clearance process while complying with the importing Party's requirements and procedures.

5.    The importing Party shall ensure full transparency of its import requirements and procedures.

6.    The exporting Party shall ensure compliance with the import requirements of the importing Party.

7.    Each Party shall establish and update lists of regulated pests, using scientific terminology, and make such lists available to the other Party.

8.    Phytosanitary import requirements shall be restricted to measures ensuring the respect for the appropriate level of protection of the importing Party, and limited to the regulated pests of concern to the importing Party. Without prejudice to Article 6 of the IPPC, a Party shall not impose or maintain phytosanitary measures for non-regulated pests.

9.    A pest risk analysis undertaken by a Party shall be carried out without undue delay after the initial request of the exporting Party. In case of difficulties, the Parties shall agree within the SPS Committee on a time schedule for carrying out the pest risk analysis.

10.    The importing Party shall have the right to carry out import checks based on the SPS risks associated with imports. Those checks shall be carried out without undue delay and with a minimum impediment to trade. If products do not conform to the requirements of the importing Party, any action taken by the importing Party shall be in conformity with the international standards and proportionate to the risk caused by the product.

11.    The importing Party shall make available the information about the frequency of import checks carried out on products. This frequency may be adapted as a consequence of verifications or import checks, or by mutual agreement between the Parties.

12.    Any fees imposed for the procedures related to the import of products under this Chapter 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.

ARTICLE 6.7

Verifications

1.    In order to obtain or maintain confidence in the effective implementation of this Chapter, the importing Party has the right to carry out verifications, including:

(a)    by conducting verification visits to the exporting Party to verify all or part of the exporting Party's control system, in accordance with the relevant international standards, guidelines and recommendations of the Codex Alimentarius, OIE and IPPC; the expenses of such verification visits shall be borne by the Party carrying out the verification visit; and

(b)    by information requests to the exporting Party about its control system and the results of the controls carried out under that system.

2.    Each Party shall provide the other Party with the results and conclusions of the verification visits carried out in the territory of the other Party.

3.    If the importing Party decides to carry out a verification visit to the exporting Party, it shall notify the exporting Party of this visit at least 60 working days before such verification visit is carried out, unless agreed otherwise. Any modification to this verification visit shall be mutually agreed by the Parties.

4.    The importing Party shall provide a draft verification report to the exporting Party within 45 working days of the completion of the verifications. The exporting Party shall have 30 working days to comment on the draft report. Comments made by the exporting Party shall be attached to and, where appropriate, included in the final verification report which shall be delivered within 30 working days. If, during the verification, the importing Party identifies a significant human, animal or plant health risk, it shall inform the exporting Party as quickly as possible and in any case within 10 working days following the end of the verification.

ARTICLE 6.8

Procedure for Listing of Establishments

1.    Upon request of the importing Party, the exporting Party shall inform the importing Party of its list of establishments which comply with the importing Party's requirements for approval and for which satisfactory sanitary guarantees have been provided in accordance with Annex 6A (Requirement and Procedures for Approval of Establishments for Products).

2.    Upon request of the exporting Party, the importing Party shall approve within 45 working days the list of establishments referred to in paragraph 1, without prior inspection of individual establishments.

3.    If the importing Party requests additional information, the time-period referred to in paragraph 2 shall be extended by up to 30 working days. Following the approval of the list of establishment, the importing Party shall take necessary measures, in accordance with its applicable legal procedures, to allow the importation of products concerned.

4.    If the importing Party rejects the request for approval, it should inform without delay the exporting Party of the reasons upon which that rejection was based.

ARTICLE 6.9

Measures linked to Animal and Plant Health

1.    The Parties recognise the concepts of disease-free areas, areas of low disease prevalence, and compartmentalisation in accordance with the SPS Agreement and OIE standards, guidelines or recommendations. The Parties also recognise the animal health status as determined by the OIE.

2.    The Parties recognise the concepts of pest-free areas, areas of low pest prevalence, protected zones and pest free production sites in accordance with the SPS Agreement and IPPC standards, guidelines or recommendations.

3.    The Parties shall consider factors such as geographical location, ecosystems, epidemiological surveillance, and the effectiveness of the SPS controls.

4.    The SPS Committee shall define in further detail the procedure for the recognition of the concepts referred to in paragraphs 1 and 2 taking into account the SPS Agreement and the OIE and IPPC standards, guidelines or recommendations.

5.    When the importing Party assesses the self-determination of the animal or plant health status made by the exporting Party, it shall, in principle, base its own assessment 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 and the OIE and IPPC standards, guidelines or recommendations. The importing Party shall endeavour to provide the exporting Party its decision without undue delay after the request for assessment.

6.    If the importing Party does not accept the self-determination of the animal or plant health status made by the exporting Party, it shall explain the reasons and, upon request by the exporting Party, enter into consultations as soon as possible to reach an alternative solution.

7.    The exporting Party shall provide relevant evidence in order to objectively demonstrate to the importing Party that the animal or plant health status of those areas is likely to remain unchanged. For that purpose, the exporting Party shall, upon request by the importing Party, give the importing Party reasonable access for inspection, testing and other relevant procedures.

ARTICLE 6.10

Equivalence

1.    The Parties recognise that the application of equivalence in Article 4 of the SPS Agreement is an important tool for trade facilitation and has mutual benefits for both exporting and importing countries.

2.    Equivalence can be accepted for a specific SPS measure or measures related to a certain product or categories of products, or on a systems-wide basis.

3.    The importing Party shall accept the SPS measures and systems of the exporting Party as equivalent if the exporting Party objectively demonstrates that its measures achieve the importing Party's appropriate level of SPS protection. To facilitate a determination of equivalence, the importing Party shall, upon request, explain the objective of any relevant SPS measures to the other Party.

4.    Within three months of the date of receipt by the importing Party of a request from the exporting Party, the Parties shall hold consultations in order to determine the equivalence of SPS measures and systems.

5.    The importing Party shall make a determination of equivalence without undue delay after the exporting Party has demonstrated the equivalence of the proposed SPS measures and systems.

6.    The importing Party shall accelerate the determination of equivalence in particular in respect of those products which it has historically imported from the exporting Party.

7.    In case of multiple requests from the exporting Party, the Parties shall agree within the SPS Committee on a time schedule in which they shall initiate the process.

8.    In accordance with Article 9 of the SPS Agreement, the importing Party shall give full consideration to the requests by the exporting Party for technical assistance to facilitate the implementation of this Article. This assistance may, inter alia, help to identify and implement measures which can be recognised as equivalent or to otherwise enhance market access.

9.    The consideration by the importing Party of a request from the exporting Party for recognition of equivalence of its SPS measures with regard to a specific product shall not be in itself a reason to disrupt or suspend ongoing imports from that Party of that product. When the importing Party has made an equivalence determination, the Parties shall formally record it and apply it without delay to trade between them in the relevant area.

ARTICLE 6.11

Committee on Sanitary and Phytosanitary Measures

1.    The SPS Committee established pursuant to Article 17.2 (Specialised Committees) shall include representatives of the competent authorities of the Parties. All decisions made by the SPS Committee shall be by mutual agreement.

2.    The SPS Committee shall meet in person within one year of the entry into force of this Agreement. It shall meet at least annually thereafter or as mutually determined by the Parties. It shall establish its rules of procedure at its first meeting. It shall meet in person, via teleconference, video-conference, or through other means as mutually agreed by the Parties.

3.    The SPS Committee may propose to the Trade Committee to establish working groups which shall identify and address technical and scientific issues arising from this Chapter and explore opportunities for further collaboration on SPS matters of mutual interest.

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

(a)    developing the necessary procedures or arrangements for the implementation of this Chapter;

(b)    monitoring the progress in the implementation of this Chapter;

(c)    providing a forum for discussion of problems arising from the application of certain SPS measures with a view to reaching mutually acceptable solutions and promptly addressing any matters that may create unnecessary obstacles to trade between the Parties;

(d)    providing a forum to exchange information, expertise and experiences in the field of SPS matters;

(e)    identifying, initiating and reviewing technical assistance projects and activities between the Parties; and

(f)    carrying out any other function as mutually agreed between the Parties.

5.    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, equivalence and alternative measures, and any other matter referred to under this Article.

ARTICLE 6.12

Transparency and Exchange of Information

1.    The Parties shall:

(a)    ensure transparency as regards SPS measures applicable to trade between them;

(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 them with a view to minimising their negative trade effects;

(d)    upon request of a Party, communicate the import requirements that apply to the import of a particular product within 15 working days of the date of receipt of the request; and

(e)    upon request of a Party, communicate progress achieved in processing the application for the authorisation of a particular product within 15 working days of the date of receipt of the request.

2.    When a Party has made the information available either by notification to the WTO in accordance with the relevant rules and procedures, or by publication on its official publicly and free of charge accessible websites, the exchange of information pursuant to subparagraphs (c), (d) and (e) of paragraph 1 shall not be required.

3.    All notifications under this Chapter shall be made to the contact points referred to under Article 6.5 (Competent Authorities and Contact Points).

ARTICLE 6.13

Consultations

1.    When a Party considers that an SPS measure affecting bilateral trade warrants further discussion, it may, through the contact points referred to under Article 6.5 (Competent Authorities and Contact Points), request full explanation and, if necessary, request consultations on that SPS measure. The other Party shall respond promptly to such requests.

2.    The Parties shall make every effort to reach, within an agreed timeframe, a mutually acceptable solution through consultations. Should the consultations fail to resolve the matter, it shall be considered by the SPS Committee.

ARTICLE 6.14

Emergency Measures

1.    Each Party shall notify in writing to the other Party within two working days any serious or significant risk to human, animal or plant life or health, including any food emergencies, affecting products for which trade between the Parties takes place.

2.    Where a Party has serious concerns regarding a risk to human, animal or plant life or health affecting products for which trade between the Parties takes place, it may request consultations in accordance with Article 6.13 (Consultations). The consultations shall take place as soon as possible. Each Party shall endeavour to provide in due time all necessary information to avoid disruption in trade.

3.    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.

4.    The Party taking the measures shall inform the other Party as soon as possible and in any case no later than 24 hours after the adoption of the measure. Either Party may request any information related to the SPS situation and any measures adopted. The other Party shall reply as soon as the requested information is available.

5.    Upon request of either Party and in accordance with Article 6.13 (Consultations) the Parties shall hold consultations regarding the situation within 10 working days of the notification referred to in paragraph 1. The consultations shall be held with a view to avoiding unnecessary disruptions to trade. The Parties may consider options for the facilitation of the implementation or the replacement of the SPS measures.

ARTICLE 6.15

Technical Assistance and Special and Differential Treatment

1.    The Union should provide technical assistance to address specific needs of Viet Nam to comply with the Union's SPS measures, including food safety, animal and plant health, and the use of international standards.

2.    In accordance with Article 10 of the SPS Agreement, in the case of new SPS measures, the Union shall take into account the special needs of Viet Nam so as to maintain the export opportunities of Viet Nam while continuing to achieve the Union's level of protection. The SPS Committee shall be consulted upon request by either Party to reflect on and decide about:

(a)    longer timeframes for compliance;

(b)    alternative import conditions in the context of equivalence; and

(c)    technical assistance activities.

CHAPTER 7

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 objectives of promoting, developing and increasing the generation of energy from renewable and sustainable sources, particularly through facilitating trade and investment. To this effect, the Parties shall cooperate towards removing or reducing non-tariff barriers and fostering cooperation, taking into account, where appropriate, 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)    "measures requiring to form a partnership with local companies" means any requirements to jointly establish or operate with local companies a legal person, a partnership according to domestic law, a joint venture or to jointly enter into contractual relations such as business cooperation contracts with local companies;

(c)    "offset" means any undertaking that imposes the use of a local content requirement, local suppliers, technology transfer, investment, counter-trade or similar actions to encourage local development;

(d)    "renewable and sustainable sources" means sources in the form of wind, solar, geothermal, hydrothermal, ocean energy, hydropower with capacity of 50 megawatt or less, biomass, landfill gas, sewage treatment plant gas or biogases; it does not encompass products from which energy is generated; and

(e)    "service supplier" means any natural or legal person of a Party that supplies a service.

ARTICLE 7.3

Scope

1.    This Chapter applies to measures which affect trade and investment between the Parties related to the generation of energy from renewable and sustainable sources.

2.    This Chapter does not apply to research and development projects and to demonstration projects carried out on a non-commercial scale.

3.    This Chapter does not apply to projects funded and governed by agreements with international organisations or foreign governments to which the procedures or conditions of those donors apply.

4.    Subject to paragraph 5, 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 an inconsistency between this Chapter and other provisions of this Agreement, those provisions shall prevail to the extent of the inconsistency.

5.    Paragraphs (a) and (b) of Article 7.4 (Principles) apply after five years from the date of entry into force of this Agreement.

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, investors or enterprises;

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

(c)    ensure that any measures 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 amongst applicants from the Parties;

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

(i)    importation and use of products originating in the other Party, by the other Party's suppliers are subject to Articles 2.16 (Administrative Fees, Other Charges, and Formalities on Imports and Exports) and 4.10 (Fees and Charges); and

(ii)    provision of services by the other Party's suppliers are subject to Articles 8.19 (Scope and Definitions), 8.20 (Conditions for Licensing and Qualification) and 8.21 (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.    This Article applies to the products covered by the tariff headings listed in Annex 7-A (List of Tariff Headings). The Parties may agree to include other products in this list by exchange of letters.

2.    If relevant international standards established by the International Organization for Standardization or the International Electrotechnical Commission exist, the Parties shall use those international standards, or their relevant parts, as a basis for any standard, technical regulation or conformity assessment procedure, except when those international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued. In those cases, a Party shall, upon request of the other Party, identify the part of the respective standard, technical regulation or conformity assessment procedure which substantially deviate from the relevant international standard and provide justification as to the reasons for the deviation.

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

4.    A Party accepting a supplier's declaration of conformity as a positive assurance of conformity shall endeavour not to require the submission of test results.

5.    If a Party requires test reports, whether alone, as the basis of, or in conjunction with other assurances of conformity, or as positive assurance that a product is in conformity with its relevant standards or technical regulations, it shall endeavour to accept test reports in form of the International Electrotechnical Commission System of Conformity Assessment Schemes for Electrotechnical Equipment and Components (IECEE CB Scheme) Test Reports without requiring any further testing.

6.    If a Party requires third party's certification for product, it shall endeavour to accept a valid CB Test Certificate under the IECEE CB Scheme as sufficient assurance of conformity without requiring any further conformity assessment or administrative procedures or approvals.

7.    This Article is without prejudice to the Parties applying requirements not related to the products in question, such as zoning laws or building codes.

ARTICLE 7.6

Exceptions

1.    This Chapter is subject to Articles 2.22 (General Exceptions), 8.54 (General Exceptions) and 9.3 (Security and General Exceptions).

2.    Nothing in this Chapter shall be construed as preventing a Party from adopting or enforcing measures necessary for the safe operation of the energy networks concerned, or the safety of the energy supply, subject to the requirement that those 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 under like circumstances, or a disguised restriction on trade and investment between the Parties.

ARTICLE 7.7

Implementation and Cooperation

1.    The Parties shall cooperate and exchange information on any issues relating to the implementation of this Chapter in the relevant specialised committees established pursuant to Article 17.2 (Specialised Committees). The Trade Committee may decide to adopt appropriate implementing measures to this effect.

2.    The Parties shall exchange information, regulatory experiences and best practices in areas such as:

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

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

3.    The Parties shall promote cooperation, with respect to domestic or regional technical regulations, regulatory concepts, standards, requirements and conformity assessment procedures which comply with international standards, in relevant regional fora.

CHAPTER 8

LIBERALISATION OF INVESTMENT,
TRADE IN SERVICES AND ELECTRONIC COMMERCE

SECTION A

GENERAL PROVISIONS

ARTICLE 8.1

Objectives and Scope

1.    The Parties, affirming their respective commitments under the WTO Agreement and their commitment to create a better climate for the development of trade and investment between the Parties, hereby lay down the necessary arrangements for the progressive liberalisation of investment and trade in services and for cooperation on electronic commerce.

2.    Consistent with the provisions of this Chapter, each Party retains the right to adopt, maintain and enforce measures necessary to pursue legitimate policy objectives such as the protection of the environment and public health, social policy, the integrity and stability of the financial system, the promotion of security and safety, and the promotion and protection of cultural diversity.

3.    This Chapter does not apply to measures affecting natural persons seeking access to the employment market of a Party, nor does it apply to measures regarding citizenship, residence or employment on a permanent basis.

4.    Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including those 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 5 accruing to any Party under the terms of a specific commitment in this Chapter and its Annexes.

5.    Nothing in this Chapter shall be construed as limiting the obligations of the Parties under Chapter 9 (Government Procurement) or to impose any additional obligation relating to government procurement.

6.    This Chapter does not apply to subsidies granted by the Parties 6 , except for Article 8.8 (Performance Requirements).

7.    A Party's decision not to issue, renew or maintain a subsidy or grant, shall not constitute a breach of Article 8.8 (Performance Requirements), in the following circumstances:

(a)    in the absence of any of the Party's specific commitments to the investor under law or contract to issue, renew, or maintain that subsidy or grant; or

(b)    in accordance with any terms or conditions attached to the issuance, renewal or maintenance of the subsidy or grant.

8.    This Chapter does not apply to the Parties' respective social security systems or to activities in the territory of each Party, which are connected, even occasionally, with the exercise of official authority.

ARTICLE 8.2

Definitions

1.    For the purposes of this Chapter:

(a)    "aircraft repair and maintenance services during which an aircraft is withdrawn from service" means such activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include so-called line maintenance;

(b)    "computer reservation system (CRS) services" means services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued;

(c)    "cross-border supply of services" means the supply of a service:

(i)    from the territory of a Party into the territory of the other Party; or

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

(d)    "economic activities" include activities of an industrial, commercial and professional character and activities of craftsmen, but do not include activities performed in the exercise of governmental authority;

(e)    "enterprise" means a juridical person, branch 7 or representative office set up through establishment;

(f)    "establishment" means the setting up, including the acquisition, of a juridical person or creation of a branch or a representative office in the Union or in Viet Nam, respectively 8 , with a view to establishing or maintaining lasting economic links;

(g)    "ground handling services" means the supply at an airport of the following services: airline representation, administration and supervision; passenger handling; baggage handling; ramp services; catering; air cargo and mail handling; fuelling of an aircraft, aircraft servicing and cleaning; surface transport; flight operation, crew administration and flight planning. Ground handling services do not include security, aircraft repair and maintenance, or management or operation of essential centralised airport infrastructure such as de-icing facilities, fuel distribution systems, baggage handling systems, and fixed intra-airport transport systems;

(h)    "investor" means a natural person or a juridical person of a Party that seeks to establish 9 , is establishing or has established an enterprise in the territory of the other Party;

(i)    "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 or association;

(j)    "juridical person of a Party" means a juridical person of the Union or a juridical person of Viet Nam, set up in accordance with the domestic laws and regulations of the Union or its Member States, or of Viet Nam, respectively, and engaged in substantive business operations 10 in the territory of the Union or of Viet Nam, respectively;

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

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

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

(l)    "natural person" means a natural person of a Party as defined in subparagraph (h) of Article 1.5;

(m)    "operation" means, with respect to an enterprise, the conduct, management, maintenance, use, enjoyment, sale or other forms of disposal of the enterprise; 11

(n)    "selling and marketing of air transport services" means opportunities for the air carrier concerned to freely sell and market its air transport services, including all aspects of marketing such as market research, advertising and distribution; those activities do not include the pricing of air transport services nor the applicable conditions;

(o)    "services" include any service in any sector except services supplied in the exercise of governmental authority;

(p)    "services supplied and activities performed in the exercise of governmental authority" means services supplied or activities performed neither on a commercial basis nor in competition with one or more economic operators;

(q)    "service supplier" of a Party means any natural or juridical person of a Party that supplies a service; and

(r)    "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 laws and regulations. 12

2.    A juridical person is:

(a)    "owned" by natural or juridical persons of one of the Parties if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party; or

(b)    "controlled" by natural or juridical persons of one of the Parties if such persons have the power to name a majority of its directors or otherwise to legally direct its actions.

3.    Notwithstanding the definition of a "juridical person of a Party" in subparagraph 1(j), shipping companies established outside the Union or Viet Nam and controlled by nationals of a Member State of the Union or of Vietnam, respectively, shall also be covered by this Chapter if their vessels are registered in accordance with the respective domestic laws and regulations in a Member State or in Viet Nam and fly the flag of that Member State or of Viet Nam, respectively.

SECTION B

LIBERALISATION OF INVESTMENT

ARTICLE 8.3

Scope

1.    This Section applies to measures adopted or maintained by a Party affecting the establishment or the operation of an enterprise by an investor of the other Party in the territory of the Party that adopts or maintains those measures.

2.    This Section does not apply to:

(a)    audio-visual services;

(b)    mining, manufacturing and processing 13 of nuclear materials;

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

(d)    national maritime cabotage; 14

(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;

(iii)    computer reservation system (CRS) services; and

(iv)    ground handling services;

and

(f)    services supplied and activities performed in the exercise of governmental authority.

ARTICLE 8.4

Market Access

1.    With respect to market access through establishment and maintenance of an enterprise, each Party shall accord treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively.

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 in Annexes 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively, are defined as:

(a)    limitations on the number of enterprises that may perform a specific economic activity, whether in the form of numerical quotas, monopolies, exclusive rights or the requirements of an economic needs test;

(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;

(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 ventures through which an investor of the other Party may perform an economic activity; and

(f)    limitations on the total number of natural persons that may be employed in a particular sector or that an investor 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 8.5

National Treatment

1.    In the sectors inscribed in its Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments) and subject to any conditions and qualifications set out therein, each Party shall accord to investors of the other Party and to their enterprises, with respect to establishment in its territory, treatment no less favourable than that accorded, in like situations, to its own investors and to their enterprises.

2.    A Party shall accord to investors of the other Party and to their enterprises 15 , with respect to the operation of those enterprises, treatment no less favourable than that accorded, in like situations, to its own investors and to their enterprises.

3.    Notwithstanding paragraph 2 and, in the case of Viet Nam subject to Annex 8-C (Exemption for Viet Nam on National Treatment), a Party may adopt or maintain any measure with respect to the operation of an enterprise provided that such measure is not inconsistent with the commitments set out in Annexes 8-A (The Union's Schedule of Specific Commitments) and 8-B (Viet Nam's Schedule of Specific Commitments), respectively, where such measure is:

(a)    a measure that is adopted on or before the date of entry into force of this Agreement;

(b)    a measure referred to in subparagraph (a) that is being continued, replaced or amended after the date of entry into force of this Agreement, provided the measure is no less consistent with paragraph 2 after it is continued, replaced or amended than the measure as it existed prior to its continuation, replacement or amendment; or

(c)    a measure not falling within subparagraphs (a) or (b), provided it is not applied in respect of, or in a way that causes loss or damage to, enterprises established in the territory of the Party before the date of entry into force of such measure. 16

ARTICLE 8.6

Most-Favoured-Nation Treatment

1.    Each Party shall accord to investors of the other Party and to their enterprises as regards their operation in its territory, treatment no less favourable than the treatment it accords, in like situations, to investors of a third country and their enterprises.

2.    Paragraph 1 does not apply to the following sectors:

(a)    communication services, except for postal services and telecommunication services;

(b)    recreational, cultural and sporting services;

(c)    fishery and aquaculture;

(d)    forestry and hunting; and

(e)    mining, including oil and gas.

3.    Paragraph 1 shall not be construed as obliging a Party to extend to the investors of the other Party or their enterprises the benefit of any treatment granted pursuant to any bilateral, regional or multilateral agreement that entered into force before the date of entry into force of this Agreement.

4.    Paragraph 1 shall not be construed as obliging a Party to extend to the investors of the other Party or their enterprises the benefit of:

(a)    any treatment granted pursuant to any bilateral, regional or multilateral agreement which includes commitments to abolish substantially all barriers to the operation of enterprises among the parties or requires the approximation of legislation of the parties in one or more economic sectors; 17

(b)    any treatment resulting from any international agreement for the avoidance of double taxation or other international agreement or arrangement relating wholly or mainly to taxation; or

(c)    any treatment resulting from measures providing for the recognition of qualifications, licences or prudential measures in accordance with Article VII of GATS or its Annex on Financial Services.

5.    For greater certainty, the "treatment" referred to in paragraph 1 does not include dispute resolution procedures or mechanisms, such as resolution of investment disputes between investors and states, provided for in any other bilateral, regional or multilateral agreements. Substantive obligations in such agreements do not in themselves constitute "treatment" and thus cannot be taken into account when assessing a breach of this Article. Measures by a Party pursuant to those substantive obligations shall be considered "treatment".

6.    This Article shall be interpreted in accordance with the principle of ejusdem generis. 18

ARTICLE 8.7

Schedule of Specific Commitments

The sectors liberalised by each Party pursuant to this Sub-Section and the terms, limitations, conditions and qualifications referred to in Articles 8.4 (Market Access), 8.5 (National Treatment) and 8.8 (Performance Requirements) are set out in Annexes 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively.

ARTICLE 8.8

Performance Requirements

1.    In the sectors inscribed in its respective Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) and 8-B (Viet Nam's Schedule of Specific Commitments) and subject to any conditions and qualifications set out therein, a Party shall not impose or enforce any of the following requirements which are mandatory or enforceable under domestic law or under administrative rulings, in connection with the establishment or operation of any enterprises of investors of a Party or of a third country in its territory to:

(a)    export a given level or percentage of goods or services;

(b)    achieve a given level or percentage of domestic content;

(c)    purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from natural persons or enterprises in its territory;

(d)    relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such enterprise;

(e)    restrict sales of goods or services in its territory that such enterprise produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;

(f)    transfer technology, a production process or other proprietary knowledge to a natural person or enterprises in its territory; or

(g)    supply exclusively from the territory of the Party a good produced or a service provided by the enterprise to a specific regional or world market.

2.    In the sectors inscribed in its respective Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) and 8-B (Viet Nam's Schedule of Specific Commitments) and subject to any conditions and qualifications set out therein, a Party shall not condition the receipt or continued receipt of an advantage, in connection with the establishment or operation of an enterprise of an investor of a Party or of a third country in its territory, on compliance with any of the following requirements to:

(a)    achieve a given level or percentage of domestic content;

(b)    purchase, use or accord a preference to goods produced in its territory, or to purchase goods from producers in its territory;

(c)    relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such enterprise; or

(d)    restrict sales of goods or services in its territory that such enterprise produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.

3.    Paragraph 2 shall not be construed as preventing a Party from conditioning the receipt or continued receipt of an advantage in connection with any enterprise in its territory on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development in its territory.

4.    Subparagraph 1(f) shall not be construed as preventing the application of a requirement imposed or a commitment or undertaking enforced by a court, administrative tribunal or competition authority, in order to remedy an alleged violation of competition laws.

5.    Subparagraphs 1(a) to 1(c), 2(a) and 2(b) do not apply to qualification requirements for goods or services with respect to participation in export promotion and foreign aid programmes.

6.    For greater certainty, subparagraphs 2(a) and 2(b) do not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.

7.    For greater certainty, paragraphs 1 and 2 do not apply to any requirement other than the requirements set out in those paragraphs.

8.    This Article does not apply to measures adopted or maintained by a Party in accordance with subparagraph 8(b) of Article III of GATT 1994.

SECTION C

CROSS-BORDER SUPPLY OF SERVICES

ARTICLE 8.9

Scope

This Section applies to measures of the Parties affecting the cross-border supply of all services sectors with the exception of:

(a)    audio-visual services;

(b)    national maritime cabotage; 19 and

(c)    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;

(iii)    computer reservation system (CRS) services; and

(iv)    ground handling services.

ARTICLE 8.10

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 not 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;

(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 terms of designated numerical units in the form of 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, each Party shall accord to services and service suppliers of the other Party, in respect of all measures affecting the cross-border 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 the Party compared to like services or service suppliers of the other Party.

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

ARTICLE 8.12

Schedule of Specific Commitments

The sectors liberalised by each Party pursuant to this Section and the terms, limitations, conditions and qualifications referred to in Articles 8.10 (Market Access) and 8.11 (National Treatment) are set out in its Schedule of Specific Commitments included in Appendix 8-A-1 of Annex 8-A (The Union's Schedule of Specific Commitments) or Appendix 8-B-1 of Annex 8B (Viet Nam's Schedule of Specific Commitments), respectively.

SECTION D

TEMPORARY PRESENCE OF NATURAL PERSONS
FOR BUSINESS PURPOSES

ARTICLE 8.13

Scope and Definitions

1.    This Section applies to measures of a Party concerning the entry and temporary stay in its territory of business visitors, intra-corporate-transferees, business sellers, contractual service suppliers and independent professionals.

2.    For the purposes of this Section:

(a)    "business sellers" means natural persons who are representatives of a supplier of goods or services of a Party seeking entry and temporary stay in the territory of the other Party for the purpose of negotiating the sale of services or goods, or entering into agreements to sell services or goods for that supplier and who do not engage in supplying the services or the goods; 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, nor are they commission agents;

(b)    "business visitors for establishment purposes" means natural persons working in a senior position within a juridical person of a Party who are responsible for setting up an enterprise of such juridical person, provided they do not offer or provide services or engage in any other economic activity than required for establishment purposes and they do not receive remuneration from a source located within the host Party;

(c)    "contractual services suppliers" means natural persons employed by a juridical person of a Party which is not an agency for placement and supply services of personnel nor acting through such an agency, which has not been established in the territory of the other Party and which has concluded a bona fide contract 20 to supply services with a final consumer in the other Party, requiring the presence on a temporary basis of its employees in that Party, in order to fulfil the contract to provide services;

(d)    "independent professionals" means natural persons engaged in the supply of a service and established as self-employed in the territory of a Party who have not been established in the territory of the other Party and who have concluded a bona fide contract 21 other than through an agency for placement and supply services of personnel to supply services with a final consumer in the other Party, requiring their presence on a temporary basis in that Party in order to fulfil the contract to provide services;

(e)    "intra-corporate transferees" means natural persons who have been employed by a juridical person or its branch or have been partners in it for at least one year and who are temporarily transferred to an enterprise of the juridical person in the territory of the other Party, provided that the natural person concerned belongs to the categories of managers or executives, specialists or trainee employees;

(f)    "managers or executives" means natural persons working in a senior position within a juridical person of a Party, who primarily direct the management of the enterprise 22 in the other Party, and who are receiving general supervision or direction principally from the board of directors or from stockholders of the business or their equivalent, including at least:

(i)    directing the enterprise or a department or sub-division thereof;

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

(iii)    having the personal authority to recruit and dismiss or to recommend recruitment, dismissal or other personnel-related actions;

(g)    "qualifications" means diplomas, certificates and other evidence of formal qualification issued by an authority designated pursuant to legislative, regulatory or administrative provisions and certifying successful completion of professional training;

(h)    "specialists" means natural persons working within a juridical person possessing specialised knowledge essential to the establishments' areas of activity, techniques or management; in assessing such knowledge, account shall be taken not only of knowledge specific to the establishment, but also of whether the person has a high level of qualification including adequate professional experience referring to a type of work or activity requiring specific technical knowledge, including possible membership of an accredited profession; and

(i)    "trainee employees" means natural persons who have been employed by a juridical person or its branch for at least one year, and who possess a university degree and are temporarily transferred for career development purposes or to obtain training in business techniques or methods. 23

ARTICLE 8.14

Business Visitors and Intra-Corporate Transferees

1.    For the sectors liberalised in accordance with Section B (Liberalisation of Investment), each Party shall allow investors of the other Party to employ in their enterprises natural persons of that other Party provided that such employees are business visitors or intra-corporate transferees. 24

2.    The entry and temporary stay shall be:

(a)    for managers or executives, a period of up to three years;

(b)    for specialists, a period of up to three years;

(c)    for trainee employees, a period of up to one year; and

(d)    for business visitors for establishment purposes, a period of up to 90 days 25 .

3.    For every sector liberalised in accordance with Section B (Liberalisation of Investment), a Party shall not adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, limitations on the total number of natural persons that an investor may employ as business visitors for establishment purposes and intra-corporate transferees in a specific sector in the form of numerical quotas or a requirement of an economic needs test and as discriminatory limitations, unless otherwise specified in Appendix 8-A-3 of Annex 8-A (The Union's Schedule of Specific Commitments) and Appendix 8-B-2 of Annex 8-B (Viet Nam's Schedule of Specific Commitments, respectively.

ARTICLE 8.15

Business Sellers

For every sector liberalised in accordance with Section B (Liberalisation of Investment) or Section C (Cross-Border Supply of Services) and subject to any reservations listed in Appendix 8-A-3 of Annex 8-A (The Union's Schedule of Specific Commitments) and Appendix 8-B-2 of Annex 8-B (Viet Nam's Schedule of Specific Commitments), respectively, each Party shall allow the entry and temporary stay of business sellers for a period of up to 90 days 26 .

ARTICLE 8.16

Contractual Service Suppliers

1.    The Parties affirm their respective obligations arising from their commitments under GATS with respect to the entry and temporary stay of contractual services suppliers.

2.    Each Party shall allow the supply of services into its territory by contractual services suppliers of the other Party, subject to the conditions specified in paragraph 3 and any reservations listed in Appendix 8-A-3 of Annex 8-A (The Union's Schedule of Specific Commitments) and Appendix 8B-2 of Annex 8-B (Viet Nam's Schedule of Specific Commitments), respectively, for the following sectors or sub-sectors:

(a)    architectural services;

(b)    urban planning and landscape architecture services;

(c)    engineering services;

(d)    integrated engineering services;

(e)    computer and related services;

(f)    higher education services (only privately funded services);

(g)    foreign language training; and

(h)    environmental services.

3.    The commitments undertaken by the Parties are subject to the following conditions:

(a)    the natural persons shall be engaged in the supply of a service on a temporary basis as employees of a juridical person, which has obtained a service contract not exceeding 12 months;

(b)    the natural persons entering the other Party should be offering such services as employees of the juridical person supplying the services for at least two years immediately preceding the date of submission of an application for entry into the other Party, in addition, the natural persons shall possess, at the date of submission of an application for entry into the other Party, at least five years professional experience 27 in the sector of activity which is the subject of the contract;

(c)    the natural persons entering the other Party shall possess:

(i)    a university degree or a qualification demonstrating knowledge of an equivalent level 28 ; and

(ii)    professional qualifications in the case that this is required to exercise an activity pursuant to the laws, regulations or legal requirements of the Party where the service is supplied;

(d)    the natural person shall not receive remuneration for the provision of services in the territory of the other Party other than the remuneration paid by the juridical person employing the natural person;

(e)    the entry and temporary stay of natural persons within the Party concerned shall be for a cumulative period of not more than six months 29 or for the duration of the contract, whichever is less;

(f)    access accorded under this Article relates only to the service activity which is the subject of the contract and does not confer entitlement to exercise the professional title of the Party where the service is provided;

(g)    the number of persons covered by the service contract shall not be larger than necessary to fulfil the contract, as may be required by the laws and regulations or other measures of the Party where the service is supplied; and

(h)    other discriminatory limitations, including on the number of natural persons in the form of an economic needs test, specified in Appendix 8-A-3 of Annex 8-A (The Union's Schedule of Specific Commitments) and Appendix 8-B-2 of Annex 8-B (Viet Nam's Schedule of Specific Commitments).

ARTICLE 8.17

Independent Professionals

Five years after the date of entry into force of this Agreement, the Parties shall review this Section to consider establishing the modalities to extend the provisions therein to independent professionals.

SECTION E

REGULATORY FRAMEWORK

SUB-SECTION 1

DOMESTIC REGULATION

ARTICLE 8.18

Scope and Definitions

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

(a)    cross-border supply of services;

(b)    establishment and maintenance of juridical or natural persons; and

(c)    temporary stay in their respective territories of categories of natural persons.

2.    This Sub-Section only applies to sectors for which a Party has undertaken specific commitments and to the extent that these specific commitments apply.

3.    This Sub-Section does not apply to measures to the extent that they constitute limitations as scheduled under Articles 8.4 (Market Access), 8.5 (National Treatment), 8.10 (Market Access) or 8.11 (National Treatment).

4.    For the purposes of this Section:

(a)    "competent authority" means any central, regional or local government or 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 an economic activity other than services;

(b)    "licensing procedures" means administrative or procedural rules that a natural or a juridical person, seeking authorisation to carry out the activities as referred to in paragraph 1, including the amendment or renewal of a licence, must adhere to in order to demonstrate compliance with licensing requirements;

(c)    "licensing requirements" means 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 carry out the activities as referred to in paragraph 1;

(d)    "qualification procedures" means administrative or procedural rules to which a natural person must adhere in order to demonstrate compliance with qualification requirements, for the purpose of obtaining authorisation to supply a service; and

(e)    "qualification requirements" means 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 Licensing and Qualification

1.    Each Party shall ensure that measures relating to licensing requirements and procedures, as well as 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 licence shall, subject to availability, be granted as soon as it is established, on the basis of an appropriate examination that the conditions for obtaining an authorisation or licence 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 investor 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 presence of natural persons for business purposes. Where such procedures are not independent of the authority entrusted with the administrative decision concerned, each Party shall ensure that the procedures provide for an objective and impartial review.

This paragraph shall not be construed as requiring 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.    Licensing and qualification procedures and formalities shall not in themselves constitute a restriction on the supply of a service or the pursuit of any other economic activity. Each Party shall endeavour to make such procedures and formalities as simple as possible and shall not unduly complicate or delay the provision of the service. Any licensing fees 30 which the applicants may incur from their applications should be reasonable and shall not in themselves restrict the supply of the relevant 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 decisions in an independent manner and not be accountable to any person supplying the services or carrying out the economic activities for which the licence or authorisation is required.

3.    In case specific time periods for applications exist in each Party's laws and regulations, 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 the reaching of a final decision, is completed within a reasonable timeframe after the date of the submission of a complete application. Each Party shall endeavour to establish the normal timeframe for processing an application.

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

6.    Authenticated copies should be accepted, whenever 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 shall, upon formal request, also be informed of the reasons for rejection of the application. 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 2

PROVISIONS OF GENERAL APPLICATION

ARTICLE 8.21

Mutual Recognition of Professional Qualifications

1.    Nothing in this Article shall prevent a Party from requiring that natural persons possess the necessary qualifications and 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 or respective authorities, as appropriate, in their respective territories to develop and provide a joint recommendation on mutual recognition of professional qualifications to the Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement established pursuant to Article 17.2 (Specialised Committees). Such a joint recommendation shall be supported by evidence of:

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

(b)    the compatibility of the respective regimes, such as 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.    Upon receipt of a joint recommendation, the Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement shall, within a reasonable period of time, review the joint recommendation with a view to determining whether it is consistent with this Agreement.

4.    Where, on the basis of the information provided for in paragraph 2, the joint 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.

SUB-SECTION 3

COMPUTER SERVICES

ARTICLE 8.22

Understanding on Computer Services

1.    To the extent that trade in computer services is liberalised in accordance with Section B (Liberalisation of Investment), Section C (Cross-Border Supply of Services) and Section D (Temporary Presence of Natural Persons for Business Purposes), the Parties shall comply with paragraphs 2 to 4.

2.    The Parties understand that CPC 31 84 which is the United Nations code used for describing computer and related services, covers the basic functions used to provide 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 these basic functions. 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:

(a)    consulting, 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 computer programmes;

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

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

(e)    training services for staff of clients, relating to computer programmes, 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 32 by both electronic and other means. In these cases, it is important to distinguish between the computer and related services, such as web-hosting or application hosting, and the other service 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 33

ARTICLE 8.23

Prevention of Anti-Competitive Practices in the Postal Services Sector

Each Party shall maintain or introduce appropriate measures for the purposes of preventing suppliers who, alone or together, have the ability to affect materially the terms of participation in the relevant markets for postal services as a result of use of their position in the market, from engaging in or continuing anti-competitive practices.

ARTICLE 8.24

Licences

1.    Where a Party requires a licence for providing postal services, it shall make publicly available:

(a)    all the licensing criteria and the period of time normally required to reach a decision concerning an application for a licence; and

(b)    the terms and conditions of such licence.

2.    The reasons for the denial of a licence shall be made known to the applicant upon request and an appeal procedure through a relevant regulatory body shall be established by each Party. The appeal procedure shall be transparent, non-discriminatory and based on objective criteria.

ARTICLE 8.25

Postal Regulatory Authority

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

SUB-SECTION 5

TELECOMMUNICATIONS NETWORKS AND SERVICES

ARTICLE 8.26

Scope

1.    This Sub-Section sets out principles of the regulatory framework for the provision of public telecommunications networks and services, liberalised pursuant to Section B (Liberalisation of Investment), Section C (Cross-Border Supply of Services) and Section D (Temporary Presence of Natural Persons for Business Purposes).

2.    This Sub-Section does not apply to any measure adopted or maintained by a Party relating to broadcasting 34 or cable distribution of radio or television programming.

ARTICLE 8.27

Definitions

For the purposes of this Sub-Section:

(a)    "end user" means a final service consumer or a final 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;

(b)    "essential facilities" means facilities of a public telecommunications network and 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;

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

(d)    "major supplier" means a supplier of public telecommunications services which has the ability to materially affect the terms of participation, having regard to price and supply, in the relevant market for public telecommunications services as a result of control over essential facilities or use of its position in the market;

(e)    "number portability" means the ability of end users of public telecommunications services who so request to retain, at the same location, the same telephone numbers when switching between the same category of suppliers of public telecommunications services;

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

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

(h)    "regulatory authority" in the telecommunications sector means the body or bodies charged by a Party with the regulation of telecommunications;

(i)    "telecommunications network" means transmission systems and, where applicable, switching or routing equipment and other resources, including network elements which are not active, which permit the conveyance of signals by wire, radio, optical, or other electromagnetic means;

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

(k)    "user" means a service consumer or a service supplier.

ARTICLE 8.28

Regulatory Authority

1.    The regulatory authority shall be separate from, and not accountable to, any supplier of public telecommunications networks or services.

2.    The decisions of and the procedures used by regulators shall be impartial with respect to all market participants. To that end, a Party that retains ownership or control of providers of telecommunications networks or services shall ensure that regulatory actions, decisions or measures taken by the regulatory authority with respect to such providers do not discriminate against and, as a result, materially disadvantage any of their competitors.

3.    The regulatory authority shall be sufficiently empowered to regulate the sector, and have adequate financial and human resources to carry out the tasks assigned to it.

4.    The tasks to be undertaken by a regulatory authority shall be made public in an easily accessible and clear form, in particular when those tasks are assigned to more than one body.

5.    The powers of the regulatory authority shall be exercised transparently and in a timely manner.

6.    Regulatory authorities shall have the power to ensure that suppliers of telecommunications networks and services 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. The information requested shall be no more than is necessary to allow the performance of the regulatory authorities' tasks and treated in accordance with the requirements of confidentiality.

ARTICLE 8.29

Authorisation to Provide Telecommunications Networks and Services

1.    Each Party shall ensure that licensing procedures should be publicly available, including:

(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 licence.

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

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

4.    Any licensing fees 35 which the applicants may incur from their application to get a licence shall be reasonable and shall not in themselves restrict the supply of the service.

ARTICLE 8.30

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.

2.    The current state of allocated frequency bands shall be made publicly available but detailed identification of radio spectrum allocated for specific government uses shall not be required.

3.    Decisions on allocating and assigning spectrum and frequency management are not measures that are per se inconsistent with Article 8.4 (Market Access), Article 8.8 (Performance Requirements) 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 in a manner that takes into account existing and future needs.

ARTICLE 8.31

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 of a major supplier 36 , including private leased circuits, offered within or across the borders of that Party on reasonable, nondiscriminatory and transparent terms and conditions, including as set out in paragraphs 2 and 3.

2.    Each Party shall ensure that suppliers of public telecommunications services requesting to have access to the network of a major supplier 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.

4.    Each Party shall ensure that suppliers that acquire information from another supplier in the process of negotiating access use that information solely for the purpose for which it was supplied and at all times respect the confidentiality of information transmitted or stored.

ARTICLE 8.32

Interconnection

1.    Each Party shall ensure that any suppliers of public telecommunications services shall have the right, and when requested by another supplier, the obligation, to negotiate interconnection with each other for the purposes of providing public telecommunications networks and services.

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

3.    For public telecommunications services, each Party shall ensure interconnection with a major 37 supplier at any technically feasible point in the network. Such interconnection shall be provided:

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

(b)    in a timely fashion, on terms, conditions (including in relation to technical standards, 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 users, subject to charges that reflect the cost of construction of necessary additional facilities.

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

5.    Major suppliers shall make publicly available either their interconnection agreements or their reference interconnection offers where appropriate.

ARTICLE 8.33

Competitive Safeguards on Major Suppliers

The Parties shall introduce or maintain appropriate measures for the purposes of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anticompetitive practices. These anti-competitive practices in their territories include, in particular:

(a)    engaging in anti-competitive cross-subsidisation;

(b)    using information obtained from competitors with anti-competitive results; and

(c)    not making available to other services suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to provide services.

ARTICLE 8.34

Universal Service

1.    Each Party shall have the right to define the kind of universal service obligation it wishes to maintain. Each Party shall administer any universal service obligation that it maintains in a transparent, non-discriminatory, and competitively neutral manner and shall ensure that its universal service obligation is not more burdensome than necessary for the kind of universal service that it has defined.

2.    The designation of universal service suppliers shall be made through an efficient, transparent and non-discriminatory mechanism.

ARTICLE 8.35

Number Portability

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

ARTICLE 8.36

Confidentiality of Information

Each Party shall ensure the confidentiality of telecommunications and related traffic data by means of a public telecommunications network and publicly available telecommunications services without restricting trade in services.

ARTICLE 8.37

Resolution of Telecommunications Disputes

1.    In the event of a dispute arising between suppliers of telecommunications networks or services in connection with rights and obligations that arise from this Sub-Section, the regulatory authority concerned shall, at the request of either party concerned, issue a binding decision to resolve the dispute in the shortest possible timeframe and in any case within a reasonable period of time, except in exceptional circumstances.

2.    Where a dispute referred to in paragraph 1 concerns the cross-border provision of services, the regulatory authorities concerned shall coordinate their efforts in order to induce a resolution of the dispute.

3.    The decision of the regulatory authority shall be made available to the public, having regard to the requirements of business confidentiality. The parties concerned shall be given a full statement of the reasons on which it is based and shall have the right to appeal that decision in accordance with paragraph 5.

4.    The procedure referred to in paragraphs 1, 2 and 3 shall not preclude either party concerned from bringing an action before the courts.

5.    Any user or supplier affected by the decision of a regulatory authority shall have a right to appeal against that decision to an appeal body that is independent of the party involved. This body, which may be a court, shall have the appropriate expertise to carry out its functions effectively. The merits of the case shall be duly taken into account and the appeal mechanism shall be effective. Where the appeal body is not judicial in character, written reasons for its decision shall always be given and its decisions shall also be subject to review by an impartial and independent judicial authority. Decisions taken by appeal bodies shall be effectively enforced. Pending the outcome of the appeal, the decision of the regulatory authority shall stand, unless interim measures are granted in accordance with the domestic laws and regulations.

ARTICLE 8.38

Co-location

1.    Each Party shall ensure that major suppliers in its territory:

(a)    provide to suppliers of public telecommunications networks or services of the other Party that are facilities-based suppliers in the territory of that Party, physical co-location of equipment necessary for interconnection; and

(b)    in situations where physical co-location referred to in subparagraph (a) is not practical for technical reasons or because of space limitations, cooperate with suppliers of public telecommunications networks or services of the other Party that are facilities-based suppliers in the territory of that Party, to find and implement a practical and commercially viable alternative solution.

2.    Each Party shall ensure that major suppliers in its territory provide to suppliers of public telecommunications networks or services the physical co-location or practical and commercially viable alternative solution referred to in paragraph 1 in a timely manner and on terms and conditions, including technical standards and specifications, and at rates that are reasonable having regard to economic feasibility, non-discriminatory and transparent.

3.    Each Party may determine, in accordance with its domestic laws and regulations, the locations at which it requires major suppliers in its territory to provide the physical colocation or the practical and commercially viable alternative solutions referred to in paragraph 1.

ARTICLE 8.39

Leased Circuits Services

Each Party shall, unless it is not technically feasible, ensure that major suppliers in its territory make leased circuits services that are public telecommunications services, available to suppliers of public telecommunications networks or services of the other Party in a timely manner and on terms and conditions (including technical standards and specifications), and at rates that are reasonable having regard to economic feasibility, non-discriminatory and transparent.

ARTICLE 8.40

Unbundled Network Elements

Each Party shall ensure that their telecommunications regulatory authority has the power to require major suppliers to meet reasonable requests by suppliers of public telecommunications networks or services for access to, and use of, specific network elements, on an unbundled basis, in a timely manner and on terms and conditions that are reasonable, transparent, and nondiscriminatory. Each Party shall determine such specific network elements requested to be made available in its territory in accordance with its domestic laws and regulations.

SUB-SECTION 6

FINANCIAL SERVICES

ARTICLE 8.41

Scope and Definitions

1.    This Sub-Section sets out the principles of the regulatory framework for all financial services liberalised pursuant to Section B (Liberalisation of Investment), Section C (Cross-Border Supply of Services) and Section 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 offered by a financial service supplier of a Party; financial services comprise the following activities:

(i)    insurance and insurance-related services:

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

(1)    life; and

(2)    non-life;

(B)    reinsurance and retrocession;

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

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

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

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

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

(C)    financial leasing;

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

(E)    guarantees and commitments;

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

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

(2)    foreign exchange;

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

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

(5)    transferable securities; and

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

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

(H)    money broking;

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

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

(K)    provision and transfer of financial information, and financial data processing and the provision of related software by suppliers of other financial service; and

(L)    advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs 2(a)(ii)(A) to 2(a)(ii)(K), 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 seeks to provide or provides financial services but does not include a public entity;

(c)    "new financial service" means a service of a financial nature including services relating to existing and new products or the manner in which a product is delivered, which 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, 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, where applicable.

ARTICLE 8.42

Prudential Carve-Out

1.    Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining 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; or

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

2.    The measures referred to in paragraph 1 shall not be more burdensome than necessary to achieve their aim.

3.    Nothing in this Agreement shall be construed as requiring 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 endeavour to ensure that internationally agreed standards for regulation and supervision in financial services and for the fight against tax evasion and avoidance are implemented and applied in its territory. Such internationally agreed standards are, inter alia, the Core Principle for Effective Banking Supervision of the Basel Committee, the Insurance Core Principles of the International Association of Insurance Supervisors, the Objectives and Principles of Securities Regulation of the International Organization of Securities Commissions, the Agreement on Exchange of Information on Tax Matters of the Organisation for Economic Cooperation and Development, the Statement on Transparency and Exchange of Information for Tax Purposes of the G20 and the Forty Recommendations on Money Laundering and the Nine Special recommendations on Terrorist Financing of the Financial Action Task Force.

5.    The Parties take note of the Ten Key Principles for Information Exchange promulgated by the Finance Ministers of the G7 Nations.

6.    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 8.43

Transparent Regulation

Each Party shall make available to interested persons its requirements for completing applications relating to the supply of financial services.

Upon the request of an applicant, the concerned Party shall inform the applicant of the status of its application. If the concerned Party requires additional information from the applicant, it shall notify the applicant without undue delay.

ARTICLE 8.44

New Financial Services

Each Party shall permit a financial service supplier of the other Party to provide any new financial service that the former Party would permit its own financial service suppliers to provide in accordance with its domestic laws and regulations, in like situations, provided that the introduction of the new financial services does not require a new law or modification of an existing law. A Party may determine the institutional and legal form through which the service may be provided and may require authorisation for the provision of the service. Where such authorisation is required, a decision shall be made within a reasonable time and the authorisation may only be refused for prudential reasons.

ARTICLE 8.45

Data Processing

1.    Each Party shall adopt or maintain appropriate safeguards to protect personal data and privacy, including individual records and accounts.

2.    No later than two years from the date of entry into force of this Agreement, each Party shall permit financial service suppliers 38 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 suppliers.

3.    Nothing in this Article restricts the right of a Party to protect personal data and privacy, so long as such right is not used to circumvent this Agreement.

ARTICLE 8.46

Specific Exceptions

1.    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 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 laws and regulations, by financial service suppliers in competition with public entities or private institutions.

2.    Nothing in this Agreement, except for Section B (Liberalisation of Investment) which is subject to paragraph 3, shall apply to activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary policy or exchange rate policies.

3.    Nothing in Section B (Liberalisation of Investment) shall apply to non-discriminatory measures of general application taken by any public entity in pursuit of monetary policy or exchange rate policy.

4.    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 laws and regulations, by financial service suppliers in competition with public entities or private institutions.

5.    For greater certainty, the Parties understand that paragraphs 1 and 4 shall not be construed as permitting the Parties to apply, without protecting the rights of affected investors or investments, measures referred to in those paragraphs when the activities or services mentioned therein have been liberalised or may be carried out, as provided by the Party's domestic laws and regulations, by financial services suppliers in competition with public entities or private institutions.

ARTICLE 8.47

Self-Regulatory Organisations

When a Party requires membership of, participation in or access to any self-regulatory organisation 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 Articles 8.5 (National Treatment), 8.6 (Most-Favoured-Nation Treatment) and 8.11 (National Treatment).

ARTICLE 8.48

Clearing and Payment Systems

Under the terms and conditions that accord national treatment as provided for in Articles 8.5 (National Treatment) and 8.11 (National Treatment), each Party shall grant to financial service suppliers of the other Party established in its territory 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 shall not confer access to the Party's lender of last resort facilities.

SUB-SECTION 7

INTERNATIONAL MARITIME TRANSPORT SERVICES

ARTICLE 8.49

Scope, Definitions and Principles

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

2.    For the purposes of this Sub-Section:

(a)    "container station and depot services" means activities consisting in storing containers, whether in port areas or inland, with a view to their stuffing or stripping, repairing and making them available for shipments;

(b)    "customs clearance services" or alternatively, "customs house brokers' services" means activities consisting in carrying out on behalf of another party customs formalities concerning import, export or through transport of cargoes, whether this service is the main activity of the service provider or a usual complement of its main activity;

(c)    "feeder services" means the pre- and onward transportation by sea, between ports located in the territory of a Party, of international cargo, notably containerised, en route to a destination outside the territory of that Party;

(d)    "freight forwarding services" means the activity consisting of organising and monitoring shipment operations on behalf of shippers, through the acquisition of transport and related services, preparation of documentation and provision of business information;

(e)    "international cargo" means cargo transported between a port of one Party and a port of the other Party or of a third country, or between a port of one Member State of the Union and a port of another Member State of the Union;

(f)    "international maritime transport services" means the transport of passengers or cargo by sea-going vessels between a port of a Party and a port of the other Party or of a third country including the direct contracting with providers of other transport services, with a view to cover multimodal transport operations under a single transport document, but not the right to provide such other transport services;

(g)    "maritime auxiliary services" means maritime cargo handling services, customs clearance services, container station and depot services, maritime agency services and maritime freight forwarding services;

(h)    "maritime cargo handling services" means activities exercised by stevedore companies, including terminal operators but not including the direct activities of dockers, when this workforce is organised independently of the stevedoring or terminal operator companies; the activities covered include the organisation and supervision of:

(i)    the loading or discharging of cargo to or from a ship;

(ii)    the lashing or unlashing of cargo; and

(iii)    the reception or delivery and safekeeping of cargoes before shipment or after discharge;

and

(i)    "multimodal transport operations" means the transport of cargo using more than one mode of transport, involving an international sea-leg, under a single transport document.

3.    In view of the existing levels of liberalisation between the Parties in international maritime transport the following principles apply:

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

(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, with regard to, inter alia, access to ports, use of infrastructure and use of maritime auxiliary services, as well as related fees and charges, customs facilities and access to berths and facilities for loading and unloading;

(c)    each Party shall permit international maritime service suppliers of the other Party to have an enterprise in its territory under conditions of establishment and operation in accordance with the conditions set out in its Schedule of Specific Commitments;

(d)    the Parties shall make available to international maritime transport suppliers of the other Party, on reasonable and non-discriminatory terms and conditions, the following services at the port: pilotage, towing and tug assistance, provisioning, fuelling and watering, garbage collecting and ballast waste disposal, port captain's services, navigation aids, emergency repair facilities, anchorage, berth and berthing services as well as shore-based operational services essential to ship operations, including communications, water and electrical supplies;

(e)    the Union, subject to the authorisation by its competent authorities, shall permit the international maritime transport service suppliers of Viet Nam to re-position their owned or leased empty containers which are not being carried as cargo against payment and are transported for their use in handling their cargo in foreign trade, between ports of a Member State of the Union;

(f)    Viet Nam, subject to the authorisation by its competent authorities, 39 shall permit the international maritime transport service suppliers of the Union or its Member States to reposition their owned or leased empty containers, which are not being carried as cargo against payment and are transported for their use in handling their cargo in foreign trade, between Quy Nhon port and Cai MepThi Vai port. After five years from the date of entry into force of this Agreement, Viet Nam shall permit the international maritime transport service suppliers of the Union or its Member States to reposition owned or leased empty containers, which are not being carried as cargo against payment and are transported for their use in handling their cargo in foreign trade, between its national ports with the condition that the fed vessels (namely mother vessels) should call at ports of Viet Nam;

(g)    the Union, subject to the authorisation by its competent authorities, shall permit international maritime transport service suppliers of Viet Nam to provide feeder services between their national ports;

(h)    Viet Nam, subject to the authorisation by its competent authorities, 40 shall permit international maritime transport service suppliers of the Union or its Member States to provide feeder services between Quy Nhon port and Cai MepThi Vai port for their own vessels with the condition that the fed vessels (namely mother vessels) should call at Cai MepThi Vai port.

4.    In applying the principles referred to in subparagraphs 3(a) and 3(b), 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)    abstain, upon the date of entry into force of this Agreement, from introducing or applying any unilateral measures or 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.

SECTION F

ELECTRONIC COMMERCE

ARTICLE 8.50

Objective and Principles

The Parties, recognising that electronic commerce increases trade opportunities in many sectors, shall 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.

ARTICLE 8.51

Customs Duties

The Parties shall not impose customs duties on electronic transmissions.

ARTICLE 8.52

Regulatory Cooperation on Electronic Commerce

1.    The Parties shall maintain a dialogue on regulatory issues raised by electronic commerce, which shall, 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 in the ambit of electronic commerce; and

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

2.    This dialogue may take the form of exchange of information on the Parties' respective laws and regulations on the issues referred to in paragraph 1 as well as on the implementation of such laws and regulations.

SECTION G

EXCEPTIONS

ARTICLE 8.53

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 between countries where like conditions prevail, or a disguised restriction on establishment or operation of an enterprise or cross-border supply of services, nothing in this Chapter shall be construed as preventing the adoption or enforcement by any Party of measures:

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

(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 investors 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; or

(iii)    safety;

or

(f)    inconsistent with paragraphs 1 or 2 of Article 8.5 (National Treatment) or paragraph 1 of 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, investors or services suppliers of the other Party. 41

SECTION H

INSTITUTIONAL PROVISION

ARTICLE 8.54

Committee on Investment, Trade in Services,
Electronic Commerce and Government Procurement

1.    The Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement established pursuant to Article 17.2 (Specialised Committees) shall be composed of representatives of the Parties.

2.    The Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement shall be responsible for the implementation of this Chapter. To that end it shall monitor and regularly review the implementation by the Parties and consider any matter in relation to this Chapter that is referred to it by a Party.

3.    The responsibility for Chapter 9 (Government Procurement) is set out in Article 9.23 (Committee on Investment, Services, Electronic Commerce and Government Procurement).

CHAPTER 9

GOVERNMENT PROCUREMENT

ARTICLE 9.1

Definitions

For the purposes of this Chapter:

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

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

(c)    "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;

(d)    "government procurement" means the process by which a procuring entity as defined in subparagraph (l) obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or use in the production or supply of goods or services for commercial sale or resale;

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

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

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

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

(i)    "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;

(j)    "offset" means any condition or undertaking that encourages local development or improves a Party's balance-of-payments accounts, such as the use of domestic content, of domestic suppliers, the licensing and transfer of technology, investment, countertrade and similar action or requirement;

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

(l)    "procuring entity" means an entity listed in each Party's Annex to this Chapter;

(m)    "publish" means to disseminate information in paper format or by electronic means that is distributed widely and is readily accessible to the general public;

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

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

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

(q)    "supplier" means a person or group of persons that provides or could provide goods or services to a procuring entity; and

(r)    "technical specification" means a tendering requirement that:

(a)    sets out the characteristics of:

(i)    goods to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production; or

(ii)    services to be procured, including quality, performance and safety or the processes or methods for their provision;

or

(b)    addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.

ARTICLE 9.2

Scope and Coverage

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 government procurement:

(a)    of goods, services, or any combination thereof, as specified in Annexes 9-A (Coverage of Government Procurement for the Union) and 9-B (Coverage of Government Procurement for Viet Nam);

(b)    by any contractual means, including purchase, lease, and rental, with or without an option to buy;

(c)    for which the value, as estimated in accordance with paragraphs 6 and 7, equals or exceeds the relevant threshold specified in each Party's Annex to this Chapter, at the time of publication of a notice in accordance with Article 9.6 (Notices); and

(d)    that is not otherwise excluded from coverage in paragraph 3, or each Party's Annex to this Chapter, or by the effect of any other relevant parts of this Agreement.

3.    Except where provided otherwise in each Party's Annex to this Chapter, 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, including its procuring entities, provides, including cooperative agreements, grants, subsidies, loans, equity infusions, guarantees, fiscal incentives, and contributions in kind;

(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; and

(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 organisation or funded by international or foreign grants, loans or other assistance where the recipient Party, including its procuring entities, is bound to apply particular procedures or conditions imposed by the international organisation or other donors for the benefit of their international or foreign grants, loans or other assistance. Where the procedures or conditions of the international organisation or donor do not restrict the participation of suppliers, the procurement shall be subject to paragraphs 1 and 2 of Article 9.4 (General Principles); or

(iii)    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.

4.    Annex 9-A (Coverage of Government Procurement for the Union) and Annex 9-B (Coverage of Government Procurement for Viet Nam) specify in its Sections for each Party the following information:

(a)    in Section A, the central government entities whose procurement is covered by this Chapter;

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

(c)    in Section C, other entities whose procurement is covered by this Chapter;

(d)    in Section D, the goods covered by this Chapter;

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

(f)    in Section F, the construction services covered by this Chapter;

(g)    in Section G, any general notes; and

(h)    in Section H, the means for publishing the procurement information.

5.    Transitional measures for the application of this Chapter are set out in Section I (Transitional Measures) of Annex 9-B (Coverage of Government Procurement for Viet Nam).

6.    If the domestic legislation of a Party allows a covered procurement to be carried out on behalf of the procuring entity by other entities or persons whose procurement is not covered with respect to the goods and services concerned, the provisions of this Chapter equally apply.

Valuation

7.    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 this procurement is awarded to one or more suppliers at the same time or over a given period of time, taking into account all forms of remuneration, including:

(i)    premiums, fees, commissions and interest; and

(ii)    the total value of any option clause.

8.    For recurring contracts that consist, due to an individual requirement of the procurement, in awarding more than one contract, or in awarding contracts in separate parts, the calculation of the estimated maximum total value shall be based on:

(a)    the value of recurring contracts of the same type of good or service awarded during the preceding 12 months or the procuring entity's preceding fiscal year, adjusted, where possible, to take into account anticipated changes in the quantity or value of the good or service being procured over the following 12 months; or

(b)    the estimated value of recurring contracts of the same type of good or service to be awarded during the 12 months following the initial contract award or the procuring entity's fiscal year.

ARTICLE 9.3

Security and General Exceptions

1.    Nothing in this Agreement shall be construed as preventing a Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.

2.    Subject to the requirement that such measures are not applied in a manner which would constitute a disguised restriction on international trade, nothing in this Agreement shall be construed as preventing a Party from imposing or enforcing measures:

(a)    necessary to protect public morals, order or safety;

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

(c)    necessary to protect intellectual property; or

(d)    relating to goods or services of persons with disabilities, philanthropic institutions, non-profit institutions carrying out philanthropic activities 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 offering the goods or services of both Parties, 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 less favourably than another locally established supplier on the basis of the degree of foreign affiliation or ownership; or

(b)    discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of the other Party.

Compliance and Conduct of Procurement

3.    Each Party shall ensure that its procuring entities comply with this Chapter in conducting covered procurements.

4.    A procuring entity shall conduct covered procurement in a transparent and impartial manner that:

(a)    is consistent with this Chapter, by using one of the following methods of open tendering, selective tendering or limited tendering; and

(b)    avoids conflicts of interest and prevents corrupt practices, in accordance with relevant domestic laws and regulations.

5.    Nothing in this Chapter shall prevent a Party, including its procuring entities, from developing new procurement policies, procedures, or contractual means, provided that they are not inconsistent with this Chapter.

Use of Electronic Means

6.    The Parties shall endeavour to conduct covered procurement by electronic means. This includes the publication of procurement information, notices and tender documentation, the reception of tenders and, where appropriate, the use of electronic auctions.

7.    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 the establishment of the time of receipt and the prevention of inappropriate access.

Rules of Origin

8.    A Party shall not apply to covered procurement of goods or services imported or supplied from the other Party rules of origin that are different compared to the rules of origin it 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

9.    With regard to covered procurement and subject to the relevant Annex to this Chapter, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset.

Measures Not Specific to Procurement

10.    Paragraphs 1 and 2 do not apply to:

(a)    customs duties and charges of any kind imposed on, or in connection with, importation;

(b)    the method of levying such duties and charges; and

(c)    other import regulations or formalities and measures affecting trade in services other than measures governing covered procurement.

ARTICLE 9.5

Information on the Procurement System

1.    Each Party shall:

(a)    promptly publish any measure of general application, including standard contract terms mandated by law or regulation, regarding covered procurement in officially designated paper or electronic medium; and

(b)    provide upon request of the other Party, to the extent possible, an explanation thereof.

2.    Section H (Publication of Procurement Information) of each Party's Annex to this Chapter lists the paper or electronic medium through which the Party publishes the information described in paragraph 1 and the notices required by Article 9.6 (Notices), paragraph 7 of Article 9.8 (Qualification of Suppliers) and paragraph 3 of Article 9.17 (Post-Award Information).

ARTICLE 9.6

Notices

Notice of Intended Procurement

1.    For each covered procurement, except in the circumstances referred to in Article 9.14 (Limited Tendering), a procuring entity shall publish a notice of intended procurement in the appropriate paper or electronic medium listed in Section H (Publication of Procurement Information) of the Annexes to this Chapter. The notice published in an electronic medium shall remain available at least until expiration of the time period indicated in the notice. The notices shall:

(a)    for procuring entities covered by Section A (Central Government Entities), be accessible by electronic means free of charge through a single point of access specified in Section H (Publication of Procurement Information); and

(b)    for procuring entities covered by Section B (Sub-Central Government Entities) or C (Other Covered Entities), where accessible by electronic means, be provided, at least, through links in a single gateway electronic site that is accessible free of charge.

The Parties, including their procuring entities covered by Sections B (Sub-Central Government Entities) or C (Other Covered Entities), are encouraged to publish their notices by electronic means free of charge through a single point of access.

2.    Except as otherwise provided for in this Chapter, each notice of intended procurement shall include:

(a)    the name and address of the procuring entity and other information necessary to contact the procuring entity and obtain all relevant documents relating to the procurement, including information on the cost and terms of payment for obtaining those documents, 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)    if possible, for recurring contracts, an estimate of the timing of subsequent notices of intended procurement;

(d)    where appropriate, 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, where appropriate, 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 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 the official language at the place of the procuring entity;

(j)    a list and brief description of any conditions for participation of suppliers, including, where appropriate, 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 Chapter.

Summary Notice

3.    For each case of intended procurement, a procuring entity shall publish a summary notice in English that is readily accessible free of charge through an electronic medium listed in Section H (Publication of Procurement Information) at the same time as the publication of the notice of intended procurement. The summary notice shall contain at least the following information:

(a)    the subject-matter of the procurement;

(b)    the final date for the submission of tenders or, 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.

4.    The Union shall provide technical and financial assistance to Viet Nam in order to develop, establish and maintain an automatic system for the translation and publication of summary notices in English. This cooperation is addressed in Article 9.21 (Cooperation) of this Chapter. The implementation of this paragraph is subject to the realisation of the initiative on technical and financial assistance for the development, establishment and maintenance of an automatic system for the translation and publication of summary notices in English in Viet Nam.

Notice of Planned Procurement

5.    Procuring entities are encouraged to publish as early as possible in each fiscal year a notice regarding their future procurement plans (hereinafter referred to as "notice of planned procurement"), which should include the subject-matter of the procurement and the planned date of the publication of the notice of intended procurement.

6.    A procuring entity covered by Sections B (Sub-Central Government Entities) or C (Other Covered Entities) 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 to the procuring entity, and a statement that interested suppliers should express their interest in the procurement to the procuring entity.

ARTICLE 9.7

Conditions for Participation