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Title: FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF CHINA (TAIWAN), THE REPUBLIC OF EL SALVADOR AND THE REPUBLIC OF HONDURAS
Announced Date: 2007-05-07
Attachment:
1. Signed on May 7, 2007;
 
PREAMBLE

The Government of the Republic of China (Taiwan), the Government
of the Republic of El Salvador and the Government of the
Republic of Honduras determined to:

STRENGTHEN the traditional bonds of friendship and the spirit of
cooperation among their countries;

RECOGNIZE the strategic and geographic position of each nation
within its respective regional market;

REACH a better balance in their trade relations;

CREATE an expanded and secure market for goods and services
produced in their territories;

RECOGNIZE the differences in the levels of development and the
size of their economies and the need to create opportunities for
economic development;

AVOID distortions in their reciprocal trade;

ESTABLISH clear rules of mutual benefit governing trade of their
goods and services, and for the promotion and protection of the
investments in their territories;

RESPECT the rights and obligations derived from the Marrakesh
Agreement Establishing the World Trade Organization (WTO), as
well as other bilateral and multilateral cooperation instruments;

STRENGTHEN the competitiveness of their enterprises in global
markets;

CREATE employment opportunities and improve living standards in
their territories;

PROMOTE economic development in accordance with the protection
and conservation of the environment, as well as sustainable
development;

PRESERVE their capacity to safeguard the public welfare; and

PROMOTE the dynamic participation of different economic agents,
in particular the private sector, in deepening the trade
relations among their nations;

HAVE AGREED as follows:

PART ONE: GENERAL ASPECTS

CHAPTER 1: INITIAL PROVISIONS

Article 1.01 Establishment of a Free Trade Area
1. The Parties to this Agreement, consistent with Article XXIV
of the General Agreement on Tariffs and Trade 1994 and
Article V of the General Agreement on Trade in Services,
hereby establish a free trade area.
2. Except as otherwise provided, the Republic of El Salvador and
the Republic of Honduras, considered individually, will apply
this Agreement on a bilateral basis with the Republic of
China (Taiwan). This Agreement does not apply to the trade
relations between the Republic of El Salvador and the
Republic of Honduras.

Article 1.02 Objectives
1. The objectives of this Agreement are to:
(a) promote the expansion and diversification of trade of goods
and services between the Parties;
(b) eliminate barriers to trade in, and facilitate the
cross-border movement of goods and services between the
territories of the Parties;
(c) promote fair competition between the Parties;
(d) promote, protect and substantially increase investments in
each Party;
(e) create effective procedures for the implementation and
application of this Agreement, and for its joint
administration and dispute settlement; and
(f) establish a framework for further bilateral cooperation
based on mutually agreed terms and conditions in order to
expand and enhance the benefits of this Agreement.
2. The Parties shall interpret and apply the provisions of this
Agreement in the light of its objectives set out in paragraph
1 and in accordance with applicable rules of international
law.

Article 1.03 Relation to Other International Agreements
1. The Parties reaffirm their rights and obligations with
respect to each other under the WTO Agreement and other
agreements to which the Parties are party.
2. In case of any inconsistency between the provisions of this
Agreement and the provisions of the agreements mentioned in
paragraph 1, the provisions of this Agreement shall prevail,
unless otherwise agreed.
3. In the event of any inconsistency between this Agreement and
the specific trade obligations set forth in:
(a) the Convention on International Trade in Endangered Species
of Wild Fauna and Flora (CITES), done at Washington, March
3, 1973, as amended June 22, 1979;
(b) the Montreal Protocol on Substances that Deplete the Ozone
Layer, done at Montreal, September 16, 1987, as amended
June 29, 1990 and September 27, 1997; or
(c) the Basel Convention on the Control of Trans-boundary
Movements of Hazardous Wastes and their Disposal, done at
Basel, March 22, 1989;
such obligations shall prevail to the extent of the
inconsistency, provided that where a Party has a choice among
equally effective and reasonably available means of complying
with such obligations, the Party chooses the alternative that is
the least inconsistent with the other provisions of this
Agreement.

Article 1.04 Extent of Obligations
Each Party shall ensure, in conformity with its Constitutional
rules, the adoption of all necessary measures to comply with the
provisions of this Agreement in its territory and at all levels
of government.

Article 1.05 Succession of Agreements
Any reference in this Agreement to any other treaty or
international agreement shall be made in the same terms to its
successor treaty or international agreement to which the Parties
are party.

CHAPTER 2: GENERAL DEFINITIONS

Article 2.01 Definitions of General Application
For purposes of this Agreement, unless otherwise agreed, the
following terms shall be understood as:

chapter: the first two digits of the Harmonized System;
Commission: the Administrative Commission of the Agreement
established in accordance with Article 14.01 (Administrative
Commission of the Agreement);
customs duty: any tax, tariff or duty on imports or any charge
of any type collected in relation to the import of goods,
including any type of surtax or surcharge on imports, except:
(a) any charge equivalent to an established internal tax in
accordance with Article III.2 of the GATT 1994;
(b) any fee or other charge related to the import, proportional
to the cost of services rendered;
(c) premium offered or collected on an imported good arising
out of any tendering system in respect to the
administration of quantitative import restrictions, tariff
rate quota or tariff preference quota; and
(d) antidumping or countervailing duty that is applied pursuant
to a Party's domestic law and applied consistently with
Chapter 7 (Unfair Trade Practices);
Customs Valuation Agreement: the WTO Agreement on Implementation
of Article VII of the General Agreement on Tariffs and Trade
1994;
days: calendar days, including Saturdays, Sundays, and holidays;
enterprise: any legal entity constituted or organized under
applicable law, whether or not for profit, and whether
privately-owned or governmentally-owned, including any
corporation, trust, partnership, sole proprietorship, joint
venture, or other association;
enterprise of a Party: an enterprise constituted or organized
under the law of a Party;
existing: in effect on the date of entry into force of this
Agreement;
GATS: the WTO General Agreement on Trade in Services;
GATT 1994: the WTO General Agreement on Tariffs and Trade 1994;
goods: any matter, material, product or part;
goods of a Party: domestic products as these are understood in
the GATT 1994, or such goods as the Parties may agree, and
includes originating goods of that Party;
Harmonized System (HS): the Harmonized Commodity Description and
Coding System, including its General Rules of Interpretation,
Section Notes, and Chapter Notes, chapters, headings,
subheadings, as adopted and implemented by the Parties in their
respective tariff laws;
heading: the first four digits in the tariff classification
number under the Harmonized System;
measure: any law, regulation, procedure, requirement, provision
or practice, among others;
national: a natural person of a Party according to Annex 2.01;
originating goods: goods that qualify as originating according
to the rules established in Chapter 4 (Rules of Origin);
Party: the Republic of China (Taiwan), the Republic of El
Salvador or the Republic of Honduras, for which this Agreement
is in force;
person: a natural person, or an enterprise; person of a Party: a
national or an enterprise of a Party;
person of a Party: a national or an enterprise of a Party;
producer: a person who manufactures, produces, processes or
assembles a good, or who cultivates, grows, develops, raises,
exploits a mine, extracts, harvests, fishes, hunts, collects,
gathers, or captures a good;
Secretariat: "Secretariat" as established in accordance with
Article 14.03 (Secretariat);
state enterprise: an enterprise that is owned or controlled by a
Party through ownership interests;
subheading: the first six digits in the tariff classification
number under the Harmonized System;
tariff reduction schedule: "tariff reduction schedule”, as
established in Annex 3.04 (Tariff Reduction Schedule);
territory: the land, maritime and air space of each Party,
including the exclusive economic zone and the continental shelf,
within which each exercises sovereign rights and jurisdiction in
accordance with international and domestic law;
TRIPS: the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights;
Uniform Regulations: "Uniform Regulations", as established in
Article 5.11 (Uniform Regulations); and
WTO Agreement: the Marrakesh Agreement Establishing the World
Trade Organization, done on April 15, 1994.

PART TWO: TRADE IN GOODS

CHAPTER 3: NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

Section A Definitions and Scope of Application

Article 3.01 Definitions
For purposes of this Chapter, unless otherwise agreed in this
Agreement, the following terms shall be understood as:
agricultural products or agricultural goods: the products listed
in Annex I of the WTO Agreement on Agriculture, and including
any future amendments agreed at the WTO;
commercial samples of negligible value:
(a) raw materials and goods of which dimensions, quantities,
weight, volume or presentation are such that indicate
without a doubt that they are not for any other use than
demonstrations or proof;
(b) objects of common materials fixed over cards, supports or
clearly presented as samples, according to trade uses;
(c) raw materials and goods, as well as the surplus of those
raw materials and goods that have been disabled for other
use rather than demonstration, by laceration, perforation,
marked permanently, or any other way that effectively
prevent their commercialization; and
(d) goods that cannot be subject to the conditions established
in subparagraphs (a) through (c), consisting in:
(i) nonconsumer good, with no more than one (1) US dollar
unit value, composed by unique specimens in each series
or quality; and
(ii) consumer goods with no more than one (1) US dollar unit
value, including those composed totally or partially of
specimens of the same type or quality, as long as the
quantity and form of presentation exclude all
possibility of commercialization; and
printed advertising materials: products classified in chapter 49
of the Harmonized System, including brochures, pamphlets,
leaflets, trade catalogues, yearbooks published by trade
associations, and tourist promotional materials and posters that
are used to promote, publish, or advertise an originating good
or service, and are supplied free of charges.

Article 3.02 Scope of Application
Except as otherwise provided in this Agreement, this Chapter
applies to the trade in goods between the Parties.

Section B National Treatment

Article 3.03 National Treatment
1. Each Party shall accord national treatment to the goods of
the other Party in accordance with Article III of GATT 1994,
including its interpretative notes, and for that matter, the
Article III of GATT 1994 and its interpretative notes are
incorporated into and made part of this Agreement.
2. The provisions on paragraph 1 regarding the national
treatment shall mean, with respect to a Party, including its
departments, counties, or provinces, a treatment not less
favourable than the most favourable treatment that this Party
accords to any like, directly competitive, or substitutable
goods of its national origin.
3. Paragraphs 1 and 2 shall not apply to the measures set out in
Annex 3.03.

Section C Tariffs

Article 3.04 Tariff Reduction Schedule
1. Unless otherwise provided in this Agreement, no Party may
increase any existing tariff rate nor adopt any new customs
tariff on originating goods.
2. The Parties agree to establish the tariff reduction schedule
in Annex 3.04 for the originating goods.
3. Except as otherwise provided in this Agreement each Party
shall progressively eliminate its customs duties on goods in
accordance with its schedules to Annex 3.04 and Annex 3.14.
4. Paragraphs 1 and 3 do not intend to impede a Party to create
a new subheading duty, if the customs tariff applied for is
not higher than the tariff applied to the fraction.
5. Paragraphs 1 and 3 of this Article are not intended to
prevent a Party from maintaining or increasing a customs duty
as may be authorized by any dispute settlement provision of
the Dispute Settlement Agreement of the WTO.
6. Upon request by either Party, the Parties shall hold
consultations to examine the possibility to improve the
tariff treatment of each Party established in Annex 3.04. An
agreement between the Parties of improving the tariff
treatment of a good, shall prevail over any customs tariff or
preference established in their schedules for that specific
good, once approved by each Party in accordance with its
applicable legal procedures.
7. Paragraph 1 of this Article does not prevent a Party from
increasing a customs tariff to a level not higher than that
established in Annex 3.04 if previously this customs tariff
had been unilaterally reduced to a level lower than that
established in Annex 3.04.
8. During the tariff reduction process, the Parties commit
themselves to apply in their reciprocal trade of originating
goods, the lowest customs tariff, obtained by comparing the
level established in accordance with its respective Tariff
Reduction Schedule and the level in force according to
Article I of GATT 1994.

Article 3.05 Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for the
following goods, regardless of their origin:
(a) professional equipment, including equipment for the press
and television, broadcasting and cinematographic equipment,
necessary for carrying out the business activities, trade,
or profession of a business person who qualifies for
temporary entry pursuant to the laws of the importing Party
activities;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising films and recordings; and
(d) goods imported for sports purposes.
2. Each Party, shall, at the request of an interested person,
and for reasons deemed valid by its customs authority, extend
the time limit for temporary admission beyond the period
initially fixed, pursuant to its domestic law.
3. No Party shall condition the duty-free temporary admission of
goods referred to in paragraph 1, other than to require that
such goods:
(a) not be sold or leased in its territory;
(b) be accompanied by a bond in an amount no greater than the
duties and charges that would otherwise be owed on entry or
final importation, reimbursable or releasable on
exportation of the good;
(c) be capable of identification when exported;
(d) be exported within such other period related to the purpose
of the temporary admission as the Party may establish, or
within one year, unless extended;
(e) be admitted in quantities no greater than is reasonable for
their intended use; and
(f) be otherwise admissible into the territory of the Party
under its domestic laws.
4. If any condition that a Party imposes under paragraph 3 has
not been fulfilled, the Party may apply the customs duty and
any other charge that would normally be owed on the goods
plus penalties provided for under its domestic law.
5. Each Party, through its customs authority, shall adopt
procedures providing for the expeditious release of goods
admitted under this Article.
6. Each Party shall permit goods temporarily admitted under this
Article to be exported through a customs port other than that
through which they were admitted.
7. Each Party, through its customs authority, according to its
domestic law, shall relieve the importer or other person
responsible for the goods admitted under this Article from
any liability for failing to export the goods, provided that
satisfactory proof has been presented to customs authorities
showing that the goods have been destroyed in accordance with
the domestic laws of each Party within the given period or
any lawful extension.
8. Subject to Chapters 10 (Investment) and 11(Cross-Border Trade
in Services):
(a) each Party shall allow a container used in international
transportation that enters its territory from the territory
of the other Party to exit its territory on any route that
is reasonably related to the cost effective and prompt
departure of such container;
(b) neither Party shall require any bond or impose any penalty
or charge solely by reason of any difference between the
port of entry and the port of departure of a container;
(c) neither Party shall condition the release of any
obligation, including any bond, that it imposes in respect
of the entry of a container into its territory on its exit
through any particular port of departure; and
(d) neither Party shall require that a carrier bringing a
container from the territory of the other Party into its
territory be the same carrier that takes such container to
the territory of the other Party.

Article 3.06 Duty-Free Entries of Commercial Samples of
Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entrance to commercial samples
of negligible value and to printed advertising materials
imported from the territory of the other Party, but may require
that:
(a) such samples be imported solely for the solicitation of
orders for goods, or services provided from the territory,
of another Party or a non-Party; or
(b) such advertising materials be imported in packets that each
contain no more than one copy of each such material and
that neither such materials nor packets form part of a
larger consignment.

Article 3.07 Customs Valuation
Upon the entry into force of this Agreement, the principles of
customs valuation applied to trade between the Parties shall be
that established in the Customs Valuation Agreement, including
its annexes. Besides, the Parties shall not determine the
customs value of the goods based on the officially established
minimum value.

Section D Non-Tariff Measures

Article 3.08 Domestic Support
1. The Parties recognize that domestic support measures may be
important to their agricultural sectors, but they may also
distort trade and affect production. In this sense, the
Parties shall apply domestic support in accordance with the
Agreement on Agriculture of the WTO, or its successors, and
when a Party decides to support its agriculture producers it
shall ensure, in accordance with the relevant legal
instruments, that the benefits arising from those programs do
not distort domestic trade of the other Party, nor diminish
the opportunity of the goods of the other Party to access the
market of the Party.
2. In order to ensure transparency, the Parties agree that the
Committee on Trade in Goods established pursuant to Article
3.16 shall carry out ongoing and permanent analysis of the
status of all domestic support measures, seeking to evaluate
the accomplishment of the provisions under paragraph 1.
Also, the Parties shall exchange information in a timely
manner or, at the request of a Party may engage in
consultations over this issue at any time.

Article 3.09 Agricultural Export Subsidies
The Parties agree not to adopt or maintain agricultural export
subsidies on goods in their reciprocal trade since the entry
into force of this Agreement.

Article 3.10 Import and Export Restrictions
1. The Parties agree to immediately eliminate non-tariff
barriers, with the exception of rights of the Parties under
Articles XX and XXI of GATT 1994, and those regulated in
Chapter 8 (Sanitary and Phytosanitary Measures) and Chapter 9
(Measures on Standards, Metrology and Authorization
Procedures).
2. Except as otherwise provided in this Agreement, neither Party
may adopt or maintain any prohibition or restriction on the
importation of any goods of the other Party or on the
exportation or sale for export of any goods destined to the
territory of the other Party, except in accordance with
Article XI of GATT 1994, including its interpretative notes.
To this end, Article XI of GATT 1994 and its interpretative
notes, are incorporated into and form part of this Agreement.
3. The Parties reaffirm their rights and obligations under GATT
1994, that prohibit, under any circumstances any form of
restrictions, export price requirements and, except as
permitted in the enforcement of countervailing and
antidumping duty orders and undertakings, import price
requirements, including minimum prices and reference prices.
4. In the event that a Party adopts or maintains a prohibition
or restriction on the importation or exportation of
originating goods from the other Party, if required, the
former Party shall establish that the measure is in
accordance with this Agreement and the WTO Agreements.
5. Paragraphs 1 through 3 shall not apply to the measures set
out in Annex 3.03.
6. If a Party has state trading enterprises, said Party shall
guarantee that their activities be carried out based solely
on considerations of a commercial nature, such as prices,
quality, availability, marketability, transportation and
other conditions of purchase or sale. The Party shall accord
to the trade of the other Party fair and equitable treatment,
to avoid these activities becoming barriers to trade, in
accordance with Article XVII of GATT 1994 including its
interpretative notes, and to this end, this Article and its
interpretative notes, are incorporated into and form part of
this Agreement.

Article 3.11 Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII.1 of
the GATT 1994 and its interpretative notes, that all fees and
charges of whatever character (other than customs duties,
charges equivalent to an internal tax or other internal
charge applied consistently with Article III.2 of the GATT
1994, and antidumping and countervailing duties) imposed on
or in connection with importation or exportation are limited
in amount to the approximate cost of services rendered and do
not represent an indirect protection to domestic products or
a taxation of imports or exports for fiscal purposes.
2. No Party may require consular transactions, including related
fees and charges, in connection with the importation of any
good of another Party.
3. Each Party shall make available and maintain through the
Internet a current list of the fees and charges it imposes in
connection with importation or exportation.

Article 3.12 Country of Origin Marking
1. The Parties confirm their rights and obligations under
Article IX of GATT 1994 and any successor agreement.
2. Each Party shall ensure that the establishment and
implementation of their laws on country of origin marking
does not have the purpose or effect of creating unnecessary
barriers to trade between the Parties.

Article 3.13 Export Taxes
Except as provided in Annex 3.03, at the time of entry into
force of this Agreement, neither Party shall adopt nor maintain
any tax, duty or charge on the export of a good to the territory
of the other Party.

Article 3.14 Special Safeguard Measures
1. The Parties may apply a Special Safeguard Measure (SSM) at
any given time in a calendar year, for those goods included
in Annex 3.14, whenever the percentage of the average imports
of a good have exceeded the trigger levels established in
Annex 3.14. The percentage shall be the average imports from
the other Party to the average imports from the globe during
the last three (3) years with importation, within the
previous five (5) years.
2. The SSM application shall consist of a tariff increase to the
level of the MFN customs tariff established either at the
time of importation or the one referred on the base rate,
whichever is lower.
3. The SSM application is not subject to any kind of
compensation.
4. The SSM duration period shall be maintained until the end of
the year.
5. The adopted SSM shall be effective on the day that said
measure is published in the media designated by each Party’s
legislation, taking into account all relevant information
that justifies its entry into force. The Party imposing the
measure shall notify it to the other Party at least thirty
(30) days before its application.
6. Notwithstanding the application of the SSM, the Parties shall
be able to hold consultations at any time in order to
exchange information and try to reach mutually beneficial
agreements.
7. Whenever new goods are incorporated into the Tariff Reduction
Schedule included in Annex 3.04, the Parties shall be able to
include them in Annex 3.14 in accordance to the national
legislation.
8. The SSM shall not apply to the goods listed under the
exclusion category or subject to a tariff quota system.

Article 3.15 Distinctive Products
The Parties shall conduct consultations in the Committee on
Trade in Goods, about the recognition of distinctive products.

Article 3.16 Committee on Trade in Goods
1. The Parties hereby establish the Committee on Trade in Goods,
which shall be composed as set out in Annex 3.16.
2. The Committee on Trade in Goods shall meet periodically, and
by request of a Party or the Commission, to ensure the
effective implementation and administration of this Chapter.
3. Without prejudice to the provisions of Article 14.05 (2)
(Committees), the Committee shall have the following
functions:
(a) supervise the implementation and administration of this
Chapter refered in paragraph 2 of this Article by the
Parties;
(b) at the request of either Party, review any proposed
modification or addition;
(c) make recommendation on modifications or additions to the
Commission;
(d) consider any other matter related to the implementation and
administration of the Chapter refered in paragraph 2 of
this Article;
(e) recomend to the Comission the establishment of
Sub-Comittees or technical groups whenever it is
appropriate; and
(f) analyze, the status of all domestic support measures of the
Parties, in an ongoing and permanent manner, as well as any
other modifications of this measures, seeking to assess
compliance with paragraph 1 of Article 3.08.

CHAPTER 4: RULES OF ORIGIN

Article 4.01 Definitions
For purposes of this Chapter, the following terms shall be
understood as:
CIF: the value of an imported good that includes the costs of
insurance and freight to the port or place of entry in the
importing Party;
FOB: free on board; regardless of the mode of transportation, at
the point of direct shipment by the seller to the buyer;
fungible goods or materials: goods or materials which are
interchangeable for commercial purposes and whose properties are
essentially identical and it is not possible to differentiate
one from another by a simple eye examination;
generally accepted accounting principles: recognized consensus
or substantial authorized support given in the territory of one
of the Parties with respect to the recording of revenues,
expenses, costs, assets and liabilities, the disclosure of
information and the preparation of financial statements.
Generally accepted accounting principles may encompass broad
guidelines for general application, as well as detailed
standards, practices and procedures;
goods wholly obtained or produced entirely in the territory of
one or more Parties:
(a) minerals extracted or obtained in the territory of one or
more Parties;
(b) vegetables and vegetable products harvested, gathered or
collected in the territory of one or more Parties;
(c) live animals born and raised in the territory of one or
more Parties;
(d) goods obtained by hunting, trapping, fishing, aquaculture,
gathering or capture in the territory of one or more
Parties;
(e) goods obtained from live animals in the territory of one or
more Parties;
(f) fish, shellfish, and other marine species obtained outside
the territorial sea of a Party, by fishing vessels
registered or recorded in a Party and fly its flag, or by
fishing vessels rented by enterprises established in the
territory of a Party;
(g) goods obtained or produced on board factory vessels from
the goods referred to in subparagraph (f) provided that
such vessels are registered or recorded in a Party and fly
its flag, or are rented by enterprises established in the
territory of a Party;
(h) goods obtained by a Party or a person of a Party from the
seabed or subsoil beneath the seabed outside the
territorial sea provided that the Party has rights to
exploit such seabed or subsoil;
(i) scrap and waste derived from manufacturing or processing
operations in the territory of one or more Parties,
provided those goods are only fit for the recovery of raw
materials; or
(j) goods produced in the territory of one or more Parties,
exclusively from goods mentioned in subparagraph (a)
through (i) above;
indirect material: a good used in the production, testing or
inspection of another good, but not physically incorporated into
the good, or a good used in the maintenance of buildings or the
operation of equipment related to the production of another
good, including:
(a) fuel, energy, solvents and catalysts;
(b) equipment, devices and supplies used in the testing or
inspection of goods;
(c) gloves, glasses, footwear, clothing, and safety equipment
and supplies;
(d) tools, dies and molds;
(e) spare parts and materials used in the maintenance of
equipment and buildings;
(f) lubricants, greases, compounding materials, and other
materials used in production, or used to operate equipment
and maintenance of buildings; and
(g) any other goods that are not incorporated into the good but
whose use in the production of the good can reasonably be
demonstrated to be a part of that production;
material: a good used in the production of another good
including ingredients, parts, components and goods that have
been physically incorporated into another good or were subject
to the production process of another good;
production: methods of obtaining goods including manufacturing,
producing, growing, assembling, processing, harvesting, raising,
breeding, mining, extracting, hunting, collecting, gathering,
fishing, trapping and capturing; and
value: the value of a good or material for purposes of
calculating customs duties or for purposes of applying this
Chapter according to the rules established in the Customs
Valuation Agreement.

Article 4.02 Application and Interpretation Instruments
1. For purposes of this Chapter:
(a) the tariff classification of goods shall be based on the
Harmonized System; and
(b) the rules of the Customs Valuation Agreement shall be used
to determine the value of a good or material.
2. For purposes of this Chapter, the Customs Valuation Agreement
shall be applied to determine the origin of a good as follows:
(a) the rules of the Customs Valuation Agreement shall be
applied to domestic transactions, with the modifications
required by the circumstances, as they should apply to
international transactions; and
(b) the provisions of this Chapter shall prevail over those of
the Customs Valuation Agreement, where there are
inconsistencies.

Article 4.03 Originating Goods
Except as otherwise provided in this Chapter, a good shall be
considered as originating in the territory of a Party, when:
(a) it is wholly obtained or produced entirely in the territory
of one or more Parties;
(b) it is produced entirely in the territory of one or more
Parties exclusively from materials that qualify as
originating according to this Chapter; or
(c) it is produced in the territory of one or more Parties from
non-originating materials that meet with a change in tariff
classification, satisfies a regional value content or other
requirements, as specified in Annex 4.03 and the good
complies with all other applicable requirements of this
Chapter.

Article 4.04 Minimal Processes or Operations
Except otherwise provided in this Chapter, the minimal processes
or operations that by themselves or in combination do not confer
origin to a good are the following:
(a) the necessary operations for the preservation of a good
during transportation or storage, including airing,
ventilation, drying, refrigeration, freezing, elimination
of damaged parts, application of oil, antirust painting or
protective coatings, or the placing in salt, sulfur dioxide
or some other aqueous solution;
(b) simple operations consisting of cleaning, washing, sifting,
straining, shaking, selection, classification or grading,
culling, peeling, shelling or striping, grain removal,
pitting, pressing or crushing, soaking, elimination of dust
or of spoiled or damaged parts, sorting, division of
consignments in bulk, grouping in packages, placing of
marks, labels or distinctive signs on products and their
packages, packing, unpacking or repackaging;
(c) combination or mixing operations of goods that have not
result in any important difference in the characteristics
of the goods before and after the combination or mixing;
(d) simple jointing or assembling of parts to produce a
complete good, or to form sets or assortments of goods; and
(e) simple water dilution operations or ionization and salting,
which have not changed the nature of the good.

Article 4.05 Indirect Materials
Indirect materials shall be considered as originating,
regardless where they are produced or manufactured, and the
value of those materials shall be included in the costs as
indicated in the accounting records of the producer of the good.

Article 4.06 Accumulation
1. Each Party shall provide that originating goods or materials
of one or more of the Parties, incorporated into a good in
the territory of another Party, shall be considered to
originate in the territory of that other Party.
2. Each Party shall provide that a good is originating when the
good is produced in the territory of one or more of the
Parties by one or more producers, provided that the good
satisfies the requirements established in Article 4.03 and
all other applicable requirements in this Chapter.

Article 4.07 Regional Value Content
1. The regional value content of the goods shall be calculated
according to the following formula:

RVC= [(TV- VNM) / TV] * 100

where:
RVC is the regional value content, expressed as a percentage;
TV is the transaction value of the good adjusted to a FOB
basis, except as otherwise provided in paragraph 2,
determined according to Articles 1 through 8 and 15 of the
Customs Valuation Agreement; and
VNM is the transaction value of the non-originating materials
adjusted to a CIF basis, except as otherwise provided in
paragraph 5, according to Articles 1 through 8 and 15 of
the Customs Valuation Agreement.
2. When the good is not exported directly by its producer, the
value shall be adjusted to the point at which the buyer
receives the good in the territory in which the producer is
located.
3. All the records of the costs considered for the calculation
of the regional value content shall be recorded and
maintained according to the generally accepted accounting
principles applicable in the territory of the Party where the
good is produced.
4. When the producer of a good acquires a non-originating
material in the territory of a Party in which the producer is
located, the value of the non-originating material shall not
include freight, insurance, packing costs and any other cost
incurred in the transportation of the material from the
supplier’s warehouse to the location of the producer.
5. For purposes of calculating the regional value content, the
value of the non-originating materials used in the production
of the good shall not include the value of the
non-originating materials used by:
(a) another producer in the production of an originating
material that is acquired and used by the producer of the
good in the production of that good; or
(b) the producer of a good in the production of a material that
is self produced.

Article 4.08 De Minimis
1. A good shall be considered originating if the value of all
non-originating materials used in the production of that good
that does not satisfy the requirement of change in tariff
classification set out in Annex 4.03 does not exceed ten
percent (10%) of the transaction value of the good, as
determined according to Article 4.07.
2. When it refers to goods classified into chapters 50 through
63 of the Harmonized System, the percentage indicated in
paragraph 1 shall refer to the weight of fibers or yarns with
respect to the weight of the good being produced.
3. Paragraph 1 shall not apply to a non-originating material
used in the production of goods classified into chapter 1
through 24 of the Harmonized System, unless the
non-originating material is classified in a different
subheading than the good for which the origin is being
determined according to this Article.

Article 4.09 Fungible Goods and Materials
1. When in the production of a good originating or
non-originating fungible goods or materials are used, the
origin of those fungible goods or materials shall be
determined through the application of one of the following
inventory management methods:
(a) first in first out (FIFO) method;
(b) last in first out (LIFO) method; or
(c) averaging method.
2. Once the inventory management method listed out in the
preceding paragraph is selected by a producer, it shall be
used during the entire period of a fiscal year of that
producer.

Article 4.10 Sets or Assortments of Goods
1. A set or assortment of goods that is classified according to
rule 3 of the General Rules of the Interpretation of the
Harmonized System, as well as the goods whose description
according to the nomenclature of the Harmonized System is
specifically that of a set or assortment, shall qualify as
originating, whenever each one of the goods contained in that
set or assortment complies with the rules of origin set out
in this Chapter and in Annex 4.03.
2. Notwithstanding paragraph 1, a set or assortment of goods
shall be considered originating, if the value of all
non-originating goods used in making the set or assortment
does not exceed the percentage set out in paragraph 1 of
Article 4.08 with respect to the value of the set or
assortment, as determined according to Article 4.07.
3. The provisions of this Article shall prevail over the
specific rules of origin set out in Annex 4.03.

Article 4.11 Accessories, Spare Parts and Tools
1. The accessories, spare parts or tools delivered with the good
that usually form part of the good shall not be taken into
account for determining whether all non-originating materials
used in the production of the good undergo the applicable
change in tariff classification set out in Annex 4.03,
provided that:
(a) the accessories, spare parts or tools are not invoiced
separately from the good; and
(b) the amount and the value of these accessories, spare parts
or tools are customary for the good.
2. When the good is subject to a requirement of regional value
content, the value of the accessories, spare parts or tools
shall be considered as originating or non-originating
materials, as the case may be, for calculating the regional
value content of the good.
3. For those accessories, spare parts or tools that do not
fulfill the conditions mentioned above, the corresponding
specific rules of origin shall apply to each of them
respectively and separately, according to this Chapter.

Article 4.12 Packaging Materials and Containers for Retail Sale
1. When packaging materials and containers in which a good is
packaged for retail sales are classified in the Harmonized
System with the good, they shall not be taken into account in
determining whether all non-originating materials used in the
production of the good undergo the applicable change in
tariff classification set out in Annex 4.03.
2. When the good is subject to a requirement of regional value
content, the value of these packaging materials and
containers shall be taken into account as originating or
non-originating materials, as the case may be, in calculating
the regional value content of the good.

Article 4.13 Packing Materials and Containers for Shipment
Containers and packing materials in which the good is packed for
shipment shall not be taken into account in determining whether:
(a) the non-originating materials used in the production of the
good undergo the applicable change in tariff classification
set out in Annex 4.03; or
(b) the good satisfies the requirement of regional value
content.

Article 4.14 Transit and Transshipment
An originating good shall not lose such status when it is
exported from a Party to another Party and during its
transportation it passes by the territory of one Party or by the
territories of one or more non-Parties, as long as it fulfills
the following requirements:
(a) the transit is justifiable by geographical reasons or by
considerations relative to requirements of international
transportation;
(b) the good has not been destined for trade, consumption, and
use in the countries of transit;
(c) during its transportation and temporary storage the good
has not undergone operations other than unloading,
reloading or any other operation necessary to preserve them
in good condition; and
(d) the good remains under the control of the customs authority
in the territory of a Party or non-Party.

Article 4.15 Committee on Rules of Origin and Customs Procedures
1. For the purposes of the effective implementation and
operation of this Chapter and Chapter 5 (Custom Procedures
Related to the Origin of Goods), the Parties shall establish
a Committee on Rules of Origin and Customs Procedures
(hereinafter referred to in this Article as“the Committee”)
pursuant to Article 14.05 (Committees).
2. The Committee shall meet when the Commission requires it or
as the Parties may agree.
3. The Committee shall have, along with the function established
in Article 14.05 (Committees), the following functions:
(a) review and make appropriate recommendations to the
Commission on the implementation and operation of this
Chapter and Chapter 5 (Custom Procedures Related to the
Origin of Goods);
(b) review and make appropriate recommendations to the
Commission on:
(i) matters relating to determinations of origin;
(ii) certificate of origin established in Article 5.02
(Origin Certification) and its filling instructions
referred to in the Uniform Regulations;
(iii) the certifying procedures established in Article 5.02
(Origin Certification) with a view to confirm whether
it would be more beneficial to the Parties to let
exporters or producers certify certificates of origin
by themselves;
(iv) the advance rulings established in Article 5.07
(Advanced Rulings); and
(v) uniform regulations established in Article 5.11 (Uniform
Regulations);
(c) modify the specific rules of origin contained in Annex 4.03;
(d) consider any other matter as the Parties may agree related
to this Chapter and Chapter 5 (Custom Procedures Related to
the Origin of Goods); and
(e) consider any other matter that the Commission may consider
necessary.
4. The Parties shall consult and cooperate to ensure that this
Chapter and Chapter 5 (Custom Procedures Related to the
Origin of Goods) are applied in an effective and uniform
manner, consistently with the spirit and the objectives of
this Agreement.
5. A Party that considers that one or more of the provisions of
this Chapter and its Annex or Chapter 5 (Custom Procedures
Related to the Origin of Goods) requires modification in
order to take into account developments in production
processes, lack of supply of originating materials, or other
relevant matters may submit a proposal of modification along
with supporting rationale and any studies to the Commission
for consideration.
6. Upon submission by a Party of a proposal of modification
under paragraph 5 of this Article, the Commission shall refer
the matter to Committee. The Committee shall meet to
consider the proposal of modification within sixty (60) days
of the date of referral or on such other date as the
Commission may decide.
7. Within the period referred in paragraph 6, the Committee
shall provide a report to the Commission, setting out its
conclusions and recommendations, if any. Upon reception of
the report, the Commission may take appropriate action under
Article 14.01 (Administrative Commission of the Agreement).

CHAPTER 5: CUSTOMS PROCEDURES RELATED TO THE ORIGIN OF GOODS

Article 5.01 Definitions
1. For purposes of this Chapter, the following terms shall be
understood as:
certificate of origin: a certificate of origin issued in the
format established in paragraph 1 of Article 5.02, completed,
signed and dated by the exporter or producer of a good in the
territory of a Party, and certified by a certifying authority of
that Party, according to the provisions of this Chapter and to
the instructions for filling the certificate.
certifying authority: in the case of the Republic of China
(Taiwan), the Bureau of Foreign Trade (BOFT), Ministry of
Economic Affairs, or its successor, or other agencies as
authorized by BOFT or its successor; in the case of the Republic
of El Salvador, the Centro de Tramites de Exportacion (CENTREX)
of the Banco Central de Reserva and/or other offices, public or
private, that are authorized by the Ministerio de Economia; and
in the case of the Republic of Honduras, the Direccion General
de Integracion Economica y Politica Comercial of the Secretaria
de Estado en los Despachos de Industria y Comercio, or its
successor;
commercial importation: the importation of a good into the
territory of a Party for sale, or for commercial, industrial or
similar purposes;
competent authority: in the case of the Republic of China
(Taiwan), the customs authority under the Ministry of Finance,
or its successor; in the case of Republic of El Salvador, the
Ministerio de Economia is responsible of aspects relative to its
administration in what proceeds, or its successor and the
Direccion General de Aduanas of the Ministerio de Hacienda is
responsible of the origin verification procedures and issuing
advanced rulings, or its successor; and in the case of the
Republic of Honduras, the Secretaria de Estado en los Despachos
de Industria y Comercio, or its successor;
customs authority: the authority, according to the respective
laws of each Party, responsible for administering and
implementing customs laws and regulations;
days: "days" as defined in Chapter 2 (General Definitions);
determination of origin: the written legal document issued by
the competent authority as a result of a procedure for verifying
whether a good qualifies as originating according to Chapter 4
(Rules of Origin);
exporter: a person located in the territory of a Party from
which the good is exported by that person and that is obligated
to keep the records referred to in paragraph 1 (a) of Article
5.05 in the territory of that Party;
identical goods: goods that are equal in all aspects, including
physical characteristics, quality and commercial prestige,
irrespective of minor differences in appearance that are not
relevant to the determination of origin of these goods according
to Chapter 4 (Rules of Origin);
importer: a person located in the territory of a Party from
which the good is imported by that person and that is obligated
to keep the records referred to in paragraph 1 (b) of Article
5.05 in the territory of that Party;
preferential tariff treatment: the application of the tariff
rate corresponding to an originating good according to the
tariff reduction schedule, pursuant to Article 3.04 (Tariff
Reduction Schedule) of this Agreement; and
producer: a person located in the territory of a Party, as
defined in Chapter 2 (General Definitions), who is obligated,
according to this Chapter, to maintain records in the territory
of that Party according to paragraph (a) of Article 5.05.
2. The definitions established in Chapter 4 (Rules of Origin)
shall be incorporated into this Chapter.

Article 5.02 Origin Certification
1. For the purposes of this Chapter, the Parties shall establish
a single format of certificate of origin, which shall enter
into force on the same day as this Agreement and may be
modified by mutual consent.
2. The certificate of origin established in paragraph 1 shall be
used to certify that a good being exported from the territory
of a Party into the territory of the other Party qualifies as
originating.
3. The certifying authority of each Party shall require its
exporters or producers to complete, sign and date a
certificate of origin for each export of goods for which an
importer of the other Party may claim preferential tariff
treatment.
4. The exporter or producer completing, signing, and dating a
certificate of origin will do so through an affidavit,
committing to assume administrative, civil or criminal
liability whenever the exporter includes false or incorrect
information in the certificate of origin.
5. The certifying authority of each Party shall certify that the
certificate of origin completed, signed and dated by the
exporter or producer of the good is correct based on the
information provided by such exporter or producer, who shall
be responsible for the accuracy and validity of the
information, and shall verify that the exporter or producer
is indeed located in that Party.
6. Each Party shall require the certificate of origin to be
sealed, signed and dated by the certifying authority of the
exporting Party with respect to the exportation of a good for
which the importer may claim preferential tariff treatment.
The certificate of origin shall contain a serial number
allowing its identification, which will be managed by the
certifying authority.
7. The certifying authority of the exporting Party shall:
(a) elaborate and implement the administrative procedures for
certifying the certificates of origin that its producer or
exporter completes, signs and dates;
(b) provide, if requested by the competent authority of the
importing Party, information about the origin of the
imported goods claiming preferential tariff treatment; and
(c) notify in writing, before this Agreement enters into force,
the list of the names of the authorized persons and, where
applicable, the list of bodies authorized to certify the
certificate of origin, with the corresponding signatures
and seals. Modifications to this list shall be notified
immediately in writing to the other Parties and shall enter
into force thirty (30) days after the date on which those
Parties receive notification of the modification. Until the
modifications enter into force, the certification will be
done by the current certifying authority.
8. Each Party shall provide that a certificate of origin shall
only be applicable to a single importation of one or more
goods into the territory of that Party.
9. Each Party shall provide that a certification of origin be
accepted by the customs authority of the importing Party for
a period of one year from the date on which the certificate
was signed and sealed by the certifying authority.
10. Each Party shall provide that when an exporter is not the
roducer of the good, complete, sign and date the certificate
of origin with basis on:
(a) the exporter’s knowledge that the good qualifies as
originating; and
(b) the certificate of origin completed, signed and dated by
the producer of the good and willingly provided to the
exporter.
11. Each Party shall provide that the preferential tariff
reatment shall not be denied only because the good covered
by a certificate of origin is invoiced by an enterprise
located in the territory of a non-Party.

Article 5.03 Obligations Regarding Importations
1. Each Party shall require the importer claiming preferential
tariff treatment for a good imported into its territory from
the territory of the other Party to:
(a) declare in writing in the importation document required by
its legislation, based on a certificate of origin that a
good qualifies as originating;
(b) have the certificate of origin in his possession at the
time the declaration is made;
(c) provide, if requested by its customs authority, the
certificate of origin or copies of it; and
(d) promptly make a corrected declaration and pay any duties
owed when the importer has reasons to believe that the
certificate of origin on which a customs declaration was
based contains incorrect information. When the importer
presents a corrected declaration, the importer may not be
sanctioned, as long as the customs authorities have not
initiated their faculties of verification and control.
2. Each Party shall provide that, if an importer in its
territory fails to comply with any requirement established in
this Chapter, it may deny the preferential tariff treatment
under this Agreement to a good imported from the territory of
the other Party.
3. Each Party shall provide that, when the importer does not
request for a preferential tariff treatment for goods
imported into its territory that would have qualified as
originating, the importer may, according to the legislation
of each Party, request the return of the customs duties paid
in excess for not having requested the preferential tariff
treatment for that good, as long as the request is
accompanied by:
(a) a written declaration, indicating that the good qualifies
as originating at the time of importation;
(b) the certificate of origin or its copy; and
(c) any other documentation related to the import of the good,
as the customs authority of that Party may require.

Article 5.04 Obligations Regarding Exportations
1. Each Party shall require its exporter or producer that has
completed, signed and dated a certificate of origin to submit
a copy of such certificate to its competent authority upon
request.
2. Each Party shall require its exporter or producer who has
completed, signed and dated a certificate of origin or
provided information for his/her certifying authority, and
has reasons to believe such certificate contains incorrect
information, to notify promptly in writing all persons to
whom that certificate was given and its certifying authority,
of any change that may affect the accuracy or validity of
that certificate, in which case, the exporter or producer may
not be penalized for having provided an incorrect certificate
or information, according to the legislation of each Party.
3. Each Party shall require a that false certificate of origin
completed, signed and dated by an exporter or a producer in
its territory that a good to be exported to the territory of
another Party is originating shall be subject to penalties
equivalent to those that would apply to an importer in its
territory that makes a false statement or representation in
connection with an importation, with appropriate
modifications.
4. The certifying authority of the exporting Party shall provide
the competent authority of the importing Party the
notification referred to in paragraph 2.

Article 5.05 Records
Each Party shall provide that:
(a) its exporter or producer who obtains a certificate of
origin and provides information to its certifying authority
shall maintain, for at least five (5) years from the date
on which the certificate is signed, all records and
documents related to the origin of the goods, including
those concerning:
(i) the purchase, costs, value, and payment of the good
exported from its territory;
(ii) the purchase, costs, value and payment of all materials,
including indirect ones, used in the production of the
good exported from its territory; and
(iii) the production of the good in the form in which it is
exported from its territory;
(b) an importer who claims preferential tariff treatment for a
good imported into that Party’s territory shall maintain a
copy of the certificate of origin and other documentation
relating to the importation for at least five (5) years
from the date of importation of the good; and
(c) the certifying authority of the exporting Party that has
issued a certificate of origin shall maintain all
documentation relating to the issuance of the certificate
for a minimum period of five (5) years from the issuing
date of the certificate.

Article 5.06 Origin Verification Procedures
1. The importing Party, through its competent authority, may:
(a) request information about the origin of a good from the
certifying authority of the exporting Party; and,
(b) request its Embassy in the territory of the other Party for
assistance in those matters.
2. For purposes of determining whether a good imported into its
territory from the territory of the other Party under
preferential tariff treatment according to this agreement
qualifies as originating, a Party may verify the origin of
the good through its competent authority by means of:
(a) written questionnaires or requests for information sent
directly to the importer in its territory or the exporter
or producer in the territory of the other Party;
(b) verification visits to the exporter or producer in the
territory of the other Party to review the records and
documents referred to in Article 5.05 (a), and to inspect
the materials and facilities used in the production of the
good in question;
(c) delegating its Embassy in the territory of the other Party
to conduct the verification visit; or
(d) other procedures as the Parties may agree to.
3. For the purposes of this Article, the questionnaires,
requests, official letters, determinations of origin,
notifications or any other written communications sent by the
competent authority to the importer, exporter or the producer
for origin verification, shall be considered valid, provided
that they are done by the following means:
(a) certified mails with receipts of acknowledgement or other
ways that confirm that the importer, exporter or producer
has received the documents;
(b) official communications through the Embassies of the
Parties whenever the competent authority requires; or
(c) any other way as the Parties may agree.
4. In a written questionnaire or request for information
referred to in paragraph 2 (a) it shall:
(a) indicate the time period, which shall be no more than
thirty (30) days from the date of receipt, that the
importer, exporter or producer has to duly complete and
return the questionnaire or provide the information
requested; and
(b) include the notification of intention to deny preferential
tariff treatment, in case the importer, exporter or
producer does not duly complete and return the
questionnaire or does not provide the information requested
within such time period.
5. The importer, exporter or producer who receives a
questionnaire or request for information according to
paragraph 2 (a) shall duly complete and return the
questionnaire or respond to the request for information
within the time period established in paragraph 4 (a) from
the date of receipt. During that time period, the importer,
exporter or producer may make a written request to the
competent authority of the importing Party for an extension
of no more than thirty (30) days. A Party shall not deny the
preferential tariff treatment based solely on the request of
an extension for completing and returning the questionnaire
or responding to the information request.
6. Each Party shall provide that, even if the answered
questionnaire or information requested referred to in
paragraph 5 has been received within the specified time
period, it may still request, through its competent
authority, additional information from the importer, exporter
or producer, by means of a subsequent questionnaire or
request. In such cases the importer, exporter or producer
shall answer the questionnaire or respond to the request
within thirty (30) days from the date of receipt.
7. If the importer, exporter or producer does not duly complete
a questionnaire, or does not return the questionnaire or
provide the information requested within the time period
established in paragraphs 4 (a), 5 and 6 above, the importing
Party may deny preferential tariff treatment to the goods
subject to verification, by issuing a written determination
of origin, including facts and the legal basis for that
determination, to the importer, exporter or producer.
8. Prior to conducting a verification visit according to
paragraph 2 (b), the importing Party shall, through its
competent authority, provide a written notification of its
intention to conduct the visit. The notification shall be
sent to the exporter or producer to be visited, the importer,
to the certifying authority and the competent authority of
the Party in whose territory the visit will be conducted,
and, if necessary, to the embassy of the other Party in the
territory of the importing Party. The competent authority of
the importing Party shall request the written consent from
the exporter or producer to be visited, to make a
verification visit.
9. The notification referred to in paragraph 8 shall include:
(a) the name of the competent authority that sends the
notification;
(b) the name of the exporter or producer to be visited;
(c) the date and place of the proposed verification visit;
(d) the objective and scope of the verification visit,
including the specific reference to the good subject to
verification;
(e) the names and positions of the officers conducting the
verification visit; and
(f) the legal basis for carrying out the verification visit.
Any modification of the information referred to in this
paragraph shall also be notified according to paragraph 8.
10. If the exporter or producer has not given his written
onsent for the making of the proposed verification visit
within the thirty (30) days of the written notification as
provided in paragraphs 8 and 9, the importing Party may deny
preferential tariff treatment to the good by notifying in
writing to the importer, exporter or producer the
determination of origin, including facts and the legal basis
for such denial.
11. When the exporter or producer receives a notification
ccording to paragraphs 8 and 9, within the fifteen (15) days
from the date on which the notification was received may,
one time only, request in writing the postponement of the
visit with the corresponding justifications, for a period no
longer than thirty (30) days from the date on which the
notification was received, or for a longer term the
competent authority of the importing Party and the exporter
or producer may agree. For these purposes, the competent
authority of the importing Party shall notify the
postponement of the visit to the importer, exporter or
producer of the good, the competent authority and the
certifying authority of the exporting Party.
12. A Party shall not deny the preferential tariff treatment
ased solely on the request to postpone the verification
visit, according to paragraph 11.
13. Each Party shall permit an exporter or producer who is
ubject to a verification visit to designate two observers to
be present during the visit, provided that the observers
only participate in that manner. Nevertheless, the failure
to designate the observers shall not be a cause for
postponing the visit.
14. Each Party shall require that an exporter or a producer
rovides the records and documents referred to in Article
5.05(a) to the competent authority of the importing Party
conducting a verification visit. If the records and
documents are not in possession of the exporter or producer,
the exporter may request to the producer of the good or the
producer may request the supplier of the materials, to
deliver these to the competent authority of the importing
Party.
15. A Party may deny the preferential tariff treatment to an
mported good subject to an origin verification, if the
exporter or producer:
(a) fails to provide the records or documents for determining
the origin of the good, in accordance with the provisions
of this Chapter and of Chapter 4 (Rules of Origin); or
(b) denies access to the records or documents.
16. Each Party, through its competent authority, shall verify
he compliance of the requirements of regional value content,
de minimis, or any other provision contained in Chapter 4
(Rules of Origin) in compliance with the generally accepted
accounting principles that apply in the territory of the
Party from which the good was exported.
17. Once the verification visit has been concluded, the
ompetent authority of the importing Party shall prepare a
minute of the visit, which shall include the facts confirmed
by it. The exporter or producer, subject to the verification
visit, may sign this minute.
18. Within a period of one hundred and twenty (120) days from
he conclusion of the verification of origin, the competent
authority of the importing Party shall issue a determination
of origin, in writing, in which it is determined if the good
qualifies or not as originating, which shall include the
factual findings and legal basis for the determination of
origin and notify the importer, exporter or producer, as
well as the competent authority and certifying authority of
the exporting Party the determination of origin.
19. When the period established in paragraph 18 concludes and
he competent authority of the importing Party does not issue
a determination of origin, the good subject to the
verification of origin shall receive the same preferential
tariff treatment as if it were an originating good.
20. Where through a verification the importing Party determines
hat an importer, exporter or a producer has provided more
than once, a false or unfounded certificate of origin or
stating that a good qualifies as originating, the importing
Party may suspend preferential tariff treatment to the
identical goods imported, exported or produced by that
person, until it is proved that such person is in compliance
with all the requirements under Chapter 4 (Rules of Origin)
and this Chapter.
21. When the competent authority of the importing Party
etermines that a good imported into its territory does not
qualify as originating, the importer must pay any custom
duties owed and other applicable charges according to the
legislation of each Party.
22. In case the preferential tariff treatment is resumed, the
ompetent authority of the importing Party shall issue a
written determination of origin in which the competent
authority of the importing Party establishes the resumption
of the preferential tariff treatment for the good, shall be
notified to the importer, exporter or producer and the
competent authority and certifying authority of the
exporting Party; which shall include the factual findings
and the legal basis of its determination.
23. A Party shall not apply a determination of origin issued
nder paragraph 18 to an importation made before the date of
entry into force of the determination origin where:
(a) the customs authority of the exporting Party issued an
advance ruling regarding the tariff classification or
valuation of one or more materials used in the good under
Article 5.07;
(b) the importing Party’s determination is based on a tariff
classification or valuation for such materials that is
different than that provided for in the advance ruling
referred to in subparagraph (a); and
(c) the customs authority issued the advance ruling before the
importing Party’s determination.

Article 5.07 Advance Rulings
1. Each Party shall, through its competent authority,
expeditiously provide a written advance ruling, prior to the
importation of a good into its territory. The advance ruling
shall be issued in response to a written application made by
an importer in its territory or an exporter or producer in
the territory of the other Party, based on the facts and
circumstances stated by such importer, exporter or producer
of the good, with respect to:
(a) whether the good qualifies as originating according to
Chapter 4 (Rules of Origin);
(b) whether the non-originating materials used in the
production of the good have undergone applicable changes on
tariff classification established in Annex 4.03 (Specific
Rules of Origin);
(c) whether the good fulfills the requirement of regional value
content established in Chapter 4 (Rules of Origin) and in
Annex 4.03 (Specific Rules of Origin);
(d) whether the method applied by an exporter or producer in
the territory of the other Party, according to the norms
and principles of the Customs Valuation Agreement, to
calculate the transaction value of a good or of the
materials used in the production of the good, with respect
to which an advance ruling is being requested, is adequate
for demonstrating whether the good satisfies a regional
value content requirement according to Chapter 4 (Rules of
Origin) and in Annex 4.03 (Specific Rules of Origin); or
(e) such other matters as the Parties may agree.
2. Each Party shall establish directives for the issuance of
advance rulings, including:
(a) the obligation of the importer to provide information
reasonably required to process an application for such
ruling;
(b) the power of the competent authority to ask at any time for
additional information from the person who applies for an
advance ruling, while evaluating such application;
(c) the obligation of the competent authority to issue an
advance ruling within a maximum period of one hundred
twenty (120) days, once all the necessary information has
been collected from the applicant; and
(d) the obligation of the competent authority to issue an
advance ruling in a complete, well-founded, and reasoned
manner.
3. Each Party shall apply an advance ruling to the imports
concerned, from the date on which the ruling is issued or a
later date indicated in the ruling, unless such ruling has
been modified or revoked according to paragraph 5.
4. Each Party shall provide any person who applies for an
advance ruling the same treatment, including the same
interpretation and application of the provisions of Chapter 4
(Rules of Origin), regarding the determination of origin as
provided for any other person, to whom an advance ruling has
been issued, whenever the facts and circumstances are
identical in all substantial aspects.
5. An advance ruling may be modified or revoked by the issuing
competent authority:
(a) when it is based on an error:
(i) in fact;
(ii) in the tariff classification of the good or materials
which are the subject of the ruling; or
(iii) in the application of the regional value content
requirement according to Chapter 4 (Rules of Origin);
(b) when the ruling is not in accordance with the
interpretation agreed by the Parties with respect to
Chapter 4 (Rules of Origin);
(c) when there is a change in the facts or circumstances on
which the ruling is based;
(d) for the purpose being in accordance with a modification of
Chapter 4 (Rules of Origin) or this Chapter; or
(e) for the purpose of complying with an administrative
decision independent from the issuing authority, a judicial
decision or to adjust to a change in the national
legislation of the Party that issued the advance ruling.
6. Each Party shall provide that any modification or revocation
of an advance ruling shall enter into force from the date on
which the modification or revocation is issued, or on such
later date as may be specified therein, and shall not be
applied to the importation of a good having occurred prior to
that date, unless the person to whom the advance ruling was
issued has not acted according to its terms and conditions.
7. Each Party shall provide that, when its competent authority
verifies the origin of a good with respect to which an
advance ruling has been issued, that authority shall evaluate
whether:
(a) the exporter or producer has complied with the terms and
conditions of the advance ruling;
(b) the operations of the exporter or producer are consistent
with the facts and circumstances on which the advance
ruling is based; and
(c) the data and calculations used in the application of
criteria or methods to calculate the regional value content
are correct in all substantial aspects.
8. Each Party shall provide that, when its competent authority
determines that any of the requirements established in
paragraph 7 has not been fulfilled, that authority may modify
or revoke the advance ruling as the circumstances warrant.
9. Each Party shall provide that, when a person to whom an
advance ruling has been issued demonstrates that he has acted
with reasonable care and in good faith while stating the
facts and circumstances on which the ruling was based, that
person shall not be penalized whenever the issuing authority
determines that the ruling was based on incorrect information.
10. Each Party shall provide that, when an advance ruling has
een issued to a person who had falsely stated or omitted
substantial facts or circumstances on which the ruling was
based, or has not acted in accordance with the terms and
conditions of the ruling, the competent authority may apply
measures against that person according to the legislation of
each Party.
11. The Parties shall provide that the holder of an advance
uling may use it solely while the facts or circumstances on
which the ruling was based are maintained. In case those
facts or circumstances have changed, the holder of the
ruling shall be allowed to present the necessary information
for the issuing authority to modify or revoke it according
to paragraph 5.
12. Any good subject to an origin verification or a request for
eview or appeal in the territory of one of the Parties,
shall not be subject to advance ruling.

Article 5.08 Confidentiality
1. Each Party shall maintain, according to its legislation, the
confidentiality of information, provided as confidential,
collected according to this Chapter and shall protect such
information from disclosure.
2. The confidential information collected in accordance with
this Chapter may only be disclosed to the authorities in
charge of the administration and enforcement of
determinations of origin, and of customs and taxation matters
according to the legislation of each Party.

Article 5.09 Penalties
Each Party shall establish or maintain measures that impose
criminal, civil or administrative penalties for violations of
its laws and regulations related to the provisions of this
Chapter.

Article 5.10 Review and Appeal
1. Each Party shall grant the same rights of review and appeal
with respect to determinations of origin and advance rulings
to its importers, or to the exporters or producers of the
other Party to whom those determinations of origin and
rulings have been issued according to Article 5.06 and
Article 5.07.
2. When a Party denied preferential tariff treatment to a good
by a determination of origin based on non-compliance with
time periods established in this Chapter, with respect to the
presentation of records or other information to the competent
authority of that Party, the decision made in the review or
appeal shall only deal with the non-compliance of the time
period to which this paragraph refers.
3. Each Party shall provide that the rights of review and appeal
referred to in paragraphs 1 and 2 shall include, in
accordance with the laws of each Party, access to:
(a) at least one level of administrative review independent of
the official or office responsible for the determination of
origin or advance ruling under review; and
(b) judicial review.

Article 5.11 Uniform Regulations
1. The Parties shall establish and implement, through their
respective laws or regulations, by the date on which this
Agreement enters into force, or at any later date as agreed
by the Parties, the uniform regulations regarding the
interpretation, application and administration of Chapter 4
(Rules of Origin), this Chapter and other matters as may be
agreed by the Parties.
2. Any modification or addition to the uniform regulation shall
be done as the Parties agree.

Article 5.12 Cooperation
1. Each Party shall notify the other Party of the following
determinations, measures and rulings, including, to the
extent possible, the ones to be applied:
(a) a determination of origin issued as a result of a
verification of origin conducted according to Article 5.06,
once the review and appeal referred to in Article 5.10 are
exhausted;
(b) a determination of origin that the Party considers contrary
to a ruling issued by the competent authority of the other
Party on the tariff classification or the value of a good,
or of the materials used in the manufacturing of a good;
(c) a measure that establishes or significantly modifies an
administrative policy that may in the future affect the
determinations of origin; and
(d) an advance ruling, and its revocation or modification,
issued according to Article 5.07.
2. The Parties shall cooperate:
(a) in the enforcement of their respective customs laws or
regulations, for the implementation of this Agreement, and,
if applicable, under mutual customs assistance agreements,
or in any another customs related agreement which they are
parties to;
(b) to the extent possible and for the purpose of facilitating
the flow of trade between their territories, in customs
issues such as the collection and exchange of statistics
regarding the importation and exportation of goods, and the
exchange of information;
(c) to the extent possible, in the collection and exchange of
documentation on customs procedures; and
(d) in searching for a mechanism with the purpose of
discovering and preventing the illegal transshipment of
goods from a Party or non-Party.

CHAPTER 6: SAFEGUARD MEASURES

Article 6.01 Definitions
For the purposes of this Chapter, the following terms shall be
understood as:
Agreement on Safeguards: the Agreement on Safeguards which forms
part of the WTO Agreement, its modifications or any successor
agreement;
causal link: as defined in Agreement on Safeguards;
critical circumstances: those circumstances where delay of the
application of the safeguard measure would cause damage that
would be difficult to repair;
domestic industry: the producers as a whole of the like or
directly competitive goods operating within the territory of a
Party, or those whose collective output of the like or directly
competitive goods constitutes a major proportion of the total
domestic production of those goods;
investigating authority: the investigating authority shall be:
(a) in the case of the Republic of China (Taiwan), the
International Trade Commission of the Ministry of Economic
Affairs, or its successor;
(b) in the case of the Republic of El Salvador, the Direccion
de Administracion de Tratados Comerciales del Ministerio de
Economia, or its successor; and
(c) in the case of the Republic of Honduras, the Direccion
General de Integracion Economica y Politica Comercial de la
Secretaria de Estado en los Despachos de Industria y
Comercio, or its successor;
safeguard measure: all kinds of tariff measures as applied in
accordance with the provisions of this Chapter, with the
exception of any derived safeguard measure of an initiated
procedure before the entering into force of this Agreement [1];
serious injury: as defined in the Agreement on Safeguards;
threat of serious injury: as defined in the Agreement on
Safeguards; and
transition period: a period of ten (10) years as of the date
this Agreement enters into force; except when it refers to a
good where tariffs should be eliminated in a period of more than
ten (10) years, according to the Schedule on Annex 3.04 (Tariff
Reduction Schedule) of the Party that applies the measure, in
which case transition period means the one set out in the
aforementioned Schedule.

Article 6.02 Bilateral Safeguard Measures
1. All the substantive aspects, procedures and in general the
application of the safeguard measures shall be governed by
this Chapter, and Article XIX of GATT 1994, the Agreement on
Safeguards and the applicable legislation for each Party as
suppletory.
2. During the transition period, each Party may apply a
safeguard measure according to the procedure established in
this Chapter if, as a result of the reduction or elimination
of a customs tariff in accordance with this Agreement, an
originating good from 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
constitute a substantial cause of serious injury, or a threat
thereof, to the domestic industry of the like or directly
competitive good.
3. The importing Party may to the extent necessary to prevent or
remedy serious injury, or the threat thereof:
(a) suspend the further reduction of any customs tariff
provided for under this Agreement on the good; or
(b) increase the customs tariff on the good to a level not to
exceed the lesser of:
(i) the Most Favored Nation (MFN) applied customs tariff in
effect at the time the measure is taken; or
(ii) the MFN applied customs tariff in effect on the day
immediately preceding the date of entry into force of
this Agreement.
4. The Republic of El Salvador and the Republic of Honduras
shall have the right to extend the period of application of a
safeguard measure for up to an additional two (2) years
beyond the maximum period provided for in Article 6.02,
paragraph 5.
5. The following conditions shall be observed in the proceeding
that may result in the application of a safeguard measure
according to paragraph 2:
(a) a Party shall, without delay and in writing, notify the
other Party of the initiation of the proceeding which could
have as a consequence the application of a safeguard
measure against a good originating in the territory of the
other Party;
(b) any safeguard measure shall be initiated no later than one
(1) year from the date of the initiation of the procedure;
except for what is established by the Article 6.04
paragraph 15;
(c) no safeguard measure may be maintained:
(i) for more than four (4) years, extendable for a period of
four (4) additional consecutive years, as provided in
Article 6.04 paragraphs 27 through 29; or
(ii) after the termination of the transition period, unless
with the consent of the Party against whose good the
measure is applied;
(d) a safeguard measure may be applied as many times as
necessary, provided that at least a period has elapsed,
equivalent to half of the time during which the safeguard
measure was applied for the first time;
(e) the period in which a provisional safeguard measure has
been applied shall be calculated for the purpose of
determining the period of duration of the definitive
safeguard measure established in subparagraph (c) of this
paragraph;
(f) provisional measures that do not become definitive shall be
excluded from the limitation provided for in subparagraph
(d) of this paragraph; and
(g) on the termination of the safeguard measure, the applied
customs tariff shall be the rate as that in the Tariff
Reduction Schedule.
6. In critical circumstances a Party may apply provisional
bilateral safeguard measures pursuant to a preliminary
determination that there is clear evidence that increased
imports have been given on originating goods of the other
Party, as a result of the reduction or elimination of duty
pursuant to this Agreement and under such conditions as to
constitute a serious injury or threat thereof. The duration
of provisional measures shall not exceed two hundred (200)
days.

Article 6.03 Global Safeguard Measures
1. Each Party shall reserve its rights and obligations in
accordance with Article XIX of GATT 1994, and the Agreement
on Safeguards, its modifications or successor provisions,
except those relating to compensation or retaliation and
exclusion of a safeguard measure which are inconsistent with
the provisions of this Article.
2. Any Party applying a safeguard measure in accordance with
paragraph 1 shall exclude from this measure, goods imported
from the other Party, unless:
(a) imports from the other Party account for a substantial
share of total imports. Those imports normally shall not
be considered to be substantial if that Party is not among
the top three suppliers of the good subject to the
proceeding, measured in terms of its import share during
the most recent three (3) year period; and
(b) imports from the other Party contribute importantly to the
serious injury, or threat thereof, caused by total
imports. To determine this, the investigating authority
shall consider factors such as the change in the import
share of the other Party in the total imports, as well as
the import volume of the other Party and the changes in
that volume. Normally, the imports from a Party shall not
be considered to contribute importantly to serious injury,
or threat thereof, if its growth rate of imports from a
Party, during the period in which the injurious surge in
imports occurred, is appreciably lower than the growth rate
of total imports from all sources during the same period.
3. A Party shall notify in writing within a fifteen (15) day
term to the other Party of the initiation of a proceeding
that may result in the application of a safeguard measure, in
accordance with paragraph 1 of this Article.
4. No Party may apply a measure under paragraph 1 of this
Article, that imposes restrictions on a good, without
previous notification in writing to the other Party, and
without giving appropriate opportunity to carry out
consultations in advance with the other Party, with as much
anticipation as feasible before applying it.
5. When a Party determines, in accordance with this Article,
that it needs to apply a safeguard measure to those goods
originating from the other Party, the measure applied to
those goods shall consist, only and exclusively, of tariff
measures.
6. The Party applying a safeguard measure under this Article
shall provide to the other Party mutually agreed trade
liberalization compensation, in the form of concessions,
having substantially equivalent trade effects or equivalent
to the additional customs tariff expected to result from the
safeguard measure.
7. If the Parties are unable to agree on the compensation, the
Party against whose good the safeguard measure is applied may
impose measures which have trade effects substantially
equivalent to the effects of the safeguard measure applied
pursuant to paragraph 1 of this Article.

Article 6.04 Administration of the Safeguard Measure
Proceedings
1. Each Party shall ensure the consistent, impartial and
reasonable application of the applicable legislation of each
Party, regulations, decisions and rulings governing the
application of safeguard measure proceedings, which shall be
consistent with the provisions set forth in Article XIX of
GATT 1994, Agreement on Safeguards, its modifications or
successors.
2. Safeguard proceedings and the determination of the existence
of serious injury or threat thereof shall be entrusted to the
investigating authority of each Party. The investigating
authority empowered under the domestic law of each Party to
conduct these proceedings should be provided with all the
necessary resources to fulfill its duties.
3. Each Party shall comply in an equitable, timely, transparent
and effective manner with the safeguard proceedings under
this Chapter.
Proceeding
4. The investigating authority may initiate a proceeding ex
officio or by a petition of a domestic industry. When the
investigating authority acts ex officio it shall notify the
domestic industry to corroborate with its consent to continue
the investigation.
5. When the procedure is initiated ex officio, or is a result of
a petition by the domestic industry, support by at least
twenty-five percent (25%) of said domestic industry shall be
required.
Content of the Petition
6. The domestic industry that files a petition to initiate an
investigation shall provide the following information in the
petition, to the extent that such information is publicly
available from governmental or other sources, or its best
estimates and the basis therefore if such information is not
thus available:
(a) designation of the investigating authority to whom the
petition is presented;
(b) data of identification of the petitioner or petitioners, as
well as the location of the establishments in which they
produce the like or directly competitive good. A proxy
shall document the capacity with which they act;
(c) documentation to certify petitioner’s share of domestic
production of the like or directly competitive goods they
represent and reasons for claiming that they represent said
domestic industry;
(d) description of the imported good concerned at the level of
tariff subheading under which that good is classified, or
when necessary at a more detailed level, the effective
tariff treatment as well as the specifications and elements
that allow to compare them with domestic goods;
(e) description of the affected like or directly competitive
domestic goods and its tariff subheading;
(f) volume and value of the imports;
(g) import data for each of the three (3) full years
immediately prior to the initiation of the safeguard
proceedings that form the basis of the claim that the good
is being imported into the territory of the other Party, in
increased quantities, either in absolute terms or relative
to domestic production;
(h) cause of injury: the listing and description of the alleged
causes of injury or threat thereof, and a summary of the
basis for the assertion that imports of the good concerned
increased relative to domestic production. The
quantitative and objective indicators that denote the
nature and cause of injury or threat thereof to the
domestic industry, such as changes in the level of sales,
prices, production, productivity, utilization of installed
capacity, market share, profits or losses, and employment;
(i) volume and value of the domestic production of the like
or directly competitive goods for each of the three (3)
full years immediately prior to the initiation of the
safeguard measure proceedings;
(j) petition to initiate the investigation and for the
imposition of a safeguard measure;
(k) lists of known importers and exporters with addresses or
place to serve them notice;
(l) petitioner’s addresses or place to serve them notice;
(m) place and date of petition; and
(n) signature of the petitioner or legal representative.
Acceptance or Rejection of the Petition
7. After receiving a petition, the investigating authority shall
review it and determine within thirty (30) days whether to
accept the petition: a) If the petition fulfills the
requirements, the investigating authority shall initiate the
investigation; b) If the petition does not fulfill the
requirements, the investigating authority shall notify the
petitioner of the requirement to fulfill them within a period
of fifteen (15) days and this term shall be extended for the
same period at the request of the interested parties; or c)
the investigating authority may reject the petition, through
a justified resolution, if there are not enough elements to
justify the investigation or if the petitioner fails to
fulfill the standing requirements of the domestic industry
support. If the petitioner fulfills the requirements pursuant
to part b) of this paragraph, the investigating authority
shall, within thirty (30) days after the petitioner fulfills
the requirements, accept the petition and initiate the
investigation or reject it. If the petitioner does not
fulfill the requirements, the investigating authority shall
reject it, without prejudice of submission of a new petition
by the interested parties at a later date.
Resolution to Initiate an Investigation
8. The resolution to initiate an investigation shall contain as
minimum:
(a) identification of the investigating authority, as well as
the place and date on which the resolution is issued;
(b) indication that the petition is accepted along with the
attached documents;
(c) name of the individual or legal person of domestic
producers of the like or directly competitive goods that
support the petition and their addresses to be served
notice;
(d) description of the imported good concerned at the level of
the tariff subheading under which that good is classified,
or when necessary at a more detailed level, the effective
tariff treatment, as well as a description of the like or
directly competitive goods;
(e) the basis that sustains the resolution;
(f) previous representative period;
(g) time period for interested parties to submit written
allegations and related documents; and
(h) other relevant data.
Notifications in General
9. The notifications in the proceedings shall be made in writing
within fifteen (15) days after the date the resolutions are
issued, with attached copies of public versions of the
petition and documents.
Publication Requirements
10. When initiating an investigation, the investigating
uthority shall publish a notice of initiation in an official
journal of the Party or nation-wide newspaper, within a
period of ten (10) days starting from the acceptance of the
petition. The notification of the investigation initiation
shall be sent through the investigating authority to the
other Party by certified mail, courier, fax or any other
means that will ensure its reception.
Opposition
11. The investigating authority shall grant forty-five (45) days
o the interested parties, starting from the day after the
notification that the investigation has initiated, to allow
them to submit their position and introduce evidence. The
investigating authority may, at the request of the
interested parties, extend the period by no more than thirty
(30) days.
Previous Representative Period
12. The previous representative period, shall be the basis for
he determination of the existence of serious injury or
threat thereof to the domestic industry and shall be
determined by the investigating authority upon initiating
the investigation and can be modified when necessary.
Consultations
13. Once a petition is accepted, the Party that intends to
nitiate the case shall notify the other Party, and the
Parties may hold consultations at any time during the
proceeding, without interrupting them.
14. During these consultations the Parties may address, among
thers, any issue relating to the investigation, the
elimination of the measure, and in general, any related
issues.
Period of Investigation
15. An investigation shall normally be concluded within one
undred eighty (180) days, and in exceptional circumstances
qualified by the investigating authority, shall conclude
three hundred and sixty-five (365) days from the initiation
of the investigation.
Information Required
16. The investigating authority may request all kinds of
nformation from the interested parties. When the interested
parties deny access to the necessary information, or they do
not cooperate within the period set by the investigating
authority, it can make a determination based on the evidence
available.
Provisional Safeguard Measures
17. If the justified elements are gathered for the petition of a
rovisional measure, and the investigating authority has made
an affirmative injury determination or threat thereof, it
may recommend that the competent authority imposes a
provisional measure.
18. Provisional measures shall take the form of customs tariff
ncreases to be promptly refunded, pursuant to this Chapter,
if the subsequent investigation does not determine that
increased imports have caused or threatened to cause serious
injury to a domestic industry.
Evidence of Serious Injury or Threat Thereof
19. In conducting its proceedings the investigating authority
hall gather, to the best of its ability, all relevant
information appropriate to make the determination. It shall
evaluate all relevant factors of an objective and
quantifiable nature having a bearing on the situation of the
domestic industry, including the rate and amount of the
increased import quantities, absolute or relative to
domestic production of the good concerned, the share of the
domestic market taken by the increased imports, changes in
the level of sales, production, productivity, capacity
utilization, profits and losses, and employment. In making
its determination, the investigating authority may also
consider other economic factors, such as changes in prices
and inventories, and the ability of the domestic industry to
raise capital or investments.
Public Hearing
20. During the course of each proceeding, the investigating
uthority shall:
(a) notify the date and the place of the public hearing to the
interested parties, including the importers and exporters,
fifteen (15) days before it is held, to allow them to
appear in person or through a representative to submit
evidence, allegations and be heard on issues of serious
injury or threat thereof and the appropriate remedy; and
(b) provide an opportunity to all interested parties appearing
at the hearing to express their arguments and to ask
questions.
21. After the public hearing, the interested parties should have
ifteen (15) days to submit their supplementary evidence and
conclusions on the investigation, in writing, to the
investigating authority.
Confidential Information
22. The investigating authority shall establish or maintain
rocedures for the treatment of confidential information
protected by the national legislation that is provided in
the course of the proceeding, and shall request that the
interested parties furnish non-confidential written
summaries thereof. If the interested parties indicate that
the information cannot be summarized, they shall explain the
reasons why a summary cannot be provided. Unless it is
demonstrated that the information is accurate, in a
convincing way and from an accurate source, the authority
may disregard that information.
23. The investigating authority shall not disclose any
onfidential information provided in accordance with any
obligation related to the confidential information obtained
in the course of the proceedings.
Deliberation and Determination
24. The competent authority, before making definitive
etermination in a proceeding for the application of
safeguard measures, shall allow sufficient time to gather
and check relevant information, shall hold a public hearing
and provide opportunity for all interested parties to
prepare and submit their views.
25. The investigating authority shall promptly publish a final
etermination notice in an official journal or nation-wide
newspaper publicizing the results of the investigation and
the reasoned conclusions on all pertinent issues of law and
fact. The determination notice shall include a description
of the imported good, its tariff subheading, the methodology
applied and the findings made in the proceedings. The
statement of reasons shall set out the basis for the
determination, including a description of:
(a) the domestic industry seriously injured or threatened with
serious injury;
(b) information supporting a finding that imports are
increasing, the domestic industry is seriously injured or
threatened with serious injury, and increasing imports are
causing or threatening to cause serious injury; and
(c) if provided for by domestic law, any finding or
recommendation regarding the appropriate remedy, as well as
the basis thereof.
26. Each Party shall ensure that the determinations in safeguard
easure proceedings may be subject to review by judicial or
administrative proceedings of the Party, as provided in its
domestic laws. Negative determinations of the existence of
serious injury or threat thereof shall not be subject to
modification by the competent authority, unless the
modification is required by such judicial or administrative
review.
Extension of Measures
27. If the importing Party determines that reasons justify the
xtension of a bilateral safeguard measure, the Party shall
notify the competent authority of the other Party of its
intention to extend the measure at least ninety (90) days
before the measure is expected to expire, and shall prove
that the reasons leading to its application persist, for the
purpose of holding respective consultations, which shall be
done according to the provisions of this Article.
28. The domestic industry that submitted the request for an
xtension of measures shall present a readjustment plan,
including variables controllable by the domestic industry or
production involved to eliminate injury or threat thereof.
29. The notifications of extension and compensation shall be
resented pursuant to this Article prior to the expiration of
the applied measures.
Compensation
30. The Party that applies a safeguard measure according to this
rticle shall provide to the other Party mutually agreed
compensation in the form of concessions that have commercial
effects substantially equivalent to the value of the
additional customs duties that are expected from the
safeguard measure. However, no compensation shall be
provided for the first three (3) years that the safeguard
measure is in effect, as well as the right of suspension of
the concession or other obligations substantially equivalent
shall not be exercised by the Party against which the
safeguard measure is applied during these three (3) years.
31. Following the expiration of the three (3) years mentioned in
he previous paragraph, the Party that applies the measure
shall give opportunity to hold consultations within ninety
(90) days following the expiration. If the Parties cannot
reach an agreement on compensation, the Party to whose good
the safeguard measure is applied shall be able to suspend
concessions or other obligations that have commercial
effects substantially equivalent to those of the applied
safeguard measure according to this Article, after having
notified the other Party in writing at least thirty (30)
days before imposing these measures. The Party shall apply
the tariff measure during the necessary minimum period to
reach the effects substantially equivalent and in any event
it shall cease when the other Party finishes the application
of the safeguard measure.

Article 6.05 Dispute Settlement with regards to Safeguard
Measures
No Party shall request the establishment of an arbitral panel,
under Article 15.07 (Establishment of an Arbitral Panel), before
the application of a safeguard measure by the other Party.

CHAPTER 7: UNFAIR TRADE PRACTICES

Article 7.01 Anti-dumping and Countervailing Measures
The Parties confirm their rights and obligations for the
application of antidumping or countervailing duties imposed by a
Party on the goods imported from the territory of the other
Party, such measures shall be subject to Article VI and XVI of
GATT 1994, the Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994 and the Agreement on
Subsidies and Countervailing Measures.

Article 7.02 Scope of Application
Except as provided in this Chapter, the antidumping and
countervailing duties shall be applied by the Parties in
accordance with the provisions of the agreements set forth in
Article 7.01 and the legislation of each Party as suppletory.

Article 7.03 Investigating Authority
For the investigation and application of the provisions of this
Chapter the investigating authority in the case of the Republic
of China (Taiwan), is the Ministry of Economic Affairs and the
Ministry of Finance, or their successors; in the case of the
Republic of El Salvador is the Direccion de Administracion de
Tratados Comerciales del Ministerio de Economia, or its
successor; and in the case of the Republic of Honduras is the
Direccion General de Integracion Economica y Politica Comercial
de la Secretaria de Estado en los Despachos de Industria y
Comercio, or its successor.

Article 7.04 Consultations
Prior to initiating an antidumping or countervailing
investigation under this Chapter, the Parties may hold
consultations in order to clarify the facts of the situations
and to arrive at a mutually agreed solution.

Article 7.05 Support of Domestic Industry
An antidumping or countervailing investigation shall not be
initiated between the Parties unless the authority has
determined that the application has been made by on behalf of
the domestic industry whose collective output constitutes more
than fifty percent (50 %) of the total production of the like
products produced by that portion of the domestic industry
expressing either support for or opposition to the application,
however no investigation shall be initiated when the domestic
producers expressly supporting the application account for less
than twenty- five percent (25 %) of the total production of the
like products produced by the domestic industry.

Article 7.06 Maximum Period for Completing an Investigation
An investigation on dumping or subsidy practices initiated by a
Party against the goods imported from the territory of the other
Party shall be concluded within one (1) year after its
initiation and, in special circumstances, this period may be
extended to no more than eighteen (18) months after its
initiation.

Article 7.07 Duration of Measures
Notwithstanding the right to review in accordance with the WTO
Agreements included in Article 7.01, any definitive antidumping
or countervailing duty imposed by a Party on a good imported
from the territory of the other Party shall be terminated on a
date no later than five (5) years from its imposition.

PART THREE: TRADE BARRIERS

CHAPTER 8: SANITARY AND PHYTOSANITARY MEASURES

Article 8.01 Definitions
For purposes of this Chapter, the Parties shall apply the
definitions and terms set out in:
(a) the Agreement on the Application of Sanitary and
Phytosanitary Measures, that forms a part of the WTO
Agreement, hereinafter referred to as ASPS;
(b) the World Organisation for Animal Health, hereinafter
referred to as OIE;
(c) the International Plant Protection Convention, hereinafter
referred to as IPPC; and
(d) the Codex Alimentarius Commission, hereinafter referred to
as Codex.

Article 8.02 General Provisions
1. The Parties reaffirm their existing rights and obligations
with respect to each other under the ASPS.
2. The Parties, on the basis of the ASPS, establish this
framework of rules and disciplines that shall guide the
adoption and implementation of sanitary and phytosanitary
measures.
3. The authorities legally responsible for ensuring the
compliance with the sanitary and phytosanitary obligations
provided in this Chapter shall be deemed as the competent
authorities.
4. The Parties shall facilitate trade through mutual cooperation
to prevent the introduction or spreading of pests or diseases
and to improve plant health, animal health, and food safety.
5. The Parties shall use the relevant dispute settlement
provisions of the WTO Agreement, instead of Chapter 15
(Dispute Settlement) of this Agreement, for any formal
disputes related to their rights and obligations under the
ASPS.

Article 8.03 Rights of the Parties
The Parties, according to the ASPS, may:
(a) establish, adopt, maintain or implement any sanitary or
phytosanitary measures in their territories, only to the
extent necessary to protect human life and health (food
safety) and animal life or to preserve plant health, even
if they are stricter than international standards,
guidelines or recommendations, provided that there is a
scientific basis to justify them;
(b) implement the sanitary and phytosanitary measures only to
the extent necessary to reach an appropriate level of
protection; and
(c) ensure that plants, animals, products and by-products bound
for export are subject to sanitary and phytosanitary
monitoring to ensure conformity with the requirements of
the sanitary and phytosanitary measures established by the
importing Party.

Article 8.04 Obligations of the Parties
1. Sanitary and phytosanitary measures shall not constitute a
disguised restriction to trade and shall not have the purpose
or effect of creating an unnecessary obstacle to trade
between the Parties.
2. Sanitary and phytosanitary measures shall be based on
scientific principles, shall only be maintained if there are
reasons to sustain them and shall be based on risk assessment.
3. Sanitary and phytosanitary measures shall be based on
international standards, guidelines or recommendations.
4. Where conditions are identical or similar, sanitary and
phytosanitary measures shall not discriminate arbitrarily or
unjustifiably.

Article 8.05 International Standards and Harmonization
With the aim to harmonize sanitary and phytosanitary measures,
the procedures of control, inspection and the approval of
sanitary and phytosanitary measures of the Parties, shall be
based on the following principles:
(a) each Party shall use international standards, guidelines or
recommendations as reference guideline for its sanitary and
phytosanitary measures;
(b) each Party may adopt, implement, establish or maintain a
sanitary or phytosanitary measure with a level of
protection different from or stricter than that of
international standards, guidelines or recommendations,
provided that there is scientific justification for the
measure;
(c) with the aim of reaching a higher degree of harmonization,
each Party shall follow the guidelines of the ASPS, the
IPPC for plant health, the OIE for animal health and the
Codex for food safety and tolerance limits; and
(d) the Parties shall establish harmonized systems for the
procedures of control, inspection and approval of the
sanitary and phytosanitary measures for animals, plants,
their products and by-products as well as food safety.

Article 8.06 Equivalence
With the purpose of implementing sanitary and phytosanitary
measures in the territory of the Parties, the Parties shall
implement control, inspection and approval procedures according
to the following principles:
(a) each Party shall accept the sanitary or phytosanitary
measures of the other Party as equivalent, even if these
measures differ from its own in the same product, if the
other Party objectively demonstrates to the Party that,
based on scientific information and risk assessment, its
measures achieve the Party’s appropriate level of sanitary
or phytosanitary protection. Upon request by a Party, the
other Party shall give reasonable access to information
related to its inspection, testing and other relevant
procedures; and
(b) the Parties shall facilitate access to their territories
for the purpose of inspection, testing and other relevant
procedures in order to establish equivalence of sanitary
and phytosanitary measures.

Article 8.07 Assessment Risk and Determination of the
Appropriate Level of Sanitary and Phytosanitary Protection
According to the guidelines developed by relevant international
organizations:
(a) the Parties shall ensure that their sanitary and
phytosanitary measures are based on an assessment, as
appropriate to the circumstances, of the existing risk for
the protection of human life and health (food safety) and
animal health, or to protect plant health taking into
account the guidelines and risk assessment techniques
developed by relevant international organizations;
(b) the Parties shall provide necessary access for assessing
sanitary and phytosanitary services through the procedures
in force for verification of control, inspections, approval
procedures, measure implementation and programs on sanitary
and phytosanitary matters, on the basis of the guidelines
and recommendations of the international organizations
recognized by the WTO;
(c) in assessing the risk of a good and in establishing the
appropriate level of protection, the Parties shall take
into account the following factors among others:
(i) available scientific and technical information;
(ii) existence of pests or diseases;
(iii) epidemiology of pests and diseases of quarantine
importance;
(iv) analysis of critical control points in sanitary (food
safety) and phytosanitary aspects;
(v) physical, chemical and biological hazards in foods;
(vi) relevant ecological and environmental conditions;
(vii) production processes and methods, and inspection,
sampling and testing methods;
(viii) structure and organization of sanitary or
phytosanitary services;
(ix) procedures for protection, epidemiological surveillance,
diagnostic and treatment to ensure food safety;
(x) loss of production or sales in the event of the entry,
establishment, spread or dissemination of a pest or
disease;
(xi) applicable quarantine measures and treatments that shall
satisfy the importing Party on risk mitigation; and
(xii) costs of controlling or eradication of pests or
diseases in the territory of the importing Party and
relative cost-effectiveness of other possible methods
to reduce the risk;
(d) for the purpose of establishing and harmonizing the
appropriate level of protection, the Parties shall avoid
arbitrary or unjustifiable distinctions that may result in
discrimination or disguised restriction to trade;
(e) where relevant scientific evidence is insufficient for
carrying out risk assessment, the Party may provisionally
adopt sanitary and phytosanitary measures on the basis of
available pertinent information, including that from the
relevant international organization described in this
Chapter. In such circumstances, the Parties shall seek to
obtain the additional information necessary for a more
objective assessment of risk and review the sanitary or
phytosanitary measures accordingly within a reasonable time
frame, and with this aim, the following procedures shall be
applied:
(i) the importing Party that applies the provisional measure,
shall request from the other Party, within thirty (30)
days of adoption of the provisional measure, the
necessary technical information to complete the risk
assessment, and the other Party shall provide the
information. If the information is not provided, the
provisional measure shall be sustained, and if on
expiration of this period the information has not been
requested, the provisional measure shall be withdrawn;
(ii) if the importing Party has requested information, it
shall have sixty (60) days from the date of provision of
this information to review, withdraw or keep as final
the provisional measure. If necessary, the Party may
extend this time period;
(iii) the importing Party may request clarification about the
information provided by the exporting Party after its
receipt;
(iv) the importing Party shall allow the exporting Party to
make its comments and shall take them into account for
its conclusion of the risk assessment; and
(v) the adoption or revision of the provisional sanitary or
phytosanitary measure shall be immediately notified to
the other Party through the notification authorities
established under the ASPS;
(f) if the result of risk assessment involves non-acceptance of
the importation, the scientific basis for the decision
shall be notified in writing; and
(g) when a Party has reasons to believe that a sanitary or
phytosanitary measure established or maintained by the
other Party restricts or may restrict its exports and that
the measure is not based on relevant international
standards, guidelines or recommendations, or such
standards, guidelines or recommendations do not exist, the
Party may demand an explanation for the reasons of the
sanitary and phytosanitary measures and the Party
maintaining these measures shall provide the explanation
within sixty (60) days from the date of receipt of the
inquiry by the competent authority.

Article 8.08 Recognition of Pest- or Disease-Free Areas and
Areas of Low Pest or Disease Prevalence
1. The Parties shall recognize the pest- or disease-free areas
and the areas of low pest or disease prevalence according to
international standards, guidelines or recommendations,
taking into account geographical situation, ecosystems,
epidemiological surveillance and the effectiveness of
sanitary and phytosanitary controls in the area.
2. The Party claiming that an area within its territory is free
from a specific pest or disease, shall demonstrate
objectively to the importing Party this condition and ensure
that it will be maintained as such, on the basis of the
protection measures adopted and implemented by those in
charge of the sanitary and phytosanitary services.
3. The Party interested in obtaining recognition that an area is
free from a specific pest or disease shall send the request
to the other Party and provide relevant scientific and
technical information.
4. The Party that receives the request for recognition may carry
out inspections, testing and other verification procedures.
If the Party does not accept the request, it shall indicate
in writing the technical basis for its decision.
5. The Parties may initiate consultation in order to reach
agreement on specific requirements for recognition of pest-
or disease-free areas or areas of low pest or disease
prevalence. Due to the lack of international standards for
the recognition of areas of low pest or disease prevalence,
it is agreed by both Parties that the recognition of such
areas shall be pending until the establishment of the
international standards.

Article 8.09 Control, Inspection and Approval Procedures
1. The Parties, according to this Chapter, shall observe the
provisions of Annex C to the ASPS on control, inspection and
approval procedures, including approval of the use of
additives or establishment of tolerances for contaminants in
food, beverages and feedstuffs.
2. When the competent authority of the exporting Party requests
for the first time to the competent authority of the
importing Party to inspect a production unit or production
process in its territory, the competent authority of the
importing Party shall, upon completion of review and
evaluation of necessary documents and information and risk
assessment required by the importing Party, carry out the
inspection within a period of one hundred (100) days. This
period may be extended by mutual agreement between the
Parties in those cases where it can be justified. When the
inspection is completed, the competent authority of the
importing Party shall issue a decision based on the results
on the inspection and shall notify the exporting Party within
ninety (90) days after the inspection.

Article 8.10 Transparency
1. Each Party, when proposing adoption or modification of a
sanitary or phytosanitary measure of general application,
shall notify the following:
(a) adoptions and modifications of these measures, it shall
also provide information on measures according to the
provisions of Annex B to the ASPS, and shall implement the
relevant adjustment;
(b) changes or revisions in sanitary or phytosanitary measures
that have a significant effect on trade between the
Parties, within sixty (60) days prior to the entry into
force of the new provisions, to allow the other Party to
comment; such requirement shall be exempted for
emergencies, according to the provisions of Annex B to the
ASPS;
(c) changes in the status of animal health, as the occurrence
of exotic diseases and listed diseases in List A of the
OIE, within twenty-four (24) hours after confirming the
disease;
(d) changes in the phytosanitary status, as the occurrence of
quarantine pests and diseases or spread of quarantine pests
and diseases under official control, within seventy-two
(72) hours of their verification; and
(e) disease outbreaks which are scientifically shown to be
caused by the consumption of imported food and food
products, natural or processed.
2. The Parties shall use the notification authorities and
enquiry points established under the ASPS as communication
channels. When emergency measures are needed, the Party shall
immediately notify the other Party in writing, indicating
briefly the purposes and basis of the measure, and the nature
of the problem.
3. According to the provisions of Article 13.02 (Information
Center), each Party shall answer any reasonable request for
information from the other Party and shall provide relevant
documentation according to the principles of paragraph 3 of
Annex B to the ASPS.

Article 8.11 Technical Consultations
1. A Party, when necessary, may request consultations with the
other Party regarding the application or interpretation of
the content in this Chapter.
2. The Party that considers that the sanitary and phytosanitary
measures of the other Party are interpreted or implemented
inconsistently with this Chapter, shall have the burden to
establish the inconsistency.
3. If the Party requests consultations, it shall notify the
Committee. The Committee shall facilitate the consultations,
and if necessary, forward to an ad-hoc working group for
technical recommendations.

Article 8.12 Committee on Sanitary and Phytosanitary Measures
1. The Parties hereby establish the Committee on Sanitary and
Phytosanitary Measures (“the Committee”), as set out in
Annex 8.12.
2. The Committee shall hear matters regarding this Chapter and,
without prejudice to Article 14.05(2) (Committees), shall
carry out the following functions:
(a) monitoring the fulfilment and correct application of the
provisions in this Chapter;
(b) promoting the means necessary for the training and
specialization of technical staff;
(c) promoting the active participation of the Parties in
international bodies;
(d) creating and updating a database of specialists qualified
in the fields of food safety, plant and animal health, for
the purpose of the provisions of Article 14.06 (Groups of
Experts);
(e) enhancing mutual understanding of each Party’s sanitary
and phytosanitary measures and the regulatory processes
that relate to those measures;
(f) consulting on matters related to the development or
application of sanitary and phytosanitary measures that
affect, or may affect, trade between the Parties; and
(g) addressing sanitary and phytosanitary matters with a view
to facilitating trade between the Parties.
3. The Parties shall establish the Committee through an exchange
of letters identifying the primary representative of each
Party to the Committee.
4. The Committee shall seek to promote communication and enhance
present or future relationships between the Parties’
ministries with responsibility for sanitary and phytosanitary
matters.
5. The Committee shall seek to facilitate a Party’s response,
in reasonable time, to a written request for information from
another Party. The Committee shall endeavor to ensure that
the responding Party communicates to the requesting Party the
steps involved in responding to the request.
6. The Committee shall meet if necessary as requested by the
Parties.
7. All decisions of the Committee shall be taken by consensus,
unless the Committee otherwise decides.

CHAPTER 9: MEASURES ON STANDARDS, METROLOGY, AND AUTHORIZATION
PROCEDURES

Article 9.01 Definitions
1. For purposes of this Chapter, the following terms shall be
understood as:
administrative refusal: action taken in the exercise of its
authorities by a public body of the importing Party to prevent
the entry in its territory of a consignment that does not comply
with its technical regulations, conformity assessment procedures
or metrological requirements;
assessment of risk: evaluation of potential adverse effects on
legitimate objectives that could impede trade;
authorization procedure: any mandatory administrative procedure
for granting registration, license or any other approval for a
good to be produced, marketed or used for a stated purpose or
under stated conditions;
comparable situation: situation that offers the same level of
safety or protection for reaching a legitimate objective;
conformity assessment procedure: any procedure used, directly or
indirectly, to determine that a technical regulation or standard
is fulfilled, including sampling, testing, inspection,
evaluation, verification, assurance of conformity, registration,
accreditation, and approval as well as their combinations;
international standard: a standard, guide or recommendation,
adopted by an international standardizing body and made
available to the public;
international standardizing or metrological body: a
standardizing or metrological body whose membership is open to
at least all the Members of the WTO, including the International
Organization for Standardization (ISO), the International
Electrotechnical Commission (IEC), the Codex Alimentarius
Commission (CAC), the International Organization of Legal
Metrology (OIML), the International Commission on Radiation
Units and Measurements, Inc. (ICRU), or any other body that the
Parties designate;
legitimate objectives: national security requirements,
prevention of deceptive practices, protection of human health or
safety, animal or plant life or health, or the environment;
make compatible: to bring different standards-related measures
of the same scope approved by different standardizing bodies to
a level such that they are either identical, equivalent or have
the effect of permitting goods to be used in place of one
another or for fulfilling the same purpose;
standard: document approved by a recognized body that provides,
for common and repeated use, rules, guidelines or
characteristics for goods or related processes and production
methods, with which compliance is not mandatory. It may also
include, or deal exclusively with, terminology, symbols,
packaging, marking or labeling requirements as they apply to a
good, process or production method;
standardization measures: the rules, technical regulations,
requirements of metrology or procedures for conformity
assessment;
TBT Agreement: the WTO Agreement on Technical Barriers to Trade;
and
technical regulation: document which lays down characteristics
of goods or their related processes and production methods,
including the applicable administrative provisions with which
compliance is mandatory. It may also include or deal
exclusively with terminology, symbols, packaging, marking or
labelling requirements as they apply to a good, process, or
production method.
2. Except as defined in paragraph 1, the Parties shall use the
terms of the current ISO/IEC Guide 2: 1996 “Standardization
and Related Activities-General Vocabulary”.

Article 9.02 General Provisions
1. In addition to the provisions of the WTO Agreement, the
Parties shall apply the provisions of this Chapter.
2. The Parties shall use the relevant dispute settlement
provisions of the WTO Agreement, instead of Chapter 15
(Dispute Settlement) of this Agreement for any formal
disputes, related to their rights and obligations under the
TBT Agreement.

Article 9.03 Scope of Application
1. This Chapter shall apply to the measures adopted by the
Parties on standards, authorization procedures, and
metrology, as well as on related measures that may directly
or indirectly affect the trade in goods between the Parties.
2. This Chapter shall not apply to sanitary and phytosanitary
measures.

Article 9.04 Basic Rights and Obligations
Right to Adopt Standardization Measures
1. Each Party may develop, adopt, apply, and maintain:
(a) measures on standards, authorization procedures, and
metrology, according to the provisions of this Chapter; and
(b) technical regulations and conformity assessment procedures
that allow the Party to reach its legitimate objectives.
Unnecessary Barriers
2. No Party shall develop, adopt, maintain or apply measures on
standards, authorization procedures or metrology that have
the purpose or effect of creating unnecessary trade barriers
to the other Party.
Non-Discriminatory Treatment
3. Each Party shall, in relation to measures on standardization,
authorization procedures, and metrology, accord to the goods
of the other Party national treatment and treatment no less
favorable than that it accords to like goods of any other
country.
Use of International Standards
4. In the development or implementation of its measures on
standardization, authorization procedures or metrology, each
Party shall use international standards where they exist or
their completion is imminent, or use the relevant parts of
them, except where such international standards would not be
an effective or appropriate means for fulfilling the
legitimate objectives because of fundamental climatic,
geographical, technological or infrastructural factors, or
scientifically verified reasons.

Article 9.05 Assessment of Risk
1. In pursuing its legitimate objectives, each Party conducting
risk assessments shall take into account:
(a) risk assessments carried out by international standardizing
or metrological bodies;
(b) available scientific evidence or technical information;
(c) related processing technology; or
(d) intended end uses of goods.
2. Where a Party establishes a level of protection that it
considers appropriate and conducts an assessment of risk, it
shall avoid arbitrary or unjustifiable distinctions between
similar goods in the level of protection it considers
appropriate, where the distinctions:
(a) result in arbitrary or unjustifiable discrimination against
goods of the other Party;
(b) constitute a disguised restriction on trade between the
Parties; or
(c) discriminate between similar goods for the same use under
the same conditions that pose the same level of risk and
provide similar benefits.
3. A Party shall provide to the other Party, upon request,
relevant documentation on its risk assessment processes and
on the factors taken into account when conducting the
assessment and definition of protection levels, according to
Article 9.04.

Article 9.06 Compatibility and Equivalence
1. Without prejudice to the rights conferred by this Chapter and
taking into account the international activities on standards
and metrology, the Parties shall, to the greatest extent,
make compatible their respective standards and metrology
measures, without reducing the level of safety or protection
to human, animal or plant life or health, the environment and
consumers.
2. A Party shall accept as equivalent to its own any technical
regulations of the other Party, when in cooperation with the
other Party, the importing Party determines that the
technical regulations of the exporting Party adequately
fulfill the legitimate objectives of the importing Party.
3. The importing Party shall provide to the exporting Party, on
request, its reasons in writing for not treating a technical
regulation as equivalent under paragraph 2.

Article 9.07 Conformity Assessment
1. Each Party shall develop, adopt, and apply conformity
assessment procedures to accord access to like goods from the
territory of the other Party under conditions no less
favorable than those accorded to its like goods or to those
of any other country, in a comparable situation.
2. With regard to its conformity assessment procedures, each
Party shall:
(a) initiate and complete these procedures as expeditiously as
possible and on a non-discriminatory basis;
(b) publish the procedure and the normal period of each
procedure or, upon request, to convey this information to
the applicant;
(c) have the competent body or authority review without delay
upon receipt of an application if the documentation is
complete and communicate to the applicant as soon as
possible and with accuracy and thoroughness the findings of
the assessment, so that the applicant may take corrective
measures as needed and even when the application shows
deficiencies, proceed with the conformity assessment as far
as possible if requested by the applicant and, upon
request, inform the applicant of the stage of the procedure
and explain any possible delay;
(d) request only the information necessary to assess the
conformity and calculate the fees;
(e) respect the confidentiality of the information about a good
of the other Party obtained by such procedures or provided
in connection with them, in the same manner as in the case
of goods from the Party, so as to protect the legitimate
trade interests;
(f) make equitable the fees imposed for assessing the
conformity of a good of the other Party, compared with the
fees that would be collected for assessing the conformity
of a like good of this Party, taking into account
communication, transportation, and other costs due to
differences in location of the applicant’s premises and of
the conformity assessment body;
(g) ensure that the location of premises used in conformity
assessment procedures and sampling procedures do not cause
unnecessary inconvenience to applicants or their agents;
(h) if the specifications of a good are modified after the
determination of its conformity with technical regulations
or applicable standards, limit the conformity assessment
procedure for the modified good to the extent necessary to
determine with due assurance that the good shall continue
to conform to the technical regulations or applicable
standards; and
(i) establish a procedure for reviewing the claims related to
the application of a conformity assessment procedure and
adopt corrective measures if the claim is justified.
3. With the aim of advancing the facilitation of trade, a Party
shall consider favorable a request from the other Party to
initiate negotiations designed to conclude agreements for the
mutual recognition of the results of their respective
conformity assessment procedures.
4. To the extent practicable, each Party shall accept the
results of conformity assessment procedures carried out in
the territory of the other Party, provided that those
procedures offer enough confidence, equivalent to the
confidence of its own procedures and that the good meets the
technical regulations or applicable standards adopted or
maintained in the territory of this Party.
5. Before accepting the results of a conformity assessment
procedure under paragraph 4 and with the aim of strengthening
the sustained reliability of the results of conformity
assessment of each Party, the Parties may consult about
matters such as the technical capacity of conformity
assessment bodies, including the verified compliance with
relevant international standards through means such as
accreditation.
6. Each Party, recognizing that the outcome shall be to the
mutual advantage of both Parties, shall accredit, approve or
recognize conformity assessment bodies in the territory of
the other Party, in conditions no less favorable than those
accorded to conformity assessment bodies in its territory.
7. The Parties may use the capacity and technical infrastructure
of the accredited bodies established in the territory of the
Parties in the conformity assessment procedures.

Article 9.08 Authorization Procedures
1. Each Party shall develop, adopt and apply authorization
procedures to accord access to like goods from the territory
of the other Party under conditions no less favorable than
that accorded to its goods or to the goods of any other
country, in a comparable situation.
2. In relation to its authorization procedures, each Party shall:
(a) initiate and complete these procedures as expeditiously as
possible and in a non-discriminatory manner;
(b) publish the procedure and the normal period of each
procedure or upon request to convey this information to the
applicant;
(c) have the competent authority review without delay upon
receipt of an application if the documentation is complete
and communicate to the applicant as soon as possible and
with accuracy and thoroughness the results of the
authorization, so that the applicant may take corrective
measures as needed, and even when the application shows
deficiencies, proceed with the authorization procedure as
far as possible if requested by the applicant and, upon
request, inform the applicant of the stage of the procedure
and explain any possible delay;
(d) request only the information necessary to authorize and
calculate the fees;
(e) respect the confidentiality of the information about a good
of the other Party obtained by such procedures or provided
in connection with them, in the same manner as in the case
of goods from the Party, in order to protect the legitimate
trade interests;
(f) make equitable the fees imposed for authorization procedure
with respect to a good of the other Party, compared with
the fees that would be collected for an authorization
procedure of a like good of this Party, taking into account
communication, transportation, and other costs due to
differences in location of the applicant’s premises and of
the authorizing body; and
(g) establish a procedure for reviewing the claims related to
the application of an authorization procedure and adopt
corrective measures if the claim is justified.

Article 9.09 Metrology
Each Party shall ensure, to the extent practicable, the
documented traceability of its standards and the calibration of
its measuring instruments, according to the recommendations of
the Bureau International des Poids et Measures (BIPM) and the
International Organization of Legal Metrology (OIML), and comply
with the requirements set out in this Chapter.

Article 9.10 Notification
1. In cases where there is no relevant international standard,
or the technical content of a proposed technical regulation
or of a conformity assessment procedure does not conform with
the technical content of the relevant international
standards, and if these technical regulations may have a
significant impact on trade between the Parties, each Party
shall notify, in writing, the other Party of the proposed
measure, at least sixty (60) days before its adoption,
allowing the interested parties to make comments, discuss
these comments upon request, and take these comments and the
results of these discussion into account.
2. If a Party faces serious problems or the threat of serious
problems related to safety, health, environment protection,
and national security, this Party may not present the
communication prior to the project, but once adopted shall
notify the other Party.
3. The notifications under paragraphs 1 and 2 shall be done
following the models established in the TBT Agreement.
4. Within thirty (30) days of entry into force of this
Agreement, each Party shall notify the other Party of the
institution designated to carry out the notifications under
this Article.
5. Each Party shall notify in writing the other Party of its
standardization plans and programs.
6. When a Party rejects a shipment by an administrative
decision, the Party shall notify the person in charge of the
shipment of the technical reasons for the rejection, without
delay and in writing via fax, courier, e-mail or other media.
7. Once the information required under paragraph 5 is completed,
the Party shall immediately transmit it to the Information
Center of the other Party.

Article 9.11 Information Centers
1. Each Party shall ensure the existence of an information
center in its territory that may answer all reasonable
questions and requests from the other Party and from
interested persons and supply the relevant updated
documentation relating to any measure on standards,
metrology, conformity assessment procedures or authorization
procedures adopted or proposed in its territory by
governmental or non-governmental bodies.
2. Each Party designates the center set out in Annex 9.11(2) as
Information Center.
3. If an information center requests copies of the documents
referred to in paragraph 1 they shall be delivered without
cost. The interested persons from the other Party shall
receive copies of the documents at the same price as the
nationals from this Party, plus the actual cost of shipment.

Article 9.12 Technical Consultations
1. When a Party considers that a measure on standards, technical
regulations, metrology or authorization procedures of the
other Party is interpreted or applied in an inconsistent way
with the provisions of this Chapter, the Party will have the
obligation to prove the inconsistency.
2. When a Party requests consultations and notifies the
Committee specified in Article 9.13, the Committee shall
facilitate the consultations and send them to an ad-hoc
working group or to another forum for consultations.

Article 9.13 Committee on Standards, Metrology, and
Authorization Procedures
1. The Parties hereby establish the Committee on Standards,
Metrology, and Authorization Procedures, as set out in Annex
9.13.
2. The Committee will hear matters relating to this Chapter,
without prejudice to the provisions of Article 14.05
(Committees), and shall have the following functions:
(a) analyzing and proposing ways to resolve measures on
standards, authorization procedures, and metrology that a
Party considers a technical barrier to trade;
(b) promptly addressing any issue that a party raises related
to the development, adoption, application, or enforcement
of standards, technical regulations, metrology requirements
or conformity assessment procedures;
(c) facilitating the process by which the Parties shall make
compatible their measures on standards and metrology,
giving priority, inter alia, to labelling and packaging;
(d) promoting technical cooperation activities between the
Parties;
(e) providing assistance to the risk assessment activities
carried out by the Parties;
(f) working together to develop and strengthen the standards
and metrology measures of the Parties; and
(g) facilitating the process by which the Parties shall
establish mutual recognition agreements.
3. The Committee shall meet if necessary as requested by the
Parties.
4. All decisions of the Committee shall be taken by consensus
unless, the Committee otherwise decides.

PART FOUR: INVESTMENT, SERVICES AND RELATED MATTERS

CHAPTER 10: INVESTMENT

Section A Definitions

Article 10.01 Definitions
For purposes of this Chapter, the following terms shall be
understood as:
Additional Facility Rules of ICSID: Additional Facility Rules of
ICSID established in 1978;
claim: the claim made by the disputing investor against a Party
under Section C of this Chapter;
disputing investor: an investor that makes a claim under Section
C of this Chapter;
disputing parties: the disputing investor and the disputing
Party;
disputing Party: a Party against which a claim is made under
Section C of this Chapter;
disputing party: the disputing investor or the disputing Party;
enterprise: an "enterprise" as defined in Chapter 2 (General
Definitions), and a branch of an enterprise;
enterprise of a Party: an enterprise constituted or organized
under the law of a Party, and a branch located in the territory
of a Party and carrying out business activities there;
ICC: the International Chamber of Commerce;
ICC Arbitration Rules: the Rules of Arbitration of the
International Chamber of Commerce that came into effect on
January 1, 1998;
ICSID: the International Centre for Settlement of Investment
Disputes;
ICSID Convention: the Convention on the Settlement of Investment
Disputes between States and Nationals of other States, done at
Washington, March 18, 1965;
investment: any kind of goods or rights of any nature acquired
or used with the purpose of obtaining an economic profit or
other business objective, acquired with resources transferred or
reinvested by an investor, and including:
(a) an enterprise, shares in an enterprise, shares in the
capital of an enterprise that allow the owner to
participate in its income or profits. Debt instruments of
an enterprise and loans to an enterprise where:
(i) the enterprise is a branch of the investor; or
(ii) the date of maturity of the debt instrument or loan is
at least three (3) years;
(b) a share in an enterprise that grants to the owner the right
to participate in the assets of this enterprise in a
liquidation, provided that they do not arise from a debt
instrument or a loan excluded under subparagraph (a);
(c) real estate or other properties, tangible or intangible,
including rights in the intellectual property field, as
well as any other proprietary right (such as mortgages,
liens, usufruct, and similar rights), acquired with the
expectation of or used with the purpose of obtaining an
economic benefit or other business objectives;
(d) share or benefits arising from the allocation of capital or
other resources to the developing of an economic activity
in the territory of a Party according, inter alia to:
(i) contracts that involve the presence of the property of an
investor in the territory of a Party, including
concessions and construction and turnkey contracts; or
(ii) contracts where remuneration substantially depends on
the production, income, or profits of an enterprise;
but investment does not include:
(a) a payment obligation or a credit granted to the State or a
state enterprise;
(b) monetary claims exclusively derived from:
(i) commercial contracts for the sale of goods or services by
a national or an enterprise in the territory of a Party
to an enterprise in the territory of the other Party; or
(ii) a credit granted in relation to a commercial
transaction, of which date of maturity is less than
three (3) years, such as trade financing, except a loan
covered by the provisions of subparagraph (a); or
(c) any other monetary claim that does not refer to aspects set
out in subparagraphs (a) through (d);investor of a
non-Party: with respect to a Party, an investor that
attempts to make, is making, or has made an investment in
the territory of that Party, that is not an investor of a
Party;
investor of a Party: a Party or a state enterprise of a Party or
a national or an enterprise of a Party that makes, or has made
an investment in the territory of the other Party; provided,
however, that a natural person who is a dual national shall be
deemed to be exclusively a national of the State of his or her
dominant and effective nationality;
investment of an investor of a Party: the investment property or
under direct or indirect control of an investor of this Party.
In the case of an enterprise, an investment is property of an
investor of a Party if that investor has the property of more
than fifty percent (50%) of the equity. An investment is under
the control of an investor of a Party if that investor has the
power to:
(a) designate most of its directors; or
(b) direct otherwise its operations legally;
New York Convention: the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, done at
New York, June 10, 1958;
transfers: remittance and international payments;
Tribunal: an arbitration tribunal established under Article
10.22 and Article 10.28; and
UNCITRAL Arbitration Rules: the arbitration rules of the United
Nations Commission on International Trade Law, approved by the
United Nations General Assembly on December 15, 1976.

Section B Investment

Article 10.02 Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a
Party relating to:
(a) investors of the other Party with respect to all aspects of
its investments;
(b) investments of investors of the other Party in the
territory of the Party; and
(c) all investments of the investors of a Party in the
territory of the other Party with regard to Article 10.07.
2. This Chapter does not apply to the measures adopted or
maintained by a Party related to:
(a) financial services;
(b) limiting the participation of an investment of investors of
the other Party in its territory for reasons of public
order or national security;
(c) government services or functions such as law enforcement,
correctional services, income security or unemployment
insurance, social security services, social welfare, water
supply, public education, public training, health, and
child care; and
(d) disputes or claims arising before the entry into force of
this Agreement or relating to facts that occurred before it
entered into force, even if their effects persist
thereafter.
3. This Chapter applies to the entire territory of the Parties
and to any level of government, regardless of any
inconsistent measures that may exist in the law of these
government levels.
4. Notwithstanding the provisions of paragraph 2 (c), if a duly
authorized investor from a Party provides services or carries
out functions such as correctional services, income security
or unemployment insurance, social security services, social
welfare, water supply, public education, public training,
health, and child care, the investment of this investor shall
be protected by the provisions of this Chapter.
5. Except for the provisions of Annex 10 D, this Chapter shall
apply to both investments made prior to and after the entry
into force of this Agreement, by investors of a Party in the
territory of the other Party.

Article 10.03 National Treatment
1. Each Party shall accord to investors of the other Party
treatment no less favorable than that it accords, in like
circumstances, to its own investors with respect to the
establishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of investments in
its territory.
2. Each Party shall accord to investments of investors of the
other Party treatment no less favorable than that it accords,
in like circumstances, to investments of its own investors
with respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition
of investments.

Article 10.04 Most-Favored-Nation Treatment
1. Each Party shall accord to investors of the other Party
treatment no less favorable than that it accords, in like
circumstances, to investors of a non-Party with respect to
the establishment, acquisition, expansion, management,
conduct, operation, and sale or other disposition of
investments in its territory.
2. Each Party shall accord to investments of investors of the
other Party treatment no less favorable than that it accords,
in like circumstances, to investments of investors of a
non-Party with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other
disposition of investments.
3. For greater certainty, the treatment granted by this Article
does not extend to the treatment accorded in other dispute
settlement mechanisms, such as those provided for in Section
C Settlement of Disputes Between a Party and an Investor of
the Other Party of this Chapter, that are contained in
international treaties or agreements.

Article 10.05 Fair and Equitable Treatment
1. Each Party shall accord to investors of the other Party and
their investments treatment in accordance with customary
international law, including fair and equitable treatment as
well as full protection and security.
2. For greater certainty, paragraph 1 prescribes the customary
international law minimum standard of treatment of aliens as
the minimum standard of treatment to be afforded to the
investors of the other Party and their investments. The
concepts of “fair and equitable treatment” and “full
protection and security” do not require treatment in
addition to or beyond that which is required by that
standard, and do not create additional substantive rights.
The obligation in paragraph 1 to provide:
(a) “fair and equitable treatment” includes the obligation
not to deny justice in criminal, civil, or administrative
adjudicatory proceedings in accordance with the principle
of due process embodied in the principal legal systems of
the world; and
(b) “full protection and security” requires each Party to
provide the level of police protection required under
customary international law.
3. A determination that there has been a breach of another
provision of this Agreement, or of a separate international
treaty or agreement, does not establish that there has been a
breach of this Article.

Article 10.06 Compensation for Losses
Each Party shall accord to the investors of the other Party
whose investments have been adversely affected in its territory
due to armed conflict, war, revolution, insurrection, or civil
strife, non-discriminatory treatment on any measure adopted or
maintained in relation to such losses.

Article 10.07 Performance Requirements
1. No Party may, in connection with the establishment,
acquisition, expansion, management, conduct, operation, or
sale or other disposition of an investment of an investor of
a Party or of a non-Party in its territory, impose or enforce
any of the following requirements, or enforce any commitment
or undertaking:
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use, or accord a preference to goods produced
or services provided in its territory, or to purchase goods
or services from persons in its territory;
(d) to 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 investment;
(e) to restrict sales of goods or services in its territory
that such investment produces or provides by relating such
sales in any way to the volume or value of its exports or
foreign exchange earnings;
(f) to transfer technology, production process, or other
proprietary knowledge to a person in its territory, except
when the requirement is imposed by a competent judicial
court or administrative authority, to remedy an alleged
violation of competition laws or to act in a manner not
inconsistent with other provisions of this Agreement or
when a Party authorizes use of an intellectual property
right in accordance with Article 31 of the TRIPS, or to
measures requiring the disclosure of proprietary
information that falls within the scope of, and are
consistent with Article 39 of the TRIPS [2]; or
(g) to act as the exclusive supplier of the goods it produces
or services it provides to a specific region or world
market.
All the provisions established in paragraph 1 do not apply to
any requirement other than indicated herein.
2. No Party may condition the receipt or continued receipt of an
advantage, in connection with an investment in its territory
of an investor of the other Party, on compliance with any of
the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use, or accord a preference to goods produced
in its territory, or to purchase goods from producers in
its territory; or
(c) to 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 investment.
All the provisions established in paragraph 2 do not apply to
any requirements other than indicated herein.
3. The provisions included in:
(a) paragraph 1 (a), (b), and (c) and paragraph 2 (a) and (b)
do not apply to requirements relating to the qualification
of goods and services for programs of export promotion and
foreign aid programs;
(b) paragraph 1 (b), (c), (f), and (g) and paragraph 2 (a) and
(b) do not apply to procurement by a Party or by a state
enterprise; and
(c) paragraph 2 (a) and (b) does not apply to requirements
imposed by an importing Party related to the contents of a
good necessary to qualify it for preferential tariffs or
quotas.
4. Nothing in paragraph 2 shall be construed to prevent a Party
from conditioning the receipt or continued receipt of an
advantage, in connection with an investment in its territory
of an investor of the other Party, 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.
5. Provided that such measures are not applied in an arbitrary
or unjustified manner or do not constitute a disguised
restriction to international trade or investment, nothing in
paragraph 1 (b), (c), or (f) or paragraph 2 (a) or (b) shall
be construed to prevent a Party from adopting or maintaining
measures, including environment measures, necessary to:
(a) ensure compliance with laws and regulations that are not
inconsistent with the provisions of this Agreement;
(b) protect human, animal, or plant life, or health; or
(c) conserve living or non-living exhaustible natural resources.
6. A measure that requires an investment to use a technology to
meet generally applicable health, safety, or environmental
requirements shall not be construed to be inconsistent with
paragraph 1 (f). For greater certainty, Articles 10.03 and
10.04 apply to the measure.
7. This Article does not preclude enforcement of any commitment,
undertaking, or requirement between private parties, where a
Party did not impose or require the commitment, undertaking,
or requirement.

Article 10.08 Senior Management and Boards of Directors
1. No Party may require that an enterprise of that Party that is
an investment of an investor of the other Party appoint to
senior management positions individuals of any particular
nationality.
2. A Party may require that a majority of the board of directors
or equivalent organs of administration, of an enterprise of
that Party that is an investment of an investor of the other
Party, be of a particular nationality, or resident in the
territory of the Party, provided that the requirement does
not materially impair the ability of the investor to exercise
control over its investment.

Article 10.09 Non-Conforming Measures
1. Articles 10.03, 10.04, 10.07, and 10.08 do not apply to:
(a) any existing non-conforming measure that is maintained by:
(i) a Party at the national level, as set out in its Schedule
to Annex I; or
(ii) a local or municipal government;
(b) the continuation or prompt renewal of any non-conforming
measure referred to in subparagraph (a); or
(c) the amendment of any non-conforming measure referred to in
subparagraph (a), provided that this amendment does not
decrease the conformity of the measure as it existed before
its amendment by Articles 10.03, 10.04, 10.07, and 10.08.
2. Articles 10.03, 10.04, 10.07, and 10.08 shall not apply to
any measure adopted or maintained by a Party in relation to
sectors, sub-sectors, or activities, as are indicated in
their Schedule to Annex II.
3. No Party may under any measure adopted after the date of
entry into force of this Agreement and covered by its
Schedule to Annex II, require an investor of the other Party,
by reason of its nationality, to sell or otherwise dispose of
an investment existing at the time the measure becomes
effective.
4. Article 10.04 does not apply to treatment accorded by a Party
in accordance with any International Treaty or Agreement, or
with regards to the sectors, sub-sectors, and activities as
set out in its Schedule to Annex III.
5. Articles 10.03, 10.04, and 10.08 do not apply to:
(a) procurement by a Party or a state enterprise; and
(b) subsidies or grants provided by a Party or a state
enterprise, including government supported loans,
guarantees, and insurance.

Article 10.10 Transfers
1. Provided they comply with the corresponding legislation, each
Party shall permit all transfers relating to an investment of
an investor of the other Party in the territory of the Party
to be made freely and without delay. Such transfers include:
(a) profits, dividends, interest, capital gains, royalty
payments, management fees, technical assistance and other
fees, returns in kind, and other amounts derived from the
investment;
(b) proceeds from the sale of all or any part of the investment
or from the partial or complete liquidation of the
investment;
(c) payments made under a contract entered into by the
investor, or its investment, including payments made
pursuant to a loan agreement;
(d) payments made pursuant to Article 10.11; and
(e) payments arising from the dispute settlement mechanism
under Section C of this Chapter.
2. Each Party shall permit transfers to be made without delay in
a freely convertible currency at the market rate of exchange
prevailing on the date of transfer.
3. No Party shall require its investors to transfer, or penalize
its investors that fail to transfer the income, earnings,
profits, or other amounts derived from or attributable to,
investments in the territory of the other Party.
4. Notwithstanding paragraphs 1 and 2, a Party may prevent a
transfer through the equitable, non-discriminatory, and good
faith application of its laws relating to:
(a) bankruptcy, insolvency, or the protection of the rights of
creditors;
(b) administrative or judicial definitive resolutions or
criminal offences;
(c) financial reporting or record keeping of transfers when
necessary to assist law enforcement or financial regulatory
authorities;
(d) ensuring the satisfaction of judgments and arbitral awards
in adjudicatory proceedings; or
(e) issuing, trading, or dealing in securities, futures,
options, or derivatives.
5. Paragraph 3 shall not be construed to prevent a Party from
imposing any measure through the equitable,
non-discriminatory, and good faith application of its laws
relating to the matters set out in subparagraphs (a) through
(e) of paragraph 4.

Article 10.11 Expropriation and Compensation
1. No Party may directly or indirectly nationalize or
expropriate an investment of an investor of the other Party
in its territory or take a measure tantamount to
nationalization or expropriation of such an investment
("expropriation"), except:
(a) for a public interest; [3]
(b) on a non-discriminatory basis;
(c) in accordance with due process of law; and
(d) on payment of compensation in accordance with this Article.
2. Compensation shall be equivalent to the fair market value of
the expropriated investment immediately before the
expropriation took place ("date of expropriation"), and shall
not reflect any change in value occurring because the
intended expropriation had become known earlier. Valuation
criteria shall include going concern value, asset value
including declared tax value of tangible property, and other
criteria, as appropriate, to determine fair market value.
3. Compensation shall be paid without delay and be fully
realizable.
4. The amount paid as compensation shall be no less than the
equivalent amount that would have been paid on that date to
the expropriated investor in a currency of free
convertibility in the international financial market
according to the exchange rate in force on the date in which
the fair market price was determined. The compensation shall
include the payment of interests computed from the day of
dispossession of the expropriated investment until the day of
payment, and shall be computed on the basis of a commercially
applicable rate for this currency set by the national bank
system of the Party where the expropriation occurred.
5. Upon payment, the compensation shall be freely transferable
according to Article 10.10.
6. This Article does not apply to the issuance of compulsory
licenses granted in relation to intellectual property rights,
or to the revocation, limitation, or creation of intellectual
property rights, to the extent that such issuance,
revocation, limitation, or creation is consistent with the
TRIPS.
7. For purposes of this Article and for greater certainty, a
non-discriminatory measure of general application shall not
be considered a measure tantamount to an expropriation of a
debt security or loan covered by this Chapter solely on the
ground that the measure imposes costs on the debtor that
cause it to default on the debt.

Article 10.12 Special Formalities and Information Requirements
1. Nothing in Article 10.03 shall be construed to prevent a
Party from adopting or maintaining a measure that prescribes
special formalities in connection with the establishment of
investments by investors of the other Party, such as a
requirement that investors be residents of the Party or that
investments be legally constituted under the laws or
regulations of the Party, provided that such formalities do
not materially impair the protections afforded by a Party to
investors of the other Party and investments of investors of
the other Party pursuant to this Chapter.
2. Notwithstanding Articles 10.03 and 10.04, a Party may require
an investor of the other Party, or its investment in its
territory, to provide routine information concerning that
investment solely for informational or statistical purposes.
The Party shall protect any confidential information from any
disclosure that would prejudice the competitive position of
the investor or the investment. Nothing in this paragraph
shall be construed to prevent a Party from otherwise
obtaining or disclosing information in connection with the
equitable and good faith application of its law.

Article 10.13 Relation to Other Chapters
1. In the event of any inconsistency between this Chapter and
another Chapter, the latter shall prevail to the extent of
the inconsistency.
2. A requirement by a Party that a service provider of the other
Party post a bond or other form of financial security as a
condition for providing a cross-border service into its
territory does not of itself make this Chapter applicable to
the rendering of that cross-border service. This Chapter
applies to that Party's treatment of the posted bond or
financial security.

Article 10.14 Denial of Benefits
Subject to previous notification and consultation done according
to Articles 13.04 (Provision of Information) and 15.05
(Consultations), a Party may deny the benefits under this
Chapter to an investor of the other Party that is an enterprise
of such other Party and to the investment of this investor, if
the investors of a non-Party own or control, (directly or
indirectly) the enterprise and the enterprise has no substantial
business activities in the territory of the Party under whose
law it is constituted or organized.

Article 10.15 Subrogation
1. When one Party, or any agency, institution, statutory body or
corporation designated by it, has furnished an insurance
contract or any other financial guarantee against
non-commercial risks, relating to any investment of one of
the investors of the other Party, the latter shall recognize
the rights of the first Party to subrogate in the rights of
the investor, whenever a payment has been made by virtue of
such contract or guarantee.
2. When one Party, or any agency, institution, statutory body or
corporation designated by it, has paid its investors and by
that virtue has acquired his rights and benefits, such
investors may not claim such rights and benefits to the other
Party, except by express authorization of the first Party.
For greater certainty, the same claim can only be submitted
either by the investor or the Party.

Article 10.16 Environmental Measures
1. Nothing in this Chapter shall be construed to prevent a Party
from adopting, maintaining, or enforcing any measure
otherwise consistent with this Chapter that it considers
appropriate to ensure that the investment activity in its
territory is undertaken in compliance with its ecological or
environmental laws and regulations.
2. The Parties recognize that it is inappropriate to encourage
investment by relaxing domestic health, safety or
environmental measures. Accordingly, a Party shall not waive
or otherwise derogate from, or offer to waive or otherwise
derogate from, such measures as an encouragement for the
establishment, acquisition, expansion or retention in its
territory of an investment of an investor. If a Party
considers that the other Party has offered such an
encouragement, it may request consultations with the other
Party, within the Committee of Investment and Cross-border
Trade in Services. [4]

Section C Settlement of Disputes between a Party and an Investor
of the other Party

Article 10.17 Purpose
Notwithstanding the rights and obligations of the Parties under
Chapter 15 (Dispute Settlement), this Section establishes a
mechanism for the settlement of investment disputes arising from
the violation of obligations established under Section B of this
Chapter that assures both equal treatment among investors of the
Parties in accordance with the principle of reciprocity and due
process before an impartial tribunal.

Article 10.18 Claim by an Investor of a Party on Its Own Behalf
1. An investor of a Party may submit to arbitration under this
Section a claim on the grounds that the other Party or an
enterprise controlled directly or indirectly by the other
Party, has breached an obligation under this Chapter if the
investor has suffered losses or damages from the violation of
this Chapter.
2. An investor may not make a claim if more than three (3) years
have elapsed from the date on which the investor first
acquired, or should have first acquired, knowledge of the
alleged breach and knowledge that the investor has suffered
losses or damages.

Article 10.19 Claim by an Investor of a Party on Behalf of an
Enterprise
1. An investor of a Party, on behalf of an enterprise of the
other Party, that the investor owns or controls directly or
indirectly, may submit to arbitration under this Section a
claim that the other Party or an enterprise controlled
directly or indirectly by that Party has breached an
obligation under this Chapter, whenever the enterprise has
suffered losses or damages due to that violation.
2. An investor may not make a claim on behalf of an enterprise
described in paragraph 1 if more than three (3) years have
elapsed from the date on which the enterprise first acquired,
or should have first acquired, knowledge of the alleged
breach and knowledge that the enterprise has suffered losses
or damages.
3. Where an investor makes a claim under this Article and the
investor or a non-controlling investor in the enterprise
makes a claim under Article 10.18 arising out of the same
events that gave rise to the claim under this Article, and
two or more of the claims are submitted to arbitration under
Article 10.22, the claims should be heard together by a
Tribunal established under Article 10.28, unless the Tribunal
finds that the interests of a disputing party would be
prejudiced thereby.

Article 10.20 Settlement of a Dispute through Consultation and
Negotiation
The disputing Parties must first attempt to settle a dispute
through consultation or negotiation. The period for consultation
and negotiation cannot exceed one hundred and eighty (180) days
from the date the disputing investor delivered written notice of
its intention to initiate consultation and negotiation.

Article 10.21 Notice of Intent to Submit a Claim to Arbitration
The disputing investor shall deliver to the disputing Party
written notice of its intention to submit a claim to arbitration
at least ninety (90) days before the claim is submitted, said
notice shall specify:
(a) the name and address of the disputing investor and, where a
claim is made under Article 10.19, the name, address, and
the type of business of the enterprise;
(b) the provisions of this Chapter alleged to have been
breached and any other relevant provisions;
(c) the issues and the factual basis for the claim; and
(d) the relief sought and the approximate amount of damages
claimed.

Article 10.22 Submission of a Claim to Arbitration
1. Provided that one hundred and eighty (180) days have elapsed
since the events giving rise to a claim, a disputing investor
may submit the claim to arbitration under:
(a) the ICSID Convention, provided that both the disputing
Party and the Party of the investor are Contracting Parties
to the Convention;
(b) the Additional Facility Rules of ICSID, provided that
either the disputing Party or the Party of the investor,
but not both, is a Contacting Party to the ICSID Convention;
(c) the UNCITRAL Arbitration Rules; or
(d) the ICC Arbitration Rules.
2. The applicable arbitration rules shall govern the arbitration
established in this Chapter except to the extent modified by
this Section.

Article 10.23 Conditions Prior to the Submission of a Claim to
Arbitration
1. Consent of the disputing parties in the arbitration procedure
according to this Chapter shall be considered as consent to
this arbitration that excludes any other procedure.
2. The disputing investor shall exhaust its local administrative
remedies as a condition for consenting to the arbitration
under this Chapter. Nevertheless, if one hundred and eighty
days (180) days have elapsed from the date on which the
administrative remedies were lodged and the administrative
authorities have not issued a final resolution, the investor
may directly appeal to arbitration, according to the
provisions of this Section.
3. In order to submit to Arbitration under this Chapter a claim
that is based on the fact that a Party has failed to comply
with its obligation not to deny justice and therefore has not
granted a “fair and equitable treatment” in accordance with
customary international law, the disputing investor must
previously exhaust all internal judicial remedies.
4. A disputing investor may submit a claim under Article 10.18
to arbitration only if:
(a) the investor consents to arbitration in accordance with the
procedures set out in this Section; and
(b) the investor and, where the claim is for losses or damages
to an interest in an enterprise of the other Party that the
investor owns or controls directly or indirectly, the
enterprise, waive their right to initiate or continue
before any competent judicial court or administrative
authority, under the law of the Parties, or other dispute
settlement procedures, any proceedings with respect to the
measure of the disputing Party that is alleged to be a
breach referred to in Article 10.18, except for
proceedings, not involving the payment of monetary damages,
before a competent judicial court or administrative
authority under the law of the disputing Party.
5. A disputing investor may present a claim to the arbitration
procedure according to Article 10.19 only if both investor
and enterprise:
(a) consent to submit the claim to arbitration in accordance
with the procedures set out in this Section; and
(b) waive their right to initiate or continue before any
competent judicial court or administrative authority under
the law of the Parties, or other dispute settlement
procedures, any proceedings with respect to the measure of
the disputing Party that is alleged to be a breach referred
to in Article 10.19, except for proceedings, not involving
the payment of monetary damages, before a competent
judicial court or administrative authority under the law of
the disputing Party.
6. The consent and the waiver required by this Article shall be
stated in writing, delivered to the disputing Party and
included in the submission of the claim to arbitration.
7. The waiver by the enterprise, under paragraphs 4 (b) and 5
(b) , shall not be required if, and only if, the disputing
Party has deprived the disputing investor of the control of
an enterprise.

Article 10.24 Consent to Arbitration
1. Each Party consents to the submission of a claim to
arbitration in accordance with the procedures and
requirements set out in this Section.
2. The consent given by paragraph 1 and the submission by a
disputing investor of a claim to arbitration shall be deemed
as having satisfied the requirement of:
(a) Chapter II of the ICSID Convention (Jurisdiction of the
Centre) and the Additional Facility Rules for written
consent of the parties; and
(b) Article II of the New York Convention for an agreement in
writing.

Article 10.25 Number of Arbitrators and Method of Appointment
Except with regards to a Tribunal established under Article
10.28, and unless the disputing parties agree otherwise, the
Tribunal shall be comprised of three arbitrators; one arbitrator
appointed by each of the disputing parties and the third, who
shall be the presiding arbitrator of the Tribunal, appointed by
agreement of the disputing parties.

Article 10.26 Constitution of a Tribunal When a Party Fails to
Appoint an Arbitrator or the Disputing Parties
Are Unable to Agree on a Presiding Arbitrator
1. In the event a disputing party does not appoint an arbitrator
or an agreement is not reached with regards to the
appointment of the presiding arbitrator of the Tribunal, the
arbitrator or the presiding arbitrator of the Tribunal in the
arbitration proceeding shall be designated, according to this
Section.
2. When a Tribunal, except with regards to a Tribunal
established under Article 10.28, is not constituted within a
period of ninety (90) days from the date on which the claim
is submitted to arbitration, the Secretary-General of the
ICSID, or an appropriate official (hereinafter the
Secretary-General) at an international organization agreed
upon by the disputing parties with previous consultation of
the same ones, shall appoint the pending arbitrator or
arbitrators, except for the presiding arbitrator of the
Tribunal who shall be appointed according to paragraph 3. In
any case, the majority of arbitrators shall not be nationals
of either disputing Party or the Party of the disputing
investor.
3. The Secretary-General shall appoint the presiding arbitrator
of the Tribunal from the roster of arbitrators referred to in
paragraph 4, ensuring that the presiding arbitrator of the
Tribunal is not a national of the disputing Party or a
national of the Party of the disputing investor. In case an
available arbitrator cannot be found within the roster to
head the Tribunal, the Secretary-General shall appoint the
presiding arbitrators of the tribunal from the roster of
arbitrators of the ICSID, provided that he or she is of a
nationality different from the disputing Party or from the
Party of the disputing investor.
4. On the date of entry into force of this Agreement, the
Parties shall establish and maintain a roster of six (6)
arbitrators as possible presiding arbitrators of the
Tribunal, none of which may be national of a Party, who
comply with the rules contemplated in Article 10.22 and have
experience in international law and in investment matters.
The members of the roster shall be appointed by mutual
agreement, regardless of nationality, for a period of two (2)
years that may be extended if the Parties so decide. In case
of death or resignation of one member of the roster, the
Parties shall appoint by mutual agreement a substitute for
the remaining period to which the former member was appointed.

Article 10.27 Agreement to Appointment of Arbitrators
For purposes of Article 39 of the ICSID Convention and Article 7
of Schedule C to the ICSID Additional Facility Rules, and
without prejudice to an objection to an arbitrator based on
Article 10.26 (3) or on a ground other than nationality:
(a) the disputing Party agrees to the appointment of each
individual member of a Tribunal established under the ICSID
Convention or the ICSID Additional Facility Rules;
(b) a disputing investor referred to in Article 10.18 may
submit a claim to arbitration, or continue a claim, under
the ICSID Convention or the ICSID Additional Facility
Rules, only on condition that the disputing investor agrees
in writing to the appointment of each individual member of
the Tribunal; and
(c) a disputing investor referred to in Article 10.19 (1) may
submit a claim to arbitration, or continue a claim, under
the ICSID Convention or the ICSID Additional Facility
Rules, only on condition that the disputing investor and
the enterprise agree in writing to the appointment of each
individual member of the Tribunal.

Article 10.28 Consolidation
1. A Tribunal under this Article shall be established according
to the UNCITRAL Arbitration Rules and shall conduct its
proceedings in accordance with those Rules, except as
modified by this Section.
2. Where a Tribunal established under this Article determines
that claims have been submitted to arbitration under Article
10.22 raise a question of law or fact in common, the Tribunal
may, in the interests of fair and efficient resolution of the
claims, and after hearing the disputing parties, order:
(a) to assume jurisdiction over, and hear and determine
together, all or part of the claims; or
(b) to assume jurisdiction over, and hear and determine one or
more of the claims, the determination of which it believes
would assist in the resolution of the others.
3. A disputing party that seeks an order under paragraph 2 shall
request the Secretary-General to establish a Tribunal and
shall specify in the request:
(a) the name of the disputing Party or disputing investors
against which the order is sought;
(b) the nature of the order sought; and
(c) the grounds on which the order is sought.
4. The disputing party shall deliver a copy of the request to
the disputing Party or disputing investors against which the
order is sought.
5. Within sixty (60) days of receipt of the request, the
Secretary-General shall establish a Tribunal comprising three
arbitrators. The Secretary-General shall appoint the
presiding arbitrator from the roster referred to in Article
10.26 (4). In the event that no such presiding arbitrator is
available to serve, the Secretary-General shall appoint, from
the ICSID Panel of Arbitrators, a presiding arbitrator who is
not a national of any of the Parties. The Secretary-General
shall appoint the two other members from the roster referred
to in Article 10.26 (4), and to the extent not available from
that roster, from the ICSID Panel of Arbitrators, and to the
extent not available from that Panel, under the discretion of
the Secretary-General. One member shall be a national of the
disputing Party and one member shall be a national of the
Party of the disputing investors.
6. Where a Tribunal has been established under this Article, a
disputing investor that has submitted a claim to arbitration
under Article 10.18 or 10.19 and that has not been named in a
request made under paragraph 3 may make a written request to
the Tribunal that it be included in an order made under
paragraph 2, and shall specify in the request:
(a) the name, address, and the type of business of the
enterprise of the disputing investor;
(b) the nature of the order sought; and
(c) the grounds on which the order is sought.
7. A disputing investor referred to in paragraph 6 shall deliver
a copy of its request to the disputing parties named in a
request made under paragraph 3.
8. A Tribunal established under Article 10.22 shall not have
jurisdiction to decide a claim, or a part of a claim, over
which a Tribunal established under this Article has assumed
jurisdiction.
9. On application of a disputing party, a Tribunal established
under this Article, pending its decision under paragraph 2,
may order that the proceedings of a Tribunal established
under Article 10.22 be stayed, unless the latter Tribunal has
already adjourned its proceedings, until there is a decision
about the propriety of consolidation.
10. A disputing party shall deliver to the Secretariat, within
ifteen (15) days of receipt by the disputing Party, a copy
of:
(a) a request for arbitration made under paragraph (1) of
Article 36 of the ICSID Convention;
(b) a notice of arbitration made under Article 2 of Schedule C
of the ICSID Additional Facility Rules;
(c) a notice of arbitration given under the UNCITRAL
Arbitration Rules; or
(d) a request for arbitration made under ICC Arbitration Rules.
11. A disputing Party shall deliver to the Secretariat a copy of
request made under paragraph 3:
(a) within fifteen (15) days of receipt of the request, in the
case of a request made by a disputing investor; or
(b) within fifteen (15) days of making the request, in the case
of a request made by the disputing Party.
12. A disputing Party shall deliver to the Secretariat a copy of
request made under paragraph 6 within fifteen (15) days of
receipt of the request.
13. The Secretariat shall maintain a public register of the
ocuments referred to in paragraphs 10, 11, and 12 of this
Article.

Article 10.29 Notice
A disputing Party shall deliver to the other Party:
(a) written notice of a claim that has been submitted to
arbitration no later than thirty (30) days after the date
that the claim is submitted; and
(b) copies of all pleadings filed in the arbitration.

Article 10.30 Participation by a Party
On written notice to the disputing parties, a Party may make
submissions to a Tribunal on a question of interpretation of
this Agreement.

Article 10.31 Documents
1. A Party shall be entitled, at its own cost, to receive from
the disputing Party a copy of:
(a) the evidence that has been tendered to the Tribunal
according to this Section; and
(b) the written argument of the disputing parties.
2. A Party receiving information pursuant to paragraph 1 shall
treat the confidential information as if it were a disputing
Party.

Article 10.32 Venue of Arbitration
Unless the disputing parties agree otherwise, a Tribunal
established under this Section shall hold an arbitration in the
territory of a Contracting Party to the New York Convention,
selected in accordance with:
(a) the ICSID Additional Facility Rules if the arbitration is
under those Rules, or the ICSID Convention;
(b) the UNCITRAL Arbitration Rules if the arbitration is under
those Rules; or
(c) the ICC Arbitration Rules if the arbitration is under those
Rules.

Article 10.33 Governing Law
1. A Tribunal established under this Section shall decide the
issues in dispute in accordance with this Agreement, and
applicable rules of international law.
2. When appropriate, the Tribunal may apply general principles
of law, and the law of the disputing Party, including its
rules on the conflict of laws.
3. A decision of the Commission declaring its interpretation of
a provision of this Agreement shall be binding on a tribunal
established under this Section, and any decision or award
issued by the tribunal must be consistent with that decision.

Article 10.34 Interpretation of Annexes
1. Where a disputing Party asserts as a defense that the measure
alleged to be a breach is within the scope of a reservation
or exception set out in those Annexes, on request of the
disputing Party, the Tribunal shall request the
interpretation of the Commission on the issue. The
Commission, within sixty (60) days of delivery of the
request, shall submit in writing its interpretation to the
Tribunal.
2. Further to Article 10.33 (2), a Commission interpretation
submitted under paragraph 1 shall be binding on the Tribunal
established under this Section. If the Commission fails to
submit an interpretation within sixty (60) days, the Tribunal
shall decide the issue.

Article 10.35 Expert Reports
Without prejudice to the appointment of other kinds of experts
where authorized by the applicable arbitration rules, a
Tribunal, at the request of a disputing party or, on its own
initiative, may appoint one or more experts to report to it in
writing on any issue concerning the controversy.

Article 10.36 Interim Measures of Protection
A Tribunal established under this Section may request, or the
disputing parties may petition to, in accordance with domestic
legislation, national courts for imposing an interim measure of
protection to preserve the rights of a disputing party, or to
ensure that the Tribunal's jurisdiction is made fully
effective. A Tribunal established under this Section may not
order attachment or enjoin the application of the measure
alleged to constitute a breach referred to in Article 10.18 or
10.19.

Article 10.37 Final Award
1. Where a Tribunal established under this Section makes a final
award against a disputing Party, the Tribunal may award only:
(a) monetary damages and any applicable interest; or
(b) restitution of property, in which case the award shall
provide that the disputing Party may pay monetary damages
and any applicable interest in lieu of restitution.
A Tribunal may also award costs in accordance with the
applicable arbitration rules.
2. Subject to paragraph 1, where a claim is made under Article
10. 19 (1):
(a) an award of restitution of property shall provide that
restitution be made to the enterprise; or
(b) an award of monetary damages and any applicable interest
shall provide that the sum be paid to the enterprise.
3. The award shall provide that it is made without prejudice to
any right that any person may have in the relief under
applicable domestic law.
4. The tribunal is not authorized to award punitive damages.

Article 10.38 Finality and Enforcement of an Award
1. An award made by a Tribunal established under this Section
shall have no binding force except between the disputing
parties and in respect of the particular case.
2. Subject to paragraph 3 and the applicable review procedure
for an award, a disputing party shall abide by and comply
with an award without delay.
3. A disputing party may not seek enforcement of a final award
until:
(a) in the case of a final award made under the ICSID
Convention:
(i) one hundred and twenty (120) days have elapsed from the
date the award was rendered and no disputing party has
requested explanation, revision or annulment of the
award; or
(ii) explanation, revision or annulment proceedings have been
completed; and
(b) in the case of a final award under the ICSID Additional
Facility Rules, the UNCITRAL Arbitration Rules, or the ICC
Arbitration Rules:
(i) ninety (90) days have elapsed from the date the award was
rendered and no disputing party, has used pertinent legal
remedies; or
(ii) a court has dismissed or allow the application of
pertinent legal remedies against the award and there is
no further appeal.
4. Each Party shall provide for the enforcement of an award in
its territory.
5. If a disputing Party fails to abide by or comply with a final
award, the Commission, on delivery of a request by a Party
whose investor was a party to the arbitration, shall
establish a panel under Article 15.07 (Establishment of an
Arbitral Panel). The requesting Party may seek in such
proceedings:
(a) a determination that the failure to abide by or comply with
the final award is inconsistent with the obligations of
this Agreement; and
(b) a recommendation that the Party abide by or comply with the
final award.
6. A disputing investor may seek enforcement of an arbitration
award under the New York Convention, or the ICSID Convention,
regardless of whether proceedings have been taken under
paragraph 5.
7. A claim that is submitted to arbitration under this Section
shall be considered to arise out of a commercial relationship
or transaction for purposes of Article 1 of the New York
Convention.

Article 10.39 General Provisions
Time when a Claim is Submitted to Arbitration
1. A claim is submitted to arbitration under this Section when:
(a) the request for arbitration under paragraph (1) of Article
36 of the ICSID Convention has been received by the
Secretary-General;
(b) the notice of arbitration under Article 2 of Schedule C of
the ICSID Additional Facility Rules has been received by
the Secretary-General;
(c) the notice of arbitration given under the UNCITRAL
Arbitration Rules is received by the disputing Party; or
(d) the request for arbitration under Article 4 of the ICC
Arbitration Rules has been received by the Secretariat.
Delivery of Notifications and Other Documents
2. Delivery of notifications and other documents to a Party
shall be made to the place named for that Party in Annex 10 C.
Receipts under Insurance or Guarantee Contracts
3. In an arbitration under this Section, a Party shall not
assert, as a defense, counterclaim, right of setoff or
otherwise, that the disputing investor has received or will
receive, pursuant to an insurance or guarantee contract,
indemnification or other compensation for all or part of its
alleged damages.
Publication of an Award
4. The awards shall be published only if there is an agreement
in writing by the disputing parties.

CHAPTER 11: CROSS-BORDER TRADE IN SERVICES

Article 11.01 Definitions
For purposes of this Chapter, the following terms shall be
understood as:
cross-border trade in services or cross-border service: the
provision of a service:
(a) from the territory of a Party into the territory of the
other Party;
(b) in the territory of a Party, by a person of that Party to
the services consumer of the other Party; or
(c) by a service provider of a Party, through presence of
nationals of a Party in the territory of the other Party;
but does not include the provision of a service in the territory
of a Party by an investment, as defined in Article 10.01
(Definitions), in that territory;
enterprise: an "enterprise" as defined in Chapter 2 (General
Definitions), and a branch of an enterprise;
enterprise of a Party: an enterprise constituted or organized
under the law of a Party, and a branch located in the territory
of a Party and carrying out business activities there;
services provided in the performing of government functions: any
cross-border service provided by a public institution in
non-commercial conditions and without competing with one or more
service providers;
service provider of a Party: a person of a Party that provides
or seeks to provide a cross-border service; and
specialty air services: any non-transportation air services,
such as aerial fire-fighting, sightseeing, spraying, surveying,
mapping, photography, parachute jumping, glider towing, and
helicopter-lift for logging and construction, and other airborne
agricultural, industrial, and inspection services.

Article 11.02 Scope of Application
1. This Chapter applies to measures adopted or maintained by a
Party relating to cross-border trade in services by service
providers of the other Party, including measures respecting:
(a) the production, distribution, marketing, sale, and delivery
of a cross-border service;
(b) the purchase or use of, or payment for, a cross-border
service;
(c) the access to and use of distribution and transportation
systems in connection with the provision of a cross-border
service;
(d) the presence in its territory of a cross-border service
provider of the other Party; and
(e) the provision of a bond or other form of financial security
as a condition for the provision of a cross-border service.
2. For purposes of this Chapter, it shall be understood that the
measures adopted or maintained by a Party include the
measures adopted or maintained by non-governmental
institutions or bodies in the performance of regulatory,
administrative or other functions of a governmental nature
delegated to them by the Party.
3. This Chapter does not apply to:
(a) subsidies or grants provided by a Party or a state
enterprise, including government-supported loans,
guarantees, and insurance;
(b) air services, including domestic and international air
transportation services, whether scheduled or
non-scheduled, and related services in support of air
services, other than:
(i) aircraft repair and maintenance services during which an
aircraft is withdrawn from service;
(ii) specialty air services;
(iii) the selling and marketing of air transport services; and
(iv) computer reservation system (CRS) services;
(c) government services or functions such as law enforcement,
correctional services, income security or insurance, or
social security or insurance, social welfare, water supply,
public education, public training, health, and child care;
(d) cross-border financial services;
(e) cross-border telecommunications services; and
(f) government procurement done by a Party or state enterprise.
[5]
4. Nothing in this Chapter shall be construed to impose any
obligation on a Party with respect to a national of the other
Party seeking access to its employment market, or employed on
a permanent basis in its territory, or to confer any right on
that national with respect to that access or employment.

Article 11.03 National Treatment
1. Each Party shall accord to cross-border services and service
providers of the other Party treatment no less favorable than
that it accords, in like circumstances, to its own services
and service providers.
2. Specific commitments assumed under this Article shall not be
construed to require any Party to compensate for any inherent
competitive disadvantages which result from the foreign
character of the relevant services or service suppliers.

Article 11.04 Most-Favored-Nation Treatment [6]
Each Party shall accord to cross-border services and service
providers of the other Party treatment no less favorable than
that it accords, in like circumstances, to services and service
providers of any non-Party.

Article 11.05 Local Presence
No Party may require a service provider of the other Party to
establish or maintain a representative office or any form of
enterprise, or to be resident, in its territory as a condition
for the cross-border provision of a service.

Article 11.06 Market Access
No Party may adopt or maintain measures that:
(a) impose limitations on:
(i) the number of service suppliers whether in the form of
numerical quotas, monopolies, exclusive service
suppliers, or the requirement of an economic needs test;
(ii) the total value of service transactions or assets in
form of numerical quotas or the requirement of an
economic needs test;
(iii) the total number of service operations or on the total
quantity of services output expressed in terms of
designated numerical units in the form of quotas or the
requirement of an economic needs test; [7] or
(iv) the total number of natural persons that may be employed
in a particular service sector or that a service
supplier may employ and who are necessary for, and
directly related to, the supply of a specific service in
the form of numerical quotas or the requirement of an
economic needs test; or
(b) restrict or require specific types of legal entity or joint
venture through which a service supplier may supply a
service.

Article 11.07 Permission, Authorization, Licensing, and
Certification
With a view to ensuring that any measure adopted or maintained
by a Party relating to the permission, authorization, licensing
or certification of nationals of the other Party does not
constitute an unnecessary barrier to cross-border trade, each
Party shall endeavor to ensure that any such measure:
(a) is based on objective and transparent criteria, such as
competence and the ability to provide a cross-border
service;
(b) is not more burdensome than necessary to ensure the quality
of a cross border service; and
(c) does not constitute a disguised restriction on the
cross-border provision of a service.

Article 11.08 Non-conforming Measures
1. Articles 11.03, 11.04, 11.05, and 11.06 do not apply to:
(a) any existing non-conforming measure that is maintained by:
(i) a Party at the national level, as set out in its Schedule
to Annex I; or
(ii) a local or municipal level of government;
(b) the continuation or prompt renewal of any non-conforming
measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in
subparagraph (a) to the extent that the amendment does not
decrease the conformity of the measure, as it existed
immediately before the amendment, with Articles
11.03,11.04,11.05, and 11.06.
2. Articles 11.03, 11.04, 11.05, and 11.06 do not apply to any
measure that a Party adopts or maintains with respect to
sectors, sub-sectors or activities, as set out in its
Schedule to Annex II.
3. Article 11.04 does not apply to the treatment granted by a
Party in accordance with any international treaty or
agreement, or with regards to the sectors, subsectors, and
activities as set out in its Schedule to Annex III.

Article 11.09 Denial of Benefits
Subject to prior notification and consultation in accordance
with Articles 13.04 (Provision of Information) and 15.05
(Consultations), a Party may deny the benefits of this Chapter
to a service provider of the other Party where the Party
decides, according to its effective law that the service is
being provided by an enterprise that is owned or controlled by
persons of a non-Party having no substantial business activities
in the territory of the other Party.

Article 11.10 Future Liberalization
The Parties, through future negotiations to be convened by the
Commission, shall deepen the liberalization reached in different
service sectors, with the aim of eliminating the remaining
restrictions listed under Article 11.08 (1) and (2).

Article 11.11 Procedures
The Parties shall establish procedures for:
(a) a Party to notify and include in its relevant Schedule the
amendments of measures referred to in Article 11.07 (1),
(2) , and (3); and
(b) consultations on reservations for further liberalization.

Article 11.12 Disclosure of Confidential Information
No provision in this Chapter may be construed as imposing on the
Parties the obligation to provide confidential information of
which the disclosure may be an obstacle to the observance of
laws or otherwise be damaging to the public interest, or that
may injure legitimate trade interests of state and private
enterprises.

Article 11.13 Transfers and Payments
1. Each Party shall permit all transfers and payments relating
to the cross-border supply of services to be made freely and
without delay into and out of its territory.
2. Each Party shall permit such transfers and payments relating
to the cross-border supply of services to be made in a freely
usable currency at the market rate of exchange prevailing at
the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent a
transfer or payment through the equitable,
non-discriminatory, and good faith application of its laws
relating to:
(a) bankruptcy, insolvency, or the protection of the rights of
creditors;
(b) issuing, trading, or dealing in securities, futures,
options, or derivatives;
(c) financial reporting or record keeping of transfers when
necessary to assist law enforcement or financial regulatory
authorities;
(d) criminal or penal offenses; or
(e) ensuring compliance with orders or judgments in judicial or
administrative proceedings.

Article 11.14 Committee on Investment and Cross-border Trade in
Services
1. The Parties hereby establish the Committee on Investment and
Cross-border Trade in Services, as set out in Annex 11.14.
2. The Committee shall hear matters relating to this Chapter and
Chapter 10 (Investment) and, without prejudice to the
provisions of Article 14.05 (2) (Committees), shall have the
following functions:
(a) supervising the implementation and administration of
Chapters 10 (Investment) and 11 (Cross-border Trade in
Services);
(b) discussing matters relating to investment and cross-border
trade in services presented by a Party;
(c) analyzing matters that are discussed in other international
fora;
(d) facilitating the exchange of information between the
Parties and cooperating in giving advice on investment and
cross-border trade in services; and
(e) establishing working groups or convening panels of experts
on matters of interest to the Parties.
3. The Committee shall meet when necessary or at any other time
at the request of any Party. Representatives of other
institutions may also take part in its meetings if the
relevant authorities deem it appropriate.

CHAPTER 12: TEMPORARY ENTRY OF BUSINESS PERSONS

Article 12.01 Definitions
1. For purposes of this Chapter, the following terms shall be
understood as:
business activities: legitimate commercial activities undertaken
and operated for the purpose of obtaining profits in the market,
but not including the possibility of obtaining employment, wages
or remuneration from a labor source in the territory of a Party;
business person: a national of a Party who engages in trade of
goods, provision of services, or management of investment
activities;
labor certification: procedure applied by the competent
administrative authority for the purpose of determining if a
national of a Party who seeks temporary entry into the territory
of the other Party displaces national workers in the same
domestic industry or noticeably harms its labor conditions;
national: "national" as defined in Chapter 2 (General
Definitions), but not including those permanent or definitive
residents;
pattern of practice: a practice repeatedly followed by the
immigration authorities of one Party during the representative
period immediately before the execution of the same; and
temporary entry: entry into the territory of a Party by a
business person of the other Party without the intention to
establish permanent residence.
2. For purposes of Annex 12.04, the following terms shall be
understood as:
executive functions: functions assigned in an organization to a
person who shall have the following basic responsibilities:
(a) managing the administration of the organization, or of a
relevant component, or function within it;
(b) establishing the policies and objectives of the
organization, components or function; or
(c) receiving supervision or general direction only from
executives in a higher level, the board of directors or the
administrative council of the organization or its
shareholders;
management functions: functions assigned in an organization to a
person who shall have the following basic responsibilities:
(a) managing the organization or an essential function within
it;
(b) supervising and controlling the work of other professional
employees, supervisors, or administrators;
(c) having the authority to hire and dismiss or to recommend
these actions, and to undertake other actions related to
the management of the personnel directly supervised by this
person, and to perform senior functions within the
organizational hierarchy or functions related to his
position; or
(d) performing discretionary actions related to the daily
operation of the function over which this person has
authority; and functions requiring specialized knowledge:
functions that require special knowledge of goods,
services, research, equipment, techniques, management of an
organization or of its interests and their application in
international markets, or an advanced level of knowledge or
experience in the processes and procedures of the
organization.

Article 12.02 General Principles
This Chapter reflects the preferential trading relationship
between the Parties, the convenience of facilitating temporary
entry on a reciprocal basis and the establishment of transparent
criteria and procedures for temporary entry as well as the need
to guarantee the security at the borders, and to protect the
domestic labor force and permanent employment in their
respective territories.

Article 12.03 General Obligations
1. Each Party shall apply its measures relating to the
provisions of this Chapter in accordance with Article 12.02
and, in particular, shall apply them expeditiously so as to
avoid undue delays or the impairment of trade in goods or
services or the management of investment activities under
this Agreement.
2. The Parties shall endeavor to develop and adopt common
criteria, definitions, and interpretations for the
implementation of this Chapter.

Article 12.04 Granting of Temporary Entry
1. Each Party shall grant temporary entry to business persons
who are otherwise qualified for entry under applicable
measures relating to public health and safety and national
security, in accordance with this Chapter, including the
provisions of Annex 12.04 and 12.04 (1).
2. A Party may deny temporary entry to a business person when
the temporary entry of that person might adversely affect:
(a) the settlement of a labor dispute underway at the place or
intended place of employment; or
(b) the employment of any person who is involved in such
dispute.
3. Each Party shall limit any fees for processing applications
for temporary entry of business persons to the approximate
cost of the services rendered.
4. An authorization of temporary entry under this Chapter does
not supersede the requirements demanded by the exercise of a
profession or activity according to the specific rules in
force in the territory of the Party authorizing the temporary
entry.

Article 12.05 Provision of Information
1. In addition to Article 13.03 (Publication), each Party shall:
(a) provide to the other Party such materials as will enable it
to become acquainted with its measures relating to this
Chapter; and
(b) no later than one (1) year after the date of entry into
force of this Agreement, prepare, publish, and make
available in its own territory, and in the territory of the
other Party, explanatory material in a consolidated
document regarding the requirements for temporary entry
under this Chapter in such a manner that it enables
business persons of the other Party to become acquainted
with them.
2. Each Party shall collect, maintain, and make available to the
other Party the information regarding the granting of
temporary entry under this Chapter to business persons of the
other Party who have been issued immigration documentation,
including specific data for each authorized category.

Article 12.06 Dispute Settlement
A Party may not initiate proceedings under Article 15.05
(Consultations), regarding a denial to grant temporary entry
under this Chapter or a particular case arising under Article
12.03, unless:
(a) the matter involves a pattern of practice; and
(b) the affected business person has exhausted the available
administrative proceedings regarding that particular
matter, in accordance with the domestic law and regulations
of that Party.

Article 12.07 Relationship to Other Chapters and Articles
Except as provided in this Chapter, in Chapters 1 (Initial
Provisions), 2 (General Definitions), 14 (Administration of the
Agreement), 18 (Final Provisions) and in Articles 13.02
(Information Center), 13.03 (Publication), 13.04 (Provision of
Information), 13.05 (Guarantees of Hearing, Legality, and Due
Process), and 13.06 (Administrative Proceedings for Adopting
Measures of General Applications), no provision in this
Agreement shall impose an obligation on a Party regarding its
immigration measures.

PART FIVE: ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS

CHAPTER 13: TRANSPARENCY

Article 13.01 Definitions
For purposes of this Chapter, administrative ruling of general
application means an administrative ruling or interpretation
that applies to all persons and fact situations that fall
generally within its scope and that establishes a norm of
conduct but does not include:
(a) a determination made in an administrative proceeding that
applies to a particular person, good, or service of another
Party in a specific case; or
(b) a judicial ruling that adjudicates with respect to a
particular act or practice.

Article 13.02 Information Center
1. Each Party shall designate within sixty (60) days after the
entry in force of this Agreement an office to serve as an
information center to facilitate communications among the
Parties, on any matter covered by this Agreement.
2. On request of another Party, the information center shall
identify the office or official responsible for the matter
and assist, as necessary, in facilitating communication with
the requesting Party.

Article 13.03 Publication
Each Party shall ensure that its laws, regulations, procedures,
and administrative rulings of general application respecting any
matter covered by this Agreement are promptly published or
otherwise made available in such a manner as to enable
interested persons and Parties to become acquainted with them.

Article 13.04 Provision of Information
1. To the maximum extent possible, each Party shall notify the
other Party of any proposed or actual measure that the Party
considers might affect substantially the other Party’s
interest under this Agreement.
2. On request of another Party, a Party shall promptly provide
information and respond to questions pertaining to any actual
or proposed measure.
3. Any notification or information provided on actual or
proposed measures under this Article shall be without
prejudice as to whether the measure is consistent with this
Agreement.

Article 13.05 Guarantees of Hearing, Legality, and Due Process
Each Party shall ensure that in legal and administrative
proceedings related to the application of any measure referred
to in Article 13.03, the guarantees of hearing, legality and due
process established in their own laws are respected in the sense
of Articles 13.06 and 13.07.

Article 13.06 Administrative Proceedings for the Adoption of
Measures of General Application
With a view to administering in a consistent, impartial, and
reasonable manner all measures of general application affecting
matters covered in this Agreement, each Party shall, in its
administrative proceedings applying measures referred to in
Article 13.03 to particular persons, goods, or services of
another Party in specific cases, ensure that:
(a) wherever possible, persons of the other Party that are
directly affected by a proceeding are provided reasonable
notice, in accordance with domestic procedures, when a
proceeding is initiated, including a description of the
nature of the proceeding, a statement of the legal
authority under which the proceeding is initiated and a
general description of any issues in controversy;
(b) such persons are afforded a reasonable opportunity to
present facts and arguments in support of their positions
prior to any final administrative action, when the time,
the nature of the proceeding, and the public interest
permit; and
(c) its procedures are in accordance with domestic law.

Article 13.07 Review and Appeal
1. Each Party shall maintain judicial or administrative
tribunals or procedures for the purpose of the prompt review
and, where warranted, correction of final administrative
actions regarding matters covered by this Agreement. Such
tribunals shall be impartial and independent of the office or
authority entrusted with administrative enforcement and shall
not have any substantial interest in the outcome of the
matter.
2. Each Party shall ensure that, in any such tribunals or
procedures, the parties to the proceedings are provided with
the right to:
(a) a reasonable opportunity to support or defend their
respective positions; and
(b) a decision based on the evidence and submissions compiled
by the administrative authority.
3. Each Party shall ensure, subject to appeal or further review
as provided in its domestic law, that such decisions shall be
implemented by, and shall govern the practice of, the
competent authority with respect to the administrative action
at issue.

Article 13.08 Communications and Notifications
Except as agreed otherwise, it shall be understood that a
communication or notification to a Party has been completed, as
of its receipt by the Information Center of that Party.

Article 13.09 Language
Unless the Parties otherwise agree:
(a) notifications, communications, and information supply that
a Party provides to the other Party, in accordance with
this Agreement, shall be: in the case of the Republic of
China (Taiwan), in its official language, along with a
corresponding English translation or in English; and in the
case of the Republic of El Salvador and the Republic of
Honduras, in their official language, along with a
corresponding English translation; and
(b) the writings, allegations, notifications, communications,
hearings, and proceedings that the Parties submit, in any
procedure described in Chapter 15 (Dispute Settlement)
shall be: in the case of the Republic of China (Taiwan), in
its official language, along with a corresponding English
translation or in English; and in the case of the Republic
of El Salvador and the Republic of Honduras, in their
official language, along with a corresponding English
translation.

CHAPTER 14: ADMINISTRATION OF THE AGREEMENT

Section A Commission, Sub-commission and Secretariat

Article 14.01 Administrative Commission of the Agreement
1. The Parties hereby establish the Administrative Commission of
the Agreement, which is composed of the officials referred to
in Annex 14.01, or of the persons designated by them.
2. The Commission shall:
(a) supervise the implementation and the correct application of
the provisions of this Agreement;
(b) evaluate the results in the application of this Agreement;
(c) monitor the development of the Agreement and recommend to
the Parties any modifications which it deems necessary;
(d) resolve any disputes that may arise regarding the
interpretation or application of this Agreement, as
stipulated in Chapter 15 (Dispute Settlement);
(e) supervise the work of all committees established or created
under this Agreement, as indicated in Article 14.05 (3); and
(f) consider any matter that may affect the operation of this
Agreement, or any other to be entrusted by the Parties.
3. The Commission may:
(a) establish and delegate responsibilities to committees and
working groups of experts;
(b) modify, in fulfillment of the Agreement’s objectives:
(i) the schedules attached to Annex 3.04 (Tariff Reduction
Schedule) with the objective of incorporating goods
excluded from the tariff elimination;
(ii) the period referred to in Annex 3.04 (Tariff Reduction
Schedule) to speed the process;
(iii) the rules of origin established in Annex 4.03 (Specific
Rules of Origin);
(iv) the Uniform Regulations;
(v) the Annexes I, II and III of Chapter 10 (Investment); and
(vi) the Annexes I, II and III of Chapter 11 (Cross-border
Trade in Services);
(c) seek the advice of non-governmental persons or groups;
(d) develop any regulations needed for the implementation of
this Agreement; and
(e) take any other actions as are necessary in the exercise of
its functions if the Parties so decide.
4. Each Party shall implement, in accordance with its applicable
legal procedures, any modification referred to in
subparagraph 3 (b).
5. The Commission shall establish its rules and procedures. All
decisions of the Commission shall be taken by consensus.
6. The Commission shall convene at least once a year in regular
session, and if requested by one of the Parties, in
extraordinary session. Regular sessions of the Commission
shall be chaired successively by each Party.

Article 14.02 Administrative Sub-commission of the Agreement
1. The Parties hereby establish the Administrative
Sub-commission of the Agreement, which is composed of the
officials as set out in Annex 14.02 or persons designated by
them.
2. The Administrative Sub-commission shall:
(a) prepare and revise technical documents for decision-making
under this Agreement;
(b) follow-up on the decisions taken by the Commission;
(c) supervise the committees and the working groups of experts
established under this Agreement as described in Article
14.05 (3), and in accordance with Article 14.01 (2); and
(d) consider any other matter that may affect the operation of
this Agreement, assigned by the Commission.
3. The Commission shall establish its rules and procedures to
ensure the operation of the Administrative Sub-commission of
the Agreement.

Article 14.03 Secretariat
1. Each Party shall:
(a) designate a permanent office or official responsible for
acting on behalf of the National Section of the Secretariat
of such Party and shall notify the Commission of the
address, phone number and any other relevant information
where its National Section is located;
(b) be responsible for:
(i) the operation and costs of the National Section; and
(ii) the remuneration and expenses to be paid to panelists,
their assistants and experts appointed as stipulated in
this Agreement, in Annex 14.03; and
(c) designate a Secretary of its National Section, who shall be
the civil employee responsible for its administration.
2. The Secretariat shall:
(a) assist the Commission and the Sub-commission;
(b) support the arbitrating groups created pursuant to Chapter
15 (Dispute Settlement) and the procedures established in
Article 15.11 (Model Rules of Procedure);
(c) support the work of the committees and working groups of
experts established under the Agreement, as instructed by
the Commission; and
(d) conduct any other matters instructed by the Commission.

Section B Committees and Working Groups of Experts

Article 14.04 General Provisions
1. The provisions in this Section shall apply to all the
committees and working groups of experts established under
the framework of this Agreement.
2. Each committee and working group of experts shall be composed
of representatives of the Parties. All decisions shall be
taken by consensus.

Article 14.05 Committees
1. The Commission may create committees other than the ones
established in Annex 14.05.
2. Each committee shall:
(a) supervise the implementation of the Chapters of this
Agreement under its competence;
(b) consider any proposed or actual measures submitted by a
Party that may affect the effective implementation of the
Agreement;
(c) request technical reports by the competent authorities, and
take necessary actions to resolve the issue;
(d) evaluate and recommend to the Commission any proposal for
modifications, amendments or any other additional
provisions to the Chapters of this Agreement under its
competence; and
(e) carry out the matters instructed by the Commission as
established under this Agreement and any other mechanisms
derived from it.
3. The Commission and the Sub-commission shall supervise the
work of all committees established under this Agreement.
4. Each committee may establish its own rules and procedures,
and shall meet upon request of any of the Parties or the
Commission.

Article 14.06 Working Groups of Experts
1. Notwithstanding Article 14.01 (3) (a), a committee may create
ad hoc groups of experts, whose work shall be supervised, for
completing the technical studies it deems necessary to carry
out its mandate. The working group of experts shall strictly
complete the mandate entrusted to it within the terms and
timeframes established and shall report to its corresponding
committee.
2. The rules and procedures of a working group of experts may be
established by the corresponding committee.

CHAPTER 15: DISPUTE SETTLEMENT

Section A Dispute Settlement

Article 15.01 General Provisions
1. The Parties shall at all times endeavor to agree on the
interpretation and application of this Agreement, and shall
make every attempt through cooperation and consultations to
arrive at a mutually satisfactory resolution of any matter
that might affect its operation.
2. All solutions to matters formally raised under the provisions
of this Chapter, shall be consistent with this Agreement and
shall not nullify or impair benefits accruing to any Party
under this Agreement, nor impede the attainment of any
objective of this Agreement.
3. Mutually agreed solutions to matters formally raised under
the consultations of this Chapter made by the Parties of the
matters related with this Agreement shall be notified to the
Commission within a thirty (30) day period after a solution
is reached.
4. For the purpose of this Chapter, “disputing Parties” means
the complaining Party and the Party complained against.

Article 15.02 Scope of Application
Except as otherwise provided in this Agreement, the dispute
settlement provisions of this Chapter shall apply:
(a) with respect to the prevention or settlement of all
disputes between the Parties regarding the interpretation
or application of this Agreement;
(b) wherever a Party considers that an actual or proposed
measure of the other Party is or would be inconsistent with
the obligations of this Agreement or that the other Party
has otherwise failed to carry out its obligations under
this Agreement; or
(c) wherever a Party considers that an actual or proposed
measure of the other Party causes or would cause
nullification or impairment in the sense of Annex 15.02.

Article 15.03 Choice of Forum
1. The disputes arising in connection with the provisions of
this Agreement and the WTO Agreement or agreements negotiated
in accordance with the WTO Agreement may be settled in one of
those fora, as the complaining Party chooses.
2. Where a Party has requested the establishment of the arbitral
panel under Article 15.07, or has requested the establishment
of a panel under Article 6 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes of the WTO
Agreement, the forum chosen shall be used to the exclusion of
the other.

Article 15.04 Perishable Goods
1. On disputes regarding perishable goods, [8] the Parties and
the panel referred to in Article 15.07 may expedite the
procedure. For this purpose, the Parties shall, by mutual
agreement, shorten the timeframes established in this Chapter.
2. In cases of urgency, including issues regarding perishable
goods, the consultations shall begin within fifteen (15) days
upon receipt of the request.

Article 15.05 Consultations
1. A Party may request in writing consultations with the other
Party with respect to any actual or proposed measure or any
other matter that it considers might affect the operation of
this Agreement, as referred to in Article 15.02.
2. The Party shall deliver the request to the other Party, and
shall set out the reasons for the request, including an
identification of the actual or proposed measure or other
matter at issue, and the legal basis for the complaint.
3. The consulting Parties shall make every attempt to arrive at
a mutually satisfactory resolution of any matter through
consultations under this Article. For this purpose, the
Parties shall:
(a) provide information to enable a full examination of how the
actual or proposed measure or other matter might affect the
operation and application of this Agreement; and
(b) treat any confidential information exchanged in the course
of consultations on the same basis as the Party providing
the information.

Article 15.06 Commission – Good Offices, Conciliation, and
Mediation
1. Any consulting Party may [9] request in writing a meeting of
the Commission, if the Parties fail to resolve a matter
pursuant to Article 15.04 or 15.05 within:
(a) sixty (60) days of delivery of a request for consultations;
(b) fifteen (15) days of delivery of a request for
consultations in matters regarding perishable goods; or
(c) such other terms as they may agree.
2. The requesting Party shall deliver the request to the other
Party and shall set out the reasons for the request,
including an identification of the measure or other matter at
issue, and the legal basis for the complaint.
3. Unless it decides otherwise, the Commission shall convene
within ten (10) days of delivery of the request and shall
endeavour to resolve the dispute promptly. The Commission may:
(a) call on technical advisers or create working groups or
expert groups as it deems necessary;
(b) resort to good offices, conciliation, mediation or other
dispute resolution procedures; or
(c) make recommendations, in order to assist the consulting
Parties in reaching a mutually satisfactory resolution of
the dispute.
4. Unless otherwise decided, pursuant to this Article, the
Commission shall consolidate two or more proceedings
presented for its consideration, relating to the same
measure. The Commission may consolidate two or more
proceedings presented for its consideration, relating to
other matters whenever it deems appropriate to consider these
proceedings jointly.

Article 15.07 Establishment of an Arbitral Panel
1. If the Parties fail to resolve the matter within:
(a) thirty (30) days after the Commission has convened pursuant
to Article 15.06;
(b) thirty (30) days after the Commission has convened in
respect of the matter most recently referred to it, where
proceedings have been consolidated pursuant to Article
15.06 (4);
(c) fifteen (15) days after a Party has delivered a request for
consultations under Article 15.05 in a matter regarding
perishable goods, if the Commission has not convened
pursuant to Article 15.06 (1);
(d) sixty (60) days after a Party has delivered a request for
consultations under Article 15.05, if the Commission has
not convened pursuant to Article 15.06 (3); or
(e) such other terms as the consulting Parties may agree;
any Party that requested a meeting of the Commission in
accordance with Article 15.05 may request in writing the
establishment of an arbitral panel to consider the matter, and
shall set out the reasons for the request, including an
identification of the actual measure or other matter at issue,
and the legal basis for the complaint.
2. The complaining Party shall deliver the request to the other
Party, and shall set out the reasons for the request,
including an identification of the measure or other matter at
issue and the legal basis for the complaint.
3. The disputing Parties may consolidate two (2) or more
proceedings regarding other issues whenever they deem it
appropriate to consider these proceedings jointly.
4. Arbitral panel procedures shall be considered invoked when
the Party complained against receives the request to
establish a panel. The disputing Parties shall adopt all
necessary measures pursuant to Article 15.10 for the
establishment of the panel.
5. Unless otherwise decided by the disputing Parties, the panel
shall be established and shall carry out its functions in
consistency with the provisions of this Chapter.
6. Notwithstanding paragraph 1, an arbitral panel may not be
established to review a proposed measure.

Article 15.08 Roster
1. Within six (6) months of the date of entry into force of this
Agreement, the Parties shall establish and maintain a roster
of up to thirty (30) individuals with the required
qualification to serve as panelists. Said roster shall be
composed of the “Roster of Panelists of the Parties” and
the “Roster of Panelists of Non-Party Countries”. Each
Party may designate five (5) national panelists to form the “
Roster of Panelists of the Parties”, and five (5) panelists
of Non-Party countries to form the “Roster of Panelists of
Non-Party Countries”.
2. The roster of panelists may be modified every three (3)
years. Notwithstanding, the Commission may revise, by request
of a Party, the roster of panelists before the expiration of
this period.
3. The members of the roster of panelists shall meet the
qualifications set forth in Article 15.09.

Article 15.09 Qualifications of the Panelists
1. The panelists shall meet the following qualifications:
(a) have expertise or experience in law, international trade,
other matters covered by this Agreement, or the resolution
of disputes arising under international trade agreements;
(b) be chosen strictly on the basis of objectivity,
reliability, and sound judgment; and
(c) be independent of, and not be affiliated with or take
instructions from any Party.
2. The panelists shall comply with a Code of Conduct to be
established by the Commission.
3. Individuals may not serve as panelists for a dispute in which
they have participated pursuant to Article 15.06.

Article 15.10 Panel Selection
1. The disputing Parties shall apply the following procedures in
selecting a panel:
(a) the arbitral panel shall be composed of three (3) members;
(b) the disputing Parties shall endeavour to agree on the
designation of the chair of the arbitral panel within
fifteen (15) days of receipt of the request for the
establishment of the arbitral panel;
(c) if the disputing Parties do not reach an agreement within
the above-mentioned timeframe, the chair shall be chosen by
drawing lot from the “Roster of Panelists of Non-Party
Countries”;
(d) within fifteen (15) days after the designation of the
chair, each Party shall select a panelist from the “Roster
of Panelists of the Parties”; and
(e) if a disputing Party does not select a panelist, the
panelist shall be chosen by drawing from the “Roster of
Panelists of the Parties” and shall be of that Party’s
nationality.
2. Where a disputing Party considers that a panelist has
violated the Code of Conduct, the disputing Parties shall
hold consultations and decide whether to remove that panelist
and select a new one pursuant to the provisions of this
Article.

Article 15.11 Model Rules of Procedure
1. Upon the entry into force of this Agreement, the Commission
shall establish the Model Rules of Procedure in accordance
with the following principles:
(a) the procedures shall ensure the right to at least one
hearing before the arbitral panel and an opportunity for
each disputing Party to provide initial and rebuttal
written submissions; and
(b) the hearing before the arbitral panel, the deliberations
and the preliminary report, as well as all the writings and
communications presented in it shall be confidential.
2. Unless the disputing Parties otherwise agree, the arbitral
panel shall conduct its proceedings in accordance with the
Model Rules of Procedure.
3. Unless the disputing Parties otherwise agree, within twenty
(20) days of receipt of the request for the establishment of
the arbitral panel, the terms of reference shall be:
"To examine, in the light of the provisions of this Agreement,
the matters submitted for its consideration and to make
findings, decisions, and recommendations as provided in Articles
15.13 (2) and 15.14”.
4. If a complaining Party claims that a matter causes
nullification or impairment of benefits referred to in Annex
15. 02, the terms of reference shall so indicate.
5. When a disputing Party requests that the arbitral panel
makes
findings on the extent of the adverse trade effects brought
upon by the measure adopted by the other disputing Party and
it is considered by the disputing Party as inconsistent with
the Agreement, or that the measure has caused nullification
or impairment in the sense of Annex 15.02, the terms of
reference shall indicate so.

Article 15.12 Role of Experts
Upon request of a disputing Party, or ex officio, the arbitral
panel may seek information and technical advice from any persons
or institutions that it deems appropriate under the Model Rules
of Procedure.

Article 15.13 Preliminary Report
1. Unless the disputing Parties otherwise agree, the arbitral
panel shall base its preliminary report on the communications
and arguments presented by the disputing Parties, as well as
the relevant provisions of this Agreement and any information
received, pursuant to Article 15.12.
2. Unless the disputing Parties otherwise agree, within ninety
(90) days after the arbitral panel has notified its
acceptance to the Secretariat and a period of eight (8) days
has passed from the day on which the Secretariat notifies the
establishment to the disputing Parties, the arbitral panel
shall present to the disputing Parties a preliminary report
containing:
(a) findings of fact, including any findings pursuant to a
request under Article 15.11 (5);
(b) a decision about whether the measure in question is
inconsistent with the obligations arising from this
Agreement, or is a cause of nullification or impairment in
the sense of Annex 15.02 or any other decision requested in
the terms of reference; and
(c) its recommendations, if any, to settle the dispute.
3. Panelists may furnish separate opinion in writing on matters
in which consensus has not been reached.
4. Either disputing Party may submit written comments to the
arbitral panel on its preliminary report within fourteen (14)
days of presentation of the report. After considering any
written comments on the preliminary report, the arbitral
panel upon request of a disputing Party, or ex officio, may:
(a) reconsider its report; and
(b) take any steps deemed appropriate.

Article 15.14 Final Report
1. Within thirty (30) days of the presentation of the
preliminary report, unless the disputing Parties otherwise
agree, the arbitral panel shall notify the disputing Parties
of its final report reached by majority of votes, including
any separate opinions, in writing, on matters in which there
is no consensus.
2. No arbitral panel may, in either its preliminary report or
its final report, disclose the identity of the panelists that
voted with the majority or the minority.
3. Unless the disputing Parties otherwise agree, the disputing
Parties shall release the final report to the public within
fifteen (15) days of its notification to the disputing
Parties.

Article 15.15 Implementation of the Final Report
1. The final report of the arbitral panel shall be compulsory
for the disputing Parties to implement under the terms and
conditions specified in it. The term of implementation shall
not exceed six (6) months from the date on which the final
report was notified to the disputing Parties, unless the
disputing Parties otherwise agree.
2. When the final report of the arbitral panel determines that a
measure has not conformed to a disputing Party’s obligations
under this Agreement, the Party complained against shall be
prevented from implementing the measure or shall eliminate
the non-conformity.
3. When the final report of the arbitral panel determines that a
measure is causing nullification or impairment in the sense
of Annex 15.02, it shall indicate the level of nullification
or impairment and may suggest mutually satisfactory
adjustments for the disputing Parties.

Article 15.16 Suspension of Benefits
1. Unless the disputing Parties notify the Commission of their
agreement on the final report, within fifteen (15) days after
the expiration of the timeframe determined by the arbitral
panel, the panel shall determine if the Party complained
against has conformed to the report.
2. The complaining Party may suspend the Party complained
against from the benefits arising from this Agreement that
have an effect equivalent to the benefits not received, if
the arbitral panel decides that:
(a) a measure is inconsistent with the obligations of this
Agreement, and the Party complained against has not
implemented the final report within the term established by
the panel; or
(b) a measure is the cause of nullification or impairment in
the sense of Annex 15.02, and the disputing Parties do not
reach a mutually satisfactory agreement of the dispute
within the term established by the panel.
3. The suspension of benefits shall last until the Party
complained against implements the final report or until the
disputing Parties reach a mutually satisfactory agreement of
the dispute.
4. In considering what benefits to be suspended pursuant to this
Article:
(a) the complaining Party should first seek to suspend benefits
in the same sector or sectors that are affected by the
measure, or other matter that the panel has found to be
inconsistent with the obligations of this Agreement or to
have caused nullification or impairment in the sense of
Annex 15.02; and
(b) if the complaining Party considers not feasible or
effective to suspend benefits in the same sector or
sectors, it may suspend benefits in other sectors.
5. Once benefits have been suspended, the disputing Parties,
upon written request of a disputing Party, shall establish an
arbitral panel for determining if the final report has been
enforced, or if the level of benefits suspended by the
complaining Party is excessive to the Party complained
against, in accordance with this Article. When possible, the
panel shall be composed of the same panelists who resolved
the dispute.
6. When the arbitral panel established in paragraph 5 is
composed of the same panelists who resolved the dispute, it
shall submit a final report within thirty (30) days as of the
request mentioned in paragraph 5. When the arbitral panel
established in paragraph 5 is not composed of the same
panelists, the panel shall submit a final report within sixty
(60) days of the meeting in which it was established, or when
the disputing Parties so decide.
7. When the Party complained against cannot comply with the
final report, within thirty (30) days after the arbitral
panel submits the final report, the Party complained against
may request consultations with the complaining Party to reach
an agreement on alternative measures to compensate the
complaining Party.
8. If an agreement on alternative measures is not reached, the
complaining Party may suspend the benefits, notwithstanding
the provisions established in paragraphs 2 and 4, to the
extent necessary to persuade the Party complained against to
comply with the final report. In the application of this
provision, the difference in the development levels of the
disputing Parties will be taken into consideration.

Section B Domestic Proceedings and Settlement of Private
Commercial Disputes

Article 15.17 Interpretation of the Agreement before Judicial
and Administrative Proceedings
1. If an issue of interpretation or application of this
Agreement arises in any domestic judicial or administrative
proceedings of a Party that the other Party considers as
meriting its intervention, or if a court or administrative
body solicits the views of a Party, that Party shall notify
the other Party. The Commission shall endeavor to agree on
an appropriate response as expeditiously as possible.
2. The Party in whose territory the court or administrative body
is located shall submit any agreed interpretation of the
Commission to the court or administrative body in accordance
with the rules of that forum.
3. If the Commission does not agree upon an interpretation or
response, a Party may submit its own views to the judicial or
administrative proceeding in accordance with the rules of
that forum.

Article 15.18 Private Rights
No Party may provide for a right of action under its domestic
law against the other Party on the grounds that a measure of the
other Party is inconsistent with this Agreement.

Article 15.19 Alternative Dispute Resolution
1. Each Party shall, to the maximum extent possible, encourage
and facilitate the use of arbitration and other means of
alternative dispute resolution for the settlement of
international commercial disputes between private parties in
the free trade area established by this Agreement.
2. For this purpose, each Party shall provide appropriate
procedures to ensure observance of agreements to arbitrate
and for the recognition and enforcement of arbitral awards in
such disputes.
3. The Commission may establish an Advisory Committee on Private
Commercial Disputes comprising persons with expertise or
experience in the resolution of private international
commercial disputes. The Committee shall report and provide
recommendations to the Commission on general issues referred
to it by the Commission respecting the availability, use, and
effectiveness of arbitration and other procedures for the
resolution of such disputes in the free trade area
established by this Agreement.

CHAPTER 16: EXCEPTIONS

Article 16.01 Definitions
For purposes of this Chapter, the following terms shall be
understood as:
Fund: the International Monetary Fund;
international capital transactions: “international capital
transactions”, as defined in the Articles of Agreement of the
International Monetary Fund;
payments for current international transactions: “payments for
current international transactions”, as defined in the Articles
of Agreement of the International Monetary Fund;
tax convention: a convention for the avoidance of double
taxation or other international taxation agreements or
arrangements; and
transfers: international transactions and related international
transfers and payments.

Article 16.02 General Exceptions
1. Article XX of GATT 1994 and its interpretative notes are
incorporated into and made an integral part of this
Agreement, for purposes of:
(a) Part Two (Trade in Goods), except to the extent that any of
its provisions apply to services and investment; and
(b) Part Three (Trade Barriers), except to the extent that any
of its provisions apply to services and investment.
2. Subparagraphs (a), (b) and (c) of Article XIV of the GATS,
are incorporated into and made an integral part of this
Agreement, for purposes of:
(a) Part Two (Trade in Goods), to the extent that any of its
provisions apply to services;
(b) Part Three (Trade Barriers), to the extent that any of its
provisions apply to services; and
(c) Part Four (Investment, Services and Related Matters).

Article 16.03 National Security
Nothing in this Agreement shall be construed:
(a) to require a Party to furnish or allow access to any
information the disclosure of which it determines to be
contrary to its essential security interests;
(b) to prevent a Party from taking any actions that it
considers necessary for the protection of its essential
security interests:
(i) relating to the traffic in arms, ammunitions and
implements of war and to such traffic and transactions in
other goods, materials, services and technology
undertaking directly or indirectly for the purposes of
supplying a military or other security establishment;
(ii) taken in time of war or other emergency in international
relations; or
(iii) relating to the implementation of national policies or
international agreements respecting the
non-proliferation of nuclear weapons or other nuclear
explosive devices; or
(c) to prevent a Party from taking action in pursuance of its
obligations under the United Nations Charter for the
Maintenance of International Peace and Security.

Article 16.04 Balance of Payments
1. No provision in this Agreement shall be interpreted to
prevent a Party from adopting or maintaining measures that
restrict transfers when the Party faces serious difficulties
in or threats to its balance of payments, provided that the
restrictions are compatible with this Article.
2. The Party shall notify the other Party within thirty (30)
days after the adoption of a measure in accordance with
paragraph 1. In the event that all Parties become party to
the Articles of Agreement of the International Monetary Fund,
the procedure of paragraph 3 should be followed.
3. As soon as it is feasible, after a Party applies a measure
according to this Article and its international obligations,
the Party shall:
(a) submit all restrictions to current account transactions for
review by the Fund according to Article VIII of the
Articles of the Agreement of the International Monetary
Fund;
(b) initiate consultations with the Fund with respect to the
measures of economic adjustment geared to address the
fundamental economic problems causing the difficulties; and
(c) adopt or maintain economic policies according to such
consultations.
4. The measures adopted or maintained under this Article shall:
(a) avoid unnecessary damage to the commercial, economic, and
financial interests of the other Party;
(b) not be more burdensome than necessary to deal with the
balance of payments difficulties, or threat thereof;
(c) be temporary and be phased out progressively as the balance
of payments situation improves;
(d) be consistent with those of paragraph 3 (c), as well as
with the Articles of Agreement of the International
Monetary Fund; and
(e) be applied on a national treatment or most-favored-nation
treatment basis, whichever is better.
5. A Party may adopt or maintain a measure under this Article
that gives priority to services that are essential to its
economic program, provided that a Party may not impose a
measure for the purposes of protecting a specific industry or
sector, unless the measure is consistent with paragraph 3
(c) , and with Article VIII (3) of the Articles of Agreement
of the International Monetary Fund.
6. The restrictions imposed on transfers must:
(a) be consistent with Article VIII (3) of the Articles of
Agreement of the International Monetary Fund, when they are
applied to payments for current international transactions;
and
(b) be consistent with Article VI of the Articles of Agreement
of the International Monetary Fund and be applied only in
conjunction with measures on payments for current
international transactions under paragraph 3 (a).

Article 16.05 Disclosure of information
Nothing in this Agreement shall be construed to require a Party
to furnish or allow access to information the disclosure of
which would impede law enforcement, or would be contrary to the
Party’s law protecting personal privacy or the financial
affairs and accounts of individual customers of financial
institutions.

Article 16.06 Taxation
1. Except as set out in this Article, nothing in this Agreement
shall apply to taxation measures.
2. Nothing in this Agreement shall affect the rights and
obligations of any Party under any tax convention. In the
event of any inconsistency between this Agreement and any
such convention, that convention shall prevail to the extent
of the inconsistency.
3. Notwithstanding paragraph 2:
(a) Article 3.03 (National Treatment) and such other provisions
of this Agreement as are necessary to give effect to that
Article shall apply to taxation measures to the same extent
as does Article III of the GATT 1994; and
(b) Article 3.12 (Export Taxes) shall apply to taxation
measures.
4. For purposes of this Article, taxation measures do not
include:
(a) a customs duty as defined in Chapter 2 (General
Definitions); nor
(b) the measures listed in exceptions (b), (c), and (d) to that
definition.
5. Subject to paragraph 2:
(a) Articles 10.03 (National Treatment) and 11.03 (National
Treatment) shall apply to the taxation measures on income,
capital gains or on the taxable capital of enterprises that
relate to the purchase or consumption of particular
services; and
(b) Articles 10.03 (National Treatment) and 10.04 (Most Favored
Nation Treatment); 11.03 (National Treatment) and 11.04
(Most Favored Nation Treatment); shall apply to all
taxation measures, other than those on income, capital
gains or on the taxable capital of enterprises, taxes on
estates, inheritances, and donations,
except that nothing in those Articles shall apply:
(i) to any most-favored-nation obligation with respect to an
advantage accorded by a Party pursuant to any tax
convention;
(ii) to any existing taxation measure which provides
different tax treatment between residents and
non-residents;
(iii) to a non-conforming provision of any existing taxation
measure;
(iv) to the continuation or prompt renewal of a non-
conforming provision of any existing taxation measure;
(v) to an amendment to a non-conforming provision of any
existing taxation measure to the extent that the amendment
does not decrease its conformity, at the time of the
amendment, with any of those articles; or
(vi) to the adoption or enforcement of any new taxation
measure aimed at ensuring the equitable or effective
imposition or collection of taxes and does not
arbitrarily discriminate among persons, goods or
services of the Parties, or arbitrarily nullify or
impair advantages granted by those articles, in the
sense of Annex 15.02 (Nullification or Impairment).

CHAPTER 17: COOPERATION

Section A General Provisions

Article 17.01 Purpose
1. The main purpose of this Chapter is to establish guidelines
in which the Government of the Republic of China (Taiwan)
shall strengthen its cooperation relations with the
Governments of the Republic of El Salvador and the Republic
of Honduras, reaffirming its importance in the economic,
financial and technical areas, as an instrument to contribute
to the accomplishment of the objectives and the principles
derived from this Agreement.
2. In every cooperation measure initiated under this Agreement,
the Parties must take into account the need to protect,
preserve, and improve their environment and natural resources.

Article 17.02 Specific Purposes
The specific purposes of this Chapter are the following:
(a) strengthen and diversify the cooperation activities between
the Parties;
(b) strengthen the cooperation in order to develop, improve,
intensify and diversify commercial relationships;
(c) strengthen and diversify financing sorts for development;
(d) promote a propitious environment for the development of
micro, small, and medium enterprises, and for the
development of exportable offer;
(e) improve the capacity of public and private sectors to
profit from the opportunities provided by this Agreement;
and
(f) contribute to the creation of trade, financial and
technological flows and investment between the Parties.

Article 17.03 Dispute Settlement
None of the provisions under this Chapter shall apply to the
dispute settlement mechanism established in Chapter 15 (Dispute
Settlement).

Section B Cooperation

Article 17.04 Cooperation Activities
1. The Parties may initiate and carry out various types of
cooperation activities, including the participation of
experts, national and international institutions, as
considered appropriate, to promote the accomplishment of the
purposes and to fulfill the obligations under this Agreement.
2. Nothing under this Chapter, shall preclude the Parties from
establishing bilateral cooperation relations and cooperation
linkages in other areas.
3. The cooperation activities shall be carried out taking into
account:
(a) the economic, financial, environmental, geographical,
social, technological, cultural, and legal differences
between the Parties;
(b) national priorities agreed upon by the Parties;
(c) the advisability to prevent duplication of existing
cooperation activities; and
(d) the intention of the Parties to develop and implement
cooperation activities through different initiatives.

Article 17.05 Commercial and Industrial Cooperation
1. The Parties shall support and encourage measures to develop
and strengthen actions aiming to institute a dynamic and
integrated management of the commercial and industrial
cooperation in order to create favorable conditions for
economic development while acknowledging the mutual interests
of the Parties.
2. Such cooperation shall focus particularly on the following:
(a) promote trade flows and investments among companies of the
Parties;
(b) promote cooperation projects in areas of market information
and market research; technological information, creation of
technological and competitiveness databases in the fields
of quality and technology; production, administration, and
commercialization of exporting companies and companies with
exporting potential; as well as the promotion of technology
transfer;
(c) support the education and training of human resources on
international trade, quality, productivity, innovation, and
technological development; and free trade zones management;
and
(d) strengthen contacts among economic agents of the Parties,
to detect commercial and technical opportunities, with the
purpose of identifying and exploring areas of mutual
commercial interest to increase trade, investment,
industrial cooperation, and projects of technology transfer
and the improvement of quality and productivity.

Article 17.06 Cooperation in the Micro, Small-and-Medium
Enterprises Sector
1. The Parties will promote a propitious environment for the
development of the micro, small-and-medium enterprises.
2. This cooperation will focus on the following:
(a) promote business partnership and the creation of
information networks to enable the development of the
micro, small-and-medium enterprises;
(b) support research and studies that extend, promote, and
facilitate the financing and operating of programs and
projects for the development of competitiveness of the
micro, small-and-medium enterprises, with the purpose of
increasing the commercial trade;
(c) support the improvement of business environment, especially
related to aspects of policies and norms that aim for the
competitive development of the micro, small-and-medium
enterprises; and
(d) promote the adoption of new technologies in micro,
small-and-medium enterprises to update their company
management, extend their markets, and facilitate the
fulfillment of their obligations.

Article 17.07 Cooperation in the Matter of Exportable Offer
1. The Parties will create a cooperation program, aiming to
carry out studies on exportable offer and on inactive
production capabilities, as well as identifying potential
investment areas, joint investments, and strategic alliances
that shall enable and diversify the trade flows between the
Parties and towards other markets.
2. The Parties will also create cooperation programs in
exportable offer and on potential export capabilities, taking
into account:
(a) support to diversify, reconvert, and strengthen productive
sectors, exporters and sectors with potential export
capabilities for technology transfer;
(b) support projects and/or programs to strengthen innovation,
competitiveness, and development of the productive sectors,
exporters, and those with potential export capabilities; and
(c) the cooperation for the execution of strategies, programs,
and projects that contribute to increasing, diversifying,
and improvement of product quality and harmlessness of
products, through technical training, consulting services,
and technology transfers.

Article 17.08 Cooperation in the Matter of Tourism
1. The main objective for the cooperation between the Parties in
the matter of tourism is to improve the exchange of
information, in order to adjust practices in this topic to
achieve a balanced and sustainable development of tourism.
2. For the purposes of this Article, the Parties will focus
particularly on the following:
(a) respecting the integrity and interests of the local
communities;
(b) promoting investment and joint investments that may allow
the expansion of tourism;
(c) exchanging of information regarding tourism development;
(d) providing support in the fields of statistics and
information technology, as well as for the creation of
business databases;
(e) education and training;
(f) organization of activities and events and the participation
in tourism trade fairs;
(g) cooperation on feasibility studies; and
(h) support for the commercial promotion agreed by the Parties
for the micro, small-and-medium enterprises in the tourism
sector.

Article 17.09 Cooperation in the Matter of Energy
1. The objective of the cooperation between the Parties will be
the development of their corresponding energy sectors,
focusing on the promotion of technology transfer and
sectorial regulation.
2. The cooperation in this field will be carried out, mainly, by
means of exchanges of information, training of human
resources, technology transfers, and joint projects for
technological development and infrastructure projects agreed
upon by the Parties; as well as the design of more efficient
energy generation processes, the rational use of energy,
support for the use of alternative and renewable energies
that protect the environment, and the promotion of recycling
projects and waste treatment for energy use.
3. Grant cooperation to the institutions in charge of energy
issues and formulation of energy policies.

Article 17.10 Cooperation in the Matter of Transportation,
Logistics, and Distribution
1. The cooperation between Parties regarding transportation
matters will seek to:
(a) support the improvement and update of the systems of
transportation, logistics, and distribution, according to
the ability of the Parties;
(b) promote management norms; and
(c) promote operational norms.
2. For the purposes of this Article, the Parties will give
priority to:
(a) the exchange of information between experts regarding the
respective transportation, logistics, and distribution
policies and other topics of common interest;
(b) cooperation to support the improvement and update of any
type of transportation system; and
(c) technology transfers as essential support for the update
and improvement of the transportation system.
3. The Parties will study all aspects regarding the exchanges of
information on registries and the different types of
international services of maritime transportation, logistics,
and distribution, in order to prevent them from becoming
barriers to mutual trade expansion.

Article 17.11 Cooperation in the Matter of Agriculture,
Forestry, Aquaculture, and Fishing
1. The objective of the cooperation in this field is to support
and promote strategies, actions, and policy measures in the
areas of agriculture, forestry, aquaculture, and fishing and
animal and plant health inspection, that allow the
consolidation of the efforts of the Parties in the
achievement of extensive rural development.
2. Each Party could facilitate the other Parties, in providing
counseling, information and technical cooperation, in terms
and conditions mutually agreed, to strengthen the
communication of the application, administration and
regulation of the sanitary and phytosanitary measures, as
well as the procedures and systems on these matters.
3. For the purposes of this Article, the Parties will make
efforts in the following areas, but not limited thereto:
(a) diversification, adjustment, and improvement of the
competitiveness of the agricultural, aquaculture, forestry,
and fishing subsectors;
(b) mutual information exchanges, including reference to the
development of policies in farming, forestry, animal and
plant health inspection;
(c) cooperation to support the process of technological
innovation, subsectorial competitiveness, productivity, and
the exchange of alternative agricultural technologies;
(d) technical and scientific experiments;
(e) measures intended to increase the quality of farming and
agricultural products, and to support trade promotion;
(f) cooperation to strengthen the application, administration,
and regulation of the standards related to sanitary,
phytosanitary and food safety; and
(g) cooperation to support development activities in human and
technical resources in institutions.

Article 17.12 Cooperation in the Matter of Quality,
Productivity, Innovation, and Technological
Development
Each Party shall promote the cooperation to improve the
institutional capacities and the competitiveness of the micro,
small-and-medium enterprises in the fields of quality,
productivity, innovation, and technological development,
considering, but not limited to, the following topics:
(a) technological strengthening for testing laboratories and
industrial metrology;
(b) assistance for updating academic curricula of technical
careers (middle level education, technical education, and
higher education);
(c) support with internships related to the fields of quality
and productivity, technological innovation, and
development, for private enterprises, academic and public
sector employees; and
(d) strengthen the capacities of human resources of the public
sector, in fields related to quality, productivity,
innovation, and technological development.

Article 17.13 Ministerial Committee for Economic and Commercial
Cooperation
1. The Parties hereby establish the Ministerial Committee for
Economic and Commercial Cooperation (“the Committee”),
comprising the Minister of Foreign Affairs and the Minister
of Economic Affairs or their designees for the Republic of
China (Taiwan); the Ministro de Economia or its designee in
the case of the Republic of El Salvador; and the Secretario
de Estado en los Despachos de Industria y Comercio or its
designee in the case of the Republic of Honduras.
2. The Committee shall have the following functions:
(a) promote activities that foster cooperation;
(b) review in a timely and expeditious manner, any matter of
mutual interest that the Parties decide to consider;
(c) follow up the cooperation programs included in this
Chapter; and
(d) create, in addition to what has been established in this
Chapter, the instruments and technical mechanisms to
support its implementation and solve the differences that
might arise in its prosecution.
3. The Parties agree that in the meetings of the Committee, the
representatives of their corresponding private sectors may
participate, prior to consultations among them on this matter
and by mutual agreement.
4. The Committee will meet within the first year following the
entry into force of this Agreement and, unless otherwise
agreed, annually, thereafter alternatively in the Republic of
China (Taiwan) or in the Republics of El Salvador or
Honduras, in order to review the implementation of this
Chapter and its progress, as well as to consider the status
of the cooperation activities developed under this Chapter.
Upon request by one of the Parties, extraordinary meetings of
the Committee may be convened.
5. The chairmanship of the Committee shall be alternated
annually among the Parties, and all the decisions will be
adopted by consensus.

Article 17.14 Points of Contact
1. The Parties shall designate points of contact in order to
implement the decisions adopted by the Committee, as well as
for following up the cooperation programs agreed upon by the
Committee for the purpose of fulfilling the objectives of
this Chapter. The points of contact will be able to make
publicly available the cooperation activities carried out
according to this Chapter.
2. The designation of these points of contact must be notified
between the Parties within three (3) months after this
Agreement enters into force.

Article 17.15 Work Plan
The Parties shall develop a work plan that reflects the national
priorities regarding cooperation activities to be agreed by the
Committee. The work plan may include short, medium, and long
term activities. The Committee shall also be in charge of
supervising the effective implementation of this work plan.

CHAPTER 18: FINAL PROVISIONS

Article 18.01 Modifications
1. Any modification to this Agreement shall require the
agreement of all Parties.
2. When so agreed, and approved in accordance with the
applicable legal procedures of each Party, a modification or
addition shall constitute an integral part of this Agreement.

Article 18.02 Reservations
No Party may enter a reservation in respect of any provision of
this Agreement without the written consent of the other Parties.

Article 18.03 Entry into Force
This Agreement shall have indefinite duration and shall enter
into force between the Republic of China (Taiwan), the Republic
of El Salvador and the Republic of Honduras on the thirtieth
(30th) day after they have respectively exchanged their
corresponding instruments of ratification certifying that the
procedures and legal formalities have been concluded, unless the
Parties agree otherwise.

Article 18.04 Annexes, Appendices and Footnotes
The annexes, appendices and footnotes to this Agreement
constitute an integral part of this Agreement.

Article 18.05 Withdrawal
1. Any Party may withdraw from this Agreement. This Agreement
shall remain in force for the other Parties, provided that
the Republic of China (Taiwan) is not the withdrawing Party.
2. A withdrawal shall become effective one hundred eighty (180)
days after the Party provides written notice to the other
Party, unless the Parties agree on a different period.

Article 18.06 Authentic Texts
The English, Spanish and Chinese texts of this Agreement are
equally authentic. In case of discrepancies in the
interpretation of the text, the English version shall be used as
reference.

IN WITNESS WHEREOF, the undersigned, being duly authorized by
their respective Governments, have signed this Agreement.

DONE at San Salvador, Republic of El Salvador, in triplicate in
the Chinese, English and Spanish languages, on this seventh day
of May of the year two thousand and seven.

For the Government of the Republic of China (Taiwan):
Steve Ruey-Long Chen
Minister of Economic Affairs
For the Government of the Republic of El Salvador:
Yolanda Mayora de Gavidia
Ministra de Economia
For the Government of the Republic of Honduras:
Miriam Elizabeth Azcona Bocock
Secretaria de Estado en los Despachos de Industria y Comercio

As witnesses of honor:
Elias Antonio Saca Gonzalez
President of the Republic of El Salvador

Jose Manuel Zelaya Rosales
President of the Republic of Honduras



[1] The Parties understand that neither tariff rate quotas nor
quantitative restrictions would be a permissible form of
safeguard measure.
[2] For greater certainty, the references to “the TRIPS” in
this paragraph include any waiver in force between the
Parties of any provision of that Agreement granted by WTO
Members in accordance with the WTO Agreement.
[3] For greater certainty, this term refers to a concept of
customary international law.
[4] For greater certainty, no Party may have recourse to dispute
settlement under this Agreement for any matter arising under
this Article.
[5] For purposes of this Chapter, the term “government
procurement” will be understood as it is defined in the
national legislation of each Party.
[6] For greater certainty, “Most-Favored-Nation Treatment” is
not applicable when a Party autonomously or through an
agreement, recognizes the education or experience obtained,
requirements met, or licenses or certifications granted in
the territory of a Party or a non-Party.
[7] This clause does not cover measures of a Party that limit
inputs for the supply of services.
[8] For greater certainty, the term “perishable goods” means
perishable agricultural and fish goods classified in
chapters 1 through 24 of the Harmonized System; as long as
the goods are located in customs at the point of arrival and
they are not being released.
[9] This shall not be understood as a preliminary step needed to
request the establishment of an arbitral panel, pursuant to
Article 15.07.
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