WORLD TRADE  
ORGANIZATION  WT/REG164/1 
1 April 2004  
 
(04-1463) 
Committee on Regional Trade Agreements Original:   English 
   
EC-CHILE INTERIM AGREEMENT 
  
 The following joint communication, dated 3 Februa ry 2004, is being circulated at the request 
of the Delegations of the European Communities and Chile.  
_______________ 
 
 
Agreement establishing an association between the European Community and its Member States, of 
the one part, and the Republic of Chile, of the other part  
 
 The Kingdom of Belgium, the Kingdom of Denm ark, the Federal Republic of Germany, the 
Hellenic Republic, the Kingdom of Spain, the French  Republic, Ireland, the Italian Republic, the 
Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Finland, the Ki ngdom of Sweden, the United Kingdom of Great 
Britain and Northern Ireland, 
 
 Contracting Parties to the Treaty establishi ng the European Community and the Treaty on 
European Union, hereinafter referred to as the "Member States", and   THE EUROPEAN COMMUNITY, hereinafter referred to as "the Community",  
 
 of the one part, and   THE REPUBLIC OF CHILE, hereinafter referred to as "Chile",    of the other part, 
 
 Considering  the traditional links between the Parti es and with particular reference to: 
 
- the common cultural heritage and the close historical, political and economic ties which 
unite them;  
 
- their full commitment to the respect for democratic principles and fundamental human 
rights as set out in the United Nations Universal Declaration of Human Rights;  
 - their attachment to the principles of the rule of law and of good governance;  
 
- the need to promote economic and social progress for their peoples, taking into account 
the principle of sustainable development a nd environmental protection requirements;  
 - the desirability of enlarging the framework of relations between the European Union 
and the Latin American regional integration w ith a view to contributing to a strategic 
association between the two regions as for eseen in the Declaration adopted at the 
Summit of Heads of State and Government of  Latin America and th e Caribbean and the 
European Union in Rio de Janeiro on 28 June 1999;  WT/REG164/1 
Page 2  
 
- the importance of strengthening the regular political dialogue on bilateral and 
international issues of mutual interest, as already established in the Joint Declaration 
which is part of the Framew ork Cooperation Agreement betw een the Parties of 21 June 
1996, hereinafter referred to as the "Framework Cooperation Agreement";  
 
- the importance that the Parties attach to: 
 
-        coordinating their positions and un dertaking joint initiatives in the appropriate 
international fora;  
 
-        the principles and values set out in the Final Declaration of the World Summit for 
Social Development held in Copenhagen in March 1995;  
 -        the principles and rules which govern  international trade, in particular those 
contained in the Agreement establishing the World Trade Organisation (the 
"WTO") and to the need to apply them in a transparent and non-discriminatory 
manner;  
 -        the fight against all forms of te rrorism and the commitment to establish effective 
international instruments to ensure its eradication;  
 
- the desirability of a cultural dialogue in or der to achieve a better mutual understanding 
between the Parties, and to foster the exis ting traditional, cultural and natural links 
between the citizens of both Parties;  
 - the importance of the Cooperation Agreemen t between the European Community and 
Chile of 20 December 1990 and of the Framework Cooperation Agreement in 
sustaining and fostering the implementation of these processes and principles, 
  The parties have decided to conclude this agreement : 
  
PART I : GENERAL AND INSTITUTIONAL PROVISIONS 
 
TITLE I : NATURE AND SCOPE OF THE AGREEMENT 
 
Article 1 
 
Principles
 
 1. Respect for democratic principles and fundamental human rights as laid down in the United 
Nations Universal Declaration of Human Rights and fo r the principle of the rule of law underpins the 
internal and international policies of the Partie s and constitutes an essential element of this 
Agreement. 
2. The promotion of sustainable economic and social development and the equitable distribution 
of the benefits of the Association are guiding prin ciples for the implementation of this Agreement. 
3. The Parties reaffirm their attachment to the principle of good governance.  WT/REG164/1 
 Page 3 
 
 
Article 2 
 
Objectives And Scope  
 
1. This Agreement establishes a Political and Econom ic Association between the Parties, based 
on reciprocity, common interest and on the deepening of the relationship in all areas of application. 
2. The Association is a process that will lead to  a growing relationship and cooperation between 
the Parties structured around the bo dies created in this Agreement. 
3. This Agreement covers in particular the political, commercial, economic and financial, 
scientific, technological, social, cultural and coopera tion fields. It may be extended to other areas to 
be agreed upon by the Parties. 
4. In accordance with the objectives defined above , this Agreement provides for the following: 
(a) the enhancement of political dialogue on bila teral and international matters of mutual 
interest, which will be conducted thro ugh meetings at different levels;  
(b) the strengthening of cooperation in the politi cal, commercial, economic and financial, 
scientific, technological, social, cultural and cooperation fields, as well as other areas 
of mutual interest;  
(c) the upgrading of the participation of each  Party in the framework programmes, 
specific programmes and other activities of th e other Party, insofar as permitted by 
each Party's internal procedures governing access to the programmes and activities concerned, in accordance with Part III; and 
(d) the expansion and diversification of the Par ties' bilateral trade relation in conformity 
with WTO provisions and with the specific objectives and provisions set out in      Part IV. 
 
TITLE II : INSTITUTIONAL FRAMEWORK 
 
Article 3 
 
Association Council
 
 1. An Association Council is hereby established,  which shall supervise the implementation of 
this Agreement. The Association Council shall meet  at ministerial level at regular intervals, not 
exceeding a period of two years, and extraordinarily whenever circumstances so require, if the Parties 
so agree. 
2. The Association Council shall examine any major issue arising within the framework of this 
Agreement, as well as any other bilateral, multilatera l or international question of common interest. 
3. The Association Council shall also examine proposals and recommendations from the Parties 
for the improvement of this Agreement. WT/REG164/1 
Page 4  
 
Article 4 
 
Composition And Rules Of Procedures
 
 1. The Association Council shall be composed, on th e one hand, of the President of the Council 
of the European Union, assisted by the Secret ary General/High Representative, the incoming 
Presidency, other Members of the Council of the European Union or their representatives and Members of the European Commission, and, on the ot her hand, of the Minister of Foreign Affairs of 
Chile. 
2. The Association Council shall establish its own rules of procedure. 
3. Members of the Association Council may arrange  to be represented, in accordance with the 
conditions laid down in its rules of procedure. 
4. The Association Council shall be chaired in turn  by a Member of the Council of the European 
Union and by the Minister of Foreign Affairs of Ch ile, in accordance with the pr ovisions laid down in 
its rules of procedure. 
Article 5 
 
Decision-Making Powers
 
 1. In order to attain the objectives of this Agre ement, the Association Council shall have the 
power to take decisions in the cases provided for in this Agreement. 
2. The decisions taken shall be binding on the Parties, which shall take all the measures 
necessary to implement them in accordan ce with each Party's internal rules. 
3. The Association Council may also make appropriate recommendations. 
4. The Association Council shall adopt decisions  and recommendations by mutual agreement 
between the Parties. 
Article 6 
 
Association Committee
 
 1. The Association Council shall be assisted in th e performance of its duties by an Association 
Committee composed of representatives of the Member s of the Council of the European Union and of 
the Commission of the European Communities, on the one hand, and representatives of the 
Government of Chile, on the other, normally at senior officials level. 
2. The Association Committee shall be responsible for the gene ral implementation of this 
Agreement. 
3. The Association Council shall establish the rul es of procedure of the Association Committee. 
4. The Association Committee shall have the power to take decisions in the cases provided for in 
this Agreement or where such power has been delega ted to it by the Association Council. In this event 
the Association Committee shall take its decisions in accordance with the conditions laid down in 
Article 5.  WT/REG164/1 
 Page 5 
 
 
5. The Association Committee shall generally meet  once a year for an overall review of the 
implementation of this Agreement, on a date and with an agenda agreed  in advance by the Parties, in 
Brussels one year and in Chile the next. Special mee tings may be convened, by mutual agreement, at 
the request of either of the Parties. The Associ ation Committee shall be chaired alternately by a 
representative of each of the Parties. 
Article 7 
 
Special Committees  
 1. The Association Council shall be  assisted in the performance  of its duties by the Special 
Committees established in this Agreement. 
2. The Association Council may decide  to set up any Special Committee. 
3. The Association Council shall adopt rules of procedure which determine the composition and 
duties of such committees and how they  shall function, insofar as not pr ovided for by this Agreement. 
Article 8 
 
Political Dialogue
 
  The political dialogue between the Parties sha ll be conducted within the framework provided 
for in Part II.  
Article 9 
 
Association Parliamentary Committee
 
 1. An Association Parliamentary Committee is hereby established. It shall be a forum for 
members of the European Parliament and th e Chilean National Congress (Congreso Nacional de 
Chile) to meet and exchange views. It shall m eet at intervals which it shall itself determine. 
2. The Association Parliamentary Committee shall consist of members of the European 
Parliament, on the one hand, and of members of  the Chilean National Congress (Congreso Nacional 
de Chile), on the other. 
3. The Association Parliamentary Committee sh all establish its rules of procedure. 
4. The Association Parliamentary Committee shall be  chaired in turn by a representative of the 
European Parliament and a representative of the Chilean National Congress (Congreso Nacional de 
Chile), in accordance with the provisions to be  laid down in its rules of procedure. 
5. The Association Parliamentary Committee may request of the Association Council relevant 
information regarding the implementation of this  Agreement, and the Association Council shall 
supply the Committee with the requested information. 
6. The Association Parliamentary Committee sh all be informed of the decisions and 
recommendations of the Association Council. 
7. The Association Parliamentary Committee may make recommendations to the Association 
Council. WT/REG164/1 
Page 6  
 
Article 10 
 
Joint Consultative Committee
 
 1. A Joint Consultative Committee is hereby est ablished with the task of assisting the 
Association Council to promote dialogue and coope ration between the various economic and social 
organisations of civil society in the European  Union and those in Chile. Such dialogue and 
cooperation shall encompass all economic and social  aspects of the relations between the Community 
and Chile, as they arise in the context of impl ementation of this Agreement. The Committee may 
express its view on questions arising in these areas. 
2. The Joint Consultative Committee shall be compos ed of an equal number of members of the 
Economic and Social Committee of the European Un ion, on the one hand, and of members of the 
corresponding institution dealing with economic and social matters in the Republic of Chile, on the 
other. 
3. The Joint Consultative Committee shall carry out its activities on the basis of consultation by 
the Association Council or, for the purposes of promoting the dialogue between various economic and 
social representatives, on its own initiative. 
4. The Joint Consultative Committee shall adopt its rules of procedure. 
Article 11 
 
Civil Society
 
 
 The Parties will also promote regular meetings  of representatives of the European Union's and 
the Chilean civil societies, incl uding the academic community, soci al and economic partners and non-
governmental organisations in order to keep them informed of the implemen tation of this Agreement 
and gather their suggestions for its improvement. 
 
 
PART II : POLITICAL DIALOGUE 
 
Article 12 
 
Objectives  
 1. The Parties agree to reinforce their regular di alogue on bilateral and in ternational matters of 
mutual interest. They aim at strengthening and d eepening this political dialogue with a view to 
consolidating the Association est ablished by this Agreement. 
2. The main objective of the political dialogue between the Parties is the promotion, 
dissemination, further development and common defen ce of democratic values, such as the respect for 
human rights, the freedom of the individual and the principles of the rule of law as the foundation of a democratic society. 
3. To this end, the Parties shall discuss and exch ange information on joint initiatives concerning 
any issue of mutual interest and any other intern ational issue with a view to pursuing common goals, 
in particular, security, stability, de mocracy and regional development.  WT/REG164/1 
 Page 7 
 
 
Article 13 
 
Mechanisms  
 1. The Parties agree that their political dialogue shall take the form of: 
(a) regular meetings between Heads of State and Government;  
(b) periodic meetings between Foreign Ministers;  
(c) meetings between other Ministers to discuss matters of common interest in cases in 
which the Parties consider that such m eetings will result in closer relations;  
(d) annual meetings between senior officials of both Parties. 
2. The Parties shall decide on the procedures to  be used for the abovementioned meetings. 
3. The periodic meetings of Foreign Ministers refe rred to under paragraph 1(b) shall take place 
either within the Association Council established by  Article 3, or on other agreed occasions of an 
equivalent level. 
4. The Parties shall also make maximum use of diplomatic channels. 
Article 14 
 
Cooperation In The Field Of Foreign And Security Policy
 
  The Parties shall, as far as possible, coordi nate their positions and undertake joint initiatives 
in the appropriate international fora, and coopera te in the field of foreign and security policy. 
 
Article 15 
 
Cooperation Against Terrorism
 
 
 The Parties agree to cooperate in the fight ag ainst terrorism in accordance with international 
conventions and with their respective laws and regulations. They shall do so in particular: 
 
(a) in the framework of the full implementati on of Resolution 1373 of the United Nations 
Security Council and other relevant Un ited Nations Resolutions, international 
conventions and instruments;  
(b) by exchange of information on terrorist  groups and their support networks in 
accordance with international and domestic law;  
(c) by exchange of views on means and methods used to counter terrorism, including in 
technical fields and training, and by excha nge of experiences in respect of terrorism 
prevention. 
 WT/REG164/1 
Page 8  
 
PART III : COOPERATION 
 
Article 16 
 
General Objectives
 
 
1. The Parties shall establish close cooperation aimed inter alia  at: 
(a) strengthening the institutional capacity to un derpin democracy, the rule of law, and 
respect for human rights and fundamental freedoms;  
(b) promoting social development, which should go hand in hand with economic 
development and the protection of the envir onment. The Parties shall give particular 
priority to respect for basic social rights;  
(c) stimulating productive synergies, creating new opportunities for trade and investment 
and promoting competitiveness and innovation;  
(d) increasing the level of and deepening coope ration actions, while taking into account 
the Association relation between the Parties. 
2. The Parties re-affirm the importance of econom ic, financial and tec hnical cooperation, as a 
means of contributing towards implementing th e objectives and principles derived from this 
Agreement. 
 
TITLE I : ECONOMIC COOPERATION 
 
Article 17 
 
Industrial Cooperation  
 
1. Industrial cooperation shall s upport and promote industrial policy measures to develop and 
consolidate the Parties' efforts and establish a dyn amic, integrated and decentralised approach to 
managing industrial cooperation, so as to create a favourable environment to serve their mutual 
interests. 
2. The central aims shall be: 
(a) to boost contacts between the Parties' econom ic operators, with the aim of identifying 
sectors of mutual interest, especially in the area of industrial cooperation, transfers of 
technology, trade and investment;  
(b) to strengthen and promote dialogue and exch anges of experience between networks 
of European and Chilean economic operators;  
(c) to promote industrial cooperation projects, including projects deriving from the 
process of privatisation and/ or opening-up of the Chilean  economy; these could cover 
the establishment of forms of infrastructur e stimulated by European investment 
through industrial cooperati on between businesses; and 
(d) to strengthen innovation, diversification,  modernisation, development and product 
quality in businesses.  WT/REG164/1 
 Page 9 
 
 
Article 18 
 
Cooperation On Standards, Technical Regulati ons And Conformity Assessment Procedures  
 1. Cooperation on standards, technical regulations  and conformity assessment is a key objective 
in order to avoid and reduce technical barriers to tr ade and to ensure the satisfactory functioning of 
trade liberalisation as provided for in Part IV, Title II. 
2. Cooperation between the Parties shall seek to promote efforts in: 
(a) regulatory cooperation;  
(b) compatibility of technical regulations on th e basis of international and European 
standards; and 
(c) technical assistance to create a networ k of conformity assessment bodies on a non-
discriminatory basis. 
3. In practice, cooperation shall: 
(a) encourage any measures aimed at bridging the gaps between the Parties in the areas 
of conformity assessment and standardisation;  
(b) provide organisational support between the Pa rties to foster the establishment of 
regional networks and bodies, and increas e coordination of policies to promote a 
common approach to the use of interna tional and regional standards and similar 
technical regulations and conformity assessment procedures; and 
(c) encourage any measure aimed at improvi ng convergence and compatibility between 
the respective system of the Parties in the abovementioned areas, including 
transparency, good regulatory practices and the promotion of quality standards for 
products and business practices. 
Article 19 
 
Cooperation On Small And Medium-Sized Enterprises
 
 1. The Parties shall promote a favourable envi ronment for the development of small and 
medium-sized enterprises (SMEs). 
2. Cooperation shall consist, amongst other actions, of: 
(a) technical assistance;  
(b) conferences, seminars, prospecting for industrial and technical opportunities, 
participation in round tables a nd general and sectoral fairs;  
(c) promoting contacts between economic operato rs, encouraging joint investment and 
establishing joint ventures and informati on networks through existing horizontal 
programs;  
(d) facilitating access to finance, providing in formation and stimulating innovation. WT/REG164/1 
Page 10  
 
Article 20 
 
Cooperation On Services
 
  In compliance with the WTO General Agreem ent on Trade in Services (the "GATS") and 
within the bounds of their own fields of comp etence, the Parties shall support and intensify 
cooperation with each other, reflecting the growi ng importance of services in the development and 
growth of their economies. Cooperation aimed at pr omoting the development and diversification of 
productivity and competitiveness in Chile's service sector shall be stepped up. The Parties shall 
determine the sectors on which cooperation will concen trate, and they shall also focus on the means 
available for this purpose. Activities shall be direct ed particularly at SMEs and at facilitating their 
access to sources of capital and market technology. In  that connection, special attention shall be 
devoted to promoting trade between the Parties and third countries.  
Article 21 
 
Promoting Investment
 
 1. The aim of cooperation shall be to help the Par ties to promote, within the bounds of their own 
competence, an attractive and stable  reciprocal investment climate. 
2. Cooperation shall cover in particular the following: 
(a) establishing mechanisms for providing in formation, identifying and disseminating 
investment rules and opportunities;  
(b) developing a legal framework for the Parties that favours investment, by conclusion, 
where appropriate, of bilateral agreements between the Member States and Chile to promote and protect investment and avoid dual taxation;  
(c) incorporating technical assistance activ ities for training initiatives between the 
Parties' government agencies dealing with the matter; and 
(d) developing uniform and simplified administrative procedures. 
Article 22 
 
Cooperation On Energy
 
 
1. The aim of the cooperation between the Parties sh all be to consolidate economic relations in 
key sectors such as hydroelectricity, oil and gas, renewable energy, energy-saving technology and rural electrification. 
2. Among the objectives of cooperation shall be: 
(a) exchanges of information in all suitable fo rms, including developing databases shared 
by institutions of both Parties, and training and conferences;  
(b) transfers of technology;  
(c) diagnostic studies, comparative analyses and implementation of programmes by 
institutions from both Parties;   WT/REG164/1 
 Page 11 
 
 
(d) involvement of public and private operators from both regions in technological 
development and common-infrastructure projects, including networks with other countries in the region;  
(e) conclusion, where appropriate, of specific agreements in key fields of mutual interest; 
and 
(f) assistance for Chilean institutions dealing w ith energy matters and the formulation of 
energy policy. 
Article 23 
 
Transport
 
 
1. Cooperation shall focus on restructuring and modernising Chile's transport systems, 
improving the movement of passengers and goods and providing better access to the urban, air, 
maritime, rail and road transport markets by refining the management of transport from the 
operational and administrative points of view  and by promoting operating standards. 
2. Cooperation shall cover matters including the following: 
(a) exchanges of information on the Parties' po licies, especially regarding urban transport 
and the interconnection and interoperabilit y of multimodal transport networks and 
other issues of mutual interest;  
(b) training programmes in economics, legisla tion and technical matters for economic 
operators and senior civil servants; and 
(c) cooperation projects for transfers of Eur opean technology in the Global Navigation 
Satellite System and urban public transport centres. 
Article 24 
 
Cooperation On Agriculture And Rural Sector s And Sanitary And Phytosanitary Measures  
 
1. Cooperation in this area is designed to suppor t and stimulate agricultural policy measures in 
order to promote and consolidate the Parties' effort s towards a sustainable agriculture and agricultural 
and rural development. 
2. The cooperation shall focus on capacity-building, infrastructure and technology transfer, 
addressing matters such as: 
(a) specific projects aimed at supporting sanita ry, phytosanitary, environmental and food 
quality measures, taking into account the legislation in force for both Parties, in compliance with WTO rules and other competent international organisations;  
(b) diversification and restructuring of agricultural sectors;  
(c) the mutual exchange of information, including that concerning the development of 
the Parties' agricultural policies;  
(d) technical assistance for the improvement of productivity and the exchange of 
alternative crop technologies;  WT/REG164/1 
Page 12  
 
(e) scientific and technological experiments;  
(f) measures aimed at enhancing the quality of agricultural products and supporting trade 
promotion activities;  
(g) technical assistance for the strengthening of sanitary and phytosanitary control 
systems, with a view to supporting as far as possible the promotion of equivalence 
and mutual recognition agreements. 
Article 25 
 
Fisheries
 
 
1. In view of the importance of fisheries polic y in the relations between them, the Parties 
undertake to develop closer economic and technical co llaboration, possibly leading to bilateral and/or 
multilateral agreements covering fisheries on the high seas. 
2. Furthermore, the Parties underline the importan ce they attach to fulf ilment of the mutual 
commitments specified in the Arrangement that they signed on 25 January 2001. 
 
Article 26 
 
Customs Cooperation  
 1. The Parties shall promote and facilitate coopera tion between their respective customs services 
in order to ensure that the objectives set out in Article 79 are attained, particularly in order to 
guarantee the simplification of customs procedures; facilitating legitimate trade while retaining their control capabilities. 
2. Without prejudice to the cooperation established by this Agreement, mutual assistance 
between the administrative authorities in customs ma tters shall be given in conformity with the 
Protocol of 13 June 2001 on Mutual Assistance in Customs Matters to the Framework Cooperation 
Agreement. 
3. The cooperation shall give rise among other things, to: 
(a) the provision of technical assistance, including where appropriate, the organisation of 
seminars and the placement of trainees;  
(b) the development and sharing of best practices; and 
(c) the improvement and simplification of customs matters relating to market access and 
rules of origin and the customs procedures related to them. 
Article 27 
 
Cooperation On Statistics
 
 
1. The main aim shall be to approximate methods, so that the Parties are able to use each other's 
statistics on trade in goods and services and more ge nerally on any area covered by this Agreement 
for which statistics can be collected. 
2. Cooperation shall focus on:  WT/REG164/1 
 Page 13 
 
 
(a) homologation of statistical methods to ge nerate indicators that are comparable 
between the Parties;  
(b) scientific and technological exchanges with statistical institutions of the Member 
States of the European Union, and with Eurostat;  
(c) statistical research directed at developi ng common methods for collecting, analysing 
and interpreting data;  
(d) organising seminars and workshops; and 
(e) statistical training programmes, including other countries of the region. 
Article 28 
 
Cooperation On The Environment  
 1. The aim of cooperation shall be to encour age conservation and improvement of the 
environment, prevention of contamination and degr adation of natural resources and ecosystems, and 
rational use of the latter in the interests of sustainable development. 
2. In this connection, the following are particularly significant: 
(a) the relationship between poverty and the environment;  
(b) the environmental impact of economic activities;  
(c) environmental problems and land-use management;  
(d) projects to reinforce Chile's environmental structures and policies;  
(e) exchanges of information, technology and experience in areas including 
environmental standards and mode ls, training and education;  
(f) environmental education and traini ng to involve citizens more; and 
(g) technical assistance and joint regional research programmes. 
Article 29 
 
Consumer Protection
 
  Cooperation in this field shall seek to ma ke the consumer-protection programmes in the 
Parties compatible, and shall as far as possible cover:  
(a) making consumer legislation more compa tible, so as to avoid trade barriers;  
(b) establishing and developing mutual inform ation systems for dangerous goods, and 
interconnecting those systems (early-warning systems);  
(c) exchanges of information and experts, and encouraging cooperation between both 
Parties' consumer bodies; and 
(d) organising projects for training and technical assistance. WT/REG164/1 
Page 14  
 
Article 30 
 
Data Protection
 
 1. The Parties agree to cooperate on the protection of  personal data in order to improve the level 
of protection and avoid obstacles to trade that requires transfers of personal data. 
2. Cooperation on personal data protection may incl ude technical assistance in the form of 
exchange of information and experts and the establishment of joint programmes and projects. 
Article 31 
 
Macroeconomic Dialogue
 
 1. The Parties shall promote exchanges of in formation on their respective macroeconomic 
policies and trends, and exchanges of experience re garding coordination of macroeconomic policies in 
the context of regional integration. 
2. With this aim in mind, the Parties shall seek more in-depth dialogue between their authorities 
on macroeconomic matters, in order to exch ange ideas and opinions on issues such as: 
(a) macroeconomic stabilisation;  
(b) consolidation of public finances;  
(c) tax policy;  
(d) monetary policy;  
(e) financial policy and regulation;  
(f) financial integration and opening of the capital account;  
(g) exchange-rate policy;  
(h) international financial architecture and refo rm of the international monetary system; 
and 
(i) coordination of macroeconomic policy. 
3. The methods of implementing such cooperation shall include: 
(a) meetings between macroeconomic authorities;  
(b) organising seminars and conferences;  
(c) providing training opportunities, where there is a demand; and 
(d) producing studies on issues of mutual interest.  WT/REG164/1 
 Page 15 
 
 
Article 32 
 
Intellectual Property Rights  
 1. The Parties agree to cooperate, according to th eir own capabilities, in matters relating to the 
practice, promotion, dissemination, streamlin ing, management, harmonisation, protection and 
effective application of intellectual property rights, the prevention of abuses of such rights, the fight 
against counterfeiting and piracy, and the establishm ent and strengthening of national organisations 
for control and protection of such rights. 
2. Technical cooperation may focus on one or more of the activities listed below: 
(a) legislative advice: comments on draft laws  relating to the general provisions and 
basic principles of the international conven tions listed in Article 170, copyright and 
related rights, trademarks, geographical  indications, traditional expressions or 
complementary quality mentions, industr ial designs, patents, layout-designs 
(topographies) of integrated circuits, protec tion of undisclosed information, control of 
anti-competitive practices in contractual licences, enforcement and other matters 
relating to the protection of intellectual property rights;  
(b) advice on the ways of organising administrative infrastructure, such as patent offices 
and collecting societies;  
(c) training in the field of intellectual property rights administration and management 
techniques;  
(d) specific training of judges and Customs and Police Officers, in order to make the 
enforcement of laws more effective; and 
(e) awareness-building activities for the private sector and civil society. 
Article 33 
 
Public Procurement
 
  Cooperation between the Parties in this field shall seek to provide technical assistance on issues connected with public procurement, paying  special attention to the municipal level. 
 
Article 34 
 
Cooperation On Tourism
 
 1. The Parties shall promote mutual cooperation in developing tourism. 
2. Such cooperation shall focus on: 
(a) projects intended to create and consolidat e tourist products and services of mutual 
interest or which hold an attraction fo r other markets of mutual interest;  
(b) consolidation of long-haul tourist flows;  
(c) reinforcing tourism promotion channels;  
(d) training and education in tourism;  WT/REG164/1 
Page 16  
 
(e) technical assistance and pilot projects for developing special-interest tourism;  
(f) exchanges of information on tourism prom otion, integral planning of tourist 
destinations and quality of services; and 
(g) using promotion instruments to de velop tourism at local level. 
Article 35 
 
Cooperation On Mining
 
  The Parties commit themselves to promoting cooperation on mining, mainly through agreements aimed at: 
 
(a) fostering exchanges of information and experience, in the application of clean 
technologies in the mining productive processes;  
(b) promoting joint efforts to develop scientific and technological initiatives in the field 
of mining. 
 
TITLE II : SCIENCE, TECHNOLOGY AND INFORMATION SOCIETY 
 
Article 36 
 
Cooperation On Science And Technology
 
 
1. The aims of cooperation on science and technology,  carried out in the mutual interest of both 
Parties and in compliance with their policies, partic ularly as regards the rules for use of intellectual 
property resulting from research, shall be: 
(a) policy dialogue and exchanges of scientific and technological information and 
experience at regional level, particularly in respect of policies and programmes;  
(b) promotion of lasting relations between th e two Parties' scientific communities; and 
(c) intensification of activities to promote li nkage, innovation and technology transfer 
between European and Chilean partners. 
2. Special emphasis shall be placed on human potentia l building as the real long-lasting basis of 
scientific and technological excellence and the creat ion of permanent links between both scientific 
and technological communities, at both national and regional levels. 
3. The following forms of cooperation shall be encouraged: 
(a) joint applied research projects in areas of common interest, with active participation 
by business undertakings where appropriate;  
(b) exchanges of researchers to promote project  preparation, high-level training and 
research;  
(c) joint scientific meetings to foster excha nges of information and interaction and to 
identify areas for joint research;   WT/REG164/1 
 Page 17 
 
 
(d) the promotion of activities linked to scie ntific and technological forward studies 
which contribute to the long term  development of both Parties; and 
(e) the development of links between the public and private sectors. 
4. Furthermore, the evaluation of joint work and the dissemination of results shall be promoted. 
5. Higher-education institutions, research centres and productive sectors, including SMEs, on 
both sides shall be involved in this c ooperation in an appropriate manner. 
6. The Parties shall promote their respective entities'  participation in their respective scientific 
and technological programmes in pursuit of mutu ally beneficial scientific excellence and in 
accordance with their re spective provisions governing the partic ipation of legal entities from third 
countries. 
Article 37 
 
Information Society, Information Technology And Telecommunications  
 1. Information technology and communications are key sectors in a modern society and are of 
vital importance for economic and social developm ent and the smooth transition to the information 
society. 
2. Cooperation in this area shall aim in particular to promote: 
(a) dialogue on the various issues of the information society, including promotion and 
monitoring of the emergence of the information society;  
(b) cooperation on regulatory and policy aspects of telecommunications;  
(c) exchange of information on standards, c onformity assessment and type approval;  
(d) dissemination of new information and communication technologies;  
(e) joint research projects on information and communication technologies and pilot 
projects in the field of information society applications;  
(f) promotion of exchange and training of  specialists, in particular for young 
professionals; and 
(g) exchange and dissemination of experiences from government initiatives which apply 
information technologies in their relationship with society. 
 
TITLE III : CULTURE, EDUCATION AND AUDIO-VISUAL 
 
Article 38 
 
Education And Training
 
 1. The Parties shall significantly support, within  their respective competencies, pre-schooling, 
basic, intermediate and higher e ducation, vocational training and life-long learning. Within these 
fields, special attention shall be paid to access to  education for vulnerable social groups, such as the 
disabled, ethnic minorities and the extremely poor. WT/REG164/1 
Page 18  
 
2. Special attention shall be paid to decentra lised programmes, which forge permanent links 
between specialised bodies of both Parties and enc ourage the pooling and exchange of experience and 
technical resources as well as the mobility of students. 
Article 39 
 
Cooperation In The Audio-Visual Field
 
  The Parties agree to promote the cooperation in this area, mainly through training programmes in the audio-visual sector and mean s of communication, including co-production, 
training, development and distribution activities. 
 
Article 40 
 
Exchange Of Information And Cultural Cooperation
 
  
1. In view of the Parties' very close cultura l ties, cooperation in this sphere, including 
information and media contacts, should be enhanced. 
2. The objective of this Article shall be to prom ote the exchange of information and cultural 
cooperation between the Parties, and account shall be taken of bilateral schemes with the Member 
States. 
3. Special attention shall be paid to promoting joint activities in various fields, including the 
press, cinema and television, and to encouraging youth exchange schemes. 
4. This cooperation could cover inter alia  the following areas: 
(a) mutual information programmes;  
(b) translation of literary works;  
(c) conservation and restorati on of national heritage;  
(d) training;  
(e) cultural events;  
(f) promotion of local culture;  
(g) cultural management and production; and 
(h) other areas. 
 
  WT/REG164/1 
 Page 19 
 
 
TITLE IV : PUBLIC ADMINISTRATION AN D INTERINSTITUTIONAL COOPERATION 
 
Article 41 
 
Public Administration  
 
1. Cooperation in this area shall aim at the modernisation and decentralisation of public 
administration and encompass overall organisational e fficiency and the legislative and institutional 
framework, drawing lessons from both Parties' best practices. 
2. Such cooperation may involve programmes of the following types: 
(a) modernisation of the State and of public administration;  
(b) decentralisation and the strengthening  of regional and local government;  
(c) strengthening of civil society and its incor poration into the process of defining public 
policies;  
(d) job creation and vocational training programmes;  
(e) social service management and administration projects;  
(f) development, rural housing or land management projects;  
(g) health and primary education programmes;  
(h) support for civil society and grass-roots initiatives;  
(i) any other programmes and projects which help to combat poverty by creating 
business and employment opportunities; and 
(j) promotion of culture and its several mani festations and strengthening of cultural 
identities. 
3. The means of cooperation in this area shall be: 
(a) technical assistance to Chilean policy-making and executive bodies, including 
meetings between staff of the European in stitutions and their Chilean counterparts;  
(b) regular exchanges of information taking wh atever form is appropriate, including the 
use of computer networks; personal data prot ection shall be ensured in all areas where 
data are to be exchanged;  
(c) transfers of know-how;  
(d) preliminary studies and joint project implem entation, involving comparable financial 
input; and 
(e) training and organisational support. WT/REG164/1 
Page 20  
 
Article 42 
 
Interinstitutional Cooperation
 
 1. The purpose of interinstitutional cooperation be tween the Parties is to promote closer 
cooperation between the institutions concerned. 
2. To that end, Part III of this Agreement sha ll seek to encourage regular meetings between 
these institutions; cooperation shall be  as broad as possible and include: 
(a) any measures promoting regular exchanges of information, including the joint 
development of computerised communication networks;  
(b) advice and training; and 
(c) transfers of know-how. 
3. The Parties may, by common agreement, incl ude other, additional fields of action. 
 
TITLE V : SOCIAL COOPERATION 
 
Article 43 
 
Social Dialogue
 
  The Parties recognise that: 
 
(a) the participation of the social partners will be promoted as regards living conditions 
and integration into society, 
(b) particular account will be taken of the need to avoid discrimination in the treatment of 
nationals of one Party residing legally in the territory of the other Party. 
Article 44 
 
Social Cooperation
 
 1. The Parties recognise the importance of social development, which must go hand in hand with 
economic development. They shall give priority to the creation of employment and respect for 
fundamental social rights, notably by promoting th e relevant conventions of  the International Labour 
Organisation covering such topics as the freedom of association, the right to collective bargaining and 
non-discrimination, the abolition of forced and ch ild labour and equal treatment between men and 
women. 
2. Cooperation may cover any area of interest to the Parties. 
3. Measures may be coordinated with those of the Member States and the relevant international 
organisations. 
4. The Parties shall give priority to measures aimed at: 
(a) promoting human development, the reduction of poverty and the fight against social 
exclusion, by generating innovative and re producible projects involving vulnerable  WT/REG164/1 
 Page 21 
 
 
and marginalised social sectors. Special attention shall be paid to low-income 
families and disabled persons;  
(b) promoting the role of women in the economic and social development process and 
promoting specific programmes for youth;  
(c) developing and modernising labour relations, working conditions, social welfare and 
employment security;  
(d) improving the formulation and management of social policies, including social 
housing, and improving access by beneficiaries;  
(e) developing an efficient and equitable health  system, based on solidarity principles;  
(f) promoting vocational training and de velopment of human resources;  
(g) promoting projects and programmes which ge nerate opportunities for the creation of 
employment within micro-, small and medium-sized enterprises;  
(h) promoting programmes of land management with special attention to areas with 
higher social and environmental vulnerability;  
(i) promoting initiatives contributing to social dialogue and the creation of consensus; 
and 
(j) promoting respect for human rights, democracy and citizens' participation. 
Article 45 
 
Cooperation Related To Gender  
 
1. Cooperation shall contribute to strengthening  policies and programmes that improve, 
guarantee and extend the equitable participation of men and women in all sectors of political, 
economic, social and cultural life. Cooperation sha ll contribute to easing women's access to all 
necessary resources for the full exerci se of their fundamental rights. 
2. In particular, cooperation should promote th e creation of an adequate framework to: 
(a) ensure that gender and gender-related issues can  be taken into account at every level 
and in all areas of cooperation includi ng macroeconomic policy, strategy and 
development operations; and 
(b) promote the adoption of positive measures in favour of women. 
 
TITLE VI : OTHER COOPERATION AREAS 
 
Article 46 
 
Cooperation On Illegal Immigration  
 
1. The Community and Chile agree to cooperate  in order to prevent and control illegal 
immigration. To this end: WT/REG164/1 
Page 22  
 
(a) Chile agrees to readmit any of its nationa ls illegally present on the territory of a 
Member State, upon request by the latter and without further formalities;  
(b) and each Member State agrees to readmit any of its nationals, as defined for 
Community purposes, illegally present on the territory of Chile, upon request by the latter and without further formalities. 
2. The Member States and Chile will also provide  their nationals with appropriate identity 
documents for such purposes. 
3. The Parties agree to conclude, upon request, an  agreement between Chile and the Community 
regulating the specific readmission obligations of  Chile and the Member States, including an 
obligation to readmit nationals of other countries and stateless persons. 
4. Pending the conclusion of the agreement with the Community referred to in paragraph 3, 
Chile agrees to conclude, upon request by a Member  State, bilateral agreements with individual 
Member States regulating the specific readmission obligations between Chile and the Member State concerned, including an obligation to readmit na tionals of other countries and stateless persons. 
5. The Association Council shall examine what othe r joint efforts can be made to prevent and 
control illegal immigration. 
Article 47 
 
Cooperation On Drugs And Co mbating Organised Crime
 
 1. Within their respective competencies, the Par ties undertake to coordinate and increase their 
efforts to prevent, and reduce the illicit production of, trade in and consumption of drugs and the 
laundering of profits from drug-trafficking, and to combat related organised crime through the 
intermediary of internationa l organisations and bodies. 
2. The Parties shall cooperate in this  area to implement in particular: 
(a) projects for the treatment, rehabilitation and family, social and labour reinsertion of 
drug addicts;  
(b) joint training programmes relating to preven tion of consumption and trafficking of 
narcotic drugs and psychotropic substances and related crimes;  
(c) joint study and research programmes, usi ng methodologies and indicators applied by 
the European Monitoring Centre for Drugs  and Drug Addiction, the Inter-American 
Observatory of Drugs of the Organisation of  American States and other international 
and national organisations;  
(d) measures and cooperation actions aimed at  reducing the supply of drugs and 
psychotropic substances, as part of the in ternational conventions and treaties on the 
matter which have been signed and ratifie d by the Parties to this Agreement;  
(e) information exchange on policies, progra mmes, actions and legislation linked to 
production, trafficking and consumption of narcotic drugs and psychotropic 
substances;  
(f) exchange of relevant inform ation and adoption of appropr iate standards to combat 
money laundering comparable to those a dopted by the European Union and the  WT/REG164/1 
 Page 23 
 
 
international bodies active in this field, su ch as the Financial Action Task Force on 
Money Laundering; and 
(g) measures to prevent diversion of precursor s and chemical substances essential to the 
illicit production of narcotic drugs and psychotropic substa nces, equivalent to those 
adopted by the European Community and competent international organisations and 
in accordance with the Agreement between the Republic of Chile and the European 
Community on the prevention of the diversi on of precursors and chemical substances 
frequently used in the illicit manufacture of na rcotic drugs or psychotropic substances 
of 24 November 1998. 
 
TITLE VII : GENERAL PROVISIONS 
 
Article 48 
 
Participation Of Civil Society In Cooperation  
 
 The Parties recognise the complementary role  and potential contribution of civil society 
(social interlocutors and Non-Gove rnmental Organisations) in the cooperation process. To that end, 
subject to the legal and administrative provisions of each Party, civil society actors may:  
(a) be informed of, and participate in, consultations on cooperation policies and 
strategies, including strategic priorities, particularly in the areas concerning or 
directly affecting them;  
(b) receive financial resources, insofar as the internal rules of each Party allow it; and 
(c) participate in the implementation of cooper ation projects and programmes in the areas 
that concern them. 
Article 49 
 
Regional Cooperation And Regional Integration
 
 1. Both Parties should use all existing cooperation instruments to promote activities aimed at 
developing an active and reciprocal cooperation be tween the Parties and the Mercado Común del Sur 
(Mercosur) as a whole. 
2. Such cooperation shall be an important elemen t in the Community's support for the promotion 
of regional integration among the Southe rn Cone countries of Latin America. 
3. Priority shall be given to operations aimed at: 
(a) promoting trade and investment in the region;  
(b) developing regional cooperation on the environment;  
(c) encouraging development of the communications infrastructure required for the 
economic development of the region; and 
(d) developing regional cooperation on fisheries matters. 
4. The Parties shall also cooperate more closel y on regional development and land-use planning. WT/REG164/1 
Page 24  
 
5. To this end, they may: 
(a) undertake joint action with regional and local authorities in the area of economic 
development; and 
(b) set up mechanisms for the exchange of information and know-how. 
Article 50 
 
Triangular And Bi-Regional Cooperation
 
 1. The Parties recognise the value of internationa l cooperation for the promotion of equitable 
and sustainable development processes and agr ee to give impetus to triangular cooperation 
programmes and programmes with third countries in areas of common interest. 
2. This cooperation may also be applied to bi-regional cooperation in accordance with the 
priorities of Member States and other count ries of Latin America and the Caribbean. 
Article 51 
 
Future Developments Clause
 
  Within the Parties' respectiv e competencies, no opportunity for cooperation should be ruled 
out in advance and the Parties could use the Associ ation Committee to explore together the practical 
possibilities for cooperation in their mutual interest.  
Article 52 
 
Cooperation Within The Association Relationship
 
 1. Cooperation between the Parties should contribut e to achieving the general objectives of Part 
III by identifying and developing innovative c ooperation programmes capable of providing added 
value to their new relationship as associated partners. 
2. The participation of each Party as an associated  partner in framework programmes, specific 
programmes and other activities of the other Party sh all be promoted, in so far as it is permitted by 
each Party's internal rules governing access to  the programmes and activities concerned. 
3. The Association Council may make recommendations to that effect. 
Article 53 
 
Resources
 
 1. With the aim of contributing to fulfilling the cooperation objectives established in this 
Agreement, the Parties commit themselves to prov iding, within the limits of their capacities and 
through their own channels, the appropriate resources, including financial resources. 
2. The Parties shall take all appropriate meas ures to promote and facilitate the European 
Investment Bank's activities in Chile, in accordance  with its own procedures and financing criteria 
and with their laws and regula tions, and without prejudice to the powers of their competent 
authorities.  WT/REG164/1 
 Page 25 
 
 
Article 54 
 
Specific Tasks Of The Association Committee In Cooperation Matters  
 1. When the Association Committee performs any of  the tasks conferred upon it in Part III, it 
shall be composed of representatives of the Commun ity and Chile with responsibility for cooperation 
matters, normally at senior official level. 
2. Notwithstanding the provisions of Article 6,  the Association Committee shall have, in 
particular, the following functions: 
(a) to assist the Association Council in the performance of its functions regarding 
cooperation related matters;  
(b) to supervise the implementation of the cooperation framework agreed between the 
Parties;  
(c) to make recommendations on the strategic cooperation between the Parties, which 
shall serve to set long-term objectives, the strategic priorities and specific fields for 
action, on the multiannual indicative programmes, which shall contain a description 
of sectoral priorities, specific objectives, expected results and indicative amounts, and annual action programmes; and 
(d) to report regularly to the Association Council on the application and fulfilment of the 
objectives and matters of Part III. 
 
PART IV : TRADE AND TRADE-RELATED MATTERS 
 
TITLE I : GENERAL PROVISIONS 
 
Article 55 
 
Objectives
 
  The objectives of this Part shall be as follows:  
(a) the progressive and reciprocal liberalisati on of trade in goods, in conformity with 
Article XXIV of General Agreement on Tariffs and Trade 1994 ("the GATT 1994");  
(b) the facilitation of trade in goods through, inter alia , the agreed provisions regarding 
customs and related matters, standards, technical regulations and conformity 
assessment procedures, sanitary and phyto sanitary measures and trade in wines and 
spirit drinks and aromatised drinks;  
(c) the reciprocal liberalisation of trade in services, in conformity with Article V of 
General Agreement on Trade in Services ("the GATS");  
(d) the improvement of the investment environment and, in particular, the conditions of 
establishment between the Parties, on the basis of the principle of non-discrimination;  
(e) the liberalisation of current payments and capital movements, in conformity with the 
commitments undertaken in the framework of  the international financial institutions 
and with due consideration for each Party's currency stability;  WT/REG164/1 
Page 26  
 
(f) the effective and reciprocal opening of th e government procurement markets of the 
Parties;  
(g) the adequate and effective protection of intellectual property rights, in accordance 
with the highest international standards;  
(h) the establishment of an effective cooperati on mechanism in the field of competition; 
and 
(i) the establishment of an effectiv e dispute settlement mechanism. 
Article 56 
 
Customs Unions And Free Trade Areas
 
 
1. Nothing in this Agreement shall preclude th e maintenance or establishment of customs 
unions, free trade areas or other arrangements between e ither of the Parties and third countries, insofar 
as they do not alter the rights and obliga tions provided for in this Agreement. 
2. At the request of a Party, consultations between  them shall take place within the Association 
Committee concerning agreements establishing or ad justing customs unions or free trade areas and, 
where required, on other major issues related to the Parties' respective trade policies with third 
countries. In particular, in the event of accession, su ch consultation shall take place so as to ensure 
that account can be taken of the mutual interests of the Parties. 
 
TITLE II : FREE MOVEMENT OF GOODS 
 
Article 57 
 
Objective  
 
 The Parties shall progressively and reciprocally  liberalise trade in goods over a transitional 
period starting from the entry into force of this Agre ement, in accordance with the provisions of this 
Agreement and in conformity with Article XXIV of the GATT 1994.   
CHAPTER I : ELIMINATION OF CUSTOMS DUTIES 
 
Section 1 : Common Provisions
 
 
Article 58 
 
Scope  
 1. The provisions of this Chapter concerning the elimination of customs duties on imports shall 
apply to products origina ting in one Party and exported to the other Party. For the purposes of this 
Chapter, "originating" means qualifying under the rules of origin set out in Annex III. 
2. The provisions of this Chapter concerning the elimination of customs duties on exports shall 
apply to all goods exported from one Party to the other Party.  WT/REG164/1 
 Page 27 
 
 
Article 59 
 
Customs Duty  
  A customs duty includes any duty or charge of any kind imposed in connection with the 
importation or exportation of goods, including any form  of surtax or surcharge in connection with 
such importation or exportation, but does not include any:  
(a) internal taxes or other internal charges imposed consistently with Article 77;  
(b) antidumping or countervailing duties app lied consistently with Article 78;  
(c) fees or other charges imposed consistently with Article 63. 
Article 60 
 
Elimination Of Customs Duties
 
 
1. Customs duties on imports between the Parties sh all be eliminated in accordance with the 
provisions of Articles 64 to 72. 
2. Customs duties on exports between the Parties sh all be eliminated as from the date of entry 
into force of this Agreement. 
3. For each product, the basic customs duty to whic h the successive reductions are to be applied 
pursuant to Articles 64 to 72 shall be that specified  in each Party's Tariff Elimination Schedule set out 
in Annexes I and II, respectively. 
4. If a Party reduces its applied most favoured nation customs duty rate after the entry into force 
of this Agreement and before the end of the trans itional period, the Tariff Elimination Schedule of that 
Party shall apply to the reduced rates. 
5. Each Party declares its readiness to reduce its customs duties more rapidly than is provided 
for in Articles 64 to 72, or otherwise improve th e conditions of access under such Articles, if its 
general economic situation and the situation of the economic sector concerned so permit. A decision 
by the Association Council to accelerate the elimination of a customs duty or otherwise improve conditions of access shall supersede the terms es tablished in Articles 64 to 72 for the product 
concerned. 
Article 61 
 
Standstill
 
 1. No new customs duties shall be introduced nor shall those already applied be increased in 
trade between the Parties as from the date of entry into force of this Agreement. 
2. Notwithstanding paragraph 1, Chile may mainta in its price band system as established in 
Article 12 of Law 18,525 or succeeding system for th e products covered by that law, provided it is 
applied consistently with Chile 's rights and obligations under the WTO Agreement and in a manner 
that does not afford more favourable treatment to imports of any third country, including countries 
with which Chile has concluded or  will conclude in the future an  agreement notified under Article 
XXIV of the GATT 1994. WT/REG164/1 
Page 28  
 
Article 62 
 
Classification Of Goods
 
  The classification of goods in trade between the Parties shall be that set out in each Party's 
respective tariff nomenclature in conformity w ith the Harmonised Co mmodity Description and 
Coding System ("HS"). 
 
Article 63 
 
Fees And Other Charges
 
  Fees and other charges referred to in Article 59 shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection for domestic products or a 
taxation of imports or exports for fiscal purposes. They shall be based on specific rates that 
correspond to the real value of the service rendered. 
 
Section 2 : Elimination Of Customs Duties
 
 
Subsection 2.1 : Industrial Products 
 
Article 64 
 
Scope  
  This sub-section applies to products of HS ch apters 25 to 97 not covered by agricultural and 
processed agricultural products as defined in Article 70. 
 
Article 65 
 
Customs Duties On Industrial Imports Originating In Chile
 
 
 Customs duties on imports into the Community of industrial products originating in Chile 
listed in Annex I (Tariff Elimination Schedule of  the Community) under category "Year 0" and "Year 
3" shall be eliminated in acco rdance with the following timetable, so that these customs duties are 
completely eliminated by the entry into force of the Agreement and on 1 January 2006, respectively: 
 
Percentages Of Annual Tariff Reduction  
 
Category Entry into force 1.1.04 1.1.05 1.1.06 
Year 0 100%  
Year 3 25% 50% 75% 100% 
 
Article 66 
 
Customs Duties On Industrial Imports Originating In The Community  
 
 Customs duties on imports into Chile of produc ts originating in the Community listed in 
Annex II (Tariff Elimination Schedule of Chile) under category "Year 0", "Year 5" and "Year 7" shall 
be eliminated in accordance with the following timet able, so that these customs duties are completely 
eliminated by the entry into force of this Agreement, 1 January 2008 and 1 January 2010, respectively:   WT/REG164/1 
 Page 29 
 
 
Percentages Of Annual Tariff Reduction  
 
Category Entry into 
force 1.1.04 1.1.05 1.1.06 1.1.07 1.1.08 1.1.09 1.1.10 
Year 0 100%  
Year 5 16,7% 33,3% 50% 66,7% 83,3% 100%  
Year 7 12,5% 25% 37,5% 50% 62,5% 75% 87,5% 100% 
 
Subsection 2.2 : Fish And Fisheries Products 
 
Article 67 
 
Scope  
  This sub-section applies to fish and fisheries products as covered by HS chapter 3, HS 
headings 1604 and 1605, HS subheadings 0511 91 and 2301 20, and HS heading ex 1902 20.
(1) 
 
Article 68 
 
Customs Duties On Fish And Fisheries Imports Originating In Chile  
 
1. Customs duties on imports into the Community of  fish and fisheries products originating in 
Chile listed in Annex I under category "Year 0", "Year 4", "Year 7" and "Year 10" shall be eliminated in accordance with the following tim etable, so that these customs duti es are completely eliminated by 
the entry into force of this Agreement, 1 Ja nuary 2007, 1 January 2010 and 1 January 2013, 
respectively: 
Percentages Of Annual Tariff Reduction
 
 
Category Entry 
into 
Force 1.1.04 1.1.05 1.1.06 1.1.07 1.1.08 1.1.09 1.1.10 1.1.11 1.1.12 1.1.13 
Year 0 100%  
Year 4 20% 40% 60% 80% 100%  
Year 7 12,5% 25% 37,5% 50% 62,5% 75% 87,5% 100%  
Year 10 9% 18% 27% 36% 45% 54% 63% 72% 81% 90% 100% 
 
2. Tariff quotas on imports into the Community of cer tain fish and fisheries products originating 
in Chile listed in Annex I under category "TQ" shall be applied as from the entry into force of this 
Agreement, in accordance with the conditions mentioned in th at Annex. These quotas shall be 
managed on a first-come first-served basis. 
Article 69 
 
Customs Duties On Fish And Fisheries Imports Originating In The Community  
 1. Customs duties on imports into Chile of fish and fisheries products originating in the 
Community listed in Annex II under category "Year 0" shall be eliminated at the entry into force of 
this Agreement. 
2. Tariff quotas on imports into Chile of certain fi sh and fisheries products originating in the 
Community listed in Annex II under category "TQ" sha ll be applied as from entry into force of this 
                                                     
 
(1) Ex 1902 20 is "stuffed pasta co ntaining more than 20% by weight  of fish, crustaceans, molluscs or 
other aquatic invertebrates". WT/REG164/1 
Page 30  
 
Agreement, in accordance with the conditions mentioned in th at Annex. These quotas shall be 
managed on a first-come first-served basis. 
Subsection 2.3 : Agricultural And Processed Agricultural Products 
 
Article 70 
 
Scope
 
  This sub-section applies to agricultural and processed agricultural products as covered by 
Annex I of the WTO Agreement on Agriculture. 
 
Article 71 
 
Customs Duties On Agricultural And Processed Agricultural Imports Originating In Chile
 
 
1. Customs duties on imports into the Community  of agricultural and processed agricultural 
products originating in Chile listed in Annex I unde r category "Year 0", "Year 4", "Year 7" and "Year 
10" shall be eliminated in accordance with the following timetable, so that these customs duties are 
completely eliminated by the entry into force of this Agreement, 1 January 2007, 1 January 2010 and 
1 January 2013, respectively: 
Percentages Of Annual Tariff Reduction  
 
Category Entry 
into 
Force 1.1.04 1.1.05 1.1.06 1.1.07 1.1.08 1.1.09 1.1.10 1.1.11 1.1.12 1.1.13 
Year 0 100%  
Year 4 20% 40% 60% 80% 100%  
Year 7 12,5% 25% 37,5% 50% 62,5% 75% 87,5% 100%  
Year 10 9% 18% 27% 36% 45% 54% 63% 72% 81% 90% 100% 
 
2. For the agricultural products originating in Ch ile covered by chapters 7 and 8 and headings 
20.09 and 22.04.30 of the Combined Nomenclature  and listed in Annex I under category "EP", for 
which the Common Customs Tariff provides for the application of ad valorem  customs duties and a 
specific customs duty, the tariff elim ination shall only apply to the ad valorem  customs duty. 
3. For agricultural and processed agricultural produc ts originating in Chile listed in Annex I 
under category "SP", for which the Common Custom s Tariff provides for the application of ad 
valorem  customs duties and a specific customs duty, th e tariff elimination shall only apply to the ad 
valorem  customs duty. 
4. The Community shall allow imports of processed  agricultural products originating in Chile 
listed in Annex I under category "R" to enter the Comm unity with a customs duty of 50 % of the basic 
customs duty as from the entry into force of this Agreement. 
5. Tariff quotas on imports into the Community of cer tain agricultural and processed agricultural 
products originating in Chile listed in Annex I unde r category "TQ" shall be applied as from the entry 
into force of this Agreement, in accordance with the conditions mentioned in that Annex. These 
quotas shall be managed on a first-come first-served b asis, or, as applicable in the Community, on the 
basis of a system of import and export licences.  WT/REG164/1 
 Page 31 
 
 
6. Tariff concessions shall not apply to imports in to the Community of products originating in 
Chile listed in Annex I under category "PN" as thes e products are covered by denominations protected 
in the Community. 
Article 72 
 Customs Duties On Agricultural And Processed Agricultural Import s Originating In The Community
 
 1. Customs duties on imports into Chile of agri cultural and processed agricultural products 
originating in the Community listed in Annex II under category "Year 0", "Year 5" and "Year 10" 
shall be eliminated in accordance with the follo wing timetable, so that these customs duties are 
completely eliminated by the entr y into force of this Agreement, 1 January 2008 and 1 January 2013, 
respectively: 
Percentages Of Annual Tariff Reduction
 
 
Category Entry 
into 
Force 1.1.04 1.1.05 1.1.06 1.1.07 1.1.08 1.1.09 1.1.10 1.1.11 1.1.12 1.1.13 
Year 0 100%  
Year 5 16,7% 33,3% 50% 66,6% 83,3% 100%  
Year 10 9% 18% 27% 36% 45% 54% 63% 72% 81% 90% 100% 
 
2. Tariff quotas on imports into Chile of certain agricultural products originating in the 
Community listed in Annex II under category "TQ" shall be applied as from the entry into force of this Agreement, in accordance with the conditions mentioned in that Annex. These quotas shall be 
managed on a first-come first-served basis. 
Article 73 
 
Emergency Clause For Agricultural And Processed Agricultural Products
 
 1. Notwithstanding Article 92 of this Agreemen t and Article 5 of the WTO Agreement on 
Agriculture, if, given the particular sensitivity of the agricultural markets, a product originating in a 
Party is being imported into the other Party in su ch increased quantities and under such conditions as 
to cause or threaten to cause serious injury or disturbance in the markets of like or directly 
competitive products of the other Party, that Party may take appropriate measures under the 
conditions and in accordance with the pr ocedures laid down in this Article. 
2. If the conditions in paragraph 1 are met, the importing Party may: 
(a) suspend the further reduction of any customs duties on the products concerned 
provided for under this Title; or 
(b) increase the customs duty on the product to a level which does not exceed the lesser 
of: 
(i) the most-favoured-nation customs duty; or 
(ii) the basic customs duty referred to in Article 60(3). 
3. Before applying the measure as defined under para graph 2, the Party concerned shall refer the 
matter to the Association Committee for a thorough examination of the situation, with a view to 
seeking a mutually acceptable solution. If the ot her Party so requests, the Parties shall hold WT/REG164/1 
Page 32  
 
consultations within the Association Committee. If no solution is found within 30 days of the request 
for such consultation, safeguard measures may be applied. 
4. Where exceptional circumstances require immediat e action, the importing Party may take the 
measures provided for in paragraph 2 on a transiti onal basis without complying with the requirements 
of paragraph 3 for a maximum period of 120 days. Such measures shall not exceed what is strictly 
necessary to limit or redress the injury or distur bance. The importing Party shall inform the other 
Party immediately. 
5. The measures taken under this Article shall not exceed what is necessary to remedy the 
difficulties which have arisen. The Party imposing the measure shall preserve the overall level of preferences granted for the agricultural sector. To achieve this objective, the Parties may agree on 
compensation for the adverse effects of the measure  on their trade, including the period during which 
a transitional measure applied in accordance with paragraph 4 is in place. 
To this effect, the Parties shall hold consultations to  reach a mutually agreed solution. If no agreement 
is reached within 30 days, the affected exporting Party may, after notification to the Association 
Council, suspend the application of substantia lly equivalent concessions under this Title. 
 
6. For the purposes of this Article: 
(a) "serious injury" shall be understood to m ean a significant overall impairment in the 
position of the producers as a whole of the like or directly competitive products operating in a Party;  
(b) "threat of serious injury" shall be understood to mean serious injury that is clearly 
imminent based on facts and not merely on allegations, conjecture or remote 
possibility. 
Article 74 
 
Evolution Clause
 
 
 During the third year after the entry into force of this Agreement, the Parties shall assess the 
situation, taking account of the pattern of trade in agricultural products and processed agricultural 
products between the Parties, the particular sens itivities of such products and the development of 
agricultural policy on both sides. The Parties shall examine, in the Association Committee, product by 
product and on an orderly and appropriate reciprocal  basis, the opportunities for granting each other 
further concessions with a view to improving liber alisation of trade in agricultural and processed 
agricultural products.   
CHAPTER II : NON TARIFF MEASURES 
 
Section 1 : Common Provisions
 
 
Article 75 
 
Scope  
 
 The provisions of this Chapter shall apply to trade in goods between the Parties.   WT/REG164/1 
 Page 33 
 
 
Article 76 
 
Prohibition Of Quantitative Restrictions  
  All import or export prohibitions or restricti ons in trade between the Parties, other than 
customs duties and taxes, whether made effectiv e through quotas, import or export licenses or other 
measures, shall be eliminated upon the entry into force of this Agreement. No new such measures 
shall be introduced. 
Article 77 
 
National Treatment On Internal Taxation And Regulation
(1) 
 1. Imported products of the territory of the other Party shall not be subject, either directly or 
indirectly, to internal taxes or other internal charg es of any kind in excess of those applied, directly or 
indirectly, to like domestic products. Moreover, the Pa rties shall not otherwise apply internal taxes or 
other internal charges so as to afford protection to domestic production.
(2) 
2. Imported products of the territory of the ot her Party shall be accorded treatment no less 
favourable than that accorded to like domestic pr oducts in respect of all laws, regulations and 
requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal 
transportation charges which are based exclusiv ely on the economic operation of the means of 
transport and not on the nationality of the product. 
3. Neither Party shall establish or maintain any internal quantitative regulation relating to the 
mixture, processing or use of products in specified amounts or proportions which requires, directly or 
indirectly, that any specified amount or proportion of any product which is the subject of the regulation must be supplied from domestic sources.  Moreover, neither Party shall otherwise apply 
internal quantitative regulations so as to  afford protection to domestic production.
(3) 
4. The provisions of this Article shall not prev ent the payment of subsidies exclusively to 
domestic producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisi ons of this Article and s ubsidies effected through 
governmental purchases of domestic products. 
5. The provisions of this Article shall not apply to laws, regulations, procedures or practices 
governing public procurement, which shall be subject exclusively to th e provisions of Title IV of this 
Part. 
                                                     
 
(1) Any internal tax or other internal charge, or any law, regulation of requirement of the kind referred 
to in paragraph 2 which applies to an imported product and to the like domestic product and is collected or 
enforced in the case of the imported product at the time or point of importation, is nevertheless to be regarded as an internal tax or other internal charge, or a law, regulation or requirement of the kind referred to in paragraph 2, 
and is accordingly subject to the provisions of this Article. 
(2) A tax conforming to the requirements of the first se ntence shall be considered inconsistent with the 
provisions of the second sentence only in cases where competition is involved between, on the one hand, a taxed 
product and, on the other hand, a directly competitive or substitutable product which is not similarly taxed. 
(3) Regulations consistent with the provisions of the fi rst sentence shall not be considered to be contrary 
to the provisions of the second sentence in any case in which all of the products subject to the regulations are 
produced domestically in substantial quantities. A regu lation cannot be justified as being consistent with the 
provisions of the second sentence on the ground that the proportion or amount allocated to each of the products 
which are the subject of the regulation constitutes an equitable relationship between imported and domestic 
products. WT/REG164/1 
Page 34  
 
Section 2 : Antidumping And Countervailing Measures
 
 
Article 78 
 
Antidumping And Countervailing Measures  
 
 If a Party determines that dumping and/or counte rvailable subsidisation is taking place in its 
trade with the other Party, it may take appropria te measures in accordance with the WTO Agreement 
on Implementation of Article VI of the GAT T 1994 and the WTO Agreement on Subsidies and 
Countervailing Measures. 
 
Section 3 : Customs And Related Matters  
 
Article 79 
 
Customs And Related Trade Matters  
 1. In order to ensure compliance with the provision s of this Title as they relate to customs and 
trade-related matters, and to facilita te trade without prejudice to the need for effective control, the 
Parties undertake to: 
(a) cooperate and exchange information concer ning customs legislation and procedures;  
(b) apply customs rules and procedures agreed by the Parties at a bilateral or multilateral 
level;  
(c) simplify requirements and formalities in resp ect of the release and clearance of goods, 
including, to the extent possible, collaboration on the development of procedures enabling the submission of import or export da ta to a single agency; and to coordinate 
between customs and other control agencies so as to enable official controls upon 
import or export to be carried out, as far as possible, by a single agency;  
(d) cooperate on all issues concerning rules of origin and the customs procedures related 
to them; and 
(e) cooperate on all customs valuation matters , in accordance with the Agreement on 
Implementation of Article VII of the GA TT 1994, particularly with the aim of 
reaching common views regarding the applica tion of valuation criteria, the use of 
indicative or reference indices, operational aspects and working methods. 
2. In order to improve working methods and to en sure transparency and efficiency of customs 
operations, the Parties shall: 
(a) ensure that the highest standards of inte grity be maintained, through application of 
measures reflecting the principles of the relevant international conventions and 
instruments in this field, as provided for in each Party's legislation;  
(b) take further steps wherever possible, towards the reduction, simplification and 
standardisation of data in the documenta tion required by customs, including the use 
of a single customs entry document or data message and a single customs exit document or data message, based on intern ational standards and relying as far as 
possible on commercially available information;   WT/REG164/1 
 Page 35 
 
 
(c) collaborate wherever possible on legislativ e and operational initiatives relating to 
import, export and customs procedures, and, to the extent possible, towards 
improving the service to the business community;  
(d) cooperate where appropriate on technical assistance, including the organisation of 
seminars and placements;  
(e) cooperate on the computerisation of cu stoms procedures and collaborate, where 
possible, towards the establishment of common standards;  
(f) apply the international rules and standards in  the field of customs, including wherever 
possible, the substantive elements of the revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures;  
(g) as far as possible, establish common positions  in international organisations in the 
field of customs such as the WTO, th e World Customs Organisation (WCO), the 
United Nations Organization (UN) and th e United Nations Conference on Trade and 
Development (UNCTAD);  
(h) provide effective and prompt procedures en abling the right of appeal, against customs 
and other agency administrative actions, rulings and decisions affecting import or 
export of goods, in conformity w ith Article X of the GATT 1994; and 
(i) collaborate wherever possible towards facilita ting transhipment operations and transit 
movements through their respective territories. 
3. The Parties agree that their respective trade and customs provisions and procedures shall be 
based upon: 
(a) legislation that avoids unnecessary burd ens on economic operators, that will not 
hinder the fight against fraud and provides fu rther facilitation for operators that meet 
high levels of compliance;  
(b) the protection of legitimate trade through the effective enforcement of legislative 
requirements;  
(c) the application of modern customs techni ques, including risk assessment, simplified 
procedures for entry and release of goods , post release controls, and company audit 
methods, whilst respecting the confidential na ture of commercial data in accordance 
with the provisions applicable in each Party. Each Party shall take the necessary measures to ensure the effectiven ess of the risk assessment methods;  
(d) procedures that are transparent, efficient and where appropriate simplified, in order to 
reduce costs and increase predictability for economic operators;  
(e) the development of information technology-based systems, for both export and 
import operations, between ec onomic operators and customs administrations, and 
between customs and other agencies. Such systems may also provide for the payment 
of duties, taxes and other fees by electronic transfer;  
(f) rules and procedures that provide for advance binding rulings on tariff classification 
and rules of origin. A ruling may be modifi ed or revoked at any time but only after 
notification to the affected operator and without retroactive effect unless the ruling has been made on the basis of incorrect or incomplete information being provided;  WT/REG164/1 
Page 36  
 
(g) provisions that in principle facilitate th e importation of goods through the use of 
simplified or pre-arrival customs procedures and processes; and 
(h) import provisions that do not include any requirements for pre-shipment inspections 
as defined by the WTO Agreement on Pre-shipment Inspection;  
(i) rules that ensure that any penalties imposed for minor breaches of customs 
regulations or procedural requirements are pr oportionate and, in their application, do 
not give rise to undue delays in customs clearance, in accordance with Article VIII of 
the GATT 1994. 
4. The Parties agree: 
(a) on the need for timely consultation with economic operators on substantial matters 
concerning legislative proposals and general procedures related to customs. To that 
end, appropriate consultation mechanisms between administrations and the operators 
shall be established by each Party;  
(b) to publish, as far as possible through electronic means, and publicise new legislation 
and general procedures related to customs, as well as any modifications, no later than 
the entry into force of such legislation and procedures. They shall also make publicly 
available general information of interest to economic operators, such as the hours of 
operation for customs offices, including those at ports and border crossing points, and the points of contact for information enquiries;  
(c) to foster cooperation between operators a nd customs administrations via the use of 
objective and publicly accessible Memoranda  of Understanding, based on those 
promulgated by the WCO; and 
(d) to ensure that their respective custom s and related requirements and procedures 
continue to meet the needs of the trad ing community and follow best practices. 
5. Notwithstanding paragraphs 1 to 4, the administ rations of both Parties shall provide mutual 
administrative assistance in customs matters in accordan ce with the provisions of the Protocol of      
13 June 2001 on Mutual Administrative Assist ance in Customs Matters to the Framework 
Cooperation Agreement. 
Article 80 
 
Customs Valuation
 
 
 The WTO Agreement on Implementation of Article VII of the GATT 1994, without the 
reserves and options provided for in Article 20 a nd paragraphs 2, 3 and 4 of Annex III of that 
Agreement, shall govern customs valuation ru les applied to trade between the Parties. 
 
Article 81 
 
Special Committee On Customs Cooperation And Rules Of Origin  
 1. The Parties hereby establish a Special Co mmittee on Customs Cooperation and Rules of 
Origin, composed of representatives of the Parties.  The Committee shall meet on a date and with an 
agenda agreed in advance by the Parties. The offi ce of chairperson of the Committee shall be held 
alternately by each of the Parties. The Comm ittee shall report to the Association Committee.  WT/REG164/1 
 Page 37 
 
 
2. The functions of the Committee shall include: 
(a) monitoring the implementation and admini stration of Articles 79 and 80 and of 
Annex III and any other customs matt ers related to market access;  
(b) providing a forum to consult and discuss on all issues concerning customs, including 
in particular, rules of origin and rela ted customs procedures, general customs 
procedures, customs valuation, tariff regimes, customs nomenclature, customs 
cooperation and mutual administrative assistance in customs matters;  
(c) enhancing cooperation on the development, application and enforcement of rules of 
origin and related customs procedures, general customs procedures and mutual 
administrative assistance in customs matters;  
(d) any other issues agreed by the Parties. 
3. In order to fulfil the tasks referred to in this  Article, the Parties may agree to hold ad hoc 
meetings. 
Article 82 
 
Enforcement Of Preferential Treatment  
 1. The Parties agree that administrative coopera tion is essential for the implementation and 
control of the preferences granted under this T itle and reaffirm their commitment to combat 
irregularities and fraud related to origin, includi ng customs classification and customs value. 
2. In this regard, a Party may temporarily suspe nd the preferential treatment granted under this 
Title for a product or products in respect of whic h that Party determines, in accordance with this 
Article, that there has been systematic failure to  provide administrative cooperation or fraud by the 
other Party. 
3. For the purpose of this Article, systematic fa ilure to provide administrative cooperation shall 
mean: 
(a) the absence of administrative cooperation, such as a failure to provide names and 
addresses of customs or government authorities responsible for issuing and checking certificates of origin, or specimens of stamps  used to authenticate the certificates, or a 
failure to update that info rmation where appropriate;  
(b) a systematic lack or inadequacy of acti on in verifying the originating status of 
products and the fulfilment of the other requirements of Annex III and identifying or 
preventing contravention of the rules of origin;  
(c) a systematic refusal or undue delay to carry  out subsequent verification of the proof 
of origin at the request of the other Party,  and to communicate its results in time;  
(d) the absence or systematic lack of admi nistrative cooperation in verifying conduct 
where there is a presumption of origin-related fraud. For this purpose, a Party may 
presume the existence of fraud, inter alia , where imports of a product or products 
under this Agreement massively exceed the usual levels of pr oduction and export 
capacity of the other Party. WT/REG164/1 
Page 38  
 
4. The Party which has made a finding of system atic failure to provide administrative 
cooperation or presumption of fraud shall, before applying the temporary suspension provided under 
this Article, supply the Association Committee with all relevant information required for a thorough 
examination of the situation with a view to seeki ng a solution acceptable to the Parties. At the same 
time, it shall publish in its Official Journal a noti ce to the importers indicating the product or products 
for which a finding of systematic failure to pr ovide administrative cooperation or presumption of 
fraud has been made. The legal consequences of this  publication shall be gove rned by the domestic 
law of each Party. 
5. Within 10 days after the day of notification of the information referred to  in paragraph 4, the 
Parties shall hold consultations within the Asso ciation Committee. If the Parties do not reach an 
agreement on a solution to avoid application of the temporary suspension of the preferential treatment 
within 30 days from the initiation of such consulta tions, the Party concerned may suspend temporarily 
the preferential treatment of the product or products concerned. 
The temporary suspension shall not exceed what is necessary to protect the financial interests of the 
Party concerned. 
 
6. Temporary suspensions under this Article shall be notified immediately after their adoption to 
the Association Committee. They shall not exceed a period of six months which may be renewed. 
They shall be subject to periodic consultations with in the Association Committee, particularly with a 
view to their abolition as soon as circumstances permit. 
Section 4 : Standards, Technical Regulati ons And Conformity Assessment Procedures
 
 
Article 83 
 
Objective  
 
 The objective of this section is to facilitate and increase trade in goods by eliminating and 
preventing unnecessary barriers to trade while taki ng into account the legitimate objectives of the 
Parties and the principle of non-discrimination, within the meaning of the WTO Agreement on Technical Barriers to Trade ("the TBT Agreement").  
Article 84 
 
Scope And Coverage
 
  The provisions of this section apply to trade in goods in the area of standards, technical regulations and conformity assessment procedures, as defined in the TBT Agreement. They do not 
apply to measures covered by section 5 of this Chapter. Technical specifications prepared by 
governmental bodies for public procurement purposes are not subject to the provisions of this section 
but are addressed in Title IV of this Part.  
Article 85 
 
Definitions
 
  For the purpose of this section, the definitions  of Annex I to the TBT Agreement shall apply. 
In this respect, the Decision of the WTO Committ ee on Technical Barriers to Trade on Principles for 
the Development of International Standards, Guides  and Recommendations with relation to Articles 2, 
5 and Annex 3 of that Agreement shall also apply. 
  WT/REG164/1 
 Page 39 
 
 
Article 86 
 
Basic Rights And Obligations  
  The Parties confirm their rights and oblig ations under the TBT Agreement and their 
commitment to its comprehensive implementation. In this respect and in line with the objective of this 
section, cooperation activities and measures pursued under this section shall be  conducted with a view 
to enhancing and reinforcing the implem entation of those rights and obligations. 
 
Article 87 
 
Specific Actions To Be Purs ued Under This Agreement
 
  With a view to fulfilling the objective of this section:  
1. The Parties shall intensify their bilateral coope ration in the field of standards, technical 
regulations and conformity assessment with a view to facilitating access to their respective markets, 
by increasing the mutual knowledge, understanding a nd compatibility of their respective systems. 
2. In their bilateral cooperation the Parties sh all aim at identifying which mechanisms or 
combination of mechanisms are the most appropriate for particular issues or sectors. Such mechanisms include aspects of regulatory cooperation, inter alia  convergence and/or equivalence of 
technical regulations and standards, alignment to international standards, reliance on the supplier's 
declaration of conformity and use of accreditation to qualify conformity assessment bodies, and mutual recognition agreements. 
3. Based on progress made in their bilateral coopera tion, the Parties shall agree on what specific 
arrangements should be concluded with a view to implementing the mechanisms identified. 
4. To this end, the Parties shall work towards: 
(a) developing common views on good regulatory  practices, including, but not limited to: 
(i) transparency in the preparation, adoption and application of technical 
regulations, standards and conformity assessment procedures;  
(ii) necessity and proportionality of regulat ory measures and related conformity 
assessment procedures, including the use of suppliers declaration of 
conformity;  
(iii) use of international standards as a basis for technical regulations, except 
when such international standards woul d be an ineffective or inappropriate 
means for the fulfilment of the legitimate objectives pursued;  
(iv) enforcement of technical regulations and market surveillance activities;  
(v) the necessary technical infrastructure, in terms of metrology, standardisation, 
testing, certification and accreditation, to support technical regulations; and 
(vi) mechanisms and methods for reviewing technical regulations and conformity 
assessment procedures;  
(b) reinforcing regulatory cooperation through, fo r example, exchange of information, 
experiences and data, and through scientific and technical cooperation with a view to WT/REG164/1 
Page 40  
 
improving the quality and level of their tec hnical regulations and making efficient use 
of regulatory resources;  
(c) compatibility and/or equivalence of their respective technical regulations, standards 
and conformity assessment procedures;  
(d) promoting and encouraging bilateral cooperation between their respective 
organisation, public and/or private, res ponsible for metrology, standardisation, 
testing, certification and accreditation;  
(e) promoting and encouraging full participation in international standard setting bodies, 
and reinforcing the role of international st andards as a basis for technical regulations; 
and 
(f) increasing their bilateral cooperation in the relevant internationa l organisations and 
fora dealing with the issues covered by this section. 
Article 88 
 
Committee On Standards, Technical Re gulations And Conformity Assessment
 
 
1. The Parties hereby establish a Special Committee on Technical Regulations, Standards and 
Conformity Assessment in order to achieve the objectives set out in this section. The Committee, 
made up of representatives of the Parties, shall be co-chaired by a representative of each Party. The 
Committee shall meet at least once a year, unless ot herwise agreed by the Parties. The Committee 
shall report to the Association Committee. 
2. The Committee may address any matter related to th e effective functioning of this section. In 
particular, it shall have the fo llowing responsibilities and functions: 
(a) monitoring and reviewing the implementation and administration of this section. In 
this connection, the Committee shall draw up a work program aimed at achieving the objectives of the section and in particular those set out in Article 87;  
(b) providing a forum for discussion and excha nging information on any matter related to 
this section and in particular as it relates to the Parties' systems for technical regulations, standards and conformity assessment procedures, as well as 
developments in related in ternational organisations;  
(c) providing a forum for consultation and prompt resolution of issues that act or can act 
as unnecessary barriers to trade, within the scope and meaning of this section, 
between the Parties;  
(d) encouraging, promoting and otherwise f acilitating cooperation between the Parties' 
organisations, public and/or private, for metrology, standardisation, testing, 
certification, inspection and accreditation; and 
(e) exploring any means aimed at improving access to the Parties' respective markets and 
enhancing the functioning of this section.  WT/REG164/1 
 Page 41 
 
 
Section 5 : Sanitary and Phytosanitary Measures  
 
Article 89 
 
Sanitary And Phytosanitary Measures  
 
1. The objective of this section is to facilitate trad e between the Parties in the field of sanitary 
and phytosanitary legislation, whilst safeguardi ng public, animal and plant health by further 
implementing the principles of the WTO on the App lication of Sanitary and Phytosanitary Measures 
("the WTO SPS Agreement"). An additional objective of  this section is to consider animal welfare 
standards. 
2. The objectives of this section are pursued through the "Agreement on Sanitary and 
Phytosanitary Measures Applicable to Trade in Animals and Animal Products, Plants, Plant Products 
and other Goods and Animal Welfare" , which is attached as Annex IV. 
3. By way of derogation from Article 193, the Association Committee, when dealing with 
sanitary or phytosanitary measures, shall be com posed of representatives of the Community and Chile 
with responsibility for sanitary and phytosanitary ma tters. This Committee shall then be called the 
"Joint Management Committee for Sanitary and Phytosanitary Matters". The functions of the 
Committee are set out in Article 16 of Annex IV. 
4. For the purpose of Article 184, consultations he ld under Article 16 of Annex IV shall be 
deemed to constitute the consultati ons referred to in Article 183, unless the Parties decide otherwise. 
Section 6 : Wines And Spirits  
 
Article 90 
 
Wines And Spirits  
 
 The Agreement on Trade in Wine and the Agreement on Trade in Spirit Drinks and 
Aromatised Drinks are attached as Annex V and VI, respectively.   
CHAPTER III : EXCEPTIONS 
 
Article 91 
 
General Exception Clause
 
 
 Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discrimination between the Parties where the same 
conditions prevail, or a disguised restriction on trade between the Parties, nothing in this Title shall be 
construed to prevent the adoption or enforc ement by either Party of measures which: 
 
(a) are necessary to protect public morals;  
(b) are necessary to protect human, animal or plant life or health;  
(c) are necessary to secure compliance with laws or regulations which are not 
inconsistent with this Agreement, includi ng those relating to customs enforcement, 
the protection of intellectual property ri ghts, and the prevention of deceptive 
practices;  WT/REG164/1 
Page 42  
 
(d) relate to the importation or e xportation of gold or silver;  
(e) relate to the protection of national treasures of artistic, historic or archaeological 
value;  
(f) relate to the conservation of exhaustible natural resources if such measures are made 
effective in conjunction with restrictions on domestic production or consumption; or 
(g) relate to the products of prison labour. 
Article 92 
 
Safeguard Clause
 
 
1. Unless otherwise provided by this Article, th e provisions of Article XIX of the GATT 1994 
and of the WTO Agreement on Safeguards shall a pply between the Parties. The provisions of 
paragraphs 2, 3, 4, 5, 7, 8 and 9 of this Article shall apply only when  a Party has a substantial interest 
as exporter of the product concerne d, as defined in paragraph 10. 
2. Each Party shall provide, immediately and in  any case no later than seven days from the 
event, ad hoc written notification to the Associa tion Committee of all pertinent information on the 
initiation of a safeguard investigation and on the final findings of the investigation. 
3. The information provided under paragraph 2 shall include in particular an explanation of the 
domestic procedure on the basis of which the investig ation will be carried out and an indication of the 
time schedules for hearings and othe r appropriate opportunities for interested parties to present their 
views on the matter. Furthermore, each Party sh all provide advance written notification to the 
Association Committee of all pertinent informati on on the decision to apply provisional safeguard 
measures. Such notice must be received at least seve n days before the application of such measures. 
4. Upon notification of the final findings of the investigation and before applying safeguard 
measures pursuant to the provisions of Article XI X of the GATT 1994 and of the WTO Agreement on 
Safeguards, the Party intending to apply such me asures shall refer the matter to the Association 
Committee for a thorough examination of the situat ion with a view to seeking a mutually acceptable 
solution. In order to find such a solution and if th e Party concerned so requests, the Parties shall hold 
prior consultations within the Association Committee. 
5. Notwithstanding paragraph 4, nothing shall prevent a Party from applying measures pursuant 
to the provisions of Article XIX of the GA TT 1994 and of the WTO Agreement on Safeguards. 
6. In the selection of safeguard measures referred to in this Article, the Parties shall give priority 
to those which cause least disturbance to the achieve ment of the objectives of this Agreement. Such 
measures shall not exceed what is necessary to re medy the serious injury, and shall preserve the 
level/margin of preference granted under this Title. 
7. The Parties confirm their rights and obligations under paragraphs 1 and 2 of Article 8 of the 
WTO Safeguard Agreement. 
8. The right of suspension referred to in Article 8(2) of the WTO Safeguard Agreement shall not 
be exercised between the Parties for the first 18 mont hs that a safeguard measure is in effect, provided 
that the safeguard measure has been taken as a result of  an absolute increase in imports and that such a 
measure conforms to the provisions of the WTO Safeguard Agreement.  WT/REG164/1 
 Page 43 
 
 
9. Safeguard measures shall upon application be notified immediately to the Association 
Committee and shall be the subject of consultations  once a year within the Committee, particularly 
with a view to their liberalisation or abolition. 
10. For the purposes of this Article, it is considered that a Party has a substantial interest when it 
is among the five largest suppliers of the imported product during the most recent three-year period of 
time, measured in terms of either absolute volume or value. 
11. In the event of either Party subjecting to a surv eillance procedure imports of products liable to 
give rise to the conditions for the application of a safeguard measure pursuant to this Article, it shall 
inform the other Party. 
Article 93 
 
Shortage Clause  
 1. Where compliance with the provisions of this Title leads to: 
(a) a critical shortage, or threat thereof, of foodstuffs or other products essential to the 
exporting Party; or 
(b) a shortage of essential quantities of dom estic materials for a domestic processing 
industry during periods when the domestic pri ce of such materials is held below the 
world price as part of a governmental stabilisation plan;  
and where the situations referred to above give rise or are likely to give rise to major difficulties for 
the exporting Party, that Party may take appropr iate measures under the c onditions and in accordance 
with the procedures laid down in this Article. 
 
2. In the selection of measures, priority must be given to those which least disturb the 
functioning of the arrangements in this Agreement.  Such measures shall not be applied in a manner 
which would constitute a means of arbitrary or unj ustifiable discrimination where the same conditions 
prevail, or a disguised restriction on trade, and shall be eliminated when  the conditions no longer 
justify their maintenance. In addition, the measures which may be adopted pursuant to paragraph 1(b) 
shall not operate to increase the exports of or the protection afforded to the domestic processing 
industry concerned, and shall not depart from th e provisions of this Agreement relating to non-
discrimination. 
3. Before taking the measures provided for in paragraph 1, or as soon as possible in cases to 
which paragraph 4 applies, the Party intending to  take the measures shall supply the Association 
Committee with all relevant information, with a vi ew to seeking a solution acceptable to the Parties. 
The Parties within the Association Committee may ag ree on any means needed to put an end to the 
difficulties. If no agreement is reached within 30 days  of the matter being referred to the Association 
Committee, the exporting Party may apply measur es under this Article on the exportation of the 
product concerned. 
4. Where exceptional and critical circumstances requiring immediate action make prior 
information or examination impossible, the Party intending to take the measures may apply forthwith 
the precautionary measures necessary to deal with the situation and shall inform the other Party 
immediately thereof. 
5. Any measures applied pursuant to this Article sh all be immediately notified to the Association 
Committee and shall be the subject of periodic consulta tions within that body, particularly with a view 
to establishing a timetable for their elim ination as soon as circumstances permit. WT/REG164/1 
Page 44  
 
TITLE III : TRADE IN SERVICES AND ESTABLISHMENT 
 
Article 94 
 
Objectives
 
 
1. The Parties shall reciprocally liberalise trade in  services, in accordance with the provisions of 
this Title and in conformity with Article V of the GATS. 
2. The aim of Chapter III is the improvement of the investment environment, and in particular 
the conditions of establishment between the Par ties, on the basis of the principle of non-
discrimination. 
 
CHAPTER I : SERVICES 
 
Section 1 : General Provisions  
 
Article 95 
 
Scope  
 1. For the purposes of this Chapter, trade in service s is defined as the supply of a service through 
the following modes: 
(a) from the territory of a Party into the territory of the other Party (mode 1);  
(b) in the territory of a Party to the service consumer of the other Party (mode 2);  
(c) by a service supplier of a Party, through commercial presence in the territory of the 
other Party (mode 3);  
(d) by a service supplier of a Party, through presence of natural persons in the territory of 
the other Party (mode 4). 
2. This Chapter applies to trade in a ll service sectors with the exception of: 
(a) financial services, which is subject to Chapter II;  
(b) audio-visual services;  
(c) national maritime cabotage; and 
(d) air transport services, including domestic and international air transportation services, 
whether scheduled or non-scheduled, and services  directly related to the exercise of 
traffic rights, other than: 
(i) aircraft repair and maintenance services during which an aircraft is 
withdrawn from service;  
(ii) the selling and marketing of air transport services; and 
(iii) computer reservation system (CRS) services.  WT/REG164/1 
 Page 45 
 
 
3. Nothing in this Chapter shall be construe d to impose any obligation with respect to 
government procurement, which is s ubject to Title IV of this Part. 
4. The provisions of this Chapter shall not apply to  subsidies granted by the Parties. The Parties 
shall review the issue of disciplines on subsidies re lated to trade in services in the context of the 
review of this Chapter, as provided in Article 100, with a view to incorporating any disciplines agreed 
under Article XV of the GATS. 
5. This Section applies to international mar itime transport and telecommunication services 
subject to the provisions laid down in sections 2 and 3. 
Article 96 
 
Definitions  
  For the purposes of this Chapter:  
(a) "measure" means any measure by a Party, whether in the form of a law, regulation, 
rule, procedure, decision, administrative action, or any other form;  
(b) "measure adopted or maintained by  a Party" means measures taken by: 
(i) central, regional or local governments and authorities; and 
(ii) non-governmental bodies in the exercise of powers delegated by central, 
regional or local governments or authorities;  
(c) "service supplier" means any legal or natura l person that seeks to supply or supplies a 
service;  
(d) "commercial presence" means any type of  business or professional establishment, 
including through: 
(i) the constitution, acquisition or main tenance of a legal person, or 
(ii) the creation or maintenance of a branch or a representative office, 
  within the territory of a Party for the purpose of supplying a service;  
 
(e) "legal person" means any legal entity duly  constituted or otherwise organised under 
applicable law, whether for profit or ot herwise, and whether privately-owned or 
governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;  
(f) "legal person of a Party" means a legal person constituted or otherwise organised 
under the law of the Community or its Member States or of Chile. 
Should such a legal person have only its registered office or central administration in 
the territory of the Community or of Chile, it shall not be considered as a Community or a Chilean legal person respectively, unl ess it is engaged in substantive business 
operations in the territory of the Community or of Chile, respectively. 
 
(g) A "natural person" means a national of one of the Member States or of Chile 
according to their respective legislation. WT/REG164/1 
Page 46  
 
Article 97 
 
Market Access
 
 1. With respect to market access through the modes of  supply identified in Article 95, each Party 
shall accord services and service suppliers of the ot her Party treatment no less favourable than that 
provided for under the terms, limitations and conditi ons agreed and specified in its Schedule referred 
to in Article 99. 
2. In sectors where market-access commitments are undertaken, the measures which a Party 
shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire 
territory, unless otherwise specified in its Schedule, are defined as: 
(a) limitations on the number of services supp liers whether in the form of numerical 
quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;  
(b) limitations on the total value of service transactions or assets in the form of numerical 
quotas or the requirement of an economic needs test;  
(c) limitations on the total number of service ope rations or on the total quantity of service 
output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(1) 
(d) limitations on the total number of natura l 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 a requirement of an economic needs test;  
(e) measures which restrict or require specific  types of legal entities or joint ventures 
through which a service supplier of the other Party may supply a service; and 
(f) limitations on the participation of forei gn capital in terms of maximum percentage 
limit on foreign shareholding or the total value of individual or aggregate foreign 
investment. 
Article 98 
 
National Treatment  
 
1. In the sectors inscribed in its Schedule, and subj ect to the conditions and qualifications set out 
therein, each Party shall grant to services and service suppliers of the other Party, in respect of all 
measures affecting the supply of services, treatment no less favourable than that it accords to its own 
like services and services suppliers.(2) 
2. A Party may meet the requirement of paragraph 1 by according to services and service 
suppliers of the other Party, either formally identical  treatment or formally different treatment to that 
it accords to its own like services and service suppliers. 
                                                      
(1) Paragraph 2(c) does not cover measures of a Party which limit inputs for the supply of services. 
(2) Specific commitments assumed unde r this Article shall not be construed to require the Parties to 
compensate for any inherent competitive disadvantages wh ich result from the foreign character of the relevant 
services or service suppliers.  WT/REG164/1 
 Page 47 
 
 
3. Formally identical or formally different treatment  shall be considered to be less favourable if 
it modifies the conditions of competition in favo ur of services or service suppliers of a Party 
compared to like services or service suppliers of the other Party. 
Article 99 
 
Schedule Of Specific Commitments  
 1. The specific commitments undertaken by each Party under Articles 97 and 98 are set out in 
the schedule included in Annex VII. With respect to  sectors where such commitments are undertaken, 
each Schedule specifies: 
(a) terms, limitations and conditions on market access;  
(b) conditions and qualifications  on national treatment;  
(c) undertakings relating to additional commitm ents referred to in paragraph 3;  
(d) where appropriate, the time-frame for impl ementation of such commitments and the 
date of entry into force of such commitments. 
2. Measures inconsistent with both Articles 97 and 98 are inscribed in the column relating to 
Article 97. In this case the inscription is considered  to provide a condition or qualification to Article 
98 as well. 
3. Where a Party undertakes specific commitments  on measures affecting trade in services not 
subject to scheduling under Articles 97 and 98, su ch commitments are inscribed in its Schedule as 
additional commitments. 
Article 100 
 
Review
 
 1. The Parties shall review this Chapter three years after the entry into force of this Agreement, 
with a view to further deepening liberalisation and reducing or eliminating remaining restrictions on a 
mutually advantageous basis and ensuring an overall balance of rights and obligations. 
2. The Association Committee shall examine the ope ration of this Chapter every three years 
after the review undertaken under paragraph 1 and shall submit appropriate proposals to the 
Association Council. 
Article 101 
 
Movement Of Natural Persons
 
  Two years after the entry into force of this Ag reement, the Parties shall review the rules and 
conditions applicable to movement  of natural persons (mode 4) w ith a view to achieving further 
liberalisation. This review may also address the re vision of the definition of natural person provided 
in Article 96(g). WT/REG164/1 
Page 48  
 
Article 102 
 
Domestic Regulation
 
 1. In sectors where a Party has undertaken commitme nts in its Schedule, and with a view to 
ensuring that any measure relating to the requireme nts and procedures of licensing and certification of 
service suppliers of the other Party does not constitute  an unnecessary barrier to trade, that Party shall 
endeavour to ensure that any such measure: 
(a) is based on objective and transparent criteria, such as, inter alia , competence and the 
ability to provide the service;  
(b) is not more trade-restrictive than necessary  to ensure the achievement of a legitimate 
policy objective;  
(c) does not constitute a disguised restriction on the supply of a service. 
2. The disciplines of paragraph 1 may be reviewed  within the framework of the procedure of 
Article 100 in order to take into account the discip lines agreed under Article VI of the GATS with a 
view to their incorporation into this Agreement. 
3. Where a Party recognises, unilaterally or by ag reement, education, experience, licenses or 
certifications obtained in the territory of a third country, that Party shall afford the other Party an adequate opportunity to demonstrate that education,  experience, licenses or certifications obtained in 
the other Party's territory should also be recognised or to conclude an agr eement or arrangement of 
comparable effect. 
4. The Parties shall consult periodically with a vi ew to determining the feasibility of removing 
any remaining citizenship or permanent residency requirement for the licensing or certification of 
each other's service suppliers. 
Article 103 
 
Mutual Recognition
 
 1. Each Party shall ensure that its competent author ities, within a reasonable period of time after 
the submission by a services supplier of the other Party of an application for a licence or certification: 
(a) where the application is complete, make a determination on the application and 
inform the applicant of that determination; or 
(b) where the application is not complete, inform the applicant without undue delay of 
the status of the application and the additi onal information that is required under the 
Party's domestic law. 
2. The Parties shall encourage the relevant bodi es in their respective territories to provide 
recommendations on mutual recognition, for the pur pose of enabling service suppliers to fulfil, in 
whole or in part, the criteria applied by each Pa rty for the authorisation, licensing, accreditation, 
operation and certification of service suppliers and in particular professional services. 
3. The Association Committee, within a reasonable period of time and considering the level of 
correspondence of the respective regulations, shall decide whether a recommendation referred to in 
paragraph 2 is consistent  with this Chapter. If that is th e case, such a recommendation shall be  WT/REG164/1 
 Page 49 
 
 
implemented through an agreement on mutual reco gnition of requirements, qualifications, licences 
and other regulations to be negotiated by the competent authorities. 
4. Any such agreement shall be in conformity  with the relevant provisions of the WTO 
Agreement and, in particular, Article VII of the GATS. 
5. Where the Parties agree, each Party shall encourage its releva nt bodies to develop procedures 
for the temporary licensing of professional service suppliers of the other Party. 
6. The Association Committee shall periodically, and at least once every three years, review the 
implementation of this Article. 
Article 104 
 
Electronic Commerce(1) 
  The Parties, recognising that the use of electronic means increases trade opportunities in many sectors, agree to promote the development of  electronic commerce between them, in particular 
by cooperating on the market access and regulatory issues raised by electronic commerce. 
 
Article 105 
 
Transparency
 
  Each Party shall respond promptly to all requests by the other Party for specific information 
on any of its measures of general application or inte rnational agreements which pertain to or affect 
this Chapter. The contact point referred to in Artic le 190 shall provide specific information on all such 
matters to service suppliers of the other Party upon request. Contact points need not be depositories of 
laws and regulations.  
Section 2 : International Maritime Transport
 
 
Article 106 
 
Scope  
 
1. Notwithstanding Article 95(5), the provisions of  this section shall apply with respect to 
shipping companies established outside the Commun ity or Chile and controlled by nationals of a 
Member State or of Chile, respectively, if th eir vessels are registered in accordance with their 
respective legislation, in that Member State or in Chile and carry the flag of a Member State or Chile. 
2. This Article applies to international mar itime transport, including door-to-door and 
intermodal transport operations involving a sea-leg. 
Article 107 
 
Definitions  
  For the purposes of this section: 
 
                                                     
 
(1) The inclusion of this provision in this Chapter is  made without prejudice of the Chilean position on 
the question of whether or not electronic commerce sh ould be considered as a supply of services. WT/REG164/1 
Page 50  
 
(a) "intermodal transport operations" is defi ned as the right to arrange door-to-door 
transport services of international cargo and to this effect directly contract with providers of other modes of transport;  
(b) "international maritime service suppliers" cove rs the suppliers of services relating to 
international cargo for maritime services, cargo handling, stor age and warehousing 
services, customs clearance services, container station and depot services, agency 
services and freight forwarding services. 
Article 108 
 
Market Access And National Treatment
 
 
1. In view of the existing levels of liberalisati on between the Parties in international maritime 
transport: 
(a) the Parties shall continue to effectively a pply the principle of unrestricted access to 
the international maritime market and tr affic on a commercial and non-discriminatory 
basis;  
(b) each Party shall continue to grant to ships fl ying the flag of or operated by service 
suppliers of the other Party treatment no l ess favourable than that accorded to its own 
ships with regard to, inter alia , access to ports, use of infrastructure and auxiliary 
maritime services of the ports, and related fees and charges, customs facilities and the 
assignment of berths and facilities for loading and unloading. 
2. In applying the principles of paragraph 1, the Parties shall: 
(a) not introduce cargo-sharing clauses in futu re bilateral agreements with third 
countries, other than in those excepti onal circumstances where liner shipping 
companies from the Party concerned w ould not otherwise have an effective 
opportunity to ply for trade to and from the third country concerned;  
(b) prohibit cargo-sharing arrangements in futu re bilateral agreements concerning dry 
and liquid bulk trade;  
(c) abolish, upon the entry into force of th is Agreement, all unilateral measures and 
administrative, technical and other barri ers which could have restrictive or 
discriminatory effects on the free supply of services in international maritime transport. 
3. Each Party shall permit international maritime se rvice suppliers of the other Party to have a 
commercial presence in its territory under cond itions of establishment and operation no less 
favourable than those accorded to its own service suppliers or tho se of any third country, whichever 
are the better, in accordance with the conditions inscribed in its Schedule. 
Section 3 : Telecommunications Services
 
 
Article 109 
 
Definitions  
  For the purposes of this section: 
  WT/REG164/1 
 Page 51 
 
 
(a) "telecommunications services" means the transport of electro-magnetic signals - 
sound, data image and any combinations thereof, excluding broadcasting(1). 
Therefore, commitments in this sector do not cover the economic activity consisting 
of content provision which require telecomm unications services for its transport. The 
provision of that content, transported via a telecommunications service, is subject to 
the specific commitments undertaken by th e Parties in other relevant sectors. 
(b) a "regulatory authority" means the body or bodies with any of the regulatory tasks 
assigned in relation to the issu es mentioned in this section. 
(c) "essential telecommunications facilities" mean facilities of a public 
telecommunications transport network and service that: 
(i) are exclusively or predominantly provided by a single supplier or a limited 
number of suppliers; and 
(ii) cannot feasibly be economically or techni cally substituted in order to provide 
a service. 
Article 110 
 
Regulatory Authority  
 1. Regulatory authorities for telecommunications services shall be separate from, and not 
accountable to, any supplier of basic telecommunications services. 
2. The decisions of and the procedures used by re gulatory authorities shall be impartial with 
respect to all market participants. 
3. A supplier affected by the decision of a regulatory authority shall have a right to appeal 
against that decision. 
Article 111 
 
Supply Of Services
 
 1. Where a licence is required, the terms and conditio ns for such a license shall be made publicly 
available and the period of time normally required to  reach a decision concerning an application for a 
licence shall be made publicly available. 
2. Where a licence is required, the reasons for the denial of a licence shall be made known to the 
applicant upon request. 
Article 112 
 
Major Suppliers
 
 
1. A major supplier is a supplier which has the ability to materially affect the terms of 
participation having regard to pr ice and supply in the relevant market for basic telecommunications 
services as a result of: 
                                                      
(1) Broadcasting is defined as the uninterrupted chain of transmission required for the distribution of TV 
and radio programme signals to the general public, but does not cover contribution links between operators. WT/REG164/1 
Page 52  
 
(a) control over essential facilities; or 
(b) the use of its position in the market. 
2. Appropriate measures shall be maintained for th e purpose of preventing suppliers who, alone 
or together, are a major supplier from engaging  in or continuing anti-competitive practices. 
3. The anti-competitive practices referred to above shall include in particular: 
(a) engaging in anti-competitive cross-subsidisation;  
(b) using information obtained from compet itors with anti-competitive results; and 
(c) not making available to other services suppliers on a timely basis technical 
information about essential facilities and comm ercially relevant information which 
are necessary for them to supply services. 
Article 113 
 
Interconnection
 
 1. This section applies to linking with suppliers  providing public telecommunications transport 
networks or services in order to allow the users of  one supplier to communicate with users of another 
supplier and to access services provided by another supplier. 
2. Interconnection with a major supplier shall be en sured at any technically feasible point in the 
network. Such interconnec tion shall be provided: 
(a) under non-discriminatory terms, conditions  (including technical standards and 
specifications) and rates and of a quality no l ess favourable than that provided for its 
own like services or for like services of non-affiliated service suppliers or for its 
subsidiaries or other affiliates;  
(b) in a timely fashion, on terms, cond itions (including technical standards and 
specifications) and cost-oriented rates that ar e transparent, reasonable, having regard 
to economic feasibility, and sufficiently unbundl ed so that the supplier need not pay 
for network components or facilities that it does not require for the service to be 
provided; and 
(c) upon request, at points in addition to the ne twork termination points offered to the 
majority of users, subject to charges that reflect the cost of construction of necessary additional facilities. 
4. The procedures applicable for interconnection to a major supplier shall be made publicly 
available. 
5. Major suppliers shall make inte rconnection agreements available to service suppliers of the 
Parties to ensure non-discrimination, and/or shall publish reference interconnec tion offers in advance, 
unless they are already available to the public.  WT/REG164/1 
 Page 53 
 
 
Article 114 
 
Scarce Resources  
  Any procedures for the allocation and use of s carce resources, including frequencies, numbers 
and rights of way, shall be carried out in an objective, timely, transparent and non-discriminatory 
manner.  
Article 115 
 
Universal Service
 
 1. Each Party has the right to define the kind of universal service obligation it wishes to 
maintain. 
2. The provisions governing universal service shall be transparent, objective and non-
discriminatory. They shall also be neutral with  respect to competition and be no more burdensome 
than necessary. 
 
CHAPTER II : FINANCIAL SERVICES 
 
Article 116 
 
Scope
 
 1. This Chapter applies to measures adopted or ma intained by the Parties affecting trade in 
financial services. 
2.  For the purposes of this Chapter, trade in fi nancial services is defined as the supply of a 
financial service through the following modes: 
(a) from the territory of a Party into the territory of the other Party (mode 1);  
(b) in the territory of a Party to the financial ser vice consumer of the other Party       
(mode 2);  
(c) by a financial service supplier of a Party, through commercial presence in the 
territory of the other Party (mode 3);  
(d) by a financial service supplier of a Party, through presence of natural persons in the 
territory of the other Party (mode 4). 
3. Nothing in this Chapter shall be construe d to impose any obligation with respect to 
government procurement, which is s ubject to Title IV of this Part. 
4. The provisions of this Chapter shall not apply to  subsidies granted by the Parties. The Parties 
shall review the issue of disciplines on subsidies relate d to trade in financial services, with a view to 
incorporating in this Agreement any di sciplines agreed under Article XV of GATS. 
5. This Chapter does not apply to: 
(i) activities conducted by a central bank or monetary authority or by any other public 
entity in pursuit of monetary or exchange rate policies;  WT/REG164/1 
Page 54  
 
(ii) activities forming part of a statutory system of social security or public retirement 
plans; and 
(iii) other activities conducted by a public entity fo r the account or with the guarantee or 
using the financial resources of the Government. 
6. For the purposes of paragraph 5, if a Party allows  any of the activities referred to in paragraph 
5(ii) or (iii) to be conducted by its financial service suppliers in competition with a public entity or a 
financial service supplier, this Chap ter shall apply to such activities. 
Article 117 
 
Definitions
 
 
 For the purposes of this Chapter:  1. "measure" means any measure by a Party, whethe r in the form of a law, regulation, rule, 
procedure, decision, administrative action, or any other form;  
2. "measures adopted or maintained by a Party" means measures taken by: 
(i) central, regional or local governments and authorities; and 
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or 
local governments or authorities;  
3. "financial service supplier" means any natural or  legal person that seeks to supply or supplies 
financial services but the term "financial service supplier" does not include a public entity;  
4. "public entity" means: 
(i) a government, a central bank or a monetary authority of a Party, or an entity owned or 
controlled by a Party, that is principa lly engaged in carrying out governmental 
functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or 
(ii) a private entity, performing functions normally performed by a central bank or 
monetary authority, when exercising those functions;  
5. "commercial presence" means any type of bus iness or professional establishment, including 
through: 
(i) the constitution, acquisition or main tenance of a legal person, or 
(ii) the creation or maintenance of a branch or a representative office, 
within the territory of a Party for the purpose of supplying a financial service;  
 6. "legal person" means any legal entity du ly constituted or otherwise organised under 
applicable law, whether for profit or otherwise,  and whether privately-owned or governmentally-
owned, including any corporation, tr ust, partnership, joint venture, so le proprietorship or association;  
7. "legal person of a Party" means a legal pers on constituted or otherw ise organised under the 
law of the Community or its Member States or of Chile.  WT/REG164/1 
 Page 55 
 
 
Should such a legal person have only its registered office or central administration in the territory of the Community or Chile, it shall not be consid ered as a Community or a Chilean legal person 
respectively, unless it is engaged in substantive bus iness operations in the territory of the Community 
or Chile, respectively.  
8. "natural person" means a national of one of th e Member States or of Chile according to their 
respective legislation. 
9. "financial service" means any service of a fina ncial nature offered by  a financial service 
supplier of a Party. Financial services comprise the following activities: 
Insurance And Insurance-Related Services 
 
(i) direct insurance (including co-insurance): 
  (A) life 
   (B) non-life 
 
(ii) reinsurance and retrocession;  
(iii) insurance intermediation, such as brokerage and agency;  
(iv) services auxiliary to insurance, such as c onsultancy, actuarial, risk assessment and 
claim settlement services. 
Banking And Other Financial Services (Excluding Insurance) 
 
(v) acceptance of deposits and other repayable funds from the public;  
(vi) lending of all types, including consumer credit, mortgage credit, factoring and 
financing of commercial transactions;  
(vii) financial leasing;  
(viii) all payment and money transmission services, including credit, charge and debit 
cards, travellers cheques and bankers drafts;  
(ix) guarantees and commitments;  
(x) trading for own account or for account of customers, whether on an exchange, in an 
over-the-counter market or otherwise, the following: 
(A) money market instruments, including cheques, bills, certificates of deposits;  
 
  (B) foreign exchange;     (C) derivative products including, bu t not limited to, futures and options;  
 
(D) exchange rate and inter est rate instruments, including products such as swaps, 
forward rate agreements;  
      (E) transferable securities;   WT/REG164/1 
Page 56  
 
  (F) other negotiable instruments and financial assets, including bullion.  
(xi) participation in issues of all kinds of secu rities, including underwriting and placement 
as agent (whether publicly or privately) and provision of services related to such 
issues;  
(xii) money broking;  
(xiii) asset management, such as cash or portfolio management, all forms of collective 
investment management, pension fund mana gement, custodial, depository and trust 
services;  
(xiv) settlement and clearing services for financia l assets, including securities, derivative 
products, and other negotiable instruments;  
(xv) provision and transfer of financial inform ation, and financial data processing and 
related software by suppliers of other financial services;  
(xvi) advisory, intermediation an other auxiliary financial services on all the activities listed 
in subparagraphs (v) through (xv), including credit reference and analysis, investment 
and portfolis research and advice, advice on acquisitions, and on corporate 
restructuring and strategy. 
10. "new financial service" means a service of a financial nature, including rvices related to 
existing and new products or the manner in which a product is delivered, that is not supplied by any 
financial service supplier in the territory of a Party but which is supplied in the territory of the other 
Party. 
Article 118 
 
Market Access
 
 1. With respect to market access through the m odes of supply identified in Article 116, each 
Party shall accord financial services and financial servi ce suppliers of the other Party treatment no less 
favourable than that provided for under the terms, li mitations and conditions agreed and specified in 
its Schedule referred to in Article 120. 
2. In sectors where market-access commitments are undertaken, the measures which a Party 
shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire 
territory, unless otherwise specified in its Schedule, are defined as: 
(a) limitations on the number of financial servi ces suppliers whether in the form of 
numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;  
(b) limitations on the total value of financial service transactions or assets in the form of 
numerical quotas or the requirement of an economic needs test;   WT/REG164/1 
 Page 57 
 
 
(c) limitations on the total number of financial service operations or on the total quantity 
of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(1)  
(d) limitations on the total number of natura l persons that may be employed in a 
particular financial service sector or that a financial service supplier may employ and 
who are necessary for, and directly related to, the supply of a specific financial 
service in the form of numerical quotas or a requirement of an economic needs test;  
(e) measures which restrict or require specific  types of legal entities or joint ventures 
through which a financial service supplier of  the other Party may supply a financial 
service; and 
(f) limitations on the participation of forei gn capital in terms of maximum percentage 
limit on foreign shareholding or the total value of individual or aggregate foreign investment. 
Article 119 
 
National Treatment
 
 1. In the sectors inscribed in its Schedule, and subj ect to the conditions and qualifications set out 
therein, each Party shall accord to financial service s and financial service suppliers of the other Party, 
in respect of all measures affecting the supply of financial services, treatment no less favourable than 
that it accords to its own like financia l services and financial service suppliers.
(1) 
2. A Party may meet the requirement of paragr aph 1 by according to financial services and 
financial service suppliers of the other Party, either formally identical treatment or formally different 
treatment to that it accords to its own like fi nancial services and fina ncial service suppliers. 
3. Formally identical or formally different treatment  shall be considered to be less favourable if 
it modifies the conditions of competition in favour of  financial services or financial service suppliers 
of a Party compared to like financial services or  financial service suppliers of the other Party. 
Article 120 
 
Schedule Of Specific Commitments  
 1. The specific commitment undertaken by each Party under Articles 118 and 119 are set out in 
the Schedule included in Annex VIII. With resp ect to sectors where such commitments are 
undertaken, each Schedule specifies: 
(a) terms, limitations and conditions on market access;  
(b) conditions and qualifications  on national treatment;  
(c) undertakings relating to additional commitm ents referred to in paragraph 3;  
                                                     
 
(1) Paragraph 2(c) does not cover measures of a Party which limit inputs for the supply of financial 
services. 
(1) Specific commitments assumed unde r this Article shall not be construed to require the Parties to 
compensate for any inherent competitive disadvantages wh ich result from the foreign character of the relevant 
financial services or financial service suppliers. WT/REG164/1 
Page 58  
 
(d) where appropriate the time-frame for impl ementation of such commitments and the 
date of entry into force of such commitments. 
2. Measures inconsistent with both Articles 118 and 119 are inscribed in the column relating to 
Article 118. In this case, the inscription is considered  to provide a condition or qualification to Article 
119 as well. 
3. Where a Party undertakes specific commitments on measures affecting trade in financial 
services not subject to scheduling under Articles 118 a nd 119, such commitments are inscribed in its 
Schedule as additional commitments. 
Article 121 
 
New Financial Services
 
 1. A Party shall permit financial service suppliers of  the other Party established in its territory to 
offer in its territory any new financial service with in the scope of the subsectors and financial services 
committed in its Schedule and subject to the te rms, limitations, conditio ns and qualifications 
established in that Schedule and provided that the introduction of this new financial service does not 
require a new law or the modification of an existing law. 
2. A Party may determine the legal form throug h which the service may be provided and may 
require authorisation for the provision of the financia l service. Where such authorisation is required, a 
decision shall be taken within a reasonable period of time and the authorisation may only be refused 
for prudential reasons. 
Article 122 
 
Data Processing In The Financial Services Sector
 
 1. Each Party shall permit a financial service supplie r of the other Party to transfer information 
in electronic or other form, into and out of its te rritory, for data processing where such processing is 
required in the ordinary course of busin ess of such financial service supplier. 
2. Where the information referred to in paragraph 1 consists of or cont ains personal data, the 
transfer of such information from th e territory of one Party to the territory of the other Party shall take 
place in accordance with the domestic law regulating th e protection of individuals with respect to the 
transferring and processing of personal data of the Party out of whose territory the information is 
transferred. 
Article 123 
 
Effective And Transparent Regulation In The Financial Services Sector
 
 
1. Each Party shall, to the extent practicable, pr ovide in advance to all interested persons any 
measure of general application that the Party pro poses to adopt in order to allow an opportunity for 
such persons to comment on the measure. Such measure shall be provided: 
(a) by means of an official publication; or 
(b) in other written or electronic form. 
2. Each Party's appropriate financial authority sh all make available to interested persons its 
requirements for completing applications rela ting to the supply of financial services.  WT/REG164/1 
 Page 59 
 
 
3. On the request of an applicant, the appropriate financial authority shall inform the applicant of 
the status of its application. If such authority re quires additional information from the applicant, it 
shall notify the applicant without undue delay. 
4. Each Party shall make its best endeavours to implement and apply in its territory 
internationally agreed standards for regulation and s upervision in the financial services sector and for 
the fight against money laundering. For this purp ose, the Parties shall cooperate and exchange 
information and experience within the Special Comm ittee on Financial Services referred to in    
Article 127. 
Article 124 
 
Confidential Information  
  Nothing in this Chapter:  
(a) shall require any of the Parties to provide confidential information, the disclosure of 
which would impede law enforc ement, or otherwise be contrary to the public interest, 
or which would prejudice legitimate commerc ial interests of particular enterprises, 
public or private;  
(b) shall be construed to require a Party to di sclose information relating to the financial 
affairs and accounts of individual customers of financial service suppliers, or any 
confidential or proprietary information in the possession of public entities. 
Article 125 
 
Prudential Carve-Out
 
 1. Nothing in this Chapter shall be construed to  prevent a Party from adopting or maintaining 
reasonable measures for prudential reasons, such as: 
(a) the protection of investors, depositors, fina ncial market participants, policy-holders, 
or persons to whom a fiduciary duty is  owed by a financial services supplier;  
(b) the maintenance of the safety, soundness, integrity or financial responsibility of 
financial services suppliers; and 
(c) ensuring the integrity and stability of a Party's financial system. 
2. Where such measures do not conform with the provi sions of this Chapter, they shall not be 
used as a means of avoiding the Party's co mmitments or obligations under the Chapter. 
Article 126 
 
Recognition
 
 
1. A Party may recognise prudential measures of the other Party in determining how the Party's 
measures relating to financial services shall be ap plied. Such recognition, which may be achieved 
through harmonisation or otherwise, may be based upon an agreement or arrangement or may be 
accorded autonomously. 
2. A Party that is a party to an agreement or arrangement with a third party such as those 
referred to in paragraph 1, whether future or existing, shall afford adequate opportunity for the other WT/REG164/1 
Page 60  
 
Party to negotiate its accession to such agreements or arrangements, or to negotiate comparable ones 
with it, under circumstances in which there would be equivalent regulation,  oversight, implementation 
of such regulation, and, if appr opriate, procedures concerning the sh aring of information between the 
Parties to the agreement or arrangement. Wher e a Party accords recognition autonomously, it shall 
afford adequate opportunity for the other Party to demonstrate that such circumstances exist. 
Article 127 
 
Special Committee On Financial Services
 
 1. The Parties hereby establish a Special Co mmittee on Financial Services. The Special 
Committee shall be composed of representatives of the Parties. The principal representative of each 
Party shall be an official of the Party's authority responsible for financial services set out in Annex IX. 
2. The functions of the Special Committee shall include: 
(a) supervising the implementation of this Chapter;  
(b) considering issues regarding financial services that are referred to it by a Party. 
3. The Special Committee shall meet at the request of one of the Parties on a date and with an 
agenda agreed in advance by the Parties. The offi ce of chairperson shall be held alternately. The 
Special Committee shall report to the Associa tion Committee the results of its meetings. 
4. Three years after the entry into force of this  Agreement the Special Committee on Financial 
Services shall consider actions with the aim of f acilitating and expanding trade in financial services 
and further contributing to the objectives of this Agreement, and shall report to the Association 
Committee. 
Article 128 
 
Consultations
 
 
1. A Party may request consultations with the other Party regarding any matter arising under this 
Chapter. The other Party shall give sympathetic c onsideration to the request. The Parties shall report 
the results of their consultations to th e Special Committee on Financial Services. 
2. Consultations under this Article shall include offici als of the authorities specified in         
Annex IX. 
3. Nothing in this Article shall be construed to  require financial authorities participating in 
consultations to disclose informa tion or take any action that w ould interfere with individual 
regulatory, supervisory, admini strative or enforcement matters. 
4. Where a financial authority of a Party re quires information for supervisory purposes 
concerning a financial service supplier in the other Party's territory, such financial authority may 
approach the competent financial authority in the ot her Party's territory to seek the information. The 
provision of such information may be subject to the terms, conditions and lim itations contained in the 
other Party's relevant law or to the requirement of a prior agreement or arrangement between the 
respective financial authorities.  WT/REG164/1 
 Page 61 
 
 
Article 129 
 
Specific Provisions On Dispute Settlement  
 1. Except as otherwise provided in this Article, a ny disputes under this Chapter shall be settled 
in accordance with the provisions of Title VIII. 
2. For the purpose of Article 184, consultations held under Article 128 shall be deemed to 
constitute the consultations refe rred to in Article 183, unless the Parties otherwise agree. Upon 
initiation of consultations, the Parties shall provide information to enable the examination of how a 
measure of a Party or any other matter may affect the operation and application of this Chapter, and 
give confidential treatment to the information ex changed during consultations. If the matter has not 
been resolved within 45 days after holding the co nsultations under Article 128 or 90 days after the 
delivery of the request for consultations under Artic le 128(1), whichever is earlier, the complaining 
Party may request in writing the establishment of an  arbitration panel. The Parties shall report the 
results of their consultations directly to the Association Committee. 
3. For the purpose of Article 185: 
(a) the chairperson of the arbitration pa nel shall be a financial expert;  
(b) the Association Committee shall, no later than six months after the entry into force of 
this Agreement, establish a list of at least five individuals who are not nationals of 
either Party, and who are willing and able to serve as arbitrators and be identified as chairperson of arbitration panels in fi nancial services. The Association Committee 
shall ensure that the list always contains fi ve individuals at any point in time. Those 
individuals shall have exper tise or experience in financial services law or practice, 
which may include the regulation of financ ial institutions, be independent, serve in 
their individual capacities and not be affilia ted with, nor take instructions from, any 
Party or organisation and shall comply with  the Code of Conduct set out in Annex 
XVI. Such list may be amended every three years;  
(c) within three days of the request for est ablishment of the arbitration panel, the 
chairperson of the arbitration panel shall be  selected by lot by the chairperson of the 
Association Committee from the list referre d to in paragraph (b). The other two 
arbitrators of the panel shall be selected by  lot by the chairperson of the Association 
Committee from the list referred to in Article 185(2), one among the individuals 
proposed to the Association Committee by the complaining Party, and the other 
among the individuals proposed to the Association Committee by the Party complained against. 
 
CHAPTER III : ESTABLISHMENT 
 
Article 130 
 
Scope
 
  This Chapter shall apply to establishment in  all sectors with the exception of all services 
sectors, including the financial services sector. 
 WT/REG164/1 
Page 62  
 
Article 131 
 
Definitions
 
  For the purposes of this Chapter, 
 
(a) "legal person" means any legal entity duly  constituted or otherwise organised under 
applicable law, whether for profit or ot herwise, and whether privately-owned or 
governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;  
(b) "legal person of a Party" means a legal person constituted or otherwise organised 
under the law of the Community or its Member States or of Chile. 
Should such a legal person have only its registered office or central administration in 
the territory of the Community or of Chile, it shall not be considered as a Community or a Chilean legal person respectively, unl ess it is engaged in substantive business 
operations in the territory of the Community or of Chile respectively. 
 
(c) "natural person" means a national of one of the Member States or of Chile according 
to their respective legislation. 
(d) "establishment" means: 
(i) the constitution, acquisition or main tenance of a legal person, or 
(ii) the creation or maintenance of a branch or a representative office, 
  within the territory of a Party for the purpose of performing an economic activity. 
 
As regards natural persons, this shall not extend to seeking or taking employment in 
the labour market or confer a right of access to the labour market of a Party. 
 
Article 132 
 
National Treatment
 
  In the sectors inscribed in Annex X, and subj ect to any conditions and qualifications set out 
therein, with respect to establishmen t, each Party shall grant to lega l and natural persons of the other 
Party treatment no less favourable than that it accord s to its own legal and na tural persons performing 
a like economic activity.  
Article 133 
 
Right To Regulate
 
   Subject to the provisions of Article 132, each Party may regulate the establishment of legal and natural persons.   WT/REG164/1 
 Page 63 
 
 
Article 134 
 
Final Provisions  
 1. With respect to this Chapter,  the Parties confirm their rights and obligations existing under 
any bilateral or multilateral agreemen ts to which they are parties. 
2. With the objective of progressive liberalisati on of investment conditions, the Parties affirm 
their commitment to review the investment legal framework, the investment environment and the flow 
of investment between them consistent with their commitments in international investment 
agreements, no later than three years after the entry into force of this Agreement. 
 
CHAPTER IV : EXCEPTIONS 
 
Article 135 
 
Exceptions
 
 1. Subject to the requirement that such measures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiabl e discrimination between the Parties where like 
conditions prevail, or a disguised  restriction on trade in services, financial services or establishment, 
nothing in this Title shall be construed to preven t the adoption or enforcement by either Party of 
measures: 
(a) necessary to protect public morals or to ma intain public order and public security;  
(b) necessary to protect human, animal or plant life or health;  
(c) relating to the conservation of exhaustible  natural resources if such measures are 
applied in conjunction with restrictions on the domestic supply or consumption of 
services or on domestic investments;  
(d) necessary for the protection of national treasures of artistic, historic or archaeological 
value;  
(e) necessary to secure compliance with laws or regulations which are not inconsistent 
with the provisions of this Title including those relating to: 
(i) the prevention of deceptive and fraudulent practices or to deal with the effects 
of a default on services contracts;  
(ii) the protection of the privacy of indivi duals in relation to the processing and 
dissemination of personal data and th e protection of confidentiality of 
individual records and accounts; or 
(iii) safety. 
2. The provisions of this Title shall not apply to th e Parties' respective social security systems or 
to activities in the territory of each Party which ar e connected, even occasionally , with the exercise of 
official authority. 
3. Nothing in this Title shall prevent a Part y from applying its laws, regulations and 
requirements regarding entry and stay, work, la bour conditions, and establishment of natural WT/REG164/1 
Page 64  
 
persons
(1)  provided that, in so doing, it does not apply to them in such a manner as to nullify or impair 
the benefits accruing to the other Party under th e terms of a specific provision of this Title. 
 
TITLE IV : GOVERNMENT PROCUREMENT 
 
Article 136 
 
Objective  
  In accordance with the provisions of this Title , the Parties shall ensure the effective and 
reciprocal opening of their government procurement markets. 
 
Article 137 
 
Scope And Coverage
 
 
1. This Title applies to any law, regulation, pro cedure or practice regarding any procurement, by 
the entities of the Parties, of goods and services in cluding works, subject to the conditions specified 
by each Party in Annexes XI, XII and XIII. 
2. This Title shall not be applicable to: 
(a) contracts awarded pursuant to: 
(i) an international agreement intende d for the joint implementation or 
exploitation of a project by the contracting parties;  
(ii) an international agreement relati ng to the stationing of troops; and 
(iii) the particular procedure of an international organisation. 
(b) non-contractual agreements or any form of government assistance and procurement 
made in the framework of assistance or cooperation programmes. 
(c) contracts for: 
(i) the acquisition or rental of land, ex isting buildings, or other immovable 
property or concerning rights thereon;  
(ii) the acquisition, development, produc tion or co-production of programme 
material by broadcasters and contracts for broadcasting time. 
(iii) arbitration and conciliation services;  
(iv) employment contracts; and 
(v) research and development services other than those where the benefits accrue 
exclusively to the entity for its use in  the conduct of its own affairs, on 
condition that the service is whol ly remunerated by the entity; and 
                                                      
(1) In particular, a Party may require that natu ral persons must possess the necessary academic 
qualifications and/or professional experience specified in the territory where the service or financial service is 
supplied or the establishment is set-up, for the sector of activity concerned.  WT/REG164/1 
 Page 65 
 
 
(d) financial services. 
3. Public works concessions, as defined in Article 138( i), shall also be subject to this Title, as 
specified in Annexes XI, XII and XIII. 
4. Neither Party may prepare, design or otherwise structure any procurement contract in order to 
avoid the obligations under this Title. 
Article 138 
 
Definitions  
  For the purpose of this Title, the following definitions shall apply: 
 
(a) "government procurement" means any type  of procurement of goods, services or a 
combination thereof, including works carried  out by public entities of the Parties for 
governmental purposes and not with a view to commercial resale or with a view to use in the production of goods or the supply of services for commercial sale, unless 
otherwise specified. It includes procuremen t by such methods as purchase or lease, or 
rental or hire purchase, with or without an option to buy;  
(b) "entities" means the public entities of the Par ties, such as central, sub-central or local 
government entities, municipalities, public undertakings and all other entities that procure in accordance with the provisions of this Title, as set out in Annexes XI, XII 
and XIII;  
(c) "public undertakings" means any undertak ing over which the public authorities may 
exercise directly or indirectly a dominant influence by virtue of their ownership of it, their financial participation therein, or  the rules which govern it. A dominant 
influence on the part of the public au thorities shall be presumed when these 
authorities, directly or indirectly, in relation to an undertaking: 
(i) hold the majority of the unde rtaking's subscribed capital;  
(ii) control the majority of the votes a ttaching to shares issued by the 
undertaking; or 
(iii) can appoint more than half of the members of the undertaking's 
administrative, managerial or supervisory body. 
(d) "supplier of the Parties" means any natural or legal person or public body or group of 
such persons of a Party and/or bodies of  a Party which can provide goods, services or 
the execution of works. The term shall c over equally a supplier of goods, a service 
provider or a contractor;  
(e) "legal person" means any legal entity duly  constituted or otherwise organised under 
applicable law, whether for profit or ot herwise, and whether privately-owned or 
governmentally-owned, including any corporation, trust, partnership, joint venture, 
sole proprietorship or association;  
(f) "legal person of a Party" means a legal person constituted or otherwise organised 
under the law of the Community or its Member States or of Chile;  WT/REG164/1 
Page 66  
 
Should such a legal person have only its registered office or central administration in the territory of the Community or Chile, it shall not be considered as a Community or a Chilean legal person respectively, unless it is engaged in substantive business 
operations in the territory of the Community or Chile respectively.  
(g) a "natural person" means a national of one of the Member States or of Chile 
according to their respective legislation;  
(h) "tenderer" means a supplier who has submitted a tender;  
(i) "public works concessions" means a contract of the same type as public works 
procurement contracts, except for the fact that the remuneration for the works to be 
carried out consists either solely in the right  to exploit the construction or in this right 
together with a payment;  
(j) "offsets" means those conditions imposed or c onsidered by an entity prior to, or in the 
course of its procurement process, that encourage local development or improve its Party's balance of payments accounts by means of requirements of local content, 
licensing of technology, investment, count er-trade or similar requirements;  
(k) "in writing or written" means any expression of information in words, numbers or 
other symbols, including electronic means, that can be read, reproduced and stored;  
(l) "technical specifications" means a specifica tion which lays down the characteristics 
of the goods or services to be procured, such as quality, pe rformance, safety and 
dimensions, symbols, terminology, pack aging, marking and labelling, or the 
processes and methods for their production a nd requirements relating to conformity 
assessment procedures prescribed by entities;  
(m) "privatisation" means a process by means of which government control over an entity 
is effectively eliminated and is transferred to the private sector;  
(n) "liberalisation" means a process as a result of which an entity enjoys no exclusive or 
special rights and is exclusively engaged in the provision of goods or services on 
markets that are subject to effective competition. 
Article 139 
 
National Treatment And Non-Discrimination
 
 
1. Each Party shall ensure that the procurement of  its entities covered by this Title takes place in 
a transparent, reasonable and non-discriminatory manne r, treating any supplier of either Party equally 
and ensuring the principle of open and effective competition. 
2. With respect to any laws, regulations, pr ocedures and practices regarding government 
procurement covered by this Title, each Party shall grant the goods, services and suppliers of the other 
Party a treatment no less favourable than that  accorded by it to domestic goods, services and 
suppliers. 
3. With respect to any laws, regulations, pr ocedures and practices regarding government 
procurement covered by this Title, each Party shall ensure:  WT/REG164/1 
 Page 67 
 
 
(a) that its entities do not treat a locally-establis hed supplier less favourably than another 
locally-established supplier on the basis of the degree of foreign affiliation to, or ownership by, a person of the other Party; and 
(b) that its entities do not discriminate against a locally-established supplier on the basis 
that the goods or services offered by that  supplier for a particular procurement are 
goods or services of the other Party. 
4. This Article shall not apply to measures concer ning customs duties or other charges of any 
kind imposed on or in connection with importation, the method of levying such duties and charges, other import regulations, including restrictions an d formalities, nor to measures affecting trade in 
services other than measures specifically govern ing procurement covered by this Title. 
Article 140 
 
Prohibition Of Offsets And National Preferences
 
  Each Party shall ensure that its entities do not , in the qualification and selection of suppliers, 
goods or services, in the evaluation of bids or in the award of contracts, consider, seek or impose 
offsets, nor conditions regarding national prefer ences such as margins allowing price preference. 
 
Article 141 
 
Valuation Rules
 
 
1. Entities shall not split up a procurement, nor use any other method of contract valuation with 
the intention of evading the application of this Ti tle when determining whether a contract is covered 
by the disciplines of thereof, subject to the conditio ns set out in Annexes XI and XII, Appendices 1    
to 3. 
2. In calculating the value of a contract, an entity shall take into account all forms of 
remuneration, such as premiums, fees, commissions and interests, as well as the maximum permitted total amount, including option clauses, provided for by the contract. 
3. When, due to the nature of the contract, it is not possible to calculate in advance its precise 
value, entities shall estimate this valu e on the basis of objective criteria. 
Article 142 
 
Transparency
 
 1. Each Party shall promptly publish any law, re gulation, judicial decision and administrative 
ruling of general application and procedure, in cluding standard contract clauses, regarding 
procurement covered by this Title in the appropria te publications referred to  in Annex XIII, Appendix 
2, including officially designated electronic media. 
2. Each Party shall promptly publish in the same  manner all modifications to such measures. 
Article 143 
 
Tendering Procedures
 
 
1. Entities shall award their public contracts by open or selective tendering procedures according 
to their national procedures, in compliance with  this Title and in a non-discriminatory manner. WT/REG164/1 
Page 68  
 
2. For the purposes of this Title: 
(a) open tendering procedures are those proce dures whereby any interested supplier may 
submit a tender. 
(b) selective tendering procedures are those proce dures whereby, consistent with Article 
144 and other relevant provisions of this Title, only suppliers satisfying qualification 
requirements established by the entities are invited to submit a tender. 
3. However, in the specific cases and only under the conditions laid down in Article 145, entities 
may use a procedure other than the open or selectiv e tendering procedures referred to in paragraph 1 
of that Article, in which case the entities may choose not to publish a notice of intended procurement, 
and may consult the suppliers of their choice and nego tiate the terms of contract with one or more of 
these. 
4. Entities shall treat tenders in confidence. In pa rticular, they shall not provide information 
intended to assist particular partic ipants to bring their tenders up to  the level of other participants. 
Article 144 
 
Selective Tendering
 
 1. In selective tendering, entities may limit the numbe r of qualified suppliers they will invite to 
tender, consistent with the efficient operation of th e procurement process, provided that they select the 
maximum number of domestic supplie rs and suppliers of the other Party, and that they make the 
selection in a fair and non-discriminatory manner a nd on the basis of the criteria indicated in the 
notice of intended procurement or in tender documents. 
2. Entities maintaining permanent lists of qualified suppliers may select suppliers to be invited 
to tender from among those listed, under the conditi ons of Article 146(7). Any selection shall allow 
for equitable opportunities for suppliers on the lists. 
Article 145 
 
Other Procedures
 
 1. Provided that the tendering procedure is not u sed to avoid maximum possible competition or 
to protect domestic suppliers, entiti es shall be allowed to award contracts by means other than an open 
or selective tendering procedure in the following  circumstances and subject to the following 
conditions, where applicable: 
(a) when no suitable tenders or request to par ticipate have been submitted in response to 
a prior procurement, on condition that the re quirements of the initial procurement are 
not substantially modified;  
(b) when, for technical or artistic reasons, or for reasons connected with protection of 
exclusive rights, the contract may be perfo rmed only by a particular supplier and no 
reasonable alternative or substitute exists;  
(c) for reasons of extreme urgency brought about by events unforeseeable by the entity, 
the goods or services could not be obtaine d in time by means of open or selective 
tendering procedures;   WT/REG164/1 
 Page 69 
 
 
(d) for additional deliveries of goods or services by the original supplier where a change 
of supplier would compel the entity to procure equipment or services not meeting requirements of interchangeability with al ready existing equipment, software or 
services;  
(e) when an entity procures prototypes or a first product or service which are developed 
at its request in the course of, and for, a particular contract for research, experiment, 
study or original development;  
(f) when additional services which were not in cluded in the initial contract but which 
were within the objectives of the origin al tender documentation have, through 
unforeseeable circumstances, become necessary to complete the services described 
therein. However, the total value of cont racts awarded for the additional construction 
services may not exceed 50 % of the amount of the main contract;  
(g) for new services consisting of the repetition of similar services and for which the 
entity has indicated, in the notice concer ning the initial service, that tendering 
procedures other than open or selective might be used in awarding contracts for such 
new services;  
(h) in the case of contracts awarded to the winner of a design contest, provided that the 
contest has been organised in a manner which is consistent with the principles of this 
Title; in case of several successful candida tes, all successful candidates shall be 
invited to participate in the negotiations; and 
(i) for quoted goods purchased on a commodity market and for purchases of goods made 
under exceptionally advantageous conditions wh ich only arise in the very short term 
in the case of unusual disposals and not for routine purchases from regular suppliers.  
2. The Parties shall ensure that, whenever it is necessary for entities to resort to a procedure 
other than the open or selective tendering pro cedures based on the circumstances set forth in 
paragraph 1, the entities shall maintain a record  or prepare a written report providing specific 
justification for the contract awarded under that paragraph. 
Article 146 
 
Qualification Of Suppliers
 
 
1. Any conditions for participation in procurement shall be limited to those that are essential to 
ensure that the potential supplier has the capability to fulfil the requirements of the procurement and 
the ability to execute the contract in question. 
2. In the process of qualifying suppliers, entities shall not discriminate between domestic 
suppliers and suppliers of the other Party. 
3. A Party shall not impose the condition that, in  order for a supplier to participate in a 
procurement, the supplier has previously been awar ded one or more contracts by an entity of that 
Party or that the supplier has prior work e xperience in the territory of that Party. 
4. Entities shall recognise as qualified suppliers all suppliers who meet the conditions for 
participation in a particular in tended procurement. Entities shall base their qualification decisions 
solely on the conditions for participation that ha ve been specified in advance in notices or tender 
documentation. WT/REG164/1 
Page 70  
 
5. Nothing in this Title shall preclude the ex clusion of any supplier on grounds such as 
bankruptcy or false declarations or conviction for serious crime such as participation in criminal 
organisations. 
6. Entities shall promptly communicate to suppliers  that have applied for qualification their 
decision on whether or not they qualify. 
Permanent Lists Of Qualified Suppliers 
 
7. Entities may establish permanent lists of qualified suppliers provided that the following rules 
are respected: 
(a) entities establishing permanent lists shall ensure that suppliers may apply for 
qualification at any time. 
(b) any supplier having requested to become a qualified supplier shall be notified by the 
entities concerned of the decision in this regard. 
(c) suppliers requesting to participate in a gi ven intended procurement who are not on the 
permanent list of qualified supp liers shall be given the possibility to participate in the 
procurement by presenting the equivalent certifications and other means of proof 
requested from suppliers who are on the list. 
(d) when an entity operating in the utilities sect or uses a notice on the existence of a 
permanent list as a notice of intended proc urement, as provided in Article 147(7), 
suppliers requesting to participate who ar e not on the permanent list of qualified 
suppliers shall also be considered for the procurement, provided there is sufficient 
time to complete the qualification procedure; in this event, the procuring entity shall 
promptly start procedures for qualification and the process of, and the time required 
for, qualifying suppliers shall not be used in  order to keep suppliers of other Parties 
off the suppliers' list. 
Article 147 
 
Publication Of Notices
 
 
General Provisions 
 
1. Each Party shall ensure that its entities provide  for effective dissemination of the tendering 
opportunities generated by the relevant government procurement processes, providing suppliers of the 
other Party with all the information require d to take part in such procurement. 
2. For each contract covered by this Title, excep t as set out in Articles 143(3) and 145, entities 
shall publish in advance a notice inviting interested suppliers to submit tende rs, or where appropriate, 
requests for participation for that contract. 
3. The information in each notice of intended proc urement shall include at least the following: 
(a) name, address, telefax number, electronic address of the entity and, if different, the 
address where all documents relating to the procurement may be obtained;  
(b) the tendering procedure chosen and the form of the contract;   WT/REG164/1 
 Page 71 
 
 
(c) a description of the intended procurement, as well as essential contract requirements 
to be fulfilled;  
(d) any conditions that suppliers must fulf il to participate in the procurement;  
(e) time-limits for submission of  tenders and, where appropr iate, other time limits;  
(f) main criteria to be used for award of the contract; and 
(g) if possible, terms of payment and any other terms. 
Notice Of Planned Procurement 
 
4. Each Party shall encourage its entities to publis h as early as possible in each fiscal year, a 
notice of planned procurement containing informati on regarding entities' future procurement plans. 
Such notice should include the subject matter of  the procurement and the planned date of the 
publication of the notice of intended procurement. 
5. Entities operating in the utilities sector may use a notice of planned procurement as a notice 
of intended procurement, under the condition that such notice contains as much of the information 
referred to in paragraph 3 as is available, and that it explicitly invites interested suppliers to express 
their interest in the procurement to the entity. 
6. Entities having used a notice of planned procurement as a notice of intended procurement 
shall subsequently communicate to all suppliers who have expressed an initial interest further 
information that shall include, at least, the inform ation referred to in paragraph 3 and ask them to 
confirm their interest on that basis. 
Notice Regarding Permanent Lists Of Qualified Suppliers 
 7. Entities which intend to maintain permanent lists sh all, consistently with  paragraph 2, publish 
a notice which shall identify the entity, and indi cate the purpose of the permanent list and the 
availability of the rules concerning its opera tion, including criteria for qualification and 
disqualification, as well as its duration. 
8. Where the permanent list is of a duration gr eater than three years, the notice shall be 
published annually. 
9. Entities operating in the utilities sector may use a notice on the existence of permanent lists of 
qualified suppliers as a notice of intended procuremen t. In that case, they shall provide, in a timely 
manner, information which allows a ll those who have expressed an interest to assess their interest in 
participating in the procurement. This informati on shall include the information contained in the 
notice referred to in paragraph 3, to the extent that  such information is available. Information provided 
to one interested supplier shall be provided in a non-discriminatory manner to the other interested 
suppliers. 
Common Provisions 
 10. Each notice referred to in this Article shall be accessible during the entire time period 
established for tendering for the relevant procurement. 
11. Entities shall publish the notices in a timely ma nner through means which offer the widest 
possible and non-discriminatory access to the interested  suppliers of the Parties. These means shall be 
accessible free of charge through a single point of access specified in Annex XIII, Appendix 2. WT/REG164/1 
Page 72  
 
Article 148 
 
Tender Documentation
 
 1. Tender documentation provided to suppliers shall contain all information necessary to permit 
them to submit responsive tenders. 
2. Where contracting entities do not offer free dir ect access to the entire tender documents and 
any supporting documents by electronic means, en tities shall make promptly available the tender 
documentation at the request of any supplier of the Parties. 
3. Entities shall promptly reply to any reasonable re quest for relevant information relating to the 
intended procurement, on condition that such inform ation does not give that supplier an advantage 
over its competitors. 
Article 149 
 
Technical Specifications
 
 
1. Technical specifications shall be set out in  the notices, tender documents or additional 
documents. 
2. Each Party shall ensure that its entities do not prepare, adopt or apply any technical 
specifications with a view to, or with the effect  of, creating unnecessary barriers to trade between the 
Parties. 
3. Technical specifications prescribed by entities shall 
(a) be in terms of performance and functiona l requirements rather than design or 
descriptive characteristics; and 
(b) be based on international standards, where these exist or, in their absence, on national 
technical regulations(1), recognised national standards(2), or building codes. 
4. The provisions of paragraph 3 do not apply when  the entity can objectively demonstrate that 
the use of technical specifications referred to in th at paragraph would be ine ffective or inappropriate 
for the fulfilment of the legitimate objectives pursued.  
5. In all cases, entities shall consider bids which do not comply with the technical specifications 
but meet the essential requirements thereof and ar e fit for the purpose intended. The reference to 
technical specifications in the tender document s must include words such as "or equivalent". 
                                                     
 
(1) For the purpose of this Title, a technical regula tion is a document which lays down characteristics of 
a product or a service or their related processes and production methods, including the applicable administrative 
provisions, with which compliance is mandatory. It ma y also include or deal ex clusively with terminology, 
symbols, packaging, marking or labelling requirements as th ey apply to a product, service, process or production 
method. 
(2) For the purpose of this Title, a standard is a document approved by a recognised body, that provides, 
for common and repeated use, rules, gu idelines or characteristics for products  or services or related processes 
and production methods, with which compliance is not mandatory. It may also include or deal exclusively with 
terminology, symbols, packaging, marking or labelling requirements as they apply to a product, service, process 
or production method.  WT/REG164/1 
 Page 73 
 
 
6. There shall be no requirement for or reference to  a particular trademark or trade name, patent, 
design or type, specific origin, producer or supplier, unless there is no other sufficiently precise or intelligible way of describing the procurement re quirements and provided that words, such as "or 
equivalent", are included in the tender documentation. 
7. The tenderer shall have the bur den of proving that his bid meets the essential requirements. 
Article 150 
 
Time-Limits
 
 1. All time-limits established by the entities for the receipt of tenders and requests to participate 
shall be adequate to allow suppliers of the other Party, as well as domestic suppliers, to prepare and to 
submit tenders, and where appropriate, requests for pa rticipation or applications for qualifying. In 
determining any such time-limit, entities shall, consis tent with their own reasonable needs, take into 
account such factors as the complexity of th e intended procurement and the normal time for 
transmitting tenders from foreign as well as domestic points. 
2. Each Party shall ensure that its entities sha ll take due account of publication delays when 
setting the final date for receipt of tenders or of request for participation or for qualifying for the 
supplier's list. 
3. The minimum time-limits for the receipt of tenders are specified in Annex XIII, Appendix 3. 
Article 151 
 
Negotiations
 
 1. A Party may provide for its entities to conduct negotiations: 
(a) in the context of procurements in which they  have indicated such intent in the notice 
of intended procurement; or 
(b) when it appears from evaluation that no one tender is obviously the most 
advantageous in terms of the specific eval uation criteria set forth in the notices or 
tender documentation. 
2. Negotiations shall primarily be used to iden tify the strengths and weaknesses in tenders. 
3. Entities shall not, in the course of negotiations, discriminate between tenderers. In particular, 
they shall ensure that: 
(a) any elimination of participants is carried out in accordance with the criteria set forth 
in the notices and tender documentation;  
(b) all modifications to the criteria and to the technical requirements are transmitted in 
writing to all remaining particip ants in the negotiations; and 
(c) on the basis of the revised requirements and/or when negotiations are concluded, all 
remaining participants are afforded an o pportunity to submit new or amended tenders 
in accordance with a common deadline. WT/REG164/1 
Page 74  
 
Article 152 
 
Submission, Receipt And Opening Of Tenders
 
 1. Tenders and requests to participate in procedures shall be submitted in writing. 
2. Entities shall receive and open bids from tenderers under procedures and conditions 
guaranteeing the respect of the principles of transparency and non-discrimination. 
Article 153 
 
Awarding Of Contracts
 
 
1. To be considered for award, a tender must, at the time of opening, conform to the essential 
requirements of the notices or tender documentation and be submitted by a supplier which complies 
with the conditions for participation. 
2. Entities shall make the award to the tenderer who se tender is either the lowest tender or the 
tender which, in terms of the specific objective evalua tion criteria previously set forth in the notices or 
tender documentation, is determined  to be the most advantageous. 
Article 154 
 
Information On Contract Award  
 
1. Each Party shall ensure that its entities provide for effective dissemination of the results of 
government procurement processes. 
2. Entities shall promptly inform tenderers of deci sions regarding the award of the contract and 
of the characteristics and relative advantages of the selected tender. Upon request, entities shall 
inform any eliminated tenderer of the re asons for the rejection of its tender. 
3. Entities may decide to withhold certain informa tion on the contract award where release of 
such information would prevent law enforcement or  otherwise be contrary to the public interest, 
would prejudice the legitimate commercial interests of suppliers, or might prejudice fair competition 
between them. 
Article 155 
 
Bid Challenges  
 1. Entities shall accord impartial and timely cons ideration to any complaints from suppliers 
regarding an alleged breach of this Title in  the context of a procurement procedure. 
2. Each Party shall provide non-discriminatory, tim ely, transparent and effective procedures 
enabling suppliers to challenge alleged breaches of this  Title arising in the cont ext of procurements in 
which they have, or have had, an interest. 
3. Challenges shall be heard by an impartial and independent reviewing authority. A reviewing 
authority which is not a court shall either be subj ect to judicial review or shall have procedural 
guarantees similar to those of a court. 
4. Challenge procedures shall provide for:  WT/REG164/1 
 Page 75 
 
 
(a) rapid interim measures to correct breaches of this Title and to preserve commercial 
opportunities. Such action may result in suspension of the procurement process. 
However, procedures may provide that overriding adverse consequences for the 
interests concerned, including the public interest, may be taken into account in 
deciding whether such measures should be applied; and 
(b) if appropriate, correction of the breach of this Title or, in the absence of such 
correction, compensation for the loss or da mages suffered, which may be limited to 
costs for tender preparation and protest. 
Article 156 
 
Information Technology  
 1. The Parties shall, to the extent possible, e ndeavour to use electronic means of communication 
to permit efficient dissemination of information on government procurement, particularly as regards 
tender opportunities offered by entities, while resp ecting the principles of transparency and non-
discrimination. 
2. With a view to improving access to government procurement markets, each Party shall 
endeavour to implement an electronic information system, which is compulsory for their respective entities. 
3. The Parties shall encourage the use of electronic means for the transmission of offers. 
Article 157 
 
Cooperation And Assistance
 
  The Parties shall endeavour to provide each other with technical cooperation and assistance 
through the development of training programs with a view to achieving a better understanding of their 
respective government procurement systems and statistics and better access to their respective 
markets.  
Article 158 
 
Statistical Reports
 
 
 Where a Party does not ensure an acceptable  level of compliance with Article 147(11), it 
shall, upon request of the other Party, collect and provide to the other Party on an annual basis statistics on its procuremen ts covered by this Title. Such re ports shall contain the information 
established in Annex XIII, Appendix 4. 
 
Article 159 
 
Modifications To Coverage
 
 1. Either Party may modify its coverage  under this Title, provided that it: 
(a) notifies the other Party of the modification; and 
(b) provides the other Party, within 30 days following the date of such notification, 
appropriate compensatory adjustments to its coverage in order to maintain a level of 
coverage comparable to that existing prior to the modification. WT/REG164/1 
Page 76  
 
2. Notwithstanding paragraph 1(b), no compensatory ad justments shall be provided to the other 
Party where the modification by a Party of  its coverage under this Title concerns: 
(a) rectifications of a purely formal nature and minor amendments to Annexes XI and 
XII; or 
(b) one or more covered entities on which government control or influence has been 
effectively eliminated as a result of privatisation or liberalisation. 
3. Where appropriate, the Association Committee sh all by decision modify the relevant Annex 
to reflect the modification notified by the Party concerned. 
Article 160 
 
Further Negotiations
 
  If either Party should offer in the future a third party additional advantages with regard to 
access to their respective procurement markets beyond what has been agreed under this Title, it shall 
agree to enter into negotiations with the other Part y with a view to extending these advantages to it on 
a reciprocal basis by means of a decision of the Association Committee. 
 
Article 161 
 
Exceptions
 
 
 Provided that such measures are not applied in a manner that would constitute a means of 
arbitrary or unjustifiable discrimination between the Parties or a disguised restriction on trade between 
them, nothing in this Title shall be construed to prevent any Party from adopting or maintaining 
measures:  
(a) necessary to protect public morals, order or safety;  
(b) necessary to protect human life, health or security;  
(c) necessary to protect animal or plant life or health;  
(d) necessary to protect intellectual property; or 
(e) relating to goods or services of handicapped persons, of ph ilanthropic ins titutions or 
of prison labour. 
Article 162 
 
Review And Implementation
 
  The Association Committee shall review the im plementation of this Title every two years, 
unless otherwise agreed by the Parties; it shall consid er any issue arising from it, and take appropriate 
action in the exercise of its functions. It sha ll, in particular, fulfil the following tasks: 
 
(a) coordinate exchanges between the Pa rties regarding the development and 
implementation of information technology syst ems in the field of public procurement;  
(b) make appropriate recommendations regard ing the cooperation between the Parties; 
and  WT/REG164/1 
 Page 77 
 
 
(c) adopt decisions where provided for under this Title. 
 
TITLE V : CURRENT PAYMENTS AND CAPITAL MOVEMENTS 
 
Article 163 
 
Objective And Scope  
 1. The Parties shall aim at the liberalisation of current payments and capital movements between 
them, in conformity with the commitments undertaken  in the framework of the international financial 
institutions and with due considerati on to each Party's currency stability. 
2. This Title applies to all current payments  and capital movements between the Parties. 
Article 164 
 
Current Account
 
 
 The Parties shall allow, in freely convertible  currency and in accordance with the Articles of 
Agreement of the International Monetary Fund, an y payments and transfers of the Current Account 
between the Parties.  
Article 165 
 
Capital Account
 
  With regard to movement of capital of the Bala nce of Payments, from the entry into force of 
this Agreement, the Parties shall allow the free movements of capital relating to direct investments 
made in accordance with the laws of the host count ry and investments established in accordance with 
the provisions of Title III of this Part, and the li quidation or repatriation of these capitals and of any 
profit stemming therefrom.  
Article 166 
 
Exceptions And Safeguard Measures
 
 1. Where, in exceptional circumstances, payments and capital movements between the Parties 
cause or threaten to cause serious difficulties for th e operation of monetary policy or exchange rate 
policy in either Party, the Party concerned may take safeguard measures with regard to capital 
movements that are strictly necessary for a period not exceeding one year. The application of 
safeguard measures may be extended through their formal reintroduction. 
2. The Party adopting the safeguard measures shall inform the other Party forthwith and present, 
as soon as possible, a time schedule for their removal. 
Article 167 
 
Final Provisions
 
 1. With respect to this Title, the Parties confir m the rights and obligations existing under any 
bilateral or multilateral agreements to which they are parties. WT/REG164/1 
Page 78  
 
2. The Parties shall consult each other with a view to facilitating the movement of capital 
between them in order to promote the objectives of this Agreement. 
 
TITLE VI : INTELLECTUAL PROPERTY RIGHTS 
 
Article 168 
 
Objective
 
   The Parties shall grant and ensure adequate and effective protection of intellectual property 
rights in accordance with the highest international st andards, including effective means of enforcing 
such rights provided for in international treaties.  
Article 169 
 
Scope
 
  For the purposes of this Agreement, intellectual property rights embodies copyright - including copyright in computer programs and in da tabases - and related rights, the rights related to 
patents, industrial designs, geographical indicatio ns including appellation of origins, trademarks, 
layout-designs (topographies) of integrated circuits, as well as protection of undisclosed information 
and protection against unfair competition as referred to  in Article 10 bis of the Paris Convention for 
the Protection of Industrial Property (Stockholm Act, 1967).  
Article 170 
 
Protection Of Intellectual Property Rights
 
  In pursuance of the objectives set out in Article 168, the Parties shall:  
(a) continue to ensure an adequate and e ffective implementation of the obligations 
arising from the following conventions: 
(i) the Agreement on Trade-related Aspects of Intellectual Property, Annex 1C 
to the Agreement establishing the World Trade Organisation ("the TRIPs");  
(ii) the Paris Convention for the Protection of Industrial Property (Stockholm 
Act, 1967);  
(iii) the Berne Convention for the Protection of Literary and Artistic Works (Paris 
Act, 1971);  
(iv) the Rome Convention for the Protection of Performers, Producers of 
Phonograms and Broadcasting Or ganisations (Rome, 1961); and 
(v) the International Convention for the Pr otection of New Varieties of Plants 
1978 ("1978 UPOV Convention"), or the International Convention for the Protection of New Varieties of Plants 1991 ("1991 UPOV Convention");  
(b) by 1 January 2007 accede to and ensure an ad equate and effective implementation of 
the obligations arising from the following multilateral conventions:  WT/REG164/1 
 Page 79 
 
 
(i) the Nice Agreement Concerning the Inte rnational Classification of Goods and 
Services for the Purposes of Registration of Marks (Geneva Act, 1977, amended in 1979);  
(ii) the World Intellectual Property Organization Copyright Treaty (Geneva, 
1996);  
(iii) the World Intellectual Property Organization Performances and Phonograms 
Treaty (Geneva, 1996);  
(iv) the Patent Co-operation Treaty (Washington, 1970, amended in 1979 and 
modified in 1984); and 
(v) the 1971 Strasbourg Agreement Con cerning the International Patent 
Classification (Strasbourg 1971 , amended in 1979);  
(c) by 1 January 2009 accede to and ensure an ad equate and effective implementation of 
the obligations arising from the following multilateral conventions: 
(i) the Convention for the Protection of Producers of Phonograms against the 
Unauthorised Duplication of their Phonograms (Geneva 1971);  
(ii) the Locarno Agreement establishing an International Classification for 
Industrial Designs (Locarno Un ion 1968, amended in 1979);  
(iii) the Budapest Treaty on the International Recognition of the Deposit of 
Micro-organisms for the Purposes of Pa tent Procedure (1977, amended in 
1980); and 
(iv) the Trademark Law Treaty (Geneva, 1994);  
(d) make every effort to ratify and ensure an  adequate and effec tive implementation of 
the obligations arising from the following multilateral conventions at the earliest 
possible opportunity: 
(i) the Protocol to the Madrid Agreement concerning the International 
Registration of Marks (1989);  
(ii) the Madrid Agreement concerning the International Registration of Marks 
(Stockholm Act 1967, amended in 1979); and 
(iii) the Vienna Agreement establishing an International Classification of 
Figurative Elements of Marks (Vienna 1973, amended in 1985). 
Article 171 
 
Review
 
  While the Parties express their attachment to observing the obligations deriving from the 
above multilateral conventions, the Association Council may decide to include in Article 170 other 
multilateral conventions in this field. WT/REG164/1 
Page 80  
 
TITLE VII : COMPETITION 
 
Article 172 
 
Objectives
 
 
1. The Parties undertake to apply their respective competition laws in a manner consistent with 
this Part of the Agreement so as to avoid the be nefits of the liberalisation process in goods and 
services being diminished or cancelled out by anti-competitive business conduct. To this end, the Parties agree to cooperate and c oordinate among their competition authorities under the provisions of 
this Title. 
2. With a view to preventing distortions or restrictions of competition which may affect trade in 
goods or services between them, the Parties shall give particular attention to anti-competitive 
agreements, concerted practices and abusive be haviour resulting from single or joint dominant 
positions. 
3. The Parties agree to cooperate and coordina te among themselves for the implementation of 
competition laws. This cooperation includes notificati on, consultation, excha nge of non-confidential 
information and technical assistance. The Parties acknowledge the importance of embracing principles on competition that would be accepted by both Parties in multilateral fora, including the 
WTO. 
Article 173 
 
Definitions
 
  For the purpose of this Title:  
1. "competition laws" includes: 
(a) for the Community, Articles 81, 82 and 86 of the Treaty establishing the European 
Community, Regulation (EEC) No 4064/89 and their implementing regulations or amendments;  
(b) for Chile, Decreto Ley No 211 of 1973 and Ley No 19.610 of 1999 and their 
implementing regulations or amendments; and 
(c) any changes that the abovementioned legisl ation may undergo after the entry into 
force of this Agreement. 
2. "competition authority" means: 
(a) for the Community, the Commission of  the European Communities; and 
(b) for Chile, the Fiscalía Nacional Económ ica and the Comisión Resolutiva. 
3. "enforcement activity" means any application of competition laws by way of investigation or 
proceeding conducted by the competition authority of a Party, which may result in the imposition of penalties or remedies.  WT/REG164/1 
 Page 81 
 
 
Article 174 
 
Notifications  
 1. Each competition authority shall notify the comp etition authority of the other Party of an 
enforcement activity if it: 
(a) is liable to substantially affect the other Party's important interests;  
(b) relates to restrictions on competition which ar e liable to have a direct and substantial 
effect in the territory of the other Party; or 
(c) concerns anti-competitive acts taking place prin cipally in the territory of the other 
Party. 
2. Provided that this is not contrary to the Pa rties' competition laws and does not affect any 
investigation being carried out, notification shall ta ke place at an early stage of the procedure. The 
opinions received may be taken into considerati on by the other competition authority when taking 
decisions. 
3. The notifications provided for in paragra ph 1 should be detailed enough to permit an 
evaluation in the light of the interests of the other Party. 
4. The Parties undertake to use their best efforts to  ensure that notifications are made in the 
circumstances set out above, taking into account the administrative resources available to them. 
Article 175 
 
Coordination Of Enforcement Activities
 
  The competition authority of one Party may notify the other Party's competition authority of its willingness to coordinate enforcement activities w ith respect to a specific case. This coordination 
shall not prevent the Parties from taking autonomous decisions. 
 
Article 176 
 
Consultations When The Important Interests Of One Party Are Adversely 
 
Affected In The Territory Of The Other Party  
 
1. Each Party shall, in accordance with its laws , take into consideration, as necessary, the 
important interests of the other Party in the c ourse of its enforcement activities. If the competition 
authority of a Party considers that an investiga tion or proceeding being conducted by the competition 
authority of the other Party may adversely affect such Party's important interests it may transmit its 
views on the matter to, or request consultation w ith, the other competition authority. Without 
prejudice to the continuation of any action under it s competition laws and to its full freedom of 
ultimate decision, the competition authority so addressed should give full and sympathetic consideration to the views expressed by  the requesting competition authority. 
2. The competition authority of a Party which consid ers that the interests of that Party are being 
substantially and adversely affected by anti-competitiv e practices of whatever origin that are or have 
been engaged in by one or more enterprises situated  in the other Party may request consultations with 
the competition authority of that Party. Such c onsultations shall be without prejudice to the full 
freedom of ultimate decision of the competition authority concerned. A competition authority so WT/REG164/1 
Page 82  
 
consulted may take whatever corrective measures under its competition laws it deems appropriate, 
consistent with its own domestic law, and with out prejudice to its full enforcement discretion. 
Article 177 
 
Exchange Of Information And Confidentiality
 
 
1. With a view to facilitating the effective appli cation of their respective competition laws, the 
competition authorities may exchange non-confidential information. 
2. For the purpose of improving transparency, and without prejudice to the rules and standards 
of confidentiality applicable in each Party, the Parties hereby undertake to exchange information 
regarding sanctions and remedies applied in th e cases that, according to the competition authority 
concerned, are significantly affecting important interests of the other Party and to provide the grounds on which those actions were taken, when requested by the competition authority of the other Party. 
3. Each Party shall provide the other Party with  information on state aid on an annual basis, 
including the overall amount of aid and, if possible, the segregation by sector. Each Party may request 
information on individual cases affecting trade betwee n the Parties. The requested Party will use its 
best efforts to provide non-confidential information. 
4. All exchange of information shall be subject to  the standards of confidentiality applicable in 
each Party. Confidential information whose disse mination is expressly prohibited or which, if 
disseminated, could adversely affect the interest of the Parties, shall not be provided without the 
express consent of the source of the information. 
5. Each competition authority shall maintain the c onfidentiality of any information provided to it 
in confidence by the other competition authority, and oppose any application for disclosure of such 
information by a third party that is not authori sed by the competition authority that supplied the 
information. 
6. In particular, where the laws of a Party so pr ovides, confidential information may be provided 
to their respective courts of justice, subject to ma intaining its confidentiality by the respective courts. 
Article 178 
 
Technical Assistance
 
  The Parties may provide each other technical assi stance in order to take advantage of their 
respective experience and to strengthen the implem entation of their competition laws and policies. 
 
Article 179 
 
Public Enterprises And Enterprises Entruste d With Special Or Exclusive Rights, 
 
Including Designated Monopolies  
 1. Nothing in this Title prevents a Party from designating or maintaining public or private 
monopolies according to their respective laws. 
2. With regard to public enterprises and enterpri ses to which special or exclusive rights have 
been granted, the Association Comm ittee shall ensure that, following th e date of entry into force of 
this Agreement, there is neither enacted nor main tained any measure distorting trade in goods or 
services between the Parties to an extent contrary to  the Parties' interests and that such enterprises  WT/REG164/1 
 Page 83 
 
 
shall be subject to the rules of competition insofa r as the application of such rules does not obstruct 
the performance, in law or in fact, of the particular tasks assigned to them. 
Article 180 
 
Dispute Settlement  
 
 Neither Party may have recourse to dispute settlement under this Agreement for any matter 
arising under this Title.   
TITLE VIII : DISPUTE SETTLEMENT 
 
CHAPTER I : OBJECTIVE AND SCOPE 
 
Article 181 
 
Objective
 
  The objective of this Title is to avoid and settle disputes between the Parties concerning the 
good faith application of this Part of the Agreement and to arrive to a mutually satisfactory resolution 
of any matter that might affect its operation. 
 
Article 182 
 
Scope
 
 
 The provisions of this Title shall apply with respect to any matter arising from the 
interpretation and application of this Part of the Agreement, except otherwise expressly provided. 
  
CHAPTER II : DISPUTE AVOIDANCE 
 
Article 183 
 
Consultations
 
 1. The Parties shall at all times endeavour to agr ee on the interpretation and application of this 
Part of the Agreement and shall make every attemp t through cooperation and consultations to avoid 
and settle disputes between them and to arrive at a mutually satisfactory resolution of any matter that 
might affect its operation. 
2. Each Party may request consultations within the Association Committee with respect to an 
existing or proposed measure or any matter relating to the application or interpretation of this Part of 
the Agreement or any other matter that it considers might affect its operation. For the purposes of this 
Title, a "measure" shall also include a practice. Th e Party shall state in th e request the measure or 
other matter complained of, indicate the provisions of this Agreement that it considers applicable and 
deliver the request to the other Party. 
3. The Association Committee shall convene within 30 days of delivery of the request. Upon 
initiation of consultations, the Parties shall provide information to enable the examination of how the 
measure or any other matter might affect the operati on and application of this Part of the Agreement, 
and give confidential treatment to the informati on exchanged during consu ltations. The Association 
Committee shall endeavour to resolve the dispute pr omptly by means of a decision. That decision WT/REG164/1 
Page 84  
 
shall specify the implementing measures to be taken by the Party concerned, and the timeframe for doing so. 
 
CHAPTER III : DISPUTE SETTLEMENT PROCEDURE 
 
Article 184 
 
Initiation Of The Procedure
 
 1. Parties shall at all times endeavour to reach a mutually satisfactory agreement on the dispute. 
2. Where a Party considers that an existing measu re of the other Party is in breach of an 
obligation under the provisions referred to in Article  182 and such matter has not been resolved within 
15 days after the Association Committee has convened pursuant to Article 183(3) or 45 days after the 
delivery of the request for consultations within th e Association Committee, whichever is earlier, it 
may request in writing the establishment of an arbitration panel. 
3. The complaining Party shall state in the request the existing measure it considers to be in 
breach of this Part of the Agreement and indicate the provisions of this Agreement that it considers 
relevant, and shall deliver the request to the other Party and to the Association Committee. 
Article 185 
 
Appointment Of Arbitrators
 
 
1. Arbitration panels shall consist of three arbitrators. 
2. The Association Committee shall, no later than si x months after the entry into force of this 
Agreement, establish a list of at l east 15 individuals who are willing and able to serve as arbitrators, a 
third of whom must not be national of either Pa rty and are identified as chairperson of arbitration 
panels. The Association Committee shall ensure that  the list always contains 15 individuals at any 
point in time. Those individuals shall have specia lised knowledge or experien ce in law, international 
trade or other matters relating to this Part of the Agreement or in the resolution of disputes deriving 
from international trade agreements, be independent , serve in their individual capacities and not be 
affiliated with, nor take instructions from, any Part y or organisation and shall comply with the Code 
of Conduct set out in Annex XVI. Such list may be amended every three years. 
3. Within three days of the request for the estab lishment of the arbitration panel, the three 
arbitrators shall be selected by lot by the chai rperson of the Association Committee from the list 
referred to in paragraph 2, one among the individu als proposed to the Asso ciation Committee by the 
complaining Party, one among the individuals propo sed to the Association Committee by the Party 
complained against and the chairperson among th e individuals identified for that purpose under 
paragraph 2. 
4. The date of establishment of the arbitration panel shall be the date on which the three 
arbitrators are selected by lot. 
5. Where a Party considers that an arbitrator does not comply with the requirements of the Code 
of Conduct, the Parties shall consult and, if so ag reed, they shall replace that arbitrator and select a 
new one pursuant to paragraph 6. 
6. If an arbitrator is unable to participate in the proceeding, withdraws or is replaced, a 
replacement shall be selected within three days in  accordance with the selection procedure followed to  WT/REG164/1 
 Page 85 
 
 
select that arbitrator. In such a case, any timeframe applicable to the arbitration panel proceeding shall 
be suspended for a period beginning on the date th e arbitrator is unable to participate in the 
proceeding, withdraws or is replaced and endi ng on the date the replacement is selected. 
Article 186 
 
Information And Technical Advice  
  At the request of a Party or on its own initia tive, the panel may obtain the information and 
technical advice of persons and bodies that it deems appropriate. Any information so obtained shall be 
submitted to the Parties for comments. 
 
Article 187 
 
Arbitration Panel Ruling
 
 
1. The arbitration panel shall transmit its ruling containing its findings and conclusions to the 
Parties and the Association Committee, as a general ru le not later than three months from the date of 
establishment of the arbitration panel. In no case shoul d it do so later than five months from this date. 
The arbitration panel shall base its ruling on the su bmissions and communications of the Parties and 
on any information it has received pursuant to Article  186. The ruling is final and shall be publicly 
available. 
2. The ruling shall set out the findings of fact, the applicability of the relevant provisions of this 
Agreement and the basic rationale behind an y findings and conclusions that it makes. 
3. Arbitration panels shall interpret the provisi ons of this Agreement in accordance with 
customary rules of interpretation of public internat ional law, due account being taken of the fact that 
the Parties must perform this Agreement in good fa ith and avoid circumvention of their obligations. 
4. A Party asserting that a measure of the other Party is inconsistent with the provisions of this 
Part of the Agreement shall have the burden of estab lishing such inconsistency. A Party asserting that 
a measure is subject to an exception under this Pa rt of the Agreement shall have the burden of 
establishing that the exception applies. 
5. In cases of urgency, including those involving  perishable goods, the arbitration panel shall 
make every effort to issue its ruling to the Parties within 75 days from the date of establishment of the 
arbitration panel. In no case should it do so later th an four months from that date. The arbitration 
panel may give a preliminary ruli ng on whether a case is urgent. 
6. All decisions of the arbitration panel, including the adoption of the ruling and of any 
preliminary ruling, shall be taken by majority vote. 
7. The complaining Party may, with the agreement of  the Party complained against, withdraw its 
complaint at any time before the ruling is transm itted to the Parties and the Association Committee. 
Such withdrawal is without prejudice to its right to introduce a new complaint regarding the same 
matter at a later point in time. 
8. The arbitration panel may, with the agreement of the Party complained against, suspend its 
work at any time at the request of the complaining Party for a period not to exceed 12 months. In the 
event of such a suspension, the time-frames set out in paragraphs 1 and 5 sh all be extended by the 
amount of time that the work was suspended. If the work of the panel has been suspended for more 
than 12 months, the authority for establishment of th e panel shall lapse, without prejudice to the right WT/REG164/1 
Page 86  
 
of the complaining Party to request at a later st age the establishment of an arbitration panel on the 
same subject matter. 
Article 188 
 
Compliance
 
 
1. Each Party shall be bound to take the measure s necessary to comply with the ruling of the 
arbitration panel. 
2. The Parties shall endeavour to agree on the specific measures th at are required for complying 
with the ruling. 
3. Within 30 days after the ruling has been tran smitted to the Parties and the Association 
Committee, the Party complained agai nst shall notify the other Party: 
(a) of the specific measures required for complying with the ruling;  
(b) of the reasonable timeframe for doing so; and 
(c) of a concrete proposal for a temporary compensation until the full implementation of 
the specific measures required fo r compliance with the ruling. 
4. In the event of disagreement between the Parti es on the content of such notification, the 
complaining Party shall request the original ar bitration panel to rule on whether the proposed 
measures referred to under paragraph 3( a) would be consistent with this  Part of the Agreement, on the 
duration of the timeframe and on whether the compen sation proposal is manifestly disproportionate. 
The ruling shall be given within 45 days after that request. 
5. The Party concerned shall notify to the other Party and to the Association Committee the 
implementing measures adopted in order to put an e nd to the violation of its obligations under this 
Part of the Agreement, before the expiry of th e reasonable timeframe agreed by the Parties or 
determined in accordance with paragraph 4. Upon th at notification, that other Party may request the 
original arbitration panel to rule on the conformity of those measures with this Part of the Agreement 
if they are not similar to the measures which the ar bitration panel, acting unde r paragraph 4, has ruled 
that they would be consistent with this Part of th e Agreement. The ruling of the arbitration panel shall 
be given within 45 days from that request. 
6. If the Party concerned fails to notify the impl ementing measures before the expiry of the 
reasonable timeframe or if the ar bitration panel rules that the implementing measures notified by the 
Party concerned are inconsistent with its obligat ions under this Part of the Agreement, the 
complaining Party shall, if no agreement on compen sation has been found, be entitled to suspend the 
application of benefits granted under this Part of the Agreement equivalent to the level of nullification 
and impairment caused by the measure found to violate this Part of the Agreement. 
7. In considering what benefits to suspend, a complaining Party should first seek to suspend 
benefits in the same Title or Titles of this Part of  the Agreement as that aff ected by the measure that 
the arbitration panel has found to violate this Part of the Agreement. A complaining Party that 
considers that it is not practicable or effective to  suspend benefits in the same Title or Titles may 
suspend benefits in other Titles, provided it subm its written justification. In the selection of the 
benefits to suspend, priority must be given to those which least disturb the functioning of this 
Agreement.  WT/REG164/1 
 Page 87 
 
 
8. The complaining Party shall notify the other Party and the Association Committee of the 
benefits which it intends to suspend. Within five  days from that notification, the other Party may 
request the original arbitration panel to rule on whether the benefits which the complaining Party 
intends to suspend are equivalent to the level of nullification and impairment caused by the measure 
found to violate this Part of the Agreement, a nd whether the proposed suspension is in accordance 
with paragraph 7. The ruling of the arbitration pane l shall be given within 45 days from that request. 
Benefits shall not be suspended until the arbitration panel has issued its ruling. 
9. The suspension of benefits shall be temporary and shall only be applied by the complaining 
Party until the measure found to violate this Part of  the Agreement has been withdrawn or amended so 
as to bring it into conformity with this Part of th e Agreement, or the Partie s have reached agreement 
on a resolution of the dispute. 
10. At the request of any of the Parties, the origin al arbitration panel shall rule on the conformity 
with this Part of the Agreement of any implem enting measures adopted after the suspension of 
benefits and, in the light of such ruling, whether the suspension of benefits should be terminated or 
modified. The ruling of the arbitration panel shall be given within 45 days from the date of that 
request. 
11. The rulings provided for in this Article shall be final and binding. They shall be transmitted to 
the Association Committee and be publicly available. 
 
CHAPTER IV : GENERAL PROVISIONS 
 
Article 189 
 
General Provisions  
 1. Any time-period mentioned in this Title may be m odified by mutual agreement of the Parties. 
2. Unless the Parties otherwise agree, the proce dure before the arbitration panel shall be 
governed by the Model Rules of Procedure set out  in Annex XV. The Asso ciation Committee may, 
whenever it considers necessary, amend the Model Ru les of Procedure and the Code of Conduct set 
out in Annex XVI, by means of a decision. 
3. The hearings of the arbitration panels shall be  closed to the public, unless the Parties decide 
otherwise. 
4. (a) When a Party seeks redress of a violation of an obligation under the WTO Agreement, 
it shall have recourse to the relevant ru les and procedures of the WTO Agreement, 
which apply notwithstanding the provisions of this Agreement. 
(b) When a Party seeks redress of a violation of  an obligation under this Part of the 
Agreement, it shall have recourse to th e rules and procedures of this Title. 
(c) Unless the Parties otherwise agree, when a Party seeks redress of a violation of an 
obligation under this Part of the Agreement which is equivalent in substance to an 
obligation under the WTO, it shall have rec ourse to the relevant rules and procedures 
of the WTO Agreement, which apply notwithstanding the provisions of this Agreement. 
(d) Once dispute settlement procedures have been  initiated, the forum selected, if it has 
not declined its jurisdiction, shall be used to the exclusi on of the other. Any question WT/REG164/1 
Page 88  
 
on the jurisdiction of the arbitration panels established under this Title shall be raised 
within 10 days of the establishment of the panel, and shall be settled by a preliminary 
ruling of the panel within 30 days of the establishment of the panel. 
 
TITLE IX : TRANSPARENCY 
 
Article 190 
 
Contact Points And Exchange Of Information
 
 
1. In order to facilitate communication between th e Parties on any trade matter covered by this 
Part of the Agreement, each Party shall designate a contact point. On the request of either Party, the 
contact point of the other Party shall indicate the office or official responsible for the matter and provide the required support to facilitate communication with the requesting Party. 
2. On request of the other Party, and to the extent possible under its domestic laws and 
principles, each Party shall provide information and reply to any question from the other Party 
relating to an actual or proposed measure that might substantially affect the operation of this Part of 
the Agreement. 
3. The information referred to under this Article sha ll be considered to have been provided when 
the information has been made available by a ppropriate notification to the WTO or when the 
information has been made available on the offici al, publicly and fee-free accessible website of the 
Party concerned. 
Article 191 
 
Cooperation On Increased Transparency
 
 
 The Parties agree to cooperate in bilate ral and multilateral fora on ways to increase 
transparency in trade matters.  
Article 192 
 
Publication
 
 
 Each Party shall ensure that its laws, regul ations, procedures and administrative rulings of 
general application relating to any trade matter covered by this Part of the Agreement are promptly 
published or made publicly available.  
 
TITLE X : SPECIFIC TASKS IN TRADE MATTERS OF THE BODIES  
ESTABLISHED UNDER THIS AGREEMENT 
 
Article 193 
 
Specific Tasks
 
 1. When the Association Committee performs any of  the tasks conferred upon it in this Part of 
the Agreement, it shall be composed of repr esentatives of the Community and Chile with a 
responsibility for trade-related matters, normally at senior official level.  WT/REG164/1 
 Page 89 
 
 
2. Notwithstanding the provisions of Article 6,  the Association Committee shall have, in 
particular, the following functions: 
(a) to supervise the implementation and proper a pplication of the provisions of this Part 
of the Agreement, as well as of any other instrument agreed by the Parties concerning trade-related matters, within the framework of this Agreement;  
(b) to oversee the further elaboration of the provisions of this Part of the Agreement and 
evaluate the results obtained in its application;  
(c) to resolve disputes that may arise regarding the interpretation or application of this 
Part of the Agreement, in accordance w ith the provisions of Article 183;  
(d) to assist the Association Council in the perfo rmance of its functions regarding trade-
related matters;  
(e) to supervise the work of al l the special committees establis hed under this Part of the 
Agreement;  
(f) to carry out any other function assigned to it under this Part of the Agreement or 
entrusted to it by the Association Counc il, concerning trade-related matters; and 
(g) to report annually to the Association Council. 
3. In the performance of its duties under paragraph 2, the Association Committee may: 
(a) set up any special committees or bodies to deal with matters falling within its 
competence, and determine their composition and duties, and their rules of procedure;  
(b) meet at any time agreed by the Parties;  
(c) consider any issues regarding trade-related ma tters, and take appr opriate action in the 
exercise of its functions; and 
(d) take decisions or make recommendations on trade-related matters, in accordance with 
Article 6. 
4. Pursuant to Articles 5 and 6(4), the Parties shall implement decisions resulting from the 
application of Articles 60(5) a nd 74 and Article 38 of Annex III in accordance with Annex XVII. 
 
TITLE XI : EXCEPTIONS IN THE AREA OF TRADE 
 
Article 194 
 
National Security Clause
 
 
1. Nothing in this Agreemen t shall be construed: 
(a) to require a Party to furnish any inform ation the disclosure of which it considers 
contrary to its essential security interests;  
(b) to prevent a Party from taking any action which it considers necessary for the 
protection of its essential security interests WT/REG164/1 
Page 90  
 
(i) relating to fissionable and fusionable materials or the materials from which 
they are derived;  
(ii) relating to the traffic in arms, ammuniti on and implements of war and to such 
traffic in other goods and materials or relating to the supply of services, as carried on directly or indirectly for the purpose of supplying or provisioning a 
military establishment;  
(iii) relating to government procurement indi spensable for national security or for 
national defence purposes; or 
(iv) taken in time of war or other emerge ncy in international relations; or 
(c) to prevent a Party from taking any action in pursuance of its obligations under the 
United Nations Charter for the maintena nce of international peace and security. 
2. The Association Committee shall be  informed to the fullest exte nt possible of measures taken 
under paragraphs 1(b) and (c) and of their termination. 
Article 195 
 
Balance Of Payments Difficulties
 
 1. Where a Party is in serious balance of paymen ts and external financial difficulties, or under 
threat thereof, it may adopt or maintain restrictiv e measures with regard to trade in goods and in 
services and with regard to payments and capital movements, including those related to direct 
investment. 
2. The Parties shall endeavour to avoid the applica tion of the restrictive measures referred to in 
paragraph 1. 
3. Any restrictive measure adopted or maintained  under this Article shall be non-discriminatory 
and of limited duration and shall not go beyond what is  necessary to remedy the balance of payments 
and external financial situation. They shall be in accordance with the co nditions established in the 
WTO Agreements and consistent with the Articles of  Agreement of the International Monetary Fund, 
as applicable. 
4. The Party maintaining or having adopted restric tive measures, or any changes thereto, shall 
promptly notify them to the other Party and present, as soon as possible, a time schedule for their removal. 
5. The Party applying restrictive measures sha ll consult promptly within the Association 
Committee. Such consultations shall assess the balan ce of payments situation of the Party concerned 
and the restrictions adopted or maintain ed under this Article, taking into account, inter alia , such 
factors as: 
(a) the nature and extent of the balance of  payments and the external financial 
difficulties;  
(b) the external economic and trading environment of the consulting Party;  
(c) alternative corrective measures which may be available.  WT/REG164/1 
 Page 91 
 
 
The consultations shall address the compliance of a ny restrictive measures with paragraphs 3 and 4. 
All findings of statistical and other facts presented by the International Monetary Fund relating to 
foreign exchange, monetary reserves and balance of  payments shall be accepte d and conclusions shall 
be based on the assessment by the Fund of the balance of payments and the external financial situation 
of the consulting Party. 
 
Article 196 
 
Taxation  
 
1. Nothing in this Part of the Agreement or in  any arrangement adopted under this Agreement 
shall be construed to prevent the Parties from dis tinguishing, in the application of the relevant 
provisions of their fiscal legislation, between taxpayers  who are not in the same situation, in particular 
with regard to their place of residence or with re gard to the place where their capital is invested. 
2. Nothing in this Part of the Agreement or in  any arrangement adopted under this Agreement 
shall be construed to prevent the adoption or en forcement of any measure aimed at preventing the 
avoidance or evasion of taxes pursuant to the tax prov isions of agreements to  avoid double taxation or 
other tax arrangements or dom estic fiscal legislation. 
3. Nothing in this Part of the Agreement shall a ffect the rights and obligations of either Party 
under any tax convention. In the event of any inco nsistency between this Agreement and any such 
convention, that convention shall prevail to the extent of the inconsistency. 
 
PART V : FINAL PROVISIONS 
 
Article 197 
 
Definition Of The Parties  
  For the purposes of this Agreement, "the Par ties" shall mean the Community or its Member 
States or the Community and its Member States,  within their respectiv e areas of competence as 
derived from the Treaty establishing the European Co mmunity, on the one hand, and the Republic of 
Chile, on the other. 
 
Article 198 
 
Entry Into Force
 
 
1. This Agreement shall enter into force the firs t day of the month following that in which the 
Parties have notified each other of the completi on of the procedures necessary for this purpose. 
2. Notifications shall be sent to the Secretary Ge neral of the Council of the European Union, 
who shall be the depository of this Agreement. 
3. Notwithstanding paragraph 1, the Community an d Chile agree to apply Articles 3 to 11, 
Article 18, Articles 24 to 27, Articles 48 to 54, Artic le 55 (a), (b), (f), (h), (i), Articles 56 to 93, 
Articles 136 to 162, and Articles 172 to 206, from the first day of the month following the date on 
which the Community and Chile have notified each  other of the completion of the procedures 
necessary for this purpose. WT/REG164/1 
Page 92  
 
4. Where a provision of this Agreement is applied by the Parties pending its entry into force, any 
reference in such provision to the date of entry in to force of this Agreement shall be understood to be 
made to the date from which the Parties agree to a pply that provision in accordance with paragraph 3. 
5. From the date of its entry into force in acco rdance with paragraph 1, this Agreement shall 
replace the Framework Cooperation Agreement. By  way of exception, the Protocol on Mutual 
Assistance in Customs Matters to the Framewor k Cooperation Agreement of  13 June 2001, shall 
remain in force and become an integral part of this Agreement. 
Article 199 
 
Duration
 
 
1. This Agreement shall be valid indefinitely. 
2. Either Party may give written notice to the othe r of its intention to denounce this Agreement. 
3. Denunciation shall take effect six months after notification to the other Party. 
Article 200 
 
Fulfilment Of The Obligations  
 1. The Parties shall adopt any general or specifi c measures required for them to fulfil their 
obligations under this Agreement and shall ensure that they comply with the objectives laid down in 
this Agreement. 
2. If one of the Parties considers that the other Pa rty has failed to fulfil an obligation under this 
Agreement it may take appropriate measures. Befo re doing so, it must supply the Association Council 
within 30 days with all the relevant information required for a thorough examination of the situation 
with a view to seeking a solu tion acceptable to the Parties. 
In this selection of measures, priority must be given to those which least disturb the functioning of 
this Agreement. These measures shall be notified i mmediately to the Association Committee and shall 
be the subject of consultations in the Committee if the other Party so requests. 
 3. By way of derogation from paragraph 2, an y Party may immediately take appropriate 
measures in accordance with international law in case of: 
(a) denunciation of this Agreement not sanctione d by the general rules of international 
law;  
(b) violation by the other Party of the essential elements of this Agreement referred to in 
Article 1, paragraph 1. 
The other Party may ask that an urgent meeting be ca lled to bring the Parties together     within 15 
days for a thorough examination of the situation with a view to seeking a solution acceptable to the 
Parties. 
 4. By way of derogation from paragraph 2, if one of  the Parties considers that the other Party has 
failed to fulfil an obligation under Part IV, it sha ll exclusively have recourse to, and abide by, the 
dispute settlement procedures establis hed under Title VIII of Part IV.  WT/REG164/1 
 Page 93 
 
 
Article 201 
 
Future Developments  
 1. The Parties may mutually agree to extend this  Agreement with the aim of broadening and 
supplementing its scope in accordance with their re spective legislation, by concluding agreements on 
specific sectors or activities in the light of th e experience gained during its implementation. 
2. As regards the implementation of this Agreement,  either Party may make suggestions oriented 
towards expanding cooperation in all areas, taking into account the experience acquired during the 
implementation thereof. 
Article 202 
 
Data Protection
 
  The Parties agree to accord a high level of pr otection to the processing of personal and other 
data, compatible with the highest international standards. 
 
Article 203 
 
National Security Clause
 
 
 The provisions of Article 194 shall apply to the entire Agreement. 
 
Article 204 
 
Territorial Application  
 
 This Agreement shall apply, on the one hand, to the territories in which the Treaty 
establishing the European Community is applied a nd under the conditions laid down in that Treaty, 
and, on the other hand, to the territory of the Republic of Chile.  
Article 205 
 
Authentic Texts
 
  This Agreement is drawn up in duplicate in the Danish, Dutch, English, Finnish, French, 
German, Greek, Italian, Portuguese, Spanish and Sw edish languages, each of these texts being equally 
authentic. 
 
Article 206 
 
Annexes, Appendices, Protocols And Notes
 
 
 The Annexes, Appendices, Protocols and Notes to this Agreement shall form an integral part 
thereof.   IN WITNESS WHEREOF, the undersigned Plen ipotentiaries have signed this Agreement. 
 
 DONE at Brussels on the eighteenth day of November in the year two thousand and two. 
  
__________