WT/REG/211/1 
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  Section B: Goods  
 
 For each Central American Party and the Domi nican Republic, this Chapter applies to all 
goods procured by covered entities in accordance with Section A, subject to the General Notes, and 
except as otherwise provided in Section A.  
 
 For each Central American Party and the Domi nican Republic, this Chapter does not apply to 
the acquisition of weapons, ammun itions, warfare materials, or any other procurement of goods 
necessary to protect national security, public security, or for national defense purposes.   
 
Section C: Services  
 
 For each Central American Party and the Domi nican Republic, this Chapter applies to all 
services procured by covered entities in accordance w ith Section A, subject to the existing measures 
listed in each Parties’ Schedule to Annex I, and the General Notes, and except as otherwise provided 
in Section A.   
Section D: Construction Services 
 
 
 For each Central American Party and the Do minican Republic, this Chapter does not cover 
construction of public works or public works c oncession contracts; however each Central American 
Party and the Dominican Republic shall initiate cons ultations in order to determine the viability and 
desirability of including in the coverage of this Ch apter construction of public  works and public works 
concession contracts.  
 
Section E: General Notes  
 
I. Costa Rica – Dominican Republic  
Schedule of Costa Rica  
 
1.  This Chapter does not apply to:  
 
(a) activities excluded from public tendering proce dures explicitly listed in Article 2 of 
the Ley de Contratación Administrativa N. 7494 del 2 de mayo de 1995;  
(b) employment relations;  
(c) public loans;  
(d) public works contracts, concession for public  facilities, public works concession and 
work concessions for public service, transfers of real estate generally or any other 
type of contracting that is not a procurement of goods or services;  
(e) other activities and public procurements that, according to domestic law, are subject 
to a special procurement regime, different than what is established in the Ley de 
Contratación Administrativa No. 7494 del 2 de mayo de 1995 and its regulation , 
without prejudice to paragraph 2 to this list.  
2. The procurements by the Caja Costarricense del Seguro Social  under the procedures 
established in Ley 6914 del 15 de noviembre de 1983 , shall be covered by the scope and other WT/REG211/1 
Page 152  
 
provisions of this Chapter with the only exception that these procurements shall not be subject to 
Articles 9.6 and 9.15.   3. The 40-day time limit set out in Article 9.5.1 shall not apply to the Instituto Costarricense de 
Electricidad (“ICE”). ICE shall provide suppliers suffici ent time to prepare and submit responsive 
tenders. Without prejudice to Article 9.15.6(a), IC E shall provide no less than three business days for 
suppliers to prepare and submit written challenges.  
 
Schedule of the Dominican Republic 
 
 
 This Chapter does not apply to:   
(a) procurement and acquisition of goods, supplies, works and services necessary for the 
resolution of situations arising from an exception status declared by law;  
(b) the sell of special services conducted by public sector institutions;  
(c) negotiations and agreements with other States or with international public law 
entities, or the contractual activities between public entities;  
(d) procurement activities that by their nature, low value or other circumstances, cannot 
be subject or would not be convenient to be subject to a public tender, either because 
there is only one supplier, or because of sp ecial security reasons, extreme urgency or 
other exceptional circumstances, acco rding to the domestic law;  
(e) procurement financed by loans and donati ons made by persons, entities, associations 
or other international organisms or foreign governments for the benefit of any Party, 
its entities, institutions or municipal governments. These procurements shall be governed by the terms of such special loans and donations.  
(f) procurement of goods, services and supplies between State agencies, and between 
those and decentralized, autonomous and municipal entities;  
(g) procurement of goods and services by dele gations, embassies and consulates in a 
foreign territory;  
(h) employment relations;  
(i) public works contracts, public works co ncession contracts and work concessions for 
public service, transfer of real estate and an y other type of procurement that is not a 
procurement of goods or services.   
 
II. El Salvador – Dominican Republic  
Schedule of El Salvador - Dominican Republic 
 
 
1. This Chapter does not apply to the procuremen t by public entities of strategic goods, services 
and supplies:  
(a) to safeguard the borders, natural resources s ubject to international regimes, or the 
national territory;   WT/REG211/1 
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(b) for the procurement and acquisition of g oods, supplies, works and services necessary 
for the resolution of situations arising from an exception status declared by law; and  
(c) for the procurement of goods, supplies, works and services that are necessary and 
urgent for the resolution of situations of  national interest or social benefit.  
2. This Chapter does not apply to procurement financed by loans and donations made by 
persons, entities, associations or other international organisms or foreign governments for the benefit 
of any Party, its entities, institutions or muni cipal governments. These procurements shall be 
governed by the terms of such special loans and dona tions, given that such financing is governed by 
contracts with special provisions.  
3. This Chapter does not apply to procurement of goods, services and supplies between State 
agencies, and between those and the decentralized, autonomous and municipal entities.  
4. This Chapter does not apply to procurement of goods, services and supplies that are made or 
manufactured by public agencies, autonomous or municipal entities.   
5. This Chapter does not apply to:  
(a) articles procured for official parties or receptions; and  
(b) articles procured in foreign territories to  be used in offices located in foreign 
territories;  
(c) subscriptions to or publication in newspapers, films, televi sion editorial and television 
advertisement; and  
(d) procurement of individual prof essional services in general.   
 
III. Guatemala – Dominican Republic  
Schedule of Guatemala  
 
 This Chapter does not apply to:  
 
(a) the procurement by public entities of strategic goods, public works concessions, 
services and supplies to safeguard the borders , bridges, natural resources subject to 
international regimes, or the national territory;  
(b) the procurement and acquisition of goods, supplies, public works, and services 
necessary for the resolution of situations arising from an ex ception status declared by 
law;  
(c) the procurement of goods, supplies, works a nd services that are necessary and urgent 
for the resolution of situations of national interest or social benefit;  
(d) procurement financed by loans and donati ons made by persons, entities, associations 
or other international organisms or foreign governments for the benefit of any Party, 
its entities, institutions or municipal governments. These procurements shall be governed by the terms of such special loans and donations;  WT/REG211/1 
Page 154  
 
(e) the procurement of goods, services and supp lies between State agencies, and between 
those and the decentralized, autonomous and municipal entities.  
(f) goods, work concessions, services and suppli es, considered as specific exceptions 
procured by public entities including:  
(i) goods, services or construction services procured by Guatemalan offices in a 
foreign territory, such as embassies, delegations and consulates or missions;  
(ii) individual professional ser vices in general; and  
(iii) goods, supplies and services with sole suppliers.  
Schedule of the Dominican Republic 
 
 
 This Chapter does not apply to:   
(a) procurement by public entities of strategic goods, public works concessions, services, 
and supplies to safeguard the borders, bridges, natural resources subject to 
international regimes, or the national territory;  
(b) procurement and acquisition of goods, supplies, works and services necessary for the 
resolution of situations arising from an ex ception status declared by the applicable 
Dominican Republic law;  
(c) procurement of goods, supplies, works and ser vices that are necessary and urgent for 
the resolution of situations of national in terest according to the domestic law;  
(d) procurement financed by loans and donati ons made by persons, entities, associations 
or other international organisms or foreign governments for the benefit of any Party, 
its entities, institutions or municipal governments. These procurements shall be governed by the terms of such special loans and donations;  
(e) procurement of goods, services and supplies between State agencies, and between 
those and the decentralized, autonomous and municipal entities; as well as goods, 
work concessions, services and supplies, c onsidered as specific exceptions procured 
by public entities including:  
(i) goods, services and contracts by delegati ons, Embassies and consulates in a 
foreign territory;  
(ii) individual professional services in general.   
 
IV. Honduras – Dominican Republic  
Schedule of Honduras – Dominican Republic 
 
 
1. This Chapter does not apply to the procuremen t and acquisition of goods, supplies, works and 
services necessary for the resolution of  situations ar ising from an exception status declared by law;  
2. This Chapter does not apply to the procuremen t by public entities of strategic goods, services 
and supplies:   WT/REG211/1 
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(a) to safeguard the borders, bridges, natural r esources subject to international regimes or 
the national territory;  
(b) the procurement and acquisiti on of goods, supplies, work s and services necessary for 
the resolution of situations derived from an exception status declared by law;  
(c) the procurement of goods, supplies, works a nd services that are necessary and urgent 
for the resolution of situations of national interest or social benefit.  
3. This Chapter does not apply to the procurem ent of goods, services and supplies between State 
agencies, and between those and the decentralized, autonomous and municipal entities;  
4. Those that are made or manufactured by public  agencies, autonomous or municipal entities.  
5. This Chapter does not apply to the procuremen t financed by loans and donations made by 
persons, entities, associations or other international organisms or foreign governments for the benefit 
of any Party, its entities, institutions or muni cipal governments. These procurements shall be 
governed by the terms of such special loans and dona tions, given that such financing is governed by 
contracts with special provisions.  
6. This Chapter does not apply to government procurement programs on behalf of small, 
medium, and micro enterprises.  
7. This Chapter does not apply to:  
(a) procurement of goods, services and contracts by delegations, embassies and 
consulates in a foreign territory;  
(b) procurement of individual prof essional services in general; and  
(c) the acquisition and procurement of goods, s upplies and services with sole suppliers.  
 
V. Nicaragua – Dominican Republic  
Schedule of Nicaragua  
 
1. This Chapter does not apply to the excepti ons included in Article 3 of Law No. 323, Ley de 
Contrataciones del Estado , published in La Gaceta  1 and 2 on January 3 and 4, 2000, and its 
amendments.   2. This Chapter does not apply to the procurem ent financed by loans and donations made by 
persons, entities, associations or other international organisms or foreign governments for the benefit 
of any Party, its entities, institutions or muni cipal governments. These procurements shall be 
governed by the terms of such special loans and donations.  
 
Schedule of the Dominican Republic 
 
  With respect to the Dominican Republic and Ni caragua this Chapter does not apply to the:  
 
(a) procurement and acquisition of goods, supplies, works and services necessary for the 
resolution of situations arising from an ex ception status declared by the applicable 
Dominican Republic law;  WT/REG211/1 
Page 156  
 
(b) procurement of goods, supplies, works and ser vices that are necessary and urgent for 
the resolution of situations of national in terest according to the domestic law;  
(c) procurement financed by loans and donati ons made by persons, entities, associations 
or other international organisms or foreign governments for the benefit of any Party, 
its entities, institutions or municipal governments. These procurements shall be 
governed by the terms of such special loans and donations;  
(d) procurement of goods, services and supplies between State agencies, and between 
those and the decentralized, autonomous and municipal entities; as well as, goods, work concessions, services and supplies, c onsidered as specific exceptions procured 
by public entities including:  
(i) goods, services contracts or construction services by in delegations, 
embassies, and consulates a foreign territory;  
(ii) individual professional services in general;   
(e) procurements or contracts to repair vehi cles, engines, machinery and other similar 
items.  
CHAPTER TEN:  INVESTMENT 
Section A: Investment
 
Article 10.1 
Scope and Coverage  
 1. This Chapter applies to measures adopted or  maintained by a Party relating to:   
(a) investors of another Party;  
 (b) covered investments; and  
(c) with respect to Articles 10.9 and 10.11, all i nvestments in the territory of the Party.  
2. A Party’s obligations under this Section shall a pply to a state enterprise or other person when 
it exercises any regulatory, administrative, or othe r governmental authority delegated to it by that 
Party.  
3. For greater certainty, this Chapter does not bind any Party in relation to any act or fact that 
took place or any situation that ceased to exist before the date of entry into force of this Agreement.  
Article 10.2 
 
Relation To Other Chapters 
 
1. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter 
shall prevail to the extent of the inconsistency.  
2. A requirement by a Party that a service supplier of another Party post a bond or other form of 
financial security as a condition of the cross-border supply of a service does not of itself make this  WT/REG211/1 
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Chapter applicable to measures adopted or mainta ined by the Party relating to such cross-border 
supply of the service. This Chapter applies to measur es adopted or maintained by the Party relating to 
the posted bond or financial security, to the extent that su ch bond or financial security is a covered 
investment.  
3. This Chapter does not apply to measures adopted or maintained by a Party to the extent that 
they are covered by Chapter Twelve (Financial Services).   
Article 10.3 
 
National Treatment  
1. Each Party shall accord to investors of another Party treatment no less favorable than that it 
accords, in like circumstances, to its own investor s with respect to the establishment, acquisition, 
expansion, management, conduct, operation, and sale or other di sposition of investments in its 
territory.  
2. Each Party shall accord to covered investment s treatment no less favorable than that it 
accords, in like circumstances, to investments in its territory of its own investors with respect to the 
establishment, acquisition, expansion, management , conduct, operation, and sale or other disposition 
of investments.  
3. The treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a 
regional level of government, treatment no less favor able than the most favorable treatment accorded, 
in like circumstances, by that regional level of government to investors, and to investments of 
investors, of the Party of which it forms a part.    
Article 10.4 
 
Most-Favored-Nation Treatment  
1. Each Party shall accord to investors of another Party treatment no less favorable than that it 
accords, in like circumstances, to investors of any ot her Party or of any non-Party with respect to the 
establishment, acquisition, expansion, management , conduct, operation, and sale or other disposition 
of investments in its territory.  
2. Each Party shall accord to covered investment s treatment no less favorable than that it 
accords, in like circumstances, to inv estments in its territory of invest ors of any other Party or of any 
non-Party with respect to the establishment, acquisiti on, expansion, management, conduct, operation, 
and sale or other disposition of investments.  
Article 10.5 
 
Minimum Standard Of Treatment1 
 
1. Each Party shall accord to covered investme nts treatment in accordance with customary 
international law, including fair and equita ble treatment and full protection and security.  
2. For greater certainty, paragraph 1 prescribes  the customary international law minimum 
standard of treatment of aliens as the minimum st andard of treatment to be afforded to covered 
investments.  The concepts of “fair and equitable treatment” and “full protection and security” do not 
                                                      
 1 Article 10.5 shall be interpreted in accordance with Annex 10-B.  WT/REG211/1 
Page 158  
 
require treatment in addition to or beyond that whic h is required by that standard, and do not create 
additional substantive rights.  The oblig ation in paragraph 1 to provide:  
(a) “fair and equitable treatment” includes the ob ligation not to deny justice in criminal, 
civil, or administrative adjudicatory proceed ings in accordance with the principle of 
due process embodied in the principal legal systems of the world; and  
(b) “full protection and security” requires each Party to provide the level of police 
protection required under customary international law.  
3. A determination that there has been a breach of another provision of this Agreement, or of a 
separate international agreement, does not establish that there has been a breach of this Article.  
Article 10.6 
 
Treatment In Case Of Strife
 
1. Notwithstanding Article 10.13.5(b), each Party sha ll accord to investors of another Party, and 
to covered investments, non-discriminatory treatment  with respect to measures it adopts or maintains 
relating to losses suffered by investments in its terr itory owing to armed conflict or civil strife.  
2. Notwithstanding paragraph 1, if an investor of  a Party, in the situations referred to in 
paragraph 1, suffers a loss in the terr itory of another Party resulting from:  
(a) requisitioning of its covered investment or part thereof by the latter’s forces or 
authorities; or  
(b) destruction of its covered investment or part thereof by the latter’s forces or 
authorities, which was not required by the necessity of the situation,  
the latter Party shall provide the investor restitution or compensation, which in either case shall be in 
accordance with customary international law and, with respect to compensation, shall be in 
accordance with Article 10.7.2 through 10.7.4.2 
3. Paragraph 1 does not apply to existing measures re lating to subsidies or grants that would be 
inconsistent with Article 10. 3 but for Article 10.13.5(b).  
Article 10.7 
 
Expropriation And Compensation3 
1. No Party may expropriate or nationalize a covere d investment either directly or indirectly 
through measures equivalent to expropriation or  nationalization (“expropriation”), except:   
(a) for a public purpose;  
(b) in a non-discriminatory manner;   
(c) on payment of prompt, adequate, and effective compensation in accordance with 
paragraphs 2 through 4; and  
                                                      
2 The limitations set out in Annex 10-D apply to the submission to arbitration under Section B of a 
claim alleging a breach of this paragraph. 
 3 Article 10.7 shall be interpreted in accordance with Annexes 10-B and 10-C.    WT/REG211/1 
 Page 159 
 
 
(d) in accordance with due process of law and Article 10.5.  
2. Compensation shall:   
(a) be paid without delay;  
(b) be equivalent to the fair market value of  the expropriated investment immediately 
before the expropriation took place (“ the date of expropriation”);   
(c) not reflect any change in value occurr ing because the intended expropriation had 
become known earlier; and  
(d) be fully realizable and freely transferable.  
3. If the fair market value is denominated in a freely usable currency, the compensation paid 
shall be no less than the fair market value on the date  of expropriation, plus interest at a commercially 
reasonable rate for that currency, accrued from the da te of expropriation until the date of payment.  
4. If the fair market value is denominated in  a currency that is not freely usable, the 
compensation paid – converted into the currency of pa yment at the market rate  of exchange prevailing 
on the date of payment – shall be no less than:  
(a) the fair market value on the date of expropriation, converted into a freely usable 
currency at the market rate of exchange prevailing on that date, plus  
(b) interest, at a commercially reasonable rate for that freely usable currency, accrued 
from the date of expropriation until the date of payment.  
5. This Article does not apply to the issuance of  compulsory licenses granted in relation to 
intellectual property rights in accordance with the TR IPS Agreement, or to the revocation, limitation, 
or creation of intellectual property rights, to the exte nt that such issuance, revocation, limitation, or 
creation is consistent with Chapter Fifteen (Intellectual Property Rights).4 
Article 10.8 
 
Transfers  
1. Each Party shall permit all transfers relating to  a covered investment to be made freely and 
without delay into and out of its territory.  Such transfers include:   
(a) contributions to capital;  
(b) profits, dividends, capital gains, and proceeds from the sale of all or any part of the 
covered investment or from the partial or complete liquidation of the covered 
investment;  
(c) interest, royalty payments, management fees, and technical assistance and other fees;  
(d) payments made under a contract, including a loan agreement;    
                                                      
4 For greater certainty, the referen ce to “the TRIPS Agreement” in pa ragraph 5 includes any waiver in 
force between the Parties of any provision of that Agr eement granted by WTO Members in accordance with the 
WTO Agreement. WT/REG211/1 
Page 160  
 
(e) payments made pursuant to Article 10.6. 1 and 10.6.2 and Article 10.7; and   
(f) payments arising out of a dispute.  
2. Each Party shall permit transfers relating to a covered investment to be made in a freely 
usable currency at the market rate of exch ange prevailing at the time of transfer.  
3. Each Party shall permit returns in kind relati ng to a covered investment to be made as 
authorized or specified in a written agreement be tween the Party and a covered investment or an 
investor of another Party.  
4. Notwithstanding paragraphs 1 through 3, a Party may prevent a transfer through the equitable, 
nondiscriminatory, and good faith appli cation of its laws relating to:  
(a) bankruptcy, insolvency, or the protection of the rights of creditors;   
(b) issuing, trading, or dealing in securiti es, futures, options, or derivatives;  
(c) criminal or penal offenses;   
(d) financial reporting or record keeping of  transfers when necessary to assist law 
enforcement or financial regulatory authorities; or  
(e) ensuring compliance with orders or judgments in judicial or administrative 
proceedings.  
Article 10.9 
 
Performance Requirements
 
1. No Party may, in connection with the establis hment, acquisition, e xpansion, management, 
conduct, operation, or sale or other disposition of an  investment of an investor of a Party or of a 
non-Party in its territory, impose or enforce any of the following requirements, or enforce any 
commitment or undertaking:   
(a) to export a given level or percentage of goods or services;  
(b) to achieve a given level or per centage of domestic content;   
(c) to purchase, use, or accord a preference to  goods produced in its territory, or to 
purchase goods from persons in its territory;  
(d) to relate in any way the volume or value of  imports to the volume or value of exports 
or to the amount of foreign exchange infl ows associated with such investment;   
(e) to restrict sales of goods or services in its territory that such investment produces or 
supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;  
(f) to transfer a particular technology, a production process, or other proprietary 
knowledge to a person in its territory; or   WT/REG211/1 
 Page 161 
 
 
(g) to supply exclusively from the territory of  the Party the goods that such investment 
produces or the services that it supplies to a specific regional market or to the world 
market.  
2. No Party may condition the receipt or continued receipt of an advantage, in connection with 
the establishment, acquisition, expansion, mana gement, conduct, operation, or sale or other 
disposition of an investment in its territory of an investor of a Party or of a non-Party, on compliance 
with any of the following requirements:  
(a) to achieve a given level or per centage of domestic content;   
(b) to purchase, use, or accord a preference to  goods produced in its territory, or to 
purchase goods from persons in its territory;   
(c) to relate in any way the volume or value of  imports to the volume or value of exports 
or to the amount of foreign exchange inflow s associated with such investment; or   
(d) to restrict sales of goods or services in its territory that such investment produces or 
supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.  
3.  (a)  Nothing in paragraph 2 shall be c onstrued to prevent a Party from conditioning the 
receipt or continued receipt of an advantage,  in connection with an investment in its 
territory of an investor of a Party or of  a non-Party, on compliance with a requirement 
to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.    
 
 (b)  Paragraph 1(f) does not apply:  
 
(i) when a Party authorizes use of an in tellectual property right in accordance 
with Article 31 of the TRIPS Agreement, or to measures requiring the disclosure of proprietary information th at fall within the scope of, and are 
consistent with, Article 39 of the TRIPS Agreement;
5  or  
(ii) when the requirement is imposed or the commitment or undertaking is 
enforced by a court, administrative tribunal, or competition authority to remedy a practice determined after judicial or administrative process to be anticompetitive under the Party’s competition laws.
6  
(c)  Provided that such measures are not app lied in an arbitrary or unjustifiable manner, 
and provided that such measures do not constitute a disguised restriction on 
international trade or investment, paragraphs 1(b), (c), and (f), and 2(a) and (b), shall 
not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:  
(i) necessary to secure compliance with laws and regulations that are not 
inconsistent with this Agreement;   
(ii) necessary to protect human, animal, or plant life or health; or  
                                                     
 
 5 For greater certainty, the references to “the TR IPS Agreement” in paragraph 3(b)(i) include any 
waiver in force between the Parties of any provis ion of that Agreement granted by WTO Members in 
accordance with the WTO Agreement.  
 6 The Parties recognize that a patent does not necessarily confer market power.  WT/REG211/1 
Page 162  
 
(iii) related to the conservation of living  or non-living exhaustible natural 
resources.  
 (d)  Paragraphs 1(a), (b), and (c), and 2(a) and (b), do not apply to qualification 
requirements for goods or services with respect to export promotion and foreign aid programs.  
 
 (e)  Paragraphs 1(b), (c), (f), and (g), and 2(a) and (b), do not apply to procurement.  
  (f)  Paragraphs 2(a) and (b) do not apply to requirements imposed by an importing Party 
relating to the content of goods necessary to qualify for preferential tariffs or 
preferential quotas.  
 4. For greater certainty, paragraphs 1 and 2 do not apply to any requirement other than the 
requirements set out in those paragraphs.   
5. This Article does not preclude enforcement of  any commitment, undertaking, or requirement 
between private parties, where a Party did not im pose or require the commitment, undertaking, or 
requirement.  
Article 10.10 
 
Senior Management And Boards Of Directors
 
1. No Party may require that an enterprise of that  Party that is a covered investment appoint to 
senior management positions natural pers ons of any particular nationality.  
2. A Party may require that a majority of the board of directors, or any committee thereof, of an 
enterprise of that Party that is a covered investment, be of a particular nationality, or resident in the 
territory of the Party, provided that the require ment does not materially impair the ability of the 
investor to exercise control over its investment.  
Article 10.11 
 
Investment And Environment  
Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or 
enforcing any measure otherwise consistent with this  Chapter that it considers appropriate to ensure 
that investment activity in its territory is undertak en in a manner sensitive to environmental concerns.  
 
Article 10.12 
 
Denial of Benefits  
 
1. A Party may deny the benefits of this Chapter to an investor of another Party that is an 
enterprise of such other Party and to investments of  that investor if persons of a non-Party own or 
control the enterprise and the denying Party:  
(a) does not maintain diplomatic relations with the non-Party; or  
   WT/REG211/1 
 Page 163 
 
 
(b) adopts or maintains measures with respect  to the non-Party or a person of the 
non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapte r were accorded to the enterprise or to its 
investments.  
2. Subject to Articles 18.3 (Notification and Pr ovision of Information) and 20.4 (Consultations), 
a Party may deny the benefits of this Chapter to an investor of another Party that is an enterprise of 
such other Party and to investments of that inv estor if the enterprise has no substantial business 
activities in the territory of any Party, other than th e denying Party, and persons of a non-Party, or of 
the denying Party, own or control the enterprise.   
Article 10.13 
 
Non-Conforming Measures
 
1.  Articles 10.3, 10.4, 10.9, and 10.10 do not apply to:  
 
(a) any existing non-conforming measure that  is maintained by a Party at:  
(i) the central level of government, as set out by that Party in its Schedule to 
Annex I,  
(ii) a regional level of government, as set out  by that Party in its Schedule to 
Annex I, or  
(iii) a local level of government;  
(b) the continuation or prompt renewal of an y non-conforming measure referred to in 
subparagraph (a); or  
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the 
extent that the amendment does not decr ease the conformity of the measure, as it 
existed immediately before the amendment, with Article 10.3, 10.4, 10.9, or 10.10. 
2. Articles 10.3, 10.4, 10.9, and 10.10 do not a pply to any measure that a Party adopts or 
maintains with respect to sectors, subsectors, or ac tivities, as set out in its  Schedule to Annex II.  
3. No Party may, under any measure adopted after the date of entry into force of this Agreement 
and covered by its Schedule to A nnex II, require an investor of another Party, by reason of its 
nationality, to sell or otherwise dispose of an i nvestment existing at the time the measure becomes 
effective.  
4. Articles 10.3 and 10.4 do not apply to any measure that is an exception to, or derogation from, 
the obligations under Article 15.1.8 (General Provisi ons) as specifically provided in that Article.  
5. Articles 10.3, 10.4, and 10.10 do not apply to:  
(a) procurement; or 
(b) subsidies or grants provided by a Party, including government-supported loans, 
guarantees, and insurance.  
 
 WT/REG211/1 
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Article 10.14 
 
Special Formalities And Information Requirements 
 
1. Nothing in Article 10.3 shall be construed to prevent a Party from adopting or maintaining a 
measure that prescribes special formalities in co nnection with covered investments, such as a 
requirement that investors be residents of the Part y or that covered investments be legally constituted 
under the laws or regulations of the Party, provided  that such formalities do not materially impair the 
protections afforded by a Party to investors of a nother Party and covered investments pursuant to this 
Chapter.   
2. Notwithstanding Articles 10.3 and 10.4, a Party may require an investor of another Party, or a 
covered investment, to provide information concerni ng that investment solely for informational or 
statistical purposes.  The Party shall protect any confidential business information from any disclosure 
that would prejudice the competitive position of the i nvestor or the covered investment.  Nothing in 
this paragraph shall be constr ued to prevent a Party from otherwise obtaining or disclosing 
information in connection with the equitabl e and good faith application of its law.  
Section B: Investor-State Dispute Settlement  
 
Article 10.15 
 
Consultation And Negotiation  
 In the event of an investment dispute, the cl aimant and the respondent should initially seek to 
resolve the dispute through consultation and nego tiation, which may include the use of non-binding, 
third-party procedures such as conciliation and mediation.  
 
Article 10.16 
 
Submission Of A Claim To Arbitration  
1. In the event that a disputing party considers th at an investment dispute cannot be settled by 
consultation and negotiation:  
(a) the claimant, on its own behalf, may submit to  arbitration under this Section a claim  
(i) that the respondent has breached   
   (A)  an obligation under Section A,  
    (B)  an investment authorization, or       (C) an investment agreement;  
 
 and   
(ii) that the claimant has incurred loss or damage by reason of, or arising out of, 
that breach; and  
(b) the claimant, on behalf of an enterprise of th e respondent that is a juridical person that 
the claimant owns or controls directly or  indirectly, may submit to arbitration under 
this Section a claim   WT/REG211/1 
 Page 165 
 
 
(i) that the respondent has breached  
   (A)  an obligation under Section A,  
    (B)  an investment authorization, or      
   (C)  an investment agreement;  
 
and  
(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, 
that breach.  
2. At least 90 days before submitting any claim to ar bitration under this Section, a claimant shall 
deliver to the respondent a written notice of its intent ion to submit the claim to arbitration (“notice of 
intent”). The notice shall specify:  
(a) the name and address of the claimant and, where a claim is submitted on behalf of an 
enterprise, the name, address, and place of incorporation of the enterprise;   
(b) for each claim, the provision of this Agreement, investment authorization, or 
investment agreement alleged to have been breached and any other relevant 
provisions;  
(c) the legal and factual basis for each claim; and  
(d) the relief sought and the approximate amount of damages claimed.  
3. Provided that six months have elapsed since the events giving rise to the claim, a claimant 
may submit a claim referred to in paragraph 1:  
(a) under the ICSID Convention and the ICSID Rules of Procedures for Arbitration 
Proceedings, provided that both the responde nt and the Party of the claimant are 
parties to the ICSID Convention;  
(b) under the ICSID Additional Facility Rules, pr ovided that either the respondent or the 
Party of the claimant is a party to the ICSID Convention; or  
(c) under the UNCITRAL Arbitration Rules.   
4. A claim shall be deemed  submitted to arbitration under this Section when the claimant’s 
notice of or request for arbitration (“notice of arbitration”):   
(a) referred to in paragraph 1 of  Article 36 of the ICSID Convention is received by the 
Secretary-General;  
(b) referred to in Article 2 of Schedule C of  the ICSID Additional Facility Rules is 
received by the Secretary-General; or  
(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the 
statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, are received by the respondent.   WT/REG211/1 
Page 166  
 
 A claim asserted for the first time after such  notice of arbitration is submitted shall be 
deemed submitted to arbitration unde r this Section on the date of its receipt under the applicable 
arbitral rules.  
 
5. The arbitration rules applicable under paragraph 3, and in effect on the date the claim or 
claims were submitted to arbitration under this S ection, shall govern the arbitration except to the 
extent modified by this Agreement.  
6. The claimant shall provide with the notice of arbitration:  
 
(a) the name of the arbitrator that the claimant appoints; or  
(b) the claimant’s written consent for the Secret ary-General to appoint such arbitrator.  
Article 10.17 
 
Consent Of Each Party To Arbitration
 
1. Each Party consents to the submission of a claim to arbitration under this Section in 
accordance with this Agreement.  
2. The consent under paragraph 1 and the submission of  a claim to arbitration under this Section 
shall satisfy the requirements of:  
(a) Chapter II of the ICSID Convention (Juris diction of the Centre) and the ICSID 
Additional Facility Rules for written consent of the parties to the dispute;  
(b) Article II of the New York Convention for an “agreement in writing;” and  
(c) Article I of the Inter-American Convention for an “agreement.”  
Article 10.18 
 
Conditions And Limitations On Consent Of Each Party  
1. No claim may be submitted to arbitration under this Section if more than three years have 
elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge 
of the breach alleged under Article 10.16.1 and know ledge that the claimant (for claims brought under 
Article 10.16.1(a)) or the enterprise (for claims br ought under Article 10.16.1(b)) has incurred loss or 
damage.  
2. No claim may be submitted to arbitr ation under this Section unless:  
(a) the claimant consents in writing to arbitr ation in accordance with the procedures set 
out in this Agreement; and  
(b) the notice of arbitration is accompanied,  
(i) for claims submitted to arbitration unde r Article 10.16.1(a), by the claimant’s 
written waiver, and  
(ii) for claims submitted to arbitration under Article 10.16.1(b), by the claimant’s 
and the enterprise’s written waivers    WT/REG211/1 
 Page 167 
 
 
of any right to initiate or continue befo re any administrative tribunal or court under 
the law of any Party, or other dispute settlement procedures, any proceeding with 
respect to any measure alleged to constit ute a breach referred to in Article 10.16. 
3. Notwithstanding paragraph 2(b), the claimant (for claims brought under Article 10.16.1(a)) 
and the claimant or the enterp rise (for claims brought under Ar ticle 10.16.1(b)) may initiate or 
continue an action that seeks interim injunctive re lief and does not involve the payment of monetary 
damages before a judicial or administrative tribunal of the respondent, provided that the action is brought for the sole purpose of preserving the claimant ’s or the enterprise’s rights and interests during 
the pendency of the arbitration.   
4. No claim may be submitted to arbitration:  
(a) for breach of an investment authorization under Article 10.16.1(a)(i)(B) or 
Article 10.16.1(b)(i)(B), or  
(b) for breach of an investment agreement under Article 10.16.1(a)(i)(C) or 
Article 10.16.1(b)(i)(C),  
if the claimant (for claims brought under Article 10.16.1(a)) or the claimant or the enterprise (for 
claims brought under Article 10.16.1(b)) has previo usly submitted the same alleged breach to an 
administrative tribunal or court of the responde nt, or to any other binding dispute settlement 
procedure, for adjudication or resolution.  
 
Article 10.19 
 
Selection Of Arbitrators
 
1. Unless the disputing parties otherwise agree, the tribunal shall comprise three arbitrators, one 
arbitrator appointed by each of the disputing pa rties and the third, who shall be the presiding 
arbitrator, appointed by agreement of the disputing parties.   
2. The Secretary-General shall serve as appointin g authority for an arbitration under this 
Section.  
3. If a tribunal has not been constituted within 75 da ys from the date that a claim is submitted to 
arbitration under this Section, the Secretary-General,  on the request of a disputing party, shall appoint, 
in his or her discretion, the arbitrator or arbitrators not yet appointed.  
4. For purposes of Article 39 of the ICSID Conventio n and Article 7 of Schedule C to the ICSID 
Additional Facility Rules, and without prejudice to an objection to an arbitrator on a ground other than 
nationality:  
(a) the respondent agrees to the appointment of  each individual member of a tribunal 
established under the ICSID Convention or th e ICSID Additional Facility Rules;   
(b) a claimant referred to in Article 10.16.1 (a) may submit a claim to arbitration under 
this Section, or continue a claim, under the ICSID Convention or the ICSID 
Additional Facility Rules, only on condition that the claimant agrees in writing to the appointment of each individual member of the tribunal; and   
(c) a claimant referred to in Article 10.16.1 (b) may submit a claim to arbitration under 
this Section, or continue a claim, under the ICSID Convention or the ICSID WT/REG211/1 
Page 168  
 
Additional Facility Rules, only on condition that the claimant and the enterprise agree in writing to the appointment of each individual member of the tribunal.   
Article 10.20 
 
Conduct Of The Arbitration 
 
1. The disputing parties may agree on the legal place of any arbitration under the arbitral rules 
applicable under Article 10.16.3.  If the disputing pa rties fail to reach agreement, the tribunal shall 
determine the place in accordance with the applicable arbitral rules, pr ovided that the place shall be in 
the territory of a State that is a party to the New York Convention.  
2. A non-disputing Party may make oral and writte n submissions to the tribunal regarding the 
interpretation of this Agreement.  
3. The tribunal shall have the authority to accept and consider amicus curiae  submissions from a 
person or entity that is not a disputing party.   
4. Without prejudice to a tribunal’s authority to address other objections as a preliminary 
question, a tribunal shall address and decide as a pr eliminary question any objection by the respondent 
that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant 
may be made under Article 10.26.   
(a) Such objection shall be submitted to the tr ibunal as soon as possible after the tribunal 
is constituted, and in no event later than th e date the tribunal fixes for the respondent 
to submit its counter-memorial (or, in th e case of an amendment to the notice of 
arbitration, the date the tribunal fixes for the respondent to submit its response to the 
amendment).    
(b) On receipt of an objection under this pa ragraph, the tribunal shall suspend any 
proceedings on the merits, establish a schedule for considering the objection consistent with any schedule it has establis hed for considering any other preliminary 
question, and issue a decision or award on th e objection, stating the grounds therefor.  
(c) In deciding an objection under this paragra ph, the tribunal shall assume to be true 
claimant’s factual allegations in support of any claim in the notice of arbitration 
(or any amendment thereof) and, in disputes brought under the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of the UNCITRAL 
Arbitration Rules.  The tribunal may also consider any relevant facts not in dispute.  
(d) The respondent does not waive any objection as to competence or any argument on 
the merits merely because the respondent did or did not raise an objection under this 
paragraph or make use of the expedite d procedure set out in paragraph 5. 
5. In the event that the respondent so requests with in 45 days after the tribunal is constituted, the 
tribunal shall decide on an expedited basis an obj ection under paragraph 4 and any objection that the 
dispute is not within the tribunal’s competence.  The tribunal shall suspend any proceedings on the 
merits and issue a decision or award on the objection(s), stating the grounds therefor, no later than 
150 days after the date of the request.  However, if  a disputing party requests a hearing, the tribunal 
may take an additional 30 days to issue the deci sion or award. Regardless of whether a hearing is 
requested, a tribunal may, on a showing of extraordinary cause, delay issuing its decision or award by an additional brief period, which may not exceed 30 days.   WT/REG211/1 
 Page 169 
 
 
6. When it decides a respondent’s objection under paragraph 4 or 5, the tribunal may, if 
warranted, award to the prevailing disputing party reasonable costs and attorney’s fees incurred in 
submitting or opposing the objection.  In determining whether such an award is warranted, the 
tribunal shall consider whether either the clai mant’s claim or the r espondent’s objection was 
frivolous, and shall provide the disputing par ties a reasonable opportunity to comment.  
7. A respondent may not assert as a defense, count erclaim, right of set-off, or for any other 
reason that the claimant has received or will receive  indemnification or other compensation for all or 
part of the alleged damages pursuant to  an insurance or guarantee contract.  
8. A tribunal may order an interim measure of protection to preserve the rights of a disputing 
party, or to ensure that the tribunal’s jurisdicti on is made fully effective, including an order to 
preserve evidence in the possession or control of a disputing party or to protect the tribunal’s 
jurisdiction. A tribunal may not order attachment or  enjoin the application of a measure alleged to 
constitute a breach referred to in Article 10.16.  For purposes of this paragraph, an order includes a 
recommendation.  
9. (a)  In any arbitration conducted under this Sec tion, at the request of a disputing party, a 
tribunal shall, before issuing a decision or award on liability, transmit its proposed 
decision or award to the disputing parties and to the non-disputing Parties. Within 60 days after the tribunal transmits its proposed  decision or award, the disputing parties 
may submit written comments to the tribuna l concerning any aspect of its proposed 
decision or award.  The tribunal shall consider any such comments and issue its decision or award not later than 45 days after the expiration of the 60-day comment 
period.   
 (b)  Subparagraph (a) shall not apply in any arbitration conducted pursuant to this Section 
 for which an appeal has been made available pursuant to paragraph 10 or 
 Annex 10-F.  
 
10. If a separate multilateral agreement enters into fo rce as between the Parties that establishes an 
appellate body for purposes of reviewing awards  rendered by tribunals constituted pursuant to 
international trade or investment arrangements to he ar investment disputes, the Parties shall strive to 
reach an agreement that would have such appella te body review awards rendered under Article 10.26 
in arbitrations commenced after the multilateral agr eement enters into force as between the Parties.  
Article 10.21 
 
Transparency Of Arbitral Proceedings 
 
1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the following documents, 
promptly transmit them to the non-disputing Par ties and make them available to the public:  
(a) the notice of intent;  
(b) the notice of arbitration;  
(c) pleadings, memorials, and briefs submitted to the tribunal by a disputing party and 
any written submissions submitted pursuant to Article 10.20.2 and 10.20.3 and 
Article 10.25;  
(d) minutes or transcripts of hearings of the tribunal, where available; and   
(e) orders, awards, and decisions of the tribunal.   WT/REG211/1 
Page 170  
 
2. The tribunal shall conduct hearings open to the public and shall determine, in consultation 
with the disputing parties, the appropriate logisti cal arrangements. However, any disputing party that 
intends to use information designated as protected  information in a hearing shall so advise the 
tribunal.  The tribunal shall make appropriate arrange ments to protect the information from disclosure.   
3. Nothing in this Section requires a respondent to disclose protected information or to furnish 
or allow access to information that it may with hold in accordance with Article 21.2 (Essential 
Security) or Article 21.5 (Disclosure of Information).  
4. Any protected information that is submitted to  the tribunal shall be protected from disclosure 
in accordance with the following procedures:  
(a) Subject to subparagraph (d), neither the disputing parties nor the tribunal shall 
disclose to any non-disputing Party or to the public any protected information where 
the disputing party that provided the info rmation clearly designates it in accordance 
with subparagraph (b);  
(b) Any disputing party claiming that certain information constitutes protected 
information shall clearly designate the information at the time it is submitted to the 
tribunal;  
(c) A disputing party shall, at the same time that it submits a document containing 
information claimed to be protected inform ation, submit a redacted version of the 
document that does not contain the information.  Only the redacted version shall be provided to the non-disputing Parties and made public in accordance with 
paragraph 1; and  
(d) The tribunal shall decide any objection re garding the designation of information 
claimed to be protected information.  If th e tribunal determines that such information 
was not properly designated, the disputi ng party that submitted the information may 
(i) withdraw all or part of its submission containing such information, or (ii) agree to resubmit complete and redacted documents with corrected designations in accordance 
with the tribunal’s determination and subpa ragraph (c). In either case, the other 
disputing party shall, whenever necessary, resubmit complete and redacted documents which either remove the inform ation withdrawn under (i) by the disputing 
party that first submitted the information or  redesignate the information consistent 
with the designation under of the disputing part y that first submitted the information.  
5. Nothing in this Section requires a respondent to withhold from the public information 
required to be disclosed by its laws.  
Article 10.22  
 
Governing Law
 
1. Subject to paragraph 3, when a claim is  submitted under Article 10.16.1(a)(i)(A) or 
Article 10.16.1(b)(i)(A), the tri bunal shall decide the issues in dispute in accordance with this 
Agreement and applicable rules of international law.  
2. Subject to paragraph 3 and the other terms of this Section, when a claim is submitted under 
Article 10.16.1(a)(i)(B) or (C), or Article 10.16.1 (b)(i)(B) or (C), the tribunal shall apply:  
(a) the rules of law specified in the pertin ent investment agreement or investment 
authorization, or as the disputing parties may otherwise agree; or   WT/REG211/1 
 Page 171 
 
 
(b) if the rules of law have not been specified or otherwise agreed:  
(i) the law of the respondent, including its rules on the conflict of laws;7 and  
(ii) such rules of international law as may be applicable.  
3. A decision of the Commission declaring its inte rpretation of a provision of this Agreement 
under Article 19.1.3(c) (The Free Trade Commissi on) shall be binding on a tribunal established under 
this Section, and any decision or award issued by the tribunal must be consistent with that decision.  
Article 10.23 
 
Interpretation Of Annexes  
1. Where a respondent asserts as a defense that the me asure alleged to be a breach is within the 
scope of Annex I or Annex II, the tribunal sh all, on request of the respondent, request the 
interpretation of the Commission on the issue.  The Commission shall submit in writing any decision declaring its interpretation under Article 19.1.3(c) (The Free Trade Commission) to the tribunal within 
60 days of delivery of the request.  
2. A decision issued by the Commission under paragraph 1 shall be binding on the tribunal, and 
any decision or award issued by the tribunal must be  consistent with that decision.  If the Commission 
fails to issue such a decision within 60 days , the tribunal shall decide the issue.   
Article 10.24 
 
Expert Reports
 
 Without prejudice to the appointment of other kinds of experts where authorized by the 
applicable arbitration rules, a tribunal, at the request of a disputing party or, unless the disputing 
parties disapprove, on its own initiative, may appoint one  or more experts to report to it in writing on 
any factual issue concerning envir onmental, health, safety, or other scientific matters raised by a 
disputing party in a proceeding, subject to such  terms and conditions as the disputing parties may 
agree.  
Article 10.25 
 
Consolidation  
1. Where two or more claims have been submitted separately to arbitra tion under Article 10.16.1 
and the claims have a question of law or fact in common and arise out of the same events or 
circumstances, any disputing party may seek a cons olidation order in accord ance with the agreement 
of all the disputing parties sought to be covered by the order or the terms of paragraphs 2 through 10.  
2. A disputing party that seeks a consolidation order under this Article shall deliver, in writing, a 
request to the Secretary-General and to all the dis puting parties sought to be covered by the order and 
shall specify in the request:  
(a) the names and addresses of all the disputing par ties sought to be covered by the order;  
(b) the nature of the order sought; and  
                                                      
 7 The “law of the respondent” means the law that a domestic court or tribunal of proper jurisdiction 
would apply in the same case.  WT/REG211/1 
Page 172  
 
(c) the grounds on which the order is sought.  
3. Unless the Secretary-General finds within 30 da ys after receiving a request under paragraph 2 
that the request is manifestly unfounded, a tribunal shall be established under this Article. 
4. Unless all the disputing parties sought to be c overed by the order otherwise agree, a tribunal 
established under this Article shall comprise three arbitrators:   
(a) one arbitrator appointed by agreement of the claimants;    
(b) one arbitrator appointed by the respondent; and   
(c) the presiding arbitrator appointed by the S ecretary-General, provided, however, that 
the presiding arbitrator shall not be a national of any Party.  
5. If, within 60 days after the Secretary-Genera l receives a request made under paragraph 2, the 
respondent fails or the claimants fail to appoint an  arbitrator in accordance with paragraph 4, the 
Secretary-General, on the request of any disputing party sought to be covered by the order, shall 
appoint the arbitrator or arbitrators not yet appointed.  If the respondent fails to appoint an arbitrator, the Secretary-General shall appoint a national of the disputing Party, and if the claimants fail to appoint an arbitrator, the Secretary-General shall appoint a national of a Party of the claimants.  
6. Where a tribunal established under this Article is sat isfied that two or more claims that have 
been submitted to arbitration under Article 10.16.1  have a question of law or fact in common, and 
arise out of the same events or circumstances, the tr ibunal may, in the interest of fair and efficient 
resolution of the claims, and after hearing the disputing parties, by order:  
(a) assume jurisdiction over, and hear and determine together, all or part of the claims;   
(b) assume jurisdiction over, and hear and determine one or more of the claims, the 
determination of which it believes would assist in the resolution of the others; or  
(c) instruct a tribunal previously established un der Article 10.19 to assume jurisdiction 
over, and hear and determine together, all or part of the claims, provided that  
(i) that tribunal, at the request of any cl aimant not previously a disputing party 
before that tribunal, shall be reconstitu ted with its original members, except 
that the arbitrator for the claima nts shall be appointed pursuant to 
paragraphs 4(a) and 5; and  
(ii) that tribunal shall decide whether any prior hearing shall be repeated.  
7. Where a tribunal has been established under this  Article, a claimant that has  submitted a 
claim to arbitration under Article 10.16.1 and th at has not been named in a request made under 
paragraph 2 may make a written request to the trib unal that it be included in any order made under 
paragraph 6, and shall specify in the request:  
(a) the name and address of the claimant;  
(b) the nature of the order sought; and  
(c) the grounds on which the order is sought.  
 The claimant shall deliver a copy of its  request to the Secretary-General.   WT/REG211/1 
 Page 173 
 
 
8. A tribunal established under this Article shall conduct its proceedings in accordance with the 
UNCITRAL Arbitration Rules, except as modified by this Section.  
9. A tribunal established under Article 10.19 shall not have jurisdiction to decide a claim, or a 
part of a claim, over which a tribunal establishe d or instructed under this Article has assumed 
jurisdiction.  
10. On application of a disputing party, a tri bunal established under this Article, pending its 
decision under paragraph 6, may order that the proceedings of a tribunal established under 
Article 10.19 be stayed, unless the latter tri bunal has already adjourned its proceedings.  
Article 10.26 
 
Awards  
1. Where a tribunal makes a final award against a respondent, the tribunal may award, separately 
or in combination, only:  
(a) monetary damages and any applicable interest;   
(b) restitution of property, in which case the aw ard shall provide that the respondent may 
pay monetary damages and any applicable  interest in lieu of restitution.  
 A tribunal may also award costs and attorney’s fees in accordance with this Section and the 
applicable arbitration rules.  
 
2. Subject to paragraph 1, where a claim is subm itted to arbitration under Article 10.16.1(b):   
(a) an award of restitution of property shall provide that restitution be made to the 
enterprise;   
(b) an award of monetary damages and any applicable interest shall provide that the sum 
be paid to the enterprise; and  
(c) the award shall provide that it is made without prejudice to any right that any person 
may have in the relief under applicable domestic law.  
3. A tribunal is not authorized to award punitive damages.  
4. An award made by a tribunal shall have no binding force except between the disputing parties 
and in respect of the particular case.  
5. Subject to paragraph 6 and the applicable review  procedure for an interim award, a disputing 
party shall abide by and comply with an award without delay.   
6. A disputing party may not seek enforcement of a final award until:   
(a) in the case of a final award made under the ICSID Convention   
(i) 120 days have elapsed from the date th e award was rendered and no disputing 
party has requested revision or annulment of the award; or   
(ii) revision or annulment proceedings have been completed; and  WT/REG211/1 
Page 174  
 
(b) in the case of a final award under the ICSID Additional Facility Rules or the 
UNCITRAL Arbitration Rules 
(i) 90 days have elapsed from the date th e award was rendered and no disputing 
party has commenced a proceeding to revise, set aside, or annul the award; or  
(ii) a court has dismissed or allowed an application to revise, set aside, or annul 
the award and there is no further appeal.  
7. Each Party shall provide for the enfor cement of an award in its territory.  
8. If the respondent fails to abide by or comply with a final award, on delivery of a request by 
the Party of the claimant, a panel shall be estab lished under Article 20.6 (Request for an Arbitral 
Panel). The requesting Party may seek in such proceedings:  
(a) a determination that the failure to abide by or comply with the final award is 
inconsistent with the obligati ons of this Agreement; and   
(b) in accordance with Article 20.13 (Initia l Report), a recommendation that the 
respondent abide by or comply with the final award.   
9. A disputing party may seek enforcement of an arbitration award under the ICSID Convention, 
the New York Convention, or the Inter-American Convention regardless of whether proceedings have 
been taken under paragraph 8.   
10. A claim that is submitted to arbitration under this Section shall be considered to arise out of a 
commercial relationship or transaction for purposes of Article I of the New York Convention and 
Article I of the Inter-American Convention.    
Article 10.27 
 
Service Of Documents
 
Delivery of notice and other documents on a Party shall be made to the place named for that 
Party in Annex 10-G.  
 
Section C: Definitions  
 
Article 10.28 
 
Definitions  
For purposes of this Chapter:  
 
 Centre  means the International Centre for Settle ment of Investment Disputes (“ICSID”) 
established by the ICSID Convention;  
 
 claimant  means an investor of a Party that is a pa rty to an investment dispute with another 
Party;  
 
 disputing parties  means the claimant and the respondent;  
 
 disputing party  means either the claimant or the respondent;   WT/REG211/1 
 Page 175 
 
 
 enterprise  means an enterprise as defined in Article 2.1 (Definitions of General Application), 
and a branch of an enterprise;  
 
 enterprise of a Party  means an enterprise constituted or organized under the law of a Party, 
and a branch located in the territory of a Pa rty and carrying out business activities there;  
  freely usable currency means “freely usable currency” as determined by the International 
Monetary Fund under its Articles of Agreement ;  
 
 ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the 
Administration of Proceeding by the Secretariat of the International Centre for Settlement of 
Investment Disputes ;  
  ICSID Convention means the Convention on the Settlement of Investment Disputes between 
States and Nationals of Other States , done at Washington, March 18, 1965;  
 
 Inter-American Convention  means the Inter-American Convention on International 
Commercial Arbitration, done at Panama, January 30, 1975;  
  investment  means every asset that an investor owns or  controls, directly or indirectly, that 
has the characteristics of an investment, including  such characteristics as the commitment of capital or 
other resources, the expectation of gain or profit, or  the assumption of risk.  Forms that an investment 
may take include:   
(a) an enterprise;  
(b) shares, stock, and other forms of equ ity participation in an enterprise;  
(c) bonds, debentures, other debt instruments, and loans;
8  9  
(d) futures, options, and other derivatives;  
(e) turnkey, construction, management, pr oduction, concession, revenue-sharing, and 
other similar contracts;  
(f) intellectual property rights;  
(g) licenses, authorizations, permits, and sim ilar rights conferred pursuant to domestic 
law; 10 11 and  
                                                      
8 Some forms of debt, such as bonds, debentures, and long-term notes, are more likely to have the 
characteristics of an investment, while other forms of de bt are less likely to have such characteristics.    
 9 For purposes of this Agreement, claims to payment that are immediately due and result from the sale 
of goods or services are not investments. 
 10 Whether a particular type of license, authorization, permit, or similar instrument (including a 
concession, to the extent that it has the nature of such an instrument) has the characteristics of an investment 
depends on such factors as the nature and extent of the rights that the holder has under the law of the Party. 
Among the licenses, authorizations, permits, and similar instruments that do not have the characteristics of an 
investment are those that do not create any rights prot ected under domestic law.  For greater certainty, the 
foregoing is without prejudice to whether any asset associated with the license, authorization, permit, or similar 
instrument has the characteris tics of an investment.  
11 The term “investment” does not include an order or  judgment entered in a ju dicial or administrative 
action. WT/REG211/1 
Page 176  
 
(h) other tangible or intangible, movable or immovable property, and related property 
rights, such as leases, mortgages, liens, and pledges;  
 investment agreement  means a written agreement
12 that takes effect on or after the date of 
entry into force of this Agreem ent between a national authority13  
of a Party and a covered investment 
or an investor of another Party that grants the covered investment or investor rights:  
 
(a) with respect to natural resources or other asset s that a national authority controls; and  
(b) upon which the covered investment or the investor relies in establishing or acquiring 
a covered investment other than the written agreement itself;  
 investment authorization14  
means an authorization that the foreign investment authority of a 
Party grants to a covered investment or an investor of another Party;  
  investor of a non-Party  means, with respect to a Party, an investor that attempts to make, is  
making, or has made an investment in the territory of that Party, that is not an investor of a Party;   
 investor of a Party  means a Party or state enterprise ther eof, or a national or an enterprise of 
a Party, that attempts to make, is making, or has made an investment in the territory of another Party; provided, however, that a natural person who is a dua l national shall be deemed  to be exclusively a 
national of the State of his or her dominant and effective nationality;    national  means a natural person who has the nati onality of a Party according to Annex 2.1 
(Country-Specific Definitions);  
  New York Convention  means the United Nations Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards , done at New York, June 10, 1958; 
 
 non-disputing Party  means a Party that is not a party to an investment dispute;  
  protected information means confidential business informat ion or information that is 
privileged or otherwise protected from disclosure under a Party’s law;     respondent  means the Party that is a part y to an investment dispute;  
 
 Secretary-General  means the Secretary-General of ICSID;  
  tribunal  means an arbitration tribunal establis hed under Article 10.19 or 10.25; and  
 
 UNCITRAL Arbitration Rules  means the arbitration rules of the United Nations 
Commission on International Trade Law.  
 
  
                                                     
 
 12 “Written agreement” refers to an agreement in writing, executed by both parties, that creates an 
exchange of rights and obligations, binding on both parties under the law applicable under Article 10.22.2.  For 
greater certainty, (a) a unilateral act of an administrativ e or judicial authority, such as a permit, license, or 
authorization issued by a Party solely in its regulatory capacity or a decree, order,  or judgment; and (b) an 
administrative or judicial consent decree or orde r, shall not be considered a written agreement.  
 13 For purposes of this definition, “national authority” means an authority at the central level of 
government. 
 14 For greater certainty, actions taken by a Party to  enforce laws of general application, such as 
competiton laws, are not encompassed within this definition.  WT/REG211/1 
 Page 177 
 
 
ANNEX 10-A:  PUBLIC DEBT 
 
The rescheduling of the debts of a Central Amer ican Party or the Dominican Republic, or of 
such Party’s institutions owned or controlled throug h ownership interests by such Party, owed to the 
United States and the rescheduling of any of such Pa rty’s debts owed to cred itors in general are not 
subject to any provision of Section A other than Articles 10.3 and 10.4.  
  
ANNEX 10-B:  CUSTOMARY INTERNATIONAL LAW  
 
The Parties confirm their shared understanding th at “customary international law” generally 
and as specifically referenced in Articles 10.5,  10.6, and Annex 10-C results from a general and 
consistent practice of States that they follow from a sense of legal obligation.  With regard to Article 
10.5, the customary international law minimum standard  of treatment of aliens refers to all customary 
international law principles that protect the economic rights and interests of aliens.  
 
 
ANNEX 10-C:  EXPROPRIATION  
 
The Parties confirm their shared understanding that:   
1. Article 10.7.1 is intended to reflect customary international law concerning the obligation of 
States with respect to expropriation.  
2. An action or a series of actions by a Pa rty cannot constitute an expropriation unless it 
interferes with a tangible or intangible property right or property interest in an investment.  
3. Article 10.7.1 addresses two situations. The first is direct expropriation, where an investment 
is nationalized or otherwise directly expropriated th rough formal transfer of title or outright seizure.  
4. The second situation addressed by Ar ticle 10.7.1 is indirect exprop riation, where an action or 
series of actions by a Party has an effect equivalent  to direct expropriation without formal transfer of 
title or outright seizure.  
 (a) The determination of whether an action or series of actions by a Party, in a specific 
fact situation, constitutes an indirect ex propriation, requires a case-bycase, fact-based 
inquiry that considers, among other factors:  
 
(i) the economic impact of the government action, although the fact that an 
action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone,  does not establish that an indirect 
expropriation has occurred;  
(ii) the extent to which the government acti on interferes with distinct, reasonable 
investment-backed expectations; and  
(iii) the character of the government action.  
(b) Except in rare circumstances, nondiscriminator y regulatory actions by a Party that are 
designed and applied to protect legitimate  public welfare objectives, such as public 
health, safety, and the environment, do no t constitute indirect expropriations.  
 WT/REG211/1 
Page 178  
 
ANNEX 10-D:  TREATMENT IN CASE OF STRIFE  
 
1. No investor may submit to arbitration under S ection B a claim alleging that Guatemala has 
breached Article 10.6.2 as a result of an armed movement  or civil disturbance and that the investor or 
the investor’s enterprise has incurred loss or damage by reason of or arising out of such movement or 
disturbance.  
2. No investor of Guatemala may submit to arbitr ation under Section B a claim alleging that any 
other Party has breached Article 10.6.2(b).  
3. The limitation set out in paragraph 1 is wit hout prejudice to other limitations existing in 
Guatemala’s law with respect to an investor’s cl aim that Guatemala has breached Article 10.6.2.  
 
ANNEX 10-E:  SUBMISSION OF A CLAIM TO ARBITRATION  
 
1. An investor of the United States may not submit to arbitration under Section B a claim that a 
Central American Party or the Dominican Repub lic has breached an obligation under Section A 
either:  
(a) on its own behalf under Ar ticle 10.16.1(a), or  
(b) on behalf of an enterprise of a Central American Party or the Dominican Republic 
that is a juridical person that the investor ow ns or controls directly or indirectly under 
Article 10.16.1(b),  
if the investor or the enterprise, respectively, has alleged that breach  of an obligation under Section A 
in proceedings before a court or administrative tribunal of a Central American Party or the Dominican Republic.  
 2. For greater certainty, if an investor of the United States elects to submit a claim of the type 
described in paragraph 1 to a court or administra tive tribunal of a Central American Party or the 
Dominican Republic, that election shall be definitiv e, and the investor may not thereafter submit the 
claim to arbitration under Section B.  
3. Notwithstanding Article 10.18, an investor of the United States may not submit to arbitration 
under Section B a claim relating to an investment in sovereign debt instruments with a maturity of less 
than one year unless one year has elapsed from the da te of the events giving rise to the claim.  
 
ANNEX 10-F:  APPELLATE BODY OR SIMILAR MECHANISM  
 
1. Within three months of the date of entry into  force of this Agreement, the Commission shall 
establish a Negotiating Group to develop an appellate  body or similar mechanism to review awards 
rendered by tribunals under this Chapter.  Such  appellate body or similar mechanism shall be 
designed to provide coherence to the interpretation of investment provisions in the Agreement.  The 
Commission shall direct the Negotiating Group to take into account the following issues, among others:   
(a) the nature and composition of an appe llate body or similar mechanism;  
(b) the applicable scope and standard of review;  
(c) transparency of proceedings of an a ppellate body or similar mechanism;   WT/REG211/1 
 Page 179 
 
 
(d) the effect of decisions by an appellate body or similar mechanism;  
(e) the relationship of review by an appellate body or similar mechanism to the arbitral 
rules that may be selected under Articles 10.16 and 10.25; and   
(f) the relationship of review by an appella te body or similar mechanism to existing 
domestic laws and interna tional law on the enforcement of arbitral awards.  
2. The Commission shall direct the Negotiating Group to provide to the Commission, within one 
year of establishment of the Negotiating Group, a dr aft amendment to the Agreement that establishes 
an appellate body or similar mechanism.  On appr oval of the draft amendment by the Parties, in 
accordance with Article 22.2 (Amendments), the Agreement shall be so amended.  
 
ANNEX 10-G:  SERVICE OF DOCUMENTS ON A PARTY UNDER SECTION B  
 
Costa Rica  
 
 Notices and other documents in disputes unde r Section B shall be served on Costa Rica by 
delivery to:  
 
Dirección de Aplicación de Acuerdos Comerciales Internacionales  
Ministerio de Comercio Exterior 
San José, Costa Rica  
 
The Dominican Republic  
 
 Notices and other documents in disputes under Section B shall be served on the Dominican 
Republic by delivery to:  
 
Dirección de Comercio Exterior y Administración de Tratados Comerciales Internacionales 
Secretaría de Estado de Industria y Comercio  
Santo Domingo, República Dominicana 
 
El Salvador  
 
Notices and other documents in disputes under S ection B shall be served on El Salvador by 
delivery to:  
Dirección de Administración de Tratados Comerciales  
Ministerio de Economía 
Alameda Juan Pablo II y Calle Guadalupe  
Edificio C1-C2, Plan Maestro Centro de Gobierno  
San Salvador, El Salvador 
 
Guatemala  
 
Notices and other documents in disputes under Section B shall be served on Guatemala by 
delivery to:  
 
Ministerio de Economía  
Ciudad de Guatemala, Guatemala  
 WT/REG211/1 
Page 180  
 
Honduras 
 
 
Notices and other documents in disputes under Section B shall be served on Honduras by 
delivery to:  
 
Dirección General de Integración Económica y Política Comercial 
Secretaría de Estado en los Desp achos de Industria y Comercio 
Boulevard José Cecilio del Valle 
Edificio San José, antiguo edificio de Fenaduanah 
Tegucigalpa, Honduras 
 
Nicaragua  
 
Notices and other documents in disputes under Se ction B shall be served on Nicaragua by 
delivery to:  
 
Dirección de Integración y Administración de Tratados, or its successor 
Ministerio de Fomento, Industria y Comercio 
Managua, Nicaragua 
 
United States  
 
Notices and other documents in disputes unde r Section B shall be served on the United 
States by delivery to:  
 
Executive Director (L/EX) 
Office of the Legal Adviser 
Department of State  
Washington, D.C. 20520  
United States of America 
 
 
CHAPTER ELEVEN:  CROSS-BORDER TRADE IN SERVICES  
 
Article 11.1 
Scope And Coverage  
1. This Chapter applies to measures adopted or maintained by a Party affecting cross-border 
trade in services by service suppliers of another Part y.  Such measures include measures affecting:  
(a) the production, distribution, marketing, sale, and delivery of a service;  
(b) the purchase or use of, or payment for, a service;  
(c) the access to and use of distribution, trans port, or telecommunications networks and 
services in connection with the supply of a service;  
(d) the presence in its territory of a service supplier of another Party; and  
(e) the provision of a bond or other form of financial security as a condition for the 
supply of a service.   WT/REG211/1 
 Page 181 
 
 
2. For purposes of this Chapter, “measures adopted  or maintained by a Party” means measures 
adopted or maintained by:  
(a) central, regional, or local governments and authorities; and  
(b) non-governmental bodies in the exercise of powers delegated by central, regional, or 
local governments or authorities.  
3. Articles 11.4, 11.7, and 11.8 also apply to me asures by a Party affecting the supply of a 
service in its territory by an investor of anothe r Party as defined in Article 10.28 (Definitions) or a 
covered investment.1 
 
4. This Chapter does not apply to:  
(a) financial services, as defined in Article 12.20 (Definitions), except as provided in 
paragraph 3;  
(b) air services, including domestic and international air transportation services, whether 
scheduled or non-scheduled, and related services in support of air services, other than:  
(i) aircraft repair and maintenance services during which an aircraft is 
withdrawn from service, and  
(ii) specialty air services;  
(c) procurement; or  
(d) subsidies or grants provided by a Party, including government-supported loans, 
guarantees and insurance.  
5. This Chapter does not impose any obligation on a Party with respect to a national of another 
Party seeking access to its employment market, or empl oyed on a permanent basis in its territory, and 
does not confer any right on that national w ith respect to that access or employment.  
6. This Chapter does not apply to services supplied in the exercise of governmental authority. A 
“service supplied in the exercise of governmental au thority” means any service that is supplied neither 
on a commercial basis, nor in competition with one or more service suppliers.  
Article 11.2 
 
National Treatment 
 
 
1. Each Party shall accord to service suppliers of another Party treatment no less favorable than 
that it accords, in like circumstance s, to its own service suppliers.   
 
 
                                                      
 1 The Parties understand that nothing in this Chapter,  including this paragraph, is subject to investor-
state dispute settlement pursuant to Section B of Chapter Ten (Investment).  
 WT/REG211/1 
Page 182  
 
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a regional 
level of government, treatment no less favorable than  the most favorable treat ment accorded, in like 
circumstances, by that regional level of government to service suppliers of the Party of which it forms 
a part.  
Article 11.3 
 
Most-Favored-Nation Treatment 
 
 Each Party shall accord to service suppliers of  another Party treatment no less favorable than 
that it accords, in like circumstan ces, to service suppliers of any other Party or a non-Party.  
 
Article 11.4 
 
Market Access  
 No Party may adopt or maintain, either on the basis of a regional subdivision or on the basis 
of its entire territory, measures that:    (a) impose limitations on:  
 
(i) the number of service suppliers whether in the form of numerical quotas, 
monopolies, exclusive service suppliers, or the requirement of an economic 
needs test,  
(ii) the total value of service transactions or assets in form of numerical quotas or 
the requirement of an economic needs test,  
(iii) the total number of service operations or on the total quantity of services 
output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test,
2 or  
(iv) the total number of natural persons that  may be employed in a particular 
service sector or that a service supplier may employ and who are necessary 
for, and directly related to, the supply of a specific service in the form of 
numerical quotas or the requirement of an economic needs test; or  
(b) restrict or require specific types of legal entity or joint venture through which a 
service supplier may supply a service.  
Article 11.5 
 
Local Presence  
 No Party may require a service supplier of another Party to establish or maintain a 
representative office or any form of enterprise, or to  be resident, in its territory as a condition for the 
cross-border supply of a service.  
 
 
  
                                                     
 
 2 This clause does not cover measures of a Party that limit inputs for the supply of services.   WT/REG211/1 
 Page 183 
 
 
Article 11.6 
 
Non-Conforming Measures  
1. Articles 11.2, 11.3, 11.4, and 11.5 do not apply to:  
(a) any existing non-conforming measure that  is maintained by a Party at:  
(i) the central level of government, as set out by that Party in its Schedule to 
Annex I;  
(ii) a regional level of government, as set out  by that Party in its Schedule to 
Annex I; or  
(iii) a local level of government;  
(b) the continuation or prompt renewal of an y non-conforming measure referred to in 
subparagraph (a); or  
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the 
extent that the amendment does not decr ease the conformity of the measure, as it 
existed immediately before the amendment, with Articles 11.2, 11.3, 11.4, and 11.5. 
2. Articles 11.2, 11.3, 11.4, and 11.5 do not apply to any measure that a Party adopts or 
maintains with respect to sectors, sub-sectors or activities as set out in its Schedule to Annex II.  
Article 11.7 
 
Transparency In Developing And Applying Regulations3 
 Further to Chapter Eighteen (Transparency):  
(a) each Party shall maintain or establish a ppropriate mechanisms for responding to 
inquiries from interested persons regarding its regulations relating to the subject 
matter of this Chapter;  
(b) at the time it adopts final regulations relati ng to the subject matter of this Chapter, 
each Party shall, to the extent possible,  including on request, address in writing 
substantive comments received from interested  persons with respect to the proposed 
regulations; and  
(c) to the extent possible, each Party shall a llow a reasonable time between publication of 
final regulations and their effective date.  
Article 11.8 
 
Domestic Regulation  
1. Where a Party requires authorization for the supply of a service, the Party’s competent 
authorities shall, within a reasonable time after the submission of an application considered complete 
under its laws and regulations, inform  the applicant of the decision concerning the application. At the 
                                                      
3 For greater certainty, “regula tions” includes regulations establishing or applying to licensing 
authorization or criteria. WT/REG211/1 
Page 184  
 
request of the applicant, the Party’s competen t authorities shall provide, without undue delay, 
information concerning the status of the application.   This obligation shall not apply to authorization 
requirements that are within the scope of Article 11.6.2.  
2. With a view to ensuring that measures relating to qualification requirements and procedures, 
technical standards, and licensing requirements do not constitute unnecessary barriers to trade in 
services, each Party shall endeavor to ensure, as appropriate for individual sectors, that any such 
measures that it adopts or maintains are:  
(a) based on objective and transparent criteria, such as competence and the ability to 
supply the service;  
(b) not more burdensome than necessary to en sure the quality of the service; and  
(c) in the case of licensing procedures, not in th emselves a restriction on the supply of 
the service.  
3. If the results of the negotiations related to Ar ticle VI:4 of the GATS (or the results of any 
similar negotiations undertaken in other multilateral fo ra in which the Parties participate) enter into 
effect for each Party, this Article shall be ame nded, as appropriate, after consultations between the 
Parties, to bring those results into effect under th is Agreement.  The Parties will coordinate on such 
negotiations as appropriate.  
Article 11.9 
 
Mutual Recognition
 
1. For the purposes of the fulfillment, in whole or in part, of its standards or criteria for the 
authorization, licensing, or certification of servi ces suppliers, and subject to the requirements of 
paragraph 4, a Party may recognize the education or experience obtained, requirements met, or 
licenses or certifications granted in a particular  country, including another Party and a non-Party.  
Such recognition, which may be achieved through harmonization or otherwise, may be based upon an 
agreement or arrangement with the country c oncerned or may be accorded autonomously.  
2. Where a Party recognizes, autonomously or by agreement or arrangement, the education or 
experience obtained, requirements met, or licenses or certifications granted in the territory of another 
Party or a non-Party, nothing in Article 11.3 shall be construed to require the Party to accord such 
recognition to the education or experience obtained,  requirements met, or licenses or certifications 
granted in the territory of any other Party.  
3. A Party that is a party to an agreement or arra ngement of the type referred to in paragraph 1, 
whether existing or future, shall afford adequate oppor tunity for another Party, if that other Party is 
interested, to negotiate its accession to such an  agreement or arrangement or to negotiate a 
comparable one with it.  Where a Party accords recognition autonomously, it shall afford adequate 
opportunity for another Party to demonstrate that education, experience, licenses, or certifications 
obtained or requirements met in that other Party’s territory should be recognized.  
4. No Party may accord recognition in a manner that  would constitute a means of discrimination 
between countries in the application of its standards or criteria for the authorization, licensing, or 
certification of services suppliers, or a disguised restriction on trade in services.  
  WT/REG211/1 
 Page 185 
 
 
5. Annex 11.9 applies to measures adopted or mainta ined by a Party relating to the licensing or 
certification of professional service suppliers as set out in that Annex.  
Article 11.10 
 
Transfers And Payments  
1. Each Party shall permit all transfers and paym ents relating to the cross-border supply of 
services to be made freely and without delay into and out of its territory.    
2. Each Party shall permit such transfers and pa yments relating to the cross-border supply of 
services to be made in a freely usable currency at th e market rate of exchange prevailing at the time of 
transfer.  
3. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer or payment through the 
equitable, non-discriminatory, and good faith  application of its laws relating to:  
(a) bankruptcy, insolvency, or the protection of the rights of creditors;  
(b) issuing, trading, or dealing in securiti es, futures, options, or derivatives;  
(c) financial reporting or record keeping of  transfers when necessary to assist law 
enforcement or financial regulatory authorities;  
(d) criminal or penal offenses; or  
(e) ensuring compliance with orders or judgments in judicial or administrative 
proceedings.  
Article 11.11 
 
Implementation  
 The Parties shall consult annually, or as othe rwise agreed, to review  the implementation of 
this Chapter and consider other issues of mutual interest.  
 
Article 11.12 
 
Denial Of Benefits  
1. A Party may deny the benefits of this Chapter to a service supplier of another Party if the 
service is being supplied by an enterprise owned or  controlled by persons of a non-Party, and the 
denying Party:  
(a) does not maintain diplomatic relations with the non-Party; or  
(b) adopts or maintains measures with respect to the non-Party that prohibit transactions 
with the enterprise or that would be violated  or circumvented if the benefits of this 
Chapter were accorded to the enterprise.  
 WT/REG211/1 
Page 186  
 
2. Subject to Articles 18.3 (Notification and Provi sion of Information) and 20.4 (Consultations), 
a Party may deny the benefits of this Chapter to  a service supplier of another Party that is an 
enterprise of such other Party if the enterprise has no substantial busi ness activities in the territory of 
any Party, other than the denying Party, and pers ons of a non-Party, or the denying Party, own or 
control the enterprise.  
Article 11.13 
 
Specific Commitments
 
1.  Express Delivery Services:  
 
(a) The Parties affirm that measures affecting express delivery services are subject to this 
Agreement.  
(b) For purposes of this Agreement, express delivery services means the collection, 
transport, and delivery, of documents, prin ted matter, parcels, goods, or other items 
on an expedited basis, while tracking and maintaining control of these items 
throughout the supply of the service. Express delivery services do not include (i) air 
transport services, (ii) services supplied in the exercise of governmental authority, or (iii) maritime transport services.
4  
(c) The Parties express their desire to maintain at least the level of market openness they 
provided for express delivery services existing on the date this Agreement is signed.  
(d) Neither a Central American Party nor the Dominican Republic may adopt or maintain 
any restriction on express delivery services that is not in existence on the date this Agreement is signed.  Each such Party confirms that it does not intend to direct revenues from its postal monopoly to benef it express delivery services as defined in 
subparagraph (b). Under title 39 of th e United States Code, an independent 
government agency determines whether postal rates meet the requirement that each 
class of mail or type of mail service bear the direct and indirect postal costs 
attributable to that class or type plus that portion of all other cost s of the U.S. Postal 
Service reasonably assignable to such class or type.  
(e) Each Party shall ensure that, where its monopoly supplier of postal services 
competes, either directly or through an affiliated company, in the supply of express 
delivery services outside the scope of its monopoly rights, such a supplier does not 
abuse its monopoly position to act in its terr itory in a manner inconsistent with the 
Party’s obligations under Articles 11.2, 11.3, 11.4, 10.3 (National Treatment), or 10.4 
(Most-Favored-Nation Treatment).  The Par ties also reaffirm their obligations under 
Article VIII of the GATS.
5  
2.  A Party’s Section of Annex 11.13 sets out specific commitments by that Party. 
 
 
 
                                                      
 4 For greater certainty, for the United States, expre ss delivery services do not include delivery of letters 
subject to the Private Express Statutes (18 U.S.C. § 1693 et seq. , 39 U.S.C. § 601 et seq. ), but do include 
delivery of letters subject to the exceptions to, or suspensions promulgated under, those statutes, which permit private delivery of extremely urgent letters.  
 5 For greater certainty, the Parties reaffirm that nothi ng in this Article is subject to investor-state 
dispute settlement pursuant to Section B of Chapter Ten (Investment).   WT/REG211/1 
 Page 187 
 
 
Article 11.14 
 
Definitions  
For purposes of this Chapter:  
  cross-border trade in services or cross-border supply of services means the supply of a 
service:  
 
(a) from the territory of one Party into the territory of another Party;   
(b) in the territory of one Party by a person of that Party to a person of another Party; or  
(c) by a national of a Party in the territory of another Party;  
but does not include the supply of a service in the terr itory of a Party by an investor of another Party 
as defined in Article 10.28 (Definiti ons) or a covered investment;  
 enterprise  means an “enterprise” as defined in  Article 2.1 (Definitions of General 
Application), and a branch of an enterprise;   
 
 enterprise of a Party  means an enterprise constituted or organized under the laws of that 
Party, and a branch located in the territory of that Party and carrying out business activities there;  
 
 professional services  means services, the provision of which requires specialized 
post-secondary education, or equivale nt training or experience, and for which the right to practice is 
granted or restricted by a Party, but does not incl ude services provided by trades-persons or vessel and 
aircraft crew members;   
 
 service supplier of a Party  means a person of a Party that seeks to supply or supplies a 
service;
6 
and  
 
 specialty air services  means any non-transportation air servi ces, such as aerial fire-fighting, 
sightseeing, spraying, surveying, mapping, photog raphy, parachute jumping, glider towing, and 
helicopter-lift for logging and constr uction, and other airborne agricultural, industrial, and inspection 
services.  
 
ANNEX 11.9:  PROFESSIONAL SERVICES  
 
Development of Professional Standards  
 
1. The Parties shall encourage the relevant bodi es in their respective territories to develop 
mutually acceptable standards and criteria for licensing and certification of professional service 
suppliers and to provide recommendations on mutual recognition to the Commission.  
2. The standards and criteria referred to in paragr aph 1 may be developed with regard to the 
following matters:  
(a) education – accreditation of schools or academic programs;  
                                                      
 6 The Parties understand that for purposes of Articles 11.2 and 11.3, “service suppliers” has the 
same meaning as “services and se rvice suppliers” in the GATS.  WT/REG211/1 
Page 188  
 
(b) examinations – qualifying examinations fo r licensing, including alternative methods 
of assessment such as oral examinations and interviews;  
(c) experience – length and nature of experience required for licensing;  
(d) conduct and ethics – standards of professional conduct and the nature of disciplinary 
action for non-conformity with those standards;  
(e) professional development and re-certificati on – continuing educ ation and ongoing 
requirements to maintain professional certification;  
(f) scope of practice – extent of, or limitations on, permissible activities;  
(g) local knowledge – requirements for knowle dge of such matters as local laws, 
regulations, language, geogra phy, or climate; and  
(h) consumer protection – alternatives to r esidency requirements, including bonding, 
professional liability insurance, and client  restitution funds, to provide for the 
protection of consumers.  
3. On receipt of a recommendation referred to in  paragraph 1, the Commission shall review the 
recommendation within a reasonable time to determine wh ether it is consistent with this Agreement.  
Based on the Commission’s review, each Party shall encourage its respective competent authorities, 
where appropriate, to implement the recommendation within a mutually agreed time.   
Temporary licensing  
 
4.  Where the Parties agree, each Party shall en courage the relevant bodies in its territory to 
develop procedures for the temporary licensing of professional service suppliers of another Party.  
 
Review  
 
5. The Commission shall review the implementa tion of this Annex at least once every three 
years.  
 
 
ANNEX 11.13:  SPECIFIC COMMITMENTS  
 
Section A: Costa Rica
 
 
1. Costa Rica shall repeal articles 2 and 9 of Law No. 6209, entitled Ley de Protección al 
Representante de Casas Extranjeras , dated 9 March 1978, and its regul ation, and item b) of article 
361 of the Código de Comercio,  Law No. 3284 of 24 April 1964, effective on the date of entry into 
force of this Agreement.  
2. Subject to paragraph 1, Costa Rica shall enact a new legal regime that shall become 
applicable to contracts of representation,  distribution, or production, and:  
(a) shall apply principles of general cont ract law to such contracts;   
(b) shall be consistent with the obligations of this Agreement and the principle of 
freedom of contract;   WT/REG211/1 
 Page 189 
 
 
(c) shall treat such contracts as establishing an exclusive relationship only if the contract 
explicitly states that the relationship is exclusive;  
(d) shall provide that the termination of such contracts either on their termination dates or 
in the circumstances described in subparagra ph (e) is just cause for a goods or service 
supplier of another Party to terminate the c ontract or allow the contract to expire 
without renewal; and  
(e) will allow contracts with no termination date to be terminated by any of the parties by 
giving ten months advance termination notice.  
3. The absence of an express provision for settlement of disputes in a contract of representation, 
distribution, or production shall give rise to a pr esumption that the parties intended to settle any 
disputes through binding arbitration.  Such arbitr ation may take place in Costa Rica. However, the 
presumption of an intent to submit to arbitration shall not apply where any of the parties objects to arbitration.  
4. The United States and Costa Rica shall enc ourage parties to existing contracts of 
representation, distribution, or produc tion to renegotiate such contracts so as to make them subject to 
the new legal regime enacted in accordance with paragraph 2.  
5. In any case, the repeal of articles 2 and 9 of Law No. 6209 shall not impair any vested right, 
when applicable, derived from that legisl ation and recognized under Article 34 of the Constitución 
Política de la República de Costa Rica .  
6. Costa Rica shall, to the maximum extent po ssible, encourage and facilitate the use of 
arbitration for the settlement of disputes in contracts of representation, distribution, or production. To 
this end, Costa Rica shall endeavor to facilitate th e operation of arbitration cen ters and other effective 
means of alternative resolution of claims arisi ng pursuant to Law No. 6209 or the new legal regime 
enacted in accordance with paragraph 2, and sha ll encourage the development of rules for such 
arbitrations that provide, to the greatest extent po ssible, for the prompt, low- cost, and fair resolution 
of such claims.  
7. For purposes of this Section:  
(a) contract of representation, distribution, or production  has the same meaning as 
under Law No. 6209; and  
(b) termination date  means the date provided in the contract for the contract to end, or 
the end of a contract extension period agreed upon by the parties to the contract.  
Section B: The Dominican Republic 
 
 
1. The Dominican Republic shall not apply Law No . 173 to any covered contract signed after 
the date of entry into force of this Agreemen t unless the contract explicitly provides for the 
application of Law No. 173 and in place of Law No. 173 shall:  
(a) apply principles of the Código Civil of the Dominican Republic to the covered 
contract;  
(b) treat the covered contract in a manner c onsistent with the obligations of this 
Agreement and the principle of freedom of contract;  WT/REG211/1 
Page 190  
 
(c) treat the termination of the covered contract , either on its termination date or pursuant 
to subparagraph (d), as just cause for a goods or service supplier to terminate the 
contract or allow the contract to expire without renewal;  
(d) if the covered contract has no termination date, allow it to be  terminated by any of the 
parties by giving six months advance termination notice;  
(e) provide that after the termination of the c overed contract or the decision not to renew 
it:  
(i) if the covered contract contains an indemnification provision, including a 
provision providing for no indemnifica tion, the indemnification shall be 
based on such provision;  
(ii) if the covered contract contains no su ch provision, any indemnification shall 
be based on actual economic damages and not on a statutory formula;  
(iii) the principal shall honor any pending warranties; and  
(iv) the principal shall compensate the distri butor for the value of any inventory 
that the distributor is unable to sell by reason of the termination or decision 
not to renew the contract. The value of inventory shall include any customs 
duties, surcharges, freight expenses, in ternal movement costs, and inventory 
carrying costs paid by the distributor;  
(f) allow disputes arising from the covered contract to be resolved through binding 
arbitration; and  
(g) allow the parties to the covered contract to  establish in the contract the mechanisms 
and forums that will be available in the case of disputes.  
 Nothing in subparagraph (c) shall prevent parties from demanding indemnification, when 
appropriate, in the form, type, and amount agreed in the contract.     2. If Law No. 173 applies to a covered contract, either because the contract was signed before 
the entry into force of this Agreement or the cont ract explicitly provides for the application of Law 
No. 173, and the contract is registered with the Banco Central in accordance with Article 10 of Law 
No. 173, the Dominican Republic shall provide, consistent with articles 46 and 47 of the Constitución 
de la República Dominicana , that:  
(a) the amount of an indemnity for termination of a covered contract based on the factors 
listed in Article 3 of Law No. 173 shall be no greater than would be available to the 
claimant under the Código Civil  of the Dominican Republic;  
(b) during or after the conciliation process under Ar ticle 7 of Law No. 173, the parties to 
a contract may agree to resolve the disp ute through binding arbitration; and  
(c) the Government of the Dominican Republic  and the conciliation authorities shall take 
all appropriate steps to encourage the r esolution of disputes arising under covered 
contracts through binding arbitration.  
3. For all covered contracts,   WT/REG211/1 
 Page 191 
 
 
(a) a goods or service supplier shall not be requi red to pay damages or an indemnity for 
terminating a covered contract for just cause or allowing such a contract to expire without renewal for just cause; and  
(b) a contract shall be interpreted as establishi ng an exclusive distributorship only to the 
extent that the terms of the contract explic itly state that the distributor has exclusive 
rights to distribute a product or service.  
4. The requirement that the parties to a contr act seek a negotiated settlement of any dispute 
through conciliation, and all other provisions of Law No. 173, shall re tain all their validity and force 
for all contractual relations not  subject to paragraph 1.  
5. For purposes of this Section:  
(a) covered contract means a concession contract, as defined in Law No. 173, to which 
a goods or service supplier of the United St ates or any enterprise controlled by such 
supplier is a party;  
(b) Law No. 173 means Law No. 173, entitled “ Ley sobre Protección a los Agentes 
Importadores de Mercancías y Productos ,” dated April 6, 1966, and its 
modifications; and  
(c) termination date means the date provided in the contract, or the end of a period of 
extension of a contract agreed upon by the parties to the contract.  
Section C: El Salvador 
 
 
1. Articles 394 through 399-B of the Código de Comercio shall apply only to contracts that were 
entered into after such Articles entered into force.  
2. Articles 394 through 399-B of the Código de Comercio shall not apply to any distribution 
contract that a person of the United States enters in to after the date of entry into force of this 
Agreement, as long as the contract so provides.  
3. Parties to a distribution contract shall be perm itted to establish in the contract the mechanisms 
and forums that will be available in the case of disputes.  
4. If a distribution contract makes specific provision for indemnification, including a provision 
providing for no indemnification, Article 397 of the Código de Comercio shall not apply to that 
contract.  
5. Under Salvadoran law, a distribution contract sh all be treated as exclusive only if the contract 
states so expressly.  
6. El Salvador shall encourage parties to distributio n contracts made after the date of entry into 
force of this Agreement to include provisions providing for binding arbitration of disputes and 
specifying methods for determining any indemnity.  
7. For purposes of this Section, distribution contract  has the same meaning as under 
Articles 394 through 399-B of the Código de Comercio .  
 
 
 WT/REG211/1 
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Section D: Guatemala 
 
 
1. The Parties recognize that Guatemala, through Decree 8-98 of the Congreso de la República , 
which reformed the Código de Comercio de Guatemala , repealed Decree 78-71, which regulated 
contracts of agency, distribution, or representation, and created a new regime for agents of commerce, 
distributors, and representatives.  
2. During the year following the date of entry into  force of this Agreement, the United States 
and Guatemala shall encourage parties to contract s without a fixed termination date that remain 
subject to Decree 78-71 to renegotiate such contract s.  The new contracts shall be based on the terms 
and conditions established by mutual agreement of the parties and on the provisions of the Código de 
Comercio de Guatemala , which shall regulate the activities of ag ents of commerce, distributors, and 
representatives.  The United States and Guatemala sha ll also encourage parties to other contracts of 
agency, distribution, or representation that rema in subject to Decree 78-71 to renegotiate such 
contracts so as to make them subject to th e new regime referenced in paragraph 1.  
3. The absence of an express provision for settleme nt of disputes in a contract of agency, 
distribution, or representation shall, to the extent consistent with the Constitución Política de la 
República de Guatemala,  give rise to a rebuttable presumption that the parties intended to settle any 
disputes through binding arbitration.  
4. The United States and Guatemala shall encour age the parties to contracts of agency, 
distribution, or representation to settle any disputes th rough binding arbitration.  In particular, if the 
amount and form of any indemnification payment is not established in the contract and a party wishes 
to terminate the contract, the parties may agree to arbitration to establish the amount, if any, of the 
indemnity.  
5. For purposes of this Section:  
(a) termination date  means the date provided in the contract for the contract to end, or 
the end of a contract extension period agreed upon by the parties to the contract; and  
(b) contract of agency, distribution, or representation  has the same meaning as under 
Decree 78-71.  
Section E: Honduras  
 
1. The obligations set out in paragraphs  2, 3, and 4 shall not apply to:  
(a) express conditions included in a contract of representation, distribution, or agency; or  
(b) to contractual relations entered into before  the date of entry into force of this 
Agreement.  
2. Honduras may not require a goods or service supplier of another Party:   
(a) to supply such goods or services in Honduras by means of a representative, agent, or 
distributor, except as otherwise provided by law for reasons of health, safety, or 
consumer protection;  
(b) to offer or introduce goods or services in the territory of Honduras through existing 
concessionaires for such goods or services unless a contract between them requires an 
exclusive relationship; or   WT/REG211/1 
 Page 193 
 
 
(c) to pay damages or an indemnity for term inating a contract of representation, or 
agency for just cause or allowing such a cont ract to expire without renewal for just 
cause.  
3. Honduras may not require that a representative, agent, or distributor be a national of 
Honduras or an enterprise controlled by nationals of Honduras;  
4. Honduras shall provide that:  
(a) the fact that a contract of representation,  distribution, or agency has reached its 
termination date shall be considered ju st cause for a goods or service supplier of 
another Party to terminate the contract or  allow the contract to expire without 
renewal; and  
(b) any damages or indemnity for terminating a c ontract of representation, distribution, or 
agency, or allowing it to expire without re newal, without just cause shall be based on 
the general law of contracts.  
 Nothing in subparagraph (b) shall be constr ued to require Honduras to adopt any measure 
that affects the right of the parties to demand inde mnification, when appropriate, in the form, type, 
and amount agreed in the contract.  
 
5. Honduras shall provide that:  
(a) if the amount and form of any indemnification payment is not established in a 
contract of representation, distribution, or agency and a party wishes to terminate the contract;  
(i) the parties may agree to resolve any di spute regarding such payment in the 
Center for Conciliation and Arbitration of  Honduras, or if the parties agree 
otherwise, to another arbitration center; and   
(ii) in such proceeding general principles of contract law will be applied;  
(b) Decree Law No. 549 shall apply to a contract only if:  
(i) the representative, distributor, or  agent has registered with the Secretaría de 
Estado en los Despachos de Industria y Comercio , which shall be possible 
only if it is party to a written contract of representation, distribution, or 
agency; and  
(ii) the contract was entered into while such law was in effect; and  
 (c)  in any decision awarding an indemnity  calculated under Article 14 of Decree Law 
No. 549, the amount shall be calculated as of the date of entry into force of this 
Agreement, expressed in terms of Honduran lempiras as of that date, and converted 
into U.S. dollars at the exchange rate in effect on the date of the decision.  
 6. Under Honduran law, a contract of representation, distribution, or agency is exclusive only if 
the contract states so expressly.  
 
 WT/REG211/1 
Page 194  
 
7. For purposes of this Section:  
(a) termination date  means the date provided in the contract for the contract to end, at 
12:00 p.m. on that day, or the end of a contract extension period agreed upon by the parties to the contract; and  
(b) contract of representation, distribution, or agency  has the same meaning as under 
Decree Law No. 549.  
 
CHAPTER TWELVE:  FINANCIAL SERVICES  
 
Article 12.1 
 
Scope And Coverage
 
1. This Chapter applies to measures adopted or maintained by a Party relating to:  
(a) financial institutions of another Party;  
(b) investors of another Party, and investments of  such investors, in financial institutions 
in the Party’s territory; and  
(c) cross-border trade in financial services.  
2. Chapters Ten (Investment) and Eleven (Cross-Bo rder Trade in Services) apply to measures 
described in paragraph 1 only to the extent that such Chapters or Articles of such Chapters are 
incorporated into this Chapter. 
(a) Articles 10.7 (Expropriation and Compensation) , 10.8 (Transfers), 10.11 (Investment 
and Environment), 10.12 (Denial of Bene fits), 10.14 (Special Formalities and 
Information Requirements), and 11.12 (Denial of Benefits) are hereby incorporated 
into and made a part of this Chapter.    
(b) Section B of Chapter Ten (Investor-State Di spute Settlement) is hereby incorporated 
into and made a part of this Chapter so lely for claims that a Party has breached 
Article 10.7, 10.8, 10.12, or 10.14, as incorporated into this Chapter.  
(c) Article 11.10 (Transfers and Pa yments) is incorporated into and made a part of this 
Chapter to the extent that cross-border trade in financial services is subject to 
obligations pursuant to Article 12.5.  
3. This Chapter does not apply to measures adopt ed or maintained by a Party relating to:  
(a) activities or services forming part of a public retirement plan or statutory system of 
social security; or  
(b) activities or services conducted for the account  or with the guarantee or using the 
financial resources of the Party, including its public entities,  
except that this Chapter shall apply if a Party allo ws any of the activities or services referred to in 
subparagraph (a) or (b) to be conduc ted by its financial institutions in  competition with a public entity 
or a financial institution.  
  WT/REG211/1 
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4.  (a)  Subject to subparagraph (c), for tw o years beginning on the date of entry into 
 force of this Agreement, this Chapter shall not apply to:  
(i) measures adopted or maintained by the Dominican Republic relating to 
financial institutions of Costa Rica, El Salvador, Honduras, or Nicaragua  to 
the extent they supply banking services; investors of Costa Rica, El Salvador, 
Honduras, or Nicaragua, and investments of such investors, in such financial 
institutions in the territory of the Do minican Republic; or cross-border trade 
in banking services between the Dominican Republic and Costa Rica, El Salvador, Honduras, or Nicaragua; or  
(ii) measures adopted or maintained by Costa Rica, El Salvador, Honduras, or 
Nicaragua relating to financial instituti ons of the Dominican Republic to the 
extent they supply banking services; investors of the Dominican  Republic, and investments of such investors, in such financial institutions in the territory of Costa Rica, El Salvador, Honduras, or Nicaragua; or cross-border 
trade in banking services between Costa Rica, El Salvador, Honduras, or 
Nicaragua and the Dominican Republic;  
(iii) measures adopted or maintained by the Dominican Republic relating to 
financial institutions of Guatemala; i nvestors of Guatemala, and investments 
of such investors, in such financia l institutions in the territory of the 
Dominican Republic; or cross-border trade in financial services between the Dominican Republic and Guatemala; or  
(iv) measures adopted or maintained by Guatemala relating to financial 
institutions of the Dominican Republic; investors of the Dominican Republic, and investments of such investors, in such financial institutions in the territory of Guatemala; or cross-border trade in financial services between Guatemala and the Dominican Republic.  
(b)  During the two-year period referred to in subparagraph (a), the Dominican 
 Republic and each Central American Part y shall seek to agree on those measures 
 described in subparagraph (a) that sha ll be considered non-conforming measures 
 pursuant to Article 12.9 and that shall be reflected in their respective Schedules to 
 Annex III for purposes of modifying their rights and obligations with respect to 
 each other under this Chapter.  
(c) If the Commission approves any such agreem ent during this period, each relevant 
Party’s schedule shall be modified accordingl y.  Subparagraph (a) shall cease to apply 
as between the Dominican Republic and the relevant Central American Party on the 
date the modification takes effect.  
Article 12.2 
 
National Treatment
 
1. Each Party shall accord to investors of another Party treatment no less favorable than that it 
accords to its own investors, in like circumstances,  with respect to the establishment, acquisition, 
expansion, management, conduct, operation, and sale or other disposition of financial institutions and 
investments in financial institutions in its territory.  
2. Each Party shall accord to financial instituti ons of another Party and to investments of 
investors of another Party in financ ial institutions treatment no less favorable than that it accords to its WT/REG211/1 
Page 196  
 
own financial institutions, and to investments of its  own investors in financial institutions, in like 
circumstances, with respect to the establishment, acquisition, expansion, management, conduct, 
operation, and sale or other disposition of financial institutions and investments.  
3. For purposes of the national treatment obligations  in Article 12.5.1, a Party shall accord to 
cross-border financial service suppliers of another Party treatment no less favorable than that it 
accords to its own financial service suppliers, in like circumstances, with respect to the supply of the 
relevant service.  
Article 12.3 
 
Most-Favored-Nation Treatment
 
1. Each Party shall accord to investors of another Party, financial instituti ons of another Party, 
investments of investors in financial institutions , and cross-border financial service suppliers of 
another Party treatment no less favorable than that it accords to the investors, financial institutions, 
investments of investors in financial institutions, and cross-border financial service suppliers of any 
other Party or of a non-Party, in like circumstances.  
2. A Party may recognize prudential measures of another Party or of a non-Party in the 
application of measures covered by this  Chapter.  Such recognition may be:  
(a) accorded unilaterally;  
(b) achieved through harmonization or other means; or  
(c) based upon an agreement or arrangement with another Party or a non-Party.  
3. A Party according recognition of prudential measures under paragraph 2 shall provide 
adequate opportunity to another Pa rty to demonstrate that circumstances exist in which there are or 
would be equivalent regulation,  oversight, implementation of re gulation, and, if appropriate, 
procedures concerning the sharing of inform ation between the relevant Parties.  
4. Where a Party accords recognition of pruden tial measures under paragraph 2(c) and the 
circumstances set out in paragraph 3 exist, the Pa rty shall provide adequate opportunity to another 
Party to negotiate accession to the agreement or a rrangement, or to negotiate a comparable agreement 
or arrangement.  
Article 12.4 
 
Market Access For Financial Institutions  
 No Party may adopt or maintain, with respect to  financial institutions of another Party, either 
on the basis of a regional subdivision or on the basis of its entire territory, measures that:   
 
(a) impose limitations on:  
(i) the number of financial institutions whether in the form of numerical quotas, 
monopolies, exclusive service suppliers, or the requirements of an economic needs test;    
(ii) the total value of financial service tr ansactions or assets in the form of 
numerical quotas or the requirement of an economic needs test;    WT/REG211/1 
 Page 197 
 
 
(iii) the total number of financial service operations or on the total quantity of 
financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; or  
(iv) the total number of natural persons that  may be employed in a particular 
financial service sector or that a financ ial institution 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 the requirement of an economic needs test; 
or  
 (b)  restrict or require specific types of legal entity or joint venture through which a 
 financial institution may supply a service.  
 
 For purposes of this Article, “financial ins titutions of another Party” includes financial 
institutions that investors of another Party seek to establish in the territory of the Party.  
 
Article 12.5 
 
Cross-Border Trade
 
 
1. Each Party shall permit, under terms and conditions that accord national treatment, 
cross-border financial service suppliers of anot her Party to supply the services specified in 
Annex 12.5.1.  
2. Each Party shall permit persons located in its te rritory, and its nationals wherever located, to 
purchase financial services from cross-border financial service suppliers of another Party located in the territory of that other Party or of any other Party.  This obligation does not require a Party to 
permit such suppliers to do business or solicit in its territory.  Each Party may define “doing business” 
and “solicitation” for purposes of this obligation, prov ided that those definitions are not inconsistent 
with paragraph 1.  
3. Without prejudice to other means of prudential regulation of cross-border trade in financial 
services, a Party may require the registration of cr oss-border financial servic e suppliers of another 
Party and of financial instruments.   
Article 12.6 
 
New Financial Services
1 
 
 Each Party shall permit a financial institution of another Party to s upply any new financial 
service that the Party would permit its own financ ial institutions, in like circumstances, to supply 
without additional legislative action by the Part y.  Notwithstanding Article 12.4(b), a Party may 
determine the institutional and juridical form through which the new financial service may be 
supplied and may require authorization for the supply of the service.  Where a Party requires 
authorization to supply a new financial service, a de cision shall be made within a reasonable time and 
the authorization may only be refused for prudential reasons.    
 
 
 
                                                      
 1 The Parties understand that nothing in Article 12. 6 prevents a financial institution of a Party from 
applying to another Party to request it to consider auth orizing the supply of a financial service that is not 
supplied in the territory of any Party.  The application shall be subject to the law of the Party to which the 
application is made and, for greater certainty, shall not be subject to the obligations of Article 12.6. WT/REG211/1 
Page 198  
 
Article 12.7 
 
Treatment Of Certain Information
 
 Nothing in this Chapter requires a Party to furnish or allow access to:  
 
(a) information related to the financial affair s and accounts of individual customers of 
financial institutions or cross-borde r financial service suppliers; or  
(b) any confidential information the disclosur e of which would impede law enforcement 
or otherwise be contrary to the public in terest or prejudice legitimate commercial 
interests of particular enterprises.  
Article 12.8 
 
Senior Management And Boards Of Directors  
1. No Party may require financial institutions of another Party to engage  individuals of any 
particular nationality as senior manage rial or other essential personnel.  
2. No Party may require that more than a minority of the board of directors of a financial 
institution of another Party be compos ed of nationals of the Party, persons residing in the territory of 
the Party, or a combination thereof.  
Article 12.9 
 
Non-Conforming Measures  
1. Articles 12.2 through 12.5 and 12.8 do not apply to:  
(a) any existing non-conforming measure that is maintained by a Party at  
(i) the central level of government, as set out by that Party in its Schedule to 
Annex III,  
(ii) a regional level of government, as set out  by that Party in its Schedule to 
Annex III, or  
(iii) a local level of government;  
(b) the continuation or prompt renewal of an y non-conforming measure referred to in 
subparagraph (a); or  
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the 
extent that the amendment does not decr ease the conformity of the measure, as it 
existed immediately before the amendment, with Article 12.2, 12.3, 12.4, or 12.8.2  
2. Annex 12.9.2 sets out certain specific commitments by each Party.  
                                                      
 2 For greater certainty, Article 12.5 does not apply to an amendment to any non-conforming measure 
referred to in subparagraph (a) to the extent that th e amendment does not decrease the conformity of the 
measure, as it existed on the date of entry into  force of this Agreement, with Article 12.5.   WT/REG211/1 
 Page 199 
 
 
3. Annex 12.9.3 sets out, solely for purposes of  transparency, supplementary information 
regarding certain aspects of financial services meas ures of a Party that the Party considers are not 
inconsistent with its obliga tions under this Chapter.  
4. Articles 12.2 through 12.5 and 12.8 do not apply to any measure that a Party adopts or 
maintains with respect to sectors, subsectors, or ac tivities, as set out in its Schedule to Annex III.  
5. A non-conforming measure set out in a Party’s Schedule to Annex I or II as a measure to 
which Article 10.3 (National Treatment), 10.4 (M ost-Favored-Nation Treat ment), 11.2 (National 
Treatment), 11.3 (Most-Favored-Nation Treatment), or 11.4 (Market Access) does not apply shall be 
treated as a non-conforming measure to which Article  12.2, 12.3, or 12.4, as the case may be, does not 
apply, to the extent that the measure, sector, sub sector, or activity set out in  the Schedule is covered 
by this Chapter.  
Article 12.10 
 
Exceptions  
1. Notwithstanding any other provision of this Chap ter or Chapters Ten (Investment), Thirteen 
(Telecommunications), including specifically Article  13.16 (Relationship to Other Chapters), or 
Fourteen (Electronic Commerce), and Article 11.1.3 (Scope and Coverage) with respect to the supply 
of financial services in the territory of a Party by an  investor of another Party or a covered investment, 
a Party shall not be prevented from adopting or  maintaining measures for prudential reasons,3 
including for the protection of investors, depositors , policy holders, or persons to whom a fiduciary 
duty is owed by a financial institution or cross-bor der financial service supplier, or to ensure the 
integrity and stability of the financial system.  Where such measures do not conform with the 
provisions of this Agreement referred to in this paragraph, they shall not be used as a means of 
avoiding the Party’s commitments or obligations under such provisions.  
2. Nothing in this Chapter or Chapters Ten (Investment), Thirteen (Telecommunications), 
including specifically Article 13.16 (Relationship to Other Chapters), or Fourteen (Electronic Commerce), and Article 11.1.3 (Scope and Coverage) with respect to the supply of financial services 
in the territory of a Party by an investor of another Party or a covered investment, applies to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and 
related credit policies or exchange rate policies.  Th is paragraph shall not affect a Party’s obligations 
under Article 10.9 (Performance Requirements) with  respect to measures covered by Chapter Ten 
(Investment) or under Article 10.8 (Transfers ) or 11.10 (Transfers and Payments).  
3. Notwithstanding Articles 10.8 (Transfers) a nd 11.10 (Transfers and Payments), as 
incorporated into this Chapter, a Party may prev ent or limit transfers by a financial institution or 
cross-border financial service supplier to, or for the bene fit of, an affiliate of or person related to such 
institution or supplier, through the equitable, non- discriminatory, and good faith application of 
measures relating to maintenance of the safety, soundness, integrity, or financial responsibility of financial institutions or cross-border financial ser vice suppliers.  This paragraph does not prejudice 
any other provision of this Agreement that permits a Party to restrict transfers.  
4. For greater certainty, nothing in this Chapter shall be construed to prevent the adoption or 
enforcement by any Party of measures necessary to secure compliance with laws or regulations that 
are not inconsistent with this Chapter, including  those relating to the pr evention of deceptive and 
fraudulent practices or to deal with the effects of a default on financial services  contracts, subject to 
                                                     
 
 3 It is understood that the term “prudential reasons” includes the maintenance of the safety, soundness, 
integrity, or financial responsibility of individual financial institutions or cross-border financial service 
suppliers.  WT/REG211/1 
Page 200  
 
the requirement that such measures are not applie d in a manner which would constitute a means of 
arbitrary or unjustifiable discrimination between  countries where like conditions prevail, or a 
disguised restriction on investment in financial ins titutions or cross-border trade in financial services.  
Article 12.11 
 
Transparency
 
1. The Parties recognize that tran sparent regulations and policies governing the activities of 
financial institutions and cross-border financial service suppliers are important in facilitating both 
access of foreign financial institutions and forei gn cross-border financial service suppliers to, and 
their operations in, each other’s markets.  Each Pa rty commits to promote regulatory transparency in 
financial services.   
2. In lieu of Article 18.2.2 (Publication), each Pa rty shall, to the extent practicable:   
(a) publish in advance any regulations of gene ral application relating to the subject 
matter of this Chapter that it proposes to adopt; and  
(b) provide interested persons and Parties a reasonable opportunity to comment on the 
proposed regulations.  
3. At the time it adopts final regulations, a Part y should, to the extent practicable, address in 
writing substantive comments received from inte rested persons with respect to the proposed 
regulations.  
4. To the extent practicable, each Party should allow reasonable time between publication of 
final regulations and their effective date.  
5. Each Party shall ensure that the rules of gene ral application adopted or maintained by self-
regulatory organizations of the Party are promptly published or otherwise made available in such a 
manner as to enable interested persons  to become acquainted with them.  
6. Each Party shall maintain or establish appropria te mechanisms that will respond to inquiries 
from interested persons regarding measures of ge neral application covered by this Chapter.  
7. Each Party’s regulatory authorities shall make available to interested persons the 
requirements, including any documentation required,  for completing applications relating to the 
supply of financial services.  
8. On the request of an applicant, a Party’s regulat ory authority shall inform the applicant of the 
status of its application.  If the authority requ ires additional information from the applicant, it shall 
notify the applicant without undue delay.    
9. A Party’s regulatory authority shall make an administrative decision on a completed 
application of an investor in a financial institution,  a financial institution, or a cross-border financial 
service supplier of another Party relating to the su pply of a financial service within 120 days, and 
shall promptly notify the applicant of the decision.  An application shall not be considered complete 
until all relevant hearings are held and all neces sary information is received.  Where it is not 
practicable for a decision to be made within 120 days, the regulatory authority shall notify the 
applicant without undue delay an d shall endeavor to make the decision within a reasonable time 
thereafter.   
  WT/REG211/1 
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Article 12.12 
 
Self-Regulatory Organizations  
 Where a Party requires a financial institution or a cross-border financial service supplier of 
another Party to be a member of, participate in , or have access to, a self-re gulatory organization to 
provide a financial service in or in to the territory of that Party, the Party shall ensure observance of 
the obligations of Articles 12.2 and 12.3  by such self-regulatory organization.  
 
Article 12.13 
 
Payment And Clearing Systems  
 Under terms and conditions that accord national treatment, each Party shall grant financial 
institutions of another Party established in its  territory access to payment and clearing systems 
operated by public entities, and to official funding and refinancing facilities available in the normal 
course of ordinary business.  This paragraph is not  intended to confer access to the Party’s lender of 
last resort facilities.  
 
Article 12.14 
 
Domestic Regulation  
 Except with respect to non-conforming measu res listed in its Schedule to Annex III, each 
Party shall ensure that all measures of general application to which this Chapter applies are 
administered in a reasonable, objective, and impartial manner.   
 
Article 12.15  
 
Expedited Availability Of Insurance Services  
 The Parties recognize the importance of mainta ining and developing regulatory procedures to 
expedite the offering of insurance services by licensed suppliers.  
 
Article 12.16 
 
Financial Services Committee  
1. The Parties hereby establish a Financial Servi ces Committee.  The principal representative of 
each Party shall be an official of the Party’s auth ority responsible for financial services set out in 
Annex 12.16.1.  
2. The Committee shall:  
(a) supervise the implementation of this Ch apter and its further elaboration;  
(b) consider issues regarding financial services that are referred to it by a Party; and  
(c) participate in the dispute settlement pro cedures in accordance with Article 12.19.  
 All decisions of the Committee shall be take n by consensus, unless the Committee otherwise 
decides.  WT/REG211/1 
Page 202  
 
3. The Committee shall meet annually, or as otherw ise agreed, to assess the functioning of this 
Agreement as it applies to financial services.  The Committee shall inform the Commission of the 
results of each meeting.  
Article 12.17 
 
Consultations
 
1. A Party may request consultations with another Party regarding any matter arising under this 
Agreement that affects financial services.  The othe r Party shall give sympathetic consideration to the 
request.  The consulting Parties shall report the r esults of their consultations to the Committee.  
2. Consultations under this Article shall include  officials of the authorities specified in 
Annex 12.16.1.  
3. Nothing in this Article shall be construed to  require regulatory authorities participating in 
consultations under paragraph 1 to disclose informati on or take any action that would interfere with 
specific regulatory, supervisory, administrative, or enforcement matters.   
4. Nothing in this Article shall be construed to re quire a Party to derogate  from its relevant law 
regarding sharing of information among financial re gulators or the requirements of an agreement or 
arrangement between financial author ities of two or more Parties.  
Article 12.18 
 
Dispute Settlement  
1. Section A of Chapter Twenty (Dispute Settlement) applies as modified by this Article to the 
settlement of disputes arising under this Chapter.  
2. The Parties shall establish within six months af ter the date of entry into force of this 
Agreement and maintain a roster of up to 28 indivi duals who are willing and able to serve as financial 
services panelists.  Unless the Parties otherwise agre e, the roster shall include up to three individuals 
who are nationals of each Party and up to seven i ndividuals who are not nationals of any Party. The 
roster members shall be appointed by consensus a nd may be reappointed. Once established, a roster 
shall remain in effect for a minimum of three year s, and shall remain in effect thereafter until the 
Parties constitute a new roster.  The Parties may appoint a replacement where a roster member is no 
longer available to serve.  
3. Financial services roster members, as well as financial services panelists, shall:  
(a) have expertise or experience in financial services law or practice, which may include 
the regulation of financial institutions;   
(b) be chosen strictly on the basis of objec tivity, reliability, and sound judgment;   
(c) be independent of, and not be affiliated with or take instru ctions from, any Party; and  
(d) comply with a code of conduct to be established by the Commission.  
4. When a Party claims that a dispute arises under this Chapter, Article 20.9 (Panel Selection) 
shall apply, except that:   WT/REG211/1 
 Page 203 
 
 
(a) where the disputing Parties so agree, the pa nel shall be composed entirely of panelists 
meeting the qualifications in paragraph 3; and   
(b) in any other case,  
(i) each disputing Party may select panelists meeting the qualifications set out in 
paragraph 3 or in Article 20.8 (Qua lifications of Panelists), and  
(ii) if the Party complained against invokes Article 12.10, the chair of the panel 
shall meet the qualifications set out in paragraph 3, unless the disputing Parties otherwise agree.  
5. Notwithstanding Article 20.16 (Non-Implementa tion – Suspension of Benefits), where a 
panel finds a measure to be incons istent with this Agreement and th e measure under dispute affects:  
(a) only the financial services sector, the complaining Party may suspend benefits only in 
the financial services sector;  
(b) the financial services sector and any other sector, the complaining Party may suspend 
benefits in the financial services sector that have an effect equivalent to the effect of 
the measure in the Party’s financial services sector; or  
(c) only a sector other than the financial serv ices sector, the complaining Party may not 
suspend benefits in the financial services sector.  
Article 12.19 
 
Investment Disputes In Financial Services
 
1. Where an investor of a Party submits a clai m under Section B of Chapter Ten (Investment) 
against another Party and the respondent invokes Article 12.10, on request of the respondent, the 
tribunal shall refer the matter in writing to the Financial Services Committee for a decision. The tribunal may not proceed pending receipt of a decision or report under this Article.  
2. In a referral pursuant to paragraph 1, the Fina ncial Services Committee shall decide the issue 
of whether and to what extent Article 12.10 is a valid defense to the claim of the investor.  The 
Committee shall transmit a copy of its decision to the tribunal and to the Commission.  The decision shall be binding on the tribunal.  
3. Where the Financial Services Committee has not decided the issue within 60 days of the 
receipt of the referral under paragraph 1, the respond ent or the Party of the claimant may request the 
establishment of an arbitral panel under Article 20.6 (R equest for an Arbitral Panel).  The panel shall 
be constituted in accordance with Article 12.18.  The panel shall transmit its final report to the 
Committee and to the tribunal.  The report shall be binding on the tribunal.  
4. The Financial Services Committee may decide th at, for purposes of a referral pursuant to 
paragraph 1, the financial services authorities of the relevant Parties shall make the decision described 
in paragraph 2 and transmit that decision to the tr ibunal and the Commission.  In that case, a request 
may be made under paragraph 3 if the relevant Parties have not made the decision described in 
paragraph 2 within 60 days of their rece ipt of the referral under paragraph 1.  
5. Where no request for the establishment of a pa nel pursuant to paragraph 3 has been made 
within ten days of the expiration of the 60-day pe riod referred to in paragraph 3, the tribunal may 
proceed to decide the matter.  WT/REG211/1 
Page 204  
 
6. For purposes of this Article, tribunal means a tribunal established under Article 10.19 
(Selection of Arbitrators).  
Article 12.20 
 
Definitions
 
 For purposes of this Chapter:  
 
 cross-border financial service supplier of a Party means a person of a Party that is engaged 
in the business of supplying a financial service with in the territory of the Party and that seeks to 
supply or supplies a financial service through the cross-border supply of such services;     cross-border trade in financial services or cross-border supply of financial services 
means the supply of a financial service:   
(a) from the territory of one Party into the territory of another Party,   
(b) in the territory of one Party by a person of  that Party to a person of another Party,  
(c) by a national of one Party in the territory of another Party,   
but does not include the supply of a financial service in  the territory of a Party by an investment in 
that territory;  
 
 financial institution means any financial intermediary or other enterprise that is authorized to 
do business and regulated or supervised as a financia l institution under the law of the Party in whose 
territory it is located;  
 
 financial institution of another Party means a financial institution, including a branch, 
located in the territory of a Party that is  controlled by persons of another Party;  
  financial service means any service of a financial natu re.  Financial services include all 
insurance and insurance-related services, and a ll banking and other financial services (excluding 
insurance), as well as services incidental or auxilia ry to a service of a financial nature.  Financial 
services include the following activities:  
 Insurance and insurance-related services  
 
(a) Direct insurance (including co-insurance):  
(i) life,  
(ii) non-life;  
(b) Reinsurance and retrocession;  
(c) Insurance intermediation, such as brokerage and agency; and  
(d) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment, and 
claim settlement services.  
  WT/REG211/1 
 Page 205 
 
 
Banking and other financial services (excluding insurance)  
 
(e) Acceptance of deposits and other repayable funds from the public;  
(f) Lending of all types, including consumer credit, mortgage credit, factoring and 
financing of commercial transactions;  
(g) Financial leasing;  
(h) All payment and money transmission services, including credit, charge, and debit 
cards, travelers checks, and bankers drafts;  
(i) Guarantees and commitments;  
(j) Trading for own account or for account of customers, whether on an exchange, in an 
over-the-counter market, or otherwise, the following:  
(i) money market instruments (including checks, bills, and certificates of 
deposits);  
(ii) foreign exchange;  
(iii) derivative products including, but no t limited to, futures and options;  
(iv) exchange rate and interest rate instru ments, including products such as swaps, 
forward rate agreements;  
(v) transferable securities,  
(vi) other negotiable instruments and financial assets, including bullion;  
(k) Participation in issues of all kinds of securities, including underwriting and placement 
as agent (whether publicly or privately) and provision of services related to such 
issues;  
(l) Money broking;  
(m) Asset management, such as cash or portfolio management, all forms of collective 
investment management, pension fund mana gement, custodial, depository, and trust 
services;  
(n) Settlement and clearing services for financia l assets, including securities, derivative 
products, and other negotiable instruments;  
(o) Provision and transfer of financial inform ation, and financial data processing and 
related software by suppliers of  other financial services; and  
(p) Advisory, intermediation, and other auxilia ry financial services on all the activities 
listed in subparagraphs (e) through (o), including credit reference and analysis, 
investment and portfolio research and advi ce, advice on acquisitions and on corporate 
restructuring and strategy;  
 financial service supplier of a Party means a person of a Party that is engaged in the 
business of supplying a financial service within the territory of that Party;  WT/REG211/1 
Page 206  
 
 investment means “investment” as defined in Article 10.28 (Definitions), except that, with 
respect to “loans” and “debt instrume nts” referred to in that Article:  
 
(a) a loan to or debt instrument issued by a financial institution is an investment only 
where it is treated as regulatory capital by the Party in whose territory the financial 
institution is located; and  
(b) a loan granted by or debt instrument owne d by a financial institution, other than a 
loan to or debt instrument of a financial institution referred to in  subparagraph (a), is 
not an investment;  
for greater certainty, a loan granted by or debt  instrument owned by a cross-border financial 
service supplier, other than a loan to or debt inst rument issued by a financial institution, is an 
investment if such loan or debt instrument meets the criteria for investments set out in Article 10.28;  
 investor of a Party means a Party or state enterprise thereof, or a person of a Party, that 
attempts to make, is making, or has made an invest ment in the territory of another Party; provided, 
however, that a natural person who is a dual national shall be deemed to be exclusively a national of 
the State of his or her dominant and effective nationality;   
 new financial service means a financial service not supplied in the Party’s territory that is 
supplied within the territory of another Party, a nd includes any new form of delivery of a financial 
service or the sale of a financial product that is not sold in the Party’s territory;  
 
 person of a Party means “person of a Party” as defined in  Article 2.1 (Definitions of General 
Application) and, for greater certainty, does not include a branch of an enterprise of a non-Party;  
 
 public entity means a central bank or monetary aut hority of a Party, or any financial 
institution owned or controlled by a Party; and  
 
 self-regulatory organization means any non-governmental bod y, including any securities or 
futures exchange or market, clearing agency, or ot her organization or association, that exercises its 
own or delegated regula tory or supervisory author ity over financial service suppliers or financial 
institutions.  
  
ANNEX 12.5.1:  CROSS-BORDER TRADE  
 
Section A: Costa Rica 
 
 
Banking And Other Financial Services (Excluding Insurance)  
 
1. For Costa Rica, Article 12.5.1 applies with respect to the provision and transfer of financial 
information and financial data pr ocessing and related software as re ferred to in subparagraph (o) of 
the definition of financial service, and advisory an d other auxiliary services, excluding intermediation, 
relating to banking and other financial services as refe rred to in subparagraph (p) of the definition of 
financial service.4 
 
 
                                                      
 4 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary se rvices does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service.   WT/REG211/1 
 Page 207 
 
 
Section B: The Dominican Republic  
Insurance and Insurance-Related Services  
 1. For the Dominican Republic, Article 12.5.1 applies to the cross-border supply of or trade in 
financial services as defined in s ubparagraph (a) of the definition of  cross-border supply of financial 
services with respect to:   
(a) insurance of risk relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods and any liability arising therefrom; and  
(ii) goods in international transit;  
(b) reinsurance and retrocession;  
(c) brokerage of insurance risks relating to paragraphs (a) and (b); and  
(d) consultancy, risk assessment, actuari al, and claims settlement services.  
2. For the Dominican Republic, Article 12.5.1 applies to the cross-border supply of or trade in 
financial services as defined in s ubparagraph (c) of the definition of  cross-border supply of financial 
services with respect to insurance services.
5 
Banking and Other Financial Services (Excluding Insurance)  
 
3. For the Dominican Republic, Article 12.5.1 appli es with respect to the provision and transfer 
of financial information and fi nancial data processing and relate d software as referred to in 
subparagraph (o) of the definition of financial ser vice, and advisory and other auxiliary services, 
excluding intermediation, relating to banking an d other financial services as referred to in 
subparagraph (p) of the definition of financial service.6 
 
Section C: El Salvador  
 
Insurance and Insurance-Related Services 
  
1. For El Salvador, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (a) of the defini tion of cross-border supply of financial services 
with respect to:  
(a) insurance of risk relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
                                                      
 5 It is understood that the commitment for cross-border movement of persons is limited to those 
insurance and insurance-related services listed in paragraph 1.  
6 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary services does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service. WT/REG211/1 
Page 208  
 
the goods being transported, the vehicle transporting the goods, and any liability arising therefrom, and  
(ii) goods in international transit;  
(b) reinsurance and retrocession;  
(c) brokerage of insurance risks relating to paragraphs (a) and (b); and  
(d) consultancy, risk assessment, actuari al, and claims settlement services.  
2. For El Salvador, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (c) of the defini tion of cross-border supply of financial services 
with respect to insurance services.
7 
 
Banking and Other Financial Services (Excluding Insurance)  
 3. For El Salvador, Article 12.5.1 applies with respect to:  
(a) provision and transfer of financial informati on as described in s ubparagraph (o) of the 
definition of financial service;  
(b) financial data processing as described in subparagraph (o) of the definition of 
financial service, subject to prior authoriza tion from the relevant regulator, when it is 
required;
8  and  
(c) advisory and other auxiliary financial ser vices, excluding intermediation, relating to 
banking and other financial services as describ ed in subparagraph (p) of the definition 
of financial service.9 
Section D: Guatemala  
 
Insurance and Insurance-Related Services  
 
1. For Guatemala, Article 12.5.1 applies to the cr oss-border supply of or trade in financial 
services as defined in subparagraph (a) of the defini tion of cross-border supply of financial services 
with respect to:  
(a) insurance of risk relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods, and any 
liability arising therefrom, and  
(ii) goods in international transit;  
                                                      
 7 It is understood that the commitment for cross-border movement of persons is limited to those 
insurance and insurance-related services listed in paragraph 1.  
 8 It is understood that where the financial information or financial data referred to in subparagraphs 
(a) and (b) involve personal data, the treatment of such personal data shall be in accordance with El Salvador’s 
law regulating the protection of such data.  
 9 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary se rvices does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service.   WT/REG211/1 
 Page 209 
 
 
(b) reinsurance and retrocession;  
(c) insurance intermediation such as brokerage a nd agency only for the services indicated 
in paragraphs (a) and (b); and   
(d) services auxiliary to insurance as referred to  in subparagraph (d) of the definition of 
financial service.  
2. For Guatemala, Article 12.5.1 applies to the cr oss-border supply of or trade in financial 
services as defined in subparagraph (c) of the defini tion of cross-border supply of financial services 
with respect to insurance services.10 
Banking and Other Financial Services (Excluding Insurance)  
 
3. For Guatemala, Article 12.5.1 applies with respect  to the provision and transfer of financial 
information and financial data pr ocessing and related software as re ferred to in subparagraph (o) of 
the definition of financial service, and advisory an d other auxiliary services, excluding intermediation, 
relating to banking and other financial services as refe rred to in subparagraph (p) of the definition of 
financial service.11 
Section E: Honduras  
 
Insurance and Insurance-Related Services  
 
1. For Honduras, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (a) of the defini tion of cross-border supply of financial services 
with respect to:  
(a) insurance of risk relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods, and any liability arising therefrom, and  
(ii) goods in international transit;  
(b) reinsurance and retrocession;  
(c) insurance intermediation such as brokerage a nd agency only for the services indicated 
in paragraphs (a) and (b); and   
(d) services auxiliary to insurance as referred to  in subparagraph (d) of the definition of 
financial service.  
                                                     
 
10 It is understood that the commitment for cross-border movement of persons is limited to those 
insurance and insurance-related services listed in paragraph 1. 
 11 It is understood that advisory services includes portfolio management advice but not other 
services related to portfolio management, and that auxilia ry services does not include those services referred 
to in subparagraphs (e) through (o) of the definition of financial service.  WT/REG211/1 
Page 210  
 
2. For Honduras, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (c) of the defini tion of cross-border supply of financial services 
with respect to insurance services.
12 
Banking and Other Financial Services (Excluding Insurance)  
 
3. For Honduras, Article 12.5.1 applies with respect to the provision and transfer of financial 
information and financial data pr ocessing and related software as re ferred to in subparagraph (o) of 
the definition of financial service, and advisory an d other auxiliary services, excluding intermediation, 
relating to banking and other financial services as refe rred to in subparagraph (p) of the definition of 
financial service.13 
Section F: Nicaragua  
 
Insurance and Insurance-Related Services  
 
1. For Nicaragua, Article 12.5.1 applies to the cr oss-border supply of or trade in financial 
services as defined in subparagraph (a) of the defini tion of cross-border supply of financial services 
with respect to:  
(a) insurance of risk relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods, and any 
liability arising therefrom, and  
(ii) goods in international transit;  
(b) reinsurance and retrocession;  
(c) brokerage of insurance risks relating to  paragraphs (a)(i) and (a)(ii); and   
(d) services auxiliary to insurance as referred to  in subparagraph (d) of the definition of 
financial services.14 
2. For Nicaragua, Article 12.5.1 applies to the cr oss-border supply of or trade in financial 
services as defined in subparagraph (c) of the defini tion of cross-border supply of financial services 
with respect to insurance services.15 
Banking and Other Financial Services (Excluding Insurance)  
 
3. For Nicaragua, Article 12.5.1 applies with respect to:  
                                                      
12 It is understood that the commitment for cross-border movement of persons is limited to those 
insurance and insurance-related services listed in paragraph 1. 
13 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary services does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service. 
14 For greater certainty, it is understood that these auxiliary services will only be provided to an 
insurance supplier. 
15 It is understood that the commitment for cross-border movement of persons is limited to those 
insurance and insurance-related services listed in paragraph 1.  WT/REG211/1 
 Page 211 
 
 
(a) the provision and transfer of financial info rmation as described in subparagraph (o) of 
the definition of financial service;   
(b) financial data processing as described in subparagraph (o) of the definition of 
financial service, subject to prior author ization from the relevant regulator, as 
required;16 and  
(c) advisory and other auxiliary financial ser vices, excluding intermediation and credit 
reference and analysis, relating to banking and other financial services as described in 
subparagraph (p) of the definition of financial service.17 
Section G: United States  
 
Insurance and Insurance-Related Services   
1. For the United States, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (a) of the defini tion of cross-border supply of financial services 
with respect to:  
(a) insurance of risks relating to:  
(i) maritime shipping and commercial av iation and space launching and freight 
(including satellites), with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods, and any liability arising therefrom, and  
(ii) goods in international transit; and  
(b) reinsurance and retrocession, services aux iliary to insurance as referred to in 
subparagraph (d) of the definition of fina ncial service, and insurance intermediation 
such as brokerage and agency as referred to in subparagraph (c) of the definition of 
financial service.  
2. For the United States, Article 12.5.1 applies to the cross-border supply of or trade in financial 
services as defined in subparagraph (c) of the defini tion of cross-border supply of financial services 
with respect to insurance services.  
Banking and Other Financial Services (Excluding Insurance)  
3. For the United States, Article 12.5.1 applies with respect to the provision and transfer of 
financial information and financ ial data processing and related software as referred to in 
subparagraph (o) of the definition of financial ser vice, and advisory and other auxiliary services, 
                                                     
 
16 It is understood that Nicaragua’s law regulating protection of information applies where the financial 
information or financial data processing referred to in subparagraphs (a) and (b) involves such protected 
information.  Protected information includes, but is not  limited to, information regulated under the concept of 
banking secrecy and personal information. 
17 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary services does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service. WT/REG211/1 
Page 212  
 
excluding intermediation, relating to banking an d other financial services as referred to in 
subparagraph (p) of the definition of financial service.
18 
 
ANNEX 12.9.2:  SPECIFIC COMMITMENTS  
 
Section A: Costa Rica  
 
Portfolio Management  
 
1. Costa Rica shall allow a financial institution (oth er than a trust company) organized outside 
its territory to provide investment advice and por tfolio management services, excluding (a) custodial 
services, (b) trustee services, and (c) execution services that are not related to managing a collective investment scheme, to a collective investment sch eme located in its territory. This commitment is 
subject to Article 12.1 and to Article 12.5.3.  
2. Notwithstanding paragraph 1, Costa Rica may requi re that the ultimate responsibility for the 
management of a collective inv estment scheme be borne by a “ sociedad administrador a de fondos de 
inversión ” constituted according to the Ley Reguladora del Mercado de Valores , No. 7732 of 
December 17, 1997 in the case of investment f unds or an “operadora de pensiones” constituted 
according to the Ley de Protección al Trabajador , No. 7983 of February 18, 2000 in the case of 
pension funds and complementary pension funds.   
3. For purposes of paragraphs 1 and 2, collective investment scheme  means an investment fund 
constituted according to the Ley Reguladora del Mercado de Valores , No. 7732 of December 17, 
1997, or a pension fund or a complementar y pension fund constituted according to the Ley de 
Protección al Trabajador,  No. 7983 of February 18, 2000.  
Expedited Availability of Insurance   
 
4. Costa Rica should endeavor to consider policies or procedures such as:  not requiring product 
approval for insurance other than in surance sold to individuals or compulsory insurance; allowing 
introduction of products unless those products are di sapproved within a reasonable period of time; and 
not imposing limitations on the number or frequency of product introductions.  
Section B: The Dominican Republic 
 
 
Portfolio Management  
 
1. The Dominican Republic shall allow a financia l institution (other than a trust company), 
organized outside its territory, to provide inv estment advice and portfolio management services, 
excluding (a) custodial services, (b) trustee services, and (c) execution services that are not related to managing a collective investment scheme, to a coll ective investment scheme lo cated in it territory. 
This commitment is subject to Articles 12.1 and 12.5.3.   
2. The Parties recognize that the Dominican Re public does not currently have legislation 
regulating collective investment schemes.  Notwithst anding paragraph 1, and no later than four years 
after the date of entry into force of this Ag reement, the Dominican Republic shall implement 
paragraph 1 by adopting a Special Law regulating co llective investment schemes, which shall contain 
a definition of collective investment scheme as specified in paragraph 3.  
                                                     
 
18 It is understood that advisory services includes portfolio management advice but not other services 
related to portfolio management, and that auxiliary services does not include those services referred to in 
subparagraphs (e) through (o) of the definition of financial service.  WT/REG211/1 
 Page 213 
 
 
3. For purposes of paragraphs 1 and 2, collective investment scheme  will have the meaning 
provided under the Special Law that the Domini can Republic adopts pursuant to paragraph 2.  
Expedited Availability of Insurance  
 
4. It is understood that the Dominican Republic requires prior product approval before the 
introduction of a new insurance product. The Dominican Republic shall provide that once an enterprise seeking approval for such a product fi les information with the Dominican Republic’s 
regulatory authority, the regulator  shall grant approval or issue disapproval in accordance with the 
Dominican Republic’s law for the sale of the new pr oduct within 30 days.  It is understood that the 
Dominican Republic does not maintain any limitations on the number or frequency of new product introductions.  
Section C: El Salvador 
 
 
Portfolio Management  
 
1. El Salvador shall allow a financial institution (o ther than a trust company), organized outside 
its territory, to provide investment advice and por tfolio management services, excluding (a) custodial 
services, (b) trustee services, and (c) execution services that are not related to managing a collective investment scheme, to a collective investment schem e located in the territory of El Salvador. This 
commitment is subject to Article 12.1 and to Article 12.5.3.  
2. The Parties recognize that El Salvador does not currently have legislation regulating 
collective investment schemes.  Notwithstanding para graph 1, and no later than four years after the 
date of entry into force of this Agreement, El  Salvador will implement paragraph 1 by adopting a 
Special Law regulating collective investment schem es, which shall contain a definition of collective 
investment scheme as specified in paragraph 3.  
3. For purposes of paragraphs 1 and 2, collective investment scheme  will have the meaning 
provided under the Special Law that El Salv ador adopts pursuant to paragraph 2.  
Foreign Banking  
 
4. El Salvador shall allow banks organized under th e laws of El Salvador to establish branches 
in the United States, subject to their compliance with  relevant U.S. law.  The Salvadoran regulatory 
agency will develop and issue prudential and other re quirements that such banks must meet in order 
for them to obtain authorization to apply for th e establishment of branches in the United States.  
Expedited Availability of Insurance   
5. It is understood that El Salvador requires prio r product approval before the introduction of a 
new insurance product. El Salvador shall provide that once an enterprise seeking approval for such a 
product files information with El Sa lvador’s supervisory authority, the regulator shall grant approval 
or issue disapproval in accordance with El Salvador ’s law for the sale of the new product within 60 
days. It is understood that El Salvador does not ma intain any limitations on the number or frequency 
of new product introductions.  
 
  
 
 WT/REG211/1 
Page 214  
 
Section D: Guatemala 
 
 
Portfolio Management  
 
1. Guatemala shall allow a financial institution (oth er than a trust company), organized outside 
its territory, to provide investment advice and por tfolio management services, excluding (a) custodial 
services, (b) trustee services, and (c) execution services not related to managing a collective 
investment scheme, to a collective investment schem e located in its territory.  This commitment is 
subject to Article 12.1 and to Article 12.5.3.  
2. The Parties recognize that Guatemala does not  currently allow insurance companies to 
manage collective investment schemes.  At such time as Guatemala allows insurance companies to 
manage collective investment schemes, Guatemala sh all comply with paragraph 1 with regard to 
management of such schemes by insurance companies.  
3. For purposes of paragraphs 1 and 2, collective investment scheme  means an investment 
made in accordance with Articles 74, 75, 76, 77, and 79 of the Ley del Mercado de Valores y 
Mercancías,  Decree No. 34-96 of the Congreso de la República .  
Expedited Availability of Insurance   
 
4. It is understood that Guatemala requires prior product approval before the introduction of a 
new insurance product. Guatemala sh all provide that once an enterp rise seeking approval for such a 
product files the information with Guatemala’s s upervisory authority, the authority shall grant 
approval or issue disapproval in accordance with  Guatemala’s law for th e sale of the new product 
within 60 days. It is understood that Guatemala does not maintain any limitations on the number or 
frequency of product introductions.  
Section E: Honduras  
 Portfolio Management   
1. Honduras shall allow a financial institution (other than a trust company), organized outside its 
territory, to provide investment advice and port folio management services, excluding (a) custodial 
services, (b) trustee services, and (c) execution services that are not related to managing a collective investment scheme, to a collective investment sch eme located in its territory. This commitment is 
subject to Article 12.1 and to Article 12.5.3.   
2. Notwithstanding paragraph 1, H onduras may require a collective investment scheme located 
in its territory to retain ultimate responsibility fo r the management of such  collective investment 
scheme or the funds that it manages.  
3. For purposes of paragraphs 1 and 2, collective investment scheme  will have the meaning set 
out in any future laws, regulations, or guid ance defining “collective investment scheme.”   
Expedited Availability of Insurance   
 
4. It is understood that Honduras requires prior product approval before the introduction of a 
new insurance product. Honduras shall provide that once an enterprise seeki ng approval for such a 
product files the information with the Comisión Nacional de Bancos y Seguros, the Commission shall grant approval according to its law or issue disappr oval for the sale of the new product within 30 days. 
It is understood that Honduras does not maintain any limitations on the number or frequency of 
product introductions.   WT/REG211/1 
 Page 215 
 
 
Section F: Nicaragua  
 
Portfolio Management  
 
1. Nicaragua shall allow a financial institution (oth er than a trust company), organized outside 
its territory, to provide investment advice and por tfolio management services, excluding (a) custodial 
services, (b) trustee services, and (c) execution services that are not related to managing a collective 
investment scheme or pension fund, to managers of  a collective investment scheme or pension fund 
located in its territory.  This commitment is subject to Article 12.1 and to Article 12.5.3.  
2. Notwithstanding paragraph 1, Nicaragua may re quire that the ultimate responsibility for the 
management of collective investment schemes and pension funds be borne, respectively, by the 
managers of such schemes and f unds established in its territory.  
3. The Parties recognize that Nicaragua does not currently have legislation establishing 
collective investment schemes and that its legi slation relating to pension funds is not fully 
implemented.  Notwithstanding paragraph 1, at such  time as Nicaragua adopts legislation, regulations, 
or administrative guidance establishing collective i nvestment schemes, Nicaragua shall comply with 
paragraph 1 with respect to collective investment  schemes and provide a definition of collective 
investment scheme to be added to paragraph 5.   Notwithstanding paragraph 1, at such time as 
Nicaragua undertakes further implementation relating to pension funds, Nicaragua shall comply with 
the obligations of paragraph 1 of this pr ovision with respect to pension funds.  
4. The Parties recognize that Nicaragua does not cu rrently allow insurance companies to manage 
collective investment schemes.  Notwithstanding paragraph 1, at such time as Nicaragua allows insurance companies to manage a collective investment scheme, Nicaragua shall comply with 
paragraph 1 with regard to management of collec tive investment schemes by insurance companies.  
5. For purposes of paragr aphs 1 through 3, pension fund  has the meaning established in the Ley 
del Sistema de Ahorro para Pensiones , Law No. 340 (published in La Gaceta, Diario Oficial , No. 72 
of 11 April 2000) and its implementing regulations.  
Expedited Availability of Insurance   
 
6. Nicaragua should endeavor to maintain exis ting opportunities or may wish to consider 
policies or procedures such as:  not requiring product approval for insurance other than sold to 
individuals or compulsory insurance; allowing introduction of products unless those products are 
disapproved within a reasonable period of time; and not imposing limitations on the number or 
frequency of product introductions.  
Insurance Branching  
 
7. Notwithstanding the nonconforming measures of Nicaragua in Annex III, Section B, referring 
to insurance market access, excluding any por tion of those non-conforming measures referring to 
financial conglomerates and social services, no later than  four years after the date of entry into force 
of this Agreement, Nicaragua shall allow U.S. insu rance suppliers to establish in its territory through 
branches. Nicaragua may choose how to regulate bran ches, including their characteristics, structure, 
relationship to their parent company, capital re quirements, technical reserves, and obligations 
regarding risk capital and their investments.  
 
   WT/REG211/1 
Page 216  
 
Section G: United States 
 
 
Portfolio Management  
 
1. The United States shall allow a financial institu tion (other than a trust company), organized 
outside its territory, to provide investment advi ce and portfolio management services, excluding (a) 
custodial services, (b) trustee services, and (c) execution services that are not related to managing a 
collective investment scheme, to a collective i nvestment scheme located in its territory. This 
commitment is subject to Article 12.1 and to Article 12.5.3.  
2. For purposes of paragraph 1, collective investment scheme  means an investment company 
registered with the Securities and Exchange Commission under the Investment Company Act of 1940 .  
Expedited Availability of Insurance   
 
3. The United States should endeavor to maintain ex isting opportunities or may wish to consider 
policies or procedures such as:  not requiring produc t approval for insurance ot her than insurance sold 
to individuals or compulsory insurance; allowi ng introduction of products unless those products are 
disapproved within a reasonable period of time; and not imposing limitations on the number or 
frequency of product introductions.  
Section H: Specific Commitments of Costa Rica on Insurance Services  
 
I. Preamble  
 The Government of the Republic of Costa Rica:  
 reaffirming its decision to ensure that the process of opening its insurance services sector 
must be based on its Constitution;  
 
 emphasizing that such process shall be to the benefit of the consumer and shall be 
accomplished gradually and based  on prudential regulation;  
  recognizing its commitment to modernize the Instituto Nacional de Seguros  (INS) and the 
Costa Rican legal framework in the insurance sector;  
 undertakes through this Annex the following speci fic commitments on insurance  services.  
 
 
II. Modernization of INS And The Costa Rican Legal Framework In The Insurance Sector  
By no later than January 1, 2007, Costa Rica shall establish an independent insurance 
regulatory authority which shall be separate from and not accountable to any supplier of insurance 
services. The decisions and the procedures used by the regulatory authority shall be impartial with 
respect to all market participants.  The insuran ce regulatory authority shall have adequate powers, 
legal protection, and financial resource s to exercise its functions and powers,
19 
and treat confidential 
information appropriately.   
 
 
                                                      
 19 The regulatory authority shall act consistently with the core principles of the International 
Association of Insurance Supervisors.   WT/REG211/1 
 Page 217 
 
 
III. Gradual Market Access Opening Commitments  
1.  Cross-Border Commitments  
 
 Costa Rica shall allow insurance service providers of any Party, on a non-discriminatory 
basis, to effectively compete to supply directly to the consumer insurance services on a cross-border 
basis as provided below:  
 
 A.  By no later than the date of entry in to force of this Agreement, Costa Rica shall 
permit the following:   
 
(i) pursuant to Article 12.5.2, persons locat ed in its territory, and its nationals 
wherever located, to purchase any a nd all lines of insurance (except 
compulsory automobile insurance20 and occupational risk insurance21)22 
from 
cross-border insurance service suppliers  of another Party located in the 
territory of that other Party or of a nother Party.  This obligation will not 
require Costa Rica to permit such suppliers to do business or solicit in its 
territory. Costa Rica may define “doing business” and “solicitation” for 
purposes of this obligation, as long as su ch definitions are not inconsistent 
with Article 12.5.1; and  
(ii) pursuant to Article 12.5.1, the cross-bor der supply of or trade in financial 
services as defined in subparagraph (a ) of the definition of cross-border 
supply of financial services in Article 12.20 with respect to:   
 (a) insurance risk relating to:  
 
(i) space launching of freight (including satellite), maritime shipping and 
commercial aviation, with such insurance to cover any or all of the following: 
the goods being transported, the vehicle transporting the goods and any 
liability arising therefrom; and  
(ii) goods in international transit;  
(b) retrocession and reinsurance;  
(c) services necessary to su pport global accounts;23 
                                                      
20 For purposes of this commitment, “compulsory automobile insurance” has the meaning given to that 
term in Article 48 of the Ley de Tránsito por Vias Publicas Terrestres , Law No. 7331 of 13 April 1993.   
21 As referred to in the last paragraph of Article 73 of the Constitución Política de la República de 
Costa Rica . Occupational risk insurance is a compulsory in surance that covers work ers under a subordinate 
labor relationship for acci dents or illnesses occurring as a consequence of  their occupation, as well as the direct, 
immediate, and evident effects of such accidents and illnesses. 
22 For greater certainty, Costa Rica is not required to modify its regulation of compulsory automobile 
insurance and occupational risk insura nce, provided that such regulation is consistent with the obligations 
undertaken in this Agreement, including this Annex. 
 23 For purposes of this subclause,  
(a) services necessary to support global accounts  means that the coverage of a master (global) 
insurance policy written in a territory other than Costa Rica for a multinational client by an insurer of a Party extends to the operations of the multinational client in Costa Rica; and  
(b) a multinational client is any foreign enterprise majority owned by a foreign manufacturer or 
service provider doing business in Costa Rica.    WT/REG211/1 
Page 218  
 
(d) services auxiliary to insurance as referred to  in subparagraph (d) of the definition of 
financial service;
24 and  
(e) insurance intermediation, provided by broke rs and agents outside Costa Rica, such as 
brokerage and agency as referred to in subpa ragraph (c) of the definition of financial 
services.25  
 B.  By July 1, 2007:  
 
(a) Costa Rica shall permit the establishmen t of representative offices; and   
(b) Article 12.5.1 shall apply to the cross-border supply of or trade in financial services 
as defined in subparagraph (a) of the defi nition of cross-border supply of financial 
services in Article 12.20 with respect to:  
(i) services auxiliary to insurance as refe rred to in subparagraph (d) of the 
definition of financial service;26 
 
(ii) insurance intermediation such as brok erage and agency as referred to in 
subparagraph (c) of the defi nition of financial services;27 and  
(iii) surplus lines.28 
 
 C.  For Costa Rica, Article 12.5.1 applies to the cross-border supply of or trade in 
financial services as defined in subparagra ph (c) of the definition of cross-border 
supply of financial services in Article 12.20 with respect to insurance services.  
 
2.  Right of Establishment for Insurance Providers  
 
 Costa Rica shall, on a non-discriminatory b asis, allow insurance service suppliers of any 
Party, to establish and effectively compete to supply directly to the consumer insurance services in its 
territory as provided below:  
 
(a) any and all lines of insurance29 (except compulsory automobile and occupational risk 
insurance), no later than January 1, 2008; and   
(b) any and all lines of insurance, no later than January 1, 2011.  
                                                      
24 This clause applies only to the lines of insu rance set out in III.1.A.(ii)(a), (b), and (c). 
 25 This clause applies only to the lines of insu rance set out in III.1.A.(ii)(a), (b), and (c). 
 26 This clause applies to all lines of insurance.  
 27 This clause applies to all lines of insurance.  
 28 Surplus lines of insurance means lines of insuran ce (products covering specific sets of risks with 
specific characteristics, features, and serv ices) that meet the following criteria:  
 (a)  lines of insurance other than those that INS supplies as of the date of signature of this 
Agreement, or lines of insura nce that are substantially the same as such lines; and  
 (b)  that are sold either (i) to customers with premiums in excess of 10,000 U.S. dollars per year, 
or (ii) to enterprises, or (iii) to customers with a particular net worth or revenues of a 
particular size or number of employees.    
 As of January 1, 2008, surplus lines shall be defined as insurance coverage not available from an 
 admitted company in the regular market.  
29 For greater certainty, social  security services referred to in the first, second, and third paragraphs of 
article 73 of the Constitución Política de la República de Costa Rica  and provided by the Caja Costarricense de 
Seguro Social  as of the date of signature of  this Agreement are not subject to  any commitment included in this 
Annex.  WT/REG211/1 
 Page 219 
 
 
 For purposes of this commitment Costa Rica sh all allow insurance service suppliers to be 
established through any juridical form, as provided in  Article 12.4(b). It is understood that Costa Rica 
may establish prudential solvency and integrity requir ements, which shall be in line with comparable 
international regulatory practice.   
 
ANNEX 12.9.3:  ADDITIONAL INFORMATION REGARDING FINANCIAL SERVICES 
MEASURES  
 
 Each Party indicated below has provided the following descriptive and explanatory 
information regarding certain aspects of its financial services measures solely for purposes of 
transparency.   
Section A: Costa Rica 
 
 
 Administrators of pension funds can invest up to 25 per cent of the equity of the fund in 
securities issued by foreign financial institutions.  This limit can be increased up to 50 per cent, 
provided that real yields of investments of the co mplementary pension regime are equivalent or lower 
than international yields.  
 
Section B: The Dominican Republic  
 
Banking Services and Other Financial Services (Insurance Excluded)  
 
1. Multipurpose Banks and Credit Entities  
(a) In conformity with the Ley Monetaria y Financiera,  No. 183-02, November 21, 2002, 
authorization for the operation of multipur pose banks (commercial banks) and credit 
entities (savings and credit banks and cred it corporations) requires the presentation 
before the Junta Monetaria  of an opinion of the Superintendencia de Bancos  based 
on documents presented by the applicant entity.  The Junta Monetaria  may authorize 
the establishment of subsidiaries as well as branch offices, provided there is adequate coordination and exchange of information with the supervising authorities of the 
country of origin.  
(b) Under no circumstances shall preferred shares grant their holders a greater voting 
right than common shares, nor shall holders of preferred shares collect dividends in advance of or independently from the results of the business year.   
(c) For the purposes of opening a new entity, documentation establishing the existence 
and origin of the amount contributed shall be presented before the Superintendencia 
de Bancos . Such amount shall be temporarily deposited in the Banco Central  for the 
execution of the initial investment plan and may be used to pay for the acquisition of 
fixed assets and the necessary expenses of facilities and initiation of operations.  
(d) Multipurpose banks (commercial banks) a nd credit entities are not allowed to 
decrease their paid-up capital without previous authorization of the Superintendencia 
de Bancos . The payment of dividends is subject to compliance with the requirements 
established by the Junta Monetaria .  
(e) Savings and Credit Banks may only contract obligations abroad and grant loans in 
foreign currency with the prior authorization of the Junta Monetaria .  WT/REG211/1 
Page 220  
 
(f) Representative offices of foreign banks not located in the territory of the Dominican 
Republic may not perform financia l intermediation activities.   
2. Exchange Agents  
 A prior authorization from the Junta Monetaria  is needed to act as an Exchange Agent.  
 
3. Securities and Goods Exchanges  
(a) All commodities exchanges must receive prior approval from the Consejo Nacional 
de Valores .  
(b) Securities intermediaries must be authorized to operate by the Superintendencia de  
Valores .  
(c) Securities Exchanges shall be represente d in securities negotiations by natural 
persons known as securities brokers who are holders of a credential granted by the corresponding exchange and registered in th e securities market.  To register in the 
Registro del Mercado de Valores,  securities and individuals must comply with Law 
No. 19-00. Exchanges shall be allowed to se ll or rent the right to operate in an 
exchange, with the previous approval of the corresponding exchange and the 
Superintendencia de Valores .  
(d) Securities intermediaries existing before Law No. 19-00 went into effect, that are 
members of commodities exchanges and engage  solely in the trading of commodities 
(securities representatives for commodities), must comply with the requirements of 
the law no later than five years from the date it went into effect.   
Services of Insurance and Reinsurance  
 
4. According to Ley sobre Seguros y Fianzas en la República Dominicana , No.146-02, July 22, 
2001, a foreign enterprise that wishes to or has the intention of operating in the insurance business, the 
reinsurance business, or both, within the Domini can Republic must formulate its request to the 
Superintendencia de Seguros,  expressing the fields in which it intends to operate in the Dominican 
Republic, attaching the following documents:      
(a) certification regarding the enterprise’s domiciles, that of its head office, and the 
domicile in the Dominican Republic, which must be previously established;  
(b) the profit and loss general statement of its operations during the past five years, duly 
approved according to the insurance legislation of the country of origin;  
(c) certification of the names and nationalities of  the senior managers or directors;  
(d) copy of the proxy given to the legal representative in the Dominican Republic;  
(e) certification of the State or Government en tity in charge of the operations performed 
by the insurance enterprise or enterprises in which their head office or head offices 
are located; and  
(f) certification of the agreement or agreements  taken by the competent authority of the 
enterprise stating the decision to extend its business to the Dominican Republic, and 
that it shall be responsible for its obliga tions, whether derived from its operations in 
the Dominican Republic or from the law, with both the goods it owns in the territory  WT/REG211/1 
 Page 221 
 
 
of the Dominican Republic, and also with th e goods it has in other countries as far as 
the laws of such countries allow; and that it will submit to the laws and courts of the 
Dominican Republic, expressly renouncing all rights that might oppose them.  This 
certification must be translated into Spanis h and be duly processed so  that it is fully 
valid in the Dominican Republic.  
5. Applications for insurance, policies, certificates, provisional warrants, modifications or 
endorsements, renewal certificates, and other documents related to in surance contracts, as well as 
performance bonds, should be written in plain a nd simple Spanish for ease of understanding.  
Reinsurance Located in the Territory of Another Party  
6. The Superintendencia de Seguros  will communicate to the applicant within a period not to 
exceed 30 days, its decision with regard to the requi red authorization.  If, after this period, the 
Superintendencia de Seguros  has not reached a decision to this e ffect, it will be understood that no 
objection exists to consider the appli cant entity as an accepted reinsurer.    
Pensions  
7. In conformity with Ley que Crea el Sistema Dominicano de Seguridad Social , No. 87-01 
May 9, 2001, the resources of the pension funds must  be invested exclusively in the territory of the 
Dominican Republic.  Foreign investments in this s ector are subject to speci al rules issued by the 
Consejo Nacional de Seguridad Social .  
Section C: El Salvador  
 
With regard to banking:  
 
 (a) Holding companies and other foreign financ ial institutions are subject to consolidated 
supervision in accordance with releva nt international practice.  The Superintendencia 
del Sistema Financiero , subject to the opinion of the Banco Central , shall issue 
instructions for determining eligible institutions.  
  (b) Banks and other foreign financial institu tions must satisfy requirements of prudential 
regulation and supervision in their countri es of origin in accordance with relevant 
international practice.   
 
 (c)  To be authorized to establish a branch  in El Salvador, a foreign bank must meet the 
following criteria:  
   (i)  Establishment : To obtain the authorization to establish a branch, a foreign 
 bank must:  
 
  (A)  prove that its head office is legally established in accordance with the 
 laws of the country where it is cons tituted, that such country subjects 
 the bank to prudential regulation and surveillance in accordance with  international usage on the issue, and that it is classified as a first-rate 
 bank by an internationally recognized risk rating company;  
   (B)  prove that under the laws of the country where it is constituted and its 
 own regulations, it can approve the establishment of branches,  agencies, and offices that satisfy the requirements established by the 
 Ley de Bancos  and that both the head office and the government WT/REG211/1 
Page 222  
 
 authority in charge of oversight of this entity in such country have  appropriately authorized the entity’s operation in El Salvador;  
   (C)  agree to maintain permanen tly in El Salvador at least one 
 representative with full powers to perform all activities and contracts 
 to be entered into and executed in El Salvador.  The power must be 
 granted clearly and precisely so as to bind the represented entity, so  that it is wholly responsible in th e country and internationally for all 
 actions taken and contracts signed in El Salvador and so that it 
 satisfies all the requirements established under the laws of 
 El Salvador and the laws of the country where the foreign entity is 
 constituted;  
   (D)  agree to locate and maintain in  El Salvador the amount of capital and 
 capital reserves that the Ley de Bancos  requires of El Salvador 
 banks;  
   (E)  certify that it has been in opera tion for at least five years and that the 
 results of its operations have been satisfactory, based on reports of  the oversight entity in the country where the foreign bank is  constituted and of internationally recognized risk rating companies; 
 and   
   (F)  expressly submit to the laws, c ourts, and authorities of El Salvador, 
 with regard to the acts it performs and the contracts it signs, or those  that have effect in El Salvador.   
 
  (ii)  In such cases, the Superintendencia del Sistema Financiero  shall sign 
 cooperation memoranda with the regulatory agency of the country where the  investing entity is established.  
 
(iii)  Foreign banks authorized to operat e in El Salvador shall be subject to 
inspection and oversight by the Superintendencia del Sistema Financiero , 
shall enjoy the same rights and privileg es, and will be subject to the same 
laws and standards that apply to domestic banks.  
 
Section D: Honduras 
 
 
1. Banking and savings and loan associations may not provide credits to natural persons or 
juridical persons domiciled abroad unless the Banco Central de Honduras  authorizes the credits.  
2. A branch of a foreign bank is not required to have its own Board of Directors or 
Administrative Council, but must have at least two representatives domiciled in Honduras.  Such representatives are responsible for the general dir ection and administration of the business and have 
the legal authority to act in Honduras and to execu te and to be responsible for the branch’s own 
operations.  
3. The founding members of financial institutions organized under the laws of Honduras must be 
natural persons.  
4. The operation, function, servicing, and issuance  of any new financial product with a direct 
and immediate relation to banking or le nding must have the approval of the Comisión Nacional de 
Bancos y Seguros.   WT/REG211/1 
 Page 223 
 
 
5. Shares in a foreign investment fund may be ma rketed in the territory of Honduras only if 
there is a reciprocity agreement at the government le vel or at the level of the relevant supervisory 
authorities of the country of origin of the invest ment fund and the country in which its shares are 
marketed.  
6. Corporations that classify risk and choose to organize under Honduran law must be 
constituted as sociedades anónimas  and must have in Honduras a permanent legal representative with 
a power of attorney sufficiently broad to undertak e any legal act needed for the supply of risk 
classification services in Honduras.  
Section E: Nicaragua  
 
1. Nicaragua reserves the right to deny an opera ting license to a financial institution or group 
(other than an insurance financial institution or gr oup) in the event that another Party has denied or 
cancelled an operating license to such financial institution or group.   
2. To maintain a branch in Nicaragua, a bank c onstituted and organized in a foreign country 
must:  
(a) be legally authorized and allowed by its byla ws to operate in that foreign country and 
to establish branches in other foreign countries;   
(b) prior to establishing such branch, present a certification issued by the supervising 
authority of the country in which the bank is constituted and organized, indicating that authority’s concurrence that the bank may establish a branch in Nicaragua; and  
(c) assign the branch capital that meets minimum requirements.   
 Such a branch must have its domicile in Nicaragua.   
 
3. To maintain a branch in Nicaragua, a non- banking financial institution organized and 
constituted under the laws of a foreign country must:   
(a) be legally authorized and allowed by its bylaws to operate in the country in which it 
is organized and constituted and to establish branches abroad;  
(b) prior to establishing such branch, present a certification issued by the supervising 
authority of the country in which such  institution is constituted and organized, 
indicating that authority’s concurrence with the establishment of a branch in 
Nicaragua by such institution;  
(c) assign such branch capital meeting the minimum requirements; and  
(d) in the case of a FONCITUR, the capital and all of the funds of the FONCITUR must 
be invested in Nicaragua, in projects registered with the Instituto Nicarag űense de 
Turismo.  
 Such a branch must have its domicile in Nicaragua.   
 
4. For purposes of this paragr aph and paragraph 3:  
 WT/REG211/1 
Page 224  
 
(a)  non-banking financial institution  means an institution that operates as a recipient of 
deposits from the public, as a stock exchange  or institution related to a stock 
exchange; as Almacenes Generales de De pósitos con carácter financiero;  as leasing 
entities; and as FONCITURs; and  
 
(b)  FONCITUR  means a Fondo de Capital de Inversión Turística.  
 
5. A representative office of a foreign bank may pl ace funds in Nicaragua in the form of loans 
and investments, and act as information centers fo r their clients, but is prohibited from accepting 
deposits from the public in Nicaragua.   
6. The administrator of a pension fund may invest  abroad a maximum of 30 percent of the assets 
of the fund. However, the Superintendencia de Pensiones  reserves the right to vary the investment 
limits applicable to pension funds administra tors at the foreign and national level.   
 
ANNEX 12.16.1  FINANCIAL SERVICES COMMITTEE  
 
 The authority of each Party responsible for financial services is:   
(a) in the case of Costa Rica, the Consejo Nacional de Supervisión del Sistema 
Financiero (CONASSIF) and the Ministerio de Comercio Exterior  for banking and 
other financial services and for insurance;  
(b) in the case of the Dominican Republic, the Banco Central de la República 
Dominicana in consultation with the Superintendencia de Bancos , the 
Superintendencia de Seguros , the Superintendencia de Valores,  and the 
Superintendencia de Pensiones , as appropiate,  
(c) in the case of El Salvador, the Ministerio de Economía , in consultation with the 
corresponding competent authority ( Superintendencia del Sistema Financiero, 
Superintendencia de Valores, Sup erintendencia de Pensiones and the Banco Central 
de Reserva );  
(d) in the case of Guatemala, the Superintendencia de Bancos  for banking and other 
financial services, the Ministerio de Economía  for insurance and securities, and any 
other institutions approved by those author ities to participate within the Financial 
Services Committee;  
(e) in the case of Honduras, the Banco Central de Honduras , the Comisión Nacional de 
Bancos y Seguros,  and the Secretaría de Estado en los Despachos de Industria y 
Comercio;  
(f) in the case of Nicaragua, the Ministerio de Fomento, Industria y Comercio , the 
Superintendencia de Bancos y otras Instituciones Financieras , the Superintendencia 
de Pensiones , and the Ministerio de Hacienda y Crédito Público,  for banking and 
other financial services and for insurance; and  
(g) in the case of the United States, the Department of Treasury for banking and other 
financial services and the Office of the United States Trade Representative, in 
coordination with the Department of Comme rce and other agencies, for insurance,  
or their successors.   WT/REG211/1 
 Page 225 
 
 
CHAPTER THIRTEEN:  TELECOMMUNICATIONS1 
 
Article 13.1 
 
Scope And Coverage  
1. This Chapter applies to:  
(a) measures adopted or maintained by a Part y relating to access to and use of public 
telecommunications services;  
(b) measures adopted or maintained by a Party relating to obligations of suppliers of 
public telecommunications services;  
(c) other measures relating to public telecomm unications networks or services; and  
(d) measures adopted or maintained by a Party relating to the supply of information 
services.  
2. Except to ensure that enterprises operating br oadcast stations and cable systems have 
continued access to and use of public telecommunicati ons services, this Chapter does not apply to any 
measure adopted or maintained by a Party relating to broadcast or cable distribution of radio or 
television programming.  
3. Nothing in this Chapter shall be construed to:  
(a) require a Party or require a Party to compel  any enterprise to establish, construct, 
acquire, lease, operate, or provide teleco mmunications networks or services where 
such networks or services are not offered to the public generally;  
(b) require a Party to compel any enterprise excl usively engaged in the broadcast or cable 
distribution of radio or television programm ing to make available its broadcast or 
cable facilities as a public telecommunications network; or  
(c) prevent a Party from prohibiting persons ope rating private networks from using their 
networks to supply public te lecommunications networks or services to third parties.  
Article 13.2 
 
Access To And Use Of Public Telecommunications Services  
 
1. Each Party shall ensure that enterprises of a nother Party have access to and use of any public 
telecommunications service, including leased circuits, offered in its territory or across its borders, on 
reasonable and non-discriminatory terms and cond itions, including as set out in paragraphs 2 
through 6.  
   
                                                     
 
 1 In place of the obligations estab lished in this Chapter, Costa Rica shall undertake the specific 
commitments set out in Annex 13.  WT/REG211/1 
Page 226  
 
2. Each Party shall ensure that su ch enterprises are permitted to:  
(a) purchase or lease, and attach terminal or ot her equipment that interfaces with a public 
telecommunications network;  
(b) provide services to individual or multiple end-users over leased or owned circuits;  
(c) connect owned or leased circuits with public telecommunications networks and 
services in the territory, or across the borders, of that Party or with circuits leased or 
owned by another person;  
(d) perform switching, signaling, processi ng, and conversion functions; and   
(e) use operating protocols of their choice.  
3. Each Party shall ensure that enterprises of another Party may use public telecommunications 
services for the movement of information in its territory or across its borders and for access to 
information contained in databases or otherwise stor ed in machine-readable form in the territory of 
any Party.  
4. Notwithstanding paragraph 3, a Party may ta ke such measures as are necessary to:   
(a) ensure the security and confidentiality of messages; or   
(b) protect the privacy of non-public personal data of subscribers to public 
telecommunications services,  
 subject to the requirement that such meas ures are not applied in a manner that would 
 constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on trade  
 in services.   
5. Each Party shall ensure that no condition is imposed on access to and use of public 
telecommunications networks or services, other than that necessary to:   
(a) safeguard the public service responsibilities of suppliers of public 
telecommunications networks or services, in  particular their ability to make their 
networks or services available to the public generally; or  
(b) protect the technical integrity of public telecommunications networks or services.   
6. Provided that conditions for access to and use of public telecommunications networks or 
services satisfy the criteria set out in paragraph 5, such conditions may include:   
(a) a requirement to use specified technical interfaces, including interface protocols, for 
interconnection with such networks or services; and  
(b) a licensing, permit, registration, or notif ication procedure which, if adopted or 
maintained, is transparent and provides for the processing of applications filed 
thereunder in accordance with the Part y’s national law or regulation.  
 
 
 
  WT/REG211/1 
 Page 227 
 
 
Article 13.3 
 
Obligations Relating To Suppliers Of  Public Telecommunications Services2 
 
Interconnection  
 
1.  (a)  Each Party shall ensure that supplie rs of public telecommunications services in its 
territory provide, directly or indirectly, interconnection with the suppliers of public 
telecommunications services of another Party.    
 
 (b)  In carrying out subparagraph (a), each Pa rty shall ensure that suppliers of public 
telecommunications services in its territory take reasonable steps to protect the confidentiality of commercially sensitive info rmation of, or relating to, suppliers and 
end-users of public telecommunications services and only use such information for 
the purpose of providing those services.  
  (c)  Each Party shall provide its telecomm unications regulatory body the authority to 
 require public telecommunications suppliers to file their interconnection contracts.  
 
Resale 
 
2. Each Party shall ensure that suppliers of public telecommunications services do not impose 
unreasonable or discriminatory conditions or limitations on the resale of those services.  
 
Number Portability  
 
3. Each Party shall ensure that suppliers of public telecommunications services in its territory 
provide number portability to the extent technically  feasible, on a timely basis, and on reasonable 
terms and conditions.
3 
 
Dialing Parity  
 
4. Each Party shall ensure that suppliers of public telecommunications services in its territory 
provide dialing parity to suppliers of public teleco mmunications services of another Party, and afford 
suppliers of public telecommunications services of another Party non-discriminatory access to 
telephone numbers and related services w ith no unreasonable dialing delays.  
 
Article 13.4 
 
Additional Obligations Relating To Major Supp liers Of Public Elecommunications Services4 
Treatment by Major Suppliers  
 
                                                      
 2 This Article is subject to Annex 13.3. Paragraphs 2 through 4 of this Article do not apply with respect 
to suppliers of commercial mobile services.  Nothing in this Article shall be construed to preclude a Party from imposing the requirements set out in this Article on suppliers of commercial mobile services.  
 
3 In complying with this paragraph, the Dominican Republic, El Salvador, Guatemala, Honduras, and 
Nicaragua may take into account  the economic feasibility of providing number portability.  
 4 This Article is subject to Annex 13.3. This Artic le does not apply with respect to suppliers of 
commercial mobile services. This Article is without pr ejudice to any rights or obligations that a Party may 
have under the GATS, and nothing in this Article shall be construed to preclude a Party from imposing the 
requirements set out in this Article on suppliers of commercial mobile services.  WT/REG211/1 
Page 228  
 
1. Each Party shall ensure that major suppliers  in its territory accord suppliers of public 
telecommunications services of another Party treatme nt no less favorable than such major suppliers 
accord to their subsidiaries, their affiliates, or non-affiliated service suppliers regarding:  
(a) the availability, provisioning, rates, or quality of like public telecommunications 
services; and  
(b) the availability of technical inte rfaces necessary for interconnection.  
Competitive Safeguards  
 
2.  (a) Each Party shall maintain
5 appropriate measures for the purpose of preventing 
suppliers who, alone or together, are a majo r supplier in its territory from engaging in 
or continuing anti-competitive practices.  
 
 (b)  The anti-competitive practices referred to in subparagraph (a) include in particular:  
 
(i) engaging in anti-competitive cross-subsidization;  
(ii) using information obtained from compe titors with anti-competitive results; 
and  
(iii) not making available, on a timely basis, to suppliers of public 
telecommunications services, technical information about essential facilities and commercially relevant information which are necessary for them to provide public telecommunications services.  
Resale  
 
3. Each Party shall ensure that major suppliers in its territory:   
(a) offer for resale, at reasonable rates,
6 to suppliers of public telecommunications 
services of another Party, public telecommunications services that such major 
suppliers provide at retail to end-u sers that are not suppliers of public 
telecommunications services; and  
(b) do not impose unreasonable or discriminatory conditions or limitations on the resale 
of such services.7 
Unbundling of Network Elements  
 
4.  (a)  Each Party shall provide its teleco mmunications regulatory body the authority to 
require major suppliers in its territory to offer access to network elements on an 
unbundled basis on terms, cond itions, and at cost-oriented rates that are reasonable, 
non-discriminatory, and transparent for the supply of public telecommunications services.   
                                                     
 
5 For purposes of paragraph 2, “maintain” a meas ure includes the actual implementation of such 
measure, as appropriate. 
 6 For purposes of subparagraph (a), wholesale rates set pursuant to a Party’s law and regulations satisfy 
the standard of reasonableness.  
7 Where provided in its law or regulations, a Party may prohibit a reseller that obtains, at wholesale 
rates, a public telecommunications service available at  retail to only a limited category of subscribers from 
offering the service to a diffe rent category of subscribers.  WT/REG211/1 
 Page 229 
 
 
(b)  Each Party may determine the network elem ents required to be made available in its 
territory, and the suppliers that may obtain such elements, in accordance with its law 
and regulations.  
 
Interconnection 
  
5.  (a) General Terms and Conditions   
  Each Party shall ensure that major supp liers in its territory provide interconnection 
for the facilities and equipment of suppliers  of public telecommunications services of 
another Party:  
 
(i) at any technically feasible point in the major supplier’s network;  
(ii) under non-discriminatory terms, conditi ons (including technical standards 
and specifications), and rates;  
(iii) of a quality no less favorable than that  provided by such major suppliers for 
their own like services, for like services of non-affiliated service suppliers, or 
for their subsidiaries or other affiliates;  
(iv) in a timely fashion, on terms, conditions (including technical standards and 
specifications), and, subject to Annex 13.4.5, cost-oriented rates that are transparent, reasonable, having re gard to economic feasibility, and 
sufficiently unbundled so that the suppliers need not pay for network components or facilities that they do not require for the service to be 
provided; and  
(v) on request, at points in addition to the network termination points offered to 
the majority of users, subject to charges that reflect the cost of construction of 
necessary additional facilities.  
 (b)  Options for Interconnecting with Major Suppliers  
 
Each Party shall ensure that suppliers of public telecommunications services of 
another Party may interconnect their fac ilities and equipment with those of major 
suppliers in its territory pursuant to at  least one of the following options:   
 (i) a reference interconnection offer or a nother standard interconnection offer 
containing the rates, terms, and cond itions that the major suppliers offer 
generally to suppliers of public telecommunications services; or  
(ii) the terms and conditions of an intercon nection agreement in force or through 
negotiation of a new interconnection agreement.  
 (c)  Public Availability of Interconnection Offers  
 
  Each Party shall require major suppliers in its territory to make publicly available 
reference interconnection offers or other standard interconnection offers containing 
the rates, terms, and conditions that the majo r suppliers offer generally to suppliers of 
public telecommunications services.  
 
 (d)  Public Availability of the Pro cedures for Interconnection Negotiations  WT/REG211/1 
Page 230  
 
  Each Party shall make publicly av ailable the applicable procedures for 
interconnection negotiations with ma jor suppliers in its territory.  
  (e)  Public Availability of Interconnection Agreements Concluded with Major Suppliers  
 
(i) Each Party shall require major suppliers in its territory to file all 
interconnection agreements to wh ich they are party with its 
telecommunications regulatory body or other relevant body.  
(ii) Each Party shall make publicly availabl e interconnection agreements in force 
between major suppliers in its terr itory and other suppliers of public 
telecommunications services in its territory.  
Provisioning and Pricing of Leased Circuits Services  
 
6.  (a) Each Party shall ensure that major s uppliers in its territory provide enterprises of 
another Party leased circuits services that are public telecommunications services on terms, conditions, and at rates that are reasonable and non-discriminatory.   
 
(b)  In carrying out subparagraph (a), each  Party shall provide its telecommunications 
regulatory body the authority to require majo r suppliers in its territory to offer leased 
circuits services that are public telecommuni cations services to enterprises of another 
Party at flat-rate, cost-oriented prices.  
 
Co-location  
 
7.  (a) Subject to subparagraphs (b) and (c), ea ch Party shall ensure that major suppliers in 
its territory provide to suppliers of pub lic telecommunications services of another 
Party physical co-location of equipment necessary for interconnection on terms, conditions, and at cost-oriented rates that are reasonable, non-discriminatory, and transparent.    
 
 (b)  Where physical co-location is not prac tical for technical reasons or because of space 
limitations, each Party shall ensure that major suppliers in its territory:  
 
(i)  provide an alternative solution, or  
(ii)  facilitate virtual co-location in its territory,  
on terms, conditions, and at cost-oriented rates that are reasonable, non-
discriminatory, and transparent.  
 
 (c)  Each Party may specify in its law or regulations which premises are subject to 
subparagraphs (a) and (b).  
 
Access to Rights-of-Way  
 
8. Subject to Annex 13.4.8, each Party shall ensure  that major suppliers in its territory afford 
access to their poles, ducts, conduits, and rights-of-way to suppliers of public telecommunications 
services of another Party on terms, conditions, and at rates that are reasonable and non-discriminatory.  
 
  WT/REG211/1 
 Page 231 
 
 
Article 13.5 
 
Submarine Cable Systems  
 Each Party shall ensure reasonable and non-di scriminatory treatment for access to submarine 
cable systems (including landing facilities) in its terri tory, where a supplier is authorized to operate a 
submarine cable system as a public telecommunications service.  
 
Article 13.6  
 
Conditions For The Supply Of Information Services  
1. No Party may require an enterprise  in its territory that it classifies8 as a supplier of 
information services and that supplies such ser vices over facilities that it does not own to:  
(a) supply such services to the public generally;  
(b) cost-justify its rates for such services;  
(c) file a tariff for such services;  
(d) interconnect its networks with any partic ular customer for the supply of such 
services; or  
(e) conform with any particular standard or technical regulation for interconnection other 
than for interconnection to a public telecommunications network.  
2. Notwithstanding paragraph 1, a Party may take the actions described in subparagraphs (a) 
through (e) to remedy a practice of a supplier of  information services that the Party has found in a 
particular case to be anti-competitive under its law or regulations, or to otherwise promote 
competition or safeguard the interests of consumers.  
Article 13.7 
 
Independent Regulatory Bodies9 
And Government-Owned Telecommunications Suppliers  
1. Each Party shall ensure that its telecommunica tions regulatory body is separate from, and not 
accountable to, any supplier of public telecommunica tions services. To this end, each Party shall 
ensure that its telecommunications regulatory body does not hold a financial interest or maintain an 
operating role in any such supplier.  
2. Each Party shall ensure that the decisions  and procedures of its telecommunications 
regulatory body are impartial with respect to all inte rested persons.  To this end, each Party shall 
ensure that any financial interest that it holds in  a supplier of public telecommunications services does 
not influence the decisions and procedures of  its telecommunications regulatory body.  
3. No Party may accord more favorable treatment  to a supplier of public telecommunications 
services or to a supplier of information services than  that accorded to a like supplier of another Party 
                                                      
 8 For purposes of applying this provision, each Pa rty may, through its telecommunications regulatory 
body, classify which serv ices in its territory ar e information services.  
 9 Each Party shall endeavor to ensure that its telecommunications regulatory body has adequate 
resources to carry out its functions.  WT/REG211/1 
Page 232  
 
on the ground that the supplier receiving more favorable  treatment is owned, wholly or in part, by the 
national government of the Party.  
Article 13.8 
 
Universal Service
 
 Each Party shall administer any universal servi ce obligation that it maintains in a transparent, 
non-discriminatory, and competitively neutral manner and shall ensure that its universal service 
obligation is not more burdensome than necessary for th e kind of universal service that it has defined.  
 
Article 13.9 
 
Licenses and Other Authorizations  
 
1. Where a Party requires a supplier of public telecommunications services to have a license, 
concession, permit, registration, or other type of  authorization, the Party shall make publicly 
available:  
(a) all applicable licensing or authorization criteria and procedures it applies;  
(b) the time it normally requires to reach a d ecision concerning an application for a 
license, concession, permit, registration, or  other type of authorization; and  
(c) the terms and conditions of all licenses or authorizations it has issued.  
2. Each Party shall ensure that, on request, an app licant receives the reasons for the denial of a 
license, concession, permit, registration, or other type of authorization.  
Article 13.10 
 
Allocation And Use Of Scarce Resources  
1. Each Party shall administer its procedures for the allocation and use of scarce 
telecommunications resources, including frequencies,  numbers, and rights-of-way, in an objective, 
timely, transparent, and non-discriminatory manner.  
2. Each Party shall make publicly available the current state of allocated frequency bands but 
shall not be required to provide detailed iden tification of frequencies allocated for specific 
government uses.  
3. For greater certainty, a Party’s measures regarding the allocation and assignment of spectrum 
and regarding frequency manageme nt are not measures that are per se  inconsistent with Article 11.4 
(Market Access), which is applied to Chapter Te n (Investment) through Article 11.1.3 (Scope and 
Coverage). Accordingly, each Party retains the ri ght to establish and apply its spectrum and frequency 
management policies, which may limit the numbe r of suppliers of public telecommunications 
services, provided that it does so in a manner that is consistent with this Agreement.  Each Party also 
retains the right to allocate frequency bands ta king into account present and future needs.  
 
    WT/REG211/1 
 Page 233 
 
 
Article 13.11 
 
Enforcement  
Each Party shall provide its competent authorit y with the authority to establish and enforce 
the Party’s measures relating to the obligations set out in Articles 13.2 through 13.5.  Such authority 
shall include the ability to impose effective san ctions, which may include financial penalties, 
injunctive relief (on an interim or final basis), or the modification, suspension, and revocation of 
licenses or other authorizations.  
Article 13.12 
 
Resolution Of Domestic Telecommunications Disputes  
Further to Articles 18.4 (Administrative Pro ceedings) and 18.5 (Review and Appeal), each 
Party shall ensure the following:  
 
Recourse to Telecommunications Regulatory Bodies  
 
(a) (i)  Each Party shall ensure that enterprises of another Party may seek review by a 
telecommunications regulatory body or  other relevant body to resolve 
disputes regarding the Party’s measures re lating to a matter set out in Articles 
13.2 through 13.5.  
 
(ii)  Each Party shall ensure that supp liers of public telecommunications services 
of another Party that have requested interconnection with a major supplier in 
the Party’s territory may seek review, within a reasonable and publicly available period of time after the supplier requests interconnection, by a 
telecommunications regulatory body
10 to resolve disputes regarding the terms, 
conditions, and rates for interconnec tion with such major supplier.  
 
Reconsideration  
 
(b) Each Party shall ensure that any enterprise that is aggrieved or whose interests are 
adversely affected by a determination or decision of the Party’s telecommunications 
regulatory body may petition the body to reconsider that determination or decision.  
No Party may permit such a petition to c onstitute grounds for non-compliance with 
the determination or decision of the te lecommunications regulatory body unless an 
appropriate authority stays such determination or decision.  
 
Judicial Review  
 
(c) Each Party shall ensure that any enterprise that is aggrieved or whose interests are 
adversely affected by a determination or decision of the Party’s telecommunications 
regulatory body may obtain judicial review of such determination or decision by an independent judicial authority.  
 
 
                                                     
 
 10 In the United States, this body may be a state regulatory authority.   WT/REG211/1 
Page 234  
 
 
Article 13.13 
 
Transparency
 
 Further to Articles 18.2 (Publication) and 18.3  (Notification and Provision of Information), 
each Party shall ensure that:   
(a) rulemakings, including the basis for such rulemakings, of its telecommunications 
regulatory body and end-user tariffs file d with its telecommunications regulatory 
body are promptly published or otherwise made publicly available;  
(b) interested persons are provided with ad equate advance public notice of, and the 
opportunity to comment on, any rulemaking that its telecommunications regulatory body proposes; and  
(c) its measures relating to public telecommunications services are made publicly 
available, including measures relating to:  
(i) tariffs and other terms and conditions of service;  
(ii) procedures relating to judicial a nd other adjudicatory proceedings;  
(iii) specifications of technical interfaces;  
(iv) bodies responsible for preparing, ame nding, and adopting standards-related 
measures affecting access and use;  
(v) conditions for attaching terminal or other equipment to the public 
telecommunications network; and  
(vi) notification, permit, registration, or licensing requirements, if any.  
Article 13.14 
 
Flexibility In The Choice Of Technologies
 
No Party may prevent suppliers of public telecommunications services from having the 
flexibility to choose the technologies that they u se to supply their services, including commercial 
mobile wireless services, subject to requireme nts necessary to satisfy legitimate public policy 
interests.  
Article 13.15 
 
Forbearance  
The Parties recognize the importance of relying on market forces to achieve wide choices in 
the supply of telecommunications services.  To th is end, each Party may forbear from applying a 
regulation to a service that the Party classifies as a public telecommunications service, if its 
telecommunications regulatory body determines that:  
  
  WT/REG211/1 
 Page 235 
 
 
 
(a) enforcement of such regulation is not necessary to prevent unreasonable or 
discriminatory practices;  
(b) enforcement of such regulation is not neces sary for the protection of consumers; and  
(c) forbearance is consistent with the public interest, including promoting and enhancing 
competition between suppliers of pub lic telecommunications services.  
Article 13.16  
 
Relationship To Other Chapters  
 In the event of any inconsistency between this Chapter and another Chapter, this Chapter shall 
prevail to the extent of the inconsistency.   
Article 13.17 
 
Definitions
 
 For purposes of this Chapter:  
  commercial mobile services  means public telecommunications services supplied through 
mobile wireless means;  
  cost-oriented  means based on cost, and may include a reasonable profit, and may involve 
different cost methodologies for different facilities or services;   
 dialing parity  means the ability of an end-user to use an equal number of digits to access a 
like public telecommunications service, regardless of the public telecommunications service supplier 
chosen by such end-user;   
 end-user  means a final consumer of or subscriber to a public telecommunications service, 
including a service supplier other than a supplier of public telecommunications services;    enterprise  means an “enterprise” as defined in  Article 2.1 (Definitions of General 
Application), and includes a branch of an enterprise;   
 essential facilities  means facilities of a public telecommunications network or service that:  
 
(a) are exclusively or predominantly supplied by a single or limited number of suppliers; 
and  
(b) cannot feasibly be economically or techni cally substituted in order to supply a 
service;  
 information service  means the offering of a capability for generating, acquiring, storing, 
transforming, processing, retrieving, utilizin g, or making available information via 
telecommunications, and includes electronic publishi ng, but does not include any use of any such 
capability for the management, control, or opera tion of a telecommunications system or the 
management of a telecommunications service;   WT/REG211/1 
Page 236  
 
 interconnection  means linking with suppliers providing public telecommunications services 
in order to allow the users of one supplier to comm unicate with users of another supplier and to access 
services provided by another supplier;  
 
 leased circuits means telecommunications facilities between two or more designated points 
that are set aside for the dedicated use of or availability to a particular customer or other users of the 
customer’s choosing;  
 
 major supplier  means a supplier of public telecommunications services that has the ability to 
materially affect the terms of participation (having regard to price and supply) in the relevant market 
for public telecommunications services as a result of:  
 
(a) control over essential facilities; or   
(b) use of its position in the market;  
 network element  means a facility or equipment used in supplying a public 
telecommunications service, including features, func tions, and capabilities provided by means of such 
facility or equipment;  
 
 non-discriminatory  means treatment no less favorable than that accorded to any other user of 
like public telecommunications services in like circumstances;  
 
 number portability  means the ability of end-users of public telecommunications services to 
retain, at the same location, telephone numbers without impairment of quality, reliability, or 
convenience when switching between like supplie rs of public telecommunications services;  
 
 physical co-location means physical access to and control over space in order to install, 
maintain, or repair equipment, at premises owne d or controlled and used by a supplier to supply 
public telecommunications services;    
 public telecommunications  service means any telecommunications service that a Party 
requires, explicitly or in effect, to be offere d to the public generally. Such services may include, 
inter alia , telephone and data transmission typically i nvolving customer-supplied information between 
two or more points without any end-to-end change  in the form or content of the customer’s 
information, but does not include information services;  
 
 reference interconnection offer means an interconnection offer extended by a major supplier 
and filed with or approved by a telecommunications regulatory body th at is sufficiently detailed to 
enable a supplier of public telecommunications servi ces that is willing to accept its rates, terms, and 
conditions to obtain interconnection without having to engage in negotia tions with the major supplier;  
 
 telecommunications  means the transmission and reception of signals by any electromagnetic 
means, including by photonic means;    telecommunications regulatory body  means a national body responsible for the regulation 
of telecommunications; and   
 user  means an end-user or a supplier of public telecommunications services.  
 
    WT/REG211/1 
 Page 237 
 
 
ANNEX 13:  SPECIFIC COMMITMENTS OF COSTA RICA ON 
TELECOMMUNICATIONS SERVICES 
 
I. Preamble  
The Government of the Republic of Costa Rica:    
 
 acknowledging the unique nature of the Cost a Rican social policy on telecommunications, 
and reaffirming its decision to ensure that th e process of opening its telecommunications services 
sector must be based on its Constitution;    emphasizing that such process shall be to the be nefit of the user and shall be based on the 
principles of graduality, selectivity, and regulation, a nd in strict conformity with the social objectives 
of universality and solidarity in the supply  of telecommunications services; and    
  recognizing its commitment to strengthen and modernize the Instituto Costarricense de 
Electricidad  (ICE) as a market participant in a comp etitive telecommunications marketplace while 
ensuring that the use of its infrastructure shall be  remunerated and to deve lop a regulatory body to 
oversee market development;    undertakes through this Annex the following specific commitments on telecommunications 
services.   
 
II. Modernization of ICE  
 Costa Rica shall enact a new legal framework to strengthen ICE, through its appropriate 
modernization, no later than December 31, 2004.   
 
III. Selective And Gradual Market Opening Commitments  
1.  Market Access Standstill 
 
  Costa Rica shall allow service providers of  another Party to supply telecommunications 
services on terms and conditions that are no less favorable than those established by or granted 
pursuant to its legislation in force on January 27, 2003.  
 2. Gradual and Selective Opening of Certain Telecommunications Services 
 
  (a)  As provided in Annex I, Costa Rica shall allow telecommunications services 
providers of another Party, on a non-discriminatory basis, to effectively compete to 
supply directly to the customer, through the technology of their choice, the following telecommunications services in its territory:
1 
   
 
                                                      
 1 If Costa Rica requires a license fo r the provision of a listed service, Costa Rica shall make licenses 
available within the timeframes specified in this subparagraph.  WT/REG211/1 
Page 238  
 
(i) private network services,
2 no later than January 1, 2006;  
(ii) Internet services,3 no later than January 1, 2006; and  
(iii) mobile wireless services,4 no later than January 1, 2007.  
 (b)  Subparagraph (a) shall also apply to any other telecommunications service that Costa 
Rica may decide to allow in the future. 
 
 
IV. Regulatory principles5 
The regulatory framework on telecommunications services that the Government of Costa Rica 
shall have in force as of January 1, 2006, shall c onform, among others, to the following provisions:  
 
1.  Universal Service  
 
 Costa Rica has the right to define the kind of universal service obligations it wishes to 
maintain.  Such obligations will not be regarded as anti-competitive per se , provided they are 
administered in a transparent, non-discriminatory,  and competitively neutral manner and are not more 
burdensome than necessary for the kind of universal service defined.   
2.  Independence of the Regulatory Authority 
 
  Costa Rica shall establish or maintain a regul atory authority for telecommunications services, 
which shall be separate from and not accountable to any supplier of telecommunications services. 
Costa Rica shall ensure that its telecommunicati ons regulatory authority is authorized to impose 
effective sanctions to enforce domestic measures relati ng to the obligations set out in this Annex. This 
regulatory authority may include jurisdiction over spectrum management, universal service, tariffing, 
and licensing of new market entrants.  The decisi ons and the procedures of the regulatory authority 
shall be impartial with respect to all market participants.    3.  Transparency 
 
 
 Costa Rica shall ensure that applicable pro cedures for interconnection to a major supplier and 
either its interconnection agreements  or referenced interconnection offe rs are made publicly available. 
Costa Rica shall also make publicly available all licensing or authorization criteria and procedures required for telecommunications service suppliers, and the terms and conditions of all licenses or 
authorizations issued.  
 
  
                                                     
 
 2 Private network services  (closed-user group services) mean networks provided for communications 
with no interconnection to the public switched telecomm unications network at either end.  Nothing in this 
Annex shall be construed to prevent Costa Rica from prohibiting persons operating private networks from using 
their networks to supply public telecommunications networks or services to third parties.  
 3 Internet services  shall include electronic mail, retrieval and processing of on-line information and 
databases and electronic data exchange services, and offering the ability to access the Internet.  
 4 Mobile wireless services  mean voice, data, and/or broadband services provided by radio electric 
means in specifically allocated bands, using mobile or fixed terminal equipment, using cellular, PCS (Personal 
Communications Service), satellite, or any other similar technology that may be developed in the future for 
these services.  
5 For greater certainty, this  section does not create market  access rights and obligations.  WT/REG211/1 
 Page 239 
 
 
4.  Allocation and Use of Scarce Resources  
  Costa Rica shall ensure that procedures fo r the allocation and use of limited resources, 
including frequencies, numbers, and rights of way, are administered in an objective, timely, transparent, and non-discriminatory ma nner by a competent domestic authority.
6 The Republic of 
Costa Rica shall issue licenses for use of spectrum directly to the service providers, in accordance 
with article 121, item 14 of the Constitución Política de la República de Costa Rica .  
 5. Regulated Interconnection 
 
 
 (a)  Costa Rica shall ensure that public te lecommunications services suppliers of another 
Party are provided interconnection with a ma jor supplier in a timely fashion, under 
non-discriminatory terms, conditions,7 and cost-oriented rates that are transparent, 
reasonable, and having regard to economic feasibility.   
 
 (b)  Costa Rica shall also ensure that a service supplier requesting interconnection with a 
major supplier has recourse to an independent domestic body,8 which may be the 
regulatory authority referred to in para graph 2, to resolve disputes regarding 
appropriate terms, conditions, and rates for interconnection within a reasonable time.  
 
6.  Access to and Use of the Network  
 
 (a)  Costa Rica shall ensure that enterprises of another Party have access to and use of any 
public telecommunications services, including leased circuits, offered in its territory or across its borders, on reasonable and non- discriminatory terms and conditions and 
are permitted to:   
 
(i) purchase or lease and attach terminal or other equipment that interfaces with 
a public telecommunications network;   
(ii) provide services to individual or multip le end-users over leased or owned 
circuits;  
(iii) connect owned or leased circuits w ith public telecommunications networks 
and services in its territory, or across Costa Rica’s borders or with circuits 
leased or owned by another person;  
(iv) perform switching, signaling, processi ng, and conversion functions, and use 
operating protocols of their choice; and  
(v) use public telecommunications services for the movement of information 
contained in databases or otherwise stor ed in machine-readable form in the 
territory of any Party.  
 (b)  Notwithstanding subparagraph (a), Co sta Rica may take such measures as are 
necessary to ensure the security and conf identiality of messages or to protect the 
privacy of non-public personal data of subscribers to public telecommunications 
services, subject to the requirement that such measures are not applied in a manner 
                                                     
 
6 The competent domestic authority shall be separate from and not accountable to any supplier of 
telecommunications services. 
7 For purposes of subparagraph (a), conditions  include technical regulations  and specifications, as well 
as the quality of interconnection. 
8 The independent domestic body shall be separate from and not accountable to any supplier of 
telecommunications services. WT/REG211/1 
Page 240  
 
that would constitute a means of arbitrary or unjustifiable discrimination or disguised 
restriction on trade in services.  
  (c)  Costa Rica shall also ensure that no condition is imposed on access to and use of 
public telecommunications networks or services, other than that necessary to 
safeguard the public service responsibilities of providers of public 
telecommunications networks or services, in  particular their ability to make their 
networks or services available to the public generally, or protect the technical integrity of public telecommunications networks or services.  
 
7.  Provision of Information Services 
 
 
(a) Costa Rica may not require an enterprise of  another Party in its territory that it 
classifies9 as a supplier of information services and that supplies such services over 
facilities that it does not own to:   
(i) supply such services to the public generally;  
(ii) cost-justify rates for such services;   
(iii) file tariffs for such services;   
(iv) interconnect its networks with any partic ular customer for the supply of such 
services; or  
(v) conform to any particular standard or  technical regulation for interconnection 
other than that for interconnection to a public telecommunications network.    
(b)  Notwithstanding subparagraph (a), Costa Rica may take any action referred to in 
clauses (i) through (v) to remedy a practice of a supplier of information services that it has found in a particular case to be anti- competitive under its law or regulations, or 
to otherwise promote competition or safeguard the interests of consumers.  
 8.  Competition 
 
  Costa Rica shall maintain appropriate measur es for the purpose of preventing suppliers who, 
alone or together, are a major supplier from e ngaging in anti-competitive practices, such as not 
making available, on a timely basis, to suppliers  of public telecommunications services, technical 
information about essential facilities and commercially re levant information that is necessary for them 
to provide public telecommunications services.    9.  Submarine Cable Systems 
 
  Costa Rica shall ensure reasonable and non-discr iminatory treatment for access to submarine 
cable systems (including landing facilities) in its terr itory, where a supplier is authorized to operate 
such submarine cable system as a public telecommunications service.     
 
                                                     
 
 9 The telecommunications regulatory authority will have  the competence within its territory to classify 
the services included in the information services category .   WT/REG211/1 
 Page 241 
 
 
10. Flexibility in the Choice of Technologies  
  Costa Rica may not prevent suppliers of pub lic telecommunications services from having the 
flexibility to choose the technologies that they use to supply their services, subject to requirements 
necessary to satisfy legitimate public policy interests.  
 
 
ANNEX 13.3:  RURAL TELEPHONE SUPPLIERS  
 
1. A state regulatory authority in the United States may exempt a rural local exchange carrier, as 
defined in section 251(f)(2) of the Communications Act of 1934 , as amended, from the obligations 
contained in paragraphs 2 through 4 of Article 13.3 and from the obligations contained in Article 13.4.  
2. Article 13.4 does not apply to rural telephone co mpanies in the United States, as defined in 
section 3(37) of the Communications Act of 1934 , as amended, unless a state regulatory authority 
orders otherwise.  
3. El Salvador, Guatemala, Honduras, and Nicar agua may designate and exempt a rural 
telephone company in its territory from paragraphs 2 through 4 of Article 13.3 and from Article 13.4, 
provided that the rural telephone company supplies p ublic telecommunications services to fewer than 
two percent of the subscriber lines installed in the Party’s territory. The number of subscriber lines 
supplied by a rural telephone company includes all su bscriber lines supplied by the company, and by 
its owners, subsidiaries, and affiliates.    
4. Nothing in this Annex shall be construed to  preclude a Party from imposing the requirements 
set out in Article 13.4 on rural telephone companies.     
 
ANNEX 13.4.5:  INTERCONNECTION 
 
1. For any Party that does not have an existi ng commitment under the GATS to ensure that a 
major supplier in its territory provides interconnec tion at cost-oriented rates, the obligation under 
Article 13.4.5 to ensure the provision of cost-o riented interconnection shall become effective:  
(a) two years after the date of entry into force of this Agreement; or    
(b) January 1, 2007,  
whichever is earlier.  
2. During the transition period, each such Party shall ensure that major suppliers of public 
telecommunications services in its territory:   
(a) do not charge interconnection rates above the rates charged on December 31, 2003; 
and  
(b) proportionally reduce interconnection rates as ne cessary to ensure that a cost-oriented 
interconnection rate has been achieved by the end of the transition period. 
  
ANNEX 13.4.8:  ACCESS TO RIGHTS-OF-WAY 
 
 Article 13.4.8 shall apply with respect to El  Salvador beginning when its law provides that 
poles, ducts, conducts, and rights-of-way constitute essential resources.  WT/REG211/1 
Page 242  
 
CHAPTER FOURTEEN:  ELECTRONIC COMMERCE  
 
Article 14.1 
 
General
 
1. The Parties recognize the economic growth and opportunity that electronic commerce 
provides, the importance of avoiding barriers to its use and development, and the applicability of 
WTO rules to measures affecting electronic commerce.   2. For greater certainty, nothing in this Chap ter shall be construed to prevent a Party from 
imposing internal taxes, directly or indirectly, on  digital products, provided they are imposed in a 
manner consistent with this Agreement.   
Article 14.2 
 
Electronic Supply Of Services
 
For greater certainty, the Parties affirm that  measures affecting the supply of a service using 
electronic means fall within the scope of the obligations contained in the relevant provisions of Chapters Ten (Investment), Eleven (Cross-Border  Trade in Services), and Twelve (Financial 
Services), subject to any exceptions or non-confor ming measures set out in this Agreement, which 
are applicable to such obligations.  
 
Article 14.3 
 
Digital Products
 
1. No Party may impose customs duties, fees, or other charges on or in connection with the 
importation or exportation of digital pro ducts by electronic transmission.   
2. For purposes of determining applicable cust oms duties, each Party shall determine the 
customs value of an imported carrier medium bearing a digital product based on the cost or value of 
the carrier medium alone, without regard to the cost or value of the digital product stored on the carrier medium.  
3. No Party may accord less favorable treatment  to some digital products transmitted 
electronically than it accords to other like di gital products transmitted electronically:  
(a)  on the basis that  
 
(i) the digital products receiving less favorable treatment are created, produced, 
published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms outside its territory; or  
(ii) the author, performer, producer, developer, or distributor of such digital 
products is a person of another Party or non-Party,  
 
or    WT/REG211/1 
 Page 243 
 
 
 (b)  so as otherwise to afford protection to the other like digital products that are created, 
produced, published, stored, transmitted, cont racted for, commissioned, or first made 
available on commercial terms in its territory. 1 
 
4. No Party may accord less favorable treatment to digital products transmitted electronically:  
(a) that are created, produced, published, stored, transmitted, contracted for, 
commissioned, or first made available on co mmercial terms in the territory of another 
Party than it accords to like digital pr oducts transmitted electronically that are 
created, produced, published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms in  the territory of a non-Party; or  
(b) whose author, performer, producer, developer,  or distributor is a person of another 
Party than it accords to like digital product s transmitted electronically whose author, 
performer, producer, developer, or distri butor is a person of a non-Party.  
5. Paragraphs 3 and 4 do not appl y to any non-conforming measure described in Articles 10.13 
(Non-Conforming Measures), 11.6 (Non-Confor ming Measures), or 12.9 (Non-Conforming 
Measures).   
Article 14.4 
Transparency
 
 Each Party shall publish or otherwise make av ailable to the public its laws, regulations, and 
other measures of general application that pertain to electronic commerce.   
Article 14.5 
 
Cooperation
 
 
Recognizing the global nature of electronic comme rce, the Parties affirm the importance of:  
 
(a) working together to overcome obstacles encountered by small and medium 
enterprises in using electronic commerce;  
(b) sharing information and experiences on laws, regulations, and programs in the sphere 
of electronic commerce, including those rela ted to data privacy, consumer confidence 
in electronic commerce, cyber-security, electronic signatures, intellectual property rights, and electronic government;  
(c) working to maintain cross-border flows of  information as an essential element in 
fostering a vibrant environment for electronic commerce;  
(d) encouraging the private sector to adopt self-regulation, including through codes of 
conduct, model contracts, guidelines, and enforcement mechanisms that foster electronic commerce; and  
 
                                                     
 
 1 For greater certainty, this paragraph does not provide any right to a non-Party or a person of a 
non-Party.  WT/REG211/1 
Page 244  
 
(e) actively participating in hemispheric and multilateral fora to promote the 
development of electronic commerce.  
Article 14.6  
 
Definitions
 
For purposes of this Chapter:  
 
 carrier medium  means any physical object capable of storing the digital codes that form a 
digital product by any method now known or later de veloped, and from which a digital product can be 
perceived, reproduced, or communicated, directly or  indirectly, and includes an optical medium, a 
floppy disk, and a magnetic tape;  
 
 digital products means computer programs, text, video,  images, sound recordings, and other 
products that are digitally encoded;2 
 
 electronic means  means employing computer processing; and  
 
 electronic transmission or transmitted electronically  means the transfer of digital products 
using any electromagnetic or photonic means.  
 
 
CHAPTER FIFTEEN:  INTELLECTUAL PROPERTY RIGHTS  
 
Article 15.1 
 
General Provisions  
1. Each Party shall, at a minimum, give effect to  this Chapter.  A Party may, but shall not be 
obliged to, implement in its domestic law more ex tensive protection and enforcement of intellectual 
property rights than is required under this Chapte r, provided that such protection and enforcement 
does not contravene this Chapter.   
2. Each Party shall ratify or accede to the following ag reements by the date of entry into force of 
this Agreement:  
(a) the WIPO Copyright Treaty  (1996); and  
(b) the WIPO Performances and Phonograms Treaty  (1996).  
3. Each Party shall ratify or accede to the fo llowing agreements by January 1, 2006:  
(a) the Patent Cooperation Treaty , as revised and amended (1970); and  
(b) the Budapest Treaty on the International Recognition of the Deposit of 
Microorganisms for the Purposes of Patent Procedure  (1980).  
  
                                                     
 
 2 For greater certainty, digital products do not include digitized representations of financial 
instruments.    WT/REG211/1 
 Page 245 
 
 
4. Each Party shall ratify or accede to the fo llowing agreements by January 1, 2008:  
(a) the Convention Relating to the Distribution of Programme-Carrying Signals 
Transmitted by Satellite  (1974); and  
(b) the Trademark Law  Treaty (1994).  
5. (a) Each Party shall ratify or accede to the International Convention for the Protection of 
New Varieties of Plants  (1991) (UPOV Convention 1991).1   
Nicaragua shall do so by 
January 1, 2010. Costa Rica shall do so by June 1, 2007. All other Parties shall do so by January 1, 2006.  
 
 (b)  Subparagraph (a) shall not apply to any Party that provides effective patent protection 
for plants by the date of entry into force of  this Agreement.  Such Parties shall make 
all reasonable efforts to ratify or accede to the UPOV Convention 1991.  
 
6.  Each Party shall make all reasonable effort s to ratify or accede to the following agreements:  
 
(a) the Patent Law Treaty  (2000);  
(b) the Hague Agreement Concerning the International Registration of Industrial 
Designs  (1999); and  
(c) the Protocol Relating to the Madrid Ag reement Concerning the International 
Registration of Marks  (1989).  
7. Further to Article 1.3 (Relation to Other Agre ements), the Parties affirm their existing rights 
and obligations under the TRIPS Agreement and in tellectual property agreements concluded or 
administered under the auspices of the World Intellectual Property Organization (WIPO) and to which they are party.  
 
8. In respect of all categories of intellectual pr operty covered in this Chapter, each Party shall 
accord to nationals2 of the other Parties treatment no less favorable than it accords to its own nationals 
with regard to the protection3 and enjoyment of such intellectual property rights and any benefits 
derived from such rights.    9. A Party may derogate from paragraph 8 in relation to its judicial and administrative 
procedures, including any procedure requiring a nationa l of another Party to designate for service of 
process an address in its territory or to appoint an agen t in its territory, provided that such derogation:  
                                                     
 
 1 The Parties recognize that the UP OV Convention 1991 contains exceptions to the breeder’s right, 
including for acts done privately and for non-commercial purposes, such as private and non-commercial acts of 
farmers.  Further, the Parties recogn ize that the UPOV Conventio n 1991 provides for restrictions to the exercise 
of a breeder’s right for reasons of public interest, provided  that the Parties take all m easures necessary to ensure 
that the breeder receives equitable remuneration.  The Part ies also understand that each Party may avail itself of 
these exceptions and restrictions.  Fi nally, the Parties understand that there is no conflict between the UPOV 
Convention 1991 and a Party’s ability to protect and conserve its genetic resources.  
 2 For purposes of Articles 15.1.8, 15.1.9, 15.4.2, and 15.7.1, a national of a Party shall also mean, in 
respect of the relevant right, an entity located in that Party that would meet the criteria for eligibility for 
protection provided for in the agreements listed in Artic le 15.1.2 through 15.1.6 and the TRIPS Agreement.  
 3 For purposes of this paragraph, “protection” shall include matters affecting the availability, 
acquisition, scope, maintenance, and enforcement of intell ectual property rights as well as matters affecting the 
use of intellectual property rights specifically covered by this Chapter.  Further, for purposes of this paragraph, “protection” shall also include the prohibition on circum vention of effective technological measures set out in 
Article 15.5.7 and the rights and obligations concerning rights management information set out in 
Article 15.5.8.  WT/REG211/1 
Page 246  
 
(a)  is necessary to secure compliance with laws and regulations that are not 
inconsistent with this Chapter; and  
 
 (b) is not applied in a manner that would constitute a disguised restriction on trade.  
 10. Paragraph 8 does not apply to procedures pr ovided in multilateral agreements to which the 
Parties are party concluded under the auspices of WI PO in relation to the acquisition or maintenance 
of intellectual property rights.  
 
11. Except as it provides otherwise, this Chapter giv es rise to obligations in respect of all subject 
matter existing on the date of entry into force of this  Agreement that is protected on that date in the 
Party where protection is claimed, or that meets or comes subsequently to meet the criteria for 
protection under this Chapter.  
 
12. Except as otherwise provided in this Chapte r, a Party shall not be required to restore 
protection to subject matter that on the date of entr y into force of this Agreement has fallen into the 
public domain in the Party where the protection is claimed.    
13. This Chapter does not give rise to obligations in respect of acts that occurred before the date 
of entry into force of this Agreement.   14. Each Party shall ensure that all laws, regu lations, and procedures concerning the protection or 
enforcement of intellectual property rights shall be in writing and shall be published,
4 or where such 
publication is not practicable, made publicly availabl e, in a national language in such a manner as to 
enable governments and right holders to become acquainted with them, with the object of making the 
protection and enforcement of intellect ual property rights transparent.   
 15. Nothing in this Chapter shall be constr ued to prevent a Party from adopting measures 
necessary to prevent anticompetitiv e practices that may result from the abuse of the intellectual 
property rights set out in this Chapter, provided that  such measures are consistent with this Chapter.  
 16. Recognizing the Parties’ commitment to trade capacity building as reflected in the 
establishment of the Committee on Trade Capacity Building under Article 19.4 (Committee on Trade 
Capacity Building) and the importance of trade capac ity building activities, the Parties shall cooperate 
through that Committee in the following initial cap acity-building priority activities, on mutually 
agreed terms and conditions, and subject to  the availability of appropriated funds:  
 
(a) educational and dissemination projects on the use of intellectual property as a 
research and innovation tool, as well as on th e enforcement of intellectual property 
rights;  
(b) appropriate coordination, training, sp ecialization courses, and exchange of 
information between the intellectual prope rty offices and other institutions of the 
Parties; and  
(c) enhancing the knowledge, de velopment, and implementation of the electronic 
systems used for the management of intellectual property.   
 
 
                                                     
 
4 A Party may satisfy the requirement for publication by making the measure available to the public on 
the Internet.  WT/REG211/1 
 Page 247 
 
 
Article 15.2 
 
Trademarks  
1. Each Party shall provide that trademarks sh all include collective, certification, and sound 
marks, and may include geographical indications and scent marks.  A geographical indication is 
capable of constituting a mark to the extent that th e geographical indication consists of any sign, or 
any combination of signs, capable of identifying a good or service as originating5 in the territory of a 
Party, or a region or locality in that territory, wher e a given quality, reputation, or other characteristic 
of the good or service is essentially attri butable to its geographical origin.   
2. In view of the obligations of Article 20 of th e TRIPS Agreement, each Party shall ensure that 
measures mandating the use of the term customary in common language as the common name for a good or service (“common name”) including, inter alia , requirements concerning the relative size, 
placement, or style of use of the trademark in re lation to the common name, do not impair the use or 
effectiveness of trademarks used in relation to such goods.  
3. Each Party shall provide that the owner of a registered trademark shall have the exclusive 
right to prevent all third parties not having the owner’s consent from using in the course of trade 
identical or similar signs, including geographical i ndications, for goods or services that are related to 
those goods or services in respect of which the owne r’s trademark is registered, where such use would 
result in a likelihood of confusion.  In case of th e use of an identical sign, including a geographical 
indication, for identical goods or services, a likelihood of c onfusion shall be presumed.  
4. Each Party may provide limited exceptions to the rights conferred by a trademark, such as fair 
use of descriptive terms, provided that such exceptions  take account of the legitimate interest of the 
owner of the trademark and of third parties.   
5. Article 6 bis of the Paris Convention for the Protection of Industrial Property  (1967) (Paris 
Convention) shall apply, mutatis mutandis , to goods or services that are not identical or similar to 
those identified by a well-known trademark,
6 whether registered or not, provided that use of that 
trademark in relation to those goods or services w ould indicate a connection between those goods or 
services and the owner of the trademark, and provided that the interests of the owner of the trademark 
are likely to be damaged by such use.  
6.  Each Party shall provide a system for the registration of trademarks, which shall include:  
 
(a) providing to the applicant a communication in writing, which may be electronic, of 
the reasons for any refusal to register a trademark;  
(b) an opportunity for the applicant to resp ond to communications from the trademark 
authorities, to contest an initial refusal, and to appeal judicially a final refusal to register;  
(c) an opportunity for interested parties to petition to oppose a trademark application or 
to seek cancellation of a trademark after it has been registered; and  
 
                                                     
 
5 For purposes of this Chapter, “originating” does not have the meaning ascribed to that term in 
Article 2.1 (Definitions of  General Application). 
 6 In determining whether a trademark is well known, the reputation of the trad emark need not extend 
beyond the sector of the public that normally deals with the relevant goods or services.    WT/REG211/1 
Page 248  
 
(d) a requirement that decisions in oppositi on or cancellation proceedings be reasoned 
and in writing.  
7. Each Party shall provide, to the maximu m degree practical, a system for the electronic 
application, processing, registration, and maintena nce of trademarks, and work to provide, to the 
maximum degree practical, a publicly available elect ronic database – including an on-line database – 
of trademark applications and registrations.   
 8.  (a) Each Party shall provide that each registration or publication that concerns a 
trademark application or registration and that indicates goods or services shall indicate the goods or services by their common names, grouped according to the 
classes of the classification established by the Nice Agreement Concerning the 
International Classification of Goods and Services for the Purposes of the 
Registration of Marks (1979), as revised and amended (Nice Classification).  
  (b)  Each Party shall provide that goods  or services may not be considered as being 
similar to each other solely on the ground th at, in any registration or publication, they 
appear in the same class of the Nice Cl assification.  Conversely, each Party shall 
provide that goods or services may not be considered as being dissimilar from each other solely on the ground that, in any registration or publication, they appear in different classes of the Nice Classification.  
 
9. Each Party shall provide that initial regi stration and each renewal of registration of a 
trademark shall be for a term of no less than ten years.  
 
10. No Party may require recordal of trademark lic enses to establish the validity of the license, to 
assert any rights in a trademark, or for other purposes.7 
 
Article 15.3 
 
Geographical Indications  
Definition 
 
1. For purposes of this Article, geographical indica tions are indications that identify a good as 
originating in the territory of a Party, or a region or locality in that territory, where a given quality, 
reputation, or other characteristic of the good is essen tially attributable to its geographical origin. Any 
sign or combination of signs, in any form whatsoever, shall be eligible to be a geographical indication.  
Procedures with Respect to Geographical Indications  
 
2. Each Party shall provide the legal means to identify8 and protect geographical indications of 
the other Parties that meet the criteria of paragraph 1.  Each Party shall provide the means for persons 
of another Party to apply for pr otection or petition for recognition of geographical indications. Each 
Party shall accept applications and petitions from pers ons of another Party without the requirement for 
intercession by that Party on be half of its persons.    
                                                      
 7 A Party may establish a means to allow licensees to record licenses for the purpose of providing 
notice to the public as to the existence of the license .  However, no Party may make notice to the public a 
requirement for asserting any rights under the license.  
 8 For purposes of this paragraph, legal means to identify  means a system that permits applicants to 
provide information on the quality, reputation, or other ch aracteristics of the asserted geographical indication.   WT/REG211/1 
 Page 249 
 
 
3. Each Party shall process applications or petitions, as the case may be, for geographical 
indications with a minimum of formalities.   
4. Each Party shall make its regulations governing filing of such applications or petitions, as the 
case may be, readily available to the public.   
5. Each Party shall ensure that applications or  petitions, as the case may be, for geographical 
indications are published for opposition, and sha ll provide procedures for opposing geographical 
indications that are the subject of applications or petitions.  Each Party shall also provide procedures 
to cancel any registration resulting from an application or a petition.  
6. Each Party shall ensure that measures governi ng the filing of applications or petitions, as the 
case may be, for geographical indications set out clear ly the procedures for these actions.  Each Party 
shall make available contact information sufficient to allow (a) the general public to obtain guidance 
concerning the procedures for filing applications or  petitions and the processing of those applications 
or petitions in general; and (b) app licants, petitioners, or their representatives to ascertain the status of, 
and to obtain procedural guidance concer ning, specific applications and petitions.  
Relationship between Trademarks and Geographical Indications  
 
7. Each Party shall ensure that grounds for refu sing protection or recognition of a geographical 
indication include the following:  
(a) the geographical indication is likely to be c onfusingly similar to a trademark that is 
the subject of a good-faith pending a pplication or registration; and  
(b) the geographical indication is likely to be  confusingly similar to a pre-existing 
trademark, the rights to which have been acquired in accordance with the Party’s law.
9 
 
Article 15.4 
 
Domain Names On The Internet  
1. In order to address trademark cyber-piracy, each Party shall require that the management of 
its country-code top-level domain (ccTLD) provides an appropriate procedure for the settlement of 
disputes based on the principles established in the Uniform Domain-Name Dispute-Resolution Policy .  
2. Each Party shall require that the management of its ccTLD provides on-line public access to a 
reliable and accurate database of contact information for domain-name registrants.  In determining the 
appropriate contact information, the management of a Party’s ccTLD may give due regard to the 
Party’s laws protecting the privacy of its nationals.  
 
    
                                                     
 
9 For purposes of this paragraph, the Parties unders tand that each Party has al ready established grounds 
for refusing protection of a trademark under its law, including that (a) the trademark is likely to be confusingly similar to a geographical indication that is the subject of a registration; and (b) the trademark is likely to be 
confusingly similar to a pre-existing geographical indication, the rights to which have been acquired in 
accordance with the Party’s law. WT/REG211/1 
Page 250  
 
Article 15.5 
 
Obligations Pertaining To Copyright And Related Rights
 
1. Each Party shall provide that authors, performers, and producers of phonograms10 have the 
right11 to authorize or prohibit all reproductions of their works, performances, or phonograms, in any 
manner or form, permanent or temporary (incl uding temporary storage in electronic form).12  
2. Each Party shall provide to authors, performers, and producers of phonograms the right to 
authorize the making available to the public of the original and copies of their works, performances, 
and phonograms13 through sale or other transfer of ownership.  
3. In order to ensure that no hierarchy is estab lished between rights of authors, on the one hand, 
and rights of performers and pr oducers of phonograms, on the other hand, each Party shall establish 
that in cases where authorization is needed from both the author of a work embodied in a phonogram 
and a performer or producer owning rights in the phonogram, the need for the authorization of the 
author does not cease to exist because the authorizati on of the performer or producer is also required.  
Likewise, each Party shall establish that in cases wh ere authorization is needed from both the author 
of a work embodied in a phonogram and of a performer or producer owning rights in the phonogram, the need for the authorization of the performer  or producer does not cease to exist because the 
authorization of the author is also required.  
4. Each Party shall provide that, where the te rm of protection of a work (including a 
photographic work), performance, or phonogram is to be calculated:  
(a) on the basis of the life of a natural person, th e term shall be not less than the life of 
the author and 70 years after the author’s death; and  
(b) on a basis other than the life of a natural person, the term shall be:  
(i) not less than 70 years from the end of the calendar year of the first authorized 
publication of the work, performance, or phonogram, or   
(ii) failing such authorized publication with in 50 years from the creation of the 
work, performance, or phonogram, not less than 70 years from the end of the calendar year of the creation of the work, performance, or phonogram.  
5. Each Party shall apply the provisions of Artic le 18 of the Berne Convention and Article 14.6 
of the TRIPS Agreement, mutatis mutandis , to the subject matter, rights, and obligations provided for 
in this Article and Ar ticles 15.6 and 15.7.   
6. Each Party shall provide that for copyright and related rights:  
                                                     
 
 10 References in this Chapter to “authors, performers, and producers of phonograms” include any 
successors in interest.   
 11 With respect to copyrights and related rights in this Chapter, a right to authorize or prohibit or a right 
to authorize means an exclusive right.  
 12 The Parties understand that the reproduction right as set out in this paragraph and in Article 9 of 
the Berne Convention for the Protection of Literary and Artistic Works  (1971) (Berne Convention) and the 
exceptions permitted under the Berne Convention and Article 15.5.10(a) fully apply in the digital 
environment, in particular to the use of works in digital form.  
 13 With respect to copyright and related rights in this Chapter, a “p erformance” refers to a 
performance fixed in a phonogram, unless otherwise specified.   WT/REG211/1 
 Page 251 
 
 
(a) any person acquiring or holding any econom ic right in a work, performance, or 
phonogram may freely and separately transfer such right by contract; and  
(b) any person acquiring or holding any such ec onomic right by virtue of a contract, 
including contracts of employment underlying the creation of works and performances, and production of phonograms, sh all be able to exercise such right in 
that person’s own name and enjoy fully the benefits derived from such right.  
7.  (a) In order to provide adequate legal pr otection and effective lega l remedies against the 
circumvention of effective technological me asures that authors, performers, and 
producers of phonograms use in connection with the exercise of their rights and that 
restrict unauthorized acts in respect of th eir works, performances, and phonograms, 
each Party shall provide that any person who:  
 
(i) circumvents without authority any effective technological measure that 
controls access to a protected work, performance, phonogram, or other subject matter; or   
(ii) manufactures, imports, distributes, offers to the public, provides, or otherwise 
traffics in devices, products, or components, or offers to the public or 
provides services, that:  
  (A)  are promoted, advertised, or marketed for the purpose of 
 circumvention of any effective technological measure; or  
 
   (B)  have only a limited commercially significant purpose or use other 
    than to circumvent any effective technological measure; or     (C)  are primarily designed, produced, or performed for the purpose of 
 enabling or facilitating the circumvention of any effective  technological measure,  
 
shall be liable and subject to the remedi es provided for in Article 15.11.14.  Each 
Party shall provide for criminal procedur es and penalties to be applied when any 
person, other than a nonprofit library, arch ive, educational institution, or public 
non-commercial broadcasting entity, is f ound to have engaged willfully and for 
purposes of commercial advantage or private financial gain in any of the foregoing 
activities.   
 (b)  In implementing subparagraph (a), no Pa rty shall be obligated to require that the 
design of, or the design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological measure, so long as the product does not otherwise violate 
any measures implementing subparagraph (a).  
  (c)  Each Party shall provide that a violatio n of a measure implementing this paragraph is 
a separate civil cause of action or criminal offense, independent of any infringement that might occur under the Party’s law on copyright and related rights.  
 
 (d)  Each Party shall confine exceptions to  any measures implementing the prohibition in 
subparagraph (a)(ii) on technol ogy, products, services, or devices that circumvent 
effective technological measures that contro l access to, and, in the case of clause (i), WT/REG211/1 
Page 252  
 
that protect any of the exclusive rights of copyright or related rights in, a protected work, performance, or phonogram referred to in subparagraph (a)(ii), to the following 
activities, provided that they do not impair the adequacy of legal protection or the effectiveness of legal remedies against th e circumvention of effective technological 
measures:  
 
  (i)  noninfringing reverse engineering activities with regard to a lawfully 
 obtained copy of a computer program, carried out in good faith with respect  to particular elements of that comput er program that have not been readily 
 available to the person engaged in th ose activities, for the sole purpose of 
 achieving interoperability of an independently created computer program 
 with other programs;  
   (ii)  noninfringing good faith activities, carried out by an appropriately qualified 
 researcher who has lawfully obtained a copy, unfixed performance or display 
 of a work, performance, or phonogram, and who has made a good faith effort 
 to obtain authorization for such activiti es, to the extent necessary for the sole 
 purpose of identifying and analyzing flaws and vulnerabilities of technologies  for scrambling and descrambling of information;  
   (iii)  the inclusion of a component or part for the sole purpose of preventing the 
 access of minors to inappropriate on-lin e content in a technology, product, 
 service, or device that itself is not prohibited under the measures  implementing subpara graph (a)(ii); and  
   (iv)  noninfringing good faith activities that are authorized by the owner of a 
 computer, computer system, or computer network for the sole purpose of 
 testing, investigating, or correcting the security of that computer, computer  system, or computer network.  
  (e)  Each Party shall confine exceptions to any measures implementing the prohibition 
referred to in subparagraph (a)(i) to the ac tivities listed in subparagraph (d) and the 
following activities, provided that they do not impair the adequacy of legal protection 
or the effectiveness of legal remedies against the circumvention of effective technological measures:  
 
(i) access by a nonprofit library, archive, or educational institution to a work, 
performance, or phonogram, not otherwis e available to it, for the sole 
purpose of making acquisition decisions;  
(ii) noninfringing activities for the sole purpose of identifying and disabling a 
capability to carry out undisclosed collection or dissemination of personally identifying information reflecting the on -line activities of a natural person in 
a way that has no other effect on the ability of any person to gain access to 
any work; and  
(iii)  noninfringing uses of a work, performance, or phonogram, in a particular 
class of works, performances, or phonograms, when an actual or likely 
adverse impact on those noninfringing uses is demonstrated in a legislative or 
administrative proceeding by substantial evidence; provided that in order for 
any such exception to remain in effect for more than four years, a Party must 
conduct a review before the expiration of the four-year period and at intervals 
of at least every four years thereafter, pursuant to which it is demonstrated in  WT/REG211/1 
 Page 253 
 
 
such a proceeding by substantial evidence that there is a continuing actual or 
likely adverse impact on the particular noninfringing use.  
 
 (f)  Each Party may provide exceptions to any measures implementing the prohibitions 
referred to in subparagraph (a) for lawfully authorized  activities carried out by 
government employees, agents, or contractors for law enforcement, intelligence, essential security, or similar governmental purposes.   
 
 (g)  Effective technological measure means any technology, device, or component that, 
in the normal course of its operation, controls access to a protected work, 
performance, phonogram, or other protected subject matter, or protects any copyright or any rights related to copyright.  
 
8. In order to provide adequate legal protecti on and effective legal remedies to protect rights 
management information:   
(a) Each Party shall provide that any pers on who, without authority, and knowing, or, 
with respect to civil remedies, having reasonable grounds to know, that it would 
induce, enable, facilitate, or conceal an infri ngement of any copyright or related right,  
   (i) knowingly removes or alters any rights management information;   
   (ii)  distributes or imports for distribution rights management information 
 knowing that the rights management info rmation has been removed or altered 
 without authority; or  
 
(iii)  distributes, imports for distribution, broadcasts, communicates or makes 
available to the public copies of works, performances, or phonograms, knowing that rights management inform ation has been removed or altered 
without authority,  
 shall be liable and subject to the remedies provided for in Article 15.11.14. Each 
Party shall provide for criminal procedur es and penalties to be applied when any 
person, other than a nonprofit library, archiv e, educational institution, or public non-
commercial broadcasting entity, is found to have engaged willfully and for purposes 
of commercial advantage or private financial gain in any of the foregoing activities.  
 
 (b)  Each Party shall confine exceptions to measures implementing subparagraph (a) to 
lawfully authorized activities carried out by government employees, agents, or 
contractors for law enforcement, intelligen ce, national defense, essential security, or 
similar governmental purposes.   
  (c)  Rights management information means:  
 
  (i)  information that identifies a work , performance, or phonogram, the author of 
 the work, the performer of the pe rformance, or the producer of the 
 phonogram, or the owner of any right in the work, performance, or  phonogram; or   
 
  (ii)  information about the terms and conditions of the use of the work, 
 performance, or phonogram; or  WT/REG211/1 
Page 254  
 
(iii)  any numbers or codes that represent such information,   
 
when any of these items is attached to  a copy of the work, performance, or 
phonogram or appears in connection with the communication or making available of a work, performance, or phonogram to the public.  Nothing in this paragraph shall 
obligate a Party to require the owner of any right in the work, performance, or phonogram to attach rights management information to copies of the work, performance, or phonogram, or to cause right s management information to appear in 
connection with a communication of the work, performance, or phonogram to the public.   
9. In order to confirm that all agencies at the cen tral level of government use computer software 
only as authorized, each Party shall issue appropriate  laws, orders, regulations, or decrees to actively 
regulate the acquisition and management of software for such use.  These measures may take the form 
of procedures such as preparing and maintaining inventories of software on agency computers and 
inventories of software licenses.   10. (a)  With respect to Articles 15.5, 15.6, and 15.7, each Party sha ll confine limitations or 
exceptions to exclusive rights to certain special cases that do not conflict with a 
normal exploitation of the work, performance, or phonogram, and do not 
unreasonably prejudice the legitimate interests of the right holder .  
 
(b)  Notwithstanding subparagraph (a) and Ar ticle 15.7.3(b), no Party may permit the 
retransmission of television signals (whether terrestrial, cable, or satellite) on the 
Internet without the authorization of the right holder or right holders of the content 
of the signal and, if any, of the signal.  
 
Article 15.6 
 
Obligations Pertaining Specifically To Copyright
 
Without prejudice to Articles 11(1)(ii), 11 bis(1)(i) and (ii), 11 ter(1)(ii), 14(1)(ii), and 14 bis(1) 
of the Berne Convention, each Party shall provide to authors the exclusive right to authorize or prohibit the communication to the public of their works, directly or indirectly, by wire or wireless 
means, including the making available to the public of  their works in such a way that members of the 
public may access these works from a place and at  a time individually chosen by them.  
 
Article 15.7 
 
Obligations Pertaining Specifically To Related Rights
 
1. Each Party shall accord the rights provided for in this Chapter with respect to performers and 
producers of phonograms to the performers and pr oducers of phonograms who are nationals of 
another Party and to performances or phonograms first pub lished or fixed in the territory of a Party. A 
performance or phonogram shall be considered first pub lished in the territory of a Party in which it is 
published within 30 days of its original publication.14 
2. Each Party shall provide to performers the right to authorize or prohibit:  
                                                      
 14 For purposes of this Article, fixation includes the fi nalization of the master tape or its equivalent.   WT/REG211/1 
 Page 255 
 
 
 (a)  the broadcasting and communication to the public of their unfixed performances 
except where the performance is alread y a broadcast performance; and   
  (b)  the fixation of their unfixed performances.   
3. (a) Each Party shall provide to performers and producers of phonograms the right to 
authorize or prohibit the broadcasting or any communication to the public of their performances or phonograms, by wire or wireless means, including the making available to the public of those perform ances and phonograms in such a way that 
members of the public may access them from a place and at a time individually 
chosen by them.    
  (b)  Notwithstanding subparagra ph (a) and Article 15.5.10, the application of this right to 
traditional free over-the-air noninteractive br oadcasting, and exceptions or limitations 
to this right for such broadcasting, shall be a matter of domestic law.    
 
 (c)  Each Party may adopt limitations to this right in respect of other noninteractive 
transmissions in accordance with Article 15. 5.10, provided that the limitations do not 
prejudice the right of the performer or producer of phonograms to obtain equitable remuneration.  
 
4. No Party may subject the enjoyment and exercise of the rights of performers and producers of 
phonograms provided for in this Chapter to any formality.   5.  For purposes of this Article and Article 15.5,  the following definitions apply with respect to 
performers and producers of phonograms:  
 
(a) performers  means actors, singers, musicians, dancers, and other persons who act, 
sing, deliver, declaim, play in, interpret,  or otherwise perform literary or artistic 
works or expressions of folklore;  
(b) phonogram  means the fixation of the sounds of a performance or of other sounds, or 
of a representation of sounds, other than in the form of a fixation incorporated in a 
cinematographic or other audiovisual work;  
(c) fixation  means the embodiment of sounds, or of the representations thereof, from 
which they can be perceived, reproduced, or communicated through a device;   
(d) producer of a phonogram means the person, or the lega l entity, who or which takes 
the initiative and has the responsibility for the first fixation of the sounds of a 
performance or other sounds, or the representations of sounds;   
(e) publication  of a performance or a phonogram means the offering of copies of the 
fixed performance or the phonogram to the public, with the consent of the right 
holder, and provided that copies are offered to the public in reasonable quantity;  
(f) broadcasting  means the transmission by wireless means or satellite to the public of 
sounds or sounds and images, or of the re presentations thereof, including wireless 
transmission of encrypted signals where the means for decrypting are provided to the 
public by the broadcasting organization or with its consent; and  
 WT/REG211/1 
Page 256  
 
(g) communication to the public  of a performance or a phonogram means the 
transmission to the public by any medium, otherwise than by broadcasting, of sounds of a performance or the sounds or the repr esentations of sounds fixed in a phonogram.  
For purposes of paragraph 3, “communication to the public” includes making the sounds or representations of sounds fixed in  a phonogram audible to the public.  
Article 15.8 
 
Protection Of Encrypted Program-Carrying Satellite Signals
 
1.  Each Party shall make it a criminal offense:  
 
(a) to manufacture, assemble, modify, import, export, sell, lease, or otherwise distribute a 
tangible or intangible device or system, knowing or having reason to know that the 
device or system is primarily of assistance in decoding an encrypted program-carrying satellite signal without the authorization of the lawful distributor of such signal; and  
(b) willfully to receive and further distribute a program-carrying signal that originated as 
an encrypted satellite signal knowing th at it has been decoded without the 
authorization of the lawful distributor of the signal.   
2. Each Party shall provide for civil remedies,  including compensatory damages, for any person 
injured by any activity described in paragraph 1, including any person that holds an interest in the 
encrypted programming signal or its content.  
 
Article 15.9 
 
Patents
 
1. Each Party shall make patents available for an y invention, whether a product or a process, in 
all fields of technology, provided that the invention is new, involves an inventive step, and is capable 
of industrial application. For purposes of this Articl e, a Party may treat the terms “inventive step” and 
“capable of industrial application” as being synony mous with the terms “non-obvious” and “useful,” 
respectively.   
2. Nothing in this Chapter shall be construed to  prevent a Party from excluding inventions from 
patentability as set out in Articles 27.2 and 27.3 of the TRIPS Agreement.  Notwithstanding the 
foregoing, any Party that does not provide patent prot ection for plants by the date of entry into force 
of this Agreement shall undertake all reasonable effort s to make such patent protection available. Any 
Party that provides patent protection for plants or an imals on or after the date of entry into force of 
this Agreement shall maintain such protection.  
3. A Party may provide limited exceptions to th e exclusive rights conferred by a patent, 
provided that such exceptions do not unreasonably c onflict with a normal exploitation of the patent 
and do not unreasonably prejudice the legitimate inter ests of the patent owner, taking account of the 
legitimate interests of third parties.   
4. Without prejudice to Article 5.A(3) of the Pari s Convention, each Party shall provide that a 
patent may be revoked or cancelled only on grounds th at would have justified a refusal to grant the 
patent. However, a Party may also provide that fra ud, misrepresentation, or inequitable conduct may 
be the basis for revoking, canceling, or holding a patent unenforceable.     WT/REG211/1 
 Page 257 
 
 
5. Consistent with paragraph 3, if  a Party permits a third person to use the subject matter of a 
subsisting patent to generate in formation necessary to support an a pplication for marketing approval 
of a pharmaceutical or agricultural chemical pr oduct, that Party shall provide that any product 
produced under such authority shall not be made, used, or sold in the territory of that Party other than 
for purposes related to generating information to meet requirements for approval to market the 
product once the patent expires, and if the Part y permits exportation, the product shall only be 
exported outside the territory of that Party for purposes of meeting marketing approval requirements 
of that Party.  
6.  (a) Each Party, at the request of the patent  owner, shall adjust the term of a patent to 
compensate for unreasonable delays that occur in granting the patent.  For purposes 
of this paragraph, an unreas onable delay shall at least include a delay in the issuance 
of the patent of more than five years from the date of filing of the application in the 
territory of the Party, or three years after a request for examination of the application 
has been made, whichever is later, provided th at periods attributable to actions of the 
patent applicant need not be included in  the determination of such delays.  
 
 (b) With respect to any pharmaceutical produc t that is covered by a patent, each Party 
shall make available a restoration of the pa tent term to compensate the patent owner 
for unreasonable curtailment of the effective patent term resulting from the marketing approval process related to the first comme rcial marketing of the product in that 
Party.  
 
7. Each Party shall disregard information containe d in public disclosures used to determine if an 
invention is novel or has an inventive step if the public disclosure (a) was made or authorized by, or derived from, the patent applicant, and (b) occurred w ithin 12 months prior to the date of filing of the 
application in the territory of the Party.  
 
8. Each Party shall provide patent applican ts with at least one opportunity to submit 
amendments, corrections, and observations in  connection with their applications.  
 9. Each Party shall provide that a disclosure of a claimed invention shall be considered to be 
sufficiently clear and complete if it provides inform ation that allows the invention to be made and 
used by a person skilled in the art, without un due experimentation, as of the filing date.  
 10. Each Party shall provide that a claimed inven tion is sufficiently supported by its disclosure if 
the disclosure reasonably conveys to a person skilled in the art that the applicant was in possession of 
the claimed invention as of the filing date.  
 
11. Each Party shall provide that a claimed inventi on is industrially applicable if it has a specific, 
substantial, and credible utility.    
Article 15.10 
 
Measures Related To Certain Regulated Products
 
1.  (a)  If a Party requires, as a condition of approving the marketing of a new pharmaceutical 
or agricultural chemical product, the submission of undisclosed data concerning 
safety or efficacy, the Party shall not permit third persons, without the consent of the 
person who provided the information, to market a product on the basis of (1) the information, or (2) the approval granted to the person who submitted the information WT/REG211/1 
Page 258  
 
for at least five years for pharmaceutical  products and ten years for agricultural 
chemical products from the date of approval in the Party.
15 
  (b)  If a Party permits, as a condition of a pproving the marketing of a new pharmaceutical 
or agricultural chemical product, third persons to submit evidence concerning the 
safety or efficacy of a product that was previously approved in another territory, such 
as evidence of prior marketing approval, the Party shall not permit third persons, 
without the consent of the person who previously obtained such approval in the other territory, to obtain authorization or to mark et a product on the basis of (1) evidence of 
prior marketing approval in the other territo ry, or (2) information concerning safety or 
efficacy that was previously submitted to  obtain marketing approval in the other 
territory, for at least five years for pharmaceutical products and ten years for agricultural chemical products from the da te approval was granted in the Party’s 
territory to the person who received approval in  the other territory. In order to receive 
protection under this subparagraph, a Part y may require that the person providing the 
information in the other territory seek approval in the territory of the Party within five 
years after obtaining marketing approval in the other territory.   
  (c)  For purposes of this paragraph, a new pr oduct is one that does not contain a chemical 
  entity that has been previously approved in the territory of the Party.   
 (d)  For purposes of this paragraph, each Pa rty shall protect such undisclosed information 
against disclosure except where necessary to protect the public, and no Party may consider information accessible within the public domain as undisclosed data. 
Notwithstanding the foregoing, if any undisclosed information concerning safety and efficacy submitted to a Party, or an entity acting on behalf of a Party, for purposes of 
obtaining marketing approval is disclosed by such entity, the Party is still required to 
protect such information from unfair commerc ial use in the manner set forth in this 
Article.  
 2. Where a Party permits, as a condition of approving the marketing of a pharmaceutical 
product, persons, other than the person originally subm itting safety or efficacy information, to rely on 
evidence or information concerning the safety and e fficacy of a product that was previously approved, 
such as evidence of prior marketing approval in the territory of a Party or in another country, that 
Party:   
(a) shall implement measures in its marketi ng approval process to prevent such other 
persons from marketing a product covered by a patent claiming the previously 
approved product or its approved use during the term of that patent, unless by consent 
or acquiescence of the patent owner; and  
(b) shall provide that the patent owner shall be informed of th e request and the identity of 
any such other person who requests approval to  enter the market during the term of a 
patent identified as claiming the approved product or its approved use.  
 
   
                                                     
 
 15 Where a Party, on the date it implemented the TRIPS Agreement, had in place a system for 
protecting pharmaceutical or agricultural chemical pro ducts not involving new chemical entities from unfair 
commercial use that conferred a period of protection shorte r than that specified in paragraph 1, that Party may 
retain such system notwithstanding the obligations of paragraph 1.   WT/REG211/1 
 Page 259 
 
 
Article 15.11 
 
Enforcement Of Intellectual Property Rights  
General Obligations  
 
1. Each Party understands that procedures and remedies required under this Article for 
enforcement of intellectual property righ ts are established in accordance with:   
 (a)  the principles of due process that each Party recognizes; and   
  (b)  the foundations of its own legal system.   2. This Article does not create any obligation:  
 (a) to put in place a judicial system for the enforcement of intellectual property rights 
distinct from that for the enforcement of law in general; or   
  (b) with respect to the distribution of resources for the enforcement of intellectual 
property rights and the enforcement of law in general.  
 
 The Parties understand that the decisions that a Party makes on the distribution of enforcement resources shall not excuse that Pa rty from complying with this Chapter.  
 3. Each Party shall provide that final judicial decisions or administrative rulings of general 
applicability pertaining to the enforcement of intell ectual property rights shall be in writing and shall 
state any relevant findings of fact and the re asoning or the legal basis on which the decisions 
and rulings are based. Each Party shall provide th at such decisions or rulings shall be published,
16 or 
where such publication is not practicable, otherwise made publicly available, in a national language in 
such a manner as to enable governments and right  holders to become acquainted with them.  
4. Each Party shall publicize information that it ma y collect on its efforts to provide effective 
enforcement of intellectual property rights in its ci vil, administrative, and criminal system, including 
any statistical information.   
5. In civil, administrative, and criminal proceedings involving copyright or related rights, each 
Party shall provide that:  
(a) the person whose name is indicated as th e author, producer, performer, or publisher 
of the work, performance, or phonogram in th e usual manner, shall, in the absence of 
proof to the contrary, be presumed to be the designated right holder in such work, 
performance, or phonogram; and  
(b) it shall be presumed, in the absence of proof to the contrary, that the copyright or 
related right subsists in such subject matter.  
 
   
                                                     
 
16 A Party may satisfy the requirement for publication by making the document available to the public 
on the Internet.   WT/REG211/1 
Page 260  
 
Civil and Administrative Procedures and Remedies  
 
6. Each Party shall make available to right holders
17 civil judicial procedures concerning the 
enforcement of any intellectual property right.  
7. Each Party shall provide that:  
(a) in civil judicial proceedings concerni ng the enforcement of intellectual property 
rights, its judicial authorities shall have th e authority to order the infringer to pay the 
right holder:  
 
(i) damages adequate to compensate for th e injury the right holder has suffered 
as a result of the infringement; and   
(ii) at least in the case of copyright or related rights infringement and trademark 
counterfeiting, the profits of the infringer that are attributable to the infringement and are not taken into account in computing the amount of the 
damages referred to in clause (i); and   
 (b) in determining damages for infringement of intellectual property rights, its judicial 
authorities shall consider, inter alia , the value of the infringed-upon good or service 
based on the suggested retail price or other legitimate measure of value that the right holder presents.  
 
8. In civil judicial proceedings, each Party shall,  at least with respect to civil judicial 
proceedings concerning copyright or related ri ghts infringement and trademark counterfeiting, 
establish or maintain pre-established damages as an  alternative to actual damages.  Such pre-
established damages shall be set out in domestic law and determined by the judicial authorities in an amount sufficient to compensate the right holder  for the harm caused by the infringement and 
constitute a deterrent to future infringements.  
9. Each Party shall provide that its judicial au thorities, except in exceptional circumstances, 
shall have the authority to order, at the conclusi on of civil judicial proceedings concerning copyright 
or related rights infringement and trademark counterfe iting, that the prevailing party shall be awarded 
payment of court costs or fees and reasonable attorn ey’s fees by the losing party. Further, each Party 
shall provide that its judicial authorities, at least in exceptional circumstances, shall have the authority 
to order, at the conclusion of civil judicial proceedings concerning patent infringement, that the 
prevailing party be awarded payment of reasonable attorney’s fees by the losing party.  
10. In civil judicial proceedings concerning copyri ght or related right infringement and trademark 
counterfeiting, each Party shall provide that its judici al authorities shall have the authority to order the 
seizure of suspected infringing goods, any related materials and implements, and, at least for 
trademark counterfeiting, documentary evidence relevant to the infringement.  
11. Each Party shall provide that:  
(a) its judicial authorities shall have the aut hority to order, at their discretion, the 
destruction of the goods that have been  found to be pirated or counterfeit;  
                                                     
 
 17 For the purpose of this Article, the term “right holder”  shall include federations and associations as well as 
exclusive licensees and other duly authorized licensees, as appr opriate, having the legal standing and authority to assert such  
rights.  The term “licensee” shall include the licensee of any one or more of the exclusive intellectual property rights 
encompassed in a given intellectual property.   WT/REG211/1 
 Page 261 
 
 
(b) its judicial authorities shall have the author ity to order that materials and implements 
that have been used in the manufacture or  creation of such pirated or counterfeit 
goods be, without compensation of any sort, promptly destroyed or, in exceptional circumstances, without compensation of any so rt, disposed of outside the channels of 
commerce in such a manner as to minimize the risks of further infringements.  In 
considering requests for such destruction, the Party’s judicial authorities may take 
into account, inter alia , the gravity of the infringement, as well as the interests of 
third parties holding ownership, possessory , contractual, or secured interests;  
(c) the charitable donation of counterfeit tr ademark goods and goods that infringe 
copyright and related rights shall not be orde red by the judicial authorities without the 
authorization of the right holder, except that counterfeit trademark goods may in 
appropriate cases be donated to charity fo r use outside the channels of commerce 
when the removal of the trademark elimin ates the infringing characteristic of the 
good and the good is no longer identifiable with the removed trademark.  In no case shall the simple removal of the trademark unlawfully affixed be sufficient to permit 
the release of goods into the channels of commerce.  
12. Each Party shall provide that in civil judici al proceedings concerning the enforcement of 
intellectual property rights, its judicial authorities shall have the authority to order the infringer to provide any information that the infringer possesses regarding any person involved in any aspect of 
the infringement and regarding the means of pr oduction or distribution channel for the infringing 
goods or services, including the identification of th ird persons that are involved in their production 
and distribution and their distribution channels, and to provide this information to the right holder. 
Each Party shall provide that its judicial authoriti es shall have the authority to impose sanctions, in 
appropriate cases, on a party to a proceeding that fa ils to abide by valid or ders issued by such 
authorities.  
13. To the extent that any civil remedy can be ordered as a result of administrative procedures on 
the merits of a case, each Party shall provide that such procedures conform to principles equivalent in 
substance to those provided for in this Chapter.  
14. Each Party shall provide for civil remedies ag ainst the acts described in Article 15.5.7 and 
15.5.8. Available civil remedies shall include at least:  
(a) provisional measures, including seizure of devices and products suspected of being 
involved in the prohibited activity;  
(b) actual damages (plus any profits attributable  to the prohibited activity not taken into 
account in computing the actual damages) or pre-established damages as provided in 
paragraph 8;  
(c) payment to the prevailing right holder, at th e conclusion of civil judicial proceedings, 
of court costs and fees and reasonable attorney’s fees by the party engaged in the 
prohibited conduct; and  
(d) destruction of devices and products found to be involved in the prohibited activity, at 
the discretion of the judicial authorities, as provided in subparagraphs (a) and (b) of paragraph 11.  
 No Party may make damages available agai nst a nonprofit library, archives, educational 
institution, or public broadcasting en tity that sustains the burden of proving that it was not aware and 
had no reason to believe that its acts constituted a prohibited activity.   
 WT/REG211/1 
Page 262  
 
15. In civil judicial proceedings concerning the en forcement of intellectual property rights, each 
Party shall provide that its judicial authorities shall have the authority to order a party to desist from 
an infringement, inter alia , to prevent the entry into the channels  of commerce in their jurisdiction of 
imported goods that involve the infringement of an  intellectual property right, immediately after 
customs clearance of such goods or to prevent their exportation.  
16. In the event that a Party’s judicial or other authorities appoint technical or other experts in 
civil proceedings concerning the enforcement of intellectual property rights and require that the 
parties bear the costs of such experts, the Party should seek to ensure that  such costs are closely 
related, inter alia , to the quantity and nature of work to  be performed and do not unreasonably deter 
recourse to such proceedings.  
Provisional Measures  
 
17. Each Party shall act on requests for relief inaudita altera parte  and execute such requests 
expeditiously, in accordance with its rules of judicial procedure.   
18. Each Party shall provide that its judicial aut horities shall have the authority to require the 
plaintiff to provide any reasonably available eviden ce in order to satisfy themselves with a sufficient 
degree of certainty that the plaintiff’s right is be ing infringed or that such infringement is imminent, 
and to order the plaintiff to provide a reasonable security or equivalent assurance set at a level 
sufficient to protect the defendant and to prevent abuse, and so as not  to unreasonably deter recourse 
to such procedures.  
19. In proceedings concerning the grant of provisi onal measures in relation to enforcement of a 
patent, each Party shall provide for a rebutta ble presumption that the patent is valid.  
Special Requirements Related to Border Measures 
20. Each Party shall provide that any right holder initiating procedures for its competent 
authorities to suspend the release of suspected count erfeit or confusingly similar trademark goods, or 
pirated copyright goods
18 into free circulation is required to pr ovide adequate evidence to satisfy the 
competent authorities that, under the laws of the country of importation, there is prima facie  an 
infringement of the right holder’s intellectual prope rty right and to supply sufficient information that 
may reasonably be expected to be within the right  holder’s knowledge to make the suspected goods 
reasonably recognizable by the competent author ities.  The requirement to provide sufficient 
information shall not unreasonably de ter recourse to these procedures.  
21. Each Party shall provide that its competent au thorities shall have the authority to require a 
right holder initiating procedures for suspension to provide a reasonable security or equivalent 
assurance sufficient to protect the defendant and the competent authorities and to prevent abuse.  Such 
security or equivalent assurance sh all not unreasonably deter recourse to these procedures.  Each Party 
shall provide that such security may take a form of an instrument issued by a financial services 
provider to hold the importer or owner of th e imported merchandise harmless from any loss or 
                                                      
 18 For purposes of paragraphs 20 through 25:  
counterfeit trademark goods  means any goods, including packaging, bearing without authorization a 
trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be 
distinguished in its essential aspects from such a trad emark, and which thereby infringes the rights of the 
owner of the trademark in question under the law of the country of importation; and  
pirated copyright goods means any goods which are copies made w ithout the consent of the right holder or 
person duly authorized by the right holder in the country of production and which are made directly or 
indirectly from an article where the making of that co py would have constituted an infringement of a copyright 
or a related right under the law of the country of importation.   WT/REG211/1 
 Page 263 
 
 
damage resulting from any suspension  of the release of goods in th e event the competent authorities 
determine that the article is not an infringing good.  
22. Where its competent authorities have made a determination that goods  are counterfeit or 
pirated, a Party shall grant its competent authorities the authority to inform the right holder of the names and addresses of the consignor, the importer, and the consignee, and of the quantity of the 
goods in question.  
23. Each Party shall provide that its competen t authorities may initiate border measures  
ex officio , with respect to imported, exported, or in -transit merchandise suspected of infringing an 
intellectual property right, without the need for a formal complaint from a private party or right holder.  
24. Each Party shall provide that goods that have b een determined to be pirated or counterfeit by 
its competent authorities shall be destroyed, pursuant  as appropriate to judicial order, unless the right 
holder consents to an alternate disposition, except that counterfeit trademark goods may in appropriate 
cases be donated to charity for use outside the ch annels of commerce, when the removal of the 
trademark eliminates the infringing characteristic of the good and the good is no longer identifiable 
with the removed trademark.  In regard to c ounterfeit trademark goods, the simple removal of the 
trademark unlawfully affixed shall not be suffici ent to permit the releas e of the goods into the 
channels of commerce. In no event shall the co mpetent authorities be authorized to permit the 
exportation of counterfeit or pirate d goods or to permit such goods to be subject to other customs 
procedures, except in exceptional circumstances.  
25. Each Party shall provide that where an applica tion fee or merchandise storage fee is assessed 
in connection with border measures to enforce an inte llectual property right, the fee shall not be set at 
an amount that unreasonably deters  recourse to such measures.  
Criminal Procedures and Remedies  
 
26. (a) Each Party shall provide for criminal procedures and penalties to be applied at least in 
cases of willful trademark counterfeiting or copyright or related rights piracy on a 
commercial scale. Willful copyright or related rights piracy on a commercial scale 
includes significant willful infringements of copyright or related rights, for purposes of commercial advantage or private financ ial gain, as well as willful infringements 
that have no direct or indirect motivation of  financial gain, provided that there is more 
than a de minimis  financial harm.  Each Party shall treat willful importation or 
exportation of counterfeit or  pirated goods as unlawful activities and provide for 
criminal penalties to the same extent as the tr afficking or distribution of such goods in 
domestic commerce.
19 
 
(b)  Specifically, each Party shall provide:   
(i) remedies that include sentences of imprisonment or monetary fines, or both, 
sufficient to provide a deterrent to fu ture acts of infringement.  Each Party 
shall establish policies or guidelines that encourage penalties to be imposed by judicial authorities at levels suffici ent to provide a deterrent to future 
infringements;  
                                                     
 
19 A Party may comply with this subparagraph in relation to exportation through its measures 
concerning distribution or trafficking. WT/REG211/1 
Page 264  
 
(ii) that its judicial authorities shall have the authority to order the seizure of 
suspected counterfeit or pirated goods, an y related materials and implements 
that have been used in the commissi on of the offense, any assets traceable to 
the infringing activity, and any documentary  evidence relevant to the offense. 
Each Party shall provide that items that are subject to seizure pursuant to any 
such judicial order need not be individually identified so long as they fall 
within general categories specified in the order;  
(iii) that its judicial authorities shall have the authority to order, among other 
measures, (1) the forfeiture of any assets  traceable to the infringing activity, 
(2) the forfeiture and destruction of a ll counterfeit or pirated goods, without 
compensation of any kind to the defendant, in order to prevent the re-entry of 
counterfeit and pirated goods into cha nnels of commerce, and (3) with 
respect to willful copyright or rela ted rights piracy, the forfeiture and 
destruction of materials and implements that have been used in the creation 
of the infringing goods; and  
(iv) that its authorities may, at least in cases of suspected trademark 
counterfeiting or copyright piracy, conduc t investigations or exercise other 
enforcement measures ex officio , without the need for a formal complaint by 
a private party or right holder, at least for the purpose of preserving evidence or preventing the continuation of the infringing activity.   
Limitations on Liability for Service Providers 
  
27.  For the purpose of providing enforcement pro cedures that permit effective action against any 
act of infringement of copyright
20 covered under this Chapter, in cluding expeditious remedies to   
prevent infringements, and criminal and civil re medies that constitute a deterrent to further 
infringements, each Party shall provi de, consistent with the framework set out in this Article:  
 
(a) legal incentives for service providers to coope rate with copyright owners in deterring 
the unauthorized storage and transmission of copyrighted materials; and   
(b) limitations in its law regarding the sc ope of remedies available against service 
providers for copyright infringements that they do not control, initiate or direct, and that take place through systems or networks  controlled or operated by them or on 
their behalf, as set out in this subparagraph.
21 
(i) These limitations shall preclude mone tary relief and provide reasonable 
restrictions on court-ordered relief to compel or restrain certain actions for 
the following functions and shall be  confined to those functions:   
(A)  transmitting, routing, or providi ng connections for material without 
modification of its content, or the intermediate and transient storage 
of such material in the course thereof;  
 
   (B)  caching carried out through an automatic process;    
   (C)  storage at the direction of a user of material residing on a system or 
    network controlled or operated by or for the service provider; and  
                                                     
 
 20 For purposes of this paragraph, “copyright” shall also include related rights.  
21 The Parties understand that this subparagraph is w ithout prejudice to the ava ilability of defenses to 
copyright infringement that are of general applicability.     WT/REG211/1 
 Page 265 
 
 
    (D) referring or linking users to an on-line location by using information     location tools, including hyperlinks and directories.    
(ii) These limitations shall apply only where the service provider does not initiate 
the chain of transmission of the material and does not select the material or 
its recipients (except to the extent that  a function described in clause (i)(D) in 
itself entails some form of selection).    
(iii) Qualification by a service provider for the limitations as to each function in 
clauses (i)(A) through (D) shall be co nsidered separately from qualification 
for the limitations as to each other function, in accordance with the conditions 
for qualification set forth in clauses (iv) through (vii).  
(iv) With respect to the function referred to  in clause (i)(B), the limitations shall 
be conditioned on the service provider:  
(A)  permitting access to cached material  in significant part only to users 
 of its system or network who have  met conditions on user access to 
 that material;  
   (B) complying with rules concerning the refreshing, reloading, or other 
 updating of the cached material when specified by the person making  the material available on-line in accordance with a generally accepted 
 industry standard data communications protocol for the system or 
 network through which that person makes the material available;   
   (C)  not interfering with technology  consistent with industry standards 
 accepted in the Party’s territory used  at the originating site to obtain 
 information about the use of the material, and not modifying its 
 content in transmission to subsequent users; and  
   (D)  expeditiously removing or disabling access, on receipt of an effective 
 notification of claimed infringement, to cached material that has been  removed or access to which has been disabled at the originating site.    
 
(v) With respect to functions referred to in clauses (i)(C) and (D), the limitations 
shall be conditioned on the service provider:    
   (A)  not receiving a financial benef it directly attributable to the infringing 
    activity, in circumstances where it has the right and ability to control 
    such activity;   
   (B)  expeditiously removing or disabling access to the material residing 
 on its system or network on obt aining actual knowledge of the 
 infringement or becoming aware of facts or circumstances from  which the infringement was apparent, such as through effective 
 notifications of claimed infringement in accordance with clause (ix); 
 and  
    (C)  publicly designating a representa tive to receive such notifications.  
 
(vi) Eligibility for the limitations in this s ubparagraph shall be conditioned on the 
service provider:  WT/REG211/1 
Page 266  
 
 (A)  adopting and reasonably implementing a policy that provides for 
 termination in appropriate circum stances of the acc ounts of repeat 
 infringers; and  
  (B)  accommodating and not interferi ng with standard technical measures 
 accepted in the Party’s territory th at protect and identify copyrighted 
 material, that are developed through an open, voluntary process by a 
 broad consensus of copyright owners and service providers, that are  available on reasonable and nondiscriminatory terms, and that do not  impose substantial costs on service providers or substantial burdens 
 on their systems or networks.  
 
  (vii)  Eligibility for the limitations in  this subparagraph ma y not be conditioned 
 on the service provider monitoring its service, or affirmatively seeking facts  indicating infringing activity, except to the extent consistent with such  technical measures.  
   (viii) If the service provider qualifies for the limitations with respect to the function 
 referred to in clause (i)(A), court-ordered relief to compel or restrain certain  actions shall be limited to termina ting specified accounts, or to taking 
 reasonable steps to block access to a specific, non-domestic on-line location.  If the service provider qualifies for the limitations with respect to any other 
 function in clause (i), court-ordered relief to compel or restrain certain actions  shall be limited to removing or di sabling access to the infringing material, 
 terminating specified accounts, and other remedies that a court may find 
 necessary provided that such other re medies are the least burdensome to the 
 service provider among comparably effective forms of relief.  Each Party  shall provide that any such relief shal l be issued with due regard for the 
 relative burden to the service provider and harm to the copyright owner, the  technical feasibility and effectiven ess of the remedy and whether less 
 burdensome, comparably effective en forcement methods are available.  
 Except for orders ensuring the preservation of evidence, or other orders  having no material adverse effect on the operation of the service provider’s  communications network, each Party sha ll provide that such relief shall be 
 available only where the service provider has received notice and an  opportunity to appear before the Party’s judicial authority.  
 
  (ix)  For purposes of the notice and take  down process for the functions referred to 
 in clauses (i)(C) and (D), each Party shall establish appropriate procedures 
 for effective notifications of clai med infringement, and effective counter-
 notifications by those whose material is removed or disabled through mistake  or misidentification.  At a minimum, each Party shall require that an effective  notification of claimed infringement be a written communication, physically 
 or electronically signed by a person who represents, under penalty of perjury 
 or other criminal penalty, that he is  an authorized representative of a right 
 holder in the material that is claime d to have been infringed, and containing 
 information that is reasonably sufficient to enable the service provider to  identify and locate material that the complaining party claims in good faith to 
 be infringing and to contact that complaining party.  At a minimum, each 
 Party shall require that an effectiv e counter-notification contain the same 
 information, mutatis mutandis , as a notification of claimed infringement, and 
 contain a statement that the subscr iber making the counter-notification  WT/REG211/1 
 Page 267 
 
 
 consents to the jurisdiction of the courts  of the Party.  Each Party shall also 
 provide for monetary remedies ag ainst any person who makes a knowing 
 material misrepresentation in a notification or counter-notification that causes  injury to any interested party as a result of a service provider relying on the  misrepresentation.   
 
  (x)  If the service provider removes or disables access to material in good faith 
 based on claimed or apparent infringeme nt, each Party shall provide that the 
 service provider shall be exempted from liability for any resulting claims,  provided that, in the case of material residing on its system or network, it 
 takes reasonable steps promptly to notify the person making the material 
 available on its system or network th at it has done so and, if such person 
 makes an effective counter-notification and is subject to jurisdiction in an 
 infringement suit, to restore the material on-line unless the person giving  the  original effective notification seeks judicial relief within a reasonable time.    
 
  (xi) Each Party shall establish an admi nistrative or judicial procedure enabling 
 copyright owners who have given effective notification of claimed 
 infringement to obtain expeditiously from a service provider information in  its possession identifying the alleged infringer.  
 
(xii)  Service provider  means:  
 
  (A)  for purposes of the function referred to in clause (i)(A), a provider of 
 transmission, routing, or connections for digital on-line 
 communications without modification of their content between or 
 among points specified by the user  of material of the user’s 
 choosing; and  
    (B)  for purposes of the functions referred to in clause (i)(B) through (D), 
  a provider or operator of facilities for on-line services or network 
  access.  
 
Additional Procedures and Remedies  
 
28.  Annex 15.11 applies between the Dominican Republic and the United States.   
Article 15.12 
 
Final Provisions
 
1. Except as otherwise provided in paragraph 2 and Ar ticle 15.1, each Party shall give effect to 
this Chapter on the date of entry in to force of this Agreement.    
2. As specified below, a Party may delay giving eff ect to certain provisions of this Chapter for 
no longer than the periods in this paragraph, beginning on the date of entry into force of the 
Agreement:   
 (a)  in the case of Costa Rica:  
 
(i) with respect to Articles 15.4.1 and 15.9.6, one year;    
(ii) with respect to Article 15.8.1(b), 18 months;  WT/REG211/1 
Page 268  
 
(iii) with respect to Articles 15.3.7 and 15.5.8(a)(ii), two years;   
(iv) with respect to Article 15.11.27, 30 months; and  
(v) with respect to Articles 15.5.7(a)(ii), 15.5.7(e), 15.5.7(f), 15.11.8, and 
15.11.14, three years;  
 (b)  in the case of the Dominican Republic:  
 
(i) with respect to Article 15.5.4, six months;  
(ii) with respect to Articles 15.5.9 and 15.9.6, one year;   
(iii) with respect to Article 15.2.1, 18 months;  
(iv) with respect to Articles 15.3.7, and 15.11.27, two years; and  
(v) with respect to Article 15.5.7(a)(ii), 15.5.7(e), and 15.5.7(f), three years.  
 (c) in the case of El Salvador:  
(i)  with respect to Article 15.11.27, one year;  (ii)  with respect to Article 15.8.1(b), 18 months;  (iii)  with respect to Article 15.11.23, two years;  
(iv)  with respect to Article 15.5.8(a)(ii), 30 months; and   
(vi) with respect to Articles 15.5.7(a)(ii), 15.5.7(e), 15.5.7(f), 15.11.8, and 
15.11.14, three years;  
 (d)  in the case of Guatemala:  
 
(i) with respect to Article 15.5.4, six months;  
(ii) with respect to Articles 15.5.9 and 15.9.6, one year;  
(iii) with respect to Article 15.8, 18 months;  
(iv) with respect to Articles 15.2.1, 15.3.7,  15.4, 15.5.8(a)(ii), 15.11.20, 15.11.21, 
15.11.22, and 15.11.25, two years;  
(v) with respect to Article 15.11.27, 30 months;  
(vi) with respect to Articles 15.5.7(a)(ii), 15.5.7(e), 15.5.7(f),  15.11.8, 15.11.14, 
and 15.11.24, three years; and  
(vii) with respect to Article 15.11.23, four years;  
 (e)  in the case of Honduras:  
 
(i) with respect to Articles 15.5.9 and 15.9.6, one year;  
(ii) with respect to Article 15.8, 18 months;   WT/REG211/1 
 Page 269 
 
 
(iii) with respect to Articles 15.2.1, 15.3.7,  15.4, 15.5.8(a)(ii), 15.11.20, 15.11.21, 
15.11.22, and 15.11.25, two years;  
(iv) with respect to Article 15.11.27, 30 months;   
(v) with respect to Articles 15.5.7(a)(ii), 15.5.7(e), 15.5.7(f),  15.11.8, 15.11.14, 
and 15.11.24, three years; and  
(vi) with respect to Article 15.11.23, four years; and  
 (f)  in the case of Nicaragua:  
 
(i) with respect to Articles 15.5.9 and 15.9.6, one year;  
(ii) with respect to Article 15.8.1(b), 18 months;  
(iii) with respect to Articles 15.3.7, 15.4, 15.5.8(a)(ii), 15.11.20, 15.11.21, 
15.11.22, and 15.11.25, two years;  
(iv) with respect to Articles 15.5.7(a)(ii), 15.5.7(e), 15.5.7(f),  15.11.8, 15.11.14, 
15.11.24, and 15.11.27, three years; and  
(v) with respect to Article 15.11.23, four years.  
 
ANNEX 15.11:  PROCEDURES AND REMEDIES CONCERNING BROADCAST OR CABLE 
TRANSMISSIONS OR RETRANSMISSIONS IN THE DOMINICAN REPUBLIC 
 
1. The Dominican Republic reaffirms its commitments under Chapter 15 to the application of 
administrative, civil, and criminal procedures and remedies in the case of broadcast or cable 
transmissions or retransmissions that are made wit hout the authorization of the right holder or right 
holders of the content of the signal and, if any, of the signal.  
2. The Dominican Republic shall provide that pro cedures and remedies are set out in its law for 
the temporary suspension of concessions or opera ting licenses, or both, for broadcast or cable 
transmissions or retransmissions in cases where the Oficina Nacional de Derecho de Autor (ONDA) 
or its other competent authorities determine that tran smissions or retransmissions that are the subject 
of the concession or operating license have been made  without the permission of the right holder or 
right holders of the content of the signal and, if an y, of the signal.  Such procedures shall conform to 
the requirements of Article 15.11 applicable to administrative enforcement, and shall include:  
(a) an opportunity for right holders to make written requests to ONDA or other 
competent authorities for the temporary or  permanent closure of establishments 
transmitting the unauthorized broadcast or cab le transmissions (pursuant to Article 
187 of the Ley sobre Derecho de Autor , No. 65-00, August 21, 2000,as implemented 
by Articles 116.4 and 116.5 of the Reglamento de Aplicación , No. 362-01, March 14, 
2001), and for other sanctions available under its law, and to submit evidence in support of such requests;  
(b) a requirement that holders of such con cessions or operating licenses cooperate with 
ONDA or other competent authorities so that investigations and inspections 
concerning such a request can take place w ithout delay, including by providing access 
to all documents relating to the tran smissions or retransmissions; and  WT/REG211/1 
Page 270  
 
(c) a requirement that an administrative decisi on concerning such a request be rendered 
expeditiously and not later than 60 days afte r the date of the request.  Such decisions 
shall be in writing and shall state the reasons on which they are based. Any closure shall become effective immediately following a decision requiring such closure. Temporary closure shall continue in effect for up to 30 days. Failure to cease 
transmission or retransmission following cl osure shall be considered a violation 
classified under Article 105(d) of the Ley General de Telecomunicaciones , 
No. 153-98, May 27, 1998, and shall be subject to all available sanctions authorized by that law.  
 The Dominican Republic shall further provide that ONDA or other competent authorities may 
initiate procedures for the temporary or perman ent closure of establishments transmitting the 
unauthorized broadcast or cable transmissions and other sanctions ava ilable under national law 
ex officio , without the need for a written request from a private party or right holder.  
 
3. The Dominican Republic shall provide that ONDA and its other competent authorities shall 
have sufficient resources to carry out the actions d escribed in paragraph 2, and hereby reaffirms its 
obligations under Article 15.11.2(b).  
4. INDOTEL shall exercise the powers conferred on it by the Ley General de 
Telecomunicaciones No. 153-98  to address copyright infringement in appropriate cases, consistent 
with the INDOTEL Resolution of January 30, 2004, sanctioning holders of cable transmission service 
authorizations who transmitted signals containing pr otected works or retransmitted signals issued by 
the entity originating the transmission without authori zation.  If the level of sanctions imposed in the 
INDOTEL Resolution of January 30, 2004 is not effec tive in eliminating the problem, then INDOTEL 
shall increase sanctions to an effective level.  
5. The Dominican Republic shall provide quarterly  reporting of progress made in all judicial 
actions concerning television broadc asting piracy consistent with the understanding set out in an 
exchange of letters between the Dominican Republic and the United States on the date of signature of 
this Agreement.  
 
CHAPTER SIXTEEN:  LABOR  
 
Article 16.1 
 
Statement Of Shared Commitment
 
1. The Parties reaffirm their obligations as memb ers of the International Labor Organization 
(ILO) and their commitments under the ILO Declaration on Fundamental Principles and Rights at 
Work and its Follow-Up (1998)  (ILO Declaration).1 Each Party shall strive to ensure that such labor 
principles and the internationally recognized labor rights set forth in Article 16.8 are recognized and 
protected by its law.  
2. The Parties affirm their full respect for their Constitutions.  Recognizing the right of each 
Party to establish its own domestic labor standards, and to adopt or modify accordingly its labor laws, 
each Party shall strive to ensure that its laws provide for labor standards consistent with the 
internationally recognized labor rights set forth in  Article 16.8 and shall strive to improve those 
standards in that light.  
                                                      
1 The Parties recall that paragraph 5 of the ILO Declaration states that labor standards should not be 
used for protectionist trade purposes.  WT/REG211/1 
 Page 271 
 
 
Article 16.2 
 
Enforcement Of Labor Laws  
1.  (a)  A Party shall not fail to effectively enforce its labor laws, through a sustained or 
recurring course of action or inaction, in a manner affecting trade between the Parties, after the date of entry into force of this Agreement.  
 
(b)  Each Party retains the right to exerci se discretion with respect to investigatory, 
prosecutorial, regulatory, and compliance matt ers and to make decisions regarding the 
allocation of resources to enforcement with respect to other labor matters determined 
to have higher priorities.  Accordingly, the Parties understand that a Party is in 
compliance with subparagraph (a) where a course of action or inaction reflects a 
reasonable exercise of such discretion, or results from a bona fide  decision regarding 
the allocation of resources.  
 2. The Parties recognize that it is inappropriate to encourage trade or investment by weakening 
or reducing the protections afforded in domestic labor  laws.  Accordingly, each Party shall strive to 
ensure that it does not waive or otherwise derogate  from, or offer to waive or otherwise derogate 
from, such laws in a manner that weakens or reduces adherence to th e internationally recognized labor 
rights referred to in Article 16.8 as an encourag ement for trade with another Party, or as an 
encouragement for the establishment, acquisition, expa nsion, or retention of an investment in its 
territory.   3. Nothing in this Chapter shall be construed to  empower a Party’s authorities to undertake labor 
law enforcement activities in the territory of another Party.  
 
Article 16.3 
 
Procedural Guarantees And Public Awareness
 
1. Each Party shall ensure that persons with a legally recognized interest under its law in a 
particular matter have appropriate access to tribunals  for the enforcement of the Party’s labor laws. 
Such tribunals may include administrative, quasi-judicial, judicial, or labor tribunals, as provided in the Party’s domestic law.  
2. Each Party shall ensure that proceedings before such tribunals for the enforcement of its labor 
laws are fair, equitable, and transparent and, to this end, each Party shall ensure that:  
 (a) such proceedings comply with due process of law;   (b)  any hearings in such proceedings  are open to the public, except where the 
administration of justice otherwise requires;  
 
 (c)  the parties to such proceedings are entitled to support or defend their respective 
positions, including by presenting information or evidence; and  
  (d)  such proceedings do not entail unreasonable charges or time limits or unwarranted   d e l a y s .    
3. Each Party shall provide that final decisions on the merits of the case in such proceedings are:  
 
(a) in writing and state the reasons on which the decisions are based;  WT/REG211/1 
Page 272  
 
(b) made available without undue delay to the pa rties to the proceedings and, consistent 
with its law, to the public; and  
(c) based on information or evidence in respect  of which the parties were offered the 
opportunity to be heard.  
4. Each Party shall provide, as appropriate, that parties to such proceedings have the right to 
seek review and, where warranted, correction of final decisions issued in such proceedings.  
 5. Each Party shall ensure that tribunals that conduct or review such proceedings are impartial 
and independent and do not have any substantia l interest in the outcome of the matter.  
 
6. Each Party shall provide that the parties to such proceedings may seek remedies to ensure the 
enforcement of their rights under its labor laws.  Such remedies may include measures such as orders, 
fines, penalties, or temporary workplace closures, as provided in the Party’s laws.   7.  Each Party shall promote public awareness of its labor laws, including by:  
 
 (a)  ensuring the availability of public information related to its labor laws and 
 enforcement and compliance procedures; and   
  (b) encouraging education of the public regarding its labor laws.  
 
8. For greater certainty, decisions or pending decisions by each Party’s administrative, quasi-
judicial, judicial, or labor tribunals, as well as rela ted proceedings, shall not be subject to revision or 
be reopened under the provisions of this Chapter.   
Article 16.4 
 
Institutional Arrangements
 
1. The Parties hereby establish a Labor Affairs C ouncil, comprising cabinet-level or equivalent 
representatives of the Parties, or their designees.  
2. The Council shall meet within the first year after the date of entry into force of this 
Agreement and thereafter as often as it considers necessary to oversee the implementation of and review progress under this Chapter, including the activities of the Labor Cooperation and Capacity 
Building Mechanism established under Article 16.5,  and to pursue the labor objectives of this 
Agreement.  Unless the Parties othe rwise agree, each meeting of th e Council shall include a session at 
which members of the Council have an opportunity to  meet with the public to  discuss matters relating 
to the implementation of this Chapter.  
3. Each Party shall designate an office within its la bor ministry that shall serve as a contact point 
with the other Parties, and with the public, for purposes of carrying out the work of the Council, 
including coordination of the Labor Cooperation a nd Capacity Building Mechanism. Each Party’s 
contact point shall provide for the submission, r eceipt, and consideration of communications from 
persons of a Party on matters related to the prov isions of this Chapter, and shall make such 
communications available to the other Parties and,  as appropriate, to the public.  Each Party shall 
review such communications, as appropriate, in accordance with domestic procedures. The Council 
shall develop general guidelines for considering such communications.  
4. Each Party may convene a new, or consult an ex isting, national labor a dvisory or consultative 
committee, comprising members of its public, incl uding representatives of its labor and business 
organizations, to provide views on any issues related to this Chapter.   WT/REG211/1 
 Page 273 
 
 
5. All decisions of the Council shall be taken by consensus.  All decisions of the Council shall 
be made public, unless otherwise provided in th is Agreement, or unless the Council otherwise 
decides.  
6. The Council may prepare reports on matters relate d to the implementation of this Chapter, 
and shall make such reports public.  
Article 16.5 
 
Labor Cooperation And Capacity Building Mechanism  
1. Recognizing that cooperation on labor issues ca n play an important role in advancing 
development in the territory of the Parties and in providing opportunities to improve labor standards, 
and to further advance common commitments rega rding labor matters, including the principles 
embodied in the ILO Declaration and ILO Convention No. 182 Concerning the Prohibition and 
Immediate Action for the Elimination of the Worst Forms of Child Labour (1999)  (ILO Convention 
182), the Parties hereby establish a Labor Cooperati on and Capacity Building Mechanism, as set out 
in Annex 16.5.  The Mechanism shall operate in  a manner that respects each Party’s law and 
sovereignty.  
2. While endeavoring to strengthen each Party’s institutional capacity to fulfill the common 
goals of the Agreement, the Parties shall strive to  ensure that the objectives of the Labor Cooperation 
and Capacity Building Mechanism, and the ac tivities undertaken through that Mechanism:  
(a) are consistent with each Party’s national  programs, development strategies, and 
priorities;  
(b) provide opportunities for public participa tion in the development and implementation 
of such objectives and activities; and  
(c) take into account each Party’s economy, culture, and legal system.   
Article 16.6 
 
Cooperative Labor Consultations  
1. A Party may request consultations with another Party regarding any matter arising under this 
Chapter by delivering a written request to the cont act point that the other Party has designated under 
Article 16.4.3.  
2. The consultations shall begin prom ptly after delivery of the request.  The request shall contain 
information that is specific and sufficient to en able the Party receiving the request to respond.  
3. The consulting Parties shall make every attempt to  arrive at a mutually satisfactory resolution 
of the matter, taking into account opportunities fo r cooperation relating to the matter, and may seek 
advice or assistance from any person or body they de em appropriate in order to fully examine the 
matter at issue.  WT/REG211/1 
Page 274  
 
4. If the consulting Parties fail to resolve the matte r pursuant to paragraph 3, a consulting Party 
may request that the Council be convened to consider  the matter by delivering a written request to the 
contact point of each of the other Parties.
2 
5. The Council shall promptly convene and shall endeavor to resolve the matter, including, 
where appropriate, by consulting outside expert s and having recourse to such procedures as good 
offices, conciliation, or mediation.  
6. If the matter concerns whether a Party is confor ming to its obligations under Article 16.2.1(a), 
and the consulting Parties have failed to resolv e the matter within 60 days of a request under 
paragraph 1, the complaining Party may request c onsultations under Article 20.4 (Consultations) or a 
meeting of the Commission under Article 20. 5 (Commission – Good Offices, Conciliation, and 
Mediation) and, as provided in Chapter Twenty (D ispute Settlement), thereafter have recourse to the 
other provisions of that Chapter. The Council ma y, as appropriate, provide information to the 
Commission on consultations held on the matter.  
7. No Party may have recourse to dispute settleme nt under this Agreement for any matter arising 
under any provision of this Chapter other than Article 16.2.1(a).  
8. No Party may have recourse to dispute settleme nt under this Agreement for a matter arising 
under Article 16.2.1(a) without first pursuing resoluti on of the matter in accordance with this Article.  
9. In cases where the consulting Parties agree that a matter arising under this Chapter would be 
more appropriately addressed under a nother agreement to which the consulting Parties are party, they 
shall refer the matter for appropriate acti on in accordance with that agreement.  
Article 16.7 
 
Labor Roster  
1. The Parties shall establish within six months af ter the date of entry into force of this 
Agreement and maintain a roster of up to 28 indivi duals who are willing and able to serve as panelists 
in disputes arising under Article 16.2.1(a). Unless the Parties otherwise agree, up to three members of the roster shall be nationals of each Party, and up to seven members of the roster shall be selected 
from among individuals who are not nationals of any Pa rty.  Labor roster members shall be appointed 
by consensus, and may be reappointed.  Once estab lished, a roster shall remain in effect for a 
minimum of three years, and shall remain in effect  thereafter until the Parties constitute a new roster. 
The Parties may appoint a replacement where a ro ster member is no longer available to serve.  
2. Labor roster members shall:  
(a) have expertise or experience in labor law or  its enforcement, international trade, or 
the resolution of disputes arising under international agreements;  
(b) be chosen strictly on the basis of objec tivity, reliability, and sound judgment;  
(c) be independent of, and not affiliated with or  take instructions from, any Party; and  
(d) comply with a code of conduct to be established by the Commission.  
                                                     
 
 2 For purposes of paragraphs 4, 5, and 6, the Council shall consist of the cabinet-level 
representatives of the consulting Par ties or their high-level designees.   WT/REG211/1 
 Page 275 
 
 
3. Where a Party claims that a dispute arises  under Article 16.2.1(a), Article 20.9 (Panel 
Selection) shall apply, except that the panel sha ll be composed entirely of panelists meeting the 
qualifications in paragraph 2.  
Article 16.8 
  
Definitions  
 For purposes of this Chapter:  
 
 labor laws  means a Party’s statutes or regulations, or  provisions thereof, that are directly 
related to the following internationally recognized labor rights:  
 
(a) the right of association;  
(b) the right to organize and bargain collectively;  
(c) a prohibition on the use of any form of forced or compulsory labor;  
(d) a minimum age for the employment of child ren and the prohibition and elimination of 
the worst forms of child labor; and  
(e) acceptable conditions of work with respect to minimum wages, hours of work, and 
occupational safety and health.  
 For greater certainty, the setting of standards and levels in respect of minimum wages by each 
Party shall not be subject to obligations under this  Chapter. Each Party’s obligations under this 
Chapter pertain to enforcing the level of the ge neral minimum wage established by that Party.  
 
 statutes or regulations  means:  
 
(a) for Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and 
Nicaragua, laws of its legislative body or regulations promulgated pursuant to an act 
of its legislative body that are enforcea ble by action of the executive body; and  
(b) for the United States, acts of Congress or regulations promulgated pursuant to an act 
of Congress that are enforceable by action of the federal government.  
 
ANNEX 16.5:  LABOR COOPERATION AND CAPACITY BUILDING MECHANISM  
 
Organization and Principal Functions  
 
1. The Labor Affairs Council working through each Party’s contact point shall coordinate the 
activities of the Labor Cooperation and Capacity Bu ilding Mechanism. The contact points shall meet 
within six months after the date of entry into fo rce of this Agreement and thereafter as often as they 
consider necessary.  
2. The contact points, together with representativ es of other appropriate agencies and ministries, 
shall cooperate to:  WT/REG211/1 
Page 276  
 
(a) establish priorities, with particular emphasis on those subjects identified in 
paragraph 3 of this Annex, for cooperati on and capacity building activities on labor 
issues;  
(b) develop specific cooperative and capacity building activities in accordance with such 
priorities;  
(c) exchange information regarding each Party’ s labor laws and practices, including best 
practices, as well as ways to strengthen them; and  
(d) seek support, as appropriate, from inte rnational organizations such as the 
International Labor Organization, the In ter-American Development Bank, the World 
Bank, and the Organization of American States, to advance common commitments 
regarding labor matters.  
Cooperation and Capacity Building Priorities  
 
3. The Mechanism may initiate bilateral or regional cooperative activities on labor issues, 
which may include, but need not be limited to:   
(a) fundamental rights and their effective application : legislation and practice related to 
the core elements of the ILO Declarati on (freedom of association and the effective 
recognition of the right to collective bargaini ng, elimination of all forms of forced or 
compulsory labor, the effective abolition of child labor, and the elimination of 
discrimination in respect of employment and occupation);   
(b) worst forms of child labor : legislation and practice related to compliance with ILO 
Convention 182;  
(c) labor administration : institutional capacity of labor administrations and tribunals, 
especially training and professionalization of human resources, including career civil service;  
(d) labor inspectorates and inspection systems : methods and training to improve the level 
and efficiency of labor law enforcement, strengthen labor inspection systems, and help ensure compliance with labor laws;  
(e) alternative dispute resolution : initiatives aimed at establishing alternative dispute 
resolution mechanisms for labor disputes;  
(f) labor relations : forms of cooperation and disput e resolution to ensure productive 
labor relations among workers, em ployers, and governments;    
(g) working conditions : mechanisms for supervising compliance with statutes and 
regulations pertaining to hours of work, minimum wages and overtime, occupational 
safety and health, and employment conditions;   
(h) migrant workers : dissemination of information re garding labor rights of migrant 
workers in each Party’s territory;  
(i) social assistance programs : human resource development and employee training, 
among other programs;   WT/REG211/1 
 Page 277 
 
 
(j) labor statistics : development of methods for the Par ties to generate comparable labor 
market statistics in a timely manner;   
(k) employment opportunities : promotion of new employment opportunities and 
workforce modernization;   
(l) gender : gender issues, including the elimination of discrimination in respect of 
employment and occupation; and  
(m) technical issues : programs, methodologies, and experiences regarding productivity 
improvement, encouragement of best labor practices, and the effective use of technologies, including those that are Internet-based.  
Implementation of Cooperative Activities  
 
4. Pursuant to the Mechanism, the Parties may cooperate on labor issues using any means they deem appropriate, including, but not limited to:  
 
(a) technical assistance programs, including by providing human, technical, and material 
resources, as appropriate;  
(b) exchange of official delegations, professi onals, and specialists, including through 
study visits and other technical exchanges;  
(c) exchange of information on standards, regulations, and procedures, and best 
practices, including pertinent pu blications and monographs;   
(d) joint conferences, seminars, workshops, meetings, training sessions, and outreach and 
education programs;    
(e) collaborative projects or demonstrations; and  
(f) joint research projects, studies, and reports, including by engaging independent 
specialists with recognized expertise.  
Public Participation  
 
5. In identifying areas for labor cooperation and capacity building, and in carrying out 
cooperative activities, each Party shall consid er the views of its worker and employer 
representatives, as well as those of other members of the public .  
  
CHAPTER SEVENTEEN:  ENVIRONMENT  
 
Article 17.1 
 
Levels Of Protection
 
Recognizing the right of each Party to establis h its own levels of domestic environmental 
protection and environmental devel opment policies and priorities, and to adopt or modify accordingly 
its environmental laws and policies,  each Party shall ensure that its laws and policies provide for and 
encourage high levels of environmen tal protection, and shall strive to  continue to improve those laws 
and policies.  WT/REG211/1 
Page 278  
 
Article 17.2 
 
Enforcement Of Environmental Laws
 
1.  (a)  A Party shall not fail to effectiv ely enforce its environmental laws, through a 
sustained or recurring course of action or  inaction, in a manner affecting trade 
between the Parties, after the date of entry into force of this Agreement.  
 
 (b) The Parties recognize that each Party retains the right to exercise discretion with 
respect to investigatory, prosecutorial, regulatory, and compliance matters and to 
make decisions regarding the allocation of resources to enforcement with respect to 
other environmental matters determined to ha ve higher priorities.  Accordingly, the 
Parties understand that a Party is in comp liance with subparagraph (a) where a course 
of action or inaction reflects a reasonable exercise of such discretion, or results from a 
bona fide  decision regarding the allocation of resources.  
 2. The Parties recognize that it is inappropriate to encourage trade or investment by weakening 
or reducing the protections afforded in domestic environmental laws. Accordingly, each Party shall 
strive to ensure that it does not waive or otherwi se derogate from, or offer to waive or otherwise 
derogate from, such laws in a manner that weakens or reduces the protections afforded in those laws 
as an encouragement for trade with another Party,  or as an encouragement for the establishment, 
acquisition, expansion, or retention of  an investment in its territory.   
 3. Nothing in this Chapter shall be construe d to empower a Party’s authorities to undertake 
environmental law enforcement activities in  the territory of another Party.  
 
Article 17.3 
 
Procedural Matters
 
1. Each Party shall ensure that judicial, quasi -judicial, or administrative proceedings, in 
accordance with its law, are available to sanction or  remedy violations of its environmental laws.  
(a) Such proceedings shall be fair, equitable, and transparent and, to this end, shall 
comply with due process of law and be open to the public, except where the 
administration of justice otherwise requires.  
(b) The parties to such proceedings shall be entitled to support or defend their respective 
positions, including by presenting information or evidence.  
(c) Each Party shall provide appropriate and effective remedies or sanctions for a 
violation of its environmental laws that:  
(i) take into consideration, as appropriate, th e nature and gravity of the violation, 
any economic benefit the violator h as derived from the violation, the 
economic condition of the violator, an d other relevant factors; and  
(ii) may include criminal and civil remedies and sanctions such as compliance 
agreements, penalties, fines, injunc tions, suspension of activities, and 
requirements to take remedial action or pay for damage to the environment.   WT/REG211/1 
 Page 279 
 
 
2. Each Party shall ensure that interested pers ons may request the Party’s competent authorities 
to investigate alleged violations of its environmen tal laws, and that each Party’s competent authorities 
shall give such requests due consider ation in accordance with its law.  
3. Each Party shall ensure that persons with a legally recognized interest under its law in a 
particular matter have appropriate access to proceedings referred to in paragraph 1.    
4. Each Party shall provide appropr iate and effective access to remedies, in accordance with its 
law, which may include rights such as:   
(a) to sue another person under that Party’s jurisdiction for damages under that Party’s 
laws;  
(b) to seek sanctions or remedies such as monetary penalties, emergency closures or 
temporary suspension of activities, or or ders to mitigate the consequences of 
violations of its environmental laws;  
(c) to request that Party’s competent authorities to take appropriate action to enforce its 
environmental laws in order to protect th e environment or to avoid environmental 
harm; or  
(d) to seek injunctions where a person suffers, or  may suffer, loss, damage, or injury as a 
result of conduct by another person subject to that Party’s jurisdiction that is contrary 
to that Party’s environmental laws or that violates a legal duty under that Party’s law relating to human health or the environment.  
5. Each Party shall ensure that tribunals that conduct or review proceedings referred to in 
paragraph 1 are impartial and independent and do not have any subs tantial interest in the outcome of 
the matter.  
6. For greater certainty, nothing in this Chapter shall be construed to call for the examination 
under this Agreement of whether a Party’s judicial , quasi-judicial, or administrative tribunals have 
appropriately applied that Pa rty’s environmental laws.  
Article 17.4 
 
Voluntary Mechanisms To Enha nce Environmental Performance
 
1. The Parties recognize that incentives and ot her flexible and voluntary mechanisms can 
contribute to the achievement and maintenance of  environmental protection, complementing the 
procedures set out in Article 17.3.  As appropriate and in accordance with its law, each Party shall encourage the development and use of such mechanisms, which may include:  
 (a) mechanisms that facilitate voluntary ac tion to protect or enhance the environment, 
such as:  
 
(i) partnerships involving businesses, local communities, non-governmental 
organizations, government agencies, or scientific organizations;   
(ii) voluntary guidelines for environmental performance; or  
(iii) sharing of information and expertise among authorities, interested parties, 
and the public concerning methods for achieving high levels of 
environmental protection, voluntary environmental auditing and reporting, WT/REG211/1 
Page 280  
 
ways to use resources more efficiently or reduce environmental impacts, environmental monitoring, and collection of baseline data; or  
 (b)  incentives, including market-based in centives where appropriate, to encourage 
conservation, restoration, and protection of natural resources and the environment, 
such as public recognition of facilities or ente rprises that are superior environmental 
performers, or programs for exchanging permits  or other instruments to help achieve 
environmental goals.  
 
2.  As appropriate and feasible and in accordan ce with its law, each Party shall encourage:  
 
(a) the maintenance, development, or improve ment of performance goals and indicators 
used in measuring environmental performance; and   
(b) flexibility in the means to achieve such goa ls and meet such standards, including 
through mechanisms identified in paragraph 1.  
Article 17.5 
 
Environmental Affairs Council 
 
1. The Parties hereby establish an Environmenta l Affairs Council comprising cabinet-level or 
equivalent representatives of the Parties, or their desi gnees.  Each Party shall designate an office in its 
appropriate ministry that shall serve as a contact point for carrying out the work of the Council.  
2. The Council shall meet within the first year after the date of entry into force of this 
Agreement, and annually thereafter unless the Partie s otherwise agree, to oversee the implementation 
of and review progress under this Chapter and to  consider the status of cooperation activities 
developed under the Dominican Republic – Ce ntral America – United States – Environmental 
Cooperation Agreement (“ECA”).  Unless the Partie s otherwise agree, each meeting of the Council 
shall include a session in which members of the C ouncil have an opportunity to meet with the public 
to discuss matters relating to the im plementation of this Chapter.  
3. The Council shall set its own agenda. In setting the agenda, each Party shall seek views from 
its public concerning possible issues for discussion.  
4. In order to share innovative approaches for addr essing environmental issues of interest to the 
public, the Council shall ensure a process for promoting public participation in its work , including by 
engaging in a dialogue with the public on those issues.  
5. The Council shall seek appropriate opportunitie s for the public to participate in the 
development and implementation of cooperative environmental activities, including through the ECA.  
6. All decisions of the Council shall be taken by consensus, except as provided in Article 17.8. 
All decisions of the Council sha ll be made public, unless otherwise provided in this Agreement, or 
unless the Council otherwise decides.  
Article 17.6 
 
Opportunities For Public Participation  
1. Each Party shall provide for the receipt and consideration of public communications on 
matters related to this Chapter.  Each Party shall promptly make available to the other Parties and to  WT/REG211/1 
 Page 281 
 
 
its public all communications it receives and shall re view and respond to them in accordance with its 
domestic procedures.  
2. Each Party shall make best efforts to accomm odate requests by persons of that Party to 
exchange views with that Party regarding that  Party’s implementation of this Chapter.  
3. Each Party shall convene a new, or consult an  existing, national consultative or advisory 
committee, comprising members of its public, including representatives of business and 
environmental organizations, to provide views on matters related to the implementation of this 
Chapter.  
4. The Parties shall take into account public  comments and recommendations regarding 
cooperative environmental activities undertaken pursuant to Article 17.9 and the ECA.  
Article 17.7 
 
Submissions On Enforcement Matters  
1. Any person of a Party may file a submission as serting that a Party is failing to effectively 
enforce its environmental laws.  Such submissions sh all be filed with a secretariat or other appropriate 
body (“secretariat”) that the Parties designate.1 
2. The secretariat may consider a submission under th is Article if the secretariat finds that the 
submission:  
(a) is in writing in either English or Spanish;  
(b) clearly identifies the person making the submission;  
(c) provides sufficient information to allow the secretariat to review the submission, 
including any documentary evidence on which the submission may be based;  
(d) appears to be aimed at promoting enforcem ent rather than at harassing industry;  
(e) indicates that the matter has been communicat ed in writing to the relevant authorities 
of the Party and indicates the Party’s response, if any; and  
(f) is filed by a person of a Party.  
3. The Parties recognize that the North American Agreement on Environmental Cooperation  
(“NAAEC”) provides that a person or organization residing or established in the territory of the 
United States may file a submission under that agreement with the Secretariat of the NAAEC 
Commission for Environmental Cooperation asserting th at the United States is failing to effectively 
enforce its environmental laws.2  In light of the availability of that procedure, a person of the 
United States who considers that the United States is failing to effectively enforce its environmental laws may not file a submission under this Article.  For greater certainty, a person of a Party other than 
the United States who considers that the United States is failing to effectively enforce its 
environmental laws may file a submission with the secretariat.  
                                                     
 
 1 The Parties shall designate the secretariat and provide for re lated arrangements through an 
exchange of letters or other form of agreement between the Parties.    
 2 Arrangements will be made for the United States to make available in a timely manner to the other 
Parties all such submissions, U.S. written responses, an d factual records developed in connection with those 
submissions.  At the request of any Party, the Council shall discuss such documents.  WT/REG211/1 
Page 282  
 
4. Where the secretariat determines that a submission meets the criteria set out in paragraph 2, 
the secretariat shall determine whether the submission  merits requesting a response from the Party. In 
deciding whether to request a response, the secretariat shall be guided by whether:  
(a) the submission is not frivolous and alleges ha rm to the person making the submission;  
(b) the submission, alone or in combination w ith other submissions, raises matters whose 
further study in this process would advance the goals of this Chapter and the ECA, 
taking into account guidance regarding t hose goals provided by the Council and the 
Environmental Cooperation Commission established under the ECA;  
(c) private remedies available under the Pa rty’s law have been pursued; and  
(d) the submission is drawn exclusively from mass media reports.  
 Where the secretariat makes such a request, it shall forward to the Party a copy of the 
submission and any supporting information provided with the submission.   
5. The Party shall advise the secretariat within 45  days or, in exceptional circumstances and on 
notification to the secretariat, within 60 days of delivery of the request:  
(a) whether the precise matter at issue is the subject of a pending judicial or 
administrative proceeding, in which case the secretariat shall proceed no further; and  
(b) of any other information the Party wishes to submit, such as:  
(i) whether the matter was previously the subject of a judicial or administrative 
proceeding;  
(ii) whether private remedies in connection with the matter are available to the 
person making the submission and whethe r they have been pursued; or  
(iii) information concerning relevant capacity-building activities under the ECA.  
Article 17.8 
 
Factual Records And Related Cooperation
 
1. If the secretariat considers that the submission, in  light of any response provided by the Party, 
warrants developing a factual record, the secretar iat shall so inform the Council and provide its 
reasons.  
2. The secretariat shall prepare a factual record if the Council, by a vote of any Party, instructs it 
to do so.  
3. The preparation of a factual record by the secret ariat pursuant to this Article shall be without 
prejudice to any further steps that may be taken with respect to any submission.  
4. In preparing a factual record, the secretariat sh all consider any information furnished by a 
Party and may consider any relevant tec hnical, scientific, or other information:  
(a) that is publicly available;  
(b) submitted by interested persons;   WT/REG211/1 
 Page 283 
 
 
(c) submitted by national advisory or consultative committees;   
(d) developed by independe nt experts; or  
(e) developed under the ECA.  
5. The secretariat shall submit a draft factual r ecord to the Council.  Any Party may provide 
comments on the accuracy of the draft within 45 days thereafter.  
6. The secretariat shall incorporate, as appropriate, any such comments in the final factual record 
and submit it to the Council.  
7. The Council may, by a vote of any Party, make  the final factual record publicly available, 
normally within 60 days following its submission.  
8. The Council shall consider the final factual reco rd in light of the objectives of this Chapter 
and the ECA. The Council shall, as appropriate , provide recommendations to the Environmental 
Cooperation Commission related to matters addressed in the factual record, including recommendations related to the fu rther development of the Party’ s mechanisms for monitoring its 
environmental enforcement.  
Article 17.9 
 
Environmental Cooperation
 
1. The Parties recognize the importance of strengthening capacity to protect the environment 
and to promote sustainable development in concert w ith strengthening trade and investment relations.   
2. The Parties are committed to expanding their cooperative relationship, recognizing that 
cooperation is important for achieving their shared  environmental goals and objectives, including the 
development and improvement of environmental protection, as set out in this Chapter.    
3. The Parties recognize that strengthening thei r cooperative relationship on environmental 
matters can enhance environmental protection in their territories and may encourage increased trade 
and investment in environmental goods and services.  
4. The Parties have negotiated an ECA. The Par ties have identified certain priority areas of 
cooperation for environmental activities as reflected in Annex 17.9 and as set out in the ECA.  The 
Parties also have established an Environmenta l Cooperation Commission through the ECA that is 
responsible for developing, and peri odically revising and updating, a work program that reflects each 
Party’s priorities for cooperative environmen tal programs, projects, and activities.  
5. The Parties also recognize the continuing impor tance of current and future environmental 
cooperation activities in other fora.  
Article 17.10 
 
 Collaborative Environmental Consultations  
1. A Party may request consultations with another Party regarding any matter arising under this 
Chapter by delivering a written request to the cont act point that the other Party has designated under 
Article 17.5.1.  WT/REG211/1 
Page 284  
 
2. The consultations shall begin prom ptly after delivery of the request.  The request shall contain 
information that is specific and sufficient to en able the Party receiving the request to respond.  
3. The consulting Parties shall make every attempt to  arrive at a mutually satisfactory resolution 
of the matter, taking into account opportunities for cooperation relating to th e matter and information 
exchanged by the consulting Parties, and may seek advice or assistance from any person or body they 
deem appropriate in order to fully examine the matter at issue.  
4. If the consulting Parties fail to resolve the matte r pursuant to paragraph 3, a consulting Party 
may request that the Council be convened to consider  the matter by delivering a written request to the 
contact point of each of the other Parties.
3 
 
5. The Council shall promptly convene and shall endeavor to resolve the matter, including, 
where appropriate, by consulting outside expert s and having recourse to such procedures as good 
offices, conciliation, or mediation.  
6. If the matter concerns whether a Party is confor ming to its obligations under Article 17.2.1(a), 
and the consulting Parties have failed to resolv e the matter within 60 days of a request under 
paragraph 1, the complaining Party may request c onsultations under Article 20.4 (Consultations) or a 
meeting of the Commission under Article 20. 5 (Commission – Good Offices, Conciliation, and 
Mediation) and, as provided in Chapter Twenty (D ispute Settlement), thereafter have recourse to the 
other provisions of that Chapter. The Council ma y, as appropriate, provide information to the 
Commission regarding any consultations held on the matter.  
7. No Party may have recourse to dispute settleme nt under this Agreement for any matter arising 
under any provision of this Chapter other than Article 17.2.1(a).  
8. No Party may have recourse to dispute settleme nt under this Agreement for a matter arising 
under Article 17.2.1(a) without first pursuing resoluti on of the matter in accordance with this Article.  
9. In cases where the consulting Parties agree that a matter arising under this Chapter would be 
more appropriately addressed under a nother agreement to which the consulting Parties are party, they 
shall refer the matter for appropriate acti on in accordance with that agreement.   
Article 17.11 
 
Environmental Roster  
1. The Parties shall establish within six months after the date of entry into force of this 
Agreement and maintain a roster of up to 28 indivi duals who are willing and able to serve as panelists 
in disputes arising under Article 17.2.1(a).  Unless th e Parties otherwise agree, up to three members of 
the roster shall be nationals of each Party, and up to seven members of the roster shall be selected 
from among individuals who are not nationals of any Party.  Environment roster members shall be 
appointed by consensus, and may be reappointed.  Once established, a roster shall remain in effect for 
a minimum of three years, and shall remain in ef fect thereafter until the Parties constitute a new 
roster. The Parties may appoint a replacement where a roster member is no longer available to serve.  
 2.  Environment roster members shall:   
                                                     
 
 3 For purposes of paragraphs 4, 5, and 6, the Council shall consist of cabinet-level representatives of 
the consulting Parties or their designees.   WT/REG211/1 
 Page 285 
 
 
(a) have expertise or experience in environmen tal law or its enforcement, international 
trade, or the resolution of disputes arising under international trade or environmental agreements;  
(b) be chosen strictly on the basis of objec tivity, reliability, and sound judgment;  
(c) be independent of, and not affiliated with or  take instructions from, any Party; and  
(d) comply with a code of conduct to be established by the Commission.  
3. Where a Party claims that a dispute aris es under Article 17.2.1(a), Article 20.9 (Panel 
Selection) shall apply, except that the panel sha ll be composed entirely of panelists meeting the 
qualifications in paragraph 2.   
Article 17.12 
 
Relationship To Environmental Agreements
 
1. The Parties recognize that multilateral environm ental agreements to which they are all party 
play an important role in protecting the envi ronment globally and domestically and that their 
respective implementation of these agreements is cr itical to achieving the environmental objectives of 
these agreements. The Parties further recognize that  this Chapter and the ECA can contribute to 
realizing the goals of those agreements.  Accordi ngly, the Parties shall continue to seek means to 
enhance the mutual supportiveness of multilateral envi ronmental agreements to which they are all 
party and trade agreements to which they are all party.   2. The Parties may consult, as appropriate, with  respect to ongoing negotiations in the WTO 
regarding multilateral envi ronmental agreements.  
 
Article 17.13 
Definitions
 
1.  For purposes of this Chapter:  
 
 environmental law means any statute or regulation of a Party, or provision thereof, the 
primary purpose of which is the protection of the environment, or the prevention of a danger to 
human, animal, or plant life or health, through:  
 
 (a)  the prevention, abatement, or control of the release, discharge, or emission of 
 pollutants or environmental contaminants;  
  (b)  the control of environmentally hazardous or toxic chemicals, substances, materials, 
and wastes, and the dissemination of information related thereto; or  
 
 (c)  the protection or conservation of wild  flora and fauna, including endangered species, 
their habitat, and specially protected natural areas,   
  in areas with respect to which a Party exercises sovereignty, sovereign ri ghts, or jurisdiction, 
but does not include any statute or regulation, or provision thereof, directly related to worker 
safety or health.  
 WT/REG211/1 
Page 286  
 
 For greater certainty, environmental law  does not include any statute or regulation, or 
provision thereof, the primary purpose of which is managing the commercial harvest or exploitation, 
or subsistence or aboriginal harv esting, of natural resources.   
 
 For purposes of the definition of “environmental law,” the primary purpose of a particular 
statutory or regulatory provision shall be determined  by reference to its primary purpose, rather than 
to the primary purpose of the statute or regulation of which it is part.   
 
 statute or regulation  means:  
 
 (a)  for Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and 
Nicaragua, a law of its legislative body or a regulation promulgated pursuant to an act 
of its legislative body that is enfo rceable by the executive body; and  
 
 (b)  for the United States, an act of Congress or regulation promulgated pursuant to an act 
of Congress that is enforceable by action of the federal government.  
 
2.  For purposes of Article 17.7.5, judicial or administrative proceeding  means:  
 
 (a)  a domestic judicial, quasi-judicial, or administrative action pursued by the Party in a 
timely fashion and in accordance with its law.   Such actions comprise:  mediation; 
arbitration; the process of issuing a licen se, permit, or authorization; seeking an 
assurance of voluntary compliance or a comp liance agreement; seeking sanctions or 
remedies in an administrative or judicial forum; and the process of issuing an administrative order; and  
  (b)  an international dispute resolution pr oceeding to which the Party is a party.  
 
 
ANNEX 17.9:  ENVIRONMENTAL COOPERATION  
 
1. The Parties recognize the importance of pr otecting, improving, and conserving the 
environment, including natural resources, in their territories.  The Parties underscore the importance 
of promoting all possible forms of cooperation and reaffirm that coope ration on environmental 
matters provides enhanced opportunities to advanc e common commitments to achieve sustainable 
development for the well-being of present and future generations.  
2. Recognizing the benefits that would be deri ved from a framework to facilitate effective 
cooperation, the Parties negotiated the ECA.  The Parties expect that the ECA will enhance their 
cooperative relationship, noting th e existence of differences in the Parties’ respective natural 
endowments, climatic and geogr aphical conditions, and economic, technological, and infrastructure 
capabilities.  
3. As set forth in Article V of the ECA, the Pa rties have identified the following priorities for 
environmental cooperation activities:  
(a) strengthening each Party’s environmental ma nagement systems, including reinforcing 
institutional and legal frameworks and th e capacity to develop, implement, 
administer, and enforce environmental laws , regulations, standards, and policies;  
(b) developing and promoting incentives and othe r flexible and voluntary mechanisms in 
order to encourage environmental protecti on, including the development of market-
based initiatives and economic incentives for environmental management;   WT/REG211/1 
 Page 287 
 
 
(c) fostering partnerships to address current or emerging conservation and management 
issues, including personnel training and capacity building;   
(d) conserving and managing shared, migratory,  and endangered species in international 
trade and management of marine parks and other protected areas;   
(e) exchanging information on domestic implem entation of multilateral environmental 
agreements that all the Parties have ratified;  
(f) promoting best practices leading to sust ainable management of the environment;  
(g) facilitating technology development and transf er and training to promote the use, 
proper operation, and maintenance of  clean production technologies;   
(h) developing and promoting environmentally  beneficial goods and services;   
(i) building capacity to promote public particip ation in the process of environmental 
decision-making;  
(j) exchanging information and experiences between Parties wishing to perform 
environmental reviews, including reviews of  trade agreements, at the national level; 
and  
(k) other areas for environmental cooperation on which the Parties may agree.  
4. Funding mechanisms for environmental coopera tion activities under the ECA are addressed in 
Article VIII of the ECA.  
 
CHAPTER EIGHTEEN:  TRANSPARENCY  
 
Section A: Transparency  
 
Article 18.1 
 
Contact Points  
1. Each Party shall designate, within 60 days of the date of entry into force of this Agreement, a 
contact point to facilitate communications betw een the Parties on any matter covered by this 
Agreement.  
2. On the request of another Party, the contact  point shall identify the office or official 
responsible for the matter and assist, as necessary,  in facilitating communication with the requesting 
Party.  
 
Article 18.2 
 
Publication  
1. Each Party shall ensure that its laws, regulati ons, procedures, and administrative rulings of 
general application respecting any matter covered by this Agreement are promptly published or 
otherwise made available in such a manner as to en able interested persons and Parties to become 
acquainted with them.  WT/REG211/1 
Page 288  
 
2. To the extent possible, each Party shall:  
 (a)  publish in advance any such me asure that it proposes to adopt; and  
  (b)  provide interested persons and Parti es a reasonable opportunity to comment on such 
proposed measures.  
 
Article 18.3 
 
Notification And Provision Of Information
 
1. To the maximum extent possible, each Party sha ll notify any other Party with an interest in 
the matter of any proposed or actual measure that the Party considers might materially affect the 
operation of this Agreement or othe rwise substantially affect that ot her Party’s interests under this 
Agreement.  
2. On request of another Party, a Party shall promptly provide info rmation and respond to 
questions pertaining to any actual or proposed meas ure, whether or not that other Party has been 
previously notified of that measure.  
3. Any notification or information provided under this Article shall be without prejudice as to 
whether the measure is consiste nt with this Agreement.  
Article 18.4 
 
Administrative Proceedings  
 With a view to administering in a consistent , impartial, and reasonable manner all measures 
of general application affecting matte rs covered by this Agreement, each Party shall ensure that in its 
administrative proceedings applying measures referre d to in Article 18.2 to particular persons, goods, 
or services of another Party in specific cases that :  
 
(a) wherever possible, persons of another Party that are directly affected by a proceeding 
are provided reasonable notice, in accord ance with domestic procedures, when a 
proceeding is initiated, including a description of the nature of the proceeding, a 
statement of the legal authority under whic h the proceeding is initiated, and a general 
description of any issues in controversy;  
(b) such persons are afforded a reasonable opportunity to present facts and arguments in 
support of their positions prior to any fina l administrative action, when time, the 
nature of the proceeding, and the public interest permit; and  
(c) its procedures are in accordance with domestic law.  
Article 18.5 
 
Review And Appeal  
1. Each Party shall establish or maintain judicial , quasi-judicial, or administrative tribunals or 
procedures for the purpose of the prompt review  and, where warranted, correction of final 
administrative actions regarding matters covered by th is Agreement.  Such trib unals shall be impartial 
and independent of the office or authority entrus ted with administrative enforcement and shall not 
have any substantial interest in the outcome of the matter.   WT/REG211/1 
 Page 289 
 
 
2. Each Party shall ensure that, in any such tribuna ls or procedures, the parties to the proceeding 
are provided with the right to:  
(a) a reasonable opportunity to support or defend their respective positions; and  
(b) a decision based on the evidence and submi ssions of record or, where required by 
domestic law, the record compiled by the administrative authority.  
3. Each Party shall ensure, subject to appeal or further review as provided in its domestic law, 
that such decisions shall be implemented by, and shall govern the practice of, the office or authority 
with respect to the administrative action at issue.  
Article 18.6 
 
Definitions  
 
 For purposes of this Section:  
 
 administrative ruling of general application means an administrative ruling or 
interpretation that applies to all persons and fact situ ations that fall generally within its ambit and that 
establishes a norm of conduct but does not include:   
(a) a determination or ruling made in an administrative or quasi-judicial proceeding that 
applies to a particular person, good, or service of another Party in a specific case; or  
(b) a ruling that adjudicates with respect to a particular act or practice.  
Section B: Anti-Corruption 
 
 
Article 18.7  
 
Statement Of Principle  
The Parties affirm their resolve to eliminate br ibery and corruption in international trade and 
investment.  
Article 18.8 
 
Anti-Corruption Measures  
1. Each Party shall adopt or maintain the necessary legislative or other measures to establish that 
it is a criminal offense under its law, in matters affecting international trade or investment, for:  
(a) a public official of that Party or a person who performs public functions for that Party 
intentionally to solicit or accept, directly or  indirectly, any article of monetary value 
or other benefit, such as a favor, promise, or advantage, for himself or for another 
person, in exchange for any act or om ission in the performance of his public 
functions;  
(b) any person subject to the jurisdiction of that  Party intentionally to offer or grant, 
directly or indirectly, to a public official  of that Party or a person who performs 
public functions for that Party any article of monetary value or other benefit, such as 
a favor, promise, or advantage, for himself or for another person, in exchange for any 
act or omission in the performance of his public functions;   WT/REG211/1 
Page 290  
 
(c) any person subject to the jurisdiction of that Party intentionally to offer, promise, or 
give any undue pecuniary or other advantag e, directly or indirectly, to a foreign 
official, for that official or for another pers on, in order that the official act or refrain 
from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business; 
and  
(d) any person subject to the jurisdiction of that Party to aid or abet, or to conspire in, the 
commission of any of the offenses described in subparagraphs (a) through (c).    
2. Each Party shall adopt or maintain appropr iate penalties and procedures to enforce the 
criminal measures that it adopts or maintain s in conformity with paragraph 1.   
3. In the event that, under the legal system of a Part y, criminal responsibility is not applicable to 
enterprises, that Party shall ensure  that enterprises shall be subject to effective, proportionate, and 
dissuasive non-criminal sanctions, including monetary  sanctions, for any of the offenses described in 
paragraph 1.  
4. Each Party shall endeavor to adopt or maintain  appropriate measures to protect persons who, 
in good faith, report acts of bribery or co rruption described in paragraph 1.   
Article 18.9 
 
Cooperation In International Fora 
 
 The Parties recognize the importance of re gional and multilateral initiatives to eliminate 
bribery and corruption in international trade and investment.  The Parties shall work jointly to 
encourage and support appropriate initiatives in relevant international fora.    
 
Article 18.10 
 
Definitions  
For purposes of this Section:  
 
 act or refrain from acting in relation to the performance of official duties  includes any 
use of the official’s position, whether or not w ithin the official’s authorized competence;  
 
 foreign official  means any person holding a legislative, administrative, or judicial office of a 
foreign country, at any level of government, whether appointed or elected; any person exercising a public function for a foreign country at any level of government, including for a public agency or 
public enterprise; and any official or agent of a public international organization;  
 
 public function  means any temporary or permanent, paid  or honorary activity, performed by 
a natural person in the name of a Party or in the servi ce of a Party, such as procurement, at the central 
level of government; and    public official means any official or employee of a Party at the central level of government, 
whether appointed or elected.  
 
 
   WT/REG211/1 
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CHAPTER NINETEEN:  ADMINISTRATION OF THE AGREEMENT AND TRADE 
CAPACITY BUILDING  
 
Section A:  Administration of the Agreement  
 
Article 19.1 
 
The Free Trade Commission  
1. The Parties hereby establish the Free Trad e Commission, comprising cabinet-level 
representatives of the Parties, as set out in Annex 19.1, or their designees.  
2. The Commission shall:  
(a) supervise the implementation of this Agreement;  
(b) oversee the further elaboration of this Agreement;  
(c) seek to resolve disputes that may arise rega rding the interpretation or application of 
this Agreement;  
(d) supervise the work of all committees a nd working groups established under this 
Agreement; and  
(e) consider any other matter that may aff ect the operation of this Agreement.  
3. The Commission may:  
(a) establish and delegate responsibilities to committees and working groups;  
(b) modify in fulfillment of the Agreement’s objectives:  
(i) the Schedules attached to Annex 3.3 (Tariff Elimination), by accelerating 
tariff elimination;  
(ii) the rules of origin established in Annex 4.1 (Specific Rules of Origin);  
(iii) the Common Guidelines referenced in Article 4.21 (Common Guidelines); 
and  
(iv) Annexes 9.1.2(b)(i), 9.1.2(b)(ii), and 9. 1.2(b)(iii) (Government Procurement);  
(c) issue interpretations of the provisions of this Agreement;  
(d) seek the advice of non-governmental persons or groups; and  
(e) take such other action in the exercise of its functions as the Parties may agree.  
4. Each Party shall implement, in accordance with its applicable legal procedures, any 
modification referred to in subpa ragraph 3(b) within such period as the Parties may agree.  
5. The Commission shall establish its rules and pro cedures.  All decisions of the Commission 
shall be taken by consensus, unless the Commission otherwise decides.  WT/REG211/1 
Page 292  
 
6. The Commission shall convene at least once a year in regular session, unless the Commission 
otherwise decides.  Regular sessions of the Commissi on shall be chaired successively by each Party.  
Article 19.2 
 
Free Trade Agreement Coordinators
 
1. Each Party shall appoint a free trade agreement coordinator, as set out in Annex 19.2.  
2. The coordinators shall work jointly to deve lop agendas and make other preparations for 
Commission meetings and shall follow-up on Commission decisions, as appropriate.  
Article 19.3 
 
Administration Of Dispute Settlement Proceedings  
1.  Each Party shall:  
 
(a) designate an office that shall provide administrative assistance to the panels 
established under Chapter Twenty (Disput e Settlement) and perform such other 
functions as the Commission may direct; and  
(b) notify the Commission of the location of its designated office.   
2.  Each Party shall be responsible for:  
 
(a) the operation and costs of its designated office; and   
(b) the remuneration and payment of expenses of  panelists and experts, as set out in 
Annex 19.3.  
Section B: Trade Capacity Building  
 
Article 19.4 
 
Committee On Trade Capacity Building  
1. Recognizing that trade capacity building assistance is a catalyst for the reforms and 
investments necessary to foster trade-driven econom ic growth, poverty reduction, and adjustment to 
liberalized trade, the Parties hereby establish a Committee on Trade Capacity Building, comprising 
representatives of each Party.   
2. In furtherance of the Parties’ ongoing trade cap acity building efforts and in order to assist 
each Central American Party and the Dominican Repub lic to implement this Agreement and adjust to 
liberalized trade, each such Party should periodically  update and provide to the Committee its national 
trade capacity building strategy.   
3. The Committee shall:  
(a) seek the prioritization of trade capacity building projects at the national or regional 
level, or both;   WT/REG211/1 
 Page 293 
 
 
(b) invite appropriate international donor in stitutions, private sector entities, and non-
governmental organizations to assist in th e development and implementation of trade 
capacity building projects in accordance with  the priorities set out in each national 
trade capacity building strategy;  
(c) work with other committees or working gr oups established under this Agreement, 
including through joint meetings, in suppor t of the development and implementation 
of trade capacity building projects in acco rdance with the priorities set out in each 
national trade capacity building strategy;  
(d) monitor and assess progress in implementing trade capacity building projects; and  
(e) provide a report annually to the Commission describing the Committee’s activities, 
unless the Committee otherwise decides.    
4. During the transition period, the Committee sh all meet at least twice a year, unless the 
Committee otherwise decides.  
5. The Committee may establish terms of refe rence for the conduct of its work.  
6. The Committee may establish ad hoc working groups, which may comprise government or 
non-government representatives, or both.  
7. All decisions of the Committee shall be take n by consensus, unless the Committee otherwise 
decides.  
8. The Parties hereby establish an initial worki ng group on customs administration and trade 
facilitation, which shall work under and report to the Committee.    
 
ANNEX 19.1:  THE FREE TRADE COMMISSION  
 
The Free Trade Commission shall be composed of:   (a) in the case of Costa Rica, the Ministro de Comercio Exterior ;  
(b) in the case of the Dominican Republic, the Secretario de Estado de Industria y 
Comercio ;  
(c) in the case of El Salvador, the Ministro de Economía ;  
(d) in the case of Guatemala, the Ministro de Economía ;  
(e) in the case of Honduras, the Secretario de Estado en los Despachos de Industria y 
Comercio ;  
(f) in the case of Nicaragua, the Ministro de Fomento, Industria y Comercio ; and  
(g) in the case of the United States, the United States Trade Representative,   
or their successors.  
  WT/REG211/1 
Page 294  
 
ANNEX 19.1.4:  IMPLEMENTATION OF MODIFICATIONS APPROVED 
BY THE COMMISSION  
 
1. In the case of Costa Rica, decisions of the Commission under Article 19.1.3(b) will be 
equivalent to the instrument referred to in article 121.4, third paragraph ( protocolo de menor rango ) 
of the Constitución Política de la República de Costa Rica .  
2. In the case of Honduras, decisions of the Commission under Article 19.1.3(b) will be 
equivalent to the instrument re ferred to in article 21 of the Constitución Política de la República de 
Honduras .  
 
ANNEX 19.2:  FREE TRADE AGREEMENT COORDINATORS  
 
The free trade agreement coordinators shall consist of:   (a) in the case of Costa Rica, the Director General de Comercio Exterior ;  
(b) in the case of the Dominican Republic, the Subsecretario de Estado de Industria y 
Comercio Encargado de Comercio Exterior;  
(c) in the case of El Salvador, the Director de la Dirección de Administración de 
Tratados Comerciales del Ministerio de Economía ;  
(d) in the case of Guatemala, the Director de Administración de Comercio Exterior del 
Ministerio de Economía;  
(e) in the case of Honduras, the Director General de Política Comercial e Integración 
Económica de la Secretaría de Estado en  los Despachos de Industria y Comercio ;  
(f) in the case of Nicaragua, the Director General de Comercio Exterior del Ministerio 
de Fomento, Industria y Comercio;  and  
(g) in the case of the United States, the Assi stant United States Trade Representative for 
the Americas,   
or their successors.  
  
ANNEX 19.3:  REMUNERATION AND PAYMENT OF EXPENSES  
 
1. The Commission shall establish the amounts of re muneration and expenses that will be paid 
to panelists and experts. 
2. The remuneration of panelists and their assistants , experts, their travel and lodging expenses, 
and all general expenses of pa nels shall be borne equally by the disputing Parties.  
3. Each panelist and expert shall keep a record  and render a final account of the person’s time 
and expenses, and the panel shall keep a record a nd render a final account of  all general expenses.  
 
    WT/REG211/1 
 Page 295 
 
 
CHAPTER TWENTY:  DISPUTE SETTLEMENT  
 
Section A: Dispute Settlement  
 
Article 20.1 
 
Cooperation  
The Parties shall at all times endeavor to agr ee on the interpretation and application of this 
Agreement, and shall make every attempt throug h cooperation and consulta tions to arrive at a 
mutually satisfactory resolution of any ma tter that might affect its operation.  
 
Article 20.2 
 
Scope Of Application  
Except as otherwise provided in this Agreement,  the dispute settlement provisions of this 
Chapter shall apply:  
 
(a) with respect to the avoidance or settlement of all disputes between the Parties 
regarding the interpretation or a pplication of this Agreement;  
(b) wherever a Party considers that an actual or  proposed measure of another Party is or 
would be inconsistent with th e obligations of this Agreemen t or that another Party has 
otherwise failed to carry out its ob ligations under this Agreement; and  
(c) wherever a Party considers that an actual or proposed measure of another Party 
causes or would cause nullification or impairment in the sense of Annex 20.2.  
Article 20.3 
 
Choice Of Forum  
1. Where a dispute regarding any matter arises under this Agreement and under another free 
trade agreement to which the disputing Parties ar e party or the WTO Agreement, the complaining 
Party may select the forum in which to settle the dispute.   
2. Once the complaining Party has requested a panel under an agreement referred to in 
paragraph 1, the forum selected shall be u sed to the exclusion of the others.   
Article 20.4 
 
Consultations  
1. Any Party may request in writing consultations w ith any other Party with respect to any actual 
or proposed measure or any other matter that it  considers might affect the operation of this 
Agreement.   
2. The requesting Party shall deliver the request to the other Parties, and shall set out the reasons 
for the request, including identification of the actual or proposed measure or other matter at issue and 
an indication of the legal basis for the complaint.  WT/REG211/1 
Page 296  
 
3. A Party that considers it has a substantial trade interest in the matter may participate in the 
consultations on delivery of written notice to the ot her Parties within seven days of the date of 
delivery of the request for consultations. The Party shall include in its notice an explanation of its 
substantial trade interest in the matter.   
4. Consultations on matters regarding perishable goods
1 shall commence within 15 days of the 
date of delivery of the request.  
5. The consulting Parties shall make every attempt to  arrive at a mutually satisfactory resolution 
of any matter through consultations under this Ar ticle or other consultative provisions of this 
Agreement.  To this end, the consulting Parties shall:  
(a) provide sufficient information to enable a full examination of how the actual or 
proposed measure or other matter might aff ect the operation and application of this 
Agreement; and  
(b) treat any confidential information exchange d in the course of consultations on the 
same basis as the Party pr oviding the information.  
6. In consultations under this Artic le, a consulting Party may request another consulting Party to 
make available personnel of its govern ment agencies or other regulatory bodies who have expertise in 
the matter subject to consultations.2 
Article 20.5 
Commission – Good Offices, Conciliation, And Mediation  
1. If the consulting Parties fail to resolve a matter pursuant to Article 20.4 within:  
(a) 60 days of delivery of a request for consultations;   
(b) 15 days of delivery of a request for consu ltations in matters regarding perishable 
goods; or  
(c) such other period as they may agree,  
any such Party may request in writing a meeting of the Commission.3
 
 
2. A consulting Party may also request in writing a meeting of the Commission where 
consultations have been held pursuant to Article 16.6 (Cooperative Labor Consultations), 
Article 17.10 (Collaborative Envi ronmental Consultations), or Ar ticle 7.8 (Committee on Technical 
Barriers to Trade).  
3. The requesting Party shall deliver the request to the other Parties, and shall set out the reasons 
for the request, including identification of the actual or proposed measure or other matter at issue and 
an indication of the legal basis for the complaint.  
                                                      
 1 For greater certainty, the term “perishable goods” means perishable agricultural and fish goods 
classified in chapters 1 throug h 24 of the Harmonized System.  
 2 A consulting Party receiving such a request shall strive to accommodate it.  
 3 For purposes of this paragraph and paragraphs 2 and 4, the Commission shall consist of the cabinet-
level representatives of the consulting Parties, as set out in Annex 19.1 (The Free Trade Commission), or their 
designees .   WT/REG211/1 
 Page 297 
 
 
4. Unless it decides otherwise, the Commission shall convene within ten days of delivery of the 
request and shall endeavor to resolve th e dispute promptly.  The Commission may:  
(a) call on such technical advisers or create su ch working groups or expert groups as it 
deems necessary;  
(b) have recourse to good offices, conciliati on, mediation, or such other dispute 
resolution procedures; or  
(c) make recommendations,  
as may assist the consulting Parties to reach a mutual ly satisfactory resolution of the dispute.    
 
5. Unless it decides otherwise, the Commission shall consolidate two or more proceedings 
before it pursuant to this Article regarding th e same measure or matter.  The Commission may 
consolidate two or more proceedings regarding other matters before it pursuant to this Article that it 
determines are appropriate to  be considered jointly.4 
Article 20.6 
 
Request For An Arbitral Panel  
1.  If the consulting Parties fail to resolve a matter within:  
 
(a)  30 days after the Commission has convened pursuant to Article 20.5;  
(b)  30 days after the Commission has convened in respect of the matter most recently 
referred to it, where proceedings have been consolidated pursuant to Article 20.5.5;  
(c)  30 days after a Party has delivered a request for consultations under Article 20.4 in a 
matter regarding perishable goods, if the Commission has not convened pursuant to 
Article 20.5.4;  
(d) 75 days after a Party has delivered a request  for consultations under Article 20.4, if 
the Commission has not convened pursuant to Article 20.5.4; or  
(e) such other period as the consulting Parties may agree,  
any consulting Party that requested a meeting of th e Commission with regard to the measure or other 
matter in accordance with Article 20.5 may request in  writing the establishment of an arbitral panel to 
consider the matter.  The requesting Party shall deli ver the request to the other Parties, and shall set 
out the reasons for the request, including identificati on of the measure or other matter at issue and an 
indication of the legal basis for the complaint.   
2. An arbitral panel shall be established upon delivery of a request.  
 3. A Party that is eligible under paragraph 1 to request the establishment of a panel and 
considers it has a substantial interest in the matt er may join the arbitral panel proceedings as a 
complaining Party on delivery of written notice to the other Parties.  The notice shall be delivered at 
                                                     
 
 4 For purposes of this paragraph, the Commission sha ll consist of the cabinet-level representatives of 
the consulting Parties in the relevant proceedings, as set out in Annex 19.1 (The Free Trade Commission), or 
their designees .  WT/REG211/1 
Page 298  
 
the earliest possible time, and in any event no later than seven days after the date of delivery of the 
request by the Party for the establishment of a panel.   4. If a Party does not join as a complaining Pa rty in accordance with paragraph 3, it normally 
shall refrain thereafter from initiating or continuing:  
 
(a)  a dispute settlement procedure under this Agreement; or  
(b)  a dispute settlement proceeding under the WTO Agreement or under another free 
trade agreement to which it and the Party complained against are party, on grounds that are substantially equivalent to tho se available to it under this Agreement,  
regarding the same matter in the absence of a significant change in economic or commercial 
circumstances.  
 
5. Unless otherwise agreed by the disputing Par ties, the panel shall be established and perform 
its functions in a manner consistent with  the provisions of this Chapter.  
 
6. An arbitral panel may not be established to review a proposed measure.   
Article 20.7 
 
Roster
 
1.  The Parties shall establish within six months of  the date of entry into force of this Agreement 
and maintain a roster of up to 70 individuals who are willing and able to serve  as panelists. Unless the 
Parties otherwise agree, up to eight members of the roster shall be nationals of each Party, and up to 
14 members of the roster shall be selected from amo ng individuals who are not nationals of any Party. 
The roster members shall be appointed by consen sus, and may be reappointed. Once established, a 
roster shall remain in effect for a minimum of three years, and shall remain in effect thereafter until 
the Parties constitute a new roster.  The Parties ma y appoint a replacement where a roster member is 
no longer available to serve.  
 2.  Roster members shall:    (a)  have expertise or experience in law, inte rnational trade, other matters covered by this 
Agreement, or the resolution of disputes ar ising under international trade agreements;  
 
 (b)  be chosen strictly on the basis of objectivity, reliability, and sound judgment;  
  (c) be independent of, and not be affiliated with or take inst ructions from, any Party; and  
 
 (d)  comply with a code of conduct to be established by the Commission.  
 
Article 20.8 
 
Qualifications Of Panelists
 
 All panelists shall meet the qualifications set out  in Article 20.7.2.  Individuals may not serve 
as panelists for a dispute in which they have participated pursuant to Article 20.5.4.    
 
 
  WT/REG211/1 
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Article 20.9 
 
Panel Selection  
1. The Parties shall apply the followi ng procedures in selecting a panel:  
(a) the panel shall comprise three members;  
(b) the disputing Parties shall endeavor to agr ee on the chair of the panel within 15 days 
of the delivery of the request for the estab lishment of the panel.  If the disputing 
Parties are unable to agree on the chair within  this period, the chair shall be selected 
by lot within three days from among the ro ster members who are not nationals of a 
disputing Party;  
(c) within 15 days of selection of the chair, th e complaining Party or Parties shall select 
one panelist and the Party complained  against shall select one panelist;  
(d) if the complaining Party or Parties or th e Party complained against fail to select a 
panelist within this period, the panelist sha ll be selected by lot within three days from 
among the roster members who are nationals of such Party or Parties, as the case may 
be; and   
(e) each disputing Party shall endeavor to select panelists who have expertise or 
experience relevant to the subject ma tter of the dispute, as appropriate.  
2. Panelists shall normally be selected from the ro ster.  Any disputing Party may exercise a 
peremptory challenge against any individual not on  the roster who is proposed as a panelist by a 
disputing Party within 15 days after the individual has been proposed.  
3. If a disputing Party believes that a panelist is in violation of the code of conduct, the disputing 
Parties shall consult and if they agree, the pane list shall be removed and a new panelist shall be 
selected in accordance with this Article.  
Article 20.10 
 
Rules Of Procedure  
1. The Commission shall establish by the date of en try into force of this Agreement Model Rules 
of Procedure, which shall ensure:  
(a) a right to at least one hearing before the panel, which, subject to subparagraph (e), 
shall be open to the public;  
(b) an opportunity for each disputing Party to provide initial and rebuttal written 
submissions;  
(c) that each participating Party’s written s ubmissions, written versions of its oral 
statement, and written responses to a request  or questions from the panel shall be 
public, subject to subparagraph (e);  
(d) that the panel will consider requests from non-governmental entities in the disputing 
Parties’ territories to provide written views regarding the dispute that may assist the 
panel in evaluating the submissions and ar guments of the disputing Parties; and  WT/REG211/1 
Page 300  
 
(e) the protection of confidential information.  
2. Unless the disputing Parties otherwise agree,  the panel shall conduct its proceedings in 
accordance with the Model Rules of Procedure.  
3. The Commission may modify the Model Rules of Procedure.  
4. Unless the disputing Parties otherwise agree with in 20 days from the date of the delivery of 
the request for the establishment of the pa nel, the terms of reference shall be:  
 “To examine, in the light of the relevant provi sions of this Agreement, the matter referenced 
in the panel request and to make findings, determinations, and re commendations as provided 
in Articles 20.10.6 and 20.13.3 and to deliver the written reports referred to in Articles 20.13 
and 20.14.”  
 
5. If a complaining Party in its panel request h as identified that a measure has nullified or 
impaired benefits, in the sense of Annex 20.2, the terms of reference shall so indicate.  
6. If a disputing Party wishes the panel to make fi ndings as to the degree of adverse trade effects 
on any Party of a Party’s failure to conform with th e obligations of this Agreement or of a Party’s 
measure found to have caused nullification or impa irment in the sense of Annex 20.2, the terms of 
reference shall so indicate.  
Article 20.11 
 
Third Party Participation
 
A Party that is not a disputing Party, on delivery of a written notice to the disputing Parties, 
shall be entitled to attend all hearings, to make wr itten and oral submissions to the panel, and to 
receive written submissions of the disputing Parties in accordance with the Model Rules of Procedure. 
Those submissions shall be reflected in the final report of the panel.  
 
Article 20.12 
 
Role Of Experts  
 On request of a disputing Party, or on its ow n initiative, the panel may seek information and 
technical advice from any person or body that it deem s appropriate, provided that the disputing Parties 
so agree and subject to such terms and conditions as such Parties may agree.  
 
Article 20.13 
 
Initial Report  
1. Unless the disputing Parties otherwise agree, th e panel shall base its report on the relevant 
provisions of this Agreement, the submissions a nd arguments of the disputing Parties, and on any 
information before it pursuant to Article 20.12.  
2. If the disputing Parties request, the panel may make recommendations for resolution of the 
dispute.   WT/REG211/1 
 Page 301 
 
 
3. Unless the disputing Parties otherwise agree, the panel shall, within 120 days after the last 
panelist is selected or such other period as the Model Rules of Procedure established pursuant to 
Article 20.10 may provide, present to the dis puting Parties an initial report containing:  
(a) findings of fact, including any findings pursuant to a request under Article 20.10.6;  
(b) its determination as to whether a dispu ting Party has not conformed with its 
obligations under this Agreement or that a Party’s measure is causing nullification or 
impairment in the sense of Annex 20.2, or  any other determination requested in the 
terms of reference; and  
(c) its recommendations, if the disputing Parties have requested them, for resolution of 
the dispute.  
4. When the panel considers that it cannot provide its report within 120 days, it shall inform the 
disputing Parties in writing of the reasons for the dela y together with an estimate of the period within 
which it will provide its report.  In no case should the period to provide the report exceed 180 days. 
The panel shall inform the disputing Parties of an y determination under this paragraph no later than 
seven days after the initial written submission of the complaining Party or Parties and shall adjust the 
remainder of the schedule accordingly.  
5. Panelists may furnish separate opinions on matters not unanimously agreed.   
6. A disputing Party may submit written comment s to the panel on its initial report within 
14 days of presentation of the report or within such  other period as the disputing Parties may agree.  
7. After considering any written comments on the in itial report, the panel may reconsider its 
report and make any further examin ation it considers appropriate.  
Article 20.14 
 
Final Report  
1. The panel shall present a final report to the disputing Parties, including any separate opinions 
on matters not unanimously agreed, within 30 days  of presentation of the initial report, unless the 
disputing Parties otherwise agree. The disputing Pa rties shall release the final report to the public 
within 15 days thereafter, subject to the protection of confidential information.  
 
2. No panel may, either in its initial report or  its final report, disclose which panelists are 
associated with majority or minority opinions.  
 
Article 20.15 
 
Implementation Of Final Report  
1. On receipt of the final report of a panel, th e disputing Parties shall agree on the resolution of 
the dispute, which normally shall conform with th e determinations and reco mmendations, if any, of 
the panel.  
 
2. If, in its final report, the panel determines th at a disputing Party has not conformed with its 
obligations under this Agreement or that a dis puting Party’s measure is causing nullification or WT/REG211/1 
Page 302  
 
impairment in the sense of Annex 20.2, the resoluti on, whenever possible, shall be to eliminate the 
non-conformity or the nullification or impairment.
5 
 
3. Where appropriate, the disputing Parties may agree on a mutually satisfactory action plan to 
resolve the dispute, which normally shall conform with the determinations and recommendations, if 
any, of the panel.  If the disputing Parties agree on such an action plan, a complaining Party may have 
recourse to Article 20.16.2 or Article 20.17.1, as th e case may be, only if it considers that the Party 
complained against has failed to carry out the action plan.6 
 
Article 20.16 
 
Non-Implementation − Suspension Of Benefits  
1. If a panel has made a determination of the type described in Article 20.15.2, and the disputing 
Parties are unable to reach agreement on a resolu tion pursuant to Article 20.15 within 45 days of 
receiving the final report, or such other period as th e disputing Parties agree, the Party complained 
against shall enter into negotiations with the compla ining Party or Parties with a view to developing 
mutually acceptable compensation.  
2. If the disputing Parties:  
(a) are unable to agree on compensation within 30 days after the period for developing 
such compensation has begun; or  
(b) have agreed on compensation or on a r esolution pursuant to Article 20.15 and a 
complaining Party considers that the Party complained against has failed to observe 
the terms of the agreement,  
any such complaining Party may at  any time thereafter provide written notice to the Party complained 
against that it intends to suspend the application to the Party complained against of benefits of 
equivalent effect. The notice shall specify the leve l of benefits that the Party proposes to suspend. 
Subject to paragraph 6, the complaining Party may begi n suspending benefits 30 days after the later of 
the date on which it provides notice under this para graph or the panel issu es its determination under 
paragraph 3, as the case may be.   
3. If the Party complained against considers that:   
(a) the level of benefits proposed to be suspended is manifestly excessive; or  
(b) it has eliminated the non-conformity or the nullification or impairment that the panel 
has found,  
it may, within 30 days after the complaining Part y provides notice under paragraph 2, request that the 
panel be reconvened to consider the matter.  The Pa rty complained against shall deliver its request in 
writing to the complaining Party.  The panel sha ll reconvene as soon as possible after delivery of the 
request and shall present its determination to the di sputing Parties within 90 days after it reconvenes 
to review a request under subpara graph (a) or (b), or within 120 days for a request under 
                                                     
 
 5 Compensation, the payment of monetary assessments, and the suspension of benefits are intended 
as temporary measures pending the elimination of any no n-conformity or nullification or impairment that the 
panel has found.  
 6 For greater certainty, as part of an action plan the disputing Parties may undertake, modify, or 
enhance cooperation activities.   WT/REG211/1 
 Page 303 
 
 
subparagraphs (a) and (b).  If the pa nel determines that the level of be nefits proposed to be suspended 
is manifestly excessive, it shall determine the level of benefits it considers to be of equivalent effect.  
 
4. The complaining Party may suspend benefits up to the level the panel has determined under 
paragraph 3 or, if the panel has not determined the level, the level the complaining Party has proposed 
to suspend under paragraph 2, unless the panel has de termined that the Party complained against has 
eliminated the non-conformity or the nullification or impairment.  
5. In considering what benefits to suspend pursuant to paragraph 2:  
(a) the complaining Party should first seek to suspend benefits in the same sector or 
sectors as that affected by the measure or other matter that the panel has found to be inconsistent with the obligations of this Agreement or to have caused nullification or 
impairment in the sense of Annex 20.2; and  
(b) if the complaining Party considers that it is  not practicable or effective to suspend 
benefits in the same sector or sectors, it may suspend benefits in other sectors.  
6. The complaining Party may not suspend benefits  if, within 30 days after it provides written 
notice of intent to suspend benefits or, if the pa nel is reconvened under para graph 3, within 20 days 
after the panel provides its determination, the Part y complained against provides written notice to the 
complaining Party that it will pay an annual monetary  assessment.  The disputing Parties shall consult, 
beginning no later than ten days after the Party co mplained against provides notice, with a view to 
reaching agreement on the amount of the assessment.  If the disputing Parties are unable to reach an 
agreement within 30 days after cons ultations begin, the amount of th e assessment shall be set at a 
level, in U.S. dollars, equal to 50 percent of the level of the benefits the panel has determined under 
paragraph 3 to be of equivalent effect or, if the panel has not determined the level, 50 percent of the 
level that the complaining Party has pr oposed to suspend under paragraph 2.  
7. Unless the Commission otherwise decides, a monetary assessment shall be paid to the 
complaining Party in U.S. dollars, or in an equiva lent amount of the currency of the Party complained 
against, in equal, quarterly installments beginning  60 days after the Party complained against gives 
notice that it intends to pay an assessment.  Wh ere the circumstances warrant, the Commission may 
decide that an assessment shall be paid into a fund established by the Commission and expended at 
the direction of the Commission for appropriate in itiatives to facilitate trade between the disputing 
Parties, including by further reducing unreasonable tr ade barriers or by assisting a disputing Party in 
carrying out its obligations under this Agreement.
7 
 
8. If the Party complained against fails to pay a monetary assessment, the complaining Party 
may suspend the application to the Party compla ined against of benefits in accordance with 
paragraph 4.  
9. This Article shall not apply with respect to a matter described in Article 20.17.1.  
Article 20.17  
 
Non-Implementation In Certain Disputes  
1. If, in its final report, a panel determines that  a Party has not conformed with its obligations 
under Article 16.2.1(a) (Enforcement of Labor Laws) or Article 17.2.1(a) (Enforcement of 
Environmental Laws), and the disputing Parties:  
                                                      
 7 For purposes of this paragraph, the Commission sha ll consist of the cabinet-level representatives of 
the disputing Parties, as set out in Annex 19.1 (The Free Trade Commission), or their designees.  WT/REG211/1 
Page 304  
 
(a) are unable to reach agreement on a resolu tion pursuant to Article 20.15 within 
45 days of receiving the final report; or  
(b) have agreed on a resolution pursuant to Article 20.15 and a complaining Party 
considers that the Party complained agains t has failed to observe the terms of the 
agreement,   
any such complaining Party may at any time thereafte r request that the panel be reconvened to impose 
an annual monetary assessment on the Party complained  against.  The complaining Party shall deliver 
its request in writing to the Party complained ag ainst. The panel shall reconvene as soon as possible 
after delivery of the request.   
2. The panel shall determine the amount of the monetary assessment in U.S. dollars within 
90 days after it reconvenes under paragraph 1.  In determining the amount of the assessment, the panel 
shall take into account:  
(a) the bilateral trade effects of the Party’s failure  to effectively enforce the relevant law;  
(b) the pervasiveness and duration of the Part y’s failure to effectively enforce the 
relevant law;  
(c) the reasons for the Party’s failure to effec tively enforce the relevant law, including, 
where relevant, its failure to obser ve the terms of an action plan;  
(d) the level of enforcement that could reasona bly be expected of the Party given its 
resource constraints;  
(e) the efforts made by the Party to begin remedying the non-enforcement after the final 
report of the panel, including through th e implementation of any mutually agreed 
action plan; and  
(f) any other relevant factors.  
 The amount of the assessment shall not exceed 15 million U.S. dollars annually, adjusted for 
inflation as specified in Annex 20.17.  
 
3. On the date on which the panel determines the amount of the monetary assessment under 
paragraph 2, or at any time thereafter, the comp laining Party may provide notice in writing to the 
Party complained against demanding payment of th e monetary assessment.  The monetary assessment 
shall be payable in U.S. dollars, or in an equiva lent amount of the currency of the Party complained 
against, in equal, quarterly installments beginning  60 days after the complaining Party provides such 
notice.   
4. Assessments shall be paid into a fund estab lished by the Commission and shall be expended 
at the direction of the Commission for appropriate labor or environmental initiatives, including efforts 
to improve or enhance labor or environmental law en forcement, as the case may be, in the territory of 
the Party complained against, consistent with its law. In deciding how to expend monies paid into the 
fund, the Commission shall consider the views of interested persons in the disputing Parties’ 
territories.
8 
 
                                                      
 8 For purposes of this paragraph, the Commission sha ll consist of the cabinet- level representatives of 
the disputing Parties, as set out in Annex 19.1 (The Free Trade Commission), or their designees.   WT/REG211/1 
 Page 305 
 
 
5. If the Party complained against fails to pay a monetary assessment, the complaining Party 
may take other appropriate steps to collect the assessment or otherwise secure compliance.  These steps may include suspending tariff benefits und er the Agreement as necessary to collect the 
assessment, while bearing in mind the Agreement’s objective of eliminating barriers to trade and 
while seeking to avoid unduly affecting parti es or interests not party to the dispute.  
Article 20.18 
 
Compliance Review
 
1. Without prejudice to the procedures set out in Article 20.16.3, if the Party complained against 
considers that it has eliminated the non-conformity or the nullification or impairment that the panel 
has found, it may refer the matter to the panel by providing written notice to the complaining Party or 
Parties.  The panel shall issue its report on the ma tter within 90 days after the Party complained 
against provides notice.  
2. If the panel decides that the Party complained against has eliminated the non-conformity or 
the nullification or impairment, the complaining Party or Parties shall promptly reinstate any benefits 
that Party has or those Parties have suspended under Article 20.16 or Article 20.17 and the Party 
complained against shall no longer be required to pay any monetary assessment it has agreed to pay 
under Article 20.16.6 or that has been imposed on it under Article 20.17.1.  
Article 20.19 
 
Five-Year Review  
 The Commission shall review the operation and effectiveness of Articles 20.16 and 20.17 not 
later than five years after the Agreement enters into  force, or within six months after benefits have 
been suspended or monetary assessments have been imposed in five proceedings initiated under this 
Chapter, whichever occurs first.   
Section B: Domestic Proceedings and Private Commercial Dispute Settlement 
 
 
Article 20.20 
 
Referral Of Matters From Judicial Or Administrative Proceedings  
1. If an issue of interpretation or application of th is Agreement arises in any domestic judicial or 
administrative proceeding of a Party that any Party co nsiders would merit its intervention, or if a court 
or administrative body solicits the views of a Part y, that Party shall notify the other Parties. The 
Commission shall endeavor to agree on an appr opriate response as expeditiously as possible.  
2. The Party in whose territory the court or ad ministrative body is located shall submit any 
agreed interpretation of the Commission to the c ourt or administrative body in accordance with the 
rules of that forum.  
3. If the Commission is unable to agree, any Party may submit its own views to the court or 
administrative body in accordance with  the rules of that forum.  
 
   WT/REG211/1 
Page 306  
 
Article 20.21 
 
Private Rights
 
 
 No Party may provide for a right of action unde r its law against any other Party on the ground 
that the other Party has failed to conform w ith its obligations under this Agreement.  
 
Article 20.22 
 
Alternative Dispute Resolution  
 
1. Each Party shall, to the maximum extent po ssible, encourage and facilitate the use of 
arbitration and other means of alternative disput e resolution for the settlement of international 
commercial disputes between private parties in the free trade area.  
2. To this end, each Party shall provide appropr iate procedures to ensure observance of 
agreements to arbitrate and for the recognition and en forcement of arbitral awards in such disputes.  
3. A Party shall be deemed to be in compliance w ith paragraph 2 if it is a party to and is in 
compliance with the 1958 United Nations Convention on the R ecognition and Enforcement of Foreign 
Arbitral Awards  or the 1975 Inter-American Convention on International Commercial Arbitration .  
4. The Commission may establish an Advisory Committee on Private Commercial Disputes 
comprising persons with expertise or experience in the resolution of private international commercial 
disputes.  
5. This committee shall:   
(a) report and provide recommendations to the Commission on general issues referred to 
it by the Commission respecting the availabilit y, use, and effectiveness of arbitration 
and other procedures for the resolution of su ch disputes in the free trade area; and  
(b) when the committee considers appropriate , promote technical cooperation between 
the Parties, in furtherance of the objectives identified in paragraph 1.  
  
ANNEX 20.2:  NULLIFICATION OR IMPAIRMENT  
 
1. If any Party considers that any benefit it could reasonably have expected to accrue to it under 
any provision of:  
(a) Chapters Three through Five (National Treatment and Market Access for Goods, 
Rules of Origin and Origin Procedures, and Customs Administration and Trade 
Facilitation);  
(b) Chapter Seven (Technical Barriers to Trade);  
(c) Chapter Nine (Government Procurement);  
(d) Chapter Eleven (Cross-Border  Trade in Services); or  
(e) Chapter Fifteen (Intellectual Property Rights),   WT/REG211/1 
 Page 307 
 
 
is being nullified or impaired as a result of the applic ation of any measure that is not inconsistent with 
this Agreement, the Party may have recourse to dispute settlement under this Chapter.  
 
2. A Party may not invoke paragraph 1(d) or (e ) with respect to any measure subject to an 
exception under Article 21.1 (General Exceptions).    
 
ANNEX 20.17:  INFLATION ADJUSTMENT FORMULA FOR MONETARY ASSESSMENTS  
 1. An annual monetary assessment imposed befo re December 31, 2005 shall not exceed 
15 million dollars (U.S.).  
2. Beginning January 1, 2006, the 15 million dollar (U.S.) annual cap shall be adjusted for 
inflation in accordance with paragraphs 3 through 5.  
3. The period used for the accumulated inflation adjustment shall be calendar year 2004 through 
the most recent calendar year preceding the one in which the assessment is owed.  
4. The relevant inflation rate shall be the U.S. inflation rate as measured by the Producer Price 
Index for Finished Goods published by th e U.S. Bureau of Labor Statistics.  
5. The inflation adjustment shall be estimat ed according to the following formula:  
$15 million x (1+ π
i) = A  
 π
i =   accumulated U.S. inflation rate from calendar year 2004 through the most recent 
calendar year preceding the one in which the assessment is owed.  
 A =  cap for the assessment for the year in question.   
 
 
CHAPTER TWENTY-ONE:  EXCEPTIONS  
 
Article 21.1 
 
General Exceptions 
 
1. For purposes of Chapters Three through Seven (National Treatment and Market Access for 
Goods, Rules of Origin and Origin Procedures,  Customs Administration and Trade Facilitation, 
Sanitary and Phytosanitary Measures, and Tech nical Barriers to Trade), Article XX of the 
GATT 1994 and its interpretive notes are incorporated  into and made part of this Agreement, 
mutatis mutandis . The Parties understand that the measures referred to in Article XX(b) of the 
GATT 1994 include environmental measures necessary to protect human, animal, or plant life or 
health, and that Article XX(g) of the GATT 1994 app lies to measures relating to the conservation of 
living and non-living exhaustible natural resources.  
2. For purposes of Chapters Eleven, Thirteen, and Fourteen1 (Cross-Border Trade in Services, 
Telecommunications, and Electronic Commerce), Artic le XIV of the GATS (including its footnotes) 
is incorporated into and made  part of this Agreement, mutatis mutandis . The Parties understand that 
the measures referred to in Article XIV(b) of th e GATS include environmental measures necessary to 
protect human, animal, or plant life or health.  
                                                      
1 This Article is without prejudice to whether digital products should be classified as goods or services. WT/REG211/1 
Page 308  
 
Article 21.2 
 
Essential Security
 
Nothing in this Agreemen t shall be construed:  
 
(a) to require a Party to furnish or allow access to any information the disclosure of 
which it determines to be contrary to its essential security interests; or   
(b) to preclude a Party from applying measure s that it considers necessary for the 
fulfillment of its obligations with respect  to the maintenance or restoration of 
international peace or security, or the protec tion of its own essential security interests.  
Article 21.3 
 
Taxation  
1. Except as set out in this Article, nothing in this  Agreement shall apply to taxation measures.  
2. Nothing in this Agreement shall affect the ri ghts and obligations of any Party under any tax 
convention. In the event of any inconsistency betw een this Agreement and any such convention, that 
convention shall prevail to the extent of the incons istency.  In the case of a tax convention between 
two or more Parties, the competent authorities under that convention shall have sole responsibility for 
determining whether any inconsis tency exists between this Agr eement and that convention.   
3. Notwithstanding paragraph 2:  
(a) Article 3.2 (National Treatment) and such ot her provisions of this Agreement as are 
necessary to give effect to that Article sh all apply to taxation measures to the same 
extent as does Article III of the GATT 1994; and  
(b) Article 3.10 (Export Taxes) shall apply to taxation measures.  
4. Subject to paragraph 2:  
(a) Article 11.2 (National Treatment) and Artic le 12.2 (National Trea tment) shall apply 
to taxation measures on income, capital gains, or on the taxable capital of 
corporations that relate to the purchase or consumption of particular services, except 
that nothing in this subparagraph shall prevent a Party from conditioning the receipt or continued receipt of an advantage relating to the purchase or consumption of particular services on requirements to provide the service in its territory; and  
(b) Articles 10.3 (National Treatment) and 10.4 (Most-Favored-Nation Treatment), 
Articles 11.2 (National Treatment) and 11. 3 (Most-Favored-Nation Treatment) and 
Articles 12.2 (National Treatment) and 12. 3 (Most-Favored-Nation Treatment) shall 
apply to all taxation measures, other than those on income, capital gains, or on the 
taxable capital of corporations, taxes on estates, inheritances, gifts, and 
generation-skipping transfers,   
except that nothing in those Articles shall apply:   
 
(c) any most-favored-nation obligation with resp ect to an advantage accorded by a Party 
pursuant to any tax convention;   WT/REG211/1 
 Page 309 
 
 
(d) to a non-conforming provision of any existing taxation measure;  
(e) to the continuation or prompt renewal of  a non-conforming provision of any existing 
taxation measure;  
(f) to an amendment to a non-conforming provi sion of any existing taxation measure to 
the extent that the amendment does not d ecrease its conformity, at the time of the 
amendment, with any of those Articles;  
(g) to the adoption or enforcement of any taxation measure aimed at ensuring the 
equitable or effective imposition or collection of taxes (as permitted by Article XIV(d) of the GATS); or  
(h) to a provision that conditions the receipt, or continued receipt, of an advantage 
relating to the contributions to, or income  of, pension trusts or pension plans on a 
requirement that the Party maintain conti nuous jurisdiction over the pension trust or 
pension plan.  
5. Subject to paragraph 2 and without prejudice to the rights and obligations of the Parties under 
paragraph 3, Article 10.9.2, 10.9.3, and 10.9.4 (Performance Requirements) shall apply to taxation 
measures.  
6. Article 10.7 (Expropriation and Compensation) and Article 10.16 (Submission of a Claim to 
Arbitration) shall apply to a taxation measure alle ged to be an expropriation or a breach of an 
investment agreement or investment  authorization.  However, no investor may invoke Article 10.7 as 
the basis of a claim where it has b een determined pursuant to this paragraph that the measure is not an 
expropriation.  An investor that seeks to invoke Ar ticle 10.7 with respect to a taxation measure must 
first refer to the competent authorities of the Par ties of the claimant and the respondent set out in 
Annex 21.3 at the time that it gives its notice of in tent under Article 10.16.2 the issue of whether that 
taxation measure involves an expropriation.  If the competent authorities do not agree to consider the 
issue or, having agreed to consider it, fail to agr ee that the measure is not an expropriation within a 
period of six months of such referral, the inve stor may submit its claim to arbitration under 
Article 10.16.  
Article 21.4 
 
Balance Of Payments Measures On Trade In Goods
 
 Should a Party decide to impose measures for balance of payments purposes, it shall do so 
only in accordance with that Party’s rights and obligations under the GATT 1994, including the Declaration on Trade Measures Taken for Balance of Payments Purposes (1979 Declaration) and the 
Understanding on the Balance of Payments Provisions of the GATT 1994 (BOP Understanding). In 
adopting such measures, the Party shall immediatel y consult with the other Parties and shall not 
impair the relative benefits accorded to  the other Parties under this Agreement.
2 
 
Article 21.5 
 
Disclosure Of Information  
 Nothing in this Agreement sha ll be construed to require a Part y to furnish or allow access to 
confidential information the disclosure of which w ould impede law enforcement, or otherwise be 
                                                      
 2 For greater certainty, this Articl e applies to balance of payments m easures imposed on trade in goods.  WT/REG211/1 
Page 310  
 
contrary to the public interest, or which woul d prejudice the legitimate commercial interests of 
particular enterprises, public or private.   
Article 21.6 
 
Definitions
 
 For purposes of this Chapter:  
 
 tax convention  means a convention for the avoidance of double taxation or other 
international taxation agreement or arrangement; and   
 taxes  and taxation measures  do not include:  
  
(a) a customs duty; or  
(b) the measures listed in exceptions (b) and (c ) of the definition of customs duty.  
 
ANNEX 21.3:  COMPETENT AUTHORITIES 
 
For purposes of this Chapter:  
 
 competent authorities  means  
 
(a) in the case of Costa Rica, the Viceministro de Hacienda ;  
(b) in the case of the Dominican Republic, the Subsecretario de Estado de Finanzas ;  
(c) in the case of El Salvador, the Viceministro de Hacienda ;  
(d) in the case of Guatemala, the Viceministro de Finanzas Públicas ;  
(e) in the case of Honduras, the Subsecretario en el Despacho de Finanzas ;  
(f) in the case of Nicaragua, the Viceministro de Hacienda y Crédito Publico ; and  
(g) in the case of the United States, the Assistan t Secretary of the Treasury (Tax Policy), 
Department of the Treasury,  
 or their successors.  
  
CHAPTER TWENTY-TWO:  FINAL PROVISIONS  
 
Article 22.1 
 
Annexes, Appendices, And Footnotes 
 
The Annexes, Appendices, and footnotes to this Ag reement constitute an integral part of this 
Agreement.  
   WT/REG211/1 
 Page 311 
 
 
Article 22.2 
 
Amendments  
1. The Parties may agree on any amendment of this Agreement. The original English and 
Spanish texts of any amendment shall be deposited with the Depositary, which shall promptly provide 
a certified copy to each Party.  
2. When so agreed, and approved in accordance with the applicab le legal procedures of each 
Party, an amendment shall constitute an integral part  of this Agreement to take effect on the date on 
which all Parties have notified the Depositary in wr iting that they have approved the amendment or on 
such other date as the Parties may agree.  
Article 22.3 
 
Amendment Of The WTO Agreement  
 If any provision of the WTO Agreement that the Parties have incorporated into this 
Agreement is amended, the Parties shall consult w ith a view to amending the relevant provision of 
this Agreement, as appropriate, in  accordance with Article 22.2.  
 
Article 22.4 
 
Reservations  
 No Party may enter a reservation in respect of any provision of this Agreement without the 
written consent of the other Parties.  
 
Article 22.5 
 
Entry Into Force  
1.  (a) This Agreement shall enter into force on January 1, 2005, provided that the United 
 States and one or more other signatories notify the Depositary in writing by that date 
 that they have completed their applicable legal procedures.   
 
 (b)  If this Agreement does not enter into fo rce on January 1, 2005, this Agreement shall 
  enter into force after the United States and one or more other signatories make such a   notification, on such later date as they may agree.  
 
2. Thereafter, this Agreement shall enter into fo rce for any other signatory 90 days after the date 
on which that signatory notifies the Depositary in wr iting that it has completed its applicable legal 
procedures. Unless the Parties otherwise agree, a si gnatory may not provide a notification under this 
paragraph later than two years after the date of entry into force of this Agreement.  
 
3. The Depositary shall promptly inform the Parties and non-Party signatories of any 
notification under paragraph 1 or 2.   
 
 
 
 WT/REG211/1 
Page 312  
 
Article 22.6 
 
Accession
 
1. Any country or group of countries may accede to this Agreement subject to such terms and 
conditions as may be agreed be tween such country or countries and the Commission and following 
approval in accordance with the applicable lega l procedures of each Party and acceding country.  
2. The instrument of accession shall be deposited with the Depositary, which shall promptly 
inform each Party of the accession.  
Article 22.7 
 
Withdrawal  
1. Any Party may withdraw from this Agreement by providing written notice of withdrawal to 
the Depositary. The Depositary shall promptly in form the Parties of such notification.  
2. A withdrawal shall take effect six mont hs after a Party provides written notice under 
paragraph 1, unless the Parties agree on a different period. If a Party withdraws, the Agreement shall 
remain in force for the remaining Parties.  
Article 22.8 
 
Depositary  
The original English and Spanish texts of this  Agreement shall be deposited with the General 
Secretariat of the Organization of American States, which shall serve as depositary.  The Depositary shall promptly provide a certified copy of  the original texts to each signatory.  
 
 
                     WT/REG211/1 
 Page 313 
 
 
Article 22.9 
 
Authentic Texts  
The English and Spanish texts of this  Agreement are equally authentic.  
  
IN WITNESS WHEREOF , the undersigned, being duly authorized by their respective 
Governments, have signe d this Agreement.  
 
DONE , at Washington in English and Spanish, on this 5
th day of August, 2004.  
 
  FOR THE GOVERNMENT OF THE REPUBLIC OF COSTA RICA:  
 
    FOR THE GOVERNMENT OF THE DOMINICAN REPUBLIC:  
 
    FOR THE GOVERNMENT OF THE REPUBLIC OF EL SALVADOR:   
 
   FOR THE GOVERNMENT OF THE REPUBLIC OF GUATEMALA:   
 
   FOR THE GOVERNMENT OF THE REPUBLIC OF HONDURAS:    
 
  FOR THE GOVERNMENT OF THE REPUBLIC OF NICARAGUA:    
 
  FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:   
__________