WORLD TRADE  
ORGANIZATION  WT/REG196/1 
4 May 2005 
 (05-1848) 
Committee on Regional Trade Agreements Original:   Spanish 
  
 
FREE TRADE AGREEMENT BETWEEN PANAMA AND EL SALVADOR 
 
  The following communication, dated 24 February 2005, is being circulated at the request of 
the Delegations of Panama and El Salvador. 
 
 The following text reproduces the Free Tr ade Agreement between the Governments of 
Central America and the Government of Panama.
* 
 
_______________ 
 
TABLE OF CONTENTS  
  Page 
 
FREE  TRADE AGREEMENT BETWEEN THE GOVERNMENTS OF CENTRAL  
AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF PANAMA ..............................3
 
PREAMBLE ....................................................................................................................... .....................3  
PART ONE:  GE NERAL ASPECTS ..................................................................................................... .4 
CHAPTER 1:  INITIAL PROVISIONS ................................................................................................. .4 
CHAPTER 2:  GENERAL DEFINITIONS.............................................................................................5  
PART TWO:  TRADE IN GOODS...................................................................................................... .10 
CHAPTER 3:  NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS ......................10  
CHAPTER 4:  RULES OF ORIGIN.................................................................................................... ..19 
CHAPTER 5:  CUSTOMS PROCEDURES .........................................................................................41  
CHAPTER 6:  SAFEGUARD MEASURES .........................................................................................52  
CHAPTER 7:  UNFAIR TRADING PRACTICES...............................................................................60  
PART THREE:  TECHNICAL BARRIERS TO TRADE.....................................................................62  
CHAPTER 8:  SANITARY AND PHYTOSANITARY MEASURES.................................................62  
CHAPTER 9:  STANDARDS-RELATED ME ASURES, METROLOGY AND APPROVAL 
PROCEDURES..................................................................................................................... .................70  
PART FOUR:  INVESTMENT, SERVICES AND RELATED MATTERS........................................79  
CHAPTER 10:  INVESTMENT........................................................................................................ ....79  
                                                      
* The annexes to the Agreement are available at the Secretariat for consultation by interested Members 
(office 1174).  They are also availabl e at the following websites:  www.vicomex.gob.pa/tlc_centroamerica.html  
and  www.minec.gob.sv/datco. WT/REG196/1 
Page 2  
 
 CHAPTER 11:  CROSS-BORDER TRADE IN SERVICES..............................................................100
 
CHAPTER 12:  FINANCIAL SERVICES..........................................................................................107  
CHAPTER 13:  TELECOMMUNICATIONS ....................................................................................119  
CHAPTER 14:  TEMPORARY ENTRY OF BUSINESS PERSONS................................................129  
PART FIVE:  COMPETITION POLICY............................................................................................139  
CHAPTER 15:  COMPETITION POLICY, MONOPOLIES AND STATE ENTERPRISES ...........139  
PART SIX:  GOVERNMENT PROCUREMENT ..............................................................................141  
CHAPTER 16:  GOVERNMENT PROCUREMENT.........................................................................141  
PART SEVEN:  INTELLECTUAL PROPERTY ...............................................................................147  
CHAPTER 17:  INTELLECTUAL PROPERTY ................................................................................147  
PART EIGHT:  ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS................................149  
CHAPTER 18:  TRANSPARENCY....................................................................................................14 9 
CHAPTER 19:  ADMINISTRATION OF THE AGREEMENT ........................................................151  
CHAPTER 20:  DISPUTE SETTLEMENT ........................................................................................157  
CHAPTER 21:  EXCEPTIONS........................................................................................................ ...167  
CHAPTER 22:  FINAL PROVISIONS...............................................................................................171  
 
  WT/REG196/1 
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 FREE TRADE AGREEMENT BETWEEN THE GOVERNMENTS OF CENTRAL AMERICA 
AND THE GOVERNMENT OF THE REPUBLIC OF PANAMA 
PREAMBLE  
The Governments of the Republics of Costa Rica, El Salvador, Guatemala, Honduras and 
Nicaragua, on the one hand, and the Government of the Republic of Panama, on the other, resolved to: 
Facilitate  regional and hemispheric integration; 
Strengthen  the traditional bonds of friendship and spirit of cooperation among their nations; 
Achieve  a better balance in their trade relations; 
Foster an expanded and secure market for facilitati ng trade in goods and services and the flow 
of capital and technology in their territories; 
Avoid distortions to their mutual trade; 
Establish  clear and mutually advantageous rules governing the promotion and protection of 
investments and their trade in goods and services; 
Respect  their rights and obligations under the Ma rrakesh Agreement Establishing the World 
Trade Organization (WTO) and other bilateral a nd multilateral instruments of integration and 
cooperation; 
Enhance  the competitiveness of their firms in global markets; 
Create employment opportunities and improve the liv ing standards of their people in their 
respective territories; 
Promote economic development in a manner consiste nt with environmental protection and 
conservation and with sustainable development; 
Preserve  their capacity to safeguard the public welfare;  and 
Promote  dynamic participation by the different economic agents, particularly the private 
sector, in the effort to enhance trade relations am ong the Parties and to develop and cultivate, to the 
fullest extent possible, the opportunities for their joint presence on international markets; 
Enter into the following  Free Trade Agreement: WT/REG196/1 
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 PART ONE:  GENERAL ASPECTS 
CHAPTER 1:  INITIAL PROVISIONS 
Article 1.01 
Establishment of the Free-Trade Area
 
1. Through this Agreement, the Parties lay the groundwork for establishing and implementing a 
free trade zone, consistent with Article XXI V of the GATT 1994 and Article V of the GATS. 
 2. Unless otherwise provided, the Republics of Costa Rica, El Salvador, Guatemala, Honduras 
and Nicaragua, considered individually, shall a pply the rules and procedures under this Agreement 
bilaterally with the Republic of Panama. 
Article 1.02 
Objectives
 
1. The objectives of this Agreement are to: 
  (a) Further develop the free trade zone; 
(a) encourage the expansion and diversifica tion of trade in goods and services among the 
Parties; 
(b) promote conditions of fair competition in the free-trade Area; (c) eliminate barriers to trade and facilitate the circulation of goods and services in the 
free-trade Area; 
(d) promote, protect and substantially increase investments in each Party;  and 
(e) establish effective procedures for the app lication and observance of this Agreement, 
for its joint administration and for dispute settlement. 
2. The Parties shall interpret and apply the provisions of this Agreement in the light of the 
objectives set out in paragraph 1 and in accordance with applicable rules of international law. 
Article 1.03 
Observance
 
 Each Party shall ensure, in acco rdance with its constitutional re quirements, that all necessary 
measures are adopted for observance of the provisions of  this Agreement in its territory by all levels 
of government. 
Article 1.04 
Relation to Other International Agreements  
1. The Parties affirm their existing rights and obligations with respect to each other under the 
WTO Agreement and other agreements to which they are party.  WT/REG196/1 
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 2. In the event of any inconsistency between th is Agreement and the agreements referred to in 
paragraph 1, this Agreement shall prevail to the extent of the inconsistency, except as otherwise 
provided in this Agreement.  3. In the event of any inconsistency between th is Agreement and the specific trade obligations 
set out in: 
 
(a) The Convention on International Trade in Endangered Species of Wild Fauna and 
Flora, done at Washington, 3 March 1973, as amended 22 June 1979; 
(b) the Montreal Protocol on Substances that Deplete the Ozone Layer, done on 
16 September 1987, as amended 29 June 1990;  or 
(c) the Basel Convention on the Control of Transboundary Movements of Hazardous 
Wastes and Their Disposal, done on 22 March 1989; 
such obligations shall prevail to the extent of th e inconsistency, provided that where a Party has a 
choice among equally effective and reasonably available means of co mplying with such obligations, 
the Party chooses the alternative that is the least inconsistent with the other provisions of this 
Agreement. 
Article 1.05 
Successor Agreements
 
All references to any other international agre ement shall be understood to be made in the 
same terms to a successor agreement to which the Parties are party. 
CHAPTER 2:  GENERAL DEFINITIONS 
Article 2.01 
Definitions of General Application  
For the purposes of this Agreement, unless otherwise specified: Substantial business activities  mean the activity conducted by an enterprise in the territory 
of a Party if the enterprise engages in a determ inable and stable economic activity which may be 
confirmed by any of the following criteria: 
(a) registration as an income tax payer in the territory of that Party; 
(b) a payroll duly registered with the corresponding  authority in the territory of that Party;  
or 
(c) permanent premises, facilities or offices in  the territory of that Party which are not 
restricted to receiving notifications; 
Customs Valuation Agreement  means the Agreement on Implementation of Article VII of 
the General Agreement on Tariffs and Trade 1994, in cluding its interpretative notes, which is part of 
the WTO Agreement; WT/REG196/1 
Page 6  
 
 WTO Agreement  means the Marrakesh Agreement Establishing the World Trade 
Organization, done on 15 April 1994; 
TRIPS  means the Agreement on Trade-Related Aspects of Intellectual Property Rights, 
which is part of the WTO Agreement; 
GATS means the General Agreement on Trade in Services, which is part of the 
WTO Agreement; 
customs duty  means any customs or import duty or charge of any kind imposed in 
connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any: 
(a) Charge equivalent to an internal ta x imposed consistently with Article III, 
paragraph 2, of the GATT 1994; 
(b) anti-dumping or countervailing duty that is a pplied pursuant to a Party's domestic law 
and is not applied in a manner that is in consistent with Chapter 7 (Unfair Trading 
Practices); 
(c) fee or other charge in connection with importation commensurate with the cost of 
services rendered;  and 
(d) premium offered or collected on an impor ted good arising out of any tendering system 
in respect of the administration of quantita tive import restrictions, tariff rate quotas or 
tariff preference levels; 
chapter means the first two digits in the Harmonized System; 
Central America  means the Republics of Costa Rica, El Salvador, Guatemala, Honduras and 
Nicaragua; 
Commission  means the Administrative Commission  of the Agreement established under 
Article 19.01 (The Administrative Commission of the Agreement); 
days  means calendar days; 
enterprise  means any entity constituted or organized  under the applicable law of a Party, 
whether or not for profit, and whether privately owned or governmentally owned, including any 
company, corporation, foundation, trust, partnershi p, sole proprietorship, joint venture or other 
association; 
State enterprise  means an enterprise that is owned or  controlled through ownership interests 
by a Party; 
Understanding  means the Understanding on Rules and Procedures Governing the Settlement 
of Disputes, which is part of the WTO Agreement; 
existing  means in effect on the date of entry into force of this Agreement; 
GATT  1994  means the General Agreement on Tariffs and Trade 1994, which is part of the 
WTO Agreement;  WT/REG196/1 
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 measure  means any law, regulation, procedur e, requirement, provision or practice, inter alia ; 
goods  means any material, matter, product or part; 
goods of a Party  means domestic products as these ar e understood in the GATT 1994 or such 
goods as the Parties may agree, and includes originating goods of that Party.  Goods of a Party may incorporate materials from other countries; 
originating  goods means goods qualifying as such under Chapter 4 (Rules of Origin); 
national  means a natural person of a Party, as established in Annex 2.01; 
Central American country  means a country of Central America; 
Party  means each Central American country consid ered individually and Panama, in which 
this Agreement has entered into force; 
heading  means the first four digits in the Harmonized System; 
person  means a natural person or an enterprise; 
person of a Party  means a national or an enterprise of a Party; 
producer  means a person who grows, mines, harvests, raises, fishes, hunts, manufactures, 
processes or assembles a good; 
Tariff Elimination Programme means the programme established pursuant to Annex 3.04 
(Tariff Elimination Programme); 
Uniform Regulations  means the regulations established pursuant to Article 5.12 (Uniform 
Regulations); 
Secretariat  means the Secretariat established under Article 19.03 (The Secretariat); 
Harmonized system  means the Harmonized Commodity Description and Coding System, 
including its General Rules of Interpretation and legal Section, Chapter, Heading and Subheading 
Notes, as adopted and implemented by the Parties in their respective laws; 
subheading means the first six digits in the Harmonized System;  and 
territory  means the land, maritime, and air space of each Party and the exclusive economic 
zone and the continental shelf over which it exerci ses sovereign rights and jurisdiction in accordance 
with international law; 
ANNEX 2.01 
Country-Specific Definitions
 
For the purposes of this Agreement, unless otherwise specified: 
National means: 
For Costa Rica: WT/REG196/1 
Page 8  
 
 (a) A Costa Rican by birth, in accordance with Article 13 of  the Political Constitution of 
the Republic of Costa Rica; 
(b) a Costa Rican by naturalization, in accordance with Article 14 of the Political 
Constitution of the Republic of Costa Rica;  and 
(c) a person who is a permanent resident under Costa Rican law; 
for El Salvador: 
(a) A Salvadoran by birth, as defined in Artic le 90 of the Constitution of the Republic of 
El Salvador;  and 
(b) a Salvadoran by naturalization, as defi ned in Article 92 of the Constitution of the 
Republic of El Salvador;  and 
(c) a person who is a permanent r esident under Salvadoran law; 
for Guatemala: (a) A person born in the territory of the Re public of Guatemala, on Guatemalan vessels 
or aircraft, and children born abroad to a Gu atemalan father or mother.  The children 
of diplomats and others holding legall y comparable positions are excepted; 
(b) nationals by birth of the Republics that constituted the Central American Federation if 
they acquire residence in Guatemala and stat e to a competent authority their desire to 
become a Guatemalan citizen.  In that ev ent, they may retain their nationality of 
origin, without detriment to the provisi ons of Central American treaties or 
conventions;  and 
 (c) a person who obtains naturalization under the law; 
 
for Honduras: 
(a) A Honduran by birth, as defined in Article 23 of the Constitution of the Republic of 
Honduras;  and 
(b) a Honduran by naturalization, as define d in Article 24 of the Constitution of the 
Republic of Honduras; 
for Nicaragua: (a) Nicaraguan, as determined in Article 15 of the Political Constitution of the Republic 
of Nicaragua; 
(b) notwithstanding, foreigners with the stat us of permanent residents, as defined in 
Article 9 of the Immigration Law, Law 153, published in La Gaceta  (Official Journal) 
80 of 30 April 1993 ("Ley de Migración, Ley No.
 153, La Gaceta, Diario Oficial, 
No. 80, 30 de abril de 1993"), shall enjoy the benefits, rights and obligations that this Agreement confers on nationals, solely with  respect to the application of this 
Agreement;  and  WT/REG196/1 
 Page 9 
 
 
 for Panama: 
(a) A Panamanian by birth, in accordance with  Article 9 of the Political Constitution of 
the Republic of Panama; 
(b) a Panamanian by naturalization, in accordance with Article 10 of the Political 
Constitution of the Republic of Panama;  and 
(c) a Panamanian by adoption,  in accordance with Article 11 of the Political Constitution 
of the Republic of Panama; 
 (d) a person who is a permanent resident under Panamanian law. WT/REG196/1 
Page 10  
 
 PART TWO:  TRADE IN GOODS 
CHAPTER 3:  NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS 
Section A – Definitions, Scope and Coverage
 
Article 3.01 
Definitions  
For the purposes of this Chapter: 
temporary admission of goods means temporary admission of goods or temporary 
importation of goods; 
consumed means:  
(a) Actually consumed;  or 
(b) further processed or manufactured so as to  result in a substantial change in value, 
form or use of the good or in the production of another good; 
 
printed advertising materials  means those goods classified in Chapter 49 of the Harmonized 
System, including brochures, pamphlets, leaflets , trade catalogues, yearbooks published by trade 
associations, tourist promotional materials and posters that are used to promote, publicize or advertise 
a good or service and are supplied free of charge; 
goods imported for sports purposes  means sports equipment for use in sports contests, 
events or training in the territory of the Party in to the territory of which such goods are imported; 
agricultural good means a good classified under one of the following chapters, headings or 
subheadings of the Harmonized System, as amended in 1996: 
(Note:  The descriptions are pr ovided for purposes of reference)  
Tariff Classification Description 
Chapters 
Subheading Subheading 
Heading 
Headings Subheading Subheading Headings Heading 
Headings 
Headings Headings Heading Heading 01 through 24 
2905.43  2905.44 
33.01 
35.01 through 35.05 3809.10 3824.60 41.01 through 41.03 43.01 
50.01 through 50.03 
51.01 through 51.03 52.01 through 52.03 53.01 53.02 (Other than fish or fish products) 
Mannitol Sorbitol 
Essential oils 
Albuminoidal substances, modified starches Finishing agents Sorbitol, other than that of subheading 2905.44 Raw hides and skins and leather Raw furskins 
Raw silk and silk waste 
Wool and animal hair Raw cotton, cotton waste and cotton carded or combed Raw flax True hemp, raw  WT/REG196/1 
 Page 11 
 
 
 goods intended for display or demonstration  includes their component parts, ancillary 
apparatus and accessories; 
commercial samples of negligible or no commercial value  means commercial samples 
having a value (individually or in the aggregate as shipped) of not more than one U.S. dollar, or the equivalent amount in the currency of any of the Par ties, or so marked, torn, perforated or otherwise 
treated that they are unsuitable for sale or for use except as commercial samples; 
Advertising films  means recorded visual media, with or without sound-tracks, consisting 
essentially of images showing the nature or operation of goods or services offered for sale or lease by 
a person established or resident in th e territory of a Party, provided that the films are of a kind suitable 
for exhibition to prospective customers but not for broadcast to the general public, and provided that 
they are imported in packets that each contain no more than one copy of each film and that do not 
form part of a larger consignment; 
fish and fish products means fish, crustaceans, molluscs and all other aquatic invertebrates, 
marine mammals and by-products thereof, classified in one of the following chapters, headings or 
subheadings of the Harmonized System, as amended in 1996: 
(Note: The descriptions are pr ovided for purposes of reference) 
Tariff Classification Description 
 
Chapter
 
Heading  
Heading  
Heading  
Subheading  
Heading  
Heading  
Heading  
Heading  
Subheading  03 
05.07 05.08 
05.09 
0511.91 15.04 16.03 16.04 
16.05 
2301.20 Fish and crustaceans, molluscs and other aquatic 
invertebrates Ivory, tortoise-shell, whalebone, horns, antlers, hooves, nails, 
claws and beaks and products thereof 
Coral and similar materials Natural sponges of animal origin Products of fish or crustaceans, molluscs or other aquatic invertebrates; dead animals of Chapter 3 
Fats and oils and their fractions , of fish or marine mammals 
Extracts and juices other than of meat Prepared or preserved fish Crustaceans, molluscs and other aquatic invertebrates, prepared or preserved  
Flours, meals and pellets, of fish 
repair or alteration  does not include an operation or process that either destroys the essential 
characteristics of a good or creates a new or comme rcially different good.  An operation or process 
that is part of the production or assembly of an unf inished good in order to convert it into a finished 
good is not a repair or alteration of the unfinished  good; a component of a good is a good that may be 
subject to repair or alteration;  and 
agricultural export subsidies  refer to: 
(a) The provision by governments or their agencies of direct subsidies, including 
payments in kind, to a firm, to an industry, to producers of an agricultural product, to a cooperative or other association of such producers, or to a marketing board; 
 (b) the sale or disposal for export by governments or their agencies of non-commercial 
stocks of agricultural products at a price lower than the comparable price charged for 
the like product to buyers in the domestic market; WT/REG196/1 
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(c) payments on the export of an agricultural  product that are financed by virtue of 
governmental action, whether or not a charge on the public account is involved, including payments that are financed fro m the proceeds of a levy imposed on the 
agricultural product concerned or on an ag ricultural product from which the exported 
product is derived; 
 (d) the provision of subsidies to reduce the costs of marketing exports of agricultural 
products (other than widely available export promotion and advisory services) including handling, upgrading and other processing costs, and the costs of 
international transport and freight; 
 (e) internal transport and freight charges on export shipments, provided or mandated by 
governments, on terms more favourable th an for domestic shipments;  and 
 
(f) subsidies on agricultural products con tingent on their incorporation in exported 
products. 
Article 3.02 
Scope and Coverage
 
This Chapter applies to trade in goods among the Parties. 
Section B – National Treatment  
Article 3.03 
National Treatment  
1. Each Party shall accord national treatment to the goods of the other Party in accordance with 
Article III of the GATT 1994, including its interpreta tive notes, which are incorporated into and made 
part of this Agreement. 
 
2. For the purposes of paragraph 1, each Party shall accord the goods of the other Party treatment no less favourable than the most favourable treatment accorded by that Party to any like, 
directly competitive or substitutable goods of national origin. 
Section C – Tariffs
 
Article 3.04 
Tariff Elimination Programme  
1. Upon the entry into force of this Agreement,  the Parties undertake to guarantee access to their 
respective markets through the tota l and definitive elimination of cu stoms import tariffs and any other 
fees or charges on trade in originating goods , other than those set out in Annex 3.04. 
 
2. Except as otherwise provided in this Agreement, this Article is not intended to prevent a Party 
from maintaining or raising a customs duty that  may be permitted under the provisions of the 
WTO Agreement or any other agreement th at is part of the WTO Agreement. 
  WT/REG196/1 
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 3. Paragraph 1 does not prevent a Party from rais ing a customs duty to a level not greater than 
the level established in the Tariff Elimination Pr ogramme, where that customs duty has previously 
been unilaterally reduced to a level below the leve l established in the Tariff Elimination Programme.  
During the tariff elimination process, the Parties ag ree to apply to originating goods traded among 
them the lesser of either the customs duties estab lished under the Tariff Elimination Programme or the 
applicable rate determined in accordan ce with Article I of the GATT 1994. 
4. At the request of a Party, the Parties shall c onsult to consider accele rating the elimination of 
customs duties set out in the Tariff Elimination Programme.  5. Notwithstanding paragraphs 1 to 4, a Party ma y maintain, adopt or modify a customs duty on 
the goods excluded from the Tariff Elimination Programme, as set out in Annex 3.04. 
Article 3.05 
Temporary Admission of Goods
 
1. Each Party shall grant duty-free temporary admission for: 
 
(a) Professional equipment necessary for ca rrying out the business activity, trade or 
profession of a business person who qualifies for temporary entry pursuant to Chapter 14 (Temporary Entry for Business Persons); 
(b) equipment for the press or for sound or television broadcasting and cinematographic 
equipment; 
(c) goods imported for sports purposes and goods in tended for display or demonstration;  
and 
(d) commercial samples and advertising films; 
imported from the territory of the other Party, regard less of their origin and regardless of whether like, 
directly competitive or substitutable goods are available in the territory of the Party. 
2. Except as otherwise provided in this Ag reement, no Party may condition the duty-free 
temporary admission of a good referred to in paragraph 1( a), (b) or (c), other than to require that such 
good:  
(a) Be imported by a national or resident of the other Party who seeks temporary entry; 
(b) be used solely by or under the personal s upervision of such person in the exercise of 
that person's business activity, trade or profession; 
(c) not be sold or leased while in its territory; 
(d) be accompanied by a bond in an amount no greater than 110 per cent of the charges 
that would otherwise be owed  on final importation, or by another form of security, 
releasable on exportation of the good, except that a bond for customs duties shall not 
be required for an originating good; 
(e) be capable of identification when exported; 
(f) be exported on the departure of that person or  within such other period of time as is 
reasonably related to the purpose of the temporary admission;  and WT/REG196/1 
Page 14  
 
 (g) be imported in no greater quantity than is reasonable for its intended use. 
3. Except as otherwise provided in this Ag reement, no Party may condition the duty-free 
temporary admission of a good referred to in paragr aph 1(d), other than to require that such good: 
(a) Be imported solely for the solicitation of  orders for goods from the other Party, 
regardless of their origin or of whether the services are provided from the territory of 
the other Party; 
(b) not be sold, leased or put to any use othe r than exhibition or demonstration while in 
its territory; 
(c) be capable of identification when exported; (d) be exported within such period as is reasonably related to the purpose of the 
temporary admission;  and 
(e) be imported in no greater quantity th an is reasonable for its intended use. 
4. Where a good is temporarily admitted duty fr ee under paragraph 1 and any condition a Party 
imposes under paragraphs 2 and 3 has not been fulfilled, that Party may impose:  
(a) The customs duty and any other charge th at would be owed on final importation of 
the good;  and 
 (b) any applicable criminal, civil or admini strative penalties that the circumstances may 
warrant. 
5. Subject to Chapters 10 (Investment) and 11 (Cross-Border Trade in Services): 
(a) Each Party shall allow a vehicle or containe r used in international traffic that enters 
its territory from the territory of the other Part y to exit its territory on any route that is 
reasonably related to the economic and prompt departure of such vehicle or container; 
(b) no Party may require any bond or impose any penalty or charge solely by reason of 
any difference between the port of entry and the port of departure of a vehicle or 
container; 
(c) no Party may condition the release of any obligation, including any bond, that it 
imposes in respect of the entry of a vehicle or  container into its territory on its exit 
through any particular port of departure;  and 
(d) no Party may require that the vehicle or carrier bringing a container from the territory 
of the other Party into its territory be the sa me one that takes it to the territory of the 
other Party. 
6. For the purposes of paragraph 5, "vehicle" means a truck, a truck tractor, tractor, trailer unit or 
trailer, a locomotive, or a railway car or other railroad equipment.  WT/REG196/1 
 Page 15 
 
 
 Article 3.06 
Duty-Free Entry of Commercial Samples of Neg ligible or No Commercial Value and Printed 
Advertising Materials  
Each Party shall grant duty-free entry to commercial samples of negligible or no commercial 
value and to printed advertising ma terials imported from the territory of the other Party, regardless of 
their origin, but may require that: 
(a) Such samples be imported solely for th e solicitation of orders for goods or services 
from the other Party, regardless of their origin or of whether the services are provided from the territory of the other Party or that of a non-Party;  or 
(b) such advertising materials be imported in packets that each contain no more than one 
copy of each such material and that neither such materials nor packets form part of a 
larger consignment. 
Article 3.07 
Goods Re-entered after Repair or Alteration
 
1. No Party may apply a customs duty to a good,  regardless of its origin, that re-enters its 
territory after that good has been exported or tempor arily removed from its territory to the territory of 
the other Party for repair or alteration, regardless  of whether such repair or alteration could be 
performed in its territory.  2. No Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration. 
 
3. Re-entry under paragraph 1 and temporar y admission under paragraph 2 shall take place 
within the time limit established in the law of the Parties. 
Article 3.08 
Customs Valuation
 
1. The Customs Valuation Agreement shall govern  the customs valuation rules applied by the 
Parties to their reciprocal trade, in the form  in which it has been adopted by the Parties. 
 2. Notwithstanding paragraph 1, two (2) years afte r the entry into force of this Agreement, the 
Central American countries which have negotiate d reservations before the WTO under Annex III of 
the Agreement on Implementation of Article VI I of the GATT 1994 shall fully implement the 
Customs Valuation Agreement, including the anne xes and explanatory notes thereto, between the 
Parties and may not determine the value of  goods on the basis of minimum values. 
Article 3.09 
Restrictions on Domestic Suppor t and Export Subsidy Programmes
 
The Parties shall establish the treatment of dom estic support for agricultural goods and export 
subsidy programmes in Annex 3.09. WT/REG196/1 
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 Section D – Non-Tariff Measures
 
Article 3.10 
Import and Export Restrictions  
1. The Parties undertake to completely and imme diately eliminate non-tariff barriers, with the 
exception of the rights of the Parties under Articles XX and XXI of the GATT 1994 and those 
regulated in Chapter 8 (Sanitary and Phytosanita ry Measures) and Chapter 9 (Standards-Related 
Measures, Metrology and Approval Procedures).  2. Except as otherwise provided in this Agre ement, no Party may adopt or maintain any 
prohibition or restriction on the importation of an y good of the other Party or on the exportation or 
sale for export of any good destined for the territory  of the other Party, except in accordance with 
Article XI of the GATT 1994, including its interpre tative notes.  To this end, Article XI of the 
GATT 1994 and its interpretative notes are incorporated  into and made a part of this Agreement. 
 3. The Parties understand that the GATT 1994  rights and obligations incorporated by 
paragraph 2 prohibit, in any circumstances in which an y other form of restriction is prohibited, export 
price requirements and, except as permitted in enfo rcement of countervailing and antidumping orders 
and undertakings, import price requirements.  4. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall: 
 
(a) be construed as preventing the othe r Party from limiting or prohibiting the 
importation from the territory of the other Party of such a good of that non-Party;  or 
(b) allow the Party to require as a condition of export of such good to the territory of the 
other Party, that the good not be re-exported to the non-Party, directly or indirectly, 
without being consumed in the territory of the other Party. 
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of 
a good from a non-Party, the Parties, at the request of  the other Party, shall consult with a view to 
avoiding undue interference with or distortion of pr icing, marketing and distribution arrangements in 
that other Party. 
6. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3.10(6). 
Article 3.11 
Customs Processing Fees and Consular Fees
 
1. Except as provided for in Annex 3.11(1), when this Agreement comes into force the Parties 
shall not apply any existing customs processing fees or  adopt any new customs user fee on originating 
goods. 
 
2. Except as provided for in Annex 3.11(2), no Part y shall collect consular fees or charges or 
require consular formalities on originating goods after this Agreement comes into force.  WT/REG196/1 
 Page 17 
 
 
 Article 3.12 
Geographical Indications a nd Appellations of Origin  
1. Each Party shall recognize and protect the geogr aphical indications and appellations of origin 
of the other Party, as established in this Article.  
2. No Party shall permit the importation, manuf acture or sale of a good that uses a geographical 
indication or appellation of origin protected in th e other Party, unless it has been manufactured and 
certified therein, pursuant to its legislation applicable to that good.  3. Paragraphs 1 and 2 shall only have effect with respect to t hose geographical indications and 
appellations of origin protected by  the domestic legislation of the Pa rty that is claiming protection and 
the definition of which is consistent with Article 22 (1) of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights.  Furthe r, to gain protection, each Party shall notify the other Party of the 
geographical indications or appella tions of origin which, fulfilling the above-mentioned requirements, 
shall be considered within the scope of the protection. 
 
4. All of the above shall be understood without pr ejudice to the recognitio n that the Parties may 
grant to homonymous geographical indications and appellations of origin that legitimately could 
belong to a non-Party. 
Article 3.13
 
Country of Origin Marking  
1. Each Party shall apply to th e goods of the other Party, where relevant, its legislation on 
country of origin markings, in accordance with Artic le IX of the GATT 1994.  To that end, Article IX 
of the GATT 1994 is incorporated into and ma de an integral part of this Agreement. 
 2. Each Party shall accord the goods of the ot her Party treatment no less favourable than it 
accords to the goods of a non-Party with respect to the application of rules relating to country of 
origin markings, in accordance with Article IX of the GATT 1994.  3. Each Party shall ensure that  the establishment and application of the respective legislation on 
country of origin markings is not intended to cr eate, and does not have the effect of creating, 
unnecessary obstacles to trade among the Parties. 
Article 3.14 
Export Taxes
 
Except as provided in Annex 3.14, no Party may adopt or maintain any duty, tax or other 
charge on the export of any good to the territory of the other Party, unless such duty, tax or charge is 
adopted or maintained on any such good when destined for domestic consumption. 
Article 3.15 
International Obligations  
A Party, prior to adopting a measure unde r an inter-governmental agreement on goods 
pursuant to Article XX(h) of the GATT 1994, whic h may affect the trade in commodities among the WT/REG196/1 
Page 18  
 
 Parties, shall consult the other Party to prevent th e nullification or impairment of a concession granted 
by that Party under Article 3.04. 
Article 3.16 
Committee on Trade in Goods
 
1. The Parties establish a Committee on Trade in  Goods, the composition of which is established 
in Annex 3.16. 
 2. The Committee shall examine matters related to  this Chapter, Chapter 4 (Rules of Origin), 
Chapter 5 (Customs Procedures) and the Uniform Regulations. 
3. Without detriment to Article 19.05(2) (Committees), the Committee shall: 
 (a) Refer to the Commission matters that impede  access to markets in the territory of the 
Parties, particularly relating to the application of non-tariff measures;  and 
 (b) promote trade in goods among the Parties, through consultations and studies to 
accelerate the elimination of tariffs by modifying the time limits established in Annex 3.04. 
ANNEX 3.16 
Committee on Trade in Goods
 
The Committee on Trade in Goods established in Article 3.16 shall be composed of: 
(a) For Costa Rica, a representative of the Ministry of Foreign Trade ("Ministerio de 
Comercio Exterior") or its successor; 
 (b) for El Salvador, a representative of the Ministry of Economic Affairs ("Ministerio de 
Economía") or its successor; 
 (c) for Guatemala, a representative of the Mi nistry of Economic Affairs ("Ministerio de 
Economía") or its successor; 
 (d) for Honduras, a representative of the Secretariat of State for Industry and Trade 
("Secretaría de Estado en los Despachos de  Industria y Comercio") or its successor; 
 (e) for Nicaragua, a representative of the Ministry of Development, Industry and Trade 
("Ministerio de Fomento, Industria y Comercio") or its successor;  and 
 (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio e 
Industria") through the Vice-Ministry of Foreign Trade ("Viceministerio de Comercio Exterior") or its successor.  WT/REG196/1 
 Page 19 
 
 
 CHAPTER 4:  RULES OF ORIGIN 
Article 4.01 
Definitions  
For the purposes of this Chapter: c.i.f. means the value of imported goods, including the cost of insurance and freight, at the 
port or point of introduction into the importing country; 
f.o.b . means free on board, regardless of the mode of transportation, at the port or point of 
final shipment abroad; 
material  means a good that is used in the production or processing of another good and 
includes components, inputs, raw materials, parts and pieces; 
indirect material  means a good used in the production, testing or inspection of another good 
but not physically incorporated into it, or a good u sed in the maintenance of buildings or the operation 
of equipment associated with the production of a good, including: 
(a) Fuel, energy, catalysts and solvents; 
(b) equipment, devices and supplies used  for testing or inspecting the goods; 
(c) gloves, glasses, footwear, clothing, safety equipment and supplies; 
(d) tools, dies and moulds; (e) spare parts and materials used in the maintenance of equipment and buildings; (f) lubricants, greases, compounding materials and other materials used in production or 
to operate equipment or maintain buildings;  and 
(g) any other materials or products that are not incorporated into the good but the use of 
which in the production of the good can reasona bly be demonstrated to be a part of 
that production; 
fungible goods means goods that are interchangeable for commercial purposes and the 
properties of which are essentially identical and cannot be differentiated by a simple visual examination; 
goods wholly obtained or produced entirely in the territory of one or more Parties 
means:  
(a) Mineral goods extracted in the territory of one or more Parties; 
 (b) vegetable goods harvested in the territory of one or more Parties;  (c) live animals born and raised in th e territory of one or more Parties; 
 (d) goods obtained from hunting or fishing in the territory of one or more Parties; WT/REG196/1 
Page 20  
 
  (e) fish, shellfish and other marine life take n from the sea outside the territorial waters 
and maritime zones where the Parties exercise jurisdiction by vessels registered or recorded with a Party and flying its flag or vessels leased by companies established in 
the territory of a Party; 
(f) goods produced on board factory ships from the goods referred to in  subparagraph (e), 
provided such factory ships are registered or recorded with that Party and fly its flag 
or on factory ships leased by companies est ablished in the territory of a Party; 
(g) goods taken by a Party or a person of a Party from the seabed or marine subsoil 
outside territorial waters, provided that the Party has rights to exploit such seabed or marine subsoil; 
(h) waste and scrap derived from: 
(i) Production in the territory of one or more Parties;  or 
(ii) used goods collected in the territory of one or more Parties, provided such 
goods are fit only for the recovery of raw materials;  or 
(i) goods produced in the territory of one or more Parties exclusively from goods 
referred to in subparagraphs (a ) through (h), or from their derivatives, at any stage of 
production; 
generally accepted accounting principles  means the principles used in the territory of each 
Party that confer substantial authoritative support w ith respect to the record ing of revenues, costs, 
expenses, assets and liabilities, relating to informat ion and the preparation of financial statements.  
These standards may be broad guidelines of genera l application as well as detailed standards, 
practices and procedures; 
production  means growing, mining, harvesting, breeding and raising, fishing, hunting, 
manufacturing, processing or assembling a good; 
value  means the value of a good or material, determined in accordan ce with the Customs 
Valuation Agreement; 
transaction value  of a good means the price actually paid or payable for a good with respect 
to a transaction by the producer of the good, adjust ed in accordance with the principles of Article 1 
and paragraphs 1, 3 and 4 of Artic le 8 of the Customs Valuation Agreement, regardless of whether the 
good is sold for export.  For the purposes of this definition, the vendor referred to in the Customs 
Valuation Agreement shall be the producer of the good;  and 
transaction value of a material  means the price actually paid or payable for a material with 
respect to a transaction by the producer of the good,  adjusted in accordance with the principles of 
Article 1 and paragraphs 1, 3 and 4 of Article 8 of the Customs Valuation Agreement, regardless of 
whether the material is sold for export.  For the purposes of this definition, the vendor referred to in 
the Customs Valuation Agreement shall be the supplier of the material and the buyer referred to in the 
Customs Valuation Agreement shall be the producer of the good.  WT/REG196/1 
 Page 21 
 
 
 Article 4.02 
Instruments of Application and Interpretation  
1. For the purposes of this Chapter: 
 
(a) The basis for the tariff classification of goods is the Harmonized System;  and 
(b) the value of a good or material shall be determined on the basis of the principles and 
rules of the Customs Valuation Agreement. 
2. In applying the Customs Valuation Agreement unde r this Chapter to determine the origin of a 
good:  
 (a) The principles and rules of the Customs Valuation Agreement shall apply to domestic 
transactions, with such modifications as may be required by the circumstances, as 
would apply to international transactions;  and 
  (b) the provisions of this Chapter shall take precedence over the Customs Valuation 
Agreement to the extent of any difference. 
Article 4.03 
Originating Goods
 
1. Except as otherwise provided in this Chapter, a good shall be considered originating where: 
 
(a) The good is wholly obtained or produced en tirely in the territory of one or more of 
the Parties; 
 
 (b) the good is produced in the territory of one or more of the Parties exclusively from 
originating materials as defined in this Chapter; 
 
 (c) the good is produced in the territory of one or more of the Parties from non-
originating materials that undergo a change  in tariff classification, comply with a 
regional value content or other requirement s, as set out in Annex 4.03, and the good 
satisfies all other applicable pr ovisions of this Chapter;  or 
  (d) the good is produced in the territory of one or more of the Parties but one or more of 
the non-originating materials that are used in the production of the good do not 
undergo a change in tariff classification because: 
  (i) The good was imported into the territory of a Party in an unassembled or a 
disassembled form but was classified as an assembled good pursuant to 
Rule 2(a) of the General Rules of In terpretation of the Harmonized System; 
  (ii) the heading for the good provides for and specifically describes both the good 
itself and its parts, provided the heading is not divided into subheadings;  or 
 
(iii) the subheading provides for and specifica lly describes the good and its parts; 
provided that the regional value content of  the good, determined in accordance with 
Article 4.07, is not less than thirty (30) per cent and the good satisfies all other applicable WT/REG196/1 
Page 22  
 
 requirements of this Chapter, unless the specific a pplicable rule of origin of Annex 4.03 under 
which it is classified specifies a different regional value content requirement, in which case that requirement is to be applied. 
The provisions of this subparagraph do not appl y to the goods included in Chapters 61 to 63 
of the Harmonized System. 
2. If a Party complies with the specific rule of origin established in Annex 4.03, it shall not be 
required to comply as well with the regional value content requirement established in paragraph 1(d). 
 3. For the purposes of this Chapter, a good produced from non-originating materials that 
undergo a change in tariff classification and satisfy th e other requirements set out in Article 4.03 shall 
have been produced entirely in the territory of one or  more of the Parties and the entire regional value 
content requirement for the good shall be met in the territory of one or more of the Parties. 
 4. Notwithstanding this Article, goods shall not be considered originating despite complying 
with the requirement of a change in tariff clas sification of their materials, where the goods are 
exclusively the result of the operations established in  Article 4.04 performed in the territory of the 
Parties through which they acquire the final form in  which they will be sold, where such operations 
have used non-originating materials, unless the specifi c rule of origin of Annex 4.03 states otherwise. 
Article 4.04 
Minimum Operations or Processes
 
The minimum operations or processes which in themselves or in combination do not confer 
origin on a good are: 
(a) Airing, ventilating, dr ying, refrigeration, freezing; 
 (b) cleaning, washing, sifting, screening, selection, classification or grading, thinning;  
(c) peeling, husking, shelling, boning, squeezing, macerating; 
 (d) dusting, removal of damaged parts, oili ng, painting to prevent rust or provide 
protective covering; 
 (e) testing or calibrating, division of bulk sh ipments, grouping into packets, application 
of marks, labels or distinguishing signs on products or their packages; 
 (f) packing, unpacking or repacking;  (g) dilution with water or another a queous solution, ionization and salting; 
 
(h) the simple collection or assembly of parts to form a complete good, make a set or 
assortment;  and 
 (i) slaughtering animals.  WT/REG196/1 
 Page 23 
 
 
 Article 4.05 
Indirect Materials  
An indirect material shall be considered to be an originating material without regard to where 
it is prepared or produced and the value of such material shall be the cost reported in the accounting 
records of the producer of the good. 
Article 4.06 
Accumulation  
1. A Party may only accumulate origin with or iginating goods from countries in which this 
Agreement has come into force.  
2. Materials or goods originating in the territory of a Party incorporated into a good in the 
territory of the other Party shall be considered originating in the territory of the latter Party. 
 3. For the purposes of determining whether a good is an originating good, the producer of a 
good may choose to accumulate its own production with that of one or more producers in the territory 
of one or more Parties of materials that are incorpor ated into that good, so that the production of the 
materials is considered to have been performed by that producer, provided the good complies with the 
requirements of Article 4.03.  4. Accumulation shall apply as follows:  
 (a) Where a specific rule of origin is comm on to all the Parties to this Agreement for a 
good;  or 
  (b) where a specific rule of origin a nd the tariff elimination period for a good are 
common to a group of no less than three (3) Parties to this Agreement. 
 
5. Two (2) years after this Agreement comes into force for all the Parties, they shall establish a 
programme of work to examine the possibility th at materials of Panamanian origin can be 
accumulated for the purpose of complying with the rules of origin in effect among the Central American countries.  This shall apply provided the end good into which the materials are incorporated is subject to free trade between Panama and each  Central American country and among the latter 
countries. 
 6. Notwithstanding paragraph 5, if the Central American countries accord the treatment referred 
to in the said paragraph to a non-Party country be fore they accord it to Panama, they shall accord 
treatment no less favourable to goods of Panamanian origin. 
Article 4.07 
Regional Value Content
 
1. The regional value content of goods shall be calculated on the basis of the following formula: 
 WT/REG196/1 
Page 24  
 
 RVC = 
where: [(TV - VNM) / TV] * 100  
RVC: 
 
TV: 
 
    VNM: is the regional value content, expressed as a percentage; 
 is the transaction value of the good ad justed to a f.o.b. basis, except as 
provided in paragraph 2. In the event that there is no transaction value or one 
cannot be determined under Article 1 of  the Customs Valuation Agreement, 
the value shall be determined in accord ance with Articles 2 through 7 of that 
Agreement;  and  
is the transaction value of non-originating materials adjusted to  a c.i.f. basis, 
except as provided in paragraph 5. In the event that there is no transaction value or one cannot be determined unde r Article 1 of the Customs Valuation 
Agreement, the value shall be dete rmined in accordance with Articles 2 
through 7 of that Agreement. 
 
2. Where the producer of a good does not export it directly, the transaction value shall be adjusted to the point at which the purchaser receiv es the good within the territory where the producer 
is located.  3. Where origin is determined on the basis of  the regional value content method, the required 
percentage shall be specified in Annex 4.03. 
 4. All the costs considered in calculating the regional value content shall be recorded and 
maintained in accordance with the Generally Accepted Accounting Principles applicable in the 
territory of the Party in which the good is produced. 
 
5. Where the producer of a good buys a non-originat ing material in the territory of the Party 
where the producer is located, the value of the no n-originating material shall not include freight, 
insurance, packing or any other cost incurred in transporting the material from the warehouse of the 
supplier to the location of the producer.  
6. To calculate the regional value content, the va lue of the non-originating materials used in the 
production of a good shall not include the value of the non-originating materials used in the production of an originating material bought and used in the production of that good. 
Article 4.08 
De Minimis
 
1. A good that does not undergo a change in ta riff classification as established in Annex 4.03 
shall be considered to be an originating good if th e value of all non-originating materials used in the 
production of the good that do not undergo a change  in tariff classification is not more than 
ten (10) per cent of the value of the good calculated on the basis of Article 4.07.  2. For goods classified in Chapters 50 to 63 of the Harmonized System, the percentage 
established in paragraph 1 refers to  the weight of the fibres and yarns compared to the weight of the 
good produced.  3. Paragraph 1 does not apply to a non-origina ting material used in the production of a good 
provided for in Chapters 1 to 27 of the Harmoni zed System unless the non-originating material is  WT/REG196/1 
 Page 25 
 
 
 provided for in a subheading other than that of th e good the origin of which is being determined under 
this Article. 
Article 4.09 
Fungible Goods  
1. Where originating and non-originating fungible goods are used in the preparation or 
production of a good, the origin of that good may be determined by applying one of the following 
inventory-management methods, at the choice of the producer:  
(a) First-in-first-out (FIFO);  
(b) last-in-first-out (LIFO);  or 
 (c) method of averages. 
 2. Where originating and non-originating fungible goods are physically commingled in the 
inventory and do not, prior to export, undergo an y productive process or any other operation in the 
territory of the Party in which they were physically commingled, other than unloading, reloading or any other movement necessary to maintain the goods in  good condition or ship th em to the territory of 
another Party, the origin of the good may be de termined on the basis of one of the inventory 
management methods.  
3. Once one of the inventory management methods  has been selected, it shall be used during the 
entire fiscal year or period. 
Article 4.10 
Sets and Assortments of Goods
 
1. Sets and assortments of goods classified as provided in Rule 3 of the General Rules of 
Interpretation of the Harmonized System and goods  the description of which under the nomenclature 
of the Harmonized System is specifically that of a set or assortment shall qualify as originating, provided that each of the goods in the set or assort ment complies with the rules of origin established 
in this Chapter and in Annex 4.03.  2. Notwithstanding paragraph 1, a set or assortment  of goods shall be considered originating if 
the value of all the non-originating goods used to  form the set or assortment does not exceed the 
percentage established in Article 4.08(1) of the valu e of the set or assortment, adjusted on the basis of 
Article 4.07(1) or (2), as applicable.  3. The provisions of this Article shall take precedence over the specific rules established in 
Annex 4.03. 
Article 4.11 
Accessories, Spare Parts and Tools
 
1. Accessories, spare parts or tools delivered with the good and which form a standard part of 
the good shall be disregarded in determining whethe r all the non-originating materials used in the 
production of the good undergo the applicable change  in tariff classification set out in Annex 4.03, 
provided that: WT/REG196/1 
Page 26  
 
  
(a) The accessories, spare parts or tools are not invoiced separately from the good, 
regardless of whether they are liste d separately in the invoice;  and 
 (b) the quantities and value of the accessories, spare parts or tools are customary for the 
good being classified. 
 2. If the good is subject to a regional value cont ent requirement, the valu e of the accessories, 
spare parts or tools shall be taken into account as or iginating or non-originating materials, as the case 
may be, in calculating the regional value content of the good. 
 
3. Accessories, spare parts and tools that do not  comply with the foregoing conditions shall have 
the rule of origin corresponding to each of them applied separately. 
Article 4.12 
Packaging Materials and Containers in which a Good is Packaged for Retail Sale
 
1. Packaging materials and containers in whic h a good is packaged for retail sale shall, if 
classified with the good in the Harmonized System, be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff 
classification set out in Annex 4.03.  2. If the good is subject to a regional value cont ent requirement, the valu e of such packaging 
materials and containers shall be taken into account  as originating or non-originating materials, as the 
case may be, in calculating the regional value content of the good. 
Article 4.13 
Packing Materials and Containers for Shipment
 
Packing materials and containers in which a good is packed for shipment shall be disregarded 
in determining whether: 
(a) The non-originating materials used in the production of the good undergo the 
applicable change in tariff classifi cation set out in Annex 4.03;  and 
 (b) the good satisfies a regional value content requirement. 
Article 4.14 
Direct Transhipment and Shipment and International Transit
 
A good shall not lose its originating status when  exported from one Party to the other Party 
and in transit through the territory of an y other Party or non-Party, provided that: 
(a) The transit is justified for geographical  reasons or considerations related to 
international transport requirements; 
(b) the good has not been nationalized and is  not destined for use in the country or 
countries of transit; 
  WT/REG196/1 
 Page 27 
 
 
 (c) it does not undergo, during its transport or storage, processing or any operation other 
than packaging, packing, repacking, load ing, unloading or handling to ensure its 
conservation;  and 
 (d) it remains under the control or supervision of the customs authority in the territory of 
the Party or non-Party. 
 
Otherwise, the good shall lose its originating status. 
ANNEX 4.03 
Specific Rules of Origin
 
Section A – General Interpretative Note  
1. A requirement of a change in tariff classifi cation is applicable onl y to non-originating 
materials.  2. Where a specific rule of origin is defined on the basis of a change in tariff classification and 
in its wording exceptions are made for classifications  at chapter, heading or subheading level in the 
Harmonized System, it shall be interpreted that the materials in those tariff classifications must be 
originating for the good to qualify as originating.  3. The excepted materials, separated by co mmas and with the disjunction "or", must be 
originating for the good to qualify as originating, even  in the event that one or more of the materials 
covered by the exception is used in its production. 
 4. Where a tariff heading or subheading is s ubject to optional specific rules of origin, 
compliance with one such rule shall suffice.  
5. Where a specific rule of origin provides for a group of headings or subheadings a change 
from another heading or subheading, such a change ma y be within or outside the group of headings or 
subheadings specified in the rule, as applicable, unless otherwise specified. 
Section B – Specific Rules of Origin Applicable Between the Republics of Costa Rica, El Salvador, 
Guatemala, Honduras and Nicaragua, and the Republic of Panama  
Section I:  Live Animals and Animal Products  
Chapter 01  Live animals  
01.01 - 01.05  A change to heading 01.01 through 01.05 from any other chapter;  or the 
animals under this heading shall originate in the country of birth and 
rearing. 
01.06  A change to heading 01.06 from any other chapter; or the animals under 
this heading shall originate in the country of birth and/or rearing or capture. 
 
Chapter 03  Fish and crustaceans, molluscs and other aquatic invertebrates  
Note to Chapter 03:  Fish and crustaceans, molluscs and ot her aquatic invertebrates shall 
be originating even if obtained from imported fry or larvae.  
03.01 - 03.04  A change to heading 03.01 through 03.04 from any other chapter. 
03.06 - 03.07 A change to heading 03.06 through 03.07 from any other chapter. WT/REG196/1 
Page 28  
 
  
Chapter 04  Milk and dairy produce;  birds' eggs;  natural honey;  edible products 
of animal origin, not elsewhere specified or included 
04.07 - 04.10  A change to heading 04.07 through 04.10 from any other chapter; or the 
products under this heading shall originate in the country where the eggs, natural or unprocessed honey and other products of animal origin not  
elsewhere specified or included were obtained. 
 
Chapter 05  Products of animal origin, not elsewhere specified or included  
05.01 - 05.11  A change to heading 05.01 through 05.11 from any other chapter.  
Section II:  Vegetable Products  
Note to Section II: 
Plant products (vegetables, fruit, forest products, inter alia ) grown in the territory of a Party 
shall be treated as originating in that Party even if they have been grown from seeds, bulbs, cuttings, 
grafts, buds or other living parts of pl ants imported from a Party or non-Party. 
Chapter 06  Live trees and other plants; bulbs, roots and the like; cut flowers and 
ornamental foliage  
06.01 - 06.04  A change to heading 06.01 through 06.04 from any other chapter; or 
products under this heading shall originate in the country where they were grown or reproduced.  
 
Chapter 07  Edible vegetables and certain roots and tubers  
07.01 - 07.14  A change to heading 07.01 through 07.14 from any other chapter; or the 
products under this heading shall originate in the country where they were 
grown in their natural or unprocessed state.  
 
Chapter 08  Edible fruit and nuts;  peel of citrus fruits or melons  
08.01 - 08.12  A change to heading 08.01 through 08.12 from any other chapter; or the 
products under this heading shall originate in the country where they were 
grown.  
0813.10 - 0813.40 A change to subheading 0813.10 through 0813.40 from any other chapter; 
or the products under this heading shall originate in the country where they were grown.   
 
Chapter 08  Edible fruit and nuts;  peel of citrus fruits or melons  
08.14 A change to heading 08.14 from any other chapter; or the products under 
this heading shall originate in the country where they were grown.  
 
Chapter 09  Coffee, tea, maté and spices  
09.01  A change to heading 09.01 from any other chapter; or the products under 
this heading shall originate in the country where the plant was grown and 
where the product was obtained.  
09.03 A change to heading 09.03 from any other chapter; or the products under 
this heading shall originate in the country where the plant was grown and 
where the product was obtained.  
09.05 A change to heading 09.05 from any other chapter; or the products under 
this heading shall originate in the country where the plant was grown and 
where the product was obtained.   WT/REG196/1 
 Page 29 
 
 
 0908.20 - 0908.30 A change to subheading 0908.20 through 0908.30 from any other chapter; 
or the products under this subheading shall originate in the country where the  plant was grown and where the product was obtained.  
09.09 A change to heading 09.09 from any other chapter; or the products under 
this heading shall originate in the country where the plant was grown and 
where the product was obtained.  
 
Chapter 10  Cereals  
10.01 - 10.08  A change to heading 10.01 through 10.08 from any other chapter; or the 
products under this heading shall originate in the country where they were grown.  
 
Chapter 11  Products of the milling industry;  malt; starches; inulin; wheat gluten  
1108.11  A change to subheading 1108.11 from any other heading.  
1108.19 - 1108.20 A change to subheading 1108.19 through 1108.20 from any other heading.  
 
Chapter 12  Oil seeds and oleaginous fruits;  mi scellaneous grains, seeds and fruit; 
industrial or medicinal plants;  straw and fodder  
12.01 - 12.07  A change to heading 12.01 through 12.07 from any other chapter; or the 
products under this heading shall originate in the country where they were 
grown.  
12.09 - 12.14  A change to heading 12.09 through 12.14 from any other chapter; or the 
products under this heading shall originate in the country where they were grown.  
 
Chapter 13  Lac;  gums, resins and other vegetable saps and extracts  
13.01 - 13.02  A change to heading 13.01 through 13.02 from any other chapter; or the 
products under this heading shall originate in the country where they were obtained by extraction, exudation or incision.  
 
Chapter 14  Vegetable plaiting materials; vegetable products not elsewhere  
specified or included  
14.01 - 14.04  A change to heading 14.01 through 14.04 from any other chapter; or the 
products under this heading shall originate in the country where they were grown.  
Section IV: Prepared Foodstuffs; Beverages, Spirits and Vinegar; Tobacco and Manufactured 
Tobacco Substitutes  
Chapter 16  Preparations of meat, of fish or of crustaceans, molluscs or other  
aquatic invertebrates  
16.03 - 16.04  A change to heading 16.03 through 16.04 from any other chapter.  
1605.10  A change to subheading 1605.10 from any other chapter.  
1605.40 - 1605.90  A change to subheading 1605.40 through 1605.90 from any other chapter.  
 
Chapter 17  Sugars and sugar confectionery  
17.01 - 17.03  A change to heading 17.01 through 17.03 from any other chapter.  
 
Chapter 18  Cocoa and cocoa preparations  
18.01 - 18.02  A change to heading 18.01 through 18.02 from any other chapter; or the 
products under this heading shall originate in the country where they were WT/REG196/1 
Page 30  
 
 grown.  
 
Chapter 21  Miscellaneous edible preparations  
2102.20 - 2102.30  A change to subheading 2102.20 through 2102.30 from any other heading.  
2103.10 A change to subheading 2103.10 from any other heading.  
21.04 A change to heading 21.04 from any other heading.  
 
Chapter 22  Beverages, spirits and vinegar  
22.01  A change to heading 22.01 from any other chapter; or the products under 
this heading shall originate in the c ountry where water, ice and snow are 
obtained in a natural state.  
22.03 - 22.06 A change to heading 22.03 through 22.06 from any other chapter.  
 
Chapter 23  Residues and waste from the food industries; prepared animal fodder  
23.01 - 23.03  A change to heading 23.01 through 23.03 from any other chapter.  
23.05 A change to heading 23.05 from any other chapter.  
23.07 - 23.08 A change to heading 23.07 through 23.08 from any other chapter.  
 
Chapter 24  Tobacco and manufactured tobacco substitutes  
24.01  A change to heading 24.01 from any other chapter.  
Section V:  Mineral Products  
Chapter 25 Salt;  sulphur;  earths and stone;  plastering materials, lime and 
cement 
25.01 - 25.22  A change to heading 25.01 through 25.22 from any other chapter.  
25.24 - 25.30 A change to heading 25.24 through 25.30 from any other chapter.  
 
Chapter 26  Ores, slag and ash  
26.01 - 26.17  A change to heading 26.01 through 26.17 from any other chapter.  
26.18 - 26.21 A change to heading 26.18 through 26.21 from any other heading.  
 
Chapter 27  Mineral fuels, mineral oils and products of their distillation; 
bituminous substances;  mineral waxes  
Note to heading 27.15 For heading 27.15, the deliberate and proporti onately controlled 
mixture of materials (other than simple dilution with water) following 
pre-determined specifications that result in a product that possesses 
physical or chemical characteristics that are relevant for a different purpose or use than the initial ma terials, is considered to have 
undergone a substantial transformation.  
 
Chapter 27  Mineral fuels, mineral oils and products of their distillation; 
bituminous substances;  mineral waxes  
27.01 - 27.05  A change to heading 27.01 through 27.05 from any other chapter.  
27.06 - 27.08  A change to heading 27.06 through 27.08 from any other heading.  
27.09  A change to heading 27.09 from any other chapter.  
27.11 - 27.15  A change to heading 27.11 through 27.15 from any other heading.  
27.16  A change to heading 27.16 from any other heading or this product shall 
originate in the country in which the electrical energy is generated.   WT/REG196/1 
 Page 31 
 
 
 Section VI: Products of the Ch emical or Allied Industries  
Notes to Section VI: 
1. A "chemical reaction" is a process (inc luding biochemical processes) that produces a 
molecule with a new structure through the breakdow n of intra-molecular links and the formation of 
new ones or through the alteration of the spatial distribution of the atoms of a molecule.  The 
following operations are not considered to be ch emical reactions for the purposes of the present 
definition:  
(a) Dilution in water or other solvents;  
(b) the removal of solvents, including dissolved water;  and 
 (c) the addition or removal of crystallization water. 
 2. Purification:  the purification brought about by  removing 80 per cent of the impurity content 
or the reduction or elimination that produces a chemical with a minimum degree of purity to make the 
product suitable for uses such as:  
(a) Pharmaceutical substances or food produc ts that comply with national standards or 
the international pharmacopoeia; 
 
(b) reagents for chemical analysis or for laboratory use; 
 (c) elements and components for use in microelectronics;  (d) different optical applications;  and 
 
(e) human or veterinary use.  
Chapter 28  Inorganic chemicals;  organic or  inorganic compounds of precious 
metals, of rare-earth metals, of radioactive elements or of isotopes  
Notes to Chapter 28:  1. Standard solution: "standard solu tions" are preparations suitable 
for analytical use, testing or reference, with degrees of purity or proportions guaranteed by the manufacturer. The preparation of 
standard solutions confers origin. 
2. Separation of isomers: the isolation or separation of isomers from a mixture of isomers confers origin. 
28.01 - 28.03  A change to heading 28.01 through 28.03 from any other heading. 
2804.10 - 2806.20  A change to subheading 2804.10 through 2806.20 from any other 
subheading. 
28.08  A change to heading 28.08 from any other heading.  
Chapter 28  Inorganic chemicals;  organic or  inorganic compounds of precious 
metals, of rare-earth metals, of radioactive elements or of isotopes  
2809.10 - 2809.20  A change to subheading 2809.10 through 2809.20 from any other 
subheading. 
28.10  A change to heading 28.10 from any other heading.  
2811.11 - 2816.30  A change to subheading 2811.11 through 2816.30 from any other 
subheading. 
28.17  A change to heading 28.17 from any other heading.  WT/REG196/1 
Page 32  
 
 2818.10 - 2821.20  A change to subheading 2818.10 through 2821.20 from any other 
subheading. 
28.22 - 28.23 A change to heading 28.22 through 28.23 from any other heading. 
2824.10 - 2837.20 A change to subheading 2824.10 through 2837.20 from any other 
subheading. 
28.38 A change to heading 28.38 from any other heading. 
2839.11 - 2846.90 A change to subheading 2839.11 through 2846.90 from any other 
subheading. 
28.47 A change to heading 28.47 from any other heading. 
2848.00 - 2851.00 A change to subheading 2848.00 through 2851.00 from any other 
subheading. 
 
Chapter 29  Organic chemicals  
Notes to Chapter 29:  1. Standard solution:  "standard so lutions" are preparations suitable 
for analytical use, testing or reference, with degrees of purity or 
proportions guaranteed by the manufacturer.  The preparation of 
standard solutions confers origin. 2. Separation of isomers:  the isol ation or separation of isomers from 
a mixture of isomers confers origin.  
2901.10 - 2910.90  A change to subheading 2.901.10 through 2910.90 from any other 
subheading. 
29.11  A change to heading 29.11 from any other heading.  
2912.11 - 2912.60  A change to subheading 2912.11 through 2912.60 from any other 
subheading. 
29.13  A change to heading 29.13 from any other heading.  
2914.11 - 2915.90  A change to subheading 2914.11 through 2915.90 from any other 
subheading. 
2917.11 - 2918.90  A change to subheading 2917.11 through 2918.90 from any other 
subheading. 
29.19  A change to heading 29.19 from any other heading. 
2920.10 - 2927.00  A change to subheading 2920.10 through 2927.00 from any other 
subheading. 
29.28  A change to heading 29.28 from any other heading.  
2929.10 - 2934.90  A change to subheading 2929.10 through 2934.90 from any other 
subheading. 
29.35  A change to heading 29.35 from any other heading.  
2936.10 - 2939.90  A change to subheading 2936.10 through 2939.90 from any other 
subheading. 
29.40 A change to heading 29.40 from any other heading. 
2941.10 - 2941.90 A change to subheading 2941.10 through 2941.90 from any other 
subheading 
29.42 A change to heading 29.42 from any other heading. 
 
Chapter 31  Fertilisers  
31.01 A change to heading 31.01 from any other heading. 
 
Chapter 32  Tanning or dyeing extracts;  tanni ns and their derivatives; pigments 
and other colouring matter;  paints and varnishes;  putty;  inks  
Notes to Chapter 32:  1. Standard solution: "standard solu tions" are preparations suitable 
for analytical use, testing or reference, with degrees of purity or proportions guaranteed by the manufacturer. The preparation of  WT/REG196/1 
 Page 33 
 
 
 standard solutions confers origin. 
2. Separation of isomers: the isolation or separation of isomers from a mixture of isomers confers origin.  
32.03  A change to heading 32.03 from any other heading.  
32.05  A change to heading 32.05 from any other heading.  
32.11  A change to heading 32.11 from any other heading.  
32.13  A change to heading 32.13 from any other heading.  
32.15  A change to heading 32.15 from any other heading.  
 
Chapter 33  Essential oils and resinoids;  perfumery, cosmetic or toilet  
preparations  
Notes to Chapter 33:  Separation of isomers: the isolation or separation of isomers from a 
mixture of isomers confers origin. 
33.03 - 33.07  A change to heading 33.03 through 33.07 from any other heading. 
 
Chapter 34  Soap, organic surface-active agents, washing preparations, lubricating 
preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, "dental waxes" and dental preparations with a basis of plaster  
34.01  A change to heading 34.01 from any other heading.  
34.03 - 34.07  A change to heading 34.03 through 34.07 from any other heading. 
 
Chapter 35  Albuminoidal substances;  modified starches;  glues;  enzymes 
35.01 - 35.07  A change to heading 35.01 through 35.07 from any other heading. 
 
Chapter 36  Explosives; pyrotechnic products; matches; pyrophoric alloys; certain 
combustible preparations  
36.01 - 36.06  A change to heading 36.01 through 36.06 from any other heading. 
 
Chapter 37  Photographic or cinematographic goods  
37.01 - 37.07  A change to heading 37.01 through 37.07 from any other heading. 
 
Chapter 38  Miscellaneous chemical products  
38.01 - 38.07  A change to heading 38.01 through 38.07 from any other heading. 
38.09 - 38.23  A change to heading 38.09 through 38.23 from any other heading. 
3824.10 - 3824.90  A change to subheading 3824.10 through 3824.90 from any other subheading. 
Section VII: Plastics and Articles Thereof; Rubber and Articles Thereof  
Chapter 40  Rubber and articles thereof  
40.01  A change to heading 40.01 from any other chapter. 
40.02 - 40.06 A change to heading 40.02 through 40.06 from any other heading. 
Section VIII: Raw Hides and Skins, Leather, Fu rskins and Articles Thereof; Saddlery and Harness;  
Travel Goods, Handbags and Similar Containers; Artic les of Animal Gut (Other than Silkworm Gut)  
Chapter 41  Raw hides and skins (other than furskins) and leather  
41.01 - 41.03  A change to heading 41.01 through 41.03 from any other chapter. 
41.04 - 41.07 A change to heading 41.04 through 41.07 from any other heading, enabling 
a change from wet blue hides and skins to tanned hides and skins. WT/REG196/1 
Page 34  
 
 Section IX: Wood and Articles of Wood; Wood Charcoal; Cork and Articles of Cork; Manufactures 
of Straw, of Esparto or of Other Pla iting Materials; Basketware and Wickerwork  
Chapter 45  Cork and articles of cork  
45.01 - 45.04  A change to heading 45.01 through 45.04 from any other heading. 
 
Chapter 46  Manufactures of straw, of esparto or of other plaiting materials; 
basketware and wickerwork  
46.01 - 46.02  A change to heading 46.01 through 46.02 from any other heading. 
Section X:  Pulp of Wood or of other Fibrous  Cellulosic Material; Recovered (Waste and Scrap) 
Paper or Paperboard; Paper and Paperboard and Articles Thereof  
Chapter 47  Pulp of wood or of other fibrous cellulosic material;  recovered (waste 
and scrap) paper or paperboard  
47.01 - 47.07  A change to heading 47.01 through 47.07 from any other heading. 
 
Chapter 48  Paper and paperboard; articles of paper pulp, of paper or of  
paperboard  
48.01 - 48.09  A change to heading 48.01 through 48.09 from any other heading. 
48.10 - 48.11  A change to heading 48.10 through 48.11 from any other heading. The 
process of rolling or laminating, including with other materials of this 
heading, confers origin. 
48.12 - 48.15 A change to heading 48.12 through 48.15 from any other heading. 
48.16 A change to heading 48.16 from any other heading, except from heading 
48.09. 
48.17 A change to heading 48.17 from any other heading. 
4818.10 - 4818.30 A change to subheading 4818.10 through 4818.30 from any other heading, 
except from heading 48.03. 
4818.40 - 4818.90 A change to subheading 4818.40 through 4818.90 from any other 
heading. 
48.19 A change to heading 48.19 from any other heading. 
4820.10 - 4820.30 A change to subheading 4820.10 through 4820.30 from any other 
heading. 
4820.40 A change to subheading 4820.40 from any other heading, except from  
subheading 4811.90. 
4820.50 - 4823.40 A change to subheading 4820.50 through 4823.40 from any other heading. 
4823.59 - 4823.90 A change to subheading 4823.59 through 4823.90 from any other heading. 
 
Chapter 49  Printed books, newspapers, pictures and other products of the 
printing industry; manuscripts, typescripts and plans  
49.01 - 49.11  A change to heading 49.01 through 49.11 from any other chapter. 
Section XI: Textiles and Textile Articles  
Chapter 50  Silk 
50.01 - 50.03  A change to heading 50.01 through 50.03 from any other heading. 
50.07 A change to heading 50.07 from any other heading.  
 
Chapter 51  Wool, Fine or Coarse Animal Hair; Horsehair Yarn and Woven 
Fabric   WT/REG196/1 
 Page 35 
 
 
 51.01 - 51.05  A change to heading 51.01 through 51.05 from any other heading. 
 
Chapter 52  Cotton  
52.01 - 52.03  A change to heading 52.01 through 52.03 from any other heading. 
 
Chapter 53  Other vegetable textile fibres; paper yarn and woven fabrics of paper 
yarn  
53.01 - 53.08  A change to heading 53.01 through 53.08 from any other heading. 
 
Chapter 55  Man-made staple fibres  
55.01 - 55.07  A change to heading 55.01 through 55.07 from any other heading. 
55.09 - 55.10  A change to heading 55.09 through 55.10 from any other heading. 
Section XII:  Footwear, Headgear, Umbrellas, S un Umbrellas, Walking-Sticks, Seat-Sticks, Whips, 
Riding-Crops and Parts Thereof;  Prepared Feathers and Articles Made Therewith;  Artificial Flowers;  
Articles of Human Hair  
Chapter 65  Headgear and parts thereof  
65.01 - 65.07  A change to heading 65.01 through 65.07 from any other heading. 
 
Chapter 66  Umbrellas, sun umbrellas, walking-sticks, seat-sticks, whips, riding-
crops and parts thereof  
66.01 - 66.03  A change to heading 66.01 through 66.03 from any other heading. 
 
Chapter 67  Prepared feathers and down and articles made of feathers or of down; 
artificial flowers; articles of human hair  
67.01 - 67.04  A change to heading 67.01 through 67.04 from any other heading. 
Section XIII: Articles of Stone, Plaster, Cement, Asbestos, Mica or Similar Materials; Ceramic 
Products; Glass and Glassware  
Chapter 68  Articles of stone, plaster, cement, asbestos, mica or similar materials  
68.01 - 68.10  A change to heading 68.01 through 68.10 from any other chapter. 
68.11 A change to heading 68.11 from any other heading.  
6812.10 - 6812.90 A change to subheading 6812.10 thro ugh 6812.90 from any other subheading. 
68.13 - 68.15 A change to heading 68.13 through 68.15 from any other heading. 
 
Chapter 69  Ceramic products  
69.01 - 69.06  A change to heading 69.01 through 69.06 from any other heading. 
69.09  A change to heading 69.09 from any other heading.  
69.11 - 69.14  A change to heading 69.11 through 69.14 from any other heading. 
 
Chapter 70  Glass and glassware  
70.01 - 70.18  A change to heading 70.01 through 70.18 from any other heading. 
7019.11 - 7019.90  A change to subheading 7019.11 through 7019.90 from any other subheading. 
70.20  A change to heading 70.20 from any other heading.  WT/REG196/1 
Page 36  
 
 Section XIV: Natural or Cultured Pearls, Precious or Semi-precious Stones, Precious Metals, Metals 
Clad with Precious Metal and Articles Thereof; Imitation Jewellery; Coins  
Chapter 71  Natural or cultured pearls, precious or semi-precious stones, precious  
metals, metals clad with precious metal and articles thereof; imitation jewellery; coins  
71.01 - 71.18  A change to heading 71.01 through 71.18 from any other heading. 
Section XV:  Base Metals and Articles of Base Metal  
Chapter 72  Iron and steel  
72.01 - 72.07  A change to heading 72.01 through 72.07 from any other heading. 
72.11  A change to heading 72.11 from any other heading.  
72.13 - 72.16  A change to heading 72.13 through 72.16 from any other heading. 
7217.10  A change to subheading 7217.10 from any other heading.  
72.18 - 72.29 A change to heading 72.18 through 72.29 from any other heading. 
 
Chapter 73  Articles of iron and steel  
73.01 - 73.06 A change to heading 73.01 through 73.06 from any other chapter. 
73.07 A change to heading 73.07 from any other heading. 
73.12 - 73.20 A change to heading 73.12 through 73.20 from any other heading. 
7321.90 A change to subheading 7321.90 from any other heading. 
73.22 - 73.23 A change to heading 73.22 through 73.23 from any other heading. 
73.25 - 73.26 A change to heading 73.25 through 73.26 from any other heading. 
 
Chapter 74  Copper and articles thereof  
74.01 - 74.19 A change to heading 74.01 through 74.19 from any other heading. 
 
Chapter 75  Nickel and articles thereof  
75.01 - 75.08 A change to heading 75.01 through 75.08 from any other heading. 
 
Chapter 76  Aluminium and articles thereof  
76.01 - 76.05 A change to heading 76.01 through 76.05 from any other heading. 
7607.11 A change to subheading 7607.11 from any other heading. 
76.08 - 76.09 A change to heading 76.08 through 76.09 from any other heading. 
76.11 - 76.14 A change to heading 76.11 through 76.14 from any other heading. 
76.16 A change to heading 76.16 from any other heading. 
 
Chapter 78  Lead and articles thereof  
78.01 - 78.06  A change to heading 78.01 through 78.06 from any other heading. 
 
Chapter 79  Zinc and articles thereof  
79.01 - 79.07  A change to heading 79.01 through 79.07 from any other heading. 
 
Chapter 80  Tin and articles thereof  
80.01 - 80.07  A change to heading 80.01 through 80.07 from any other heading. 
 
Chapter 81  Other base metals;  cermets;  articles thereof  
8101.10 - 8113.00  A change to subheading 8101.10 through 8113.00 from any other 
subheading. 
  WT/REG196/1 
 Page 37 
 
 
 Chapter 82  Tools, implements, cutlery, spoons and forks, of base metal; parts 
thereof of base metal  
82.01 - 82.10  A change to heading 82.01 through 82.10 from any other heading. 
82.11 - 82.12  A change to heading 82.11 through 82.12 from any other heading, even 
blanks.  
82.13 - 82.15 A change to heading 82.13 through 82.15 from any other heading. 
 
Chapter 83  Miscellaneous articles of base metal  
83.02  A change to heading 83.02 from any other heading.  
83.05 - 83.11  A change to heading 83.05 through 83.11 from any other heading. 
Section XVI: Machinery and Mechanical Appliances,  Electrical Equipment and Parts Thereof; Sound 
Recorders and Reproducers, Television Image and Sound Recorders and Reproducers, and Parts and 
Accessories of Such Articles  
Chapter 84  Nuclear reactors, boilers,  machinery and mechanical appliances; parts 
thereof  
8401.40  A change to subheading 8401.40 from any other heading.  
8402.90  A change to subheading 8402.90 from any other heading.  
8403.90  A change to subheading 8403.90 from any other heading.  
8404.90  A change to subheading 8404.90 from any other heading.  
8405.90  A change to subheading 8405.90 from any other heading.  
8406.90  A change to subheading 8406.90 from any other heading.  
84.09 A change to heading 84.09 from any other heading. 
8410.11 - 8411.99 A change to s ubheading 8410.11 through 8411.99 from any other subheading. 
8412.90 A change to subheading 8412.90 from any other heading. 
8413.91 - 8413.92 A change to subheading 8413.91 through 8413.92 from any other heading. 
8415.90 A change to subheading 8415.90 from any other heading. 
8416.90 A change to subheading 8416.90 from any other heading. 
8419.90 A change to subheading 8419.90 from any other heading. 
8420.91 - 8420.99 A change to subheading 8420.91 through 8420.99 from any other heading. 
8422.90 A change to subheading 8422.90 from any other heading. 
8423.10 - 8423.90 A change to s ubheading 8423.10 through 8423.90 from any other subheading. 
84.31 A change to heading 84.31 from any other heading. 
8433.11 - 8433.90 A change to s ubheading 8433.11 through 8433.90 from any other subheading. 
8434.90 A change to subheading 8434.90 from any other heading. 
8435.90 A change to subheading 8435.90 from any other heading. 
8436.91 - 8436.99 A change to subheading 8436.91 through 8436.99 from any other heading. 
8438.90 A change to subheading 8438.90 from any other heading. 
8439.91 - 8439.99 A change to subheading 8439.91 through 8439.99 from any other heading. 
8440.90 A change to subheading 8440.90 from any other heading. 
8441.90 A change to subheading 8441.90 from any other heading. 
8442.40 - 8442.50 A change to subheading 8442.40 through 8442.50 from any other heading. 
8443.90 A change to subheading 8443.90 from any other heading. 
84.48-84.49 A change to heading 84.48 through 84.49 from any other heading. 
8450.90 A change to subheading 8450.90 from any other heading. 
8451.90 A change to subheading 8451.90 from any other heading. 
8452.90 A change to subheading 8452.90 from any other heading. 
8453.90 A change to subheading 8453.90 from any other heading. 
8454.90 A change to subheading 8454.90 from any other heading. 
8455.90 A change to subheading 8455.90 from any other heading. WT/REG196/1 
Page 38  
 
 84.66 A change to heading 84.66 from any other heading. 
 
Chapter 84  Nuclear reactors, boilers,  machinery and mechanical appliances; parts 
thereof  
8467.91 - 8467.99 A change to subheading 8467.91 through 8467.99 from any other heading. 
8468.90 A change to subheading 8468.90 from any other heading. 
84.71 A change to heading 84.71 from any other heading 
8473.10 - 8473.29 A change to subheading 8473.10 through 8473.29 from any other heading. 
8473.40 - 8473.50 A change to subheading 8473.40 through 8473.50 from any other heading. 
8474.90 A change to subheading 8474.90 from any other heading. 
8475.90 A change to subheading 8475.90 from any other heading. 
8476.90 A change to subheading 8476.90 from any other heading. 
8477.90 A change to subheading 8477.90 from any other heading. 
8478.90 A change to subheading 8478.90 from any other heading. 
8479.90 A change to subheading 8479.90 from any other heading. 
84.80 A change to heading 84.80 from any other heading; or a change in tariff 
classification is not required, when the regional content value is not less than 30%. 
8482.91 - 8482.99 A change to subheading 8482.91 through 8482.99 from any other heading. 
8483.90 A change to subheading 8483.90 from any other heading. 
84.84 - 84.85 A change to heading 84.84 through 84.85 from any other heading;  or a 
change in tariff classification is not  required, when the regional content 
value is not less than 30%. 
 
Chapter 85  Electrical machinery and equipment and parts thereof; sound 
recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles  
85.03  A change to heading 85.03 from any other heading.  
8504.90  A change to subheading 8504.90 from any other heading.  
8505.90  A change to subheading 8505.90 from any other heading.  
8508.10 - 8508.90  A change to subheading 8508.10 through 8508.90 from any other subheading. 
8509.90 A change to subheading 8509.90 from any other heading. 
8510.90 A change to subheading 8510.90 from any other heading. 
8511.90 A change to subheading 8511.90 from any other heading. 
8512.90 A change to subheading 8512.90 from any other heading. 
8513.90 A change to subheading 8513.90 from any other heading. 
8515.90 A change to subheading 8515.90 from any other heading. 
8516.80 - 8516.90 A change to subheading 8516.80 through 8516.90 from any other heading. 
8517.90 A change to subheading 8517.90 from any other heading. 
8518.90 A change to subheading 8518.90 from any other heading. 
85.22 A change to heading 85.22 from any other heading. 
85.29 A change to heading 85.29 from any other heading. 
8530.90 A change to subheading 8530.90 from any other heading. 
8531.90 A change to subheading 8531.90 from any other heading. 
8532.10 - 8533.90 A change to subheading 8532.10 through 8533.90 from any other subheading. 
85.34 A change to heading 85.34 from any other heading. 
85.36 A change to heading 85.36 from any other heading. 
85.38 A change to heading 85.38 from any other heading. 
8539.10 - 8539.90 A change to subheading 8539.10 through 8539.90 from any other subheading. 
8543.90 A change to subheading 8543.90 from any other heading. 
85.44 - 85.48 A change to heading 85.44 through 85.48 from any other heading.  WT/REG196/1 
 Page 39 
 
 
 Section XVII: Vehicles, Aircraft, Vessels and Associated Transport Equipment  
Chapter 86  Railway or tramway locomotives, rolling-stock and parts thereof;  
railway or tramway track fixtures and fittings and parts thereof;  mechanical (including electro-mech anical) traffic signalling equipment 
of all kinds  
86.01 - 86.09  A change to heading 86.01 through 86.09 from any other heading. 
 
Chapter 87  Vehicles other than railway or tramway rolling-stock and parts and 
accessories thereof  
87.06  A change to heading 87.06 from any other heading.  
 
Chapter 88  Aircraft, spacecraft, and parts thereof  
88.01 - 88.05  A change to heading 88.01 through 88.05 from any other heading. 
 
Chapter 89  Ships, boats and floating structures  
89.01 - 89.08  A change to heading 89.01 through 89.08 from any other heading. 
Section XVIII:  Optical, Photographic, Cinematographic, Measuring, Checking, Precision, Medical  
or Surgical Instruments and Apparatus;  Clocks and Watches;  Musical Instruments;  Parts and  
Accessories Thereof  
Chapter 90  Optical, photographic, cinematographi c, measuring, ch ecking, precision, 
medical or surgical instruments and apparatus; parts and accessories 
thereof  
90.01 - 90.02  A change to heading 90.01 through 90.02 from any other heading. 
9003.90  A change to subheading 9003.90 from any other heading.  
9005.90  A change to subheading 9005.90 from any other heading.  
9006.91 - 9006.99  A change to subheading 9006.91 through 9006.99 from any other heading. 
9007.91 - 9007.92  A change to subheading 9007.91 through 9007.92 from any other heading. 
9008.90  A change to subheading 9008.90 from any other heading.  
9009.90  A change to subheading 9009.90 from any other heading.  
9010.90  A change to subheading 9010.90 from any other heading.  
9011.90  A change to subheading 9011.90 from any other heading.  
9012.90  A change to subheading 9012.90 from any other heading.  
9013.90  A change to subheading 9013.90 from any other heading.  
9014.90  A change to subheading 9014.90 from any other heading.  
9015.90  A change to subheading 9015.90 from any other heading.  
90.16  A change to heading 90.16 from any other heading; or a change in tariff 
classification is not required when the regional content value is not less than 30%. 
9017.90  A change to subheading 9017.90 from any other heading.  
90.19 - 90.21  A change to heading 90.19 through 90.21 from any other heading; or a  
change in tariff classification is not  required, when the regional content 
value is not less than 30%. 
9022.90  A change to subheading 9022.90 from any other heading.  
90.23  A change to heading 90.23 from any other heading.  
9024.90  A change to subheading 9024.90 from any other heading.  
9025.90  A change to subheading 9025.90 from any other heading.  
9026.90  A change to subheading 9026.90 from any other heading.  
9027.90  A change to subheading 9027.90 from any other heading.  WT/REG196/1 
Page 40  
 
 9028.90  A change to subheading 9028.90 from any other heading.  
9029.90  A change to subheading 9029.90 from any other heading.  
9030.90  A change to subheading 9030.90 from any other heading.  
9031.90  A change to subheading 9031.90 from any other heading.  
9032.90  A change to subheading 9032.90 from any other heading.  
90.33  A change to heading 90.33 from any other heading.  
 
Chapter 91  Clocks and watches and parts thereof 
91.01 - 91.14  A change to heading 91.01 through 91.14 from any other heading. 
 
Chapter 92  Musical instruments;  parts and accessories thereof 
92.01 - 92.09  A change to heading 92.01 through 92.09 from any other heading. 
Section XIX: Arms and Ammunition; Parts and Accessories Thereof  
Chapter 93  Arms and ammunition;  parts and accessories thereof  
93.01 - 93.07  A change to heading 93.01 through 93.07 from any other heading. 
Section XX:  Miscellaneous Manufactured Articles  
Chapter 94  Furniture;  medical furniture; bedding and similar furnishings;  lamps 
and lighting fittings, not elsewhere specified or included;  illuminated 
signs, illuminated name-plates and the like;  prefabricated buildings  
94.02  A change to heading 94.02 from any other heading.  
94.06  A change to heading 94.06 from any other heading.  
 
Chapter 95  Toys, games and sports equipment;  parts and accessories thereof 
95.01  A change to heading 95.01 from any other heading.  
95.03 - 95.08  A change to heading 95.03 through 95.08 from any other heading. 
 
Chapter 96  Miscellaneous manufactured articles 
96.01 - 96.02  A change to heading 96.01 through 96.02 from any other heading. 
96.04 - 96.05  A change to heading 96.04 through 96.05 from any other heading. 
9606.10 - 9606.30  A change to subheading 9606.10 through 9606.30 from any other subheading. 
9607.11 - 9607.19  A change to subheading 9607.11 through 9607.19 from any other subheading. 
9607.20  A change to subheading 9607.20 from any other heading.  
9608.10 - 9608.40  A change to subheading 9608.10 through 9608.40 from any other 
subheading, except from subheading 9608.60, or a change to subheading 9608.10 through 9608.40 from any other subheading, complying with a regional value content of not less than 30%. 
9608.50 - 9609.90  A change to subheading 9608.50 through 9609.90 from any other 
subheading. 
96.10 - 96.12  A change to heading 96.10 through 96.12 from any other heading. 
9613.10 - 9613.80  A change to subheading 9613.10 through 9613.80 from any other 
subheading. 
9613.90  A change to subheading 9613.90 from any other heading.  
96.14 - 96.18 A change to heading 96.14 through 96.18 from any other heading.  WT/REG196/1 
 Page 41 
 
 
 Section XXI: Works of Art, Collectors' Pieces and Antiques  
Chapter 97  Works of art, collectors' pieces and antiques 
97.01 - 97.05  A change to heading 97.01 through 97.05 from any other heading. 
 
CHAPTER 5:  CUSTOMS PROCEDURES 
Article 5.01 
Definitions  
1. For the purposes of this Chapter: 
 
competent authority  means the authority which, under th e law of each Party, is responsible 
for the administration and application of its custom s laws and regulations and/or the administration 
and/or application of this Chapter and Chapters 3 (National Treatment and Market Access for Goods) 
and 4 (Rules of Origin) and the Uniform Regulations , as appropriate.  The Un iform Regulations shall 
specify the competent authorities of each Party; 
exporter means an exporter located in the territo ry of a Party from which the good is 
exported and required under this Chapte r to maintain in the territory of  that Party the records referred 
to in Article 5.04(5); 
commercial importation  means the importation of a good into the territory of a Party for the 
purpose of sale, or any commercial, industrial or other like use; 
importer  means an importer located in the territory of a Party to which the good is imported, 
required under this Chapter to maintain in the terr itory of that Party the records referred to in 
Article 5.03(4); 
confidential information means information which, by its ve ry nature, is confidential, has 
not already been published and is not generally ava ilable to third parties or otherwise in the public 
domain; 
identical goods  means "identical goods" as defined in the Customs Valuation Agreement; 
origin  verification means the administrative process that begins with notification of the 
initiation of a verification by the competent authority of a Party and concludes with the final determination of origin; 
producer  means a "producer" as defined in Article 2.01 (Definitions of Ge neral Application), 
located in the territory of a Party and required under this Chapter to keep the records referred to in 
Article 5.04(5) in the territory of that Party; 
determination of origin  means a determination issued as the result of a verification of origin, 
establishing whether a good qualifies as an originati ng good, in accordance wi th Chapter 4 (Rules of 
Origin);  and 
preferential tariff treatment  means the duty rate applicable to an originating good in 
accordance with the Tariff Elimination Programme. WT/REG196/1 
Page 42  
 
 2. Except as otherwise defined in this Article, th is Chapter includes the definitions established in 
Chapter 4 (Rules of Origin). 
Article 5.02 
Declaration and Certification of Origin
 
1. For the purposes of this Chapter, on the date  on which this Agreement comes into force, the 
Parties shall have prepared a single form for th e certificate of origin and a single form for the 
declaration of origin, which may be  modified by mutual agreement. 
 2. The certificate of origin referred to in para graph 1 shall serve to certify that a good exported 
from the territory of one Party to the territory of th e other Party qualifies as an originating good.  The 
certificate shall remain valid for up to one (1) year after it is signed. 
 3. Each Party shall require its exporters to complete and sign a certificate of origin for any exportation of a good for which an importer may claim preferential tariff treatment.  
4. Each Party shall require that: 
  (a) Where an exporter is not the producer of the good, the exporter may complete and 
sign a certificate of origin on the basis of: 
 
(i) Its knowledge of whether the good qualifies as an originating good; 
 
(ii) its reasonable reliance on the producer's written representation that the good 
qualifies as an originating good;  or 
 (iii) the declaration of origin referred to in paragraph 1;  and 
 
 (b) the declaration of origin applicable to  the good to be exported shall be completed and 
signed by the producer of the good and given voluntarily to the exporter.  The declaration shall remain valid for up to one (1) year after it is signed. 
 5. Each Party shall provide that a certificate of origin that has been completed and signed by an 
exporter in the territory of the other Party is applicable to: 
  (a) A single importation of one or more goods;  or   (b) multiple importations of identical goods by the same importer within a specified 
period, not exceeding one (1) year, set out in the certificate by the exporter. 
 
Article 5.03 
Obligations Regarding Importations
 
1. Each Party shall require an importer in its terr itory that claims preferential tariff treatment for 
a good imported into its territory from the territory of the other Party to: 
 
 (a) Make a written declaration, using the import document established in its law, based 
on a valid certificate of origin, that the good qualifies as an originating good; 
  WT/REG196/1 
 Page 43 
 
 
  (b) have the certificate of origin in its posse ssion at the time the declaration referred to in 
(a) is made; 
  (c) provide, at the request of that Party's co mpetent authority, a copy of the certificate of 
origin;  and 
 
 (d) promptly make a corrected declaration and pay any duties owing where the importer 
has reason to believe that a certificate on which a declaration was based contains information that is not correct.  If the importer complies with the above obligation, it shall not be subject to penalties. 
 
2. Each Party shall provide that, where an importer in its territory fails to comply with any of the 
requirements established in this Chapter, it shall be denied the preferential tariff treatment claimed for 
the good imported into the territory of the other Party.  
3. Each Party shall provide that, where a good w ould have qualified as an originating good when 
it was imported into the territory of that Party but no claim for preferential tariff treatment was made 
at that time, the importer of the good may, no later than one (1) year after the date on which the good 
was imported, apply for a refund of any excess dutie s paid as the result of the good not having been 
accorded preferential tariff treatment, on presentation of:  
 (a) A written declaration that the good qualified  as originating at the time of importation; 
  (b) a copy of the certificate of origin;  and   (c) such other documentation relating to the importation of the good as that Party may 
require. 
 4. Each Party shall provide that an importer that  claims preferential tariff treatment for a good 
imported into its territory from the territory of the ot her Party shall retain the certificate of origin and 
all other documentation relating to the importati on required by the importing Party for a minimum 
period of five (5) years after the date of the import. 
Article 5.04 
Obligations Regarding Exportations
 
1. Each Party shall provide that an exporter or a producer in its territory that has completed and 
signed a certificate or declaration of origin shall prov ide a copy of the certificate or declaration to its 
competent authority on request. 
 
2. Each Party shall provide that an exporter or a producer in its territory that has completed and 
signed a certificate or declaration of origin, and that has reason to believe that the certificate contains information that is not correct, shall promptly notif y in writing all persons to whom the certificate or 
declaration was given of any change  that could affect the accuracy or validity of the certificate or 
declaration and its competent authority.  In such cas es, the exporter or producer shall not be subject to 
penalties for having presented an incorrect certificate or declaration. 
 3. Each Party shall provide that the competent au thority of the exporting Party shall inform the 
competent authority of the importing Party in writing of the notification referred to in paragraph 2. 
 
4. Each Party shall provide that a false certification or declaration by an exporter or a producer 
in its territory that a good to be exported to the te rritory of the other Party qualifies as an originating WT/REG196/1 
Page 44  
 
 good shall have similar legal consequences, with appropriate modifications, as would apply to an 
importer in its territory for a contravention of its customs or other applicable laws and regulations 
regarding the making of a false declaration or representation.  5. Each Party shall provide that an exporter or a producer in its territory that completes and signs 
a certificate or declaration of origin shall retain fo r a minimum period of five (5) years after the date 
on which the certificate or statement was signed, all the records and documents relating to the origin 
of the good, including those referring to:  
(a) The purchase, costs, value and payment of the good exported from its territory; 
 
(b) the purchase, costs, value and payment of all the materials, including indirect 
materials, used in the production of the good exported from its territory;  and 
 (c) production of the good in the form in which it is exported from its territory. 
Article 5.05 
Exceptions
 
Provided that an importation does not form part of two (2) or more importations that may be 
considered to have been undertaken or arrange d for the purpose of avoiding the certification 
requirements of Articles 5.02 and 5.03, a Party shall not require a certificate of origin in the following 
cases: 
(a) A commercial importation of a good the customs value of which does not exceed 
US$1,000 or the equivalent amount in the Party's currency, or such higher amount as it may establish, except that it may require that the invoice accompanying the importation include a declaration by the im porter or exporter certifying that the good 
qualifies as an originating good; 
 
(b) a non-commercial importation of a good the value of which does not exceed 
US$1,000 or the equivalent amount in the Party's currency, or such higher amount as it may establish;  or 
 (c) an importation of a good for which the Part y into whose territory the good is imported 
has waived the requirement for a certificate of origin. 
Article 5.06 
Invoicing by a Third-Country Operator
 
Where the traded good is invoiced by a third-country operator, regardless of whether it is a 
Party or a non-Party, the producer or exporter of th e country of origin is required to state in the 
respective certificate of origin, in the section h eaded 'Comments', that the goods covered by the 
declaration will be invoiced from that third country and give the name and address of the operator that 
will invoice the operation at destination.  WT/REG196/1 
 Page 45 
 
 
 Article 5.07 
Confidentiality  
1. Each Party shall maintain, in accordance with its law, the confidentiality of the confidential 
information collected pursuant to this Chapter and shall protect that information from any disclosure. 
 
2. The confidential information collected pursuant to this Chapter may only be disclosed to the 
authorities responsible for the administration and en forcement of determinatio ns of origin, and of 
customs and revenue matters, in accordance with the law of each Party. 
Article 5.08 
Origin Verifications  
1. The importing Party may request information from the exporting Party for the purpose of 
determining the origin of a good.  2. For purposes of determining whether a good impor ted into its territory from the territory of 
the other Party under preferential tariff treatment qua lifies as an originating good, the importing Party 
may, through its competent authority, conduct a verification by means of: 
 
(a) Written questionnaires and requests for info rmation to exporters or producers in the 
territory of the exporting Party; 
 (b) visits to the premises of an exporter or a producer in the territory of the exporting 
Party to review the accounting records and documents referred to in Article 5.04(5) 
and observe the facilities and materials or products used in the production of the 
good;  or 
 (c) such other procedure as the Parties may agree. 
 
3. An exporter or producer that receives a ques tionnaire and requests for information pursuant to 
paragraph 2(a) is required to complete  and return them within thirty (30)  days from the date of receipt.  
During the period, the exporter or producer ma y, on one occasion only, ap ply in writing to the 
importing Party for an extension of the period, which may not be for more than 30 days.  
4. In the event that the exporter or producer fails to return the duly completed questionnaire 
within the period or extension, the importing Party may deny preferential tariff treatment. 
 5. Prior to conducting a verification visit pursuan t to paragraph 2(b), the importing Party shall, 
through its competent authority, deliver a written notif ication of its intention to conduct the visit.  The 
notification shall be sent to the exporter or prod ucer whose premises are to be visited, to the 
competent authority of the Party in whose territory th e visit is to be conducted and, if requested by the 
latter, to the embassy of that Party in the territory of the importing Party.  The competent authority of the importing Party shall obtain the written consent of the exporter or producer whose premises are to 
be visited.  
6. The notification referred to in paragraph 5 shall include: 
 
(a) The identity of the competent authority issuing the notification; (b) the name of the exporter or producer  whose premises are to be visited; 
 WT/REG196/1 
Page 46  
 
 (c) the date and place of the proposed verification visit; 
 (d) the object and scope of the proposed verifi cation visit, including specific reference to 
the good or goods subject to the verification; 
 
(e) the identification and titles of the officials performing the verification visit;  and 
 (f) the legal authority for the verification visit.  
7. Where an exporter or a producer has not give n its written consent to a proposed verification 
visit within 30 days of receipt of notification pur suant to paragraph 5, the importing Party may deny 
preferential tariff treatment to the good or goods th at would have been the subject of the visit. 
 8. Each Party shall provide that, where its expor ter or producer receives notification pursuant to 
paragraph 5, it may, within 15 days of receipt of  the notification, apply on one occasion to postpone 
the proposed verification visit for a period not exceeding 60 days from the date of such receipt, or for 
such longer period as the Parties may agree.  Notifi cation of the postponement of the visit shall be 
made to the competent authorities of the importing Party and the exporting Party.  9. A Party shall not deny preferential tari ff treatment to a good based solely on the 
postponement of a verification vi sit pursuant to paragraph 8. 
 
10. Each Party shall permit an exporter or a prod ucer whose good or goods are the subject of a 
verification visit to designate two (2) observers to be present during the visit, provided that the 
observers do not participate in a manner other th an as observers.  The failure of the exporter or 
producer to designate observers shall not result in the postponement of the visit. 
 
11. Each Party shall, through its competent author ity, conduct a verification of the regional value 
content requirement, de minimis  calculation, or any other provision in Chapter 4 (Rules of Origin) in 
accordance with the Generally Accepted Accounting Pr inciples applied in the territory of the Party 
from which the good was exported.  
12. Origin verification, as provided for in this Ar ticle, shall be conducted within one (1) year.  
Notwithstanding the above, in duly substantiated cases, this period may be extended once only in each 
case, as set out in the Uniform Regulations.  13. Within the time-frame mentioned in paragr aph 12 or the extensi on provided for in the 
Uniform Regulations for conducting the origin verifi cation, the competent authority shall provide the 
exporter or producer of the good or goods subject  to the origin verification with a written 
determination of whether or not the good or goods  qualify as originating, including findings of fact 
and the legal basis for the determination.   Each Party shall provide that, if its competent authority fails to issue a written determination 
of origin within the time-frame mentioned in pa ragraph 12 or the extension provided for in the 
Uniform Regulations, the good or goods subject to the origin verification shall be eligible for 
preferential tariff treatment.  14. Where verifications by a Party indicate a patt ern of conduct by an exporter or a producer of 
false or unsupported representations that a good imported  into its territory qualifies as an originating 
good, the importing Party may withhold preferential ta riff treatment to identical goods exported or 
produced by such person until that person establish es compliance with Chapter 4 (Rules of Origin). 
  WT/REG196/1 
 Page 47 
 
 
 15. Each Party shall provide that where its competent authority determines that a good imported 
into its territory does not qualify as an originating good based on a tariff classification or a value applied by the Party to one or more materials used in the production of the good, which differs from the tariff classification or value applied to the ma terials by the Party from whose territory the good 
was exported, the importing Party's determination shall not become effective until it notifies in 
writing both the importer of the good and the pers on that completed and signed the certificate of 
origin for the good of its determination.  16. A Party shall not apply a determination ma de under paragraph 15 to an importation made 
before the effective date of the determination where: 
 
(a) The competent authority of the Party from the territory of which the good was 
exported has issued an advance ruling under Article 5.09 or any other ruling on the tariff classification or on the value of such  materials, on which a person is entitled to 
rely; and 
 
(b) such rulings were given prior to notification of the verification of origin. 
Article 5.09 
Advance Rulings
 
1. Each Party shall, through its competent aut hority, provide for the expeditious issuance of 
written advance rulings, prior to the importation of a good into its territory.  Advance rulings shall be 
issued by the competent authority of the territory of  the importing Party, at the request of an importer 
in its territory or an exporter or a producer in the te rritory of the other Party, on the basis of the facts 
and circumstances presented by them, concerning:   (a) Whether a good qualifies as an originating good under Chapter 4 (Rules of Origin); 
 
 (b) whether non-originating materials used in the production of a good undergo a change 
in tariff classification, as set out in A nnex 4.03 (Specific Rules of Origin); 
  (c) whether a good satisfies a regional value content requirement established in Chapter 4 
(Rules of Origin); 
 
 (d) whether the method applied by an exporter or a producer in the territory of the other 
Party, in accordance with the principles of  the Customs Valuation Agreement, for 
calculating the value of the good or of the materials used in the production of the 
good for which an advance ruling is requested  is suitable for determining whether the 
good complies with the regional value content under Chapter 4 (Rules of Origin); 
  (e) whether a good that re-enters its territory  after having been exported from its territory 
to the territory of the other Party for repair  or alteration qualifies for preferential tariff 
treatment in accordance with Article 3.07 (Goods Re-Entered after Repair or Alteration);  and 
 
 (f) such other matters as the Parties may agree.  2. Each Party shall adopt or maintain procedur es for the issuance of advance rulings, including: 
 
 (a) The information reasonably required to process an application; 
 WT/REG196/1 
Page 48  
 
  (b) the ability of its competent authority, at  any time during the course of an evaluation 
of an application, to request supplementa l information from the person requesting the 
ruling; 
 
(d) the obligation of its competent authority to issue an advance ruling after it has 
obtained all necessary information from the person requesting such a ruling;  and 
(e) the obligation of its competent authority to issue the advance ruling with a full 
explanation of the reasons therefor. 
3. Each Party shall apply an advance ruling to importations into its territory beginning on the 
date of its issuance or such later date as may be specified in the ruling, unless the advance ruling is 
modified or revoked under paragraph 5. 
 4. Each Party shall provide to any person re questing an advance ruling the same treatment, 
including the same interpretation and application of provisions of Article 3.07 (Goods Re-Entered 
after Repair or Alteration) and Chapter 4 (Rules of  Origin) regarding a determination of origin, as it 
provided to any other person to whom it issued an advance ruling, provided that the facts and 
circumstances are identical in all material respects.  5. An advanced ruling may be modified or revoked in the following cases:   (a) If the ruling is based on an error: 
 
(i) Of fact; 
(ii) in the tariff classification of a good or a material that is the subject of the 
ruling; 
(iii) in the application of a regional valu e content requirement established in 
Chapter 4 (Rules of Origin);  or 
(iv) in the application of the rules for determining whether a good that re-enters 
its territory after having been exported from its territory to the territory of the other Party for repair or alteration qualifies for duty-free treatment under Article 3.07 (Goods Re-Entered after Repair or Alteration); 
 (b) if the ruling is not in accordance with an interpretation agreed upon by the Parties 
regarding Chapter 3 (National Treatment a nd Market Access for Goods) or Chapter 4 
(Rules of Origin); 
  (c) if there is a change in the material facts or circumstances on which the ruling is 
based; 
 
 (d) to conform with a modification of this  Chapter, Chapter 3 (National Treatment and 
Market Access for Goods), Chapter 4 (Rules of Origin) or the Uniform Regulations;  
or 
  (e) to conform with an administrative or judicial decision or a change in the domestic law 
of the Party that issued the advance ruling. 
 6. Each Party shall provide that any modification or revocation of an advance ruling shall be effective on the date on which it is issued, or on such  later date as may be specified therein, and shall  WT/REG196/1 
 Page 49 
 
 
 not be applied to importations of a good that ha ve occurred prior to that date, unless the person to 
whom the advance ruling was issued has not act ed in accordance with its terms and conditions. 
 7. Notwithstanding paragraph 6, the Party issu ing the advance ruling shall postpone the entry 
into force of the modification or revocation for a period not exceeding 90 days, when the person to 
whom the advance ruling was issued acted in  good faith to that person's detriment. 
 8. Each Party shall provide that where its competent authority examines the regional value 
content of a good for which it has issued an advance ruling, it shall evaluate whether: 
 
(a) The exporter or producer has complied w ith the terms and conditions of the advance 
ruling; 
 (b) the exporter's or producer's operations ar e consistent with the material facts and 
circumstances on which the advance ruling is based;  and 
 
(c) the data and computations used in appl ying the basis or method for calculating value 
were correct in all material respects. 
 
9. Each Party shall provide that where its comp etent authority determines that any requirement 
in paragraph 8 has not been satisfied, the compet ent authority may modify or revoke the advance 
ruling as the circumstances may warrant. 
 10. Each Party shall provide that where its comp etent authority determines that an advance ruling 
was based on incorrect information, the person to wh om it was issued shall not be subject to penalties 
provided the person demonstrates that it used reasona ble care and acted in good faith in presenting the 
facts and circumstances on which the ruling was based. 
 11. Each Party shall provide that where an a dvance ruling is issued to a person that has 
misrepresented or omitted material facts or circumst ances on which the ruling is based or has failed to 
act in accordance with the terms and conditions of th e ruling, the competent authority that issued the 
ruling may apply such measures as the circum stances may warrant, under its domestic law. 
 
12. The Parties shall provide that the person to whom an advance ruling has been issued shall 
only use it for as long as the facts or circumstanc es on which the ruling is based continue.  Should 
they no longer apply, the person to whom the adva nce ruling was issued may present information to 
enable the administration that issued the ruling to proceed under paragraph 5. 
 
13. No good subject to a verification of origin or to  a review or appeal body in the territory of any 
of the Parties shall be the subject of an advance ruling. 
Article 5.10 
Review and Appeal
 
1. Each Party shall grant to the exporters or producers of the other Party the same rights of 
review and appeal of determina tions of origin and advance rulings as it provides to its importers, 
provided that:   (a) They complete and sign a certificate or d eclaration of origin for a good that has been 
the subject of a determination of origin pursuant to Article 5.08(13);  or 
 (b) they have received an advance ruling pursuant to Article 5.09. WT/REG196/1 
Page 50  
 
 2. The rights referred to in paragraph 1 shall incl ude access to at least one level of administrative 
review independent of the official or office respons ible for the determinati on or advance ruling under 
review; and access to a judicial review of the dete rmination or decision taken at the final level of 
administrative review, in accordance with the law of each Party. 
Article 5.11 
Penalties
 
1. Each Party shall establish or maintain criminal , civil or administrative penalties for violations 
of its laws and regulations relating to this Chapter. 
 2. Nothing in Article 5.03(1)(d), 5.03(2), 5.04(2)  5.08(4), 5.08(7) or 5.08(9) shall be construed 
to prevent a Party from applying such measures as the circumstances may warrant, under its law. 
Article 5.12 
Uniform Regulations
 
1. The Parties shall establish and implement, unde r their respective laws and regulations, on the 
date on which this Agreement enters into force and at any subsequent time, Uniform Regulations 
regarding the interpretation, app lication and administration of this  Chapter, Chapter 3 (National 
Treatment and Market Access for Goods), Chapter 4 (Rules of Origin) and other matters as may be agreed by the Parties.  2. The Parties undertake to complete the negotiati on of the Uniform Regulations within 60 days 
of the signing of this Agreement. 
 
3. Once the Uniform Regulations come into eff ect, each Party shall implement any modification 
thereof or addition thereto within 180 days of the Parties agreeing on such modification or addition or 
such other period as the Parties may agree. 
Article 5.13 
Cooperation
 
1. Insofar as is possible, each Party shall notify the other Party of the following measures, 
rulings and determinations, including those that are prospective in application: 
  (a) A determination of origin issued as the result of an origin verification conducted 
pursuant to Article 5.08, after the avenu es for review and appeal referred to in 
Article 5.10 have been exhausted; 
  (b) a determination of origin that the Party c onsiders to be contrary to a ruling issued by 
the competent authority of the other Party with respect to the tariff classification or value of a good or of materials used in the production of a good; 
 
(c) a measure establishing or significantly modi fying an administrative policy that could 
affect future determina tions of origin;  and 
(d) an advance ruling or a modification thereof, pursuant to Article 5.09.  WT/REG196/1 
 Page 51 
 
 
 2. The Parties shall cooperate: 
  (a) In the enforcement of their respec tive customs-related laws or regulations 
implementing this Agreement, and under any customs mutual assistance agreement or 
other customs-related agreement to which they are party; 
 
 (b) for purposes of facilitating the flow of trade among them, in such customs-related 
matters as the collection and exchange of  statistics on the importation and exportation 
of goods, the harmonization of documentation u sed in trade, the standardization of 
data elements, the acceptance of an interna tional data syntax and the exchange of 
information; 
  (c) in the exchange of customs regulations;   (d) in the verification of origin of a good, to which end the competent authority of the 
importing Party may request the competent authority of the other Party to carry out 
given investigations for that purpose in its territory and to issue the respective report 
to the competent authority of the importing Party; 
  (e) in seeking mechanisms for the detection and prevention of unlawful transhipments of 
goods from a Party or a non-Party;  and 
 
 (f) in jointly organizing training programm es on customs matters, which include training 
for officials and users who participate dir ectly in customs procedures related to the 
origin of the good. 
Article 5.14 
Recognition and Acceptance of Certificates of Provenance
 
1. Notwithstanding paragraph 4, the Parties establish the certificate of provenance for the 
purpose of identifying goods that are re-exported fro m a duty-free area of a Party to the territory of 
the other Party as goods from a third country, provided that the following is observed: 
  (a) The goods have remained under Custom s supervision by the re-exporting Party; 
 
 (b) the goods have not undergone subseque nt transformation or any other operation, 
except commercialization, unloading, relo ading or whatever other operation is 
deemed necessary for the adequate  maintenance of those goods;  and 
 
 (c) there is documentary evidence to that effect. 
 2. Pursuant to paragraph 1, each Party shall require that a re-exporter of goods located in the free 
zone shall complete and sign a certificate of provena nce, which shall be auth enticated by the customs 
authority and by the administrative authorities of the re-exporting free zone and shall cover a single importation of one or more goods to its territory. 
 
3. Each Party, through its customs authority, ma y require that importers within its territory, 
when importing from duty-free zones goods for which th ey are requesting tariff preferences present at 
the time of importation the corresponding certificate of provenance and provide a copy thereof when requested by the customs  authority for goods that qualify as originating under trade agreements or 
arrangements signed by the importing Party with third countries. 
 WT/REG196/1 
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 4. Subject to compliance with paragraphs 5 and 6,  each Party shall provide that imports of goods 
accompanied by a certificate of provenance a nd qualifying as originatin g under other trade 
agreements or arrangements signed by the importing Party with third countries do not lose the tariff 
preference or benefit accorded by the importing Party simply because they come from a duty-free zone. 
 
5. For the purposes of the application of paragraph 4, the Parties shall: 
  (a) Jointly establish a mechanism for the administration and control of these goods;  and  
 (b) require the presentation of a certificate of origin issued by third countries benefiting 
from the preferential tariff treatment indicated in the above paragraph. 
 6. For the purposes of this Article , to ensure that goods origina ting in third countries with which 
the Parties have existing trade agreements are entitle d to the tariff preferences set out therein, the 
Party and the third country, under their own legislati on, will have to agree to provide that a good for 
which preferential tariff treatment is requested does not lose its originating status when re-exported or 
marketed through a free zone. 
CHAPTER 6:  SAFEGUARD MEASURES 
Article 6.01 
Definitions
 
For the purposes of this Chapter: 
Agreement on Safeguards means the Agreement on Safeguards that is part of the 
WTO Agreement; 
threat of serious injury means "threat of serious injury" as defined in the Agreement on 
Safeguards; 
investigating authority means "investigating authority" as defined in Annex 6.01; 
critical circumstances  means circumstances where delay in taking a safeguard measure 
would cause injury that would be difficult to repair; 
serious injury means "serious injury" as defined in the Agreement on Safeguards; 
safeguard measure means any tariff measure applied pursu ant to this Chapter. It does not 
include any safeguard measure pursuant to a proced ure initiated before this Agreement enters into 
force; 
transition period  means the Tariff Elimination Programme, plus two (2) years, with the 
exception of products which enjoy free trade between the Parties pursuant to the bilateral agreements 
to which they are party, in which case the transition period shall be one (1) year; 
domestic industry  means the producers as a whole of the like or directly competitive good 
operating in the territory of a Party or those whose joint production of the like or directly competitive 
good constitutes a significant percentage of to tal domestic production of that good;  and 
causal relationship  means "causal relationship" as defined in the Agreement on Safeguards.  WT/REG196/1 
 Page 53 
 
 
 Article 6.02 
Bilateral Safeguard Measures  
1. For the application of bilateral safeguard me asures, the investigating authority shall conform 
to the provisions of this Chapter and, supplemen tarily, to the provisions of Article XIX of the 
GATT 1994, the Agreement on Safegua rds and its domestic law. 
 
2. Subject to paragraphs 4 th rough 6, and during the transition period, safeguard measures may 
be taken if, as a result of the reduction or eliminatio n of a duty provided for in this Agreement, a good 
originating in the territory of a Party is being impor ted into the territory of the other Party in such 
increased quantities, in relation to domestic production,  and under such conditions that the imports of 
the good from that Party alone constitu te a substantial cause of serious injury, or threat thereof, to a 
domestic industry producing a like or directly comp etitive good, the Party into whose territory the 
good is being imported may, to the minimum extent n ecessary to remedy or prevent the serious injury 
or threat thereof:  
 (a) Suspend the further reduction of any rate  of duty provided for under this Agreement 
on the good;  or 
  (b) increase the rate of duty on the good to a level not to exceed the lesser of: 
 
(i) The most-favoured-nation applied rate  of duty in effect at the time the 
measure is taken;  and 
 (ii) the most-favoured-nation applied rate of duty in effect on the day 
immediately preceding the date of entr y into force of this Agreement. 
 
3. The following conditions and limitations sha ll apply to a proceeding that may result in 
safeguard measures under paragraph 2:   (a) A Party shall, without delay, deliver to the other Party written notice of the institution 
of a proceeding that could result in a safeguard measure against a good originating in the territory of this other Party; 
 
 (b) any such measure shall be initiated no late r than one year after the date of institution 
of the proceeding; 
  (c) no measure may be maintained: 
 
 (i) For a period exceeding two (2) years, extendable for one (1) additional 
consecutive year in accordance with  the procedure established in 
Article 6.04(21);  or 
  (ii) beyond the expiration of the transiti on period, except with the consent of the 
Party against whose good the measure is taken; 
  (d) the Parties may apply and extend the app lication of a safeguard measure to the same 
good no more than twice during the transition period; 
 
 (e) a safeguard measure may be applie d a second time provided a minimum period 
equivalent to one half of the period duri ng which the safeguard measure was applied 
for the first time has elapsed; WT/REG196/1 
Page 54  
 
  
 (f) the period during which a provisional safe guard measure has been applied shall be 
computed for the purpose of determining the duration of the final safeguard measure established in subparagraph (c); 
 
 (g) provisional safeguard measures that do not become final are excluded from the 
limitation established in (d); 
  (h) during an extension of a safeguard measur e, the duty shall be gradually reduced to the 
level that applies under the Tariff Elimination Programme;  and 
 
 (i) upon termination of the safeguard measur e, the duty shall be the duty that applies 
under the Tariff Elimination Programme. 
 4. In critical circumstances where delay would cause damage which it would be difficult to 
repair, the Parties may apply bilateral provisiona l safeguard measures pursuant to a preliminary 
determination that there is clear evidence that imports from the other Party have increased as the 
result of the reduction or elimination of a cust oms duty under this Agreement at a rate and in 
conditions which cause serious injury or threat of  serious injury.  The duration of the provisional 
safeguard measures may not exceed 120 days.  
5. A Party may apply a safeguard measure after the expiration of the transition period to deal 
with cases of serious injury, or threat thereof, to a domestic industry arising from the operation of this 
Agreement only with the consent of the other Party.  6. The Party taking a measure under this Article shall provide the other Party with mutually 
agreed compensation in the form of concessions ha ving substantially equivalent trade effects or 
equivalent to the value of the additional duties expect ed to result from the measure.  If the Parties are 
unable to agree on compensation, the Party against whose good the measure is taken may take tariff 
action having trade effects substan tially equivalent to the measure ta ken under this Article.  The Party 
shall apply the tariff measure only for the minimum period necessary to achieve the substantially equivalent effects. 
Article 6.03 
Global Safeguard Measures
 
1. Each Party shall retain its rights and obliga tions under Article XIX of the GATT 1994 and the 
Agreement on Safeguards except those regarding co mpensation or retaliation and exclusion from a 
safeguard measure to the extent that such rights or  obligations are inconsis tent with this Article. 
 
2. A Party taking a safeguard measure under pa ragraph 1 shall exclude imports of a good from 
the other Party from the measure unless:   (a) Imports from the other Party account for a substantial share of total imports;  and 
 
 (b) imports from the other Party contribute importantly to the serious injury, or threat 
thereof, caused by total imports. 
 3. In determining whether:  
 (a) Imports from the other Party account for a substantial share of total imports, those 
imports normally shall not be considered substantial if that Party is not among the top  WT/REG196/1 
 Page 55 
 
 
 five suppliers of the good subject to th e proceeding, measured in terms of import 
share during the most recent three-year period;  and 
  (b) imports from the other Party contribute importantly to the serious injury, or threat 
thereof, the competent investigating aut hority shall consider such factors as the 
change in the import share of the other Party,  and the level and change in the level of 
imports of the other Party.  In this regard , imports from a Party normally shall not be 
deemed to contribute importantly to serious in jury, or the threat thereof, if the growth 
rate of imports from a Party during the peri od in which the injurious surge in imports 
occurred is appreciably lower than the grow th rate of total imports from all sources 
over the same period. 
 4. A Party shall, without delay, deliver written notice to the other Party of the institution of a 
proceeding that may result in safe guard measures under paragraph 1. 
 
5. No Party may impose restrictions on a good in a measure under paragraph 1 without delivery 
of prior written notice to the Commission, and wit hout adequate opportunity for consultation with the 
other Party, as far in advance of taking the measure as practicable. 
 6. Where a Party determines to take a measure pursuant to this Article to originating goods of 
the other Party, the measure it applies to the origina ting goods of the other Party shall consist, solely 
and exclusively, of tariff measures. 
 7. The Party taking a measure pursuant to this Ar ticle shall provide to the other Party mutually 
agreed trade liberalizing compensation in the form  of concessions having s ubstantially equivalent 
trade effects or equivalent to the value of the a dditional duties expected to result from the measure. 
 
8. If the Parties are unable to agree on compensation, the Party against whose good the measure is 
taken may take measures having trade effects subs tantially equivalent to the measure taken under 
paragraph 1. 
Article 6.04 
Administration of Safeguard Measure Proceedings
 
1. Each Party shall ensure the consistent and impartial administration of  its laws, regulations, 
rulings and determinations governing all safeguard measure proceedings. 
 2. Each Party shall entrust determinations of ser ious injury, or threat thereof, in safeguard 
measure proceedings to an investigating authority, subject to review in judicial or administrative 
proceedings, to the extent provided by domestic law.   Negative injury determinations shall not be 
subject to modification, on its own motion, by the in vestigating authority.  The investigating authority 
empowered under domestic law to conduct such proc eedings shall be provided with all the resources 
necessary to enable it to fulfil its mandate.  3. Each Party shall adopt or maintain equitable,  timely, transparent and effective procedures for 
safeguard measure proceedings, in accordance with  the requirements set out in this Article. 
Institution of a proceeding 
4. The investigating authority may institute a proceeding on its  own motion or under a petition 
presented by entities empowered to take action under its domestic law.  The entity filing the petition 
shall demonstrate that it is representative of the domestic industry producing a good like or directly WT/REG196/1 
Page 56  
 
 competitive with the imported good.  For that purpose,  a substantial share may not be less than 25 per 
cent. 5. Except as otherwise provided in this Article, the time periods governing such procedures shall 
be those established in the domestic law of each Party. 
Contents of a petition 
6. An entity representative of a domestic industry th at files a petition to initiate an investigation 
shall provide the following information to the extent  that such information is publicly available from 
governmental or other sources, or best estimates and the basis therefor if such information is not 
available:  
 (a) Product description - the name and desc ription of the imported good concerned, the 
tariff subheading under which that good is cl assified, its current tariff treatment and 
the name and description of the like or directly competitive domestic good concerned; 
  (b) representativeness: 
 
 (i) The names and addresses of the entities filing the petition and the locations of 
the establishments in which they produce the domestic good; 
  (ii) the percentage of domestic production of the like or directly competitive 
good that such entities account for and the basis for claiming that they are 
representative of an industry;  and 
  (iii) the names and locations of all other domestic establishments in which 
the like or directly competitive good is produced; 
 
 (c) import data - import data for each of the three (3) most recent full years immediately 
prior to the initiation of a procedure to appl y a safeguard measure that form the basis 
of the claim that the good concerned is bei ng imported in increased quantities, either 
in absolute terms or relative to  domestic production as appropriate; 
  (d) domestic production data - data on total domestic production of the like or directly 
competitive good for each of the three (3) most recent full years immediately prior to 
the initiation of a procedure to apply a safeguard measure; 
  (e) data showing injury or threat thereof - quantitative and objective data indicating the 
nature and extent of injury or threat ther eof to the concerned industry, such as data 
showing changes in the level of sales, prices, production, productivity, capacity 
utilization, market share, profits and losses, and employment; 
  (f) cause of injury - an enumeration and desc ription of the alleged causes of the injury, or 
threat thereof, and a summary of the basis for the assertion that increased imports of 
the good are causing or threatening to cause serious injury to the domestic industry, 
supported by pertinent data; and 
 
(g) criteria for inclusion - quantitative and objective data indicating the share of imports 
accounted for by imports from the territory  of the other Party and the petitioner's 
views on the extent to which such imports are significantly contributing to the serious 
injury, or threat thereof.  WT/REG196/1 
 Page 57 
 
 
 7. Petitions, with the exception of confidential in formation therein, shall promptly be made 
available for public inspection after filing. 
Consultations 
8. As soon as possible after a petition meeting the requirements of paragr aph 6 is presented and, 
in any event, prior to the initiation of an investiga tion, the Party that intends to initiate it shall notify 
the other Party and invite it to hol d consultations on the situation. 
 9. During the entire investigation period, the Pa rty whose goods are under investigation shall be 
given adequate opportunity to continue the consultations. 
 
10. At the consultations, the Parties may di scuss, among other matters, the investigation 
proceeding, elimination of the measure, the matters referred to in Article 6. 02(5) and, in general, 
exchange opinions on the measure.  11. Notwithstanding the obligation to provide adequate opportunity for consultations, the 
provisions on consultations in paragraphs 8, 9 and 10 are not intended to impede the authorities of a 
Party from promptly initiating an investigation or fo rmulating positive or negative preliminary or final 
determinations or taking measures in accordan ce with the provisions of this Agreement. 
 12. The Party that is performing an investiga tion shall give, when requested, the Party whose 
goods are under investigation access to the public file , including the non-confidential summary of the 
confidential information used to initiate the investigation or during its course. 
Notice requirement 
13. On instituting a safeguard measure proceedi ng, the investigating authority shall, in 
accordance with the national legislation of each Pa rty, publish notice of the institution of the 
proceeding in the official journal or a national ne wspaper within 30 days after presentation of the 
petition.  The other Party shall be notified of that publication without delay, in writing.  The notice 
shall identify the petitioner, the im ported good that is the subject of  the proceeding and its tariff 
subheading, the nature and timing of the determinatio n to be made, the place at which the petition and 
any other documents filed in the course of the proceeding may be inspected, and the name, address 
and telephone number of the office to be contact ed for more information.  The deadlines for 
submitting evidence and filing briefs, statements and other documents shall be established pursuant to 
the domestic law of each Party. 
 14. With respect to a safeguard measure proceedi ng instituted on the basis of a petition filed by 
an entity asserting that it is representative of the domestic industry, the investigating authority shall 
not publish the notice required by paragraph 13 without first assessing carefully that the petition meets 
the requirements of paragraph 6. 
Public hearing 
15. In the course of each proceeding,  the investigating authority shall: 
  (a) Notwithstanding the Party's law, after providing reasonable notice, notify the 
interested parties fifteen (15) days beforehand of the time and place of the public 
hearing to allow importers, exporters, cons umer associations and other interested 
parties to appear in person or by counsel to present evidence and arguments and to be 
heard on the questions of serious injury, or th reat thereof, and the appropriate remedy;  
and WT/REG196/1 
Page 58  
 
  
 (b) provide an opportunity for all interested  parties to appear at the hearing to cross-
question interested parties making presentations at that hearing. 
Confidential information 
16. For the purposes of Article 6.02, the inves tigating authority shall adopt or maintain 
procedures for the treatment of confidential info rmation, protected under domestic law, that is 
provided in the course of a proceeding, including a requirement that interested parties providing such information furnish non-confidential written summaries th ereof.  Where the interested parties indicate 
that the information cannot be summarized, the r easons why a summary cannot be provided shall be 
stated.  The authorities may disregard that information, unless it is convincingly demonstrated by 
appropriate sources that the information is correct. 
 17. The investigating authority shall not disclose any confidential information provided pursuant to any commitment regarding confidentia lity it has made during the proceeding. 
Evidence of injury or threat thereof 
18. In conducting its proceeding the investigating authority shall gather, to the best of its ability, 
all relevant information appropriate to the determination it must make.  It shall evaluate all relevant 
factors of an objective and quantifiable nature ha ving a bearing on the situation of that industry, 
including the rate and amount of the increase in imports of the good concerned, the share of the 
domestic market taken by increased imports, a nd changes in the level of sales, production, 
productivity, capacity utilization, profits and losses, and employment.  In ma king its determination, 
the investigating authority may also consider othe r economic factors, such as changes in prices and 
inventories, and the ability of firms in the industry to generate capital. 
Deliberation and report 
19. Except in critical circumstances and in gl obal measures involving perishable agricultural 
goods, the investigating authority, before making an affirmative determination in a safeguard measure 
proceeding, shall allow sufficient time to gather a nd consider the relevant information, hold a public 
hearing and provide an opportunity for all inter ested parties to prepare and submit their views. 
 20. The final determination shall be promptly published in the official journal or a national 
newspaper, setting out the findings and reasoned conc lusions on all pertinent issues of law and fact.  
The determination shall describe the imported good a nd its tariff item number, the standard applied 
and the finding made.  The statement of reasons sha ll set out the basis for the determination, including 
a description of:   (a) The domestic industry seriously injured or threatened with serious injury;  
 (b) information supporting a finding that impor ts are increasing, the domestic industry is 
seriously injured or threatened with serious injury, and increasing imports are causing or threatening serious injury;  and 
  (c) if provided for by domestic law, any finding or recommendation regarding the 
appropriate remedy and the basis therefor.  WT/REG196/1 
 Page 59 
 
 
 Extension 
21. Where the importing Party determines that the grounds that gave rise to the bilateral 
safeguard measure persist, it shall notify the competen t authority of the other Party of its intention to 
extend the measure, at least 90 days in advance of  its expiry, and shall provide evidence that the 
reasons for its adoption persist, in order to initiate the respective cons ultations, which shall be held as 
provided in this Article. 
 22. Furthermore, the entity representative of the do mestic industry which files the request for an 
extension shall submit an adjustment plan, incl uding variables which the domestic industry or 
production concerned is able to control, to ove rcome the serious injury or threat thereof. 
 
23. Notifications of extensions and compensation shall be made in the terms established in this 
Article, prior to the expiry of the measures applied. 
Article 6.05 
Dispute Settlement in Safeguard Measure Matters
 
No Party may request the establishment of an arbitral panel under Article 20.08 (Request for 
an Arbitral Panel) regarding any safeguard  measure that has simply been proposed. 
ANNEX 6.01 
Investigating Authority  
For the purposes of this Chapter, th e investigating authority shall be: 
 (a) For Costa Rica, the authority determined in its domestic law; 
 
 (b) for El Salvador, the technical unit respons ible for investigating situations that may 
warrant safeguard measures, reporting to  the Ministry of Economic Affairs 
("Ministerio de Economía") or its successor; 
 
 (c) for Guatemala, the technical unit respons ible for investigating situations that may 
warrant safeguard measures, reporting to  the Ministry of Economic Affairs 
("Ministerio de Economía") or its successor; 
  (d) for Honduras, the technical unit responsible for investigating situations that may 
warrant safeguard measures, reporting to the Secretariat of State for Industry and 
Trade ("Secretaría de Estado en los Desp achos de Industria y Comercio") or its 
successor; 
  (e) for Nicaragua, the technical unit responsib le for investigating situations that may 
warrant safeguard measures, reporting to the Ministry of Development Industry and 
Trade ("Ministerio de Fomento, Industria y Comercio") or its successor;  and 
  (f) for Panama, the Commission for Free Competition and Consumer Affairs ("Comisión 
de Libre Competencia y Asuntos del Consumidor") or its successor. 
 WT/REG196/1 
Page 60  
 
 CHAPTER 7:  UNFAIR TRADING PRACTICES 
Article 7.01 
Scope and Coverage
 
1. The Parties confirm their rights and obligations as established in Articles VI and XVI of the 
GATT 1994, the Agreement on Implementation of Artic le VI of the General Agreement on Tariffs 
and Trade 1994 and the Agreement on Subsidies and Countervailing Measures, which are part of the 
WTO Agreement.  In this respect, the Parties shall ensure that their legislation is in accordance with 
the commitments assumed under these Agreements.  2. Each Party may initiate an investigation a nd apply countervailing or anti-dumping duties, in 
accordance with this Chapter, the Agreements and Articles referred to in paragraph 1 and its domestic 
law. 
Article 7.02 
Duration of Investigations into Unfair Trading Practices
 
The authority shall immediately terminate th e investigation, without the imposition of 
definitive anti-dumping duties, in cases wh ere it has extended beyond a period of 
eighteen (18) months as of the date of decl aration of initiation of the investigation. 
Article 7.03 
Initiation of Back-to-Back Investigations  
Within a period of twelve (12) months of the date of a final ruling finding the imposition of 
an anti-dumping duty inappropriate, no new investiga tion into the same product from the same Party 
shall be initiated, unless the domestic industry reques ting the initiation of a new investigation is made 
up of producers whose collective output accounts for at least fifty (50) per cent of the total production of the like product produced by the domestic industry. 
Article 7.04 
Duration of Anti-Dumping Duties
 
Any definitive anti-dumping duty shall be termin ated within a period of not more than sixty 
(60) months from the date of im position and may not be extended. 
Article 7.05 
Establishment of Anti-Dumping Duties  
 The authority shall establish an anti-dumping du ty, whether provisional or definitive, which is 
less than the dumping margin where such lesser duty is  adequate to remove the injury to the domestic 
industry.  WT/REG196/1 
 Page 61 
 
 
 Article 7.06 
Future Work Programme  
1. The Parties share the objective of promoting significant reforms in this field to prevent 
measures of this kind from becoming concealed barriers to trade.  The Parties shall cooperate in the 
effort to achieve such reforms within the framewo rk of the World Trade Organization (WTO) and the 
Free-Trade Area of the Americas (FTAA). 
 2. At least two (2) years after the entry into for ce of this Agreement for all Parties, they shall 
establish a work programme to analyze criteria for fu rther developing the application of the following 
concepts, inter alia : 
 
 (a) Determination of the r easonable profit margin;  and 
  (b) determination of a threat of material injury. WT/REG196/1 
Page 62  
 
 PART THREE:  TECHNIC AL BARRIERS TO TRADE 
CHAPTER 8:  SANITARY AND PHYTOSANITARY MEASURES 
Article 8.01 
Definitions
 
 For the purposes of this Chapter, the Parties shall use the definitions and terms established: 
 
 (a) In the Agreement on the Application of Sanitary and Phytosanitary Measures, which 
is part of the WTO Agreement (hereinafter the SPS Agreement); 
  (b) by the International Office of Epizootics (hereinafter the OIE); 
 
 (c) in the International Plant Protection Convention (hereinafter the IPPC);   (d) by the Codex Alimentarius Commission, hereinafter the "Codex";  and  
 (e) by other international organizations of which the Parties are members and the use of 
which is agreed by the Parties. 
Article 8.02 
General Provisions
 
1. The competent authorities are the authorities with legal responsibility for ensuring compliance 
with the sanitary and phytosanitary requi rements established in this Chapter. 
 
2. Based on the SPS Agreement, the Parties estab lish a framework of rules and disciplines that 
guide the adoption of and compliance with sanitary  and phytosanitary measures, and therefore the 
provisions of this Chapter refer to the principles,  rules and procedures relating to the sanitary and 
phytosanitary measures which regulate or which may, directly or indirectly, affect trade among the 
Parties. 
 3. Through mutual cooperation, the Parties shall facilitate trade that presents no sanitary or 
phytosanitary risks and undertake to prevent the introduction or spread of pests and diseases and to 
improve plant and animal health and food safety. 
Article 8.03 
Rights of the Parties
 
In accordance with the SPS Ag reement, the Parties may: 
 (a) Establish, adopt, maintain or apply an y sanitary or phytosanitary measure in their 
territory only to the extent necessary to pr otect human (food safety) and animal life 
and health, or to preserve plant health, ev en measures that are stricter than an 
international measure, standard, guideline or recommendation, providing there is 
scientific justification for doing so; 
  WT/REG196/1 
 Page 63 
 
 
  (b) apply their sanitary and phytosanitary measures only to the extent necessary to 
achieve an appropriate level of protec tion, taking into account technical and 
economic feasibility;  and 
  (c) verify that plants, animals and their pr oducts and by-products fo r export are subject to 
strict sanitary and phytosanitary monitoring that ensures compliance with the sanitary 
and phytosanitary requirements of the importing Party. 
Article 8.04 
Obligations of the Parties
 
1. Sanitary and phytosanitary measures shall not  constitute a disguised restriction on trade or 
create unnecessary obstacles to trade among the Parties. 
2. Sanitary and phytosanitary measures shall be  based on scientific principles, be maintained 
only where there are sufficient grounds and be ba sed on an appropriate risk assessment, taking 
technical and economic feasib ility into consideration. 
3. Sanitary and phytosanitary measures shall be  based on international measures, standards, 
guidelines or recommendations, except where it is scien tifically demonstrated that such measures, 
standards, guidelines or recommendations are not an effective or adequate means of protecting human 
(food safety) and animal life and health, or of preserving plant health in the territory of a Party. 
4. Where identical or similar conditions exist,  a sanitary or phytosanitary measure shall not 
discriminate arbitrarily or unjustifiably between the goods of a Party and like goods of the other Party 
or between the goods of the other Party and like goods of a non-Party. 
5. Where one Party considers that a sanitary or phytosanitary measure of the other Party is 
interpreted or applied in a manner th at is inconsistent with the provisions of this Chapter, it shall be 
required to demonstrate that inconsistency. 
Article 8.05 
International Standards and Harmonization  
To expeditiously apply sanitary and phytosanitary  measures in the territory of the Parties, 
thereby facilitating trade flows, procedures for control, inspection and approval of sanitary and 
phytosanitary measures shall be b ased on the following principles: 
 (a) Each Party shall use international st andards, guidelines or recommendations as the 
basis for its sanitary and phytosanitary meas ures, in order to harmonize them or make 
them compatible with those of the other Party; 
 
 (b) notwithstanding subparagraph (a), the Par ties may adopt, apply, establish or maintain 
a sanitary or phytosanitary measure that offe rs a level of protection different from that 
which would be achieved by measures based  on an international standard, guideline 
or recommendation, or which is stricter, if there is scientific justification; 
 
 (c) to achieve closer harmonization, th e Parties shall follow the guidelines of the 
competent international organizations - the IPPC for plant health, the OIE for animal health, and the standards of the Codex w ith respect to food safety and tolerance 
limits; WT/REG196/1 
Page 64  
 
  
 (d) the Parties shall also take into co nsideration the standards, guidelines and 
recommendations of other international orga nizations of which they are members;  
and 
 (e) the Parties undertake to establish harmonized sanitary and phytosanitary systems for 
sampling, diagnosis, inspection and certificati on of animals, plants, their products and 
by-products and food safety. 
Article 8.06 
Equivalence
 
To more expeditiously apply sanitary and phyt osanitary measures in the territory of the 
Parties, thereby facilitating trade flows, control, inspection and approval proc edures shall be applied 
in accordance with the following principles: 
 (a) Without reducing the appropriate leve l of protection of human (food safety) and 
animal life and health or of preservation of plant health in their territory, the Parties 
shall accept to the fullest extent possible, their sanitary and phytosanitary measures as 
equivalent; 
  (b) each Party shall accept the sanitary and ph ytosanitary measures of the other Party as 
equivalent, even if they differ from its own, providing the other Party objectively demonstrates through scientific informati on and risk assessment methods agreed to 
by them, that the measures achieve an adequate level of protection;  and 
 
 (c) to establish equivalencies between th eir sanitary and phytosanitary measures, the 
Parties shall facilitate access to their territo ry for the purposes of inspection, testing 
and other pertinent measures. 
Article 8.07 
Risk Assessment and Determination of the Appropriate Level of Sanitary and
 
Phytosanitary Protection  
 On the basis of the guidelines issued by the competent international organizations: 
  (a) The Parties shall ensure that their san itary and phytosanitary measures are based on 
an adequate assessment, as appropriate to the circumstances, of the risks to human 
(food safety) and animal life and health or to the preservation of plant health, taking 
into account the guidelines and risk asse ssment techniques established by the 
competent international organizations; 
  (b) the Parties shall provide the nece ssary facilities for as sessing sanitary and 
phytosanitary services through existing procedures for verifying controls, inspections, 
approval procedures and the application of sanitary and phytosanitary measures and 
programmes on the basis of the guidelines and recommendations of the international 
organizations recognized by the WTO; 
  (c) in assessing the risk posed by a good and establishing the appropriate level of 
protection, the Parties shall take account of factors such as the following: 
   (i) The scientific and technical information available;  WT/REG196/1 
 Page 65 
 
 
  
 (ii) the existence of pests or diseases and the recognition of pest- and disease-free 
areas and areas of low pest and disease prevalence; 
  (iii) the epidemiology of quarantine pests and diseases; 
 
 (iv) an analysis of critical contro l points for sanitary (food safety) and 
phytosanitary aspects; 
  (v) food additives and physical, chemical and biological contaminants; 
 
 (vi) pertinent ecological and environmental conditions;   (vii) production processes and methods, and inspection, sampling and testing 
methods; 
 
 (viii) the structure and organization of sanitary and phytosanitary services;   (ix) protection, epidemiological surve illance, diagnosis and treatment procedures 
to ensure food safety; 
 
 (x) production or sales losses in the event of the entry, establishment, 
propagation or spread of a pest or disease; 
  (xi) quarantine measures and applicable treatments to satisfy the importing Party 
with respect to risk mitigation;  and 
 
 (xii) pest or disease control or eradicati on costs in the territory of the importing 
Party and the cost-effectiveness ratio of other possible risk reduction methods; 
  (d) in establishing their appropriate level of pr otection, the Parties shall take into account 
the objective of minimizing the negative effects on trade and, with the purpose of 
achieving consistency in protection levels , shall avoid arbitrary or unjustifiable 
distinctions that could lead to discrim ination or which constitute a disguised 
restriction on trade among the Parties; 
 
 (e) where the importing Party performs a risk assessment and concludes that the 
scientific information is insufficient, it may adopt a provisional sanitary or phytosanitary measure on the basis of the av ailable scientific information, including 
information from the competent internati onal organizations recognized by the WTO 
and the sanitary measures applied by the other Party, for which the following 
procedure shall be applied: 
 
 (i) the importing Party which takes the provisional measure shall, within 30 days 
of taking the measure, ask the other Party for all the technical information necessary for completing the risk assessment; if the importing Party fails to request the information within this period, the provisional measure shall be 
withdrawn; 
  (ii) if the importing Party requests the information, it shall have a maximum of 
60 days as of the presentation of such in formation to immediately modify the 
provisional measure and either withdr aw it or impose it as a definitive WT/REG196/1 
Page 66  
 
 measure.  If this deadline is not met, the importing Party shall withdraw the 
provisional measure immediately; 
  (iii) the importing Party may seek clarification with regard to the information 
submitted for a period of 30 days as the date of its receipt; 
 
 (iv) the importing Party shall allow the exporting Party to submit its comments 
and shall take these into considera tion in the conclusion of the risk 
assessment;  and 
 
 (v) the adoption or modification of the provisional sanitary or phytosanitary 
measure shall be immediately notified to the other Party through the enquiry 
points established under the SPS Agreement; 
  (f) a risk analysis conducted by a Party sh all be performed within the period of time 
previously agreed to by the Parties.  If th e results of the analysis indicate refusal of 
the importation, the scientific basis for the decision shall be notified in writing;  and 
  (g) where a Party has reason to believe that  a specific sanitary or phytosanitary measure 
established or maintained by the other Party restricts or may restrict its exports and 
that measure is not based on pertinent international standa rds, guidelines or 
recommendations, or such international st andards, guidelines or recommendations do 
not exist, it may ask for an explanation of the reasons for those sanitary and phytosanitary measures and the Party that maintains the measures shall provide an 
explanation within 30 days after the date  on which the competent authority receives 
the request. 
Article 8.08 
Recognition of Pest- or Disease-Free Areas and Areas of Low Pest or Disease Prevalence
 
1. On the basis of international guidelines and recommendations, the Parties shall recognize 
pest- or disease-free areas and areas of low pest or disease prevalence, giving consideration to geographic location, ecosystems, epidemiological su rveillance and the effectiveness of sanitary or 
phytosanitary controls in such areas, among the main factors. 
 
2. A Party that declares an area in its territo ry to be free from a given pest or disease shall 
demonstrate that condition objectively to the importin g Party and give it assurances that the area shall 
be maintained as such, based on the protection measu res adopted by the heads of the sanitary or 
phytosanitary services. 
 
3. A Party interested in obtaining recognition of an area as free from a given pest or disease shall submit an application to the other Party and provid e it with the corresponding scientific and technical 
information.  4. A Party receiving the application for recognitio n shall take a decision within a period agreed 
upon in advance with the other Party and may conduct  verifications involving inspections, testing and 
other procedures.  In the event it refuses the appli cation, it shall give the technical reasons for its 
decision in writing.  5. The Parties shall agree on specific requirements compliance with which shall permit a good 
produced in an area of low pest or disease prevalence to be imported if the appropriate level of 
protection is provided, in accordance with A nnex A, paragraph 7, of the SPS Agreement.  WT/REG196/1 
 Page 67 
 
 
 Article 8.09 
Control, Inspection and Approval Procedures  
1. Pursuant to this Chapter, the Parties shall apply the provisions of Annex C to the 
SPS Agreement, relating to control, inspection and approval procedures, including systems for 
approving the use of additives and for establishing to lerances for contaminants in foods, beverages or 
feedstuffs. 
 2. When the competent authority of the expor ting Party first requests that the competent 
authority of the importing Party conduct an inspection of a productive unit or productive processes in its territory, the competent authority of the impor ting Party shall conduct such inspection within a 
maximum of 90 days of the date on which the request was made, except for the first year following 
the entry into force of the Agreem ent when the competent authorities of Panama shall have a deadline 
of 105 days.  Upon completion of the inspection, the competent authority of the importing Party shall issue a reasoned decision on the outcome of the inspection and shall notify it to the exporting Party within a maximum of 30 days of the date on which the inspection was competed. 
 
 If the competent authority of the importing Part y fails to meet the aforementioned deadlines, 
the competent authority of the exporting Party may a pply in writing to the competent authority of the 
importing Party for consultations to be held  pursuant to Chapter 20 (Dispute Settlement). 
 3. Productive units or productive processes certif ied in the importing Party shall apply for 
renewal at least 120 days before their current cer tification expires.  Productive units or productive 
processes which respect the deadline specified in this paragraph will be permitted by the competent 
authorities of the importing Party to continue to e xport until such time as the corresponding inspection 
procedures are completed.  Productive units or pr oductive processes which do not apply for renewal 
before the 120-day deadline shall be governed by the procedure set out in paragraph 2. 
 
4. Certification of productive units or  productive processes issued by the competent 
authorities of the importing Party shall be valid for a minimum of one (1) year. 
Transitory paragraph 
 Upon the entry into force of this Agreemen t, productive units or productive processes the 
certification of which expires prior to the 120-day deadline may apply for renewal within a period of 
not more than 120 days from the date of entry in to force of this Agreement.  Productive units or 
productive processes which respect th e deadline specified in this paragraph will be permitted by the 
competent authorities of the importing Party to c ontinue to export until such time as the corresponding 
inspection procedures are completed.  Productive un its or productive processes which do not apply for 
renewal by the deadline laid down in this paragra ph shall be governed by the procedure set out in 
paragraph 2. 
Article 8.10 
Transparency
 
1. Each Party, when proposing the adoption or modification of a sanitary or phytosanitary 
measure of general application on the central le vel, shall notify through its competent authorities: 
 
 (a) The adoption and modification of such measu res.  It shall also facilitate information 
on the measures, in accordance with Anne x B of the SPS Agreement, making the 
appropriate adaptations; WT/REG196/1 
Page 68  
 
  
 (b) changes or modifications in sanitary or phytosanitary measures with a significant 
effect on trade among the Parties, no less than 60 days prior to the entry into force of the new provision, to permit the other Party to comment.  In emergency situations the 
term shall be waived, in accordance with Annex B of the SPS Agreement; 
 
 (c) changes in the field of animal health  and the appearance of exotic diseases and 
diseases of List A of the OIE, within 24 hours of detection of the problem; 
  (d) changes in the field of plant health, such as the appearance of quarantine pests and 
diseases or the spread of pests and diseases unde r official control, within 72 hours of 
verification; 
  (e) findings of epidemiological importance and significant changes in relation to diseases 
and pests not included in (c) or (d) that could affect trade among the Parties, within a 
maximum of 10 days; 
  (f) outbreaks of diseases which it is scientifi cally proven are caused by the consumption 
of raw or processed impor ted food products;  and 
  (g) the reasons for which a good of  an exporting Party is rejected. 
 
2. Parties shall use the notification author ities and enquiry points established in the 
SPS Agreement as channels of communication.  In th e event of safeguard measures, the Parties agree 
to notify each other in writing immedi ately, briefly indicating the objective of and justification for the 
measure, and the nature of the problem. 
 
3. As provided in Article 18.02 (Contact Points ), each Party shall respond to reasonable requests 
for information from the other Party and provide th e pertinent documentation, in accordance with the 
principles established in Annex B, pa ragraph 3, of the SPS Agreement. 
Article 8.11 
Committee on Sanitary and Phytosanitary Measures
 
1. The Parties establish a Committee on Sanitary  and Phytosanitary Measures, the composition 
of which is established in Annex 8.11.  2. The Committee shall examine matters relating to this Chapter and, without detriment to 
Article 19.05(2) (Committees), it shall: 
 
 (a) Promote the facilities needed for the trai ning and specialization of technical staff; 
  (b) promote active participation by the Pa rties in international organizations;  and 
  (c) establish and update a roster of qualified sp ecialists in the fields of food safety, plant 
health and animal health for the purpo ses of Article 19.07 (Groups of Experts).  WT/REG196/1 
 Page 69 
 
 
 Article 8.12 
Technical Cooperation  
 The Parties may provide the other Party with advisory assistance, information and technical 
cooperation, on mutually agreed te rms and conditions, to strengthen  its sanitary and phytosanitary 
measures, as well as related activities, processes and systems. 
ANNEX 8.11 
Committee on Sanitary and Phytosanitary Measures  
The Committee on Sanitary and Phytosanitary M easures established in Article 8.11(1) shall 
be composed of: 
 (a) For Costa Rica, the Ministry of Foreign Trade ("Ministerio de Comercio Exterior") 
and the agencies responsible for applying sanitary and phytosanitary measures, as 
designated by the Ministry or their successors; 
  (b) for El Salvador, the Ministry of Economic Affairs ("Ministerio de Economía"), the 
Ministry of Agriculture and Livestock ("Mi nisterio de Agricultura y Ganadería") and 
the Ministry of Public Health and Social  Welfare ("Ministerio de Salud Pública y 
Asistencia Social") or their successors; 
  (c) for Guatemala, the Ministry of Econom ic Affairs ("Ministerio de Economía"), the 
Ministry of Agriculture, Livestock and Food ("Ministerio de Agricultura, Ganadería y 
Alimentación") and the Ministry of Public Health and Social Welfare ("Ministerio de 
Salud Pública y Asistencia Social") or their successors; 
  (d) for Honduras, the Secretariat of State for Industry and Trade ("Secretaría de Estado 
en los Despachos de Industria y Comercio"), the Secretariat of State for Public Health 
("Secretaría de Estado en el Despacho de Salud Pública") and the Secretariat of State 
for Agriculture and Livestock ("Secretaría de Estado en los Despachos de Agricultura 
y Ganadería"), or their successors; 
  (e) for Nicaragua, the Ministry of Development, Industry and Trade ("Ministerio de 
Fomento, Industria y Comercio"), the Ministry of Agriculture and Forests ("Ministerio Agropecuario y Forestal") and the Ministry of Health ("Ministerio de 
Salud") or their successors;  and 
  (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio e 
Industria"), through the Vice-Ministry of Foreign Trade ("Viceministerio de Comercio Exterior"), the Ministry of Agricultural Development ("Ministerio de 
Desarrollo Agropecuario") and the Ministry of  Health ("Ministerio de Salud") or their 
successors. WT/REG196/1 
Page 70  
 
 CHAPTER 9:  STANDARDS-RELATED MEASURES, METROLOGY AND APPROVAL 
PROCEDURES 
Article 9.01 
Definitions
 
1. For the purposes of this Chapter: 
 
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the 
WTO Agreement; 
assessment of risk means evaluation of the potential injury  to legitimate objectives that could 
be caused by a good or service sold; 
make compatible means bring different standards-re lated measures of the same scope 
approved by different standardizing bodies to a level su ch that they are either identical, equivalent or 
have the effect of permitting goods or services to be used in place of one an other or fulfil the same 
purpose; 
standards-related measure  means a standard, technical regulation or conformity assessment 
procedure; 
standard  means a document, approved by a recognized body, that provides, for common and 
repeated use, rules, guidelines or characteris tics for goods or related processes and production 
methods, or for services or related operating methods , with which compliance is not mandatory.  It 
may also include or deal exclusively with termi nology, symbols, packaging, marking or labelling 
requirements as they apply to a good, service, process or production method or a related operating 
method; 
international standard means a standard or other guide or recommendation, adopted by an 
international standardizing body a nd made available to the public; 
legitimate objective includes the imperatives of national secu rity, the prevention of practices 
which may mislead consumers, the protection of human  health and safety, of animal and plant life and 
health and of the environment; 
international standardizing and metrology body means a standardizing body membership 
of which is open to the relevant bodies of at least all the Parties to the TBT Agreement, including the 
International Organization for Standardization (IS O), the International Electrotechnical Commission 
(IEC), the Codex Alimentarius Commission, the International Organizati on of Legal Metrology 
(OIML), the International Commission on Radiatio n Units and Measurements (ICRUM), or any other 
body that the Parties designate; 
approval procedure  means any mandatory administrative procedure to obtain a registration, 
permit, licence or any other authorization for a good or service to be produced, marketed or used for a stated purpose or under stated conditions; 
conformity assessment procedure means any procedure used, directly or indirectly, to 
determine that a technical regulation or standard is  fulfilled, including sampling, testing, inspection, 
evaluation, verification, assurance of conformity , registration, accreditation and approval, either 
separately or in different combinations;  WT/REG196/1 
 Page 71 
 
 
 administrative rejection  means action taken by a public administration agency of the 
importing Party, in the exercise of its powers, to pr event the entry into its territory of a shipment or 
the provision of a service for non-compliance with technical regulations, conformity assessment procedures or metrology-related measures; 
technical regulation  means a document which lays down the characteristics of goods or their 
related processes and production met hods, or the characteristics of services or their related operating 
methods, including the applicable administrative prov isions, with which compliance is mandatory.  It 
may also include or deal exclusively with termi nology, symbols, packaging, marking or labelling 
requirements as they apply to a good, service, re lated process or production or operating method; 
services  means any service subject to standards-re lated measures, metrol ogy-related measures 
or approval procedures pursuant to Article 9.12(g);  and 
comparable situation  means a situation that ensures the sa me level of safety or protection to 
achieve a legitimate objective. 
2. Except as otherwise defined in paragraph 1, the Parties shall use the terms contained in 
ISO/IEC Guide 2, "General Terms and Their Defi nitions Concerning Standardization and Related 
Activities". 
Article 9.02 
General Provisions
 
Apart from the provisions of the TBT Agreement, th e Parties shall apply the provisions of this 
Chapter. 
Article 9.03 
Scope and Coverage  
1. This Chapter applies to the standards-rela ted measures, approval procedures and metrology-
related measures of the Parties and related measures that may, directly or indirectly, affect trade in goods or services among them.  
2. This Chapter does not apply to sanitary and phytosanitary measures. 
Article 9.04 
General Rights and Obligations
 
Right to adopt standards-related measures 
1. Each Party may prepare, adopt, apply and maintain: 
 
 (a) Standards-related measur es, approval procedures and metrology-related measures as 
established in this Chapter;  and 
  (b) technical regulations and applicable conf ormity assessment procedures, to ensure the 
fulfilment of their legitimate objectives. WT/REG196/1 
Page 72  
 
 Unnecessary obstacles 
2. No Party may prepare, adopt, maintain or apply any standards-related measure, approval 
procedure or metrology-related measure with the purpose or effect of creating an unnecessary obstacle to trade with the other Party. 
Non-discriminatory treatment 
3. Each Party shall, in respect of its sta ndards-related measures, approval procedures and 
metrology-related measures, accord to goods and service providers of the other Party national 
treatment and treatment no less favourable than that it accords to like goods and the suppliers of like 
services of any other country. 
Use of international standards 
4. Each Party shall use, as a basis for prepari ng or applying its sta ndards-related measures, 
approval procedures and metrology-related measures, re levant international sta ndards or international 
standards the adoption of which is imminent, except where such standards would be an ineffective or 
inappropriate means to fulfil its legitimate objectiv es, because of fundamental climatic, geographical, 
technological or infrastructural factors or for scientifically proven reasons. 
Article 9.05 
Assessment of Risk
 
1. A Party may, in pursuing its legitimate objec tives, conduct an assessment of risk, taking into 
account:   (a) Assessments of risk performed by in ternational standardization organizations; 
 
 (b) available scientific evidence or technical information;   (c) related technology;  or  
 (d) end uses of the goods or services. 
 2. Where a Party establishes a level of protecti on that it considers appropriate to achieve its 
legitimate objectives and conducts an assessment of ri sk, it shall avoid arbitrary or unjustifiable 
distinctions between similar goods or si milar services, where the distinctions: 
 
 (a) Result in arbitrary or unjustifiable di scrimination against goods or service providers 
of the other Party; 
  (b) constitute a disguised restriction on trade among the Parties;  or  
 (c) discriminate between similar goods or similar services for the same use under the 
same conditions that pose the same level of risk and provide similar benefits. 
 3. A Party shall provide the other Party upon re quest with documentation on its risk-assessment 
processes and the factors it takes into account in  conducting the assessment and in establishing the 
levels of protection, in accordance with Article 9.04.  WT/REG196/1 
 Page 73 
 
 
 Article 9.06 
Compatibility and Equivalence  
1. Without prejudice to the rights conferred under this Chapter, and taking into account 
international standardization and metrology activi ties, the Parties shall, to the greatest extent 
practicable, make compatible their respective st andards-related and metr ology-related measures 
without reducing the level of safety or of protecti on of human, animal or plant life or health, the 
environment or consumers.  2. Each Party shall treat a technical regulation adopted by the other Party as equivalent to its 
own where in cooperation with that other Party, the importing Party determines that the technical 
regulations of the exporting Party adequately fulfil the importing Party's legitimate objectives. 
 3. The importing Party shall provide to the exporti ng Party, on request, its reasons in writing for 
not treating a technical regulation as equivalent under paragraph 2. 
Article 9.07 
Conformity Assessment
 
1. Each Party shall prepare, adopt and apply conformity assessment procedures so as to grant 
access for similar goods and similar services origina ting in the territory of the other Party under 
conditions no less favourable than those accorded to  suppliers of similar goods or similar services of 
the Party or of a non-Party in a comparable situation.  
2. With respect to its conformity assessment  procedures, each Party shall ensure that: 
  (a) Procedures are initiated and complete d as expeditiously as possible, in a non-
discriminatory order; 
 
 (b) the normal processing period for each such procedure is published or communicated 
to an applicant on request; 
  (c) upon receipt of an application, the competent body or authority promptly examines 
the completeness of the documentation and informs the applicant in a precise and 
complete manner of all deficiencies;  the competent body transmits as soon as 
possible the results of the assessment in a precise and complete manner to the 
applicant so that corrective action may be  taken if necessary;  even when the 
application has deficiencies, the competen t body proceeds as far as practicable with 
the conformity assessment if the applicant so requests;  and upon request, the applicant is informed of the stage of the procedure, with any delay being explained; 
 
 (d) information requirements are limited to what is necessary to assess conformity and 
determine fees; 
  (e) the confidentiality of information about a good or service originating in the territory 
of the other Party arising from or supplie d in connection with such conformity 
assessment procedures is resp ected in the same way as for a domestic good or service 
and in such a manner that legitimat e commercial interests are protected; 
  (f) any fees imposed for assessing the conform ity of a good or service originating in the 
territory of the other Party are equitabl e in relation to any fees chargeable for WT/REG196/1 
Page 74  
 
 assessing the conformity of like goods or services of national origin, taking into 
account communication, transportation and other costs arising from differences 
between the location of facilities of the applicant and the conformity assessment 
body; 
 
 (g) the siting of facilities used in conform ity assessment procedures and the selection of 
samples are not such as to cause unnecessary inconvenience to applicants or their 
agents; 
  (h) whenever specifications of a good or service are changed subsequent to the 
determination of its conformity to the app licable technical regulations or standards, 
the conformity assessment procedure for the modified good or service is limited to what is necessary to determine whether ad equate confidence exists that the good or 
service still meets the technical regulations or standards concerned;  and 
 
 (i) a procedure exists to review complaints  concerning the operation of a conformity 
assessment procedure and to take correctiv e action when a complaint is justified. 
 3. To facilitate trade, a Party shall give sympathe tic consideration to a request by the other Party 
to negotiate agreements for the mutual recognitio n of the results of their respective conformity 
assessment procedures. 
 
4. Each Party shall, as far as practicable, accep t the results of conformity assessment procedures 
conducted in the territory of the other Party, provided  they offer satisfactory guarantees, equivalent to 
those provided by the procedures carried out by the accepting Party in its territory or which are carried 
out in its territory and the results of which it accep ts, that the pertinent good or service conforms to 
the applicable technical regulation or standard adopted  or maintained in the territory of that Party. 
 5. Before accepting the results of a conformity assessment procedure, as provided in paragraph 4, and with the aim of enhancing the sust ained reliability of the results of the conformity 
assessment of each Party, the Parties may cons ult on aspects such as the technical capacity of 
conformity assessment bodies, including verified conf ormity with relevant international standards 
through methods such as accreditation. 
 6. Recognizing that this should be to the mutu al advantage of the Parties, each Party shall 
accredit, approve or otherwise recognize the conformi ty assessment bodies in the territory of the other 
Party under conditions no less favourable than it accords to such bodies in its territory. 
 
7. For conformity assessment procedures, the Parties may use the capacity and technical infrastructure of accredited bodies established in the territory of the Parties. 
Article 9.08 
Approval Procedures
 
1. Each Party shall prepare, adopt and appl y approval procedures so as to grant access for 
similar goods and similar services from the territory  of the other Party under conditions no less 
favourable than those accorded to suppliers of simila r goods or similar services of the Party or of a 
non-Party in a comparable situation.  2. With respect to its approval pro cedures, each Party shall ensure that: 
  WT/REG196/1 
 Page 75 
 
 
  (a) Such procedures are initiated and comp leted as expeditiously as possible, in a non-
discriminatory order; 
  (b) the normal processing period for each such procedure is published or communicated 
to an applicant on request; 
 
 (c) upon receipt of an application, the competent body or authority promptly examines 
the completeness of the documentation and informs the applicant in a precise and 
complete manner of all deficiencies;  the competent body transmits as soon as possible the results of the approval in a pr ecise and complete manner to the applicant 
so that corrective action may be taken if ne cessary;  even when the application has 
deficiencies, the competent body proceeds as far as practicable with the approval if 
the applicant so requests;  and upon request, the applicant is informed of the stage of 
the procedure, with any delay being explained; 
 
 (d) information requirements are limited to what is necessary to approve and determine 
fees; 
  (e) the confidentiality of information about a good or service originating in the territory 
of the other Party arising from or supp lied in connection with such approval 
procedures is respected in the same way as for a domestic good or service and in such 
a manner that legitimate commerc ial interests are protected; 
  (f) any fees imposed for the approval procedure for a good or service originating in the 
territory of the other Party are equitable in relation to any fees chargeable for the 
approval procedure for like goods or servi ces of national origin, taking into account 
communication, transportation and other costs arising from differences between the 
location of facilities of the applicant and th e body conducting the approval procedure;  
and 
  (g) a procedure exists to review compla ints concerning the operation of an approval 
procedure and to take corrective acti on when a complaint is justified. 
Article 9.09 
Metrology
 
 Each Party shall, as far as practicable, ensu re the documented traceability of its metrological 
standards and the calibration of its measuring inst ruments in accordance with the recommendations of 
the International Bureau of Weights and Measur es (BIPM) and the International Organization of 
Legal Metrology (OIML), complying with th e principles established in this Chapter. 
Article 9.10 
Notification  
1. Where there is no pertinent international sta ndard or the technical content of a technical 
regulation or conformity assessment procedure app licable to a planned technical regulation is not 
consistent with the technical content of the per tinent international standards and provided that the 
technical regulation could have a significant effect on trade among the Parties, each Party shall notify 
the other Party in writing of the proposed measure at least 60 days in advance of its adoption, to 
enable interested parties to submit comments a nd consultations during that period and permit the 
notifying Party to take them into account. WT/REG196/1 
Page 76  
 
  
2. Where a Party experiences or is threatened by  an urgent problem relating to safety, health, 
environmental protection or national security, it ma y omit the advance notification, provided that on 
adoption of a measure it shall notify the other Party.  
3. The Parties shall make notifications under pa ragraphs 1 and 2 in accordance with the formats 
established in the TBT Agreement.  4. Within 30 days of the entry into force of this Agreement, each Part y shall inform the other 
Party of the body it has designated to make notifications under this Article. 
 
5. Each Party shall notify the ot her Party in writing of its standardization plans and programmes 
on an annual basis.  6. Where a Party administratively rejects a shipment or the provision of services, it shall 
promptly notify, in writing, the owner of the shipment or the service provider of the technical 
justification for the rejection.  7. Once the information referre d to in paragraph 5 has been generated, the Party shall 
immediately forward it to the enquiry point of the other Party. 
Article 9.11 
Enquiry Points
 
1. Each Party shall ensure that an enquiry point exists in its territory capable of responding to all 
questions and reasonable enquiries from the other Party and inter ested persons and of providing 
relevant, up-to-date documents rega rding any standards-related measu re, metrology-related measure, 
conformity assessment procedure or approval proce dure adopted or proposed in its territory by 
governmental or non-governmental bodies. 
 2. Each Party designates as an enquiry point that indicated in Annex 9.11(2).  3. Enquiry points requesting copies of the docum ents referred to in paragraph 1 shall receive 
them free of charge.  Copies of documents shall be fu rnished to interested parties of the other Party at 
the same price as to the nationals of the Party, plus real shipping costs. 
Article 9.12 
Committee on Standardization, Metrology and Approval Procedures
 
1. The Parties establish a Committee on Standard ization, Metrology and Approval Procedures, 
the composition of which is established in Annex 9.12. 
 
2. The Committee shall examine matters relating to this Chapter and, without detriment to 
Article 19.05(2) (Committees), it shall:   (a) Study and propose solutions to standard s-related measures, approval procedures or 
metrology-related measures that a Party considers to be a technical barrier to trade; 
 
 (b) facilitate the process by which the Pa rties make their standards-related and 
metrology-related measures compatible, giving  priority to labelling, packaging and 
packing;  WT/REG196/1 
 Page 77 
 
 
  
 (c) promote technical cooperation among the Parties;   (d) assist in the risk assessme nts performed by the Parties; 
 
 (e) cooperate in developing  and strengthening standards-related and metrology-related 
measures in the Parties; 
  (f) facilitate the process by which the Par ties establish mutual-recognition agreements; 
and 
 
 (g) at the request of a Party, evaluate a nd recommend to the Commission for approval the 
inclusion of services sectors or subsectors s ubject to standards-related and metrology-
related measures and approval procedures. Th ey shall be included through a decision 
of the Commission. 
Article 9.13 
Technical Cooperation
 
1. Each Party shall promote technical cooperati on by its standardization and metrology bodies, 
providing information or technical assistance, to the extent possible, and on mutually-agreed terms, to 
assist compliance with this Chapter and strengthen standards-related and metrology-related activities, 
processes, systems and measures. 
 
2. The Parties may make joint efforts to arrange for technical cooperation from non-Party 
countries. 
ANNEX 9.11(2) 
Enquiry Points  
The Enquiry Point referred to in Article 9.11(2) shall be composed of: 
 (a) For Costa Rica, the National Office of St andards and Units of Measurement ("Oficina 
Nacional de Normas y Unidades de Medidas, ONNUM") of the Ministry of Economic Affairs and Trade ("Ministerio de  Economía y Comercio") or its successor; 
  (b) for El Salvador, the Ministry of Econom ic Affairs ("Ministerio de Economía") or its 
successor; 
  (c) for Guatemala, the Ministry of Economic  Affairs ("Ministerio de Economía") or its 
successor; 
 
 (d) for Honduras, the Secretariat of State for Industry and Trade ("Secretaría de Estado 
en los Despachos de Industria y Comerc io"), Directorate-General of Consumer 
Protection ("Dirección General de Protecci ón al Consumidor"), Department of 
Standardization and Metrology ("Departamen to de Normalización y Metrología"), or 
its successor; 
 
 (e) for Nicaragua, the Ministry of Development, Industry and Trade ("Ministerio de 
Fomento, Industria y Comercio") through the Directorate of Technology, WT/REG196/1 
Page 78  
 
 Standardization and Metrology ("Dirección de Tecnología, Normalización y 
Metrología") or its successor;  and 
  (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio e 
Industria"), through the Directorate-Genera l for Standards and Industrial Technology 
("Dirección General de Normas y Tecnol ogía Industrial"), or its successor. 
ANNEX 9.12 
Committee on Standardization, Metrology and Approval Procedures
 
The Committee on Standardization, Metrol ogy and Approval Procedures established in 
Article 9.12(1) shall be composed of: 
 (a) For Costa Rica, the Ministry of Foreign Trade ("Ministerio de Comercio Exterior") or 
its successor and the National Office of Standards and Units of Measurement ("Oficina Nacional de Normas y Unidades de Medidas, ONNUM") of the Ministry of 
Economic Affairs and Trade ("Ministerio de  Economía y Comercio") or its successor; 
 
 (b) for El Salvador, the Trade Policy Directorate of the Ministry of Economic Affairs 
("Dirección de Política Comercial del Ministerio de Economía") or its successor; 
  (c) for Guatemala, the body designated by the Ministry of Economic Affairs ("Ministerio 
de Economía") or its successor; 
 
 (d) for Honduras, the Secretariat of State for Industry and Trade ("Secretaría de Estado 
en los Despachos de Industria y Comerc io") through the Directorate-General of 
Consumer Protection ("Dirección Genera l de Protección al Consumidor"), the 
Department of Standardization and Metr ology ("Departamento de Normalización y 
Metrología") or its successor; 
 
 (e) for Nicaragua, the Ministry of Development, Industry and Trade ("Ministerio de 
Fomento, Industria y Comercio") through the Directorate of Technology, Standardization and Metrology ("Dirección de Tecnología, Normalización y Metrología") or its successor;  and 
 
 (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio e 
Industria") through the Vice-Ministry of Foreign Trade ("Viceministerio de Comercio Exterior") or its successor.  WT/REG196/1 
 Page 79 
 
 
 PART FOUR:  INVESTMENT, SERVICES AND RELATED MATTERS 
CHAPTER 10:  INVESTMENT 
Section A – Investment  
Article 10.01 
Scope and Coverage  
1. This Chapter applies to measures adopted  or maintained by a Party relating to: 
  (a) The investors of the other Party in all matters relating to their investment;   (b) investments of investors of the other Party in the territory of the Party;  and 
 
 (c) all investments of the investors of a Party in the territory of the other Party with 
respect to Article 10.07. 
 2. This Chapter does not apply to measures a dopted or maintained by a Party relating to: 
 
 (a) Financial services;   (b) the measures adopted by a Party to r estrict the participation of investments of 
investors of the other Party in its territory for reasons of public policy or national security; 
 
 (c) economic activities reserved for each Party, pursuant to its current legislation on the 
date of entry into force of this Agreemen t, which shall be listed in Annex III on the 
economic activities reserved for each Party; 
 
 (d) government services or functions, such as law enforcement, correctional services, 
income security or insurance, social securi ty, social welfare, public education, public 
training, health and child care;  or 
  (e) disputes or claims arising prior to the entr y into force of this Agreement or relating to 
facts that occurred before it entered into for ce, even if their effects persist thereafter. 
 
3. This Chapter applies to the entire territory of the Parties and to any level of government 
regardless of any inconsistent measures that may exist in the law of these levels of government. 
 4. Notwithstanding paragraph 2(d), if a duly aut horized investor of a Party provides services or 
carries out functions, such as correctional services, income security or insurance, social security, 
social welfare, public education, public training,  health, and child care, the investments of that 
investor shall be protected under this Chapter.  5. This Chapter applies to invest ments existing on the date this Agreement enters into force and 
to investments made or acquired after that date. 
 WT/REG196/1 
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 Article 10.02 
National Treatment
 
1. Each Party shall accord to investors of the ot her Party treatment no less favourable 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 disposition of investments. 
 
2. Each Party shall accord to investments of investors of the other Party treatment no less favourable than that it accords, in like circumstances,  to investments of its own investors with respect 
to the establishment, acquisition, expansion, ma nagement, conduct, operation, and sale or other 
disposition of investments. 
Article 10.03 
Most-Favoured Nation Treatment
 
1. Each Party shall accord to investors of the ot her Party treatment no less favourable than that it 
accords, in like circumstances, to investors of an y other Party or a non-Party with respect to the 
establishment, acquisition, expansion, management , conduct, operation, and sale or other disposition 
of investments. 
 2. Each Party shall accord to investments of investors of the other Party treatment no less favourable than that it accords, in lik e circumstances, to investments of  investors of any other Party or 
a non-Party with respect to the establishment,  acquisition, expansion,  management, conduct, 
operation, and sale or other disposition of investments. 
 
Article 10.04 
Standard of Treatment
 
Each Party shall accord to investors of the othe r Party and the investments of investors of the 
other Party the better of the treatments required by Articles 10.02 and 10.03. 
Article 10.05 
Compensation for Losses  
Each Party shall accord the investors of th e other Party whose investments have been 
adversely affected in its territory as a result of  armed conflict or civil strife, non-discriminatory 
treatment with regard to any measure adopted  or maintained in relation to such losses. 
Article 10.06 
Minimum Standard of Treatment  
A Party shall accord to investments of investor s of the other Party treatment in accordance 
with international law, including fair and e quitable treatment and full protection and security.  WT/REG196/1 
 Page 81 
 
 
 Article 10.07 
Performance Requirements  
1. No Party may impose or enforce any of the following requirements, or enforce any 
commitment or undertaking, in connection wi th the establishment, acquisition, expansion, 
management, conduct or operation of an investment  of an investor of a Party in its territory: 
 
 (a) To export a given level or percentage of goods or services; 
  (b) to achieve a given level or  percentage of domestic content; 
 
 (c) to purchase, use or accord a preference to  goods produced or services provided in its 
territory, or to purchase goods or services from persons in its territory; 
  (d) to relate in any way the volume or value of imports to the volume or value of exports 
or to the amount of foreign exchange in flows associated with such investment; 
 
this paragraph does not apply to any requ irement other than those set out herein. 
2. No Party may condition the receipt or continue d receipt of an advantage, in connection with 
an investment in its territory of an investor of  a Party, on compliance with any of the following 
requirements:  
 (a) To achieve a given level or  percentage of domestic content; 
  (b) to purchase, use or accord a preferen ce to goods produced in its territory, or to 
purchase goods from producers in its territory;  or 
 
 (c) to relate in any way the volume or value of imports to the volume or value of exports 
or to the amount of foreign exchange in flows associated with such investment; 
 this paragraph does not apply to any requ irement other than those set out herein. 
3. The provisions of: 
 
 (a) Paragraphs 1(a), (b) and (c) and paragraphs 2(a) and (b ) do not apply to qualification 
requirements for goods or services with respect to export promotion and foreign aid programmes; 
  (b) paragraphs 1(b) and (c) an d paragraphs 2(a) and (b) do not apply to procurement by a 
Party or a State enterprise;  and 
  (c) paragraphs 2(a) and (b) do not apply to the requirements imposed by an importing 
Party with regard to the contents of a good required to qualify it for preferential tariffs 
or quotas. 
 
4. Nothing in paragraph 2 shall be construed to  prevent a Party from conditioning the receipt or 
continued receipt of an advantage, in  connection with an investment in its territory of an investor of a 
Party, on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities,  or carry out research and development, in its 
territory. 
 WT/REG196/1 
Page 82  
 
 5. Provided that such measures are not applied in an arbitrary or unjustifiable manner, and do 
not constitute a disguised restriction on internationa l trade or investment, nothing in paragraphs 1(b) 
or (c) or 2(a) or (b) shall be construed to prev ent a Party from adopting or maintaining measures, 
including environmental measures:  
 (a) Necessary to secure compliance with laws  and regulations that are not inconsistent 
with the provisions of this Agreement; 
  (b) necessary to protect human, animal or plant life or health;  or  
 (c) necessary for the conservation of living  or non-living exhaustible natural resources. 
 6. In cases where, in the opinion of a Party, the imposition by the other Party of any of the following requirements adversely affects trade flows or constitutes a significant barrier to investment 
by an investor of the Party, the matter shall be considered by the Commission: 
 
 (a) To restrict the sales of goods in its terr itory that such investment produces by relating 
such sales in any way to the volume or value of its exports or foreign exchange earnings; 
  (b) to transfer technology, a production pr ocess or other proprietary knowledge to a 
person in its territory, except when the requirement is imposed by a court, 
administrative tribunal or authority competent to remedy an alleged violation of competition laws or to act in a manner not in consistent with other provisions of this 
Agreement;  or 
 
 (c) to act as the exclusive supplier of the go ods it produces to a specific regional or world 
market. 
 7. A measure that requires an investment to use a technology to meet generally applicable 
health, safety or environmental requirements sha ll not be construed to be inconsistent with 
paragraph 6(b).  For greater certainty, Articles 10.02 and 10.03 apply to the measure. 
 
8. If the Commission finds that the requirement in  question does in fact negatively affect trade 
flows or constitutes a significant barrier to the invest ment of an investor of the other Party, it shall 
recommend those provisions necessary to abolish the pr actice concerned.  The Parties shall consider 
these provisions as included in this Agreement. 
 
Article 10.08
 
Senior Management, Governing B odies and Boards of Directors  
1. No Party may require that an enterprise of that Party that is an investment of an investor of 
the other Party appoint to senior management positions in that enterprise individuals of any particular 
nationality. 
 
2. A Party may require that a majority of the members of the governing body or board of directors of an enterprise of that Party that is an in vestment of an investor of the other Party be of a 
particular nationality, provided that the requireme nt does not materially impair the ability of the 
investor to exercise control over its investment. 
  WT/REG196/1 
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 Article 10.09  
Reservations and Exceptions  
1. Articles 10.02, 10.03, 10.07 and 10.08 do not apply to: 
  (a) Any existing non-conforming measure that is maintained by: 
 
  (i) a Party at the national level, as set out in its Schedule to Annex I or III;  or    (ii) a local or municipal government;  
 (b) the continuation or prompt renewal of  any non-conforming measure referred to in 
subparagraph (a);  or 
  (c) an amendment to any non-conforming meas ure 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 amendmen t, with Articles 10.02, 10.03, 10.07 and 
10.08. 
 2. Articles 10.02, 10.03, 10.07 and 10.08 shall not  apply to any measure that a Party adopts or 
maintains with respect to sectors, subsectors or activities, as set out in its  Schedule to Annex II. 
 
3. No Party may, under any measure adopted after th e date of entry into force of this Agreement 
and covered by its Schedule to Anne x II, require an investor of the other Party, by reason of its 
nationality, to sell or otherwise dispose of an i nvestment existing at the time the measure becomes 
effective.  
4. Article 10.03 does not apply to treatment accorded by one of the Parties pursuant to 
agreements or, with respect to sectors, set out in its Schedule to Annex IV.  5. Articles 10.02, 10.03 and 10.08 do not apply to:   (a) Procurement by a Party or a State enterprise;  or 
 
 (b) subsidies, grants or contributions provided by a Party or a State enterprise, including 
government-supported loans, guarantees and insurance. 
 
Article 10.10 
Transfers
 
1. Each Party shall permit all transfers relating to an investment of an investor of the other Party 
in the territory of the Party to be made fr eely and without delay. Such transfers include: 
  (a) Profits, dividends, interest, capital ga ins, royalty payments, management fees, 
technical assistance and other fees, returns in kind and other amounts derived from 
the investment; 
  (b) proceeds from the sale of all or any part  of the investment or from the partial or 
complete liquidation of the investment; 
 WT/REG196/1 
Page 84  
 
  (c) payments made under a contract entered into by the investor, or its investment, 
including payments made pursuant to a loan agreement; 
 (d) payments made pursuant to Article 10.11;  and   (e) payments arising from the application of  provisions relating to the dispute settlement 
mechanism under Section B of this Chapter. 
 2. Each Party shall permit transfers to be made in  a freely convertible currency at the market rate 
of exchange prevailing on the date of transfer.  
3. No Party may require its investors to transfer, or penalize its investors that fail to transfer, the 
income, earnings, profits or other amounts derived from , or attributable to, investments in the territory 
of the other Party.  4. Notwithstanding paragraphs 1 and 2, a Pa rty may establish mechanisms for preventing a 
transfer through the equitable, non-discriminat ory application of its laws relating to: 
  (a) Bankruptcy, insolvency or the protection of the rights of creditors;   (b) criminal or penal offences or final administrative rulings;  
 (c) failure to comply with the requirement to  submit reports of transfers of currency or 
other monetary instruments; 
  (d) enforcement of judgments and arbitral awards in adjudicatory proceedings;  or  
 (e) enforcement of laws and regulations on  issuing, trading or dealing in securities. 
 5. Paragraph 3 shall not be construed to prev ent a Party from imposing any measure through the 
equitable and non-discriminatory application of its laws relating to the matters set out in 
subparagraphs (a) through (e) of paragraph 4. 
Article 10.11
 
Expropriation and Compensation  
1. No Party may directly or indirectly nationalize or expropriate an investment of an investor of 
the other Party in its territory or take a measure tantamount to nationalization or expropriation of such 
an investment ("expropriation"), except:  
 (a) For a public purpose or public order a nd social interest, pursuant to Annex 10.11(1); 
  (b) on a non-discriminatory basis;   (c) in accordance with the pr inciples of legality and due process and with Article 10.06;  
and 
 
 (d) upon payment of compensation in accordance with this Article.  2. Compensation shall be equivalent to the fair  market value of the expropriated investment 
immediately before the expropriation took place ("date  of expropriation"), and shall not reflect any 
change in value occurring because the intended e xpropriation had become known earlier.  Valuation  WT/REG196/1 
 Page 85 
 
 
 criteria may include going concern value, asset va lue including declared tax value of tangible 
property, and other criteria, as appropria te, to determine fair market value. 
 3. Compensation shall be paid without delay and be fully realizable.  
4. Notwithstanding paragraph 5,  the amount paid as compensation shall be no less than the 
equivalent amount that would have been paid on such  date to the investor subject to the expropriation 
in a freely convertible currency on the internationa l financial market in accordance with the exchange 
rate in force on the date on which the fair market  price was determined.  Compensation shall include 
payment of interest from the date on which the i nvestor has been dispossessed of the expropriated 
investment until the date of payment, which shall be  based on an average deposit rate of interest for 
this currency in the national banking system of the Party where the expropriation is carried out. 
 5. Compensation paid in a freely convertible curre ncy shall include payment of interest from the 
date on which the investor has be en dispossessed of the expropriated investment until the date of 
payment, which shall be based on an average deposit ra te of interest for this currency in the national 
banking system of the Party where the expropriation is carried out.  6. On payment, compensation shall be freely transferable as provided in Article 10.10.  7. This Article does not apply to the issuance of compulsory licences granted in relation to 
intellectual property rights, or to the revocation, limitation or creation of intellectual property rights, 
to the extent that such issuance, revocation,  limitation or creation is  consistent with the 
TRIPS Agreement.  8. For purposes of this Article and for greater certainty, a non-discriminatory measure of general 
application shall not be considered a measure tantamount  to an expropriation of a debt security or loan 
covered by this Chapter solely on the grounds that  the measure imposes costs on the debtor that cause 
it to default on the debt. 
Article 10.12 
Special Formalities and Information Requirements
 
1. Nothing in Article 10.02 shall be construed to  prevent a Party from adopting or maintaining a 
measure that prescribes special formalities in conn ection with the establishment of investments by 
investors of the other Party, such as a requirement  that investments be legally constituted under the 
laws or regulations of the Party, provided that su ch formalities do not materially impair the protection 
afforded by a Party pursuant to this Chapter.  
2. Notwithstanding Articles 10.02 or 10.03, a Party ma y require an investor of the other Party, or 
its investment in its territory, to provide routine information concerning that investment solely for 
informational or statistical purposes.  The Party shall protect such business information that is 
confidential from any disclosure that would prejudi ce the competitive position of the investor or the 
investment. 
Article 10.13 
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.  WT/REG196/1 
Page 86  
 
 2. A requirement by a Party that a service provider of the other Party post a bond or other form 
of financial security as a condition of providing a ser vice into its territory does not of itself make this 
Chapter applicable to the provision of that cross-bor der service.  This Chapter applies to that Party's 
treatment of the posted bond or financial security. 
Article 10.14 
Denial of Benefits
 
Subject to prior notification and consultation in accordance with Articles 18.04 (Provision of 
Information) and 20.06 (Consultations), a Party may deny  the benefits of this Chapter to an investor 
of the other Party that is an enterprise of such Part y and to investments of such investors if investors 
of a non-Party own or control the enterprise in acco rdance with the definition of "investment of an 
investor of a Party" in Article 10.40 and the en terprise has no substantial business activities in the 
territory of the Party under whose law it is constituted or organized. 
Article 10.15 
Environmental Measures  
1. Nothing in this Chapter sha ll be construed to prevent a Party from adopting, maintaining or 
enforcing any measure consistent with this Chapte r that it considers appropriate to ensure that 
investment activity in its territory complies with the ecological and environmental legislation of that Party.  2. The Parties recognize that it is inappropriat e to encourage investment by relaxing domestic 
health, safety, ecological or environmental measur es.  Accordingly, no Party shall exempt or 
undertake to exempt the investment of an invest or from the application of such measures as an 
encouragement for the establishment, acquisition, expansion or retention in its territory of an 
investment of an investor.  If a Party considers that the other Party has offered such an encouragement, it may request cons ultations with the other Party. 
Section B - Settlement of Disputes between a Party and an Investor of the Other Party
 
Article 10.16 
Purpose  
Without prejudice to the rights and obligations of the Parties under Chapter 20 (Dispute 
Settlement), this Section establishes a mechanism for the settlement of investment disputes arising 
from the violation of an obligation established under Section A of this Chapter and assures both equal 
treatment among investors of the Parties in accordan ce with the principle of reciprocity and proper 
observance of the safeguards of public hearing and defence as part of a due process of law before an 
impartial tribunal. 
Article 10.17 
Claim by an Investor of a Party on Its Own Behalf  
1. An investor of a Party may submit to arbitr ation under this Section a claim on the grounds 
that the other Party, or an enterprise controlled dir ectly or indirectly by the other Party, has breached 
an obligation under this Chapter, whenever the i nvestor has suffered losses or damages by reason of 
or arising from that violation.  WT/REG196/1 
 Page 87 
 
 
  
2. An investor may not make a claim if more th an three (3) years have elapsed from the date on 
which the investor first acquired, or should have first acquired, knowledge of the alleged breach and 
knowledge that the investor incurred loss or damage. 
Article 10.18 
Claim by an Investor of a Party on Behalf of an Enterprise  
1. An investor of a Party, on behalf of an ente rprise of the other Party that is a juridical person 
that the investor owns or controls directly or indi rectly, may submit to arb itration under this Section a 
claim that the other Party or an enterprise controlled directly or indirectly by that Party has breached 
an obligation under this Chapter, whenever the en terprise has suffered losses or damages by reason of 
or arising from that violation. 
 2. An investor may not make a claim on behalf of  an enterprise described in paragraph 1 if more 
than three (3) years have elapsed from the date on wh ich the enterprise first acquired, or should have 
first acquired, knowledge of the alleged breach a nd knowledge that the enterprise incurred loss or 
damage. 
 3. Where an investor makes a claim under this  Article and a non-controlling investor in the 
enterprise makes a claim under Article 10.17 arising ou t of the same events that gave rise to the claim 
under this Article, or two or more of the claims ar e submitted to arbitration under Article 10.21, the 
claims should be heard together by a Tribunal established under Article 10.27, unless the 
Consolidation Tribunal finds that the interests of  a disputing party would be prejudiced thereby. 
 4. An investment may not submit a clai m to arbitration under this Section. 
Article 10.19 
Settlement of a Claim through Consultation and Negotiation
 
The disputing parties shall first attempt to se ttle a claim through consultation or negotiation. 
Article 10.20 
Notice of Intent to Submit a Claim to Arbitration  
The disputing investor shall deliver to the di sputing Party written notice of its intention to 
submit a claim to arbitration at least 90 days before  the claim is submitted, which notice shall specify: 
 (a) The name and address of the disputing investor and, where a claim is made under 
Article 10.18, the name and address of the enterprise; 
  (b) the provisions of this Chapter alleged to  have been breached and any other relevant 
provisions; 
 
 (c) the issues and the factual basis for the claim;  and 
  (d) the relief sought and the approximate amount of damages claimed. WT/REG196/1 
Page 88  
 
 Article 10.21
 
Submission of a Claim to Arbitration  
1. Except as provided in Annex 10.21, and provided that six (6) months have elapsed since the 
events giving rise to a claim, a disputing inv estor may submit the claim to arbitration under: 
 
 (a) The ICSID Convention, provided that both the disputing Party and the Party of the 
investor are parties to the Convention; 
  (b) the Additional Facility Rules of ICSID, pr ovided that either the disputing Party or the 
Party of the investor, but not both, is a party to the ICSID Convention;  or 
 
 (c) the UNCITRAL Arbitration Rules.  2. The rules applicable to each of the arbitrati on proceedings set out in this Chapter shall govern 
the arbitration except to the extent modified by this Section. 
Article 10.22
 
Conditions Precedent to Submission of a Claim to Arbitration  
1. The consent of the disputing parties to the ar bitration proceedings under this Chapter shall be 
considered to be consent to this arbitrati on to the exclusion of any other procedure. 
 2. Each Party may demand exhaustion of its local administrative remedies as a condition for 
consenting to arbitration under this Chapter.  Neve rtheless, if the administrative authorities have not 
issued a final ruling six (6) months as from the date on which the corresponding administrative 
remedies were lodged, the investor may appeal di rectly to arbitration, in accordance with the 
provisions of this Section.  
3. A disputing investor may submit a claim under Article 10.17 to arbitration only if: 
  (a) The investor consents to arbitration in accordance with the procedures set out in this 
Section;  and 
  (b) the investor and, where the claim is for lo ss or damage to an interest in an enterprise 
of the other Party that is a juridical person that the investor owns or controls directly 
or indirectly, the enterprise waive their right  to initiate or continue before any court 
under the law of any of the Parties, or other dispute settlement procedures, any 
proceedings with respect to the measure of th e disputing Party that is alleged to be a 
breach referred to in Article 10.17, except for proceedings for injunctive, declaratory 
or other extraordinary relief, not involving the payment of damages, before an 
administrative tribunal or court under the law of the disputing Party. 
  Accordingly, once the investor or the enterpri se has submitted its claim to an arbitration 
procedure under this Section, the choice of such a procedure shall be final, precluding the possibility 
of submitting the claim to the competent national c ourt of the disputing Party or to other dispute 
settlement procedures, without prejudice to the ex ceptions set out above with respect to preventive 
measures.  4. A disputing investor may submit a claim under Article 10.18 to arbitration only if both the investor and the enterprise:  WT/REG196/1 
 Page 89 
 
 
  
 (a) Consent to arbitration in accordance with the procedures set out in this Section;  and 
  (b) waive their right to initiate or continue before any court under the law of a Party, or 
other dispute settlement procedures, any pro ceedings with respect to the measure of 
the disputing Party that is alleged to be a breach referred to in Article 10.18, except 
for proceedings for injunctive, declaratory or  other extraordinary relief, not involving 
the payment of damages, before an administrative tribunal or court under the law of the disputing Party. 
 
 Accordingly, once the investor or the enterpri se has submitted its claim to an arbitration 
procedure under this Section, the choice of such a procedure shall be final, precluding the possibility 
of submitting the claim to the competent national c ourt of the disputing Party or to other dispute 
settlement procedures, without prejudice to the ex ceptions set out above with respect to preventive 
measures. 
 
5. The consent and waiver required by this Article shall be in wr iting, shall be delivered to the 
disputing Party and shall be included in th e submission of a claim to arbitration. 
 6. Only where the disputing Party has deprived th e disputing investor of control of an enterprise 
shall a waiver from the enterprise under paragraph 3(b) or 4(b) not be required. 
Article 10.23 
Consent to Arbitration
 
1. Each Party consents to the submission of a claim to arbitration in accordance with the 
procedures and requirements set out in this Section.  
2. The consent given by paragraph 1 and the subm ission by a disputing investor of a claim to 
arbitration implies compliance with the requirements of:   (a) Chapter II of the ICSID Convention (Jur isdiction of the Centre) and the Additional 
Facility Rules for written consent of the Parties; 
 
 (b) Article II of the New York Convention for an agreement in writing;  and 
  (c) Article I of the Inter-Ameri can Convention for an agreement. 
Article 10.24 
Number of Arbitrators and Method of Appointment
 
Except in respect of a Tribunal established under Article 10.27, and unless the disputing 
parties otherwise agree, the Tribunal shall comprise three (3) arbitrators, one arbitrator appointed by 
each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by 
agreement of the disputing parties. WT/REG196/1 
Page 90  
 
 Article 10.25 
Constitution of a Tribunal When a Party Fails to Ap point an Arbitrator or the Disputing Parties
 
Are Unable to Agree on a Presiding Arbitrator  
1. In the event of a disputing party not appoint ing an arbitrator or no agreement being reached 
on the appointment of the presiding arbitrator, the Se cretary-General shall designate the arbitrators in 
the arbitration proceeding, pursuant to this Section. 
 2. If a Tribunal, other than a Tribunal establishe d under Article 10.27, has not been constituted 
within 90 days from the date that a claim is submi tted to arbitration, the Secretary-General, at the 
request of either disputing party and, insofar as is possible, after consultation with the disputing 
parties, shall appoint the arbitrator or arbitrators not yet appointed, except that the presiding arbitrator 
shall be appointed in accordance with paragraph 3. In  any case, the majority of the arbitrators may not 
be nationals of the disputing Party or nationa ls of the Party of the disputing investor. 
 3. The Secretary-General shall appoint the presiding arbitrator from the roster of presiding 
arbitrators referred to in paragraph 4, provided that  the presiding arbitrator is not a national of the 
disputing Party or a national of the Party of the disp uting investor. In the event that no such presiding 
arbitrator is available to serve, the Secretar y-General shall appoint, from the ICSID Panel of 
Arbitrators, a presiding arbitrator who is not a nationa l of either the disputing Party or the Party of the 
disputing investor.  
4. On the date of entry into force of this Ag reement, the Parties shall establish, and thereafter 
maintain, a roster of 18 presiding arbitrators, none  of whom may be a national of either Party, 
satisfying the requirements in the ICSID Convention and in the rules referred to in Article 10.21 and 
experienced in international law and investment matt ers. The members of the roster shall be appointed 
by mutual agreement, regardless of nationality, for a period of two (2) years that may be extended if 
the Parties so decide. In the event of the death or  resignation of a member of the roster, the Parties 
shall, by mutual agreement, appoint another person to substitute this member in his or her functions 
for the remainder of the period for wh ich the former person was appointed. 
Article 10.26 
Agreement to Appointment of Arbitrators
 
For the purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the 
ICSID Additional Facility Rules, and without prejud ice to an objection to an arbitrator based on 
Article 10.25(3) or on a ground other than nationality: 
 (a) The disputing Party agrees to the appointment of each individual member of a 
Tribunal established under the ICSID Conven tion or the ICSID Additional Facility 
Rules; 
 
 (b) a disputing investor referred to in Artic le 10.17 may submit a claim to arbitration, or 
continue a claim, under the ICSID Conve ntion or the ICSID Additional Facility 
Rules, only on condition that the dispu ting investor agrees in writing to the 
appointment of each individual member of the Tribunal; 
 
 (c) a disputing investor referred to in Artic le 10.18(1) may submit a claim to arbitration, 
or continue a claim, under the ICSID C onvention or the ICSID Additional Facility 
Rules, only on condition that the disputing investor and the enterprise it represents 
agree in writing to the appointment of each individual member of the Tribunal.  WT/REG196/1 
 Page 91 
 
 
 Article 10.27 
Consolidation  
1. A Consolidation Tribunal established under this Article shall be estab lished pursuant to the 
UNCITRAL Arbitration Rules and shall conduct its proceedings in accordan ce with those Rules, 
except as modified by this Section. 
 
2. Where a Consolidation Tribunal established und er this Article is satisfied that claims 
submitted to arbitration under Article 10.21 have a question of law or fact in common, the 
Consolidation Tribunal may, in the interests of fair  and efficient resolution of the claims, and after 
hearing the disputing parties, by order: 
 
 (a) Assume jurisdiction over, hear and determin e all or part of the claims together;  or 
  (b) assume jurisdiction over, hear and determine one or more of the claims, the 
determination of which it believes would assist in the resolution of the others. 
 
3. A disputing party that seeks a consolida tion order under paragraph 2 shall request the 
Secretary-General to establish a Consolidation Tribunal and shall specify in the request: 
  (a) The name of the disputing Party or disputing investors against which the 
consolidation order is sought; 
 
 (b) the nature of the order sought;  and   (c) the grounds on which the order is sought.  
4. The disputing party shall deliver a copy of the request to the disputing Party or disputing 
investors against which the consolidation order is sought.  5. Within sixty (60) days of receipt of th e request, the Secretary-General shall establish a 
Consolidation Tribunal comprising three (3) arbitrat ors.  The Secretary-General shall appoint the 
presiding arbitrator for the Consolidation Tribunal from the roster referred to in Article 10.25(4).  In 
the event that no such presiding arbitrator is ava ilable to serve, the Secretary-General shall appoint, 
from the ICSID Panel of Arbitrators, a presiding arb itrator for the Consolida tion Tribunal who is not a 
national of either Party.  The Secretary-Genera l shall appoint the two (2) other members of the 
Consolidation Tribunal from the roster referred to in  Article 10.25(4), and to the extent not available 
from that roster, from the ICSID Panel of Arbitrators,  and to the extent not available from that Panel, 
at the discretion of the Secretary-General. One (1 ) member of the Consolidation Tribunal shall be a 
national of the disputing Party and one (1) member shall be a national of the Party of the disputing 
investors.  6. Where a Consolidation Tribunal has been estab lished under this Article, a disputing investor 
that has submitted a claim to arbitration under Article 10.17 or 10.18 and that has not been named in a 
consolidation request made under paragraph 3 may make a written request to the Consolidation 
Tribunal that it be included in such request made under paragraph 2, and shall specify in the request: 
  (a) The name and address of the disputing investor and, where applicable, the name and 
address of the enterprise; 
 
 (b) the nature of the consolidation order sought;  and  WT/REG196/1 
Page 92  
 
  (c) the grounds on which the order is sought. 
 7. A disputing investor referred to in paragra ph 6 shall deliver a copy of its request to the 
disputing parties named in a request made under paragraph 3.  
8. A Tribunal established under Article 10.21 shall not have jurisdiction to decide a claim, or a 
part of a claim, over which a Consolidation Tr ibunal established under this Article has assumed 
jurisdiction.  9. On application of a disputing party, a Cons olidation Tribunal established under this Article, 
pending its decision under paragraph 2, may order that the proceedings of a Tribunal established 
under Article 10.21 be stayed, unless the latter Trib unal has already adjourned its proceedings until 
there is a decision about the propriety of consolidation.  10. A disputing Party shall deliver to the Secretaria t, within fifteen (15) days of receipt by the 
disputing Party, a copy of: 
  (a) A request for arbitration made u nder paragraph (1) of Article 36 of the 
ICSID Convention; 
  (b) a notice of arbitration made under Article  2 of Schedule C of the ICSID Additional 
Facility Rules;  or 
  (c) a notice of arbitration given under the UNCITRAL Arbitration Rules.  11. A disputing Party shall deliver to the Secretar iat a copy of a request made under paragraph 3: 
 
 (a) Within fifteen (15) days of receipt of the request, in the case of a request made by a 
disputing investor; 
  (b) within fifteen (15) days of the date on which the request was made, in the case of a 
request by the disputing Party. 
 
12. A disputing Party shall deliver to the Secret ariat a copy of a request made under paragraph 6 
within fifteen (15) days of receipt of the request.  13. The Secretariat shall maintain a public register  of the documents referred to in paragraphs 10, 
11, and 12. 
Article 10.28 
Notification
 
A disputing Party shall deliver to the other Party: 
 (a) Written notice of a claim that has been submitted to arbitration no later than thirty 
(30) days after the date on which the claim is submitted;  and 
 
 (b) copies of all pleadings filed in the arbitration.  WT/REG196/1 
 Page 93 
 
 
 Article 10.29 
Participation by a Party  
On written notice to the disputing parties, a Party may submit to a Tribunal established under 
this Section its points of view on questions  of interpretation of this Agreement. 
Article 10.30 
Documents  
1. A Party shall be entitled to receive from the di sputing Party, at the cost of the requesting 
Party, a copy of:   (a) The evidence tendered to any Tribuna l established under this Section;  and 
 
 (b) the written arguments of the disputing parties.  2. A Party receiving information pursuant to para graph 1 shall accord confidential treatment to 
information as though it were a disputing Party. 
Article 10.31 
Venue of Arbitration
 
Unless the disputing parties agree otherwise, a Tribunal established under this Section shall 
hold arbitration proceedings in the territory of a Pa rty that is a party to the New York Convention, 
selected in accordance with: 
 (a) The ICSID Additional Facility Rules if the arbitration is under those Rules or the 
ICSID Convention;  or 
  (b) the UNCITRAL Arbitration Rules if the arbitration is under those Rules. 
Article 10.32 
Governing Law
 
1. A Tribunal established under th is Section shall decide the issu es in dispute in accordance with 
this Agreement and the applicable  rules of international law. 
 2. An interpretation by the Commission of a provi sion of this Agreement shall be binding on a 
Tribunal established under this Section. 
Article 10.33 
Interpretation of Annexes
 
1. Where a disputing Party asserts as a defence that  a measure alleged to be a breach is within 
the scope of a reservation or exception set out in any of the Annexes, at the request of the disputing 
Party, any Tribunal established under this Section sh all request the interpretation of the Commission 
on the issue.  The Commission, within sixty (60) days of delivery of the request, shall submit its 
interpretation to the Tribunal in writing. WT/REG196/1 
Page 94  
 
  
2. Further to Article 10-32(2), a Commission in terpretation submitted under paragraph 1 shall be 
binding on any Tribunal established under this Section.  If the Commission fails to submit an interpretation within sixty (60) days, the Tribunal shall decide the issue. 
Article 10.34 
Expert Reports
 
Without prejudice to the appointment of other kinds of experts where authorized by the 
applicable arbitration rules, a Tribunal, at the requ est of a disputing party or on its own initiative, may 
appoint one or more experts to report to it in  writing on any issue concerning the dispute. 
Article 10.35 
Interim Measures of Protection  
A Tribunal established under this Section may ask the national courts or order the disputing 
parties to impose interim measures of protection to preserve the rights of a disputing party, or to 
ensure that the Tribunal's competence or jurisdictio n is made fully effective.  A Tribunal may not 
order attachment or seizure, or compliance with or  enjoin the application of the measure alleged to 
constitute a breach referred to in Article 10.17 or 10.18. 
Article 10.36 
Final Award  
1. Where a Tribunal established under this Secti on makes a final award against a Party, the 
Tribunal may award only:  
 (a) Monetary damages and a ny applicable interest;  or 
  (b) restitution of property, in which case the award shall provide that the disputing Party 
may pay monetary damages and any appli cable interest in lieu of restitution. 
 
A Tribunal may also award costs in accordanc e with the applicable arbitration rules. 
2. Subject to paragraph 1, where a claim is made under Article 10.18(1): 
  (a) An award of restitution of property sha ll 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. 
 3. For the purposes of paragraphs 1 and 2, the da mages shall be determined in the currency in 
which the investment was made. 
 
4. The award shall be made without prejudice to the rights that a third party with legal interest 
may have in the relief for the damages incurred, under the applicable law.  WT/REG196/1 
 Page 95 
 
 
 Article 10.37 
Finality and Enforcement of an Award  
1. An award made by a Tribunal established under this Section sha ll have no binding force 
except between the disputing parties and in respect of the particular case.  
2. Subject to paragraph 3 and the applicable review, clarification or annulment procedure for an 
award provided for by the relevant mechanism whic h is appropriate in the opinion of the Secretary-
General, a disputing party shall abide by and comply with an award without delay. 
 3. A disputing party may 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  the award was rendered and no disputing 
party has requested revision or annulment of the award;  or 
 
 (ii) clarification, revision or annulment  proceedings have been completed;  and 
  (b) in the case of a final award under the ICSID Additional Facility Rules or the 
UNCITRAL Arbitration Rules: 
 
 (i) Three (3) months have elapsed from the date the award was rendered and no 
disputing party has commenced a proceedi ng to revise, set aside or annul the 
award;  or 
  (ii) a tribunal of the disputing Party has dismissed or allowed an application 
submitted by one of the disputing Parti es to revise, set aside or annul the 
award and there is no further appeal. 
 4. Each Party shall provide for the enfo rcement of an award in its territory. 
 5. If a disputing Party fails to abide by or comply with a final award, the Commission, on 
delivery of a request by a Party whose investor was a party to the arbitration proceeding, shall 
establish a panel under Article 20.08 (Request for an Arbitral Panel).  The requesting Party may seek 
in such proceedings:   (a) A determination that the failure to ab ide by or comply with the final award is 
inconsistent with the obligati ons of this Agreement;  and 
  (b) a recommendation that the Party abid e by or comply with the final award. 
 6. A disputing investor may seek enforc ement 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 5. 
 7. A claim that is submitted to arbitration under this  Section shall be considered to arise out of a 
commercial relationship or transaction for the purpos es of Article 1 of the New York Convention and 
Article 1 of the Inter-American Convention. WT/REG196/1 
Page 96  
 
 Article 10.38 
General Provisions
 
Time when a claim is submitted to arbitration proceedings 
1. A claim is submitted to arbitr ation under this Section when: 
 
 (a) The request for arbitration under paragr aph 1 of Article 36 of the ICSID Convention 
has been received by the Secretary-General; 
  (b) the notice of arbitration under Article 2 of Schedule C of the ICSID Additional 
Facility Rules has been received by the Secretary-General;  or 
 
 (c) the notice of arbitration given unde r the UNCITRAL Arbitration Rules has been 
received by the disputing Party. 
Delivery of notices and other documents 
2. Delivery of the notice and other documents to  a Party shall be made to the place named for 
that Party in Annex 10.38(2). 
Receipts under insurance or guarantee contracts 
3. In an arbitration proceeding under this Sec tion, a Party shall not assert, as a defence, 
counterclaim, right of setoff or otherwise, that th e disputing investor has received or will receive, 
pursuant to an insurance or guarantee contract, inde mnification or other compensation for all or part 
of its alleged damages. 
Publication of an award 
4. Awards shall be published only if an agreemen t to this effect between the disputing Parties 
exists in writing. 
Article 10.39 
Exclusions
 
The dispute settlement provisions of this Sec tion or of Chapter 20 (Dispute Settlement) shall 
not apply to the matters re ferred to in Annex 10.39. 
Section C – Definitions  
Article 10.40 
Definitions  
For the purposes of this Chapter: 
ICSID  means the International Centre for Settlement of Investment Disputes; 
New York Convention  means the United Nations C onvention on the Recognition and 
Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;  WT/REG196/1 
 Page 97 
 
 
 Inter-American Convention  means the Inter-American C onvention on International 
Commercial Arbitration, done at Panama, 30 January 1975; 
ICSID Convention  means the Convention on the Settleme nt of Investment Disputes between 
States and Nationals of other States, done at Washington, 18 March 1965; 
enterprise means "enterprise" as defined in Chapter 2 (General Definitions); 
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 Party and carrying out business activities there; 
investment :  any kind of goods or rights of any nature acquired or used with the purpose of 
obtaining an economic profit or for other business purposes, acquired with resources transferred or 
reinvested by an investor, and including: 
 (a) An enterprise, shares in an  enterprise, shares in the capita l of an enterprise that allow 
the owner to participate in its income or profits; debt securities of an enterprise and 
loans to an enterprise where: 
   (i) Where the enterprise is an affiliate of the investor;  or 
 
 (ii) where the original maturity of the debt security or loan is at least three 
(3) years; 
  (b) an interest in an ente rprise that entitles the owner to  share in the assets of that 
enterprise on dissolution, other than a debt security or a loan excluded from 
subparagraph (a); 
  (c) real estate or other property, tangible or intangible, including rights in the intellectual 
property field, as well as any other proprie tary right (such as mortgages, liens, 
usufruct and similar rights) acquired with the expectation or used for the purpose of 
economic benefit or other business purposes; 
  (d) interests or benefits arising from the commitment of capital or other resources in the 
territory of a Party to economic activity, such as under: 
  (i) contracts involving the presence of an investor's property in the territory of 
the Party, including concessions or cons truction or turnkey contracts;  or 
  (ii) contracts where remuneration de pends substantially on the production, 
revenues or profits of an enterprise; 
 
but investment does not mean: 
 - a payment obligation of or a credit gran ted to the State or a state enterprise; 
 
- claims to money that arise solely from:  
(i) commercial contracts for the sale of goods or services by a national or 
enterprise in the territory of a Party to an enterprise in the territory of the 
other Party;  or WT/REG196/1 
Page 98  
 
 (ii) the extension of credit in connec tion with a commercial transaction, the 
expiry date of which is in less than th ree (3) years, such as trade financing, 
other than a loan covered by the pr ovisions on a loan to an enterprise 
pursuant to subparagraph (a);  or 
- any other monetary claim that does not i nvolve the kinds of interest set out in 
subparagraphs (a) to (d); 
disputing investor  means an investor that makes a claim under Section B of this Chapter; 
investment of an investor of a Party  means an investment owned or controlled directly or 
indirectly by an investor of such Party; 
In the case of an enterprise, an investment is th e property of an investor of a Party if this 
investor holds more than fifty (50) per cent of its equity interest. 
An investment is controlled by an investor of a Party if the investor has the power to: 
(i) Appoint a majority of the directors;  or 
  (ii) legally manage its operations in any other way; 
 
investor of a Party  means a Party or State enterprise ther eof, or a national or an enterprise of 
such Party, that seeks to make, is making or has made , as applicable, an investment in the territory of 
the other Party.  The intention of making an investment may be demonstrated, inter alia , by means of 
legal acts aimed at realizing an investment or by the process of committing the necessary resources in 
order to realize an investment. 
disputing Party  means the Party against which a clai m is made under Section B of this 
Chapter; 
disputing party  means the disputing investor or the disputing Party; 
disputing parties  means the disputing investor and the disputing Party; 
claim  means the claim made by the disputing invest or against a Party under Section B of this 
Chapter; 
UNCITRAL Arbitration Rules  means the arbitration rules of the United Nations 
Commission on International Trade Law, approved by the United Nations General Assembly on 
15 December 1976; 
Secretary-General  means the Secretary-General of ICSID; 
transfers  means transfers and international payments; 
Tribunal  means an arbitration tribunal est ablished under Article 10.21;  and 
Consolidation Tribunal  means an arbitration tribunal established under Article 10.27.  WT/REG196/1 
 Page 99 
 
 
 ANNEX 10.38(2) 
Delivery of Notices and Other Documents  
1. For the purposes of Article 10.38(2), the place for delivery of notices and other documents is: 
  (a) For Costa Rica: 
Directorate-General of Foreign Trade ("Dirección General de Comercio Exterior") or 
its successor Foreign Trade Centre ("Centro de Comercio Exterior") Paseo Colón, San José, Costa Rica 
 (b) for El Salvador: 
Trade Policy Directorate of the Ministry of Economic Affairs ("Dirección de Política 
Comercial, Ministerio de Economía") or its successor Alameda Juan Pablo II, Calle Guadalupe, Edificio C-2, Planta 3 Centro de Gobierno San Salvador, El Salvador 
 (c) for Guatemala: 
Ministry of Economic Affairs ("Ministerio de Economía") or its successor 8ª. Avenida 10-43, Zona 1 Guatemala, Guatemala 
 (d) for Honduras: 
Secretariat of State for Industry and Trade ("Secretaría de Estado en los Despachos de 
Industria y Comercio") 
Directorate-General of Treaty Administration ("Dirección General de Administración de Tratados") or its successor 
  Calle Peatonal, Antiguo local de Lloyds Bank, Segundo Piso 
Tegucigalpa, Honduras 
 (e) For Nicaragua: 
Directorate-General of Foreign Trade ("Dirección General de Comercio Exterior") or its successor Ministry of Development, Industry and Trade ("Ministerio de Fomento, Industria y Comercio") Km. 6 Carretera a Masaya 
Managua, Nicaragua 
 (f) For Panama: 
Ministry of Trade and Industry ("Ministerio de Comercio e Industrias")  Vice-Ministry of Foreign Trade ("Viceministerio de Comercio Exterior") or its successor 
National Directorate of International Tr ade Negotiations ("Dirección Nacional de 
Negociaciones Comerciales Internacionales") Vía Ricardo J. Alfaro, Plaza Edison, Piso #3 Panama, Republic of Panama 
2. The Parties shall report any change in the place for delivery of notices and other documents. WT/REG196/1 
Page 100  
 
 CHAPTER 11:  CROSS-BORDER TRADE IN SERVICES 
Article 11.01 
Definitions
 
For the purposes of this Chapter: cross-border trade in services or cross-border service means the provision of a service: 
 (a) From the territory of a Party into the territory of the other Party; 
  (b) in the territory of a Party to a services consumer of the other Party;  or   (c) by a service provider of a Party, through the presence of physical persons, in the 
territory of the other Party; 
 but does not include the provision of a service in the territory of a Party by an investment in that 
territory, as defined in Article 10.40 (Definitions); 
enterprise  means "enterprise" as defined in Chapter 2 (General Definitions); 
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 Party and carrying out business activities there; 
service provider of a Party  means a person of the Party that seeks to provide or provides a 
cross-border service; 
quantitative restriction  means a non-discriminatory measure that imposes limitations on: 
 (a) The number of service providers, whether in the form of a quota, a monopoly or an 
economic needs test, or by any other quantitative means;  or 
  (b) the operations of any service provider, whet her in the form of a quota or an economic 
needs test, or by any other quantitative means; 
 
specialty air services  means cross-border aerial mapping, aerial surveying, aerial 
photography, forest fire management, fire fighti ng, aerial advertising, glider towing, parachute 
jumping, aerial construction, heli- logging, aerial sightseeing, flight training, aerial inspection and 
surveillance, and aerial spraying services;  and 
services provided in the performance of government functions means all cross-border 
services provided by a public institution that are provided in non-commercial conditions and do not 
compete with one or more service providers. 
Article 11.02 
Scope and Coverage
 
1. This Chapter applies to measures adopted or maintained by a Party relating to cross-border 
services provided by service providers of the other Party, including measures regarding: 
 
 (a) The production, distribution, marketing, sale and delivery of a cross-border service;  WT/REG196/1 
 Page 101 
 
 
  
 (b) the purchase or use of, or payment for, a cross-border service;   (c) the access to and use of distribution and transportation systems in connection with the 
provision of a cross-border service; 
 
 (d) the presence in its territory of a cross-border service provider of the other Party;  and   (e) the provision of a bond or other form of financial security as a condition for the 
provision of a cross-border service. 
 
2. For the purposes of this Chapter, measures adopt ed or maintained by a Party include measures 
adopted or maintained by a non-governmental body in  the exercise of a regulatory, administrative or 
other governmental authority delegated to it by that Party.  
3. This Chapter does not apply to: 
  (a) Subsidies or donations accorded by a Pa rty or a State enterprise, including loans, 
guarantees and insurance supported by a Party; 
  (b) air services, including domestic and international air transportation services, whether 
scheduled or non-scheduled, and related services in support of air services, other 
than: 
  (i) Aircraft repair and maintenance services during which an aircraft is 
withdrawn from service; 
 
  (ii) specialty air services;  and    (iii) computerized reservation systems;   (c) government services or functions, such as law enforcement, correctional services, 
income security or insurance, social securi ty, social welfare, public education, public 
training, health and child care; 
  (d) cross-border trade in financial services;  or  
 (e) procurement by a Party or a State enterprise. 
 4. Nothing in this Chapter sha ll be construed to impose any obligation on a Party with respect to 
a national of the other Party seeking access to its employment market, or employed on a permanent basis in its territory, or to confer any right on that  national with respect to such access or employment. 
Article 11.03 
National Treatment
 
Each Party shall accord to cross-border services and service providers of the other Party 
treatment no less favourable than that it accords to its own like services and like service providers. WT/REG196/1 
Page 102  
 
 Article 11.04 
Most-Favoured Nation Treatment
 
Each Party shall immediately and unconditiona lly accord to cross-border services and service 
providers of the other Party treatment no less favourable than it accords to like services and like service providers of any other country. 
Article 11.05 
Standard of Treatment
 
Each Party shall accord to cross-border service s and service providers of the other Party the 
better of the treatment required by Articles 11.03 and 11.04. 
Article 11.06 
Local Presence  
No Party may require a service provider of th e other Party to establish or maintain a 
representative office or any form of enterprise, or to  be resident, in its territory as a condition for the 
cross-border provision of a service. 
Article 11.07 
Granting of Permits, Authorizations, Licenses and Certificates  
For the purpose of ensuring that any measure that  a Party adopts or maintains in relation to 
the requirements and procedures for granting perm its, authorizations, licenses and certificates to 
nationals of the other Party do es not constitute an unnecessary barr ier to cross-border services, each 
Party shall endeavour to ensure that such measures: 
 (a) Are based on objective and transparent cr iteria, such as the capacity and ability to 
provide a cross-border service; 
  (b) are not more burdensome than necessar y to ensure the quality of a cross-border 
service;  and 
 
 (c) do not constitute a disguised restriction on the provision of a cross-border service. 
Article 11.08 
Reservations
 
1. Articles 11.03, 11.04 and 11.06 do not apply to: 
  (a) Any existing non-conforming measure that is maintained by: 
 
  (i) A Party at the national level, as set out in its Schedule to Annex I;  or    (ii) a local or municipal government;   WT/REG196/1 
 Page 103 
 
 
  (b) the continuation or prompt renewal of  any non-conforming measure referred to in 
subparagraph (a);  or 
  (c) an amendment to any non-conforming measur e 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 11.03, 11.04 and 11.06. 
 2. Articles 11.03, 11.04 and 11.06 shall not appl y to any measure that a Party adopts or 
maintains with respect to sectors, subsectors or activities, as set out in its  Schedule to Annex II. 
Article 11.09 
Non-Discriminatory Quantitative Restrictions
 
1. Each Party shall set out in its Schedule to Annex V any non-discriminatory quantitative 
restrictions that it maintains.  2. Each Party shall notify the other Party of any non-discriminatory quantitative restriction, 
other than those at local or municipal government leve l, that it adopts after the date of entry into force 
of this Agreement and shall set out the restric tion in the Schedule referred to in paragraph 1. 
 3. The Parties shall periodically, but in any even t at least every two (2) years, endeavour to 
negotiate the liberalization or removal of:  
 (a) The quantitative restrictions maintained by a Party set out in the schedule referred to 
in paragraph 1;  and 
  (b) quantitative restrictions adopted by a Pa rty after this Agreement comes into force. 
Article 11.10 
Denial of Benefits
 
Subject to prior notification and consultation in accordance with Articles 18.04 (Provision of 
Information) and 20.06 (Consultations), a Party may deny the benefits of this Chapter to a service 
provider of the other Party where the Party establis hes that the service is being provided by an 
enterprise that has no substantial business activities in the territory of the other Party and, in 
accordance with the law of that other Party, is owned or controlled by persons of a non-Party. 
Article 11.11 
Future Liberalization  
Through future negotiations to be arranged by the Commission, the Parties shall seek further 
liberalization in the different services sectors, with a view to eliminating the remaining restrictions in the Schedules referred to in Article 11.08(1) and (2). 
Article 11.12 
Procedures
 
 
The Parties shall establish procedures for: WT/REG196/1 
Page 104  
 
  (a) A Party to notify the other Party and include in its relevant Schedule: 
   (i) Amendments to measures referred to in Article 11.08(1) and (2);  and 
   (ii) quantitative restrictions in accordance with Article 11.09; 
 
 (b) commitments to liberalize quantitative restrictions, licensing requirements and other 
non-discriminatory measures;  and 
  (c) consultations on reservations , quantitative restrictions or commitments with a view to 
further liberalization. 
Article 11.13 
Recognition of Higher Education Qualifications
 
Annex 11.13 sets out the rules to be followed by the Parties with regard to the recognition of 
qualifications issued by a Party. 
Article 11.14 
Disclosure of Confidential Information  
No provision in this Chapter may be constr ued as imposing on the Parties the obligation to 
provide confidential information the disclosure of which may constitute an obstacle to the observance 
of laws or be otherwise damaging to the public interest , or that may injure legitimate trade interests of 
State and private enterprises. 
Article 11.15 
Committee on Investment and Cross-Border Trade in Services  
1. The Parties establish a Committee on Investme nt and Cross-Border Trade in Services, the 
composition of which is established in Annex 11.15.  
2. The Committee shall examine matters relating to  this Chapter and to Chapter 10 (Investment) 
and, without detriment to Article 19.05(2) (C ommittees), shall have the following functions: 
  (a) Supervising the implementation and admi nistration of Chapters 10 (Investment) and 
11 (Cross-Border Trade in Services); 
 
 (b) discussing matters relating to investment and cross-border trade in services presented 
by a Party; 
  (c) examining issues related to these matt ers discussed in other international fora; 
 
 (d) facilitating the exchange of information between the Parties and cooperating in giving 
advice on investment and cross-border trade in services;  and 
  (e) establishing working groups or convening pane ls of experts on matters of interest to 
the Parties.  WT/REG196/1 
 Page 105 
 
 
 3. The Committee shall meet when necessary or at  any other time at the request of a Party.  
Representatives of other institutions may also take part  in its meetings if the relevant authorities deem 
it appropriate. 
Article 11.16 
International Freight Transportation by Road  
Annex 11.16 sets out the rules to be followed by the Parties with regard to the application of 
measures governing services of international freight transportation by road. 
ANNEX 11.13 
Recognition of Higher Education Qualifications  
Recognition of higher education qualifications 
1. Where a Party recognizes, either unilaterally or by agreement with another country, a higher 
education qualification obtained in the territo ry of the other Party or of a non-Party: 
  (a) Nothing in Article 11.04 shall be cons trued to require the Party to accord such 
recognition to higher education qualifications  obtained in the territory of the other 
Party;  and 
  (b) a Party shall afford the other Party an adequate opportunity to demonstrate that the 
higher education qualifications obtained in the territory of the other Party should also 
be recognized or to negotiate or conc lude an agreement or arrangement of 
comparable effect. 
 
Basis for recognition of higher education qualifications 
2. The Parties agree that the processes of mutual  recognition of higher education qualifications 
shall be through the establishment of standards a nd criteria for such processes, while simultaneously 
protecting consumers and safeguarding the public interest. 
 
3. The Parties shall encourage the relevant bodies, including competent government authorities 
and professional associations and colleges, where per tinent, to develop standards and criteria on the 
mutual recognition of qualifications.  4. The standards and criteria referred to in paragr aph 3 may consider the law of each Party and, 
by way of example, the following elements:  education, examinations, academic curricula, inter alia . 
 5. The Parties shall provide the detailed info rmation necessary for the recognition of higher 
education qualifications, includi ng information on academic courses, study guides and materials, 
payment of fees, examination dates, timetables and locations.  The information includes legislation, 
administrative guidelines and centrally-applied genera l measures and those prepared by governmental 
and non-governmental institutions. WT/REG196/1 
Page 106  
 
 ANNEX 11.15 
Committee on Investment and Cross-Border Trade in Services
 
The Committee on Investment and Cross-Border Trade in Services established in 
Article 11.15 shall be composed of: 
 (a) For Costa Rica, the Ministry of Foreign Trade ("Ministerio de Comercio Exterior") or 
its successor; 
  (b) for El Salvador, the Ministry of Econom ic Affairs ("Ministerio de Economía") or its 
successor; 
 
 (c) for Guatemala, the Ministry of Economic  Affairs ("Ministerio de Economía") or its 
successor; 
  (d) for Honduras, the Secretariat of State for Industry and Trade ("Secretaría de Estado 
en los Despachos de Industria y Comercio") or its successor;  and 
 
 (e) for Nicaragua, the Ministry of Development, Industry and Trade ("Ministerio de 
Fomento, Industria y Comercio") or its successor;  and 
  (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio e 
Industrias") through the Vice-Ministry of Foreign Trade ("Viceministerio de 
Comercio Exterior") or its successor. 
ANNEX 11.16 
International Freight Transportation by Road
 
1. This Annex applies to the measures adopted or maintained by a Party in relation to services of 
international freight transportation by road, and establishes a mechanism of non-discriminatory 
treatment among the Parties concerning services of international freight transportation by road. 
 2. There shall be full freedom of transit through the territories of the Parties for freight carriers 
transporting goods by road from the territory of one Party to the territory of any other Party.  3. Freedom of transit implies that in internationa l road transport, in the territory of any of the 
Parties all the Parties shall enjoy free competition in  the contracting of transportation (irrespective of 
the country of origin or destination) and free access to the entire national territory in question, 
including free-trade areas and any other portion of that territory that by its natu re may be regarded as 
extraterritorial, such as export processing zones or free zones.  
4. This Annex does not apply to: 
  (a) Local freight transport by vehicle or cabotage;   (b) local or international freight and passenger transport by rail;  and 
 
 (c) local and international passenger transport. 
  WT/REG196/1 
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 5. The Regulations on the International Inland Customs Transit Regime, Declaration Form and 
Instructions, adopted by the Parties by means of  Resolution No. 65-2001 (COMRIEDRE), adopted by 
the Council of Ministers Responsible for Econ omic Integration and Regional Development on 
16 March 2001 and amendments ther eto, as well as any other equivalent successor provisions, are 
incorporated in this Agreement and form an integral part thereof. 
 
6. With respect to international freight tran sportation by road, the Parties undertake not to 
collect any duties, taxes or payment for services ot her than those specified in Annex 11.16(6), and to 
abolish all documentation other than that re quired under the Regulations incorporated under 
paragraph 5. 
 
7. Articles 11.03, 11.04 and 11.06 apply to this Annex, irrespective of the provisions of Article 11.08.  8. Any dispute that may arise in connection with the application or interpretation of this Annex, 
including the Regulations on the International In land Customs Transit Regime, Declaration Form and 
Instructions, shall be governed by  Chapter 20 (Dispute Settlement). 
 9. Two years after this Agreement has come into  force for all the Parties, the Parties shall 
establish a work programme to examine the possib ility of introducing amendments to paragraph 4 
with a view to providing broader c overage of the road transport sector. 
CHAPTER 12:  FINANCIAL SERVICES 
Article 12.01 
Definitions
 
 For the purposes of this Chapter, the following shall be understood to mean: 
 
 Regulatory authorities :  any government body that exercises supervisory authority over 
financial services providers or financial institutions; 
 
 public entity :  a central bank or monetary authority of a Party, or any financial institution 
owned or controlled by a Party, not performing commercial functions; 
 
 enterprise :  as defined in Chapter 2 (General Definitions); 
  financial institution :  any financial intermediary or other enterprise that is authorized to do 
financial service business and that is regulated or su pervised as a financial institution under the law of 
the Party in whose territory it is located;  
 financial institution of the other Party :  a financial institution, including a branch, 
constituted under the law in force that is located in  the territory of a Party and that is owned or 
controlled by persons of the other Party; 
 
 investment :  every kind of asset or rights of any nature acquired or used for the purpose of 
economic benefit or other business purposes, acquired w ith resources transferred or reinvested by an 
investor, and including:
  
 WT/REG196/1 
Page 108  
 
  (a) An enterprise, shares of an enterprise; equity participation in an enterprise that 
entitles the owner to share in income or prof its of the enterprise; debt instruments of 
an enterprise and loans of an enterprise where: 
   (i) the enterprise is an affiliate of the investor, or 
 
 (ii) the original maturity of the debt instrument or the loan is at least three 
(3) years; 
  (b) an interest in an ente rprise that entitles the owner to  share in the assets of that 
enterprise on dissolution, other than a debt instrument or a loan excluded under 
subparagraph (a); 
  (c) real estate or other property, tangibl e or intangible, including intellectual property 
rights, and any other property rights (such as mortgages, liens, usufruct, and similar 
rights) acquired in the expectation or u sed for the purpose of economic benefit or 
other business purposes; 
  (d) interests or benefits arising from the commitment of capital or other resources in the 
territory of a Party to economic activity, such as under: 
 
 (i) contracts involving the presence of an investor's property in the territory of 
the Party, including concessions or c onstruction or turnkey contracts, or 
  (ii) contracts where remuneration de pends substantially on the production, 
revenues or profits of an enterprise;  and 
 
 (e) a loan granted by a provider of cross-border financial services or a debt instrument 
owned by the provider, except a loan to a financial institution or a debt instrument 
issued by it; 
 but investment does not include: 
 
 - a payment obligation of the State or a State enterprise or the extension of credit to the 
State or a State enterprise; 
  - monetary claims that arise solely from: 
 
 (ii) commercial contracts for the sale of goods or services by a national or 
enterprise in the territory of a Party to an enterprise in the territory of the 
other Party, or 
  (iii) the extension of credit in relation to a commercial transaction, with a 
maturity period of less than three (3) years, such as trade financing, other 
than a loan covered by subparagraph (a); 
  - any other monetary claim that does not involve the kinds of interests set out in 
subparagraphs (a) through (e); 
 
 - a loan to a financial institution or a debt instrument issued by a financial institution, 
except in the case of a loan to a financia l institution that is treated as regulatory 
capital by the Party in whose territory the institution is located; 
  WT/REG196/1 
 Page 109 
 
 
  investment of an investor of a Party :  an investment owned or controlled directly or 
indirectly by an investor of such Party.   In the case of an enterprise, an investment is ow ned by an investor of a Party if such investor 
holds more than fifty per cent (50%) of the equity interest. 
 
 An investment is controlled by the investor of a Party if the investor has power to:  
(i) Appoint a majority of directors;  or  
(ii) legally manage operations in any other way; 
 
 investor of a Party :  a Party or State enterprise thereof, or a national or an enterprise of such 
Party, that seeks to make, is making or has made an investment in the territory of the other Party.  
Intention to invest may take the form of legal acts aimed at realizing the investment or committing the 
resources necessary to realize such investment; 
 
 disputing investor :  an investor that submits to arbitration a claim  under Article 12.19 and 
Section B of Chapter 10 (Investment); 
 
 new financial service :  a financial service not provided in the territory of a Party that is 
provided in the territory of the other Party and includes any new form of delivery of a financial 
service or sale of a financial product that is not sold in the territory of the first Party; 
 
 self-regulatory organization :  any non-governmental entity, including any securities or 
futures exchange or market, securities central de pository, clearing agency, or other association or 
organization that exercises its own or dele gated regulatory or supervisory authority; 
 
 cross-border provision of financial services or  cross-border trade in financial services:   
the provision of a financial service: 
  (a) From the territory of a Party to the territory of the other Party; 
 
 (b) in the territory of a Party to a consumer of the services of the other Party;  or   (c) by a service provider of a Party through the presence of physical persons of a Party in 
the territory of the other Party; 
 
 provider of financial services of a Party:   a person of a Party whose business is the 
provision of some financial service in the territory of the Party;   provider of cross-border financial services of a Party:   an authorized person of a Party 
whose business is the provision of financial service s in the territory of the Party and who seeks to 
carry out or carries out cross-border provision of financial services;  and 
  financial service:   a service of a financial nature, including banking, insurance, reinsurance 
and any service related or auxiliary to a service of a financial nature. WT/REG196/1 
Page 110  
 
 Article 12.02 
Scope and Coverage
 
1. This Chapter applies to measures adopted  or maintained by a Party relating to: 
  (a) Financial institutions of the other Party; 
 
 (b) investors of a Party and the investments of such investors in financial institutions in 
the territory of the other Party;  and 
  (c) cross-border trade in financial services. 
 
2. Nothing in this Chapter shall be construed to prevent a Party, or its public entities, from 
carrying out or providing on an exclusive basis in its territory:   (a) Activities carried out by the monetary au thorities or any other public institution for 
the purpose of implementing monetary or foreign exchange policies; 
  (b) activities and services that form part of  public retirement plans or statutory social 
security systems;  or 
  (c) other activities or services on behalf of th e Party that have the Party's guarantee, or 
use financial resources of the Party or of its public entities. 
 3. The provisions of this Chapter shall take precedence over those of other Chapters, except 
where express reference is made to those Chapters.  
4. Article 10.11 (Expropriation and compensation) is an integral part of this Chapter. 
Article 12.03 
Self-regulatory Organizations
 
 When a Party requires that a financial institution or a provider of cross-border financial 
services of the other Party be a member, participate in, or have access to a self-regulatory organization 
in order to offer a financial service in or to its te rritory, the Party shall do everything within its power 
to ensure that the organization in question fulfils the obligations of this Chapter. 
Article 12.04 
Right of Establishment  
1. The Parties recognize the principle that the inv estors of a Party must be allowed to establish a 
financial institution in the territory of the other Pa rty, through any of the procedures for establishment 
and operation permitted by that Party's law. 
 2. Each Party may, at the time of establishment of a financial institution, impose such terms and 
conditions as are compatible with Article 12.06.   WT/REG196/1 
 Page 111 
 
 
 Article 12.05 
Cross-border Trade  
1. No Party shall increase the degree of non-confor mity with the provisions of this Agreement of 
its measures relating to cross-border trade in fi nancial services conducted by the other Party's 
providers of cross-border financial services, following the entry into force of this Agreement, except 
as provided in Section B of the Party's Schedule in Annex VI. 
 2. Each Party shall allow persons located in its territory and its own nationals, wherever located, 
to purchase financial services from cross-border financ ial service providers of the other Party who are 
located in the territory of that other Party.  Th is obligation does not require a Party to permit such 
cross-border financial service providers to do business or advertise in its territory.  Each Party may 
define the terms "advertise"  and "do business" for the purpose of this obligation. 
 3. Without prejudice to other means of prudentia l regulation of cross-border trade in financial 
services, the Party may require the registration of cr oss-border financial service providers of the other 
Party and of financial instruments. 
Article 12.06 
National Treatment
 
1. Each Party shall grant the investors of the other Party treatment no less favourable than that 
granted to its own investors in respect of the est ablishment, purchase, expansion, administration, 
conduct, operation, sale and other forms of disposal of like financial institutions and investments in 
like financial institutions in its territory. 
 2. Each Party shall grant financia l institutions of the other Party and investments of investors of 
the other Party in financial institutions, treatment no less favourable than that granted to its own like 
financial institutions and investments of its own invest ors in like financial institutions in respect of the 
establishment, purchase, expansion, administratio n, conduct, operation, sale and other forms of 
disposal of financial institutions and investments.  3. Pursuant to Article 12.05, when a Party allows  cross-border provision of a financial service, it 
shall grant the other Party's providers of cross- border financial services treatment no less favourable 
than that granted to its own providers of like financial services in respect of the provision of that 
service. 
 4. The treatment granted by a Party to like fi nancial institutions and providers of like cross-
border financial services of the other Party, whether the same or different from that granted to its own 
institutions or providers of like services, is consistent  with paragraphs 1 to 3, if it affords equality of 
opportunity in respect of competition. 
 5. Treatment by a Party does not afford equality of  opportunity in respect of competition if it 
places the other Party's like financial institutions an d providers of like cross-border financial services 
at a disadvantage in terms of their capacity to provide  financial services, as compared to the capacity 
of the Party's own like financial institutions and pr oviders of like services to provide such services. 
 WT/REG196/1 
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 Article 12.07 
Most-Favoured Nation Treatment
 
 Each Party shall grant investors of the other Pa rty, financial institutions of the other Party, 
investments of investors in financial institutions a nd providers of cross-border financial services of the 
other Party, treatment no less favourable than that granted to investors, like financial institutions, 
investments of investors in like financial institu tions and providers of lik e cross-border financial 
services of the other Party or of a non-Party. 
Article 12.08 
Recognition and Harmonization  
1. In applying the measures set forth in this Chapter, a Party may recognize the prudential 
measures of the other Party or of a non-Party.  Such recognition may be: 
  (a) Accorded unilaterally;   (b) achieved through harmonization or other means; 
 
 (c) based on an agreement or arrangement  with the other Party or a non-Party. 
 2. A Party that accords recognition of prudentia l measures under paragraph 1, shall afford the 
other Party adequate opportunity to demonstrate the existence of circumstance s in which there are or 
will be equivalent regulations, s upervision and implementation of re gulations and, where appropriate, 
procedures for the sharing of information between the Parties. 
 3. When a Party accords recognition of pruden tial measures under paragraph 1(c) and the 
circumstances referred to in paragraph 2 exist, th at Party shall afford the other Party adequate 
opportunity to negotiate accession to the agreement or arrangement, or to ne gotiate a like agreement 
or arrangement. 
 4. Nothing in this Article shall be taken to m ean implementation of a compulsory mechanism for 
review by one Party of the financial system  or prudential measures of the other Party. 
Article 12.09 
Exceptions
 
1. Nothing in this Chapter sha ll be construed to prevent a Party from adopting or maintaining 
prudential measures such as:   (a) Protection of fund managers, investors,  depositors, financial market participants, 
policy holders or claimants, or persons to whom a fiduciary duty is owed by a 
financial institution or provider of cross-border financial services; 
  (b) maintenance of the safety, soundness, in tegrity or financial liability of financial 
institutions or providers of cro ss-border financial services;  and 
  (c) ensuring the integrity and stability of a Party's financial system. 
  WT/REG196/1 
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 2. No provision of this Chapter applies to non-discriminatory measures of general application 
taken by a public entity in the implementation of monetary policies or related credit policies, or 
foreign exchange policies.  This paragraph shall not effect any Party's obligations under investment 
performance requirements in respect of the me asures covered by Chapter 10 (Investment) or 
Article 12.17. 
 
3. Article 12.06 shall not apply to any exclusive rights that a Party may grant to a financial institution to provide one of the financial services referred to in paragraph 2(b) of Article 12.02. 
 4. Notwithstanding the provisions of  paragraphs 1 to 3 of Article 12.17, a Party may prevent or 
limit transfers by a financial institution or provider  of cross-border financial services, or for the 
benefit of an affiliate or person related to such institution or ser vice provider, through proper and non-
discriminatory application of measures relating to ma intenance of the safety, soundness, integrity or 
financial liability of financial in stitutions or providers of cross- border financial services.  This 
paragraph shall apply without prejudice to any othe r provision in this Agreement that allows a Party 
to limit transfers. 
Article 12.10 
Transparency
 
1. In addition to the provisions of Article 18.03  (Publication), each Party shall ensure that any 
measure it adopts on matters relating to this Chapter shall be published officially or made known in a 
timely manner in some other written form to  the persons targeted by the measure. 
 
2. The regulatory authorities of each Party sha ll make available to those interested all 
information pertaining to requirements for comp leting and submitting an application to provide 
financial services.  
3. At the request of an applicant, the regulatory authority shall inform the latter as to the status 
of its application.  If the said authority requires further information from the applicant, it shall so 
inform the applicant without undue delay.  4. Each regulatory authority shall issue an administrative decision within one hundred and twenty (120) days at the latest following receipt of  a complete application for provision of a financial 
service from an investor in a financial institution, a financial institution or a provider of cross-border 
financial services of the other Party.  The authority shall notify its decision to the applicant without delay.  An application shall not be deemed complete  until all the relevant hearings have been held and 
all the necessary information received.  When it is  not feasible to issue the decision within one 
hundred and twenty (120) days, the regulatory author ity shall so inform the applicant without undue 
delay and shall endeavour to issue the decision within the next sixty (60) days. 
 5. Nothing in this chapter requires a Party to disclose or allow access to: 
  (a) Information about the financial affa irs and accounts of individual customers of 
financial institutions or providers of cross-border financial services;  or 
 
 (b) any confidential information the disclos ure of which may hinder application of the 
law or in any way conflict with the public interest or harm legitimate business interests of specific enterprises. WT/REG196/1 
Page 114  
 
 Article 12.11 
Committee on Financial Services
 
1. The Parties establish a Committee on Financ ial Services, the composition of which is 
indicated in Annex 12.11.  
2. The Committee shall address matters arising under this Chapter and, without prejudice to 
Article 19.05(2) (Committees) sha ll have the following functions: 
  (a) Oversee application of this Chap ter and its subseque nt development; 
 
 (b) consider issues regarding financial services referred to it by a Party; 
  (c) take part in dispute settlement proce dures pursuant to Article 12.18 and 12.19;  and 
  (d) facilitate the exchange of information between supervisory authorities and cooperate 
in the provision of advice on prudentia l regulation, seeking harmonization of 
regulatory instruments and other policy in struments, where deemed appropriate. 
 3. The Committee shall meet when necessary or at the request of a Party in order to assess 
application of this Chapter. 
Article 12.12 
Consultations
 
1. Without prejudice to Article 20.06 (Consultati ons), either Party may request consultations 
with the other Party on any matter arising under th is Agreement.  The other Party shall give 
sympathetic consideration to the request.  The co nsulting Party shall report the results of the 
consultations to the Committee at its meetings. 
 
2. Officials of the competent authorities listed in  Annex 12.11 shall participate in consultations 
under this Article.  3. A Party may request the regulatory authorities of the other Party to take part in consultations 
under this Article for the purpose of discussing measur es of general application of that other Party 
which may affect operations of financial institutions  or providers of cross-border financial services in 
the territory of the Party seeking consultation.  4. Nothing in this Article shall be construed to require financial authorities participating in 
consultations under paragraph 3 to disclose informa tion or take any action that may interfere with 
individual regulatory, supervisory, ad ministrative or enforcement matters. 
 5. Where,  for supervisory purposes, a Party n eeds information concerning a financial institution 
in the other Party's territory, or providers of cr oss-border financial service s in the other Party's 
territory, the Party may approach the competent regula tory authority in that other Party's territory in 
order to seek the information. 
  WT/REG196/1 
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 Article 12.13 
New Financial Services and Data Processing  
1. Each Party shall permit a financial institution of the other Party to provide any new financial 
service that is similar in kind to the services the Part y permits its own financial institutions to provide 
under its law.  The Party may determine the institu tional and juridical form in which the service may 
be provided and may require authorization for the pr ovision of the service.  Where such authorization 
is required, the relevant decision shall be made within a reasonable time and authorization may be 
refused only for prudential reasons, provided that such  reasons are not inconsistent with the Party's 
law and with Article 12.06 and 12.07.  
2. Each Party shall permit the fina ncial institutions of the other Part y to transfer information into 
or out of its territory for data processing, by any means authorized in the Party, when such processing 
is required in the ordinary course of business of such institutions.  3. Each Party undertakes to respect the confiden tiality of information processed in its territory 
that comes from a financial institution located in the other Party. 
Article 12.14 
Senior Management and Governing Bodies or Boards of Directors
 
1. Neither Party may require that a financial institution of the other Party hire staff of a 
particular nationality to fill senior corporate management positions or other essential offices. 
 
2. Neither Party may require that a governing body or board of directors of a financial institution 
of the other Party be comprised of nationals of the Pa rty, residents in its territory or a combination of 
the two. 
Article 12.15 
Reservations and Specific Commitments  
1. Article 12.04 to 12.07, 12.13 and 12.14 does not apply to: 
  (a) Any existing non-conforming measure that is maintained by a Party at the national 
level, as set out in Section A of its Schedule to Annex VI; 
  (b) the continuation or prompt renewal of  any non-conforming measure referred to in 
subparagraph (a);  or 
  (c) an amendment to any non-conforming meas ure 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 12.04 through 12.07, 12.13 
and 12.14. 
 2. Article 12.04 through 12.07, 12.13 and 12.14 does not apply to any measure that a Party adopts or maintains under Section B of its Schedule to Annex VI.  3. Section C of the Schedule of each Party in Annex VI may establish certain specific 
commitments of that Party. 
 WT/REG196/1 
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 4. A reservation entered in Chapters 10 (Investme nt) and 11 (Cross-Border Trade in Services) in 
respect of local presence, national treatment, most-favoured-nation treatment, senior management and governing bodies or boards of directors, shall be d eemed a reservation on Article 12.04 through 12.07, 
12.13 and 12.14, as the case may be, to the extent that the measure, sector, subsector or activity 
specified in the reservation, is covered by this Chapter. 
Article 12.16 
Denial of Benefits
 
 A Party may deny wholly or in part benef its arising from this Chapter to a provider of 
financial services of the other Party or to a provid er of cross-border financial services of the other 
Party, after notification and consultation, in acco rdance with Article 12.10 and 12.12, where the Party 
determines that the service is being provided by an enterprise that does not conduct substantial trade 
activities in the territory of that other Party and is owned or controlled by persons of a non-Party. 
Article 12.17 
Transfers  
1. Each Party shall permit all transfers that relate to an investment in its territory of an investor 
of the other Party to be made freely and without delay.  Such transfers include: 
  (a) Profits, dividends, interests, capital gain s, royalty payments, administrative costs, 
technical assistance and other charges, earnings in kind and other amounts derived from the investment; 
 
 (b) proceeds from the sale of all or any part  of the investment or from the partial or 
complete liquidation of the investment; 
  (c) payments made under a contract covering the investor or its investment, including 
payments made pursuant to a loan agreement; 
 
 (d) payments made pursuant to Article 10. 11 (Expropriation and compensation);  and 
  (e) proceeds from a dispute settlement procedur e between a Party and an investor of the 
other Party pursuant to this Chapter and Section B of Chapter 10 (Investment). 
 
2. Each Party shall permit transfers to be made in a freely convertible currency, at the market 
rate of exchange prevailing on the date of transfer.  3. No Party may require its investors to transfer, or penalize its investors that fail to transfer, the 
income, earnings, profits or other amounts derived from , or attributable to, investments in the territory 
of the other Party. 
 4. Notwithstanding paragraphs 1 and 2, a Party may establish mechanisms to prevent transfers, 
through the fair and non-discriminatory application of its laws, in cases of:   (a) Bankruptcy, insolvency or the protection of the rights of creditors; 
 
 (b) criminal offences or binding administrative decisions;   WT/REG196/1 
 Page 117 
 
 
  (c) non-compliance with the requirement to  report on currency transfers or other 
monetary instruments; 
  (d) ensuring the execution of judgements and awards handed down in dispute 
proceedings;  or 
 
 (e) ensuring the enforcement of laws and regulations on the issuing of securities and 
securities trading and operations. 
 5. Paragraph 3 shall not be cons trued to prevent a Party from imposing, through equitable and 
non-discriminatory application of its laws, any measur e relating to the subparagraphs of paragraph 4. 
Article 12.18 
Dispute Settlement Between the Parties
 
1. Chapter 20 (Dispute Settlement) applies as modi fied by this Article to the settlement of 
disputes between the Parties arising under this Chapter. 
 
2. The Committee on Financial Services shall mainta in by consensus a roster of up to eighteen 
(18) individuals including three (3) individuals of  each Party, who are willing and able to serve as 
arbitrators in disputes related to this Chapter.  In addition to meeting the requirements set in 
Chapter 20 (Dispute Settlement), the roster members shall have specialized knowledge in the area of 
finance, and broad experience gained from holding responsibilities in the finance sector or finance 
sector regulation. 
 3. In constituting an arbitral panel, the roster referred to in paragraph 2 shall be used unless the 
Parties to the dispute agree that the panel may incl ude individuals who are not included in the roster  
provided they meet the requirements set in paragr aph 2.  The president shall be selected from the 
roster. 
 4. In any dispute in which the arbitral panel finds a measure to be inconsistent with the 
obligations of this Chapter where suspension of benefits under Chapter 20 (Dispute Settlement) 
applies and the measure affects:  
 (a) Only the financial services sector, the complaining Party may suspend benefits only 
in this 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 financial services sector;  or 
  (c) any sector other than the financial ser vices sector, the complaining Party may not 
suspend benefits in the financial services sector. 
Article 12.19 
Settlement of Disputes Concerning Invest ment in Financial Services between
 
an Investor of a Party and the Other Party  
1. Section B of Chapter 10 (Investment) shall be incorporated into this Chapter and shall be a 
part thereof.  WT/REG196/1 
Page 118  
 
 2. Where an investor of the other Party submits a claim against a Party under Article 10.17 
(Claim by an Investor of a Party on its Own Beha lf) or 10.18 (Claim by an Investor of a Party on 
Behalf of an Enterprise), to arbitration under Sec tion B of Chapter 10 (Investment) and the disputing 
Party invokes Article 12.09, upon application of the disputing Party the Tribunal shall refer the matter 
in writing to the Committee for a decision.  Th e Tribunal may not proceed until it has received a 
decision under this Article. 
 3. In a referral pursuant to paragraph 1, the Co mmittee shall decide whether and to want extent 
Article 12.09 is a proper basis on which to counter th e investors' claim.  Th e Committee shall forward 
a copy of its decision to the Tribunal and the Commission.  The decision shall be binding on the 
Tribunal. 
 4. Where the Committee fails to take a decision w ithin sixty (60) days of receiving the referral 
under paragraph 1, the disputing Party or the Pa rty of the disputing investor may request the 
establishment of an arbitral panel under Article 20.08 (Request for an Arbitral Panel).  The arbitral 
panel shall be constituted in accordance with Artic le 12.8 and shall send its final report to the 
Committee and the Tribunal.  The report shall be binding on the Tribunal.  5. Where no request for the establishment of an arbitral panel pursuant to paragraph 4 has been 
made within ten (10) days of the expiration of the sixty-day period referred to in that paragraph, the 
Tribunal may proceed to settle the matter. 
 
ANNEX 12.11 
Committee on Financial Services
 
1. The Committee on Financial Services establis hed in Article 12.11 shall be composed of: 
 
 (a) For Costa Rica, the Ministry of Foreign Trade ("Ministerio de Comercio Exterior") or 
its successor, in consultation with the co mpetent authority (Central Bank of Costa 
Rica, General Superintendency of Financia l Entities ("Superintendencia General de 
Entidades Financieras"), Superintendency of Pensions ("Superintendencia de 
Pensiones") and Superintendency of Secu rities ("Superintendecia de Valores")); 
 
 (b) for El Salvador, Ministry of the Economy ("Ministerio de Economía"), 
Superintendency of the Financial Syst em ("Superintendencia del Sistema 
Financiero"), Superintendency of Secur ities ("Superintendencia de Valores"), 
Superintendency of the Pensions System  ("Superintendencia del Sistema de 
Pensiones") and Central Reserve Ba nk ("Banco Central de Reserva"); 
 
 (c) for Guatemala, Ministry of the Economy ("Ministerio de Economía"), Bank of 
Guatemala ("Banco de Guatemala" ) and Superintendency of Banks 
("Superintendencia de Bancos"); 
  (d) for Honduras, Secretary of State for Indust ry and Trade ("Secretaría de Estado en los 
Despachos de Industria y Comercio"), Ce ntral Bank of Honduras ("Banco Central de 
Honduras") and National Banking and Insurance Commission ("Comisión Nacional de Bancos y Seguros"); 
  (e) for Nicaragua, Ministry of Development, Industry and Trade (Ministerio de Fomento, 
Industria y Comercio");  Central Bank of Ni caragua ("Banco Central de Nicaragua"),  WT/REG196/1 
 Page 119 
 
 
 Superintendency of Banks a nd other Financial Institutions  ("Superintendencia de 
Bancos y de Otras Instituciones Financieras"); 
  (f) for Panama, Ministry of Trade and Indust ry ("Ministerio de Comercio e Industrias") 
through the Vice-Ministry of Foreign Trade ("Viceministerio de Comercio Exterior"), 
or its successor, in consultation with th e competent authority (Superintendency of 
Banks ("Superintendencia de Bancos"), Superintendency of Insurance and Re-
insurance ("Superintendencia de Seguro s y Reaseguros") and National Securities 
Commission  ("Comisión Nacional de Valores")). 
 
2. Each Party's principle representative sha ll be the person so appointed by each Party.  
  
CHAPTER 13:  TELECOMMUNICATIONS 
Article 13.01 
Exclusion
 
 This Chapter does not apply between Panama and Costa Rica. 
Article 13.02 
Definitions  
 For the purposes of this Chapter, the following shall be understood to mean: 
 
 intra-corporate communications :  subject to Annex 13.02(1), telecommunications through 
which an enterprise communicates:   (a) Internally or with or among its subsidia ries, branches or affiliates, as defined by each 
Party;  or 
 
 (b) on a non-commercial basis with other parti es that are key to the economic activity of 
the enterprise and that have a continuing contractual relationship with it; 
 but does not include telecommunications services pr ovided to persons other than those described 
herein; 
 authorized equipment :  terminal or other equipment that  has been approved for attachment 
to the public telecommunications transport network in accordance with a Party's conformity assessment procedures;   terminal equipment :  any analogue or digital device capable of processing, receiving, 
switching, signalling or transmitting signals by electr omagnetic means and that is connected by radio 
or wire to a public telecommunications tr ansport network at a termination point. 
  standards-related measure :  a "standards-related measure"  as defined in Article 9.01 
(Definitions);  
 monopoly :  an entity, including a consortium or a g overnmental agency, that maintains or is 
designated under its legislation, if so allowed, as the sole provider of public telecommunications 
transport networks or services in any releva nt market in the territory of a Party; WT/REG196/1 
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 conformity assessment procedure :  "conformity assessment procedure" as defined in 
Article 9.01 (Definitions) and includes the pr ocedures referred to in Annex 13.02(2); 
  protocol :  a set of rules and formats that govern th e exchange of information between two (2) 
peer entities for purposes of transferring signalling or data information; 
  principal provider or dominant operator :  a provider with the capacity to significantly 
affect the conditions of participation (from th e standpoint of prices and supply) in a given 
telecommunications services market, as a result of controlling essential installations or the use of its 
market position; 
  network termination point :  the final demarcation of the public telecommunications 
transport network at the customer's premises;  
 private telecommunications network :  subject to Annex 13.02(1), a telecommunications 
transport network that is used exclusively for intra-corporate communications or between 
predetermined individuals;   public telecommunications transport network :  the telecommunications transport network 
used to commercially operate telecommunications ser vices to meet the needs of the public generally, 
not including the terminal equipment of customer s or telecommunications transport networks beyond 
the network termination point;   telecommunications  service :  a service supplied by signal transmission and reception by 
wire, radio, optical means or other electromagnetic systems, but not including distribution by cable, 
broadcasting or other kind of electromagnetic di stribution of radio and television programmes; 
  public telecommunications transport service :  any telecommunications transport service 
required by a Party, explicitly or in effect, to be offered to the public gene rally, including telegraph, 
telephone, telex and data transmissi on, that typically involves the real-time transmission of customer-
supplied information between two (2) or more points without any point-to-point change in the form or 
content of the customer information; 
  enhanced or value-added services :  those telecommunications services employing computer 
processing applications that:  
 (a) Act on the format, content, code, protocol or similar aspects of a customer's 
transmitted information; 
  (b) provide a customer with additional, di fferent or restructured information;  or 
  (c) involve customer interaction with stored information; 
 
 telecommunications :  the transmission, emission or reception of signs, signals, written 
words, images, sounds and information of any t ype by wire, radio, optical means or other 
electromagnetic systems. 
Article 13.03 
Scope and Coverage
 
1. This Chapter applies to:  WT/REG196/1 
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 (a) Subject to Annex 13.02(1), measures adopted  or maintained by a Party in relation to 
access to and use of public telecommunica tions transport networks or services by 
persons of the other Party, including price fixing and access and use by such persons operating private networks for intra-corporate communications; 
 
 (b) measures adopted or maintained by a Party in relation to the provision of enhanced or 
value-added services by persons of the othe r Party in the territory, or across the 
borders, of the first Party;  and 
 
 (c) standards-related measures relating to att achment of terminal or other equipment to 
public telecommunications transport networks. 
 2. Except to ensure that persons operating broa dcast stations and cable systems have access to 
and use of public telecommunications transport netw orks and services, this Chapter does not apply to 
measures adopted or maintained by a Party in relati on to broadcast or cable distribution of radio or 
television programming.  3. Nothing in this Chapte r shall be construed to: 
  (a) Require a Party to authorize a person of  the other Party to establish, construct, 
acquire, lease, operate or provide telecomm unications transport networks or services; 
  (b) require a Party, or require a Party to compel any person, to establish, construct, 
acquire, lease, operate or provide telecomm unications transport networks or services 
where such networks or services are not offered to the public generally; 
 
 (c) prevent a Party from prohibiting pers ons operating private telecommunications 
transport networks from using their networ ks to provide public telecommunications 
transport networks or services to third persons;  or 
  (d) require a Party to compel any person enga ged in the broadcast or cable distribution of 
radio or television programming to make ava ilable its cable or broadcast facilities as a 
public telecommunications transport network. 
Article 13.04 
Access to and Use of Public Telecommuni cations Transport Networks and Services
 
1. For the purposes of this Article, "non-discrim inatory" shall be understood to mean on terms 
and conditions no less favourable than those accorded to any other customer or user of like public 
telecommunications transport networks or services in like circumstances.  2. Each Party shall ensure that persons of th e other Party have access to and use of any public 
telecommunications transport network or service, including private leased circuits, provided in its territory or across its borders for the conduct of  their business, on reasonable and non-discriminatory 
terms and conditions, including as set out in  the other paragraphs of this Article. 
 3. Subject to paragraphs 7, 8 and Annex 13.02(1), each Party shall ensure that such persons are 
permitted to:  
 (a) Purchase or lease, and attach terminal or other equipment that interfaces with the 
public telecommunications transport network; WT/REG196/1 
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 (b) interconnect private leased or owned circuits with public telecommunications 
transport networks in the territory, or across the borders, of that Party, including for use in providing dial-up access to and from thei r customers or users, or with circuits 
leased or owned by another person on terms and conditions mutually agreed by those 
persons, as established in Annex 13.04; 
  (c) perform switching, signalli ng and processing functions;  and 
  (d) use operating protocols of their choice, in accordance with the t echnical plans of each 
Party. 
 4. Without prejudice to the applicable legislati on, each Party shall ensure that the pricing of 
public telecommunications transport services reflects economic costs directly related to providing the 
services.  Nothing in this paragraph shall be cons trued to prevent cross-subsidization between public 
telecommunications transport services. 
 5. Subject to Annex 13.02(1), each Party shall en sure that persons of the other Party may use 
public telecommunications transport networks or services for the movement of information in its 
territory or across its borders, including for in tra-corporate communications, and for access to 
information contained in databases or otherwise stor ed in machine-readable form in the territory of 
the other Party. 
 6. In addition to Article 21.02 (General Exceptions ), nothing in this Chapter shall be construed 
to prevent a Party from adopting or enforcing any measure necessary to:  
 (a) Ensure the security and confidentiality of messages;  or 
  (b) protect the privacy of subscribers to pub lic telecommunications transport networks or 
services. 
 7. In addition to Article 13.06 , each Party shall ensure that no condition is imposed on access to 
and use of public telecommunications transport ne tworks or services, other than that necessary to: 
  (a) Safeguard the public service responsibilities of providers of public 
telecommunications transport 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 transport networks or 
services. 
 8. Provided that conditions for access to a nd use of public telecommunications transport 
networks or services satisfy the criteria set out in paragraph 7, such conditions may include: 
 
 (a) A restriction on resale or shared use of such services;   (b) a requirement to use specified technical  interfaces, including interface protocols, for 
interconnection with such networks or services; 
 
 (c) a restriction on interconnection of priv ate leased or owned circuits with such 
networks or services or with circuits le ased or owned by another person, and when 
the circuits are used in the provision of public telecommunications transport networks 
or services;  WT/REG196/1 
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 (d) a licensing, permit, concession, registra tion or notification procedure which, if 
adopted or maintained, is transparent and applications filed thereunder are processed 
expeditiously. 
Article 13.05 
Conditions for the Provision of En hanced or Value-Added Services  
1. Each Party shall ensure that: 
  (a) Any licensing, permit, concession, registra tion or notification procedure that it adopts 
or maintains relating to the provision of  enhanced or value-added services is 
transparent and non-discriminatory, and th at applications filed thereunder are 
processed expeditiously;  and 
  (b) the information required under such pr ocedures conforms to the current legal 
requirements of each Party for initiating the provision of services, which may include 
compliance of the applicant's services or terminal or other equipment with the 
respective Party's standards or technical regulations. 
 2. Without prejudice to the law of each Party, no Party may require a provider of enhanced or 
value-added services to:  
 (a) Provide those services to the public generally; 
  (b) cost-justify its rates or prices;   (c) file a tariff or a price; 
 
 (d) interconnect its networks with any particular customer or network;  or 
  (e) conform with any particular standard or  technical regulation for interconnection other 
than for interconnection to a public te lecommunications transport network. 
 
3. Notwithstanding paragraph 2(c), a Party may require the filing of a tariff by: 
  (a) A services provider in order to remedy a practice of that provider that the Party has 
found in a particular case to be anticompetitive under its law;  or 
 
 (b) a monopoly, principal provider or domina nt operator to which Article 13.07 applies. 
Article 13.06 
Standards-Related Measures
 
1. Each Party shall ensure that its standards -related measures relating to the attachment of 
terminal or other equipment to the public tel ecommunications transport networks, including those 
measures relating to the use of testing and measuring equipment for conformity assessment 
procedures, are adopted or maintain ed only to the extent necessary to: 
  (a) Prevent technical damage to public  telecommunications transport networks; 
 WT/REG196/1 
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  (b) prevent technical interference with, or  degradation of, public telecommunications 
transport services; 
  (c) prevent electromagnetic interference, and ensure compatibility, wi th other uses of the 
electromagnetic spectrum; 
 
 (d) prevent billing equipment malfunction;   (e) ensure user safety and access to public telecommunications transport networks or 
services;  or 
 
 (f) ensure efficient use of the electromagnetic spectrum.  2. A Party may require approval for the attach ment to the public telecommunications transport 
network of terminal or other equi pment that is not authorized, provided that the criteria for approval 
are consistent with paragraph 1. 
 3. Each Party shall ensure that the network te rmination points for its public telecommunications 
transport networks are defined on a reasonable and transparent basis. 
 4. No Party may require separate authorization fo r equipment that is connected on the customer's 
side to authorized equipment that serves as a protective device fulfilling the criteria of paragraph 1. 
 5. Each Party shall:   (a) Ensure that its conformity assessme nt procedures are transparent and non-
discriminatory and that applications file d thereunder are processed expeditiously; 
  (b) permit any technically qualified entity to perform the testing required under the 
Party's conformity assessment procedures for terminal or other equipment to be attached to the public telecommunications tr ansport network, subject to the Party's 
right to review the accuracy and completeness of the test results;  and 
 
 (c) ensure that any measure that it adopts or  maintains requiring persons to be authorized 
to act as agents for suppliers of teleco mmunications equipment before the Party's 
relevant conformity assessment bodies is non-discriminatory. 
 
6. Where conditions permit, each Party shall adopt, as part of its conformity assessment 
procedures, the provisions necessary to accept the test  results from laboratories or testing facilities in 
the territory of the other Party for tests perform ed in accordance with the accepting Party's standards-
related measures and procedures. 
Article 13.07 
Monopolies or Anti-Competitive Practices
 
1. Where a Party maintains or designates a monopoly or where there is a principal provider or a 
dominant operator to provide public telecommunica tions transport networks or services, and it, 
directly or through an affiliate, competes in the provision of enhanced or value-added services or 
other telecommunications-related services or te lecommunications-related goods, the Party shall 
ensure that the monopoly, principal provider or dominant operator does not us e its position to engage 
in anti-competitive practices in those markets, either directly or through its dealings with its affiliates, 
in such a manner as to affect adversely a person of the other Party.  Such practices may include cross- WT/REG196/1 
 Page 125 
 
 
 subsidization, predatory conduct and the di scriminatory provision of access to public 
telecommunications transport networks or services.  2. To prevent anticompetitive practices of the kind  set forth in paragraph 1, each Party shall 
adopt or maintain effective measures, such as: 
 
 (a) Accounting requirements;   (b) requirements for structural separation;  
 (c) rules to ensure that the monopoly, prin cipal provider or dominant operator accords its 
competitors access to and use of its public telecommunications transport networks or 
services on terms and conditions no less favour able than those it accords to itself or 
its affiliates;  or 
 
 (d) rules to ensure the timely discl osure of technical changes to public 
telecommunications transport networks and their interfaces. 
Article 13.08 
Transparency
 
 In addition to Article 18.03 (Publication), each Party shall make publicly available its 
measures relating to access to and use of public te lecommunications transport networks or services, 
including measures relating to: 
  (a) Tariffs or prices and other terms and conditions of service;   (b) specifications of technical interfaces with the networks or services; 
 
(c) information on bodies responsible for th e preparation and adoption of standards-
related measures affecting such access and use; 
 
(d) conditions applying to attachment of term inal or other equipment to the networks;  
and 
 
(e) notification, permit, registration, certifi cation, licensing or concession requirements. 
Article 13.09 
Relation 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 13.10 
Relation to International Or ganizations and Agreements  
 The Parties recognize the importance of intern ational standards for global compatibility and 
interoperability of telecommunication networks or services and undertake to promote those standards 
through the work of relevant international bodi es, including the International Telecommunication WT/REG196/1 
Page 126  
 
 Union, the International Organization fo r Standardization and the Inter-American 
Telecommunications Commission. 
Article 13.11 
Technical Cooperation and Other Consultations
 
1. To encourage the development of inter operable telecommunications transport services 
infrastructure, the Parties shall cooperate in the exch ange of technical information, the development of 
government-to-government training programmes and ot her related activities.  In implementing this 
obligation, the Parties shall give special emphasis to existing exchange programmes. 
 2. The Parties shall consult with a view to dete rmining the feasibility of further liberalizing trade 
in all telecommunications services, including pub lic telecommunications transport networks and 
services. 
ANNEX 13.02(1) 
Interconnection of Private Ne tworks (Private Circuits)
 
1. In the case of the Republic of Panama, the pr ivate networks used for an enterprise's private 
communications may not connect to the public tel ecommunications transport networks, nor may they 
be used to provide telecommunications services, ev en free of charge, to third parties that are not 
subsidiaries, branch offices or affiliates of the enterprise or are not owned or controlled by it. 
 2. Paragraph 1 shall cease to have effect fo r the Republic of Panama once Panama's legal 
conditions have changed to permit private telecommunications networks used for intra-corporate 
communications to interconnect to the public teleco mmunications transport ne tworks and to provide 
services to third parties that are key to the economic  activity of an entreprise and have a continued 
contractual relationship with it
. 
ANNEX 13.02(2) 
Conformity Assessment Procedures  
 For the purposes of this Chapter, c onformity assessment procedures include: 
  For El Salvador:   (a) Legislative Decree 142 of 6 November 1997, the Telecommunications Law 
("Decreto Legislativo Nº 142 del 6 de noviembre de 1997, Ley de 
Telecomunicaciones");  and 
  (b) Executive Decree 64 of 15 May 1998, Re gulations of the Telecommunications Law 
("Decreto Ejecutivo Nº 64 del 15 de mayo  de 1998, Reglamento de la Ley de 
Telecomunicaciones"); 
 
 for Guatemala:   (a) Congressional Decree 94-96, General Te lecommunications Law ("Decreto Nº 94-96 
del Congreso de la República, Ley General de Telecomunicaciones"); 
  WT/REG196/1 
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  (b) Congressional Decree 115-97, Amendments to the General Telecommunications Law 
("Decreto Nº 115-97 del Congreso de la Re pública, Reformas a la Ley General de 
Telecomunicaciones"); 
  (c) Government Resolution 574-98, Regulations  for the Operation of Satellite Systems in 
Guatemala ("Acuerdo Gubernativo Nº 574-98,  Reglamento para la Explotación de 
Sistemas Satelitales en Guatemala");  and 
  (d) Government Resolution 408-99, Regula tions for the Provision of International 
Telephone Service ("Acuerdo Gubernativo Nº 408-99, Reglamento para la Prestación 
del Servicio Telefónico Internacional"); 
  for Honduras:   (a) Decree 185-95 of 31 October 1995, Telecommunications Framework Law 
("Decreto Nº 185-95 del 31 de octubr e de 1995, Ley Marco del Sector de 
Telecomunicaciones"); 
  (b) Resolution 89-97 of 27 May 1997, Genera l Regulations of the Telecommunications 
Framework Law ("Acuerdo Nº 89-97 del 27 de mayo de 1997, Reglamento General 
de la Ley Marco del Sector de Telecomunicaciones"); 
 
 (c) Decree 244-98 of 19 September 1998 ("D ecreto Nº 244-98 del 19 de septiembre 
de 1998"); 
  (d) Decree 89-99 of 25 May 1999 ("Decreto Nº 89-99 del 25 de mayo de 1999"); 
 
 (e) Resolution OD 003/99, Gazette of 26 February 1999 ("Resolución OD 003/99, 
Gaceta del 26 de febrero de 1999");  and 
  (f) Resolution 105/98, Gazette of 11 Ju ly 1998 ("Resolución 105/98, Gaceta del 
11 de julio de 1998");  and 
 
 for Nicaragua:   (a) Law 200 of 8 August 1995, General Te lecommunications and Postal Services Law 
published in Official Gazette 154 of 18 Augus t 1995 ("Ley Nº 200 del 8 de agosto de 
1995, Ley General de Telecomunicaciones y Servicios Postales, publicada en La 
Gaceta, Diario Oficial Nº 154, del 18 de agosto de 1995"); 
  (b) Law 210 of 30 November 1995, Law Incor porating Private Parties in the Operation 
and Expansion of Public Telecommunications Services published in Official Gazette 231 of 7 December 1995 ("Ley Nº 210 del 30 de noviembr e de 1995, Ley de 
Incorporación de Particulares en la Operación y Ampliación de los Servicios Públicos 
de las Telecomunicaciones, publicada en La Gaceta, Diario Oficial Nº 231, del 7 de diciembre de 1995"); 
  (c) Decree 19-96 of 12 September 1996, Regula tions of the Genera l Telecommunications 
and Postal Services Law, published in Gazette 177 of 19 September 1996 
("Decreto Nº 19-96 del 12 de septiembre de  1996, Reglamento de la Ley General de 
Telecomunicaciones y Servicios Postales, publicado en La Gaceta Nº 177, del 19 de septiembre de 1996"); 
 WT/REG196/1 
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  (d) Law 293 of 1 July 1998, Law Amending  Law 210, published in Gazette 123 of 
2 July 1998 ("Ley Nº 293 de 1 de julio de 1998, Ley de reforma a la Ley N° 210, 
publicada en La Gaceta N° 123, del 2 de julio 1998");  and 
  (e) Nicaraguan Commercial Code of 1916 ("Código de Comercio de Nicaragua 
de 1916"). 
  for Panama:   (a) Law 31 of 8 February 1996, on the ru les governing telecommunications in the 
Republic of Panama ("Ley 31 de 8 de febr ero de 1996, por la cual se dictan normas 
para la regulación de las telecomunicaciones en la República de Panamá"); 
  (b) Executive Decree 73 of 9 April 1997, Telecommunications Regulations ("Decreto 
Ejecutivo 73 de 9 de abril de 1997, Regl amento de las telecomunicaciones"); 
 
 (c) Resolution JD-119 of 28 October 1997, wh ereby the Regulatory Body prohibits the 
importation into the Republic of Panama of wireless telephones and intercommunication equipment that do not  comply with the National Frequency 
Allocation Plan ("Resolución JD-119 de 28 de  octubre de 1997, mediante la cual el 
Ente Regulador prohibe la importación a la República de Panamá de teléfonos y 
equipos de intercomunicación inalámbricos que no cumplan con el Plan Nacional de 
Atribución de Frecuencias"); 
  (d) Resolution JD-481 of 20 April 1998,  prohibiting, until 1 January 2003, the 
importation, marketing, distribution, sale, lease, installation and/ or operation, in the 
Republic of Panama, of public and semi- public terminals, with the exception of 
Cable & Wireless Panama, S.A. ("Reso lución JD-481 de 20 de abril de 1998, 
mediante la cual se prohibe hasta el 1 de enero de 2003, la importación, mercadeo, distribución, venta, arrendamiento instalación y/u operación, en la República de Panamá, de terminales públicos y semi -públicos, con excepción de la empresa 
Cable & Wireless Panama, S.A."); 
 
 (e) Resolution JD-952 of 11 August 1998, whereby the Regulatory Body adopted 
procedures for the testing of new technology equipment requiring the use of radioelectric frequencies ("Resolución JD-952 de 11 de agosto de 1998, en virtud de 
la cual el Ente Regulador adoptó procedim ientos para pruebas de equipos de nuevas 
tecnologías que requieran el uso de frecuencias del Espectro Radioeléctrico");  and 
  (f) Resolution JD-1785 of 3 January 2000 est ablishing the procedure for registering and 
authorizing the introduction in Panamanian territory of wireless telephones or intercommunication equipment ("Resolución JD-1785 de 3 de enero de 2000, en 
virtud de la cual se estableció el procedimiento para el registro y autorización de 
introducción al territorio panameño de te léfonos o equipos de intercomunicación 
inalámbricos"). 
ANNEX 13.04 
Interconnection Of Private Circuits
 
1. For the purposes of Article 13.04, for El Sa lvador, Guatemala, Honduras and Nicaragua, the 
interconnection of private circuits to public teleco mmunications transport netw orks shall not provide  WT/REG196/1 
 Page 129 
 
 
 access to traffic originating or terminating on public telecommunications transport networks, 
irrespective of whether the private circuits are leased or owned.  2. Paragraph 1 shall apply for the Republic of Panama once Annex 13.02(1) ceases to have 
effect. 
CHAPTER 14:  TEMPORARY ENTRY OF BUSINESS PERSONS 
Article 14.01 
Definitions
 
1. For the purposes of this Chapter: 
 
 business activity  means legitimate activities of a comme rcial nature, established and carried 
out for the purpose of obtaining profits on the mark et. It does not include the possibility of obtaining 
employment, wages or remuneration from a source of employment in the territory of a Party;   labour certification  means the procedure carried out by the competent administrative 
authority to determine whether a national of a Pa rty who wishes to obtain temporary entry into the 
territory of the other Party would displace national labour in the same industry or have a significant 
adverse effect on labour co nditions in that industry; 
  temporary entry means entry into the territory of a Party by a business person of the other 
Party without intention to establish permanent residence; 
 
 national means "national" as defined in Chapter 2 (Definitions of General Application) but 
does not include permanent residents;   business person means a national who is engaged in tr ade in goods, the provision of services 
or the conduct of investment activities; 
  recurrent practice  means a practice carried out repeatedly by the immigration authorities of 
a Party over a representative period immediately prior to its most recent occurrence;  and 
 2. For the purposes of Annex 14.04: 
 
 executive functions means functions assigned by an orga nization which confer on the person 
concerned the following essential responsibilities:   (a) To direct the administration of the organization or of a relevant component or 
function thereof; 
  (b) to establish the policies and objectives of the organization, component or function;  or   (c) to be supervised  or given general di rection only by more senior executives of the 
organization, or its governing body or boar d of directors,  or the shareholders; 
 
 management functions  means functions assigned by an organization which confer on the 
person concerned the following essential responsibilities:   (a) To direct the organization or an essential function of the organization; WT/REG196/1 
Page 130  
 
  
 (b) to supervise and control the work of other professional employees, supervisors or 
administrators; 
  (c) to have the authority to hire and dismiss or recommend hiring and dismissal and to 
undertake other aspects of personnel manage ment that are under his/her direct 
supervision  and to carry out high level functions within the organization or as part of 
the duties of his/her office;  or 
  (d) to use his/her discretionary authorit y regarding the performance of duties falling 
under his/her responsibility;  and 
  functions that require specialized knowledge  means functions that involve special 
knowledge of goods, services, research, equipment, te chniques, management of the organization or its 
interests and their application on international ma rkets, or an advanced level of knowledge or 
experience of the organization's processes and procedures. 
Article 14.02 
General Principles
 
 In addition to the provisions of Article 1.02 (O bjectives), this Chapter reflects the preferential 
trade relations that exist between the Parties, th e appropriateness of facilitating temporary entry in 
keeping with the reciprocity principle and of establishing clear criteria and procedures to this end.  It 
also reflects the need to ensu re the security of borders and protect the national workforce and 
permanent employment in the Parties' respective territories. 
Article 14.03 
General Obligations  
1. Each Party shall apply its measures relating to the provisions of th is Chapter in accordance 
with Article 14.02 and, in partic ular, shall apply those measures expeditiously so as to avoid unduly 
impairing or delaying trade in goods or services or the conduct of investment activities under this 
Agreement.  2. The Parties shall endeavour to develop and adopt common criteria, definitions and 
interpretations for the implementation of this Chapter. 
Article 14.04 
Grant of Temporary Entry
 
1. Each Party shall grant temporary entry to  business persons who are otherwise qualified for 
entry under applicable measures relating to pub lic health and safety and national security, in 
accordance with this Chapter, including the provisions of Annexes 14.04 and 14.04(1). 
 
2. A Party may deny temporary entry to a bus iness person where that pe rson's temporary entry 
would adversely affect:   (a) The settlement of any labour dispute that  is in progress at the place or intended place 
of employment;  or 
  WT/REG196/1 
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  (b) the employment of any person who is involved in such dispute. 
 3. When a Party refuses temporary entry under paragraph 2, it shall: 
  (a) Inform the business person in writing of the reasons for the refusal;  and 
 
 (b) promptly notify the other Party in  writing of the reasons for the refusal. 
 4. Each Party shall limit any fees for processing applications for temporary entry of business 
persons to the approximate cost of services rendered. 
 
5. A grant of temporary entry under this Chap ter does not replace the requirements for the 
exercise of a profession or activity under the specifi c rules in effect in the territory of the Party 
granting temporary entry. 
Article 14.05 
Provision of Information
 
1. Further to Article 18.03 (Publication), each Party shall: 
  (a) Provide to the other Party such inform ation as will enable it to become acquainted 
with  any measures it adopts under this Chapter;  and 
 
 (b) no later than one (1) year after the date of  entry into force of this Agreement, prepare, 
publish and make available to those concerned,  in its own territory and in the territory 
of the other Party, explanatory material in a consolidated document regarding the 
requirements for temporary entry under this Chapter in such a manner as will enable 
business persons of the other Party to become acquainted with them. 
 
2. Each Party shall collect and maintain, and make available to the other Party information 
respecting the granting of temporary entry under th is Chapter to business persons of the other Party 
who have been issued immigration documentation, including information speci fic to each authorized 
category. 
Article 14.06 
Dispute Settlement
 
1. A Party may not initiate pro ceedings under Article 20.06 (Con sultations) regarding a refusal 
to grant temporary entry under this Chapter or a case arising specifically under Article 14.03 unless: 
  (a) The matter involves a recurrent practice;  and 
 
 (b) the business person has exhausted the rele vant available administrative remedies. 
 2. The remedies referred to in paragraph (1)(b) shall be deemed  to be exhausted if a final 
determination has not been issued by the competent authority within six months of the start of the 
administrative proceedings, and the failure to issue a determination is not attributable to delay caused 
by the business person. WT/REG196/1 
Page 132  
 
 Article 14.07 
Relation to Other Chapters
 
 Except for the provisions of this Chapter, of Chapters 1 (Initial Provisions), 2 (General 
Definitions), 19 (Administration of the Agreement)  and 22 (Final Provisions) and of Articles 18.02 
(Contact Points), 18.03 (Publication), 18.04 (Provi sion of Information) and 18.06 (Administrative 
Proceedings for the General Measures), no provisio n of this Agreement shall impose any obligation 
on a Party regarding its immigration measures. 
ANNEX 14.04 
Temporary Entry of Business Persons  
Section A – Business Visitors  
1. Each Party shall grant temporary entry a nd sent documentary confirmation to a business 
person seeking to engage in any of the business act ivities set out in Appendix 14.04(A)(1), with no 
requisites other than those established in the immigr ation measures applicable to temporary entry, on 
presentation of:  
 (a) Proof of citizenship of a Party; 
  (b) documentation demonstrating that th e business person will be so engaged and 
describing the purpose of entry;  and 
  (c) evidence demonstrating that the proposed  business activity is international in scope 
and that the business person is not seeking to enter the local labour market. 
 2. Each Party shall provide that a business pers on satisfies the requirements of paragraph 1(c) by 
demonstrating that:  
 (a) The primary source of remuneration for th e business activity is outside the territory of 
the Party granting temporary entry;  and 
  (b) the business person's principal place of business and the actual place of accrual of 
profits, at least predominantly, remain outside the territory of the Party granting temporary entry. 
 
 For the purposes of this paragraph, the Party granting temporary entry shall ordinarily accept 
a declaration as to the principal place of business an d the actual place of accrual of profits. Where the 
Party requires further proof, it sha ll act in accordance with its law. 
 
3. Each Party shall grant temporary entry to a business person seeking to engage in a business 
activity other than those set out in Appendix 14. 04(A)(1) on a basis no less favourable than that 
provided under the measures set out in Appendix 14.04(A)(3).  4. No Party may:  
 (a) As a condition for granting temporary en try under paragraph 1 or 3, require prior 
approval procedures, petitions, labour certifica tion tests or other procedures of similar 
effect;  or 
  WT/REG196/1 
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  (b) impose or maintain any numerical r estriction relating to temporary entry under 
paragraph 1 or 3. 
 5. Notwithstanding paragraph 4, a Party may require a business person seeking temporary entry 
under this Section to obtain a visa or its equivalent prior to entry.  The Parties shall consider the 
possibility of avoiding the imposition of the visa requirement or its elimination. 
Section B – Traders and Investors
 
1. Each Party shall grant temporary entry and send documentary confirmation to a business 
person acting in a capacity that is supervisor y or executive or involves specialized knowledge, 
provided that the business person otherwise complies with existing immigration measures applicable 
to temporary entry, and is seeking to: 
  (a) Carry on substantial trade in goods or ser vices principally between the territory of the 
Party of which the business person is a nati onal and the territory of the other Party 
into which entry is sought;  or 
 
 (b) establish, develop, administer or provide advice or key technical services to the 
operation of an investment to which th e business person or the business person's 
enterprise has committed, or is in the pro cess of committing, a substantial amount of 
capital. 
 
2. No Party may: 
  (a) As a condition for granting temporary entry under paragraph 1, require labour 
certification tests or other procedures of similar effect;  or 
 
 (b) impose or maintain any numerical r estriction relating to temporary entry under 
paragraph 1. 
 3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry 
under this Section to obtain a visa or its equivalent prior to entry.  The Parties shall consider the 
possibility of avoiding the imposition of the visa requirement or its elimination. 
Section C – Intra-Company Transferees
 
1. Each Party shall grant temporary entry a nd send documentary confirmation to a business 
person employed by an enterprise who seeks to carry  out management or executive functions in that 
enterprise or a subsidiary or affiliate thereof, provided that the business person otherwise complies 
with existing immigration measures applicable to temporary entry.  Each Party may require the 
business person to have been employ ed continuously by the enterpri se for one (1) year within the 
three (3) years immediately preceding the da te of the application for admission. 
2. No Party may:   (a) As a condition for granting temporary entry under paragraph 1, require labour 
certification tests or other procedures of similar effect;  or 
 
 (b) impose or maintain any numerical r estriction relating to temporary entry under 
paragraph 1. 
 WT/REG196/1 
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 3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry 
under this Section to obtain a visa or its equivalent prior to entry.  The Parties shall consider the 
possibility of avoiding the imposition of the visa requirement or its elimination. 
ANNEX 14.04(1) 
Special Provisions Regarding Temporary Entry of Business Persons
 
 For Costa Rica: 
 1. Business persons who enter Costa Rica in any of the categories set out in Annex 14.04 shall 
be deemed to engage in activities that ar e useful or beneficial for the country. 
 
2. Business persons who enter Costa Rica in any of the categories set out in Annex 14.04 shall 
be in possession of a temporary residence visa, which may be renewed for consecutive periods, provided the conditions under which it was granted are maintained.  Such persons may not apply for 
permanent residence or change their immigration status, unless they comply with the general immigration requirements established in the Gene ral Immigration Law, Law 7033 of 4 August 1986 
("Ley General de Migración y Extranjería, Ley nú mero 7033 del 4 de agosto de 1986") and the 
Enabling Regulations ("Decreto Ejecutivo 19010 del 31 de mayo de 1989").   For El Salvador:  1. Business persons who enter El Salvador in an y of the categories set out in Annex 14.04 shall 
be deemed to engage in activities that ar e useful or beneficial for the country. 
 2. Business persons who enter El Salvador in an y of the categories set out in Annex 14.04 shall 
be in possession of a 90-day temporary business visa, which may be renewed for an equal period, to 
be issued by the Directorate General of Immigr ation ("Dirección General de Migración") indicating 
the kind of business to be carried on in the country, and the holder may engage only in that activity.  
Where the nature of the activity requires remaining in the country for a longer period, a temporary 
residency permit shall be granted for a period of  one year, which may be renewed for consecutive 
periods, provided the conditions under which it was granted are maintained.  Such persons may not 
apply for permanent residence, unless they comply  with the general immigration requirements 
established in the Immigration Law, Legislative Decree 2722 of 19 December  1958 and amendments 
("Ley de Migración, Decreto Legislativo N° 2772,  del 19 de diciembre de 1958") and the Enabling 
Regulations ("Decreto Ejecutivo N°  33 del 9 de mayo de 1959"). 
  For Guatemala: 
1. Business persons who enter Guatemala in any of the categories set out in Annex 14.04 shall 
be in possession of a business visa and subject to the country's immigration laws. 
 2. Business visas shall be granted by the Directorate General of Immigration ("Dirección General de Migración") or by Guatemalan consulates duly accredited abroad.  3. Visas granted to foreigners do not imply thei r unconditional admission into the territory of the 
Republic and shall be affixed only to valid passports  or travel documents issued by the competent 
authority.   For Honduras:   WT/REG196/1 
 Page 135 
 
 
 1. Business persons who enter Honduras in any of the categories set out in Annex 14.04 shall be 
considered to engage in activities that are useful or beneficial for the country.  2. Business persons who enter Honduras in any of the categories set out in Annex 14.04 shall be 
in possession of a 90-day temporary business visa, which may be renewed for an equal period or 
consecutive periods at the discretion of the Direct orate General of Population and Immigration Policy 
("Dirección General de Población y Política Migratoria"), subject to certification that the conditions under which it was granted are maintained.  Such pe rsons may not apply for permanent residence or 
change their immigration status, unless they comp ly with the general provi sions on alien residents 
established in the Population and Immigration Polic y Law, Decree 34 of 25 September 1970 ("Ley de 
Población y Política Migratoria, Decreto N° 34 del 25 de septiembre de 1970") and Resolution 8 on 
Procedures in respect of Immigration Facilities for Foreign Investors and Business Persons of 
19 August 1988 ("Acuerdo N° 8 Pr ocedimientos Sobre Facilidades Migratorias a Inversionistas y 
Comerciantes Extranjeros del 19 de agosto de 1988").  
 For Nicaragua: 
1. Business persons who enter Nicaragua in any of  the categories set out in Annex 14.04 shall be 
considered to engage in activities that are useful or beneficial for the country.  2. Business persons who enter Nicaragua in any of  the categories set out in Annex 14.04 shall be 
in possession of a temporary residence visa, which may be renewed for consecutive periods of up to 
three years, provided the conditions under which it was granted are maintained.  Such persons may 
not apply for permanent residence or change thei r immigration status, unless they comply with the 
general requirements established in the Immigra tion Law, Law 153 published in Gazette 80 of 
30 April 1993 ("Ley de Migración, Ley Nº 153, La Gaceta Nº 80, 30 abril 1993") and the Law in respect of Alien Residents published in Gazette 81 of  3 May 1993 ("Ley de Extranjería, Ley Nº 154, 
La Gaceta Nº 81, 3 mayo 1993"). 
  For Panama:  1. Business persons who enter Panama in any of the categories set out in Annex 14.04 shall be 
considered to engage in activities that are useful or beneficial for the country. 
 
2. Business persons who enter Panama in any of the categories set out in Annex 14.04 shall be 
in possession of a temporary residence visa, which may be renewed for con secutive periods, provided 
the conditions under which it was granted are maintain ed.  Such persons may not apply for permanent 
residence or change their immigration status, unless  they comply with the general provisions of the 
Immigration Law, Decree Law No.16 of 30 June 19 60 and amendments ("Ley General de Migración, 
Decreto Ley No. 16 de 30 de junio de 1960 y su s reformas), and Cabinet Decree No.363 of 
17 December 1970 ("Decreto de Gabinete No. 363 de 17 de diciembre de 1970"). 
APPENDIX 14.04(A)(1) 
Business Visitors
 
 Research and design 
 
 - Technical, scientific and statistical r esearchers conducting independent research or 
research for an enterprise located in the territory of the other Party. 
 WT/REG196/1 
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  Growth, manufacture and production 
 
 - Purchasing and production manageme nt personnel conducting commercial 
transactions for an enterprise located in  the territory of the other Party. 
  Marketing 
 
 - Market researchers and analysts conducting research independently or for an 
enterprise located in the territory of the other Party. 
 
 - Trade fair and promotional pe rsonnel attending a trade convention. 
 
 Sales 
 
- Sales representatives and agents taking or ders or negotiating contracts for goods or 
services for an enterprise located in the terr itory of the other Party but not delivering 
goods or providing services. 
- Buyers purchasing for an enterprise locate d in the territory of the other Party. 
 After-sales service 
 
- Installers, repair and maintenance personne l, and supervisors, possessing specialized 
technical knowledge essential to a seller's c ontractual obligation, performing services 
or training workers to perform services, pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software, purchased from an enterprise located outside the 
territory of the Party into which temporary entry is sought, during the life of the 
warranty or service agreement. 
 General service 
 
- Consultants engaging in a business activit y involving the cross-border provision of 
services. 
- Management and supervisor y personnel engaging in a commercial transaction for an 
enterprise located in the territory of the other Party. 
- Financial services personnel engaging in co mmercial transactions for an enterprise 
located in the territory of the other Party.  In the case of Panama and Honduras, this category shall be defined as:  specializ ed professional personnel providing advice in 
the area of financial services for an enterpri se established in the territory of the other 
Party. 
- Public relations and adve rtising personnel consulting with business associates, or 
attending or participating in conventions. 
- Tourism personnel (tour and travel agents, t our guides or tour operators) attending or 
participating in conventions or conducting a t our that has begun in the territory of the 
other Party.  WT/REG196/1 
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 APPENDIX 14.04(A)(3) 
Existing Immigration Measures  
 For Costa Rica: 
  Sections II, III, IV, V, VII, VIII and X of the General Immigration Law, Law 7033 of 
4 August 1986 ("Ley General de Migración and Extr anjería, Ley número 7033 del 4 de agosto de 
1986") and the Regulations of the General Immigration Law, Executive Decree 19010 of 
31 May 1989 ("Reglamento a la Ley General de Migración y Extranjería, Decreto Ejecutivo número 
19010 del 31 de mayo de 1989").  
 For El Salvador: 
  (a) The Immigration Law, Legislative Decree 2772 of 19 December 1958, published in 
Official Gazette 240, Volume 171 of 23 December 1958 ("Ley de Migración, Decreto 
Legislativo N° 2772 de 19 de diciembre de 1958, Diario Oficial Nº 240, tomo 181, 
23 diciembre 1958"); 
  (b) the Regulations of the Immigrati on Law, Executive Decree 33 of 9 March 1959, 
published in Official Gazette 56, Volume  182 of 31 March 1959 ("Reglamento de la 
Ley de Migración, Decreto Ejecutivo N° 33 de 9 de marzo de 1959, Diario Oficial 
Nº 56, tomo 182, 31 marzo 1959");  and 
 
 (c) the Law in respect of Alien Residents,  Legislative Decree 299 of 18 February 1986, 
published in Official Gazette 34, Volu me 290 of 20 February 1986 ("Ley de 
Extranjería, Decreto Legislativo N° 299 de  18 de febrero de 1986, Diario Oficial 
N° 34, tomo 290, 20 febrero 1986"). 
 
 For Guatemala:   (a) Article 85 of Decree No.95-08, the Immigration Law, published in the Official 
Gazette of Central America on 23 December 1998 ("Decreto Nº 95-98, Diario Oficial de Centroamérica, 23 de diciembre de 1998");  and 
 
 (b) Article 77 of Resolution 529-99, the Immigration Regulations, published in the 
Official Gazette of Central America on 29 July 1999 ("Acuerdo Nº 529-99, 
Reglamento de Migración, Diario Oficial de Centroamérica,  29 de  Julio de 1999"). 
 
 For Honduras: 
  (a) Law on Population and Immigration Poli cy, Decree No. Nº 34 of 25 September 1979 
("Ley de Población y Política Migratoria del 25 de septiembre de 1970") and 
  (b) Resolution 8 on Procedures in respect of  Immigration Facilities for Foreign Investors 
and Business Persons of 19 August 1988 ("Acuerdo N° 8 Procedimientos Sobre 
Facilidades Migratorias a Inversionistas y Co merciantes Extranjeros del 19 de agosto 
de 1998"). 
 WT/REG196/1 
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  For Nicaragua: 
  (a) Chapter II, Articles 7 through 40 of La w 153 of 24 February 1993, published in 
Gazette 80 of 30 April 1993 ("Ley N° 153 del 24 de febrero de 1993, La Gaceta 
Nº 80 del 30 de abril de 1993"); 
 
 (b) Article 13 of Law 154 of 10 March 1 993, published in Gazette 81 of 3 May 1993 
("Ley N° 154 del 10 de marzo de 1993, La Gaceta Nº 81 del 3 mayo de 1993");  and 
  (c) Decree 628, Nicaraguan Law on Resident Pensioners or Persons of Independent 
Means, published in Gazette 264 of 19 November 1974 ("Decreto Nº 628, Ley de 
Residentes Pensionados o Rentistas de Nicaragua, La Gaceta Nº 264 del 
19 de noviembre de 1974"). 
  For Panama: 
 
 Immigration Law, Decree Law No.16 of 30 June 1960 and amendments ("Ley General de 
Migración, Decreto Ley No. 16 de 30 de junio de  1960 y sus reformas), and Cabinet Decree No.363 
of 17 December 1970 ("Decreto de Gabinete  No. 363 de 17 de diciembre de 1970").  WT/REG196/1 
 Page 139 
 
 
 PART FIVE:  COMPETITION POLICY 
CHAPTER 15:  COMPETITION POLICY, MONOPOLIES AND STATE ENTERPRISES 
Section A – Competition Policy  
Article 15.01 
Cooperation  
1. The Parties shall ensure that the benef its of this Agreement are not undermined by 
anti-competitive business practices.  They shall al so endeavour to work toward the adoption of 
common rules to avoid such practices.  2. The Parties shall endeavour to establish mechanisms to facilitate and promote the 
development of competition policy and ensure the application of rules on free competition among and 
within the Parties to avoid the adverse effects of  anti-competitive business practices in the free-trade 
area. 
Article 15.02 
Future Work Programme
 
 Within two (2) years of the entry into force of  this Agreement, the Parties shall examine, in 
the light of their relevant legislation, the possibilit y of developing and expanding the content of this 
Chapter within the limits established in the said legi slation.  In any development or expansion of the 
content of this Chapter, special reference shall be made to practices the purpose or effect of which is 
an act of any kind that unduly harms or obstructs  free economic competition and free competition in 
the production, processing, distribution, s upply or marketing of goods or services. 
Section B – Monopolies and State Enterprises  
Article 15.03 
Monopolies and State Enterprises  
1. Nothing in this Agreement shall be cons trued to prevent a Party from designating or 
maintaining a monopoly or State enterprises, provided its law so permits. 
 
2. If its law so permits, where a Party intends to designate a monopoly and the designation may affect the interests of persons of the other Party, the Party shall:   (a) Wherever possible, provide prior written notification of the designation to the other 
Party;  and 
 
(b) at the time of designation, endeavour to introduce in the operation of the monopoly 
such conditions as will minimize or elimin ate any nullification or impairment of 
benefits. 
 
3. If its law so permits, each Party shall ensure that any monopoly it designates or maintains or 
any State enterprise:  WT/REG196/1 
Page 140  
 
  (a) Acts in a manner consistent with th e Party's obligations under this Agreement 
wherever such a monopoly exercises regulatory, administrative or other governmental authority that the Party has delegated to it in connection with the monopolized goods or services such as the power to grant impor t or export licenses, approve commercial 
transactions or impose quotas, fees or other charges; 
 
 (b) accords non-discriminatory treatment to investments of investors, to goods and to 
service providers of the other Party in its purchase or sale of the monopolized goods or services in the relevant market; and  
 
 (c) does not use its monopoly position to enga ge, either directly or indirectly, in 
anticompetitive practices that adversely affect an investment of an investor of the 
other Party. 
 4. Paragraph 3 does not apply to procurement by  government agencies of goods or services for 
official purposes and not with a view to commercial resale or use in the production of goods or the 
provision of services for commercial sale.   WT/REG196/1 
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PART SIX:  GOVERNMENT PROCUREMENT 
CHAPTER 16:  GOVERNMENT PROCUREMENT 
Article 16.01 
Definitions  
 For the purposes of this Chapter: 
  offsets means conditions imposed or considered by an  entity prior to or in the course of its 
procurement process that encourage local developmen t or improve its Party's balance of payments 
accounts, by means of  requirements of local content, licensing of technology, investment, counter-
trade or similar requirements; 
  government procurement  means  any type of procurement of goods, services or public works 
or of a combination of goods, services or public wo rks envisaged in the legislation of each Party and 
carried out by the public entities of the Parties. 
 
 entities  means all public entities of the Parti es except those listed in Annex 16.01; 
  technical specification  means a specification which sets out the characteristics of goods or 
their related processes and production methods, or the characteristics of services or their related 
operating methods, and the characteristics of the works to be carried out. It may also include or deal 
exclusively with issues relating to terminology, sym bols, packaging, marking, labelling applicable to 
goods, processes, or production and operating methods;  and   privatization  means a process by means of which a public entity is released from State 
control, be it through public tendering of shares in that entity or otherwise, as provided for in the 
Parties' applicable legislation;  and 
  supplier  means a person of a Party who provides goods or services under this Chapter. 
Article 16.02 
Objective and Scope
 
1. The objective of this Chapter is to establis h and maintain a single market for government 
procurement in order to maximize business opport unities for suppliers and reduce the transaction 
costs of the public and private sectors in the Parties.  2. To attain this goal, each Party shall:  
 (a) Ensure that suppliers of the other Pa rty participate in government procurement 
processes under equal conditions; 
  (b) ensure the principles of non-discrim ination and transparency in government 
procurement processes, as established in this Chapter;  and 
 
 (c) develop mechanisms for cooperation and technical assistance. 
 WT/REG196/1 
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 3. Except as provided in Annexes 16.01 and 16.02, this Chapter shall apply to the government 
procurement processes provided for in the laws of  the Parties and procurement by their entities 
relating to:   (a) Goods; 
 
 (b) services, subject to the Annexes to Chap ters 11 (Cross-border Trade in Services) and 
12 (Financial Services);  and 
  (c) public works. 
 
4. This Chapter does not apply to government pr ocurement by the Panama Canal Authority, or 
its successor.  5. Notwithstanding paragraph 3(b), this Chapter does not apply to: 
 
 (a) Subsidies or donations accorded by a Pa rty or a State enterprise, including loans, 
guarantees and insurance supported by a Party;  and 
  (b) government services or functions, such as law enforcement, correctional services, 
income security or insurance, social securi ty, social welfare, public education, public 
training, health and child care. 
Article 16.03 
General Rights and Obligations
 
1. The Parties agree upon the following rights and obligations, as provided in this Chapter: 
 
 (a) To apply measures relating to government  procurement in a manner consistent with 
the principles of transparency and non-discr imination, and with the other provisions 
of this Chapter; 
  (b) to ensure maximum simplicity and pub licity in the application of government 
procurement measures; 
 
 (c) to maintain and promote business oppor tunities in government procurement for 
suppliers of the other Party; 
  (d) to refrain from applying measures that: 
 
  (i) Are discriminatory;    (ii) are arbitrary;  or   (iii) have the effect of denying equal access or opportunity to a supplier of the 
other Party. 
 2. No provision of this Chapter shall prevent a Party from developing a new procurement policy, 
provided it is not inconsistent with this Chapter.  WT/REG196/1 
 Page 143 
 
 
 Article 16.04 
National Treatment and Non-Discrimination  
1. With respect to procurement carried out  by entities using any government contracting 
procedure other than direct contracting, each Part y shall accord to goods, services and suppliers of the 
other Party treatment no less favourable than that it accords to its own like goods and services and 
suppliers of like goods and services. 
 2. Without prejudice to the above, in government  procurement that uses procedures other than 
from those referred to in paragr aph 1, the Parties shall adopt such measures as are reasonably 
available to ensure compliance with the ob ligations established in Article 16.03(1)(d). 
 
3. Each Party shall ensure that its entities do not demand offsets from suppliers of the other 
Party that are participating in the government procurement process.  4. This Article does not apply to measures resp ecting customs duties or other charges of any 
kind imposed on or in connection with importation, the method of levying such duties or charges or 
other import regulations, including restrictions and formalities. 
Article 16.05 
Technical Specifications
 
 Each Party shall ensure that its entities do not prepare, adopt, or apply any technical 
specification with the purpose or effect of creating unnecessary barriers to trade. 
Article 16.06 
Denial of Benefits  
 Subject to prior notification and consultati on in accordance with Articles 18.04 (Provision of 
Information) and 20.06 (Consultati ons), a Party may deny the benefits accruing under this Chapter to 
a service provider of the other Party where the Part y establishes that the service is being provided by 
an enterprise that that has no substantial business activ ity in the territory of the other Party and, in 
accordance with the law of that other Party, is owned or controlled by persons of a non-Party. 
Article 16.07 
Appeal Procedure  
1. Each Party shall maintain or, where none exist,  establish administrative or judicial procedures 
that permit, at the request of an affected supplier of the other Party, prompt review of administrative 
decisions affecting government procurement under this Chapter. 
 2. Each Party shall ensure that:   (a) Such procedures are timely, transparent a nd effective and that they comply with the 
principle of non-discrimination, conferring on suppliers the right to be heard and 
allowing them to be represented and assist ed, to submit any evidence recognized by 
the legislation of the Party, and access to  proceedings, which must be public unless 
public access is limited on legal grounds;  and 
 WT/REG196/1 
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  (b) decisions are given in writing and have a b asis in law, and are notified to the suppliers 
by the means established in the legislation of the Party. 
Article 16.08 
Modifications to Coverage
 
1. Except as provided in paragraph 4 of Article 16.02, the Parties shall hold consultations at the 
request of any of them to examine the possibility of incorporating the entitie s listed in Annex 16.01 
into this Chapter.  2. The Parties shall approve such agreemen ts in accordance with Article 19.01(3)(b) 
(Administrative Commission of the Agreement). 
Article 16.09 
Privatization
 
1. No provision of this Chapter shall be constr ued to prevent a Party from privatizing an entity 
covered in this Chapter.  In such cases, another Party may not demand compensation. 
 
2. Privatized entities shall not be subject  to the application of this Chapter. 
Article 16.10 
Information Technology  
1. The Parties shall endeavour, to the extent po ssible, to use electronic means of communication 
that permit the efficient publication of informa tion on government procurement, particularly on 
business opportunities offered by the entities. 
 
2. To obtain a wider market for government procurement, the Parties shall endeavour to implement an electronic information and intermedia tion system for their entities.  The main objective 
of the system shall be timely publication of  the business opportunities offered by the entities. 
 
3. Notwithstanding paragraphs 1 and 2, the Parti es shall apply the publication procedures set in 
their own legislation in respect of business opportunities for procurement offered by the entities. 
Article 16.11 
Committee on Government Procurement
 
1. The Parties shall establish a Committee on government procurement, the composition of 
which is established in Annex 16.11. 
 
2. Without prejudice to Article 19.05(2) (Committees), the Committee shall:   (a) Unless otherwise agreed by the Parties, re view the results of the application of this 
Chapter every two years; 
 
 (b) except as provided in Article 16.02 (4), conduct consultations a nd studies with a view 
to incorporating the entities listed in  Annex 16.01 into this Chapter; 
  WT/REG196/1 
 Page 145 
 
 
  (c) coordinate exchanges of statistical information on government procurement;  and 
  (d) coordinate and promote the design of training programmes for the competent 
authorities of the Parties. 
Article 16.12 
Cooperation and Technical Assistance
 
 The Parties shall endeavour to provide each other with cooperation and technical assistance 
through the development of training programmes, in  order to afford a better understanding of their 
respective government procurement and statistical systems and greater access to their respective 
markets. 
Article 16.13  
Relation 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 16.14 
Dispute Settlement  
 Chapter 20 (Dispute settlement) on no account appli es to any administrative/judicial decisions 
or measures taken at any stage of Parties' government procurement processes. 
Article 16.15 
Entry into Force  
 This Chapter shall take effect eighteen (18) m onths after this Agreement enters into force for 
the Parties. 
ANNEX 16.02 
Types of Procurement  
 The types of government procurement th at are excluded from this Chapter are: 
 
 (a) Government defence contracts of a strate gic nature and other procurement related to 
national security; 
  (b) government contracts to hire personnel assigned to perform duties inherent to the 
entities; 
 
 (c) government procurement funded by States,  regional or multilatera l organizations or 
individuals that impose conditions inconsistent  with the provisions of this Chapter;  
and 
  (d) concessions. 
 WT/REG196/1 
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 ANNEX 16.11 
Committee on Government Procurement
 
 The Committee on Government Procurement estab lished in Article 16.11 shall be composed 
of:  
 (a) For Costa Rica, a representative of the Ministry of Foreign Trade or his successor; 
  (b) for El Salvador, the Ministry of Econom ic Affairs ("Ministerio de Economía") or its 
successor; 
 
 (c) for Guatemala, the Ministry of the Economy ("Ministerio de Economía") or its 
successor, and the Ministry of Public Finan ce ("Ministerio de Finanzas Públicas") or 
its successor; 
  (d) for Honduras, the Secretariat of State for Industry and Trade ("Secretaría de Estado 
en los Despachos de Industria y Comercio") , the Office of the Comptroller-General of 
the Republic ("Contraloría General de la Republica"), the Directorate General of 
Administrative Probity ("Dirección General de Probidad Administrativa") and the Executive Unit of the Programme for Transp arency in Government Procurement of 
the Presidential Commission for Modernizati on of the State ("Unidad Ejecutora del 
Programa de Transparencia de las Compras de Gobierno dependiente de la Comisión 
Presidencial de Modernización de l Estado"), or its successor; 
  (e) for Nicaragua, the Directorate for Integration and Administration of Treaties of the 
Ministry of Development, Industry and Trade ("Dirección de Integración y Administración de Tratados del Ministerio de Fomento, Industria y Comercio") or its 
successor, and the Directorate  General for Government Procurement of the Ministry 
of Finance and Public Credit ("Dirección Ge neral de Contrataciones del Estado del 
Ministerio deHacienda y Crédito Público"), or its successor;  and 
  (f) for Panama, the Ministry of Trade and Industry ("Ministerio de Comercio y 
Industria"), through the Vice-Ministry of Foreign Trade("Vice ministerio de 
Comercio Exterior"), or its successor, in consultation with the Ministry of the 
Economy and Finance ("Ministerio de Economía y Finanzas") through the Directorate for Government Procurement ("Dirección de Contrataciones Públicas"), or its successor.  WT/REG196/1 
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 PART SEVEN:  INTELLECTUAL PROPERTY 
CHAPTER 17:  INTELLECTUAL PROPERTY 
Article 17.01 
Application  
 The Parties confirm the rights and obligations in force between them under the Agreement on 
TRIPS. 
Article 17.02  
Enforcement of Intellectual Property Rights  
 Each Party shall establish in its legislation effective administrative, civil and criminal 
procedures, for the purpose of securing adequate protec tion of  intellectual property rights.  All such 
procedures shall have regard for due process in r espect of both complaini ng and defending parties. 
Article 17.03 
Border Measures  
 Each Party shall adopt legislation on border measures in accordance with the Agreement on 
TRIPS. 
Article 17.04 
Transparency  
 The Parties shall notify to the Committee on In tellectual Property laws, regulations and other 
provisions on intellectual property.  Final judicial  decisions and administrative rulings of general 
application shall be published or, failing that, ma de publicly available to enable governments and 
rights holders to become acquainted with them. 
Article 17.05 
Committee on Intellectual Property  
1. The Parties establish a Committee on Intellectual Property, composition of which is 
established in Annex 17.05.  
2. The Committee shall address matters arising under this Chapter and, without prejudice to 
Article 19.05(2) (Committees), shall as its main function seek the most suitable means to apply 
Article 17.01, and shall carry out any othe r tasks assigned to it by the Commission. 
Article 17.06 
Dispute Settlement
 
 When a Party requests consultations and so in forms the Committee, the latter shall facilitate 
such consultations.  Where Parties have held cons ultations under this Article without satisfactory WT/REG196/1 
Page 148  
 
 results, such consultations sh all constitute the consultations  referred to in Article 20.06 
(Consultations), if the Parties so agree. 
ANNEX 17.05 
Committee on Intellectual Property
 
 The Committee on Intellectual Property establishe d in Article 17.05, shall be composed of: 
 
 (a) For Costa Rica, a representative of the Ministry of Foreign Trade or his successor; 
  (b) for El Salvador, the Ministry of Econom ic Affairs ("Ministerio de Economía") or its 
successor; 
 
 (c) for Guatemala, the Ministry of Economic  Affairs ("Ministerio de Economía") or its 
successor; 
  (d) for Honduras, the Secretary of State fo r Industry and Trade or his successor;   
 
 (e) for Nicaragua, the Ministry of Development, Industry and Trade ("Ministerio de 
Fomento, Industria y Comercio") or its successor;  and 
  (f) for Panama, the Ministry of Trade and I ndustry through the Vice-Ministry of Foreign 
Trade, or its successor.  WT/REG196/1 
 Page 149 
 
 
 PART EIGHT:  ADMINISTRATIVE AND INSTITUTIONAL PROVISIONS 
CHAPTER 18:  TRANSPARENCY 
Article 18.01 
Definitions  
 For the purposes of this Chapter, an "a dministrative ruling of general application"  means an 
administrative ruling or interpretation which applies to all persons and situations of fact that ordinarily 
fall within its ambit and which establishes a rule of conduct, but does not include:   (a) A determination or ruling in an administ rative proceeding that applies to a particular 
person, good or service of the other Party in a specific case;  or 
 
 (b) a ruling that adjudicates with respect to a particular act or practice. 
Article 18.02 
Contact points
 
 Each Party shall designate a contact point to  facilitate communications among the Parties on 
any matter covered by this Agreement. 
  On the request of a Party, the contact point shall identify the office or official responsible for the matter and assist as necessary in facilitati ng communication with the requesting Party. 
Article 18.03 
Publication
 
 Each Party shall ensure that its laws, regul ations, 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 the other Parties and interested persons to 
become acquainted with them. 
Article 18.04 
Provision of Information  
1. To the extent possible, each Party shall no tify to the other Party  any proposed or actual 
measure that the Party considers might affect or th at substantially affects the other Party's interests 
under this Agreement.  2. On request of another Party, a Party shall promptly provide informa tion and respond promptly 
to questions pertaining to any actual or proposed measure. 
 3. Any notification or information provided under this Article shall be without prejudice as to 
whether the measure is consis tent with this Agreement. WT/REG196/1 
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 Article 18.05 
Safeguards of Hearings, Legality and Due Process
 
 Each Party shall ensure that judicial and ad ministrative procedures relating to the application 
of any of the measures referred to in Article 18.03 observe the safeguards that  their respective laws 
enshrine in respect of hearings, legality and due process, within the meaning of Articles 18.06 and 
18.07. 
Article 18.06 
Administrative Proceedings for the Adoption of Measures of General Application  
 With a view to administering in a consistent , impartial and reasonable manner all measures of 
general application that affect matte rs covered by this Agreement, each  Party shall ensure that, in its 
administrative proceedings in which the measures referred to in Article 18.03(1) are applied to 
particular persons, goods or services of the other Party in specific cases:   (a) Wherever possible, persons of that other Party that are directly affected by a 
proceeding are given reasonable notice, in accordance with domestic procedures, of 
the initiation of the proceeding as well as a description of the nature of the 
proceeding, a statement of the legal author ity under which the pr oceeding is initiated 
and a general description of all the issues in dispute; 
  (b) such persons are afforded a reasonable opportunity to present facts and arguments in 
support of their claims prior to any final ad ministrative action, when time, the nature 
of the proceeding and the public interest permit;  and 
  (c) its procedures are consistent with domestic law. 
Article 18.07 
Review and Appeal
 
1. Each Party shall maintain judicial or ad ministrative tribunals or  procedures in accordance 
with its legislation, for the purpose of the prompt review and, where warranted, correction of final 
administrative decisions on matters covered by this Ag reement. Such tribunals shall be impartial and 
independent of the office or authority entrusted with  administrative enforcement of the law and shall 
not have any substantial interest  in the outcome of the matter. 
 
2. Each Party shall ensure that, in any such tr ibunals or proceedings, the parties have the right 
to:   (a) A reasonable opportunity to support or defend their respective positions;  and 
 
 (b) a decision based on the evidence and submissions. 
 3. Each Party shall ensure, subject to appeal or  further review as provided in its domestic law, 
that such decisions shall be implem ented by the offices or authorities.  WT/REG196/1 
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 Article 18.08 
Communications and Notifications  
1. For the purposes of this Agreement, all comm unications or notifications addressed to a Party 
or sent by a Party shall be made through its national Section of the Secretariat, briefly informing the 
national Sections of the other Parties of that event. 
 
2. Except as otherwise provided, a communication or notification shall be considered delivered upon its receipt by the national Section of the Party's Secretariat. 
CHAPTER 19:  ADMINISTRATION OF THE AGREEMENT 
Section A – Commission, Subcommission and Secretariat
 
Article 19.01 
Administrative Commission of the Agreement  
1. The Parties hereby establish the Administrative Commission of the Agreement, comprising 
the officials mentioned in Anne x 19.01(1) or their designees. 
 
2. The Commission shall: 
  (a) Supervise compliance with and pr oper implementation of this Agreement; 
  (b) evaluate the results of the implementation of this Agreement;  
 (c) monitor developments and recommend to the Parties any amendments it deems 
appropriate; 
  (d) resolve disputes that may arise regarding the interpretation or implementation of this 
Agreement, as established in Chapter 20 (Dispute Settlement); 
 
 (e) supervise the work of all committees est ablished under this Agreement, in accordance 
with Annex 19.05(3);  and 
  (f) consider any other matter that may aff ect the operation of this Agreement and any 
other matter referred to it by the Parties. 
 
3. The Commission may:   (a) Create any ad hoc or standing committees and groups of experts needed to implement 
this Agreement, and establish their terms of reference; 
 
 (b) modify in fulfilment of the objectives of this Agreement:   (i) The schedule of products of a Party set out in Annex 3.04(2) (Tariff 
Elimination Programme) to include one  or more goods that are excluded 
under that programme; 
 WT/REG196/1 
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  (ii) the dates set out in Annex 3.04( 2) (Tariff Elimination Programme) to 
accelerate tariff elimination; 
 (iii) the rules of origin established in  Annex 4.03 (Specific Rules of Origin); 
  (iv) the Uniform Regulations; 
 
 (v) incorporate sectors or subsectors of  services subject to standards-related 
measures, metrology or approval procedures pursuant to Article 9.12(g); 
  (vi) Annexes I, II, III and IV of Chapter 10 (Investment); 
 
 (vii) Annexes I, II and III of Chapter 11 (Cross-Border Trade in Services);   (viii) Annex VI of Chapter 12 (Financial Services);  and  
 (ix) the list of entities of a Party established in Annex 16.01(Entities) to include 
one or more entities in Chapter 16 (Government Procurement); 
  (c) seek the advice of non-governmental persons or groups;   (d) prepare and approve the regulations n eeded for implementation of this Agreement; 
and 
  (e) take such other action in the exercise of its functions as the Parties may agree.  4. The modifications referred to in paragraph 3(b) shall be implemented by the Parties in 
accordance with Annex 19.01(4). 
 5. Notwithstanding paragraph 1, the Commi ssion may meet and take decisions when 
representatives of Panama and one or more Central American countries are present, in order to consider matters of bilateral interest to those Pa rties, provided the other Party or Parties are given 
sufficient notice to enable them to take part in the meeting. 
 
6. The decisions adopted by the Commission pursu ant to paragraph 5 shall not apply to a Party 
that did not attend the meeting.  7. The Commission shall establish its rules and procedures. 
 
8. The Commission shall convene at least once a year in regular session, and shall convene by 
request of a Party in special session.  The location of  the meeting shall rotate between the Parties.  In 
the case of Central America, rotation between the Parties shall take place in alphabetical order. 
Article 19.02 
Administrative Subcommission of the Agreement
 
1. The Parties hereby establish the Administra tive Subcommission, comprising the officials 
mentioned in Annex 19.02 or their designees.  2. The Administrative Subcommission shall:  
 (a) Prepare and review the technical f iles necessary for taking decisions under the 
Agreement;  WT/REG196/1 
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 (b) follow up on the decisions of the Commission;   (c) without prejudice to Article 19.01(2), it may also oversee the work of all the 
committees, subcommittees and groups of e xperts established under this Agreement 
pursuant to Article 19.05(3);  and 
  (d) examine any other matter that could affect the operation of this Agreement referred 
by the Commission. 
 
3. The Commission may establish rules and procedures to ensure proper operation of the 
Administrative Subcommission. 
Article 19.03 
Secretariat
 
The Commission shall establish and oversee a Secretariat comprising national Sections. 
 
1. Each Party shall:   (a) establish a permanent office to serve as th e national Section of its Secretariat, and 
shall notify to the Commission the address of its national Section; 
 
 (b) be responsible for: 
   (i) The operation and costs of its Section;  and  
(ii) the remuneration and payment of expe nses of panellists, their assistants, and 
experts appointed under this Agreemen t, as set out in Annex 19.03;  and 
  (c) designate an individual to serve as Secretary for its Section, who shall be responsible 
for its administration. 
 2. The Secretariat shall: 
 
 (a) Provide assistance to the Commission and the Subcommission;   (b) provide administrative assistance to ar bitral panels established under Chapter 20 
(Dispute Settlement), in accordance w ith procedures established pursuant to 
Article 20.12 (Model Rules of Procedure); 
  (c) as the Commission may direct, support the work of other committees, subcommittees 
and groups of experts estab lished under this Agreement; 
  (d) make communications and notifica tions as provided in Article 18.08 
(Communications and Notifications);  and 
  (e) carry out other functions referred by the Commission. WT/REG196/1 
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 Section B – Committees, Subcommittees and Groups of Experts
 
Article 19.04 
General Provisions  
1. The provisions of this section shall apply, on  a complementary basis,  to all the committees, 
subcommittees and groups of experts established under this Agreement. 
 
2. Each committee, subcommittee and group of e xperts shall be comprised of representatives of 
each of the Parties and all decisions shall be taken by consensus.  3. Notwithstanding paragraph 2, a committee, s ubcommittee or group of experts may meet and 
take decisions without all of their members be ing present when discussing matters exclusively of 
interest to Chile and one or mo re Central American countries, pr ovided that the representatives of 
those Parties are present and that the other Part ies are notified of the agenda of the meeting 
sufficiently in advance.  
4. For Chapters 8 (Sanitary and Phytosanita ry Measures), 9 (Standards-related Measures, 
Metrology and Approval Procedures) and 17 (Intell ectual Property), a Party may request in writing 
that the Commission convene pursuant to Article  20.07 (Intervention of the Commission, good 
offices, conciliation and mediation) when a committee or subcommittee established under the 
aforementioned Chapters has met for consultation u nder Article 20.06 (Consultations) and has failed 
to reach a mutually satisfactory solution to the dispute. 
 
5. For the other Chapters of this Agreement, th e Parties must, by consensus, request that the 
other committees or subcommittees convene for co nsultation under Article 20.06 (Consultations) 
before a Party may submit a written request for th e Commission to convene pursuant to Article 20.07 
(Intervention of the Commission, good offices, conciliation and mediation). 
 
6. For the purposes of paragraphs 4 and 5 of th is Article and notwithst anding Article 19.06(2), it 
shall not be necessary for a subcommittee to have re ported to the respective committee before a Party 
requests a meeting of the Commission under Article 20.07 (Commission, Good Offices, Conciliation and Mediation). 
Article 19.05 
Committees
 
1. The Commission may establish committees othe r than those established in Annex 19.05. 
 2. Each committee shall:  
 (a) Monitor implementation of the Chapters  of this Agreement in its sphere of 
competence; 
  (b) consider matters submitted to it by a Part y which considers that an actual or proposed 
measure of the other Party affects the effective implementation of a commitment included in the Chapters of this Agre ement that fall within its competence; 
 
 (c) request technical reports from the comp etent authorities and take actions that are 
necessary to help resolve the matter; 
  WT/REG196/1 
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  (d) assess and recommend to the Commission proposals for modifications, corrections or 
additions to the provisions of the Chapters  of this Agreement, in its sphere of 
competence; 
  (e) propose to the Commission the review of actual or proposed measures of a Party 
which in its view may be incompatible w ith the obligations of this Agreement or 
cause nullification or impairment within the meaning of Annex 20.03 (Nullification 
and Impairment);  and 
  (f) perform other tasks referred by th e Commission under this Agreement and other 
instruments that derive from it. 
 3. The Commission shall supervise the work of all the committees established pursuant to this 
Agreement.  
4. Each committee may establish its own rules and procedures and shall meet at the request of 
any of the Parties or the Commission. 
Article 19.06 
Subcommittees
 
1. To permanently delegate its  functions but only for the purposes of specific matters in its 
sphere of competence, a committee may establish one  or more subcommittees, whose work it shall 
supervise.  Each subcommittee shall have the sa me functions as the committee with respect to the 
matters referred to it.  2. Each subcommittee shall report to the comm ittee that established it on the performance of its 
functions. 
 
3. The rules and procedures of a subcommittee may be established by the same committee that 
created it.  Subcommittees shall meet at the re quest of any of the Parties or the corresponding 
committee. 
Article 19.07 
Groups of Experts
 
1. A committee or subcommittee may establish ad hoc groups of experts to conduct the technical 
studies necessary for its functions, whose work it sha ll supervise.  Groups of experts shall strictly 
perform the tasks referred to them , in the established terms and time limits.  Groups of experts shall 
report to the committee or subcommittee that established them.  
2. The rules and procedures of a group of expert s may be established by the same committee or 
subcommittee that created it. 
ANNEX 19.01(1) 
Membership of the Administrative Commission of the Agreement
 
 The Administrative Commission of the Agreement established in Article 19.01(1) shall be 
comprised of: 
 WT/REG196/1 
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  (a) For Costa Rica, the Minister of Foreign Trade or his successor; 
  (b) for El Salvador, the Minister of the Economy or his successor;   (c) for Guatemala, the Minister of the Economy or his successor; 
 
 (d) for Honduras, the Secretary of State for Industry and Trade or his successor; 
  (e) for Nicaragua, the Minister of Development, Industry and Trade or his successor;  
and 
 
 (f) for Panama, the Minister of Foreign Affairs or his successor; 
ANNEX 19.01(4) 
Implementation of Modifications Approved by the Commission
 
 The Parties shall implement the decisions of the Commission referred to in Article 
19.01(3)(b) through the following procedure: 
  (a) For Costa Rica, the agreements reached by the Parties shall be equivalent to the 
instrument referred to in Article 121.4, pa ragraph three, of the Political Constitution 
of Republic of Costa Rica; 
 
 (b) for El Salvador, as provided in its legislation; 
  (c) for Guatemala, as provided in its legislation;   (d) for Honduras, as provided in its legislation; 
 
 (e) for Nicaragua, as provided in its legislation;  and   (f) for Panama, as provided in its legislation. 
ANNEX 19.02 
Membership of the Administrative Subcommission of the Agreement
 
The Administrative Subcommission of the Agreemen t established in Article 19.02 shall be comprised 
of:   (a) For Costa Rica, a representative of the Ministry of Foreign Trade or his successor; 
 
 (b) for El Salvador, the Director of Administration of Treaties of the Ministry of the 
Economy or his successor; 
  (c) for Guatemala, a representative of the Ministry of the Economy or his successor;   (d) for Honduras, the Director General of Admi nistration of Treaties of the Secretariat of 
State for Industry and Trade, or her successor; 
  WT/REG196/1 
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  (e) for Nicaragua, the Director of Integration and Administration of Treaties of the 
Ministry of Development, Industry and Trade, or his successor;  and 
  (f) for Panama, the National Director of International Trade Negotiations of the Ministry 
of Trade and Industry, or his successor. 
ANNEX 19.03 
Remuneration And Payment Of Expenses
 
1. The Commission shall establish the amounts of remuneration and expenses that will be paid 
to the panellists, their assistants and experts.  
2. The remuneration of panellists, their assistants and experts, their travel and lodging expenses, 
and all general expenses of pane ls shall be borne equally by the Parties to the dispute. 
 3. Each panellist, assistant and expert shall k eep a record and render a final account of the 
person's time and expenses, and the panel shall keep a similar record and render a final account of all 
general expenses. 
ANNEX 19.05 
Committees
 
 Committee on Trade in Goods (Article 3.16) 
  Committee on Sanitary and Phytosanitary Measures (Article 8.11) 
 
 Committee on Standardization, Metrology and Approval Procedures (Article 9.12) 
  Committee on Investment and Cross-Border Trade in Services  
 Committee on Financial Services (Article 12.11) 
  Committee on Government Procurement (Article 16.13)   Committee on Intellectual Property (Article 17.05) 
CHAPTER 20:  DISPUTE SETTLEMENT 
Section A – Dispute Settlement
 
Article 20.01 
Definitions  
 For the purposes of this Chapter: 
 
 consulting Party  means any Party that conducts cons ultations pursuant to Article 20.06; 
  disputing Party  means the complaining Party or  the Party complained against; WT/REG196/1 
Page 158  
 
  
 disputing Parties  means the complaining Party an d the Party complained against; 
  Party complained against  means the Party against which a claim is made, which could be 
comprised of one or more Parties;  and 
 
 complaining Party  means the Party making a claim, which could be comprised of one or 
more Parties. 
Article 20.02 
General Provisions
 
1. The Parties shall at all times endeavour to ag ree on the interpretation and application of this 
Agreement and shall make every attempt through cooperation and consultati ons to arrive at a 
mutually satisfactory resolution of any matter that might affect its operation. 
 2. Any settlement of matters raised under this Ch apter shall be consistent  with this Agreement 
and shall not nullify or impair the benefits for the Parties deriving therefrom, nor impede the 
attainment of any objective of this Agreement.  3. The mutually satisfactory solutions reached by the disputing Parties with regard to any 
matters raised under this Chapter shall be notified to the Commission within a period of fifteen (15) 
days of agreement. 
Article 20.03 
Scope and Coverage
 
 Except as otherwise provided in this Agreement,  the procedures in this Chapter shall apply: 
  (a) to the avoidance or settlement of all disputes among the Parties regarding the 
application or interpretation of this Agreement;  and 
  (b) wherever a Party considers that an actual or proposed measure of the other Party is or 
would be inconsistent with the obligati ons of this Agreement or could cause 
nullification or impairment in the sense of Annex 20.03. 
Article 20.04 
Choice of Forum
 
1. Any dispute arising under this Agreemen t and the WTO Agreement or any agreement 
negotiated thereunder may be settled in either forum at the discretion of the complaining Party. 
 2.. Once a Party has requested th e establishment of an arbitral panel under Article 20.08 or the 
establishment of a panel under Article 6 of the Di spute Settlement Understanding, the forum selected 
pursuant to paragraph 1 shall be used to the exclusion of any other.  WT/REG196/1 
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 Article 20.05 
Cases of Urgency  
1. In cases of urgency, including those provided fo r in paragraphs 2 and 3,  the disputing Parties 
and the arbitral panels shall make every effort to  accelerate the proceedings to the maximum extent 
possible. 
 
2. For perishable agricultural goods, fish and fish products:   (a) A consulting Party may request in writing a meeting of the Commission, if the matter 
is not resolved in accordance with Article 20. 06 within 15 days of the date of receipt 
of the request for consultations;  and 
  (b) the Party that has requested the interv ention of the Commission in accordance with 
Article 20.07 may request in writing the est ablishment of an arbitral panel if the 
matter is not resolved within 15 days of the meeting of the Commission or, if no such 
meeting was held, within 15 days of the date  of receipt of the request for a meeting of 
the Commission. 
 3. In cases of urgency other than those provided fo r in paragraph 2, the Parties shall, to the 
extent possible, endeavour to reduce by half the periods provided for Article 20.07 and 20.08 for 
requesting a meeting of the Commission and the est ablishment of an arbitral panel, respectively. 
Article 20.06 
Consultations
 
1. Any Party may request in writing consultations  with the other Party regarding any actual or 
proposed measure or any other matter that it consider s might affect the operation of this Agreement, 
within the terms of Article 20.03. 
 
2. The requesting Party shall deliver copies of the request to the other Parties, which may 
participate as consulting Parties, provided they ma ke known their substantial trade interest in the 
matter in writing within 10 days  of submission of the request. 
 3. The Parties shall make every attempt to arri ve at a mutually satisfactory resolution of any 
matter through consultations under this  Article or Article 19.04(4) (General Provisions).  To this end, 
the consulting Parties:   (a) Shall provide sufficient information to enable an examination of how the actual or 
proposed measure or any other matter might affect the operation of this Agreement;  
and 
  (b) shall treat any confidential information exchanged in the consultations on the same 
basis as the Party providing the information. 
Article 20.07 
Intervention of the Commission, Good Offices, Conciliation and Mediation
 
1. Any Party to the consultations may request in writing a meeting of the Commission provided 
that: WT/REG196/1 
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 (a) A matter is not resolved pursuant to Artic le 20.06 within 30 days after the delivery of 
the request for consultations unless the Parties by consensus agree on a different period;  or 
 
 (b) the Party to which the request was made di d not reply within 10 days of receipt of the 
request. 
 2. A Party may also request in writing a meeti ng of the Commission pursuant to Article 19.04(4) 
(General Provisions). 
 
3. The request referred to in paragraph 1 shall state the measure or other matter complained of 
and indicate the provisions of this Agreement that it considers relevant.  4. Unless it decides otherwise, the Commission sh all convene within 10 days of delivery of the 
request and, for the purpose of reaching a mutually  satisfactory settlement of the dispute, may: 
  (a) Call on such technical advisers or crea te such expert groups as it deems necessary; 
  (b) have recourse to the good offices, conc iliation or mediation of a person or group of 
persons or other alternative dispute settlement procedures;  or 
 
 (c) make recommendations.  5. Unless it decides otherwise, the Commission sha ll join two (2) or more proceedings before it 
pursuant to this Article regarding the same me asure.  The Commission may join two (2) or more 
proceedings regarding other matters before it pursuant to this Article that it determines are appropriate 
to be considered jointly. 
Article 20.08 
Request for an Arbitral Panel
 
1. The Party that has requested intervention by the Commission under Article 20.07 may request 
in writing the establishment of an arbitral panel where the matter has not been resolved within: 
 
 (a) 30 days after the Commission has convened  or, if no meeting took place, 30 days of 
delivery of the request for a meeting of the Commission; 
  (b) 30 days after the Commission has convened, where proceedings have been 
consolidated pursuant to Article 20.07(5);  or 
  (c) such other period as the Parties may agree.  2. The Party that requests the establishment of an arbitral panel shall deliver the request to the 
Party or Parties complained against and to th e other Parties, if any, which are entitled under 
paragraph 1 to request the establishment of an arbi tral panel.  The latter shall have 10 days after 
receipt of the request to express their interest in pa rticipating in the arbitration as a complaining Party. 
 3. The request for establishment of an arbitral panel shall be made in writing and shall state 
whether consultations have been held and, in th e event that the Commission has met, the actions 
taken.  The specific measures at issue shall be identified and a brief summary provided of the legal 
basis of the complaint sufficient to present the problem clearly.  WT/REG196/1 
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4. Within 15 days after delivery of the request or within 15 days after expiry of the term referred 
to in paragraph 2, the disputing Parties shall meet  to establish an arbitral panel in accordance with 
Article 20.11.  The meeting shall be held w ith the Party or Parties that are present. 
 
5. A Party that is entitled to request the establis hment of an arbitral panel under paragraph 1 and 
decides to abstain from participating as a compla ining Party in terms of paragraph 2, may only 
participate as a third Party before the panel when  it has a substantial interest in the matter, as 
established in Article 20.13, provided it expresses its in terest in participating within 10 days after 
receipt of the request to establish the arbitral panel. 
 
6. Where a Party decides, pursuant to paragraph 5,  not to participate as a disputing Party or as a 
third Party, it shall refrain thereafter, in the absence of a significant change in economic or 
commercial circumstances, from initiating regarding the same matter:  
 (a) A dispute settlement procedure under this Chapter;  and 
  (b) a dispute settlement procedure under the Dispute Settlement Understanding.  7. Unless otherwise agreed by the disputing Parti es, the arbitral panel shall be established and 
perform its functions in a manner consistent  with the provisions of this Chapter. 
Article 20.09 
Rosters of Panellists
 
1. Prior to the entry into force of this Agre ement, the Parties, by mutual agreement, shall 
establish a "Roster of Panellists of the Parties" an d a "Roster of Panellists of non-Party Countries".  
To this end, each Party shall appoint five (5) nationa l panellists to form the "Roster of Panellists of the 
Parties" and five (5) panellists from non-Party countr ies to form the "Roster of Panellists of non-Party 
Countries".  2. The rosters may be modified every three (3) year s.  Notwithstanding, at the request of a Party, 
the Commission may review the rosters of pa nellists before that period has expired. 
 
3. All panellists shall meet the qualif ications set out in Article 20.10(1). 
Article 20.10 
Qualifications of Panellists
 
1. All the panellists shall: 
 
 (a) Have expertise or experience in law, inte rnational trade, other matters covered by this 
Agreement or the settlement of disputes aris ing under international trade agreements; 
  (b) be chosen strictly on the basis of their objectivity, probity, reliability and sound 
judgement; 
 
 (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.  WT/REG196/1 
Page 162  
 
 2. Individuals may not serve as panellists for a di spute in which they have participated pursuant 
to Article 20.07(4). 
Article 20.11 
Establishment of the Arbitral Panel
 
1. The following procedure shall be observed at  the meeting to establish the arbitral panel: 
 (a) The arbitral panel shall comprise three (3) members; 
  (b) the disputing Parties shall endeavour to agree on the chair;   (c) where the disputing Parties fail to appoint  the chair of the panel, the chair shall be 
selected by lot from the "Roster of Panellists of non-Party Countries"; 
  (d) each disputing Party shall select a panellis t who is a citizen of the other complaining 
Party from the "Roster of Panellists of th e Parties".  Notwithstanding, the disputing 
Parties may, by mutual agreement, provide that the arbitral panel be comprised of 
panellists of non-Party countries; 
  (e) where a disputing Party fails to select a panellist, such panellist shall be selected by 
lot from among the roster members who are citizens of the other disputing Party. 
 2. If a disputing Party is comprised of two (2) or  more Central American countries, one of them, 
chosen by lot, shall represent the others in the procedure established in paragraph 1. 
 3. Panellists shall normally be selected from the rosters.  Any disputing Party may exercise a 
peremptory challenge against any individual not on the rosters who is proposed as a panellist by the 
other disputing Party. 
 
4. If a disputing Party believes that a panellist is in violation of th e code of conduct, the 
disputing Parties shall consult and, if they agr ee, the panellist shall be removed and a new panellist 
shall be selected in accordance with this Article. 
Article 20.12 
Model Rules of Procedure
 
1. The Commission shall establish the Model Rules of Procedure in accordance with the 
following principles:   (a) The procedures shall assure a right to a h earing before the arbitral panel as well as the 
opportunity to provide initial and re buttal submissions in writing;  and 
 
 (b) the arbitral panel's hearings, delib erations and initial report, and all written 
submissions to and communications w ith the panel shall be confidential. 
 2. Unless the Parties agree otherwise, the ar bitral panel shall conduct its proceedings in 
accordance with the Model Rules of Procedure. 
 
3. Unless the disputing Parties agree otherwise, th e terms of reference of the arbitral panel shall 
be:   WT/REG196/1 
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  "To examine, in the light of the provisions  of the Agreement, the matter referred to the 
Commission, as set out in the request for a Commi ssion meeting, and to issue the reports referred to 
in Articles 20.15 and 20.16". 
 
4. If a complaining Party alleges that a measure  has caused nullification or impairment in the 
sense of Annex 20.03, the terms of reference shall so indicate. 
 5. If a disputing Party wishes the arbitral pane l to make findings as to the degree of adverse 
trade effects caused by a measure adopted by the othe r Party that it considers to be inconsistent with 
this Agreement or to have caused nullification or impairment in the sense of Annex 20.03, the terms 
of reference shall so indicate. 
Article 20.13 
Third Parties
 
 Pursuant to Article 1.01(2) (Establishment of the Free-Trade Area), a third Party shall be 
entitled to be heard by the panel, as provided in the Model Rules of Procedure, and to make written 
submissions.  Such submissions shall also be  made available to the disputing Parties. 
Article 20.14 
Information and Technical Advice  
 At the request of a disputing Party or on  its own motion, the arbitral panel may seek 
information and technical advice from an y person or body it deems appropriate. 
Article 20.15 
Initial Report  
1. Unless the disputing Parties otherwise agree, the arbitral panel shall issue an initial report 
based on the submissions and arguments of the Par ties and on any information before it pursuant to 
Article 20.14.  The initial report shall also reflect third-Party submissions. 
 
2. Unless the disputing Parties otherwise agree, th e arbitral panel shall, within 90 days of the 
meeting to establish the panel, present to the Parties an initial report containing: 
  (a) Findings of fact, including any findings pursuant to a request under Article 20.12(5); 
  (b) its determination as to whether the measure at issue is or would be inconsistent with 
the obligations under this Agreement or cause  nullification or impairment in the sense 
of Annex 20.03, or any other determination requested in the terms of reference;  and 
  (c) its recommendations, if any, for the settlement of the dispute.  
3. Panellists may furnish separate opini ons on matters not unanimously agreed. 
 4. A Party may submit written comments to the arb itral panel on its initial report within 14 days 
of presentation of the report.  5. In such an event, and after considering su ch written comments, the panel, on its own motion 
or at the request of a disputing Party, may: WT/REG196/1 
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 (a) Request the views of the disputing Parties;   (b) reconsider its initial report;  and  
 (c) make any further examinati on that it considers appropriate. 
Article 20.16 
Final Report
 
1. The arbitral panel shall communicate to the disputing Parties its final report, including any 
separate opinions on matters not unanimously agreed , within 30 days of presentation of the initial 
report, unless the disputing Parties otherwise agree. 
 2. No arbitral panel may, either in its initial report or its final report, disclose which panellists 
are associated with majority or minority opinions.  
3. Unless the Parties otherwise ag ree, the final report shall be published fifteen (15) days after it 
is communicated to the disputing Parties. 
Article 20.17 
Implementation of Final Reports
 
1. The final report shall be binding on the dispu ting Parties in the terms and time periods that the 
report orders.  The time period for implementing the final report shall not exceed six months, 
calculated from the date on which the last of the dis puting Parties has been notified of the final report, 
unless they agree on a different period.  2. Where a final report by an arbitral panel finds  that the measure is inconsistent with this 
Agreement, the Party complained against shall not implement the measure or shall revoke it. 
 
3. Where the final report of the arbitral pa nel determines that the measure is cause of 
nullification or impairment in the sense of Annex 20. 03, it shall determine the level of nullification or 
impairment and may suggest adjustments it considers mutually satisfactory for the disputing Parties. 
Article 20.18 
Suspension of Benefits
 
1. Unless the disputing Parties have notified th e Commission within fifteen (15) days after the 
expiry of the period established the final report that the report has been implemented to their satisfaction, the arbitral panel shall determine wh ether the Party complained against has implemented 
said report.  
2. The complaining Party may suspend appli cation of benefits under this Agreement of 
equivalent effect to the Party complained against if the arbitral panel determines: 
  (a) That a measure is inconsistent with th e obligations of this Agreement and the Party 
complained against fails to comply with the final report within the period that the arbitral panel has established;  or 
  WT/REG196/1 
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  (b) that a measure is the cause of nullifica tion or impairment in the sense of Annex 20.03 
and the disputing Parties are unable to reach  a mutually satisfactory settlement of the 
dispute within the period that the panel has established. 
 3. Benefits shall be suspended until such time as the Party compla ined against complies with the 
final report or until the Parties reach a mutually satisf actory settlement of the dispute.  However, if the 
Party complained against is comprised of two (2) or  more Parties and one of them complies with the 
final report or reaches a mutually satisfactory agreement with the complaining Party, it shall lift the suspension of benefits with respect to that Party.  
4. In considering what benefits to suspend under this Article: 
  (a) The complaining Party shall first seek to suspend benefits in the same sector or 
sectors as that or those affected by the measure or other matter that the arbitral panel has found to be inconsistent with the oblig ations under this Agreement or to have 
caused nullification or impairment in the sense of Annex 20.03;  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. 
 5. After benefits have been suspended in accord ance with this Article, on the written request of a 
disputing Party an arbitral panel shall be establis hed to determine whether there is compliance with 
the final report or whether the level of benefits suspended by the complaining Party pursuant to this 
Article is manifestly excessive.  Where possible, th e original arbitral panel shall be reconvened for 
this purpose.  
6. The proceedings of the arbitral panel estab lished for the purposes of paragraph 5 shall be 
conducted in accordance with the Model Rules of Pro cedure provided for in Article 20.12.  The panel 
shall present its final report within  sixty (60) days after the meeti ng to establish the panel or other 
such period as the disputing Parties may agree.  If the arbitral panel has been established with the 
same members that heard the dispute, it shall present its final report within thirty (30) days of the 
presentation of the request re ferred to in paragraph 5. 
Section B – Domestic Proceedings and Private Commercial Dispute Settlement
 
Article 20.19 
Interpretation of the Agreement in Judicial or Administrative Proceedings  
1. The Commission shall endeavour to agree on an appropriate non-binding interpretation or 
response as expeditiously as possible where: 
 
 (a) A Party considers that a matter of inte rpretation or application of this Agreement 
arising from a judicial or administrative proceeding of the other Party requires the interpretation of the Commission;  or 
  (b) a Party notifies it of the receipt of a request for an opinion on a matter of 
interpretation or application of this Ag reement in a judicial or administrative 
proceeding of that Party. 
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 2. The Party in whose territory the judicial or  administrative body is located shall submit the 
interpretation or response of the Commission to su ch judicial or administrative body in accordance 
with the rules of that body.  3. If the Commission is unable to agree on an inte rpretation or response, any of the Parties may 
submit its own views to the judicial or administra tive body in accordance with the rules of that body. 
Article 20.20 
Private Rights
 
 No Party may provide for a right of action u nder its domestic law against the other Party on 
the ground that a measure of that other Part y is inconsistent with this Agreement. 
Article 20.21 
Alternative Dispute Settlement Between Private Parties  
1. Each Party shall encourage and facilitate the u se of arbitration and other alternative means for 
the settlement of international trade disputes be tween private parties in the free-trade area. 
 
2. By virtue of para graph 1, each Party shall provide appropriate procedures to ensure 
observance of the international arbitration co nventions it has ratified and the recognition and 
enforcement of arbitral awards in such disputes.  3. The Commission shall establish an Adviso ry Committee on Private Commercial Disputes, 
comprising persons with expertise or experience in the settlement of private international commercial 
disputes.  The Committee shall report and provide  general recommendations to the Commission on 
the availability, use and effectiveness of arbitrati on and other procedures for the settlement of such 
disputes. 
ANNEX 20.03 
Nullification and Impairment
 
1. A Party may have recourse to dispute settlement  under this Chapter if it considers that, as a 
result of the application of any measure that is not inconsistent with this Ag reement, any benefit it 
could reasonably have expected to accrue to it under any provision of: 
  (a) Part Two (Trade in Goods);  
 (b) Part Three (Technical Barriers to Trade);  or 
  (c) Chapter 11 (Cross-Border Trade in Services)  is being nullified or impaired. 
 
2. With respect to any measure subject to  an exception under Article 21.02 (General 
Exceptions), a Party may not invoke:  
(a) Paragraph 1(a) or (b), to the extent that the benefit arises from any cross-border trade 
in services provision of Part Two (Trade in  Goods) or Three (Technical Standards);  
or  WT/REG196/1 
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 (b) paragraph 1(c).  3. To determine the elements of nullification or  impairment, the Parties may take into account 
the principles deriving from case law on Article XXIII:1(b) of the GATT 1994. 
CHAPTER 21:  EXCEPTIONS 
Article 21.01 
Definitions
 
 For the purposes of this Chapter: 
 
 tax convention  means a convention for the avoidance of double taxation or other 
international taxation agreement or arrangement;   Fund  means the International Monetary Fund; 
 
 payments for current international transactions  means "payments for current international 
transactions" as defined under the Articles of Ag reement of the International Monetary Fund; 
  international capital transactions  means "international capital transactions" as defined 
under the Articles of Agreement of the International Monetary Fund;  and  
 transfers  mean international transactions a nd transfers and related payments. 
Article 21.02 
General Exceptions
 
1. Article XX of the GATT 1994 and its interpreta tive notes are incorporated into and made part 
of this Agreement for the purposes of: 
 
 (a) Part Two (Trade in Goods), except to the ex tent that a provision of that Part applies to 
services or investment; 
  (b) Part Three (Technical Barriers to Trade), except to the extent that a provision of that 
Part applies to services or investment; 
 
 (c) Chapter 15 (Competition Policy, Monopolies a nd State Enterprises), to the extent that 
a provision of that Chapter applies to goods;  and 
  (d) Chapter 16 (Government Procurement), excep t to the extent that a provision of that 
Chapter applies to goods. 
 2. Article XIV(a), (b) and (c) of the GATS are incorporated into and made part of this 
Agreement for the purposes of:   (a) Part Two (Trade in Goods), to the extent  that a provision of that Part applies to 
services; 
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  (b) Part Three (Technical Barriers to Trade), except to the extent that a provision of that 
Part applies to services; 
  (c) Chapter 10 (Investment);  
 (d) Chapter 11 (Cross-Bord er Trade in Services); 
  (e) Chapter 12 (Financial Services);   (f) Chapter 13 (Telecommunications); 
 
 (g) Chapter 14 (Temporary Entry of Business Persons);   (h) Chapter 15 (Competition Policy, Monopolies a nd State Enterprises), to the extent that 
a provision of that Chapter applies to services;  and 
 
 (i) Chapter 16 (Government Procurement), to the extent that a provision of that Chapter 
applies to services. 
Article 21.03 
National Security
 
 Nothing in this Agreem ent shall be construed: 
 
 (a) To require a Party to furnish or allo w access to any information the disclosure of 
which it determines to be contrary to its essential security interests; 
  (b) to prevent a Party from taking any ac tions that it considers necessary for the 
protection of its essential security interests: 
 
(i) Relating to the traffic in arms, am munition and implements of war and to 
such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment; 
 
(ii) taken in time of war or other cases of serious international tension;  or 
 (iii) relating to the implementation of nati onal policies or international agreements 
respecting the non-proliferation of nuclear weapons or other nuclear 
explosive devices;  or 
  (c) to prevent a Party from taking action in  pursuance of its obligations under the United 
Nations Charter for the maintenance of international peace and security. 
Article 21.04 
Balance of Payments
 
1. Nothing in this Agreement sh all be construed to prevent a Party from adopting or maintaining 
measures that restrict transfers where the Party experiences serious balance-of-payments difficulties, or the threat thereof, and such restric tions are consistent with this Article. 
  WT/REG196/1 
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 2. As soon as practicable after a Party imposes a measure under this Article, in accordance with 
its international obligations, the Party shall:   (a) Submit any restrictions on current account  operations to the Fund for review under 
Article VIII of the Articles of Agreemen t of the International Monetary Fund; 
 
 (b) enter into good faith consultations with  the Fund on economic adjustment measures 
to address the fundamental underlying economic problems behind the difficulties;  and 
 
 (c) adopt or maintain economic polici es consistent with such consultations. 
 3. A measure adopted or maintained under this Article shall:   (a) Avoid unnecessary damage to the commercial, economic or financial interests of the 
other Party; 
  (b) not be more burdensome than necessar y to deal with the balance-of-payments 
difficulties or threat thereof; 
  (c) be temporary and be phased out progressively as the balance-of-payments situation 
improves; 
  (d) be consistent with pa ragraph 2(c) and with the Ar ticles of Agreement of the 
International Monetary Fund;  and 
 
 (e) be applied on a national treatment or  most-favoured-natio n treatment basis, 
whichever is better. 
 4. A Party may adopt or maintain a measure under this Article that gives priority to services that are essential to its economic programme, provided th at the Party does not impose the measure for the 
purpose of protecting a specific industry or sect or, unless the measure is consistent with 
paragraph 2(c) and with Article VIII(3) of the Artic les of Agreement of the International Monetary 
Fund.  5. Restrictions imposed on transfers:  
 (a) Where imposed on payments for current in ternational transactions, shall be consistent 
with Article VIII(3) of the Articles of Agre ement of the International Monetary Fund; 
  (b) where imposed on international capital transactions, shall be consistent with 
Article VI of the Articles of Agreement of  the International Monetary Fund and be 
imposed only in conjunction with meas ures imposed on current international 
transactions under paragraph 2(a);  and 
  (c) may not take the form of tariff surc harges, quotas, licences or similar measures. 
Article 21.05 
Exceptions to the Disclosure of Information
 
 Nothing in this Agreement sha ll be construed to require a Part y to furnish or allow access to 
information the disclosure of which would impede co mpliance with or be contrary to its Constitution, WT/REG196/1 
Page 170  
 
 public interest or laws protecting personal priv acy or the financial affairs and bank accounts of 
individual customers of financial institutions. 
Article 21.06 
Taxation
 
1. Except as set out in this Article, nothing in this Agreement shall apply to taxation measures. 
 
2. Nothing in this Agreement shall affect th e rights and obligations of a 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 inconsistency.  
3. Notwithstanding paragraph 2: 
  (a) Article 3.03 (National Treatment) and such  other provisions of this Agreement as are 
necessary to give effect to that Article sh all apply to taxation measures to the same 
extent as does Article III of the GATT 1994;  and 
 
 (b) Article 3.14 (Export Taxes) shall apply to taxation measures.  4. For the purposes of this Article , taxation measures do not include: 
  (a) A "customs duty" as defined in Article 2. 01 (Definitions of General Application);  or 
 
 (b) the measures listed in exceptions (b ), (c) and (d) of that definition. 
 5. Subject to paragraph 2:  
 (a) Articles 11.03 (National Treatment) a nd 12.06 (National Treatment) shall apply to 
taxation measures on income, capital gains or the taxable capital of corporations that 
relate to the purchase or consumption of particular services; 
  (b) Articles 10.02 (National Treatment) and 10.03 (Most-Favoured-Nation Treatment);  
11.03 (National Treatment) and 11.04 (Mos t-Favoured-Nation Treatment);  and 12.06 
(National Treatment) and 12.07 (Most-Favour ed-Nation Treatment) shall apply to all 
taxation measures, other than those on income , capital gains or the taxable capital of 
corporations, as well as to taxes on estates, inheritances and gifts. 
  Nothing in those Articles shall apply to: 
 
(i) Any most-favoured-nation obligation w ith respect to an advantage accorded 
by a Party pursuant to a tax convention; 
 
(ii) any non-conforming provision of any existing taxation measure; 
 
(iii) the continuation or renewal of a non-conforming provision of any existing 
taxation measure; 
 
(iv) amendments to a non-conforming provision of any existing taxation measure 
to the extent that the amendment does not decrease its conformity, at the time 
of the amendment, with any of those Articles;  or 
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 (v) any new taxation measure which aims at  ensuring the equitable and effective 
imposition or collection of taxes, and that does not arbitrarily discriminate between persons, goods or services of the Parties or arbitrarily nullify or impair benefits accorded pursuant to th ose Articles, within the meaning of 
Annex 20.03 (Nullificati on and Impairment). 
CHAPTER 22:  FINAL PROVISIONS 
Article 22.01 
Amendments
 
1. Notwithstanding Articles 19.01(5) (Adminis trative Commission of the Agreement) and 
22.03(2), the Parties may agree on an y amendment to this Agreement. 
 
2. When so agreed and approved in accordance w ith the applicable legal procedures of each 
Party, an amendment shall enter into force and c onstitute an integral part of this Agreement. 
Article 22.02 
Reservations  
 This Agreement shall not be subject to r eservations or interpretative statements on the 
occasion of its ratification. 
Article 22.03 
Duration and Entry into Force  
1. This Agreement shall have an indefinite dur ation and shall enter into force in Panama and 
each Central American country on the thirtieth day after the date on which they have exchanged their 
instruments of ratification certifying the completi on of the necessary legal procedures and formalities. 
 2. For this Agreement to become operative between Panama and each Central American 
country, the instruments of ratification shall stat e that the legal procedures and formalities have 
concluded with respect to a bila teral protocol that contains: 
 
 (a) Annex 3.04 (Tariff Elimination Progr amme), relating to the Tariff Elimination 
Programme between Panama and th at Central American country; 
  (b) Section C of Annex 4.03 (Specific Rules of Origin), applicable between Panama and 
that Central American country; 
 
 (c) Annexes I, II, III and IV of Chapter 10 (I nvestment), relating to the reservations and 
restrictions on investment applicable be tween Panama and that Central American 
country; 
 
 (d) Annexes I, II and V of Chapter 11 (Cross- Border Trade in Services), relating to the 
reservations and restrictions on cross-bord er services applicable between Panama and 
that Central American country; 
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  (e) Annex VI of Chapter 12 (Financial Services), relating to the reservations and 
restrictions on financial services applicable between Panama and that Central American country; 
  (f) Annexes 3.10(6) (Import and Export Restrictions) and 16.01 (Entities), where 
pertinent;  and 
  (g) such other matters as the Parties may agree.  3. The protocols signed under para graph 2 shall constitute an integr al part of this Agreement. 
Article 22.04 
Annexes
 
 The Annexes to this Agreement cons titute an integral part thereof. 
Article 22.05 
Withdrawal  
1. Any Party may withdraw from this Agreement.  Provided that Panama is not the Party that 
withdraws, the Agreement shall remain in force for the remaining Parties. 
 2. Withdrawal shall become effective 180 days after the other Parties are notified, unless the 
Parties agree to a different period.   WT/REG196/1 
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  Done at Panama City, Repub lic of Panama, on the sixth day of March of the year two 
thousand and two in six equally authentic originals.    
 
  
Miguel Ángel Rodríguez Echeverría 
President of the Republic of Costa Rica 
 
  
Alfonso Portillo Cabrera 
President of the Republic of Guatemala 
 
  
Mireya Moscoso Rodríguez 
President of the Republic of Panama 
 
 
  
  
Francisco Flores Pérez 
President of the Republic of El Salvador 
 
  
Enrique Bolaños Geyer 
President of the Republic of Nicaragua 
 
  
Vicente Williams 
First Vice-President of Honduras 
 
 
 
 
 WT/REG196/1 
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  Done at Panama City, Repub lic of Panama, on the sixth day of March of the year two 
thousand and two in six equally authentic originals.  
 
 
 
Miguel Ángel Rodríguez Echeverría 
President of the Republic of Costa Rica 
  
 
Alfonso Portillo Cabrera 
President of the Republic of Guatemala 
  
 
Mireya Moscoso Rodríguez 
President of the Republic of Panama 
  
  
 
 
Francisco Flores Pérez 
President of the Republic of El Salvador 
  
 
Enrique Bolaños Geyer 
President of the Republic of Nicaragua 
  
 
Vicente Williams 
First Vice-President of Honduras 
 
  
 
    
Fernando Henrique Cardoso 
President of the Republic of Brazil 
  
__________