WORLD TRADE  
ORGANIZATION  WT/REG206/1 
3 January 2006 
 
 (06-0001) 
Committee on Regional Trade Agreements Original:   Spanish 
 
 
 
 
FREE TRADE AGREEMENT BETWEEN THE UNITED MEXICAN STATES 
AND THE REPUBLIC OF NICARAGUA 
   
 The following communication, dated 17 October 2005, is being circulated at the request of 
the delegations of Mexico and Nicaragua.
∗ 
 
_______________ 
 
 
TABLE OF CONTENTS 
 
PREAMBLE....................................................................................................................... ....................3  
PART ONE: GE NERAL PART ......................................................................................................... ..4 
CHAPTER I:  INITIAL PROVISIONS ...................................................................................................4  
CHAPTER II:  GENERAL DEFINITIONS ............................................................................................5  
PART TWO:  T RADE IN GOODS...................................................................................................... 7 
CHAPTER III:  NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS ......................7  
CHAPTER IV:  AGRICULTURAL SECTOR ......................................................................................30  
CHAPTER V:  SANITARY AND PHYTOSANITARY MEASURES ................................................35  
CHAPTER VI:  RULES OF ORIGIN ...................................................................................................46  
CHAPTER VII:  CUSTOMS PROCEDURES ......................................................................................66  
CHAPTER VIII:  SAFEGUARDS ........................................................................................................75  
CHAPTER IX:  UNFAIR INTERNATIONAL TRADE PRACTICES ................................................81  
PART THREE:  TRADE IN SERVICES ..........................................................................................89  
CHAPTER X:  GENERAL PRINCIPLES ON TRADE IN SERVICES ..............................................89  
CHAPTER XXI:  TELECOMMUNICATIONS ...................................................................................97  
CHAPTER XII:  TEMPORARY ENTRY FOR BUSINESS PERSONS ............................................104  
CHAPTER XIII:  FINANCIAL SERVICES .......................................................................................110  
PART FOUR:  TECHNICAL BARRIERS TO TRADE................................................................122  
CHAPTER XIV:  STANDARDS-RELATED MEASURES ..............................................................122  
PART FIVE:  GOVERNMENT PROCUREMENT.......................................................................136  
CHAPTER XV:  GOVERNMENT PROCUREMENT .......................................................................136  
PART SIX:  INVESTMENT.......................................................................................................... ...180  
                                                      
  ∗ The full text of the free trade ag reement between Mexico and Nicarag ua, together with specific rules 
of origin (Annex 6-03) is available at the Secretariat for consultation by interested Members (Office 1174).  It 
can also be obtained at the following In ternet addresses:  www.economia.gob.mx  and www.mific.gob.ni . WT/REG206/1 
Page 2  
 
CHAPTER XVI:  INVESTMENT .......................................................................................................180
 
PART SEVEN:  INTELLECTUAL PROPERTY ..........................................................................198  
CHAPTER XVII:  INTELLECTUAL PROPERTY ............................................................................198  
PART EIGHT:  ADMINISTRATIVE PROVISIONS....................................................................216  
CHAPTER XVIII:  TRANSPARENCY ..............................................................................................216  
CHAPTER XIX:  ADMINISTRATION OF THE AGREEMENT .....................................................217  
PART NINE:  DISPUTE SETTLEMENT.......................................................................................219  
CHAPTER XX:  DISPUTE SETTLEMENT ......................................................................................219  
PART TEN:  OTHER PROVISIONS..............................................................................................226  
CHAPTER XXI:  EXCEPTIONS....................................................................................................... .226 
CHAPTER XXII:  FINAL PROVISIONS...........................................................................................228  
 
  WT/REG206/1 
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FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE 
UNITED MEXICAN STATES AND THE GOVERNMENT OF THE 
REPUBLIC OF NICARAGUA 
 
PREAMBLE  
 
 The Government of the Republic of Nicaragua  and the Government of the United Mexican 
States,  resolved to: 
  Strengthen the special bonds of friendship and cooperation between their peoples; 
 
 Accelerate  and revitalize American integration schemes; 
  Achieve  a better balance in their trade relations, bearing in mind their levels of economic 
development; 
 
 Contribute  to the harmonious development and expansion of world trade and broader 
international cooperation; 
  Create  an expanded and secure market for the go ods and services produced in their territories; 
 
 Reduce  distortions in their reciprocal trade; 
  Establish  clear and mutually advantageous rules governing their trade; 
  Ensure  a predictable commercial framework for business planning and investment; 
 
 Build  on their respective rights and obligations under the Marrakesh Agreement Establishing 
the World Trade Organization (WTO Agreement), and other multilateral and bilateral instruments of 
integration and cooperation;   Enhance  the competitiveness of their firms in global markets; 
 
 Encourage  innovation and creativity through the prot ection of intellectual property rights; 
  Create  new employment opportunities and improve working conditions and living standards in 
their respective territories; 
 
 Protect  the basic rights of their workers; 
  Undertake each of the preceding in a manner consis tent with environmental protection and 
conservation;  
 Strengthen  the development and enforcement of environmental laws and regulations; 
  Promote  sustainable development; 
  Preserve their capacity to safeguard the public welfare; and 
 
 Promote  dynamic participation by the different econom ic agents, particularly the private sector, 
in efforts to enhance economic relations between the Parties and to develop and cultivate to the 
greatest extent possible the opportunities for th eir joint presence on international markets;  
 WT/REG206/1 
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 Enter into the following Free Trade Agreement in accordance with the provisions of the WTO 
Agreement: 
 
 
PART ONE: GENERAL PART 
 
CHAPTER I: INITIAL PROVISIONS 
 
Article 1-01 
 
Establishment of the Free Trade Area
 
 The Parties establish a free trade zone pursuant  to Article XXIV of the General Agreement on 
Tariffs and Trade of 1994 (GATT 1994) and Artic le V of the General Agreement on Trade in 
Services.  
Article 1-02 
 
Objectives
 
 1. The objectives of this Agreement, as elaborat ed more specifically through its principles and 
rules, including national treatment, most-favoured -nation treatment and transparency, are to: 
(a) Encourage the expansion and diversif ication of trade between the Parties; 
 (b) eliminate barriers to trade in, and facilitate  the movement of goods between the territories 
of the Parties; 
 
(c) provide fair conditions of competiti on affecting trade between the Parties; 
 (d)  increase substantially investment opport unities in the territories of the Parties; 
 (e) provide adequate and effective protection and enforcement of intellectual property rights 
in each Party’s territory; 
 
(f) establish a framework for further cooperation between the Parties, as well as bilateral and 
multilateral cooperation to expa nd and enhance the benefits  of this Agreement; and 
 (g) create effective procedures for the implem entation and application of, and compliance 
with this Agreement, and for the resolution of disputes. 
 2.  The Parties shall interpret and apply the pr ovisions of this Agreement in the light of its 
objectives, as set out in paragraph 1, and in accord ance with applicable rules of international law. 
 
Article 1-03 
 
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. 
2. In the event of any inconsistency between th is Agreement and the agreements referred to in 
paragraph 1, this Agreement shall preva il to the extent of the inconsistency.  WT/REG206/1 
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Article 1-04 
 
Observance of the Agreement  
 The Parties shall ensure that all necessary measu res are taken to give effect to the provisions 
of this Agreement in their territories by their federa l or central, state and regional governments, except 
as otherwise provided in this Agreement. 
 
Article 1-05 
  
Successor Agreements  
 All references to any other international agre ement or treaty shall be understood to apply in 
the same terms to a successor agreement or  treaty to which the Parties are party. 
  
CHAPTER II: GENERAL DEFINITIONS 
 
Article 2-01 
  
Definitions of General Application
 
 For the purposes of this Agreement, unless otherwise specified: 
 
 customs duty includes any duty and 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 tax imposed consistently with Article III:2 of the 
GATT, in respect of similar, directly co mpetitive or substitutable goods of the Party, 
or in respect of goods from which the imported good has been manufactured or produced in whole or in part; 
  (b) countervailing duty that is applied pursuan t to a Party’s domestic law and not applied 
inconsistently with Chapter IX (U nfair International Trade Practices); 
 
 (c) fee or other charge, provided that it  is commensurate with the cost of services 
rendered;  and 
 (d) premium offered or collected on an imported good arising out of any tendering system 
in respect of the administration of quantita tive import restrictions, tariff rate quotas or 
tariff preference levels;  
 
 good of a Party  means a domestic product as understood in GATT 1994 or such goods as the 
Parties may agree, and includes originating goods of that Party. A good of a Party may incorporate materials from other countries; 
 
 originating good  means a good qualifying as such under the rules of origin set out in Chapter 
VI (Rules of Origin);  
Customs Valuation Code  means the Agreement on Implementation of Article VII of the 
General Agreement on Tariffs and Trade 1994, includi ng its interpretative notes, which is part of the 
WTO Agreement;  WT/REG206/1 
Page 6  
 
 Commission  means the Administrative Commission established under Article 19-01; 
  anti-dumping or countervailing duty means any anti-dumping or countervailing duty that is 
applied pursuant to a Party’s domestic law;  
 days means calendar days; 
  enterprise  means any entity constituted or organized under applicable law, whether or not for 
profit, and whether privately or governmentally ow ned, including other ec onomic organizations or 
units constituted or organized under the app licable law, including any branch, foundation, 
corporation, 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;   
 enterprise of a Party  means an enterprise constituted or organized under the law of a Party; 
  tariff item  means the tariff classification number cons isting of more than six digits under the 
Harmonized System; 
 
 measure  includes any law, regulation, procedure, requirement or administrative practice; 
 
 national means a natural person who is a citizen of a Party as established in its applicable 
legislation. The term also includes persons who are permanent residents in the territory of that Party 
under its law; 
 
 Party means a State in which this Agr eement has entered into force; 
 
 exporting Party  means the Party from whose territory a textile or apparel good is exported; 
 
 importing Party means the Party into whose territory  a good or service is imported; 
 
 heading means the four-digit tariff classification number under the Harmonized System; 
 
 person means a natural person or an enterprise 
 
 person of a Party  means a national or an enterprise of a Party;  
 
 Tariff Elimination Programme means the programme  established in Article 3-04; 
 
 Secretariat  means the Secretariat established under Article 19-02;  
 
 Harmonized System:  means the Harmonized Commodity Description and Coding System, 
including its General Rules of Interpretation and its explanatory notes; 
 
 subheading  means the six-digit tariff classification number under the Harmonized System; 
  territory  means, for each Party, the territory of that Party defined in Annex 2-01; 
 
  WT/REG206/1 
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ANNEX 2-01 
 
Country-Specific Definitions  
 For the purposes of this Agreement, unless otherwise specified: 
 
 territory means  
 
 (a) With respect to Mexico 
 
(i) the states of the Federation and the Federal District;  
 
(ii) the islands, including the reefs and keys, in adjacent seas;  (iii) the islands of Guadalupe and Revilla gigedo situated in the Pacific Ocean;  
 
(iv) the continental shelf and the submarine shelf of such islands, keys and reefs; 
 (v) the waters of the territorial seas, in accordance with international law, and its 
interior maritime waters;  
 (vi) the space located above the national te rritory, in accordance with international 
law;  and  
 (vii) any areas beyond the territorial seas of Mexico within which Mexico may 
exercise rights with respect to the seabed and subsoil and their natural 
resources, in accordance with internatio nal law, including the United Nations 
Convention on the Law of the Sea, and its domestic law;  
  (b) with respect to Nicaragua, the terrestrial, maritime and air space under its sovereignty, 
and the marine and submarine zones over wh ich the Republic of Nicaragua exercises 
sovereign rights and jurisdiction in acco rdance with its own legislation and 
international law. 
 
 
PART TWO: TRADE IN GOODS 
 
CHAPTER III: NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS 
 
Section A - Definitions, Scope and Coverage
 
Article 3-01 
 
Definitions  
 
 For the purposes of this Chapter: 
  
 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 a good, or in the production of another good; 
 WT/REG206/1 
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 performance requirement means a requirement that: 
 
(a)  A given level or percentage of goods or services be exported; 
 (b)  domestic goods or services of the Party granting a waiver of customs duties be 
substituted for imported goods or services; 
 (c)  a person benefiting from a waiver of customs duties purchase other goods or services 
in the territory of the Party granting the wa iver, or accord a preference to domestically 
produced goods or services; 
 
(d)  a person benefiting from a waiver of customs duties produce goods or provide 
services, in the territory of the Party gr anting the waiver, with a given level or 
percentage of domestic content;  or  
 
(e) relate in some way the volume or value of imports to the volume or value of exports, 
or to the amount of foreign exchange inflows; 
 
samples of no commercial value  means commercial samples that are so marked, torn, 
perforated or otherwise treated that they ar e unsuitable for sale or for use except as 
commercial samples;  and 
 
Article 3-02 
 
Scope and Coverage
 
 This Chapter applies to trade in goods between  the Parties, except as provided otherwise in 
this Agreement. 
 
Section B - National Treatment  
Article 3-03 
 
National Treatment  
1. Each Party shall accord national treatment to the goods of the other Party in accordance with 
Article III of GATT 1994, including its interpretativ e notes, and to this end Article III of GATT 1994 
and its interpretative notes are incorporated into and made part of this Agreement. 
2. The provisions of paragraph 1 regarding nationa l treatment shall mean, with respect to a state 
or municipality, treatment no less favourable than the most favourable treat ment accorded by such 
state or municipality to any similar, directly co mpetitive or substitutable goods, as the case may be, of 
the Party of which it forms a part. 
3.  Paragraphs 1 and 2 do not apply to th e measures set out in Articles 3-03 and 3-09.  WT/REG206/1 
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Section C - Customs Duties  
 
Article 3-04 
 
Tariff Elimination  
 
1. Except as otherwise provided in this Agre ement, neither Party may increase any existing 
customs duty, or adopt any new duty, on an originating good.1, 2 
2. Except as otherwise provided herein, when this  Agreement comes into force, each Party shall 
progressively eliminate its customs duties on all orig inating goods in accordance with the terms of 
Annex 3-04.  
3. At the request of either Party, the Parties sh all consult to consider accelerating the elimination 
of customs duties set out in their Tariff Elimina tion Programme. When approved by the Parties in 
accordance with their applicable legal procedures, any agreement between the Parties to accelerate the 
elimination of the customs duty on a good shall supersede any duty rate or staging category 
determined pursuant to their Schedules for such good. 
4. Except as otherwise provided herein, this Ag reement shall incorporate any tariff preferences 
negotiated previously between the Parties, pursuant to the First Amendatory Protocol of the Partial 
Scope Agreement signed between Mexico and Nicar agua, as reflected in the Tariff Elimination 
Programme. When this Agreement comes into for ce, the preferences negotiated or granted between 
the Parties previously under the First Amendatory Protocol of the Partial Scope Agreement between 
Mexico and Nicaragua shall be rescinded. 
5. Each Party may adopt or maintain import measures to allocate in-quota imports made 
pursuant to a tariff rate quota set out in its Ta riff Elimination Programme, provided that such 
measures do not have trade restrictive effects on imports additional to those caused by the imposition 
of the tariff rate quota. 
6. On written request of the other Party, a Pa rty applying or intending to apply measures on 
imports pursuant to paragraph 5 shall consult to  review the administration of those measures. 
Article 3-05 
 
Restriction on Drawback and Duty Deferral Programmes  
 
1. For the purposes of this Article: 
  customs duty means the customs duties that would be  applicable to a good entered for 
consumption in the customs territory of a Party if the good were not exported to the territory of the 
other Party; 
 
 fungible goods means "fungible goods" as defined in Chapter VI (Rules of Origin); 
 
 identical or similar goods means goods that are the same in  all respects, including their 
physical characteristics, quality, and reputation;  and also goods which, although not the same in 
                                                     
 
1 Paragraph 1 does not prevent a Party from raising a customs duty to a level not greater than the level 
established in the Tariff Elimination Programme, wher e that customs duty has previously been unilaterally 
reduced to a level below that establishe d in the Tariff Elimination Programme.  
2 Paragraphs 1 and 2 are not intended to prevent a Party from increasing a customs duty that may be 
permitted under any provision arising from a WTO di spute settlement procedure between the Parties. WT/REG206/1 
Page 10  
 
every respect, have similar characteristics and co mposition, which enables them to fulfil the same 
functions and be commercia lly interchangeable; and 
  material means "material" as defined in Chapter VI (Rules of Origin); 
 
2. Neither Party may refund the amount of customs duties paid, or waive or reduce customs 
duties owed, on a good imported into its territory, by  an amount that exceeds the total duty paid or 
owed on that quantity of the imported good in question,  with an appropriate discount for wastage, on 
the condition that it is:   
 (a) Used as a material in the production of another good that is s ubsequently exported to 
the territory of the other Party;  or 
  (b) substituted by an identical or similar good used as a material in the production of 
another good that is subsequently exported to the territory of the other Party.  
 
3. Neither Party may, on condition of export, refund, waive or reduce:   (a) A countervailing duty that is applied pursuant to a Party’s domestic law;     (b) a premium offered or collected on an imported good arising out of any tendering 
system in respect of the administration of quantitative import restrictions, tariff rate 
quotas or tariff preference levels;  or  
  (c) customs duties paid or owed on a good imported into its territory and substituted by 
an identical or similar good that is subseque ntly exported to the territory of the other 
Party. 
 4. Except as provided otherwise in this Article, as  from 1 July 2005, and in the circumstances 
indicated in paragraph 6, neither Party may ref und the amount of customs duties paid, or waive or 
reduce the amount of customs duties owed, on a good im ported into its territory, on condition that the 
good is: 
 
 (a) Used as a material in the production of an originating good that is subsequently 
exported to the territory of the other Party;  or 
  (b) substituted by an identical or similar go od used as a material in the production of an 
originating good that is subsequently expor ted to the territory of the other Party. 
 5. Effective 1 July 2005 and in the circumstan ces indicated in paragraph 6, when a good is 
imported into the territory of a Party pursuant to a duty deferral programme, and any of the conditions 
indicated in paragraphs 4(a) and (b) are fulf illed, the Party from whose territory the good was 
exported: 
 
 (a)  Shall assess the customs duties as if  the exported good had been withdrawn for 
domestic consumption;  and 
  (b)  within 60 days counted from the date of the export, shall collect the amount of the 
customs duties as if the exported good had been withdrawn for domestic 
consumption.  WT/REG206/1 
 Page 11 
 
 
6. Paragraphs 4 and 5 shall apply:   (a)  From the time when Nicaragua applies provisions similar to those contained in those 
paragraphs to a non-Party;  or 
 
 (b)  to a good imported to the territory of on e of the Parties that fulfils the conditions of 
paragraph 4(a) and (b).  In this case the refund of customs duties shall be suspended 
for three years, where it is shown that the refund, waiver, or reduction of customs 
duties simultaneously: 
 
(i) creates a significant distortion in the tariff treatment applied by the Party 
granting the refund, waiver, or reduction of tariffs in favour of the exportation of goods from the territory that Party; and 
 
 (ii)  causes damage to the domestic pr oduction of identical or similar goods, or 
direct competitors of the other Party. 
 7.  For the purposes of paragraph 6, a significant distortion exists in the tariff treatment applied by the Party granting the refund, waiver, or reductio n of customs duties in favour of the exportation of 
goods from the territory of that Party, when:  
 (a)  The amount of customs duties refunded,  waived or reduced on goods imported to the 
territory of that Party, which fulfil the cond itions set out in subpara graphs 4(a) and (b) 
and which are produced in the territory of th e Parties, exceeds 5 per cent of the total 
value of the annual imports of originating goo ds classified in a tariff item of the Party 
to whose territory those originating goods are exported;  or 
 
 (b) a Party refunds, waives, or reduces cu stoms duties on goods or materials arriving 
from the territory of a non-Party, on the im portation of which it maintains quantitative 
restrictions, and those goods or materials are subsequently exported to the other Party, 
used in the production of goods subsequent ly exported to the other Party, or 
substituted by identical or similar ma terials used in the production of goods 
subsequently exported to the other Party. 
 8. For the purposes of pa ragraph 6, for the determination of damage: 
  (a) Damage means significant impa irment of domestic production; and 
 
 (b) domestic production means the producer or producers of identical or similar goods, or 
direct competitors operating within the territory of a Party and which account for significantly more than 35 per cent of the total domestic production of those goods. 
 9. Paragraphs 3, 4 and 5 do not apply to: 
 
 (a) A good entered under bond or guarantee for transportation and exportation to the 
territory of the other Party; 
  (b) a good exported to the territory of the other Party in the same condition as when 
imported into the territory of the Party fr om which the good was exported.  Processes 
such as testing, cleaning, repacking or in specting the good, or preserving it in its same 
condition, shall not be considered to change a good’s condition.  When a good has 
been commingled with fungible goods and ex ported in the same condition, its origin 
for the purposes of this paragraph may be de termined on the basis of the inventory 
methods provided for in Chapter VI (Rules of Origin). WT/REG206/1 
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  (c) a good imported into the territory of a Pa rty that is subsequently deemed to be 
exported from its territory, or used as a mate rial in the production of another good that 
is deemed to be exported to the territory of the other Party, or is substituted by an 
identical or similar good used as a material in the production of another good that is 
deemed to be exported to the territory of the other Party, by reason of: 
   (i) its delivery to a duty-free shop;  or    (ii) its delivery for ships stores or supplies for ships or aircraft;  
 
 (d) the refund of customs duties by a Party on a particular good imported into its territory 
and subsequently exported to the territory of the other Party, where that refund is 
granted by reason of the failure of such good to conform to sample or specification, or 
by reason of the shipment of such good without the consent of the consignee;  or 
 
 (e) an originating good that is imported into  the territory of a Party and subsequently 
exported to the territory of the other Party, or used as a material in the production of another good that is subsequently exported to  the territory of the other Party, or is 
substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the other Party. 
 
10. A Party that reimburses, waives or reduces cust oms duties shall provide, at the request of the 
other Party, such information as is needed to ve rify the existence of the conditions set out in 
paragraph 6, including statistical information relating to the imports on which reimbursements, 
waivers or reductions of customs duties are granted,  in relation to a good exported to the territory of 
the other Party. 
 11. As a condition for excluding from the calcu lation of the percentage referred to in 
paragraph 9(a), the refunds, waivers or reductions  in tariff duties granted on a good satisfying the 
conditions of paragraphs 4(a) and (b), the Party that refunds, waives or reduces those customs duties 
shall demonstrate that there is no production in the fre e trade area of a good that is identical or similar 
to that good. 
 12. For the purposes of paragraph 11, at the requ est of the Party that refunds, waives or reduces 
customs duties on a good, the other Party shall provide , as far as possible, the relevant and available 
information on that good. 
 
13. Each Party shall establish clear and strict pr ocedures for the application of paragraphs 4 and 
5, pursuant to the following:   (a) The Party that decides to initiate an i nvestigation to apply pa ragraphs 4 and 5 shall 
announce the start thereof in the corresponding  official media, and shall notify the 
exporting Party in writing on the day following publication; 
  (b)  for the purposes of determining a significant distortion and damage pursuant to 
paragraph 6(b) (i) and (ii), the competent authorities shall evaluate all objective and quantifiable factors; 
 
 (c)  to determine the application of paragra phs 4 and 5, a direct causal relation shall be 
demonstrated between the refund, waiver or  reduction, and the distortion and damage 
to domestic production of identical or similar goods, or direct competitors; 
  WT/REG206/1 
 Page 13 
 
 
 (d)  if, as a result of such investigation, the competent authority should determine, on the 
basis of objective evidence, that the assu mptions envisaged in this Article are 
fulfilled, the importing Party may initiate consultations with the other Party; 
  (e) the consultation procedure shall not oblige  the Parties to reveal information that has 
been provided on a confidential basis, discl osure of which could impede compliance 
with the laws of the Party on the s ubject, or damage commercial interests; 
  (f)  the period of prior cons ultations shall begin on the day following receipt of the 
notification of a request to initiate consulta tions by the exporting Pa rty.  The period of 
prior consultations shall last 45 days, unless the Parties agree upon a shorter period; 
  (g) the notification referred to in subpara graph (f) shall be made through the competent 
authority and shall contain sufficient inform ation to substantiate the application of 
paragraphs 4 and 5, including: 
 
 (i) the names and addresses of the domes tic producers of identical or similar 
goods, or direct competitors representati ve of domestic production, their share 
of domestic production of that good and the basis for claiming that they are representative of that sector; 
 
 (ii) a clear and full description of the good subject to the procedure, the tariff 
subheading under which it is classified, its current tariff treatment and the description of the identical, similar or directly competitive domestic good; 
  (iii)  import data for each of the three most recent calendar years that form the 
basis of the claim that the good is being imported in increasing quantities, 
either in absolute terms or re lative to domestic production; 
  (iv) data on total domestic production of the identical or similar or directly 
competitive good for each of the three most recent years;  and 
 
 (v) data demonstrating the injury caused by imports of the good in question, 
pursuant to subparagraphs (b) and (c); 
  (h) paragraphs 4 and 5 may only be applie d once the period for prior consultations has 
expired; 
 
 (i) during the consultation period, the ex porting Party shall make any observations it 
considers relevant;  and 
  (j) the exporting Party shall apply paragraphs  4 and 5 on conclusion of the consultation 
period provided for in subparagraph (f), if any of the assumptions established in 
paragraph 6 is proven to exist. 
 14. The Parties shall hold annual consulta tions on the application of this Article. 
 WT/REG206/1 
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Article 3-06 
 
Temporary Importation of Goods
 
1. Each Party shall grant duty-free temporary admission for:  
 
 (a)  Professional equipment necessary for carrying out the business activity, trade or 
profession of a business person; 
  (b)  equipment for the press or for sound or  television broadcasting, and cinematographic 
equipment; 
 
 (c)  goods imported for sports purposes and goods  intended for display or demonstration, 
including components, auxiliary apparatus and accessories;  and 
  (d)  commercial samples and advertising films;  
 
 imported from the territory of the other Party,  regardless of their origin and regardless of 
whether similar, 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;   (b)  be used solely by or under the persona l supervision of such person in the exercise of 
the business activity, trade or profession of that person; 
  (c)  not be sold or leased or transferred in  any other form while in its territory under the 
temporary importation regime; 
  (d)  be accompanied by a bond in an amount no greater than 110 per cent of the charges 
that would otherwise be owed on entry or 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 by such  reasonable means as may be established by the 
customs authority;  
  (f)  be exported on the departure of that pe rson or within the period of time corresponding 
to the purpose of the temporary admission; 
  (g) be imported in no greater quantity than is reasonable for its intended use. 
 
 (h) not undergo any transformation or modification during the authorized period of 
importation, apart from wear and tear arising from normal use;  and 
  (i) comply with the sanitary and phytosanit ary measures adopted pursuant to Chapter V 
(Sanitary and Phytosanitary Measures) and with standards-related measures pursuant 
to Chapter XIV (Standards-Related Measures).  WT/REG206/1 
 Page 15 
 
 
3. Except as otherwise provided in this Agreem ent, neither 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, or services provided from 
the territory of the other Party or of a non-Party; 
 
 (b) not be sold, leased or transferred in an y other form, or put to any use other than 
exhibition or demonstration while in its territory; 
  (c) be accompanied by a bond in an amount no greater than 110 per cent of the charges 
that would otherwise be owed on entry or 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; 
  (d)  be capable of identification by an y reasonable means established by the customs 
authority;  
  (e) be exported within such period as is  reasonably related to the purpose of the 
temporary admission; 
  (f) be imported in no greater quantity th an is reasonable for its intended use. 
 
 (g) not undergo any transformation or modification during the authorized period of 
importation, apart from wear and tear arising from normal use;  and 
  (h)  comply with the sanitary and phytosan itary measures adopted pursuant to Chapter V 
(Sanitary and Phytosanitary Measures) and with standards-related measures pursuant 
to Chapter XIV (Standards-Related Measures). 
 4. A Party may impose the customs duty and any other charge on a good temporarily admitted duty-free that would be owed on entry or final impor tation of such good if any condition that the Party 
imposes under paragraph 2 or 3 has not been fulfilled. 
 
Article 3-07 
 
Duty-Free Entry of Commercial Samples of No Commercial Value
 
 Each Party shall grant duty-free entry to  commercial samples of no commercial value 
imported from the territory of the other Party. 
 
Article 3-08 
 
Waiver of Customs Duties  
1. Neither Party may adopt any new waiver of cu stoms duties, when the waiver is conditioned, 
explicitly or implicitly, on the fulfilment of a performance requirement.  
 2. Effective 1 July 2007, neither Party may, e xplicitly or implicitly, make the continuation of 
any existing waiver of customs duties conditional on the fulfilment of a performance requirement.  
 
3. If a waiver or a combination of waivers of cu stoms duties granted by a Party with respect to 
goods for commercial use by a designated person can be shown by the other Party to have an adverse  WT/REG206/1 
Page 16  
 
impact on:    (a)  Its economy;   (b)  the commercial interests of a person of that Party;  or 
 
 (c)  the commercial interests of an enterprise owned or controlled by a person of that 
Party, whose production facilities are located in  the territory of the Party granting the 
waiver,  
 
 the Party granting the waiver shall either cease to  grant it or make it generally available to any 
importer.  
Section D - Non-Tariff Measures 
 
Article 3-09 
 
Import and Export Restrictions  
1. Except as otherwise provided in this Agreemen t, neither 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 GATT 1994, including its interpretativ e notes.  To this end, Article XI of GATT 1994 
and its interpretative notes, are incorporated into, and made a part of, this Agreement. 
 2. The Parties understand that the rights and obligations of GATT 1994 incorporated by paragraph 1 prohibit, in any circumstances in which an y other form of restriction is prohibited, export 
price requirements and, except as permitted in en forcement of countervailing and anti-dumping orders 
and undertakings, import price requirements. 
 3. 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 be construed to prevent 
the Party from:  
 (a) Limiting or prohibiting the importation from the territory of the other Party of such 
good of that non-Party;  or 
  (b) requiring as a condition of export of such goo d of the Party 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. 
  4.  In the event that a Party adopts or mainta ins a prohibition or restriction on the importation of 
a good from a non-Party, the importing Party, on request from the other Party, shall consult with a view to avoiding undue interference or distortion of  pricing, marketing and distribution arrangements 
in the other Party. 
 
5. Paragraphs 1 through 4 do not apply to th e measures set out in Annexes 3-03 and 3-09.  WT/REG206/1 
 Page 17 
 
 
Article 3-10 
 
Export Taxes  
1. Except as set out in this Article, neither Part y 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. 
 2. Each Party may adopt or maintain a duty, tax or other charge on the export of those basic foodstuffs set out in paragraph 3, on their ingredie nts, or on the goods from which such foodstuffs are 
derived, if such duty, tax or other charge is used: 
 
 (a)  To limit to domestic consumers the bene fits of a domestic food assistance programme 
with respect to such foodstuff;  or 
  (b) to ensure the availability of suffici ent quantities of such foodstuff to domestic 
consumers, or of sufficient quantities of its ingredients or of the goods from which 
such foodstuffs are derived, to a domestic  processing industry, when the domestic 
price of such foodstuff is held below the world price as part of a governmental stabilization plan, provided that such duty, tax, or other charge: 
  (i) does not operate to increase the protec tion afforded to such domestic industry; 
and 
  (ii)  is maintained only for such period  of time as is necessary to maintain the 
integrity of the stabilization plan. 
 
3. For the purposes of paragra ph 1, basic foodstuffs means: 
 
Beans Beef liver Beef remnants and bones Beef steak or pulp 
Beer 
Bread Brown sugar Canned peppers Canned sardines 
Canned tuna 
Cheese Chicken broth Condensed milk Cooked ham Corn 
Corn dough 
Corn flour Corn tortillas Crackers Eggs 
Evaporated milk 
Fillet of fish French rolls (pan blanco)  
Gelatine Ground beef WT/REG206/1 
Page 18  
 
Instant coffee Low-priced cookies Margarine Meat of poultry Oak flakes 
Pasteurized milk 
Powdered chocolate Powdered milk Powdered milk for children Rice 
Roasted coffee 
Salt Soft drinks Soup paste Tomato purée 
Vegetable fat 
Vegetable oil Wheat flour White sugar 
 4. Notwithstanding paragraph 1, each  of the Parties may adopt or maintain a duty, tax or other 
charge on the export of any foodstuff to the territory of the other Party if such duty, tax or other 
charge is temporarily applied to relieve critical s hortages of that foodstuff.  For the purposes of this 
paragraph, "temporarily" means up to one year, or such longer period as the Parties may agree.   
Article 3-11  
 
Customs User Fees
 
 
 Neither Party may increase or establish new cust oms user fees for originating goods, and shall 
eliminate all their customs user fees on or iginating goods, effective 1 July 2005. 
 
Article 3-12 
 
Country of Origin Marking  
 Annex 3-12 applies to measures rela ted to country of origin marking. 
 
Article 3-13 
 
Distinctive Products  
 Annex 3-13 applies to the products listed therein. 
 
Section E - Publication and Notification  
Article 3-14 
 
Publication and Notification  
 1. Each Party shall ensure that its laws, regul ations, procedures and administrative rulings of 
general application, which it has implemented resp ecting the classification, valuation or a customs 
valuation of goods, the rates of customs duties, taxes and other charges or restrictions or prohibitions 
on importation or exportation, or on the transfer of payments in relation thereto, or to the sale,  WT/REG206/1 
 Page 19 
 
 
distribution, transport, insurance, storage, inspecti on, display, processing, mixture, or any other use of 
such goods, are promptly published or otherwise made av ailable in such a manner as to enable 
the other Party and intere sted persons to become  acquainted with them. Each Party shall also 
publish agreements related to intern ational trade policy that are in force between the government or a 
governmental organization of that Party, and the government or a government al organization of the 
other Party.  
 2.  To the extent possible, each Party sha ll publish in advance any measure indicated in 
paragraph 1 that it proposes to adopt, and provide  interested persons a reasonable opportunity to 
comment thereon.   3.  Neither Party shall apply, before its offi cial publication, any measure of a general nature 
adopted by the Party that has the effect of increasing a customs duty or other charge on the 
importation of goods from the other Party, or which im poses a new or stricter me asure, restriction, or 
prohibition on the importation of goods from the othe r Party, or for the transfer of funds relative 
thereto.  
 4.  The provisions of this Article do not oblige e ither Party to reveal information of a confidential 
nature, the disclosure which could constitute an obstacl e to the fulfilment of laws, be contrary to the 
public interest, or damage the legitimate commerc ial interests of public or private enterprises. 
  5.  Each Party shall identify, in terms of  tariff item and nomenclature under their respective 
tariffs, the measures, restrictions or prohibiti ons on the importation or exportation of goods for 
reasons of national security, public health, preservati on of wildlife, the enviro nment, animal health, 
standards, labelling, international commitments, requi rements of public order or any other regulation.  
 
Section F - Provisions on Textile Goods
 
 
Article 3-15 
 
Levels of temporary flexibility for goods classified  in Chapters 61 and 62 of the Harmonized System  
 1.  Each Party shall grant to goods classified in Chapter 61 and 62 of the Harmonized System, 
produced in the territory of the other Party and importe d into its territory pursua nt to paragraph 2, the 
preferential tariff treatment established in the Tariff Elimination Programme corresponding to 
originating goods, in accordance with th e amounts and periods established below: 
  (a)  During the period 1 July 1998 through 30 June 1999, US$125,000;  
 (b)  for the period 1 July 1999 through 30 June 2000, US$145,000; 
  (c)  for the period 1 July 2000 through 30 June 2001, US$165,000;   (d)  for the period 1 July 2001 through 30 June 2002, US$170,000; and 
 
 (e)  for the period 1 July 2002 through 30 June 2003, US$175,000.  2.  For the purposes of this Article, goods classi fied in chapters 61 and 62 of the Harmonized 
System shall fulfil the following requirements:  
 (a) Goods classified in chapter 61 of the Ha rmonized System, a change to headings 61.01 
through 61.17 of any other chapter, provided the good is cut (or machine woven) and sewn, or otherwise assembled in the territory of the exporting Party;  and WT/REG206/1 
Page 20  
 
  (b)  goods classified in chapter 62 of the Harmonized System, a change to headings 62.01 
through 62.17 of any other chapter, provided the good is cut (or machine woven) and sewn, or otherwise assembled in the territory of the exporting Party; 
 
 3.  The annual amounts established in paragraph 1 may not be assigned to goods classified in a 
given heading in an amount that exceeds 25 per cent of the total annual amount.   4.  Effective 1 July 2003, each Party shall only grant preferential tariff treatment to originating 
goods classified in chapters 61 and 62 of the Harmonized System. 
 
 5.  Where the importation of such goods exceed s the amounts determined in paragraph 1, each 
Party shall only grant the preferential tariff treatme nt established in the Tariff Elimination Programme 
if such goods fulfil the corresponding rule of origin established in Annex 6-03.  
 
ANNEXES 3-03 and 3.09 
 
Exceptions to Article 3-03 and Article 3-09
 
Measures of Mexico  
 
1.  Notwithstanding Article 3-09, Mexico may adopt  or maintain prohibitions or restrictions on 
the importation of goods provided for in headings  63.09 and 63.10 of the Tariff Schedule of the 
General Import Duty Act (Tarifa de la "Ley del Impuesto General de Importación"), based on the Harmonized System classification.  
2. Notwithstanding Article 3-09, Mexico may adopt or maintain prohibitions or restrictions on 
the importation of used goods provided for in the fo llowing headings, subheadings and tariff items of 
the Harmonized System:   
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
Heading, subheading or tariff item  Description 
  
8413.11  Pumps for dispensing fuel or lubrican ts, of the type used in filling stations, 
service stations or garages 
8413.40  Concrete pumps 8426.12  Mobil lifting frames on tyres and straddle carriers 8426.19  Other (transporter cranes, gantry cranes and bridge cranes) 8426.30  Portal or pedestal jib cranes 
8426.41  Cranes, self-propelled, on tyres 
8426.49  Other cranes, self-propelled 8426.91 Cranes designed for mounting on road vehicles 8426.99  Other (derrick and works trucks fitted with a crane) 8427.10  Self-propelled trucks powered by an electric motor 
8427.20  Other self-propelled trucks 
8428.40  Escalators and moving walkways 8428.90 Other lifting, handling, loading or unloading machinery 8429.11  Caterpillar type self-prope lled bulldozers and angledozers 
8429.19  Other self-propelled bulldozers and angle dozers   WT/REG206/1 
 Page 21 
 
 
8429.20  Self-propelled graders and levellers 8429.30  Self-propelled scrapers 8429.40  Self-propelled tamping machines and road rollers 8429.51  Front-end shovel loaders, self-propelled 8429.52  Machinery with a 360de grees revolving superstructure 
8429.59  Mechanical shovels and other shovel loaders 
8430.31  Coal or rock cutters a nd tunnelling machinery, self-propelled 
8430.39  Other coal or rock cutters and tunnelling machinery 8430.41  Other boring or sinking machinery, self-propelled 8430.49  Other boring or sinking machinery 
8430.50  Other moving, grading, levelli ng or tamping machinery, self-propelled 
8430.61  Tamping or compacting machinery, not self-propelled 8430.62  Scrapers, not self-propelled 8430.69  Other moving, grading or levelling machinery, not self-propelled 8452.10  Sewing machines of the household type 
8452.21  Sewing machines, automatic units 
8452.29 Other sewing machines 8452.90 Other parts of sewing machines  84.71  Automatic data processing machines and units thereof; magnetic or optical 
readers, machines for transcribing data onto data media in coded form, and machines for the treatment or processing of such data not elsewhere 
specified. 
8474.20 Crushing or grinding machines for mineral substances 8474.39  Other mixing or kneading machines for mineral substances 
8474.80  Machinery for agglomerating, shaping or moulding mineral products 8475.10  Machines for assembling electric lamps or tubes, in glass envelopes 
8477.10 Injection-moulding machines, for rubber or plastic industry 
8504.40.12  Power supplies recognizable as desi gned exclusively for the automatic data 
processing machines of heading 84.71  
8701.30  Caterpillar tractors 8701.90  Other tractors suitable for agricultural use 8711.10  Motorcycles, side-cars, with reci procating internal combustion piston engine 
not exceeding 50 cc  
8711.20  Motorcycles, side-cars, with reci procating internal combustion piston engine 
exceeding 50 cc but not exceeding 250 cc  
8711.30  Motorcycles, side-cars, with reci procating internal combustion piston engine 
exceeding 250 cc but not exceeding 500 cc  
8711.40  Motorcycles, side-cars, with reci procating internal combustion piston engine 
exceeding 500 cc but not exceeding 800 cc  
8711.90  Other motorcycles, side-cars, with reciprocating engine 8712.00  Bicycles and other cycles (including delivery tricycles), not motorized 8716.10  Trailers and semi-tra ilers for housing or camping 
8716.31  Tanker trailers and tanker semi-trailers 
8716.39  Other trailers and semi-tra ilers for the transport of goods 
8716.40  Other trailers and semi-trailers 8716.80  Other vehicles not mechanically propelled   3.  Notwithstanding Article 3-09, Mexico may adopt  or maintain prohibitions or restrictions on 
the importation of goods described in the followi ng headings and subheadings of the Harmonized 
System:  
(Descriptions are provided next to th e corresponding item for reference purposes only) 
  WT/REG206/1 
Page 22  
 
Heading or 
subheading  Description  
  
27.07  Oils and other products from the hi gh temperature distillation of coal tar, 
similar products in which the weight of aromatic constituents exceeds that of 
non-aromatic constituents. 
27.09 Petroleum oils and oils obtai ned from bituminous minerals, crude. 
27.10 Petroleum oils and oils obtained fro m bituminous, minerals, other than crude; 
preparations not elsewhere specified or included, containing by weight 70 per cent 
27.11  Petroleum gas and other gaseous hydrocarbons 
27.12  Petroleum jelly, paraffin wax, micro- crystalline petroleum wax, slack wax, 
ozokerite, lignite wax, peat wax, othe r mineral waxes, and similar products 
obtained by synthesis or by othe r processes, whether or not coloured  
27.13  Petroleum coke, petroleum bitumen & other residues 
27.14 Bitumen and asphalt natural; bituminous  or oil shale and tar sands; asphaltites 
and asphaltic rocks.  
2901.10  Saturated acyclic hydrocarbons  4.  Notwithstanding Article 3-09, Mexico may adopt  or maintain prohibitions or restrictions on 
the importation of used goods described in th e following headings and subheadings of the 
Harmonized System: 
 
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
Heading or 
subheading Description 
  
8407.34  Reciprocating piston engines of a kind used for the propulsion of vehicles of 
Chapter 87, of a cylinder capacity exceeding 1,000 cc. 
8701.20 Road tractors for semi-trailers. 87.02 Motor vehicles for the transport of ten or more persons. 
87.03 Motor cars and other motor vehicles principally designed for the transport of 
persons, (other than those of heading 87.02), including station wagons and racing cars. 
87.04 Motor vehicles for the transport of goods. 8705.20 Mobile drilling derricks. 
8705.40  Concrete mixers. 
87.06  Chassis fitted with engines, for the motor vehicles of headings 87.01 to 87.05 
 5. Notwithstanding Article 3-09, Mexico may adopt or maintain prohibitions or restrictions on 
the importation of goods described in the followi ng headings and subheadings of the Harmonized 
System:  (Descriptions are provided next to th e corresponding item for reference purposes only) 
 
Heading or subheading   Description 
  
8407.34  Reciprocating piston engines of a kind used for the propulsion of vehicles of 
Chapter 87, of a cylinder capacity exceeding 1,000 cc. 
8701.20  Road tractors for semi-trailers. 87.02  Motor vehicles for the transport of ten or more persons. 
87.03 Motor cars and other motor vehicles principally designed for the transport of  WT/REG206/1 
 Page 23 
 
 
persons, (other than those of heading 87.02), including station wagons and racing cars. 
87.04  Motor vehicles for the transport of goods. 8705.20  Mobile drilling derricks. 8705.40 Concrete mixers. 
87.06  Chassis fitted with engines, for the motor vehicles of headings 87.01 to 87.05 
 6.  Notwithstanding Article 3-03, Until 1 January 2006, Mexico may maintain the provisions of 
the Decree for Development and Modernization of  the Automotive Industry ("Decreto para el 
Fomento y Modernización de la Industria Automotr iz"), of 11 December 1989, and any renewal or 
amendment thereof even if incons istent with this Agreement. 
 
Section B - Measures of Nicaragua
 
 1.  Notwithstanding Article 3-09, Nicaragua may ad opt or maintain prohibitions or restrictions 
on the importation of goods described in headings  6309 and 6310 (Textile Articles) of the Central 
American Tariff System.  2.  Notwithstanding Article 3-09, Nicaragua may ad opt or maintain prohibitions or restrictions 
on the importation of goods described in the following  headings, subheadings and items of the Central 
American Tariff System: 
 
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
 
Heading, 
subheading or  
tariff item Description  
  
4004.00.00.00  Waste, parings and scrap of unvulcanized rubber, including powders and 
granules  
4012.10.00.00 Retreaded pneumatic tyres  
4012.20.00  Used pneumatic tires  
84.09  Electromechanical domestic appliances with self-contained electric motor 8414.5 Fans. 84.15 Air conditioning machines, comprising a motor-driven fan and elements for 
changing the temperature and humidity. 
84.18  Refrigerators, freezers and other ma terials, machines and apparatus for the 
production of cold, electric or other.  
84.50  Washing machines, including machines which both wash and dry. 84.70  Calculating machines; accounti ng machines, postage-franking machines, 
ticket-issuing machines and similar machines, incorporating a calculating device; cash registers. 
84.71 Automatic data processing machines and units thereof; magnetic or optical 
readers, machines for transcribing data  onto data media in coded form.  
85.16  Electric water heaters and immersion heaters; electric space heating apparatus 
and floor heating apparatus; electroth ermic hairdressing apparatus; electric 
flatirons; other electronic domestic appliances; electric heating resistors 
85.19 Turntables, record players, cassette players and other sound reproducing 
apparatus.  
85.21 Video recording or reproducing apparatus. 85.27 Reception apparatus for radiotelephony,  radiotelegraphy or radio broadcasting  
85.28  Reception apparatus for television. 
87.02  Motor vehicles for the transport of ten or more persons including the driver. WT/REG206/1 
Page 24  
 
87.03 Motor cars and other motor vehicles principally designed for the transport of 
persons, (other than those of heading 87.02), including station wagons and racing cars. 
87.04 Motor vehicles for the transport of goods. 87.05  Special purpose motor vehicles, other than those principally designed for the 
transport of persons or goods (for ex ample, wagons, service trucks, mobile 
cranes, fire fighting vehicles, concrete mixers, road sweepers, spraying vehicles, mobile workshops, mobile radiological units) 
87.06 Chassis fitted with engines, for the mo tor vehicles of headings 87.01 to 87.05. 
87.07 Bodies (including cabs) for the motor vehicles of headings 87.01 to 87.05. 
87.11  Motorcycles (including mopeds) an d cycles fitted with an auxiliary motor, 
with or without side-cars. 
90.09  Photocopying apparatus incorporating an optical system or of the contact type 
and thermocopying apparatus. 
 
 
3. Notwithstanding Article 3-09, Nicaragua may ad opt or maintain prohibitions or restrictions 
on the importation of goods described in the following  headings, subheadings and items of the Central 
American Tariff System  
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
 Heading, subheading  or  
tariff item Description  
  
2709.00.00.00  Petroleum oils and oils obtained from bituminous minerals, crude.  
2710.00.10.20  Gasoline with antidetonant 2710.00.10.30  Gasoline without antidetonant 2710.00.10.40  Aviation turbo fuel 2710.00.10.50  Aviation gasoline (Av gas) 
2710.00.10.90 Other uses 
2710.00.20.  Medium oils 2710.00.30. 10 Gas oil 2710.00.30.20  Fuel oil (Energy) 2710.00.30.30  Fuel oil (other) 
2710.00.30.40  Diesel oil 
2710.00.30.9  Other uses 2710.00.90.00  Other 27.11  Petroleum gases and other gaseous hydrocarbons  2714.90.00.00  Other uses (Asphalts) 
 
 4.  Notwithstanding Article 3-09, Nicaragua may ad opt or maintain prohibitions or restrictions 
on the export of wood products (exclusively the ced ro and caoba species, classified in the following 
tariff items of the Central American Tariff System:  (Descriptions are provided next to th e corresponding item for reference purposes only)) 
 Item  Description  
  
4401.10.00.00 Fuel wood 
4401.22.00.00  Non-coniferous-Dry  WT/REG206/1 
 Page 25 
 
 
4401.30.00.00  Sawdust and wood waste and scrap 4403.10.00.00  Painted 4403.49.00.00  Other 4403.99.00.00  Other 4404.20.00.00  Non-coniferous 
4405.00.00.00  Wood wool (excelsior);  
4406.10.00.00  Railway or tramway sleepers; not impregnated 4406.90.00.00  Railway or tramway sleepers; other 4407.29.00.00  Other (sawn wood) 4407.99.00.00  Other (sawn wood) 
4408.39.00.00  Other (veneer sheets) 
4408.90.00.00  Other 4409.20.00.00  Wood, continuously shaped, non-coniferous 4410.11.00.00  Boards known as waferboard 4411.19.00.00  Fibreboards of wood, other 
4411.21.00.00  Not mechanically worked 
4411.29.00.00  Other 4411.31.00.00  Not mechanically worked  4411.39.00.00  Other 4411.91.00.00  Not mechanically worked  4411.99.00.00  Other 
4413.00.00.00  Densified wood, in blocks 
  
ANNEX 3-04 
 
Tariff Reduction Programme
 
1.  Except as otherwise provided in each Party’s Schedule, the following staging categories apply 
to the elimination of customs duties by each Party pursuant to Article 3-04:    (a)  Duties on goods provided for in the items  in staging category A in a Party’s Schedule 
shall be eliminated entirely, and such goods  shall be duty-free as from 1 July 1998;  
  
 (b)  duties on goods provided for in the items  in staging category B in Mexico’s Schedule 
shall be removed in five equal annual st ages beginning on 1 July 1998, and such 
goods shall be duty-free as from 1 July 2002;  
 
 (c)  duties on goods provided for in the ite ms in staging category B in Nicaragua’s 
Schedule shall be removed in three equal a nnual stages beginning on 1 July 2000, and 
such goods shall be duty-free as from 1 July 2002;  
  (d)  duties on goods provided for in the items  in staging category C in Mexico’s Schedule 
shall be removed in ten equal annual stages beginning on 1 July 1998, and such goods 
shall be duty-free as from 1 July 2007;  
  (e)  duties on goods provided for in the ite ms in staging category C in Nicaragua’s 
Schedule shall be removed in equal annual st ages beginning on 1 July 2000, and such 
goods shall be duty-free as from 1 July 2007;  
 
 (f)  duties on goods provided for in the it ems in staging category C15 in Mexico’s 
Schedule shall be removed in 15 equal annua l stages beginning on 1 July 1998, and 
such goods shall be duty-free as from 2012;  
 WT/REG206/1 
Page 26  
 
 (g)  duties on goods provided for in the ite ms in staging category C15 in Nicaragua’s 
Schedule shall be removed in 13 equal annua l stages beginning on 1 July 2000, and 
such goods shall be duty-free as from July 2012;  
  (h)  on an originating good included in the tariff items identified by the code "DES NIC", 
Nicaragua shall apply the lower of the following customs duties: 
   (i)  Nicaragua’s most-favoured-nation tariff;  and    (ii) the customs duty applied by Mexico to the same good.  
   
 effective from the date on which Mexico completely removes its customs duties, in accordance with the Tariff Elimination Programme, Nicaragua shall also remove its customs duties 
completely; and  
 (i) on originating the goods from Nicaragua provided for in the tariff items of category 
"TA", Mexico shall apply tariffs as established in Annex 4-04(2). 
 2. Notwithstanding paragraphs Article 3-04 (1) a nd (2), a Party may adopt or maintain customs 
duties in accordance with its rights and duti es under the GATT 1994 on the originating goods 
provided for in a tariff item marked with th e code "EXCL" in each Party’s Schedule. 
 
3. The base rate of customs duty and staging category for determining the interim rate of 
customs duty at each stage of elimination for a tari ff item is indicated for that tariff item in each 
Party’s Schedule. For the case of Mexico they are in dicated in the columns "t asa base" and "veldes", 
and for Nicaragua they are indicated in the columns "TB2000" and "veldes", respectively. 
 
 4.  Notwithstanding paragraphs 1 and 2, Nicar agua may apply the component of the customs 
duty that appears in the temporary protective tariff column, marked ATP, in its Schedule on 
originating goods provided for in the correspondi ng tariff item, and shall eliminate the duty for 
originating goods effective 1 January 1999, ex cept for products specified in paragraph 5. 
 
 5.  The temporary protective tariff (TPT) applicab le to the originating goo ds listed below shall be 
eliminated according to the following Schedule:  
TPT applicable as from
: 
 
Item TPT 1-Jul-98 1-Jan-99 1-Jan-00 1-Jul-00 1-Jan-01 1-Jul-01 
2201.10.00.90 35% 25% 20% 15% 10% 5% 0 
2202.10.00.11 35% 25% 20% 15% 10% 5% 0 
2202.10.00.12 35% 25% 10% 15% 10% 5% 0 
2202.10.00.19 35% 25% 20% 15% 10% 5% 0 
2202.90.10.00 20% 10% 5% 0 0 0 0 
2202.90.90.10 35% 25% 20% 15% 10% 5% 0 
2202.90.90.90 20% 10% 5% 0 0 0 0 
2203.00.00.10 35% 25% 20% 15% 10% 5% 0 
2203.00.00.90 35% 25% 20% 15% 10% 5% 0 
2207.10.10.00 25% 15% 10% 5% 0 0 0  WT/REG206/1 
 Page 27 
 
 
Item TPT 1-Jul-98 1-Jan-99 1-Jan-00 1-Jul-00 1-Jan-01 1-Jul-01 
2207.10.90.10 20% 10% 5% 0 0 0 0 
2207.10.90.90 20% 10% 5% 0 0 0 0 
2207.20.00.10 20% 10% 5% 0 0 0 0 
2207.20.00.90 20% 10% 5% 0 0 0 0 
2208.20.00.00 30% 20% 15% 10% 5% 0 0 
2208.30.00.00 35% 25% 20% 15% 10% 5% 0 
2208.40.10.00 35% 25% 20% 15% 10% 5% 0 
2208.40.90.10 35% 25% 20% 15% 10% 5% 0 
2208.40.90.90 35% 25% 20% 15% 10% 5% 0 
2208.50.00.00 35% 25% 20% 15% 10% 5% 0 
2208.60.00.00 30% 20% 15% 10% 5% 0 0 
2208.70.00.00 30% 20% 15% 10% 5% 0 0 
2208.90.10.00 25% 15% 10% 5% 0 0 0 
2208.90.20.00 30% 20% 15% 10% 5% 0 0 
2208.90.90.00 30% 20% 15% 10% 5% 0 0 
2402.10.00.00 35% 25% 20% 15% 10% 5% 0 
2402.20.00.00 35% 25% 20% 15% 10% 5% 0 
2402.90.00.00 35% 25% 20% 15% 10% 5% 0 
2403.10.10.00 35% 25% 20% 15% 10% 5% 0 
2403.10.90.00 35% 25% 20% 15% 10% 5% 0 
2403.91.00.00 35% 25% 20% 15% 10% 5% 0 
2403.99.00.00 35% 25% 20% 15% 10% 5% 0 
3605.00.00.00 20% 10% 5% 0 0 0 0 
 
6.  The customs duty component that appears in column TPT of Nicaragua’s Tariff Elimination Schedule, applicable to originating goods, shall not be greater than the lesser of: 
 
 (a)  Customs duty component established in accordance with paragraph 4;  and  
  (b)  the customs duty applicable to memb er countries of the General Treaty on Central 
American Integration. 
 
7.  For the purposes of elimination of customs duties pursuant to Article 3-04, transitional rates 
will be rounded to one decimal place, using the nearest tenth of a percentage point above or below.  If 
the tariff rate is expressed in monetary units, it sha ll be expressed at least to the nearest  .001, below 
or above, of the Party’s official monetary unit.   WT/REG206/1 
Page 28  
 
Section A - Tariff Schedule of Mexico
 
(Attached as a separate volume) 
 
Section B - Tariff Schedule of Nicaragua  
(Attached as a separate volume) 
  
ANNEX 3-12 
 
Country of Origin Marking
 
1.  For the purposes of this Annex: 
  ultimate purchaser  means the last person in the territory of the importing Party that 
purchases the good in the form in which it was imported;  such purchaser need not be the last person 
that will use the good; 
 
 container  includes a carton, packaging, packet or wrapping;  
  usual container means  the container in which a good will ordinarily reach its ultimate 
purchaser;  
 legible means capable of being easily read; 
 
 sufficiently permanent  means capable of remaining in  place until the good reaches the 
ultimate purchaser, unless deliberately removed; 
 
 customs value  means the value of a good for the purpose of levying customs duties on an 
imported good, pursuant to the principles of the Customs Valuation Code; and   conspicuous  means capable of being easily seen with normal handling of the good or 
container;   
2.  Each Party may require that a good of the othe r Party, when imported into its territory, bear a 
country of origin marking that indicates to the ultimate purchaser of that good the name of its country of origin.   3.  Each Party may, as part of its general consumer information measures, require that an 
imported good be marked with its c ountry of origin in the same manner as prescribed for goods of that 
Party.  4.  Each Party shall, in adopting, maintaini ng and applying any measure relating to country of 
origin marking, minimize the difficulties, costs and inconveniences that the measure may cause to the 
commerce and industry of the other Party. 
 
5. Each Party shall:   (a)  Accept any reasonable method of marking of a good of the other Party, including the 
use of stickers, labels, tags or paint, th at ensures that the marking is conspicuous, 
legible and sufficiently permanent; 
  (b)  exempt from a country of origin marking requirement a good of the other Party that:   (i)  is incapable of being marked;  WT/REG206/1 
 Page 29 
 
 
  (ii) cannot be marked prior to exportation to the territory of the other Party 
without damaging the goods; 
  (iii) cannot be marked except at a cost that  is substantial in relation to its customs 
value so as to discourage its exportation to the territory of the other Party; 
  (iv)  cannot be marked without materia lly impairing its function or substantially 
detracting from its appearance; 
 
 (v)  is in a container that is marked in a manner that will reasonably indicate the 
good’s origin to the ultimate purchaser; 
  (vi) is a crude substance;  
 (vii) is to undergo production in the territory of the importing Party by the 
importer, or on its behalf, in a manner that would result in the good becoming a good of the importing Party under the Marking Rules; 
  (viii) by reason of its character, or the circumstances of its importation, the ultimate 
purchaser would reasonably know its country  of origin even though it is not 
marked; 
     (ix)  was produced more than 20 years prior to its importation,   (x)  was imported without the required marking and cannot be marked after its 
importation except at a cost that would be  substantial in relation to its customs 
value, provided that the failure to mark the good before importation was not 
for the purpose of avoiding compliance with the requirement; 
  (xi)  for the purpose of temporary duty-fre e admission, is in transit or in bond or 
otherwise under customs administration control; 
 
 (xii) is an original work of art;  or   (xiii) is imported for use by the importer and is not intended for sale in the form in 
which it was imported. 
 
6.  Except for a good described in paragraphs 5(b) (vi), (vii), (viii), (ix), (x) and (xii), a Party may 
provide that, wherever a good is exempted from the country of origin marking requirement pursuant to paragraph 5(b), its outermost usual container shall be marked so as to indicate the country of origin 
of the good it contains.  
7.  Each Party shall provide that: 
  (a)  A usual container imported empty, whethe r or not disposable, shall not be required to 
be marked with its own country of origin, but the container in which it is imported may be required to be marked with the c ountry of origin of its contents;  and 
 
 (b)  a usual container imported filled, whether or not disposable:  
(i) shall not be required to be marked with its own country of origin, but 
 WT/REG206/1 
Page 30  
 
  (ii)  may be required to be marked with the country of origin of its contents, unless 
the contents are marked with their coun try of origin and the container can be 
readily opened for inspection of the conten ts, or the marking of the contents is 
clearly visible through the container. 
 
 8.  Each Party shall, wherever administratively practicable, permit an importer to mark a good of 
the other Party subsequent to importation but prio r to release of the good from customs control or 
custody, unless that importer has repeatedly violat ed the country of origin marking requirements of 
the Party and has been previously notified in writing th at such good is required to be marked prior to 
importation. 
 
 9.  Each Party shall provide that, except with respect to importers that have been notified under 
paragraph 8, no special duty or pena lty shall be imposed for failure to comply with country of origin 
marking requirements of that Party, unless the good is removed from customs custody or control without being properly marked, or a deceptive marking has been used. 
 
10.  The Parties shall cooperate a nd consult on matters related to this Annex, including additional 
exemptions from a country of origin marking requirement.   
ANNEX 3-13 
 
Distinctive Products
3 
  Nicaragua shall recognize tequila and mezcal as distinctive products of Mexico, and therefore 
shall not permit the sale of any product as tequ ila or mezcal unless it has been manufactured in 
Mexico in accordance with the laws and regul ations of Mexico governing those products. 
  
CHAPTER IV: AGRICULTURAL SECTOR 
 
Article 4-01 
 
Definitions
 
  For the purposes of this Chapter:  
 agricultural product means  a product described in any of the following headings or 
subheadings of the Harmonized System:  
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
(a) Chapters 1 to 24 (except fish and fish products); and  
(b) Heading or subheading Description 
   
 2905.43  Mannitol  2905.44  Sorbitol 
 2918.14  Citric acid 
 2918.15  Salts and esters of citric acid 
                                                     
 
  3 For this purpose of this Annex, letters will be ex changed at ministerial level, allowing Nicaragua to 
prepare a schedule of its distinctive products, which will be recognized as such by Mexico provided this is 
compatible with Mexico’s domestic and international commitments.  WT/REG206/1 
 Page 31 
 
 
 2936.27  Vitamin C and its derivatives  33.01  Essential oils  35.01 - 35.05  Albuminoidal products based on modified starches  3809.10  Finishing agents  3823.60  Sorbitol n.e.p. 
 41.01 - 41.03  Hides and skins. 
 43.01  Raw furskins  50.01 - 50.03  Raw silk and silk waste  51.01 - 51.03  Wool and animal hair  52.01 - 52.03  Cotton yarn, cotton waste and carded or combed cotton 
 53.01  Raw flax 
 53.02  Raw hemp   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: 
 
(Descriptions are provided next to th e corresponding item for reference purposes only) 
 
Chapter, heading or subheading Description 
  
03  Fish and crustaceans, molluscs and other aquatic invertebrates. 
05.07  Ivory, tortoise-shell, whalebone, ho rns, antlers, hooves, nails, claws and beaks 
and products thereof. 
05.08  Coral and similar materials. 
05.09  Natural sponges of animal origin. 05.11  Products of fish or crustaceans, molluscs or any other aquatic invertebrate; 
dead animals of chapter 3 
15.04  Fats and oils and their frac tions, of fish or marine mammals 
16.03  Extracts and juices other than of meat 
16.04  Prepared or preserved fish 16.05  Crustaceans, molluscs and other aquatic invertebrates, prepared or preserved 2301.20  Flours, meals and pellets, of fish .   
 export subsidies means  
  (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, 
contingent on export performance;  
  (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 to 
buyers for a similar product in the domestic market; 
 
 (c)  payments on the export of an agricult ural 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; 
 WT/REG206/1 
Page 32  
 
 (d)  the provision of subsidies to reduce th e 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 charg es 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;  and  
 
 over-quota tariff rate means the rate of customs duty app licable to quantities in excess of the 
amount specified under a tariff rate quota;  
Article 4-02 
 
Scope and Coverage
 
1.  This Section applies to measures adopted or  maintained by a Party relating to agricultural 
trade.  2.  In the event of any inconsistency between  this Chapter and another provision of this 
Agreement, this Chapter shall prevail to the extent of the inconsistency. 
 
Article 4-03 
 
International Obligations
 
 A Party, prior to adopting a measure unde r an inter-governmental agreement on goods 
pursuant to Article XX(h) of GATT 1994, which may affect the trade in an agricultural between the 
Parties, shall consult the other Party to prevent th e nullification or impairment of a concession granted 
by that Party under the Tariff Elimination Programme of this Agreement.  
Article 4-04 
 
Market Access
 
1.  The Parties agree to faci litate access to their respective markets reducing or eliminating 
import barriers to trade in agricultural goods, and th ey undertake not to establish new barriers to trade 
between them.  Customs duties and quantitative restrictions  
 
2. The Parties waive their rights under Article XI:2(c) of GATT 1994, and those rights as incorporated by Article 3-09, regarding any measu re adopted or maintained with respect to the 
importation of agricultural goods.  
 
 3.  Notwithstanding any other provision of this Agreement, with regard to products listed in 
Annex 4-04(1), either Party may adopt or maintain customs duties on the importation of such products, pursuant to their rights and obligations under the WTO agreement. 
 
 4.  Once a year following the entry into force of this Agreement, the Parties shall review, through 
the Committee on Agricultural Trade established in  Article 4-08, the possibility of gradually 
eliminating customs duties on the importation of agricultural products listed in Annex 4-04(1).  WT/REG206/1 
 Page 33 
 
 
  5.  Access to the products lis ted in Annex 4-04(2) shall be gove rned by the provisions of that 
Annex.  6.  A Party may not apply an over-quota tariff rate under a special safeguard that exceeds that 
provided for in the Tariff Elimination Programme agreed between the Parties. 
 
Restrictions on the drawback of customs duties on products exported in identical or similar 
conditions. 
 7.  Effective the date of entry into force of th is Agreement, neither Party may refund the amount 
of customs duties paid, or waive or reduce the amount of customs duties owed, on any agricultural good imported into its territory that is:   (a)  Substituted by an identical or simila r good that is subsequently exported to the 
territory of the other Party;  or 
  (b)  substituted by an identical or similar good that used as a material in the production of 
another good that is subsequently exported to the territory of the other Party. 
 
Article 4-05   
 
Domestic Support
 
1.  The Parties recognize that, while domestic support measures can be of  crucial importance to 
their agricultural sectors, such me asures may also have trade distorting and production effects. They 
also recognize that domestic support reduction comm itments may result from agricultural multilateral 
trade in the WTO framework . Accordingly, where a Party supports  its agricultural producers, that 
Party should endeavour to work towa rd domestic support measures that: 
  (a)  Have minimal or no trade distorting or production effects;  or   (b) are exempt from any applicable domestic  support reduction commitments that may be 
negotiated under the WTO. 
 2. The Parties further recognize that a Part y may change its domestic support measures, 
including those that may be subject to reduction commitments, pursuant to its rights and obligations 
under the WTO Agreement. 
 
Article 4-06 
 
Export Subsidies
 
1.  The Parties share the objective of the multilateral elimination of export subsidies on 
agricultural goods and shall cooperate to achieve an  agreement to eliminate such subsidies in the 
WTO framework.  
 2. Subject to Chapter IX (Unfair Trade Practices), effective the date of entry into force of this 
Agreement, the Parties may not increase subsidi es above 7 per cent of the f.o.b. export value. 
 
 3.  Effective the date at which tariffs on origin ating agricultural products reach a zero rate under 
the Tariff Elimination Programme, and under no circum stances after 1 July 2007, the Parties may not 
maintain subsidies on the exportation of agricu ltural products in their reciprocal trade. 
 WT/REG206/1 
Page 34  
 
 4.  Notwithstanding the foregoing, effective the da te of entry into force of this Agreement, the 
Parties may not maintain, in their reciprocal tr ade, subsidies on the exportation of agricultural 
products listed in Article 5 of Export Promotion Decree (Decreto de Promoción de Exportaciones) 
No. 37-91 of Nicaragua, and those that are subject  to tariff rate quotas under the Tariff Elimination 
Programme. 
 
Article 4-07 
 
Agricultural Grading and Marketing Standards 
 
1. Trade in agricultural products between the Parties shall be subject to the provisions of 
Chapter XIV (Standards-Related Measures). 
 2.  The Parties hereby establish a Committee on Ag ricultural Grading and Marketing Standards, 
comprising representatives of each Party, which shall meet annually or as otherwise agreed. The 
Committee shall review the operation of agricultural gr ading and quality standards as they affect trade 
between the Parties, and shall resolve issues that ma y arise regarding the operation of those standards. 
This Committee shall report to the Committee on Ag ricultural Trade established under Article 4-08. 
 3. Each Party shall grant to the agricultural prod ucts imported from the other Party treatment no 
less favourable than that accorded to its own agricu ltural products in the application of agricultural 
grading and marketing standards in terms of  packaging, grading, quality, and size. 
 
Article 4-08 
 
Committee on Agricultural Trade
 
1. The Parties hereby establish a Committee on Agricultural Trade, comprising representatives 
of each Party. 
 2.  Among other functions, the Committee’s shall:   (a)  Monitor and promote cooperation on th e implementation and administration of this 
Chapter; 
  
 (b)  provide a forum for the Parties to cons ult on issues related to this Chapter at least 
semi-annually and as the Parties may otherwise agree; 
  (c)  report annually to the Commission on th e implementation of this Chapter;  and 
 
 (d)  precisely and expeditiously analyse possi ble mechanisms for inclusion in the Tariff 
Elimination Programme of products provi ded for in tariff subheadings 0901.21, 
0901.22 and 0901.90 (roasted coffee), and present them to the Commission for its consideration. 
 
 
ANNEX 4-04(1) 
 
Exclusions
 
 
 Products listed in the Tariff Elimination Progr amme, whose column "Speed of elimination" 
contains the category EXCL, shall be excluded from the elimination.    WT/REG206/1 
 Page 35 
 
 
ANNEX 4-04(2) 
 
Trade in Sugar  
1.  The Parties agree to establish a Committ ee on Sugar Analysis, comprising representatives of 
each Party. 
 
2.  The share corresponding to Nicaragua within the duty-free tariff quota scheme for sugar to be 
applied by Mexico in the event of its requiring suga r in a given year, will be 20 per cent in the first 
four years after this treaty comes into force. The sh are for subsequent years shall be determined by the 
Committee. 
 
 3.  Should Mexico not require sugar in a given year, the preferential quota for sugar that Mexico grants to Nicaragua shall be zero. Accordingly, fo r that year, no preferential access would be granted 
for Nicaragua.  
 4.  Notwithstanding Article 4-04, over and above the duty-free tariff quota that Mexico might 
grant to Nicaragua, Mexico may adopt or main tain customs duties on sugar originating from 
Nicaragua, pursuant to its rights and obligations under the WTO agreement. 
 5. For the purposes of this Annex, sugar m eans, in the case of imports from Mexico, the 
following subheadings or tariff items described in the Tariff Schedule of the General Import Duty of 
Mexico: 1701.11.01, 1701.11.99, 1701.12.01, 1701.12.99, 1701.91 (except those containing 
flavourings), 1701.99.01 and 1701.99.99.   
CHAPTER V: SANITARY AND PHYTOSANITARY MEASURES 
 
Article 5-01 
 
Definitions
 
  For the purposes of this Chapter: 
 
 food additive means any substance not normally consumed  as a food itself or  used as a basic 
food ingredient, irrespective of its nutritional valu e, which is added to a food product during its 
production, manufacturing, processing, preparation,  treatment, bottling, packaging, transport or 
storage, such that it, or one of its by-products, directly or indirectly, becomes a component of the food 
product, or affects its characteristics. This defin ition does not include contaminants or substances 
added to the food product to maintain or improve its nutritional qualities; 
 
 food means any processed, semiprocessed or raw substance, which is used for human 
consumption, including beverages, chewing gum an d any other substance used in its manufacture, 
preparation or treatment, as well as balanced s ubstances used for animal consumption (fodder); but 
does not include cosmetics, tobacco or substances used solely as medication;  
  animal means any vertebrate or invertebrate sp ecies, including aquatic and wild fauna;  
  harmonization means the establishment, recognition and application of common sanitary and 
phytosanitary measures by the Parties; 
  good  means foods, animals and plants, a nd their products and by-products; 
 WT/REG206/1 
Page 36  
 
 contaminant means any substance or living organism not intentionally added to the food 
product, which is present therein as a result of th e production (including op erations undertaken in 
agriculture, zootechnology and veterinary medicine),  manufacture, processing, preparation, treatment, 
bottling, packaging, transport or storage of that  food product, or as the result of environmental 
pollution; 
 
 disease means clinical or other infection caused by one or more aetiological agents of 
diseases listed in the International Zoosanitary Co de of the International Office of Epizootics. 
  risk assessment means  
 
 (a)  The potential for the introduction, establis hment or spread of a disease or pest, and the 
associated biological and economic consequences;  or 
  (b)  the potential for adverse effects on human, animal or plant life or health, arising from 
the presence of food additives, contaminants, toxins or disease-causing organisms in a 
good:  
  food safety means the quality that ensures foods pose no risk to human or animal health;  
 
 scientific information means data or information obtained by using scientific principles and 
methods;  
  sanitary or phytosanitary measure means  a measure that a Party adopts, maintains or 
applies in its territory to:  
 (a)  Protect human, animal or plant life or health in its territory from risks arising from the 
introduction, establishment or spread of a pest or disease; 
  (b) protect human, animal or plant life or hea lth in its territory from risks arising from the 
presence of a food additive, contaminant, toxin or disease-causing organism in a good; 
 
 (c) protect human life or health from risks arising from a disease-causing organism or 
pest carried by an animal or plant, or a product thereof;  or 
  (d) prevent or limit other damage arising from the introduction, establishment or spread 
of a pest or disease.  
  Sanitary and phytosanitary measures encompass all relevant laws, regulations, prescriptions 
and procedures, including criteria relating to th e final good; methods of processing or production 
directly related to the good; testing, inspections , certifications or approval procedures; relevant 
statistical methods; sampling procedures; risk  assessment methods; packaging and labelling 
requirements directly related to food safety;  an d quarantine regimes, such as relevant requirements 
for the transportation of animals or plants, or the material needed fo r their survival during 
transportation;   appropriate level of sanitary  or phytosanitary protection means the level of protection 
human and animal life and health, and plant health, that a Party considers appropriate; 
  international standards, guidelines or recommendations  means: 
  (a)  In relation to food safety, those adopt ed by the Codex Alimentarius Commission, 
including those regarding product decompos ition elaborated by the Codex Committee  WT/REG206/1 
 Page 37 
 
 
on Fish and Fishery Products, food additiv es, contaminants, hygiene practices, and 
methods of analysis and sampling;  
  (b)  in relation to animal health and zoon oses, those developed under the auspices of the 
International Office of Epizootics;  
 
 (c) in relation to plant health, those develo ped under the auspices of the Secretariat of the 
International Plant Protection Convention;  or 
  (d) those established by or developed under any other international organization agreed 
on by the Parties; 
  pest means a species, race or biotype of plant, animal or pathogenic agent that is harmful or 
potentially harmful to plants, animals or their products; 
 
 pesticide means a substance used to prevent, dest roy, attract, repel or combat any pest, 
including undesired plant or animal species, during the production, storage, transport, distribution and preparation of food products, plants and their produc ts or animal feed, or which can be administered 
to animals to combat ectoparasites. It also incl udes substances intended for use in controlling plant 
growth, defoliants, drying agents, agents to re duce fruit density, or germination inhibitors, and 
substances applied to crops before or after harv est to protect the product from deterioration during 
storage and transport. The term does not normally include fertilizers, nutrients of plant or animal 
origin, food additives, or animal medications; 
 
 approval procedure means a procedure for the registration,  certification, notification or any 
other mandatory administrative procedure to appr ove the use of a food additive or to establish a 
tolerance level for a contaminant for defined purpo ses or under agreed conditions in a food, drink or 
fodder, prior to allowing its use or commercializa tion when any of these contain the food additive or 
contaminant in question;    control or inspection procedure means  any procedure used, direct ly or indirectly, to 
determine that a sanitary or phytosanitary measure is  fulfilled, including sampling, testing, inspection, 
evaluation, verification, monitoring, auditing, assu rance of conformity, accreditation, registration, 
certification or other procedure involving the physi cal examination of a good, of the packaging of a 
good, or of the equipment or facilities directly rela ted to production, marketing or use of a good, but 
does not mean an approval procedure;   
 pesticide residue means a substance that is present in foods, plants and th eir products, or 
animal feed, as a consequence of the use of a pes ticide. The term includes any pesticide derivative, 
such as conversion products, metabolites and reacti on products, and impurities considered to be of 
toxicological significance;   transport means the medium of mobilization, type of packing and haulage modality 
established in a sanitary or phytosanitary measure;  
  plant means living plants and parts thereof, including seeds and germoplasm;  
  area of low pest or disease prevalence means an area designated by the competent 
authorities, which can encompass the whole of the count ry, part of the country or the whole or part of 
several countries, in which a speci fic pest or disease only occurs at low levels, and is subject to 
effective means of surveillance and control of the pest or disease, or eradication thereof;  and  
  pest-free or disease-free area means  an area designated by the competent authorities, which 
can encompass the whole of the country, part of the country or the whole or part of several countries, WT/REG206/1 
Page 38  
 
in which a specific pest or disease does not occu r. A pest-free or disease-free area may surround, be 
surrounded by, or the adjacent to an area — either w ithin part of a country or in a geographic region 
that may encompass the whole or parts of several  countries — in which a given pest or disease is 
known to exist but is subject to regional control measures, such as the establishment of protection, 
surveillance and buffer zones that isolate or eradicate the pest or disease in question. 
 
Article 5-02 
 
Scope and Coverage
 
 In order to establish a framework of disciplin es and rules to guide the development, adoption 
and fulfilment of sanitary and phytosanitary measures, th e provisions of this Chapter are applicable to 
any measure of that type, which may affect trade be tween the Parties, either directly or indirectly. 
 
Article 5-03 
 
Basic Rights and Obligations  
Adoption of sanitary and phytosanitary measures 
 
1.  Each Party may establish, adopt, maintain or apply any sanitary or phytosanitary measure, 
including those relating to food safety and to the importation of any good from the territory of the other Party, when it does not fulfil the applicab le requirements or does not satisfy the approval 
procedures, This includes measures that afford a higher level of protection than would be achieved 
through measures based on an international standa rd, guideline or recommendation, provided they are 
based on scientific principles.  
Scientific principles  
 
2. Each Party shall ensure that any sanitary or phytosanitary measure that it adopts, maintains or 
applies is:    (a)  Based on scientific principles, taking into account relevant factors, including, where 
relevant, different geographic conditions;  
 
 (b)  not maintained where there is no longer a scientific basis for it;  and  
  (c)  based on a risk assessment, as appropriate to the circumstances. 
 
Non-discriminatory treatment  
 
3. Each Party shall ensure that any sanitary or phytosanitary measure that it adopts, maintains or 
applies does not arbitrarily or unjustifiably discrim inate between its goods and similar goods of the 
other Party, or between goods of the other Part y and similar goods of any other country, where 
identical or similar conditions prevail.  
 
Disguised restrictions and unnecessary obstacles  
 
4. No Party may adopt, maintain  or apply a sanitary or phytosan itary measure that constitutes a 
disguised restriction on trade between the Par ties, or which aims to create unnecessary obstacles 
thereto. Each Party shall ensure that any sanitary or  phytosanitary measure that it adopts, maintains or 
applies is applied only to the extent necessary to achie ve its appropriate level of  protection, taking into 
account technical and economic feasibility.    WT/REG206/1 
 Page 39 
 
 
Right to establish level of protection  
 
5 .  Notwithstanding any other provision of this  Section, each Party may, in protecting human, 
animal or plant life or health, establish its appropriate levels of protection in accordance with Article 5-06.  
 
Reliance on other organizations  
 
6.  Each Party shall ensure that any organiza tion on which it relies in designing or applying a 
sanitary or phytosanitary measure acts in a manner consistent with this Chapter.  
 
Article 5-04 
 
International Standards and Standardizing Organizations 
 
1. Each Party shall use, as a basis for its sanitary and phytosanitary measures, relevant 
international standards and guidelines or recommenda tions, except where these do not constitute an 
effective or appropriate method for protecting human  and animal life and health, and plant health, 
owing to climatic, geographi c, technological or infrastructure factors, or else for scientifically justified 
reasons, or because the appropriate level of sanitary  or phytosanitary protection is not obtained. 
 2. A Party’s sanitary or phytosanitary measure that conforms to a relevant international standard, 
shall be presumed consistent with  Article 5-03 (1) through (5).  
 3. Nothing in Paragraph 1 shall be construed to  prevent a Party from adopting, maintaining or 
applying a sanitary or phytosanitary measure that is  more stringent than the relevant international 
standard, guideline or recommendation,  provided it is based on scien tific principles, in order to 
achieve appropriate levels of sanita ry and phytosanitary protection.  
  4.  Where a Party has reason to believe that a sanitary or phytosanitary measure of the other 
Party is adversely affecting or may adversely aff ect its exports, and the measure is not based on a 
relevant international standard, guideline or reco mmendation, it may request reasons for the measure, 
and the other Party shall provide such  reasons in writing within 30 days.  
 
 5.  Each Party shall, to the greatest extent practicable, participate in relevant international 
standardizing organizations, including the Codex A limentarius Commission, the International Office 
of Epizootics, and the International Plant Protec tion Convention, with a view to promoting the 
development and periodic review of internati onal standards, guidelines and recommendations.  
 
Article 5 -05  
 
Equivalence
 
 
1.  Without reducing the level of protection of human, animal or plant life or health established 
in its law, and in order to facilitate trade in goo ds, the Parties shall, as far as possible, make their 
respective sanitary or phytosanitary measures equivalent, taking into account international 
standardization guidelines and recommendations.   2. The importing Party shall treat a sanitary or phytosanitary measure adopted or maintained by 
the exporting Party as equivalent to its own, wher e the latter objectively demonstrates with scientific 
data and risk assessment methodologies based on intern ational rules agreed on by those Parties, that 
the measure in question achieves the appropriate leve l of sanitary or phytosanitary protection required 
by the importing Party.  WT/REG206/1 
Page 40  
 
 3.  Each Party shall accept the results of the sanitary and phytosanitary control procedures carried 
out in the territory of the other Party, provide d satisfactory guarantees are offered that the good 
satisfies the sanitary or phytosanitary measures estab lished, adopted, maintained or applied in the 
territory of that Party.  
 4.  Pursuant to paragraph 3, the importing Pa rty shall be granted access to perform the relevant 
control or inspection procedures, if it so requests.   5.  In designing a sanitary or phytosanitar y measure, each Party shall consider the relevant 
sanitary or phytosanitary measures curr ently in force or proposed in the territory of the other Party, 
with a view to standardizing them. 
 6.  At the request of either Party, the Parti es shall open consultations aimed at recognizing the 
equivalence of specific sanitary or phytosanitary  measures, based on international standards, 
guidelines or recommendations. 
 
Article 5-06 
 
Risk Assessment and Appropriate Level of  Sanitary and Phytosanitary Protection 
 
1.  The Parties shall ensure that their san itary and phytosanitary measures are based on an 
evaluation, appropriate to the circumstances, of th e risks existing for human and animal life, and for 
plant health, taking into account risk assessme nt techniques developed by the competent 
standardization organizations agreed upon by the Parties.  2.  In conducting a risk assessment on a specifi c good, including risks in relation to food 
additives and contaminants, each Party shall take the following factors into account:  
 
 (a)  Relevant available scientific evidence;    (b)  the prevalence of relevant diseases or pests, including the existence of pest-free or 
disease-free areas or areas of low pest or  disease prevalence, recognized by the 
Parties;  
 
 (c)  the epidemiology of the risk diseases and pests;   (d)  critical control points in processes of production, handling, packing, packaging and 
transport; 
 
 (e)  relevant ecological and other environmental conditions; 
  (f)  relevant inspection, samp ling and testing methods;  and 
  (g)  the applicable quarantine and treatment  measures that satisfy the importing country 
with regard to mitigation of the risk. 
  3.  Further to paragraph 2, each Party shall, in establishing its appropriate level of sanitary and 
phytosanitary protection take into account the risk  associated with the introduction, establishment or 
spread of an animal or plant pest or disease;  a nd, in assessing the risk, it shall also take into account 
the following economic factors, where relevant: 
  (a)  Loss of production or sales that may result from the introduction, establishment or 
spread the pest or disease; 
  WT/REG206/1 
 Page 41 
 
 
 (b)  costs of control or eradication of the pest or disease in its territory;  and   (c)  the relative cost-effectiveness of alternative approaches to limiting risks. 
  4.  Notwithstanding paragraphs 2 and 3 and Artic le 5-03 (2)(c), where a Party conducting a risk 
assessment determines that available relevant scientif ic evidence or other information is insufficient to 
complete the assessment, it may adopt a provisional sa nitary or phytosanitary measure on the basis of 
available relevant information. The Party shall, w ithin a reasonable period after information sufficient 
to complete the assessment is presented to it, comp lete its assessment, review and, where appropriate, 
revise the provisional measure in the light of the assessment. 
 
Article 5-07 
 
Adaptation to Regional Cond itions and recognition of pest- or disease-free areas
 
and areas of low pest or disease prevalence  
 
1.  Each Party shall adapt any of its sanita ry or phytosanitary measures relating to the 
introduction, establishment or spread of an animal or plant pest or disease, to the sanitary or 
phytosanitary characteristics of th e area where a good subject to such  a measure is produced and the 
area in its territory for which the good is des tined, taking into account any relevant conditions, 
including those relating to transportation and handlin g, between those areas.  In assessing the sanitary 
and phytosanitary characteristics of an area, each Party shall take into account, among other factors, 
the prevalence of specific pests or diseases, the ex istence of eradication or control programmes, and 
the criteria or guidelines prepared by the competen t organizations, as agreed upon by the Parties. 
 2.  The Parties shall, in particular, recognize the concept of pest-free or disease-free areas and 
those of low pest or disease prevalence.  The dete rmination of such areas shall be based on factors 
such as geography, ecosystems, ep idemiological surveillance and th e effectiveness of sanitary or 
phytosanitary controls.  3.  A Party that declares an area free from a given pest or disease in its territory, shall 
demonstrate that condition with scientific informati on to the other Party, and provide an assurance 
that it will remain so, based on the protection me asures adopted by the authorities responsible for 
sanitary and phytosanitary services.   4.  A Party wishing to obtain recognition of an area as free from a given pest or disease shall 
make the request and provide the corresponding scie ntific and technical information to the other 
Party. 
 5.  A Party that receives a request for recogniti on mentioned in paragraph 4, shall respond within 
a time period agreed upon by the Parties, for wh ich purpose it may undertake verifications in the 
territory of the exporting Party for inspection, t esting and other procedures.  In the event of non-
acceptance, it shall provide the scientific and technical foundation for its decision in writing. 
 
6.  The Parties shall establish agreements on sp ecific requirements allowing a good produced in 
an area of low pest or disease prevalence to be impor ted if it achieves the appropriate level of sanitary 
or phytosanitary protection. 
 
Article 5-08 
 
Control, Inspection and Approval Procedures 
 
1. Each Party shall initiate and complete any control or inspection procedure as expeditiously as 
possible and communicate the anticipated pr ocessing period to the applicant on request. WT/REG206/1 
Page 42  
 
 2.  Each Party shall ensure that its competent body:   (a)  On receipt of an application, pr omptly examines the completeness of the 
documentation and informs the applicant in a precise and complete manner of any 
deficiency;  
  (b)  transmits to the applicant as soon as possi ble the results of the procedure, in a form 
that is precise and complete so that the applicant may take any necessary corrective action,  
 
 (c)  where the application is deficient, pro ceeds as far as practicable with the procedure if 
the applicant so requests, respecting the established time-limits;  and reports on the status of the application and the reasons fo r any delay, if the applicant so requests; 
 
 (d)  limits the information the applicant is  required to supply to that necessary for 
conducting the procedure; 
  (e) accords confidential or proprietary st atus to any information arising from the 
procedure conducted for a good of the other Party; 
 
 (f)  protects the applicant’s legitimate commerc ial interests, to the extent provided under 
each Party’s law; 
  (g)  limits any requirement regarding indivi dual specimens or samples of a good to that 
which is necessary; 
 
 (h)  does not charge a fee, for performing the procedure on the good of the other Party, 
that is higher than any such fee it imposes on its own goods; 
  (i)  in selecting the location of the faciliti es at which the procedure is performed and 
selecting samples of goods, uses criteria th at do not cause unnecessary inconvenience 
to an applicant or its agent; 
  (j)  provides a mechanism to review compla ints concerning the operation of the procedure 
and take corrective action when a complaint is justified;  and 
 
 (k)  for a good modified following a determination that it fulfils the requirements of the 
applicable measure, limits the procedure to  that necessary to determine that the good 
continues to fulfil the requirements of that measure. 
  3.  Each Party shall apply the provisions of paragraph 2 to its approval procedures.  
 
 4.  Where the importing Party requires a control or inspection procedure to be performed during 
production, the exporting Party shall, on the request of the importing Party, take such reasonable 
measures as may be available to it to facilitate  access in its territory and to provide assistance 
necessary to facilitate the importing Part y’s control or inspection procedure. 
 
 5.  For the purposes of ensuring food safety, each  Party may establish in its approval procedures 
and in accordance with its current regulations, authorization requirements for the use of a food additive or the establishment of a level of toleran ce for a contaminant therein, before granting access 
to its market. Where that Party so requires, it may ad opt a relevant international standard, guideline or 
recommendation as the basis for granting access until a final decision is taken. 
  WT/REG206/1 
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Article 5-09 
 
Notification, Publication and Provision of Information  
1.  A Party that proposes to adopt or modify a san itary or phytosanitary measure in its territory, 
where it could have an effect on the trade of the other Party, shall: 
 
 (a)  Publish a notice and notify the other Party in writing, at least 60 days in advance of its 
intention to adopt or modify the measure, other than a law;  and publish and provide 
to the other Party the full text of the proposed measure; and, wherever possible, 
identify any provision that deviates in substa nce from relevant international standards, 
guidelines or recommendations, so as to enable interested persons to become 
acquainted with the proposed measure;  
  (b)  identify the good to which the measure will apply, and provide a brief description of 
the objective and reasons for the measure;  and 
 
 (c)  provide a copy of the proposed measure to  any interested person that so requests, and, 
without discrimination, allow other Parties and interested persons to make comments 
in writing, and, on request, discuss the comments and take the results of such discussions into account. 
 
2.  Where a Party considers it necessary to addr ess an urgent problem relating to sanitary or 
phytosanitary protection, it may omit any of the steps set out in paragraph 1, provided that, on 
adoption of a sanitary or phytosanitary measure, it:    (a)  Immediately provides to the other Party a notification of the type referred to in 
paragraph 1(b), including a brief description of the urgent problem;  and 
  (b) provides a copy of the measure to the othe r Party or interested person that so requests, 
and, without discrimination, allows the ot her Party and interested persons to make 
comments in writing, and, on request, discu ss the comments and take the results of 
such discussions into account. 
 
3. Except where necessary to address an urgent pr oblem referred to in paragraph 2, each Party 
shall allow a reasonable period between the publica tion of a sanitary or phytosanitary measure of 
general application and the date on which it becomes effective, to allow time for interested persons to 
adapt to the measure. 
 
 4.  Where the importing Party denies entry into  its territory of a good of the exporting Party, 
because it does not comply with a sanitary or phy tosanitary measure, it shall notify the exporting 
Party in writing, within seven days, giving an expl anation that identifies the applicable measure and 
the reasons why good is not in compliance.  
 5.  Each Party shall appoint a government aut hority responsible for the implementation in its 
territory of the notification provisions of this Artic le, within 30 days following the entry into force of 
this Agreement.  WT/REG206/1 
Page 44  
 
Article 5-10 
 
Inquiry Points 
 
1.  Each Party shall ensure that there is one inquiry  point within its territory that is able to answer 
all reasonable inquiries from the other Party and interested persons, and to provide relevant 
documents, regarding: 
  (a)  Any sanitary or phytosanitary measure  proposed, adopted, or maintained in its 
territory, including control and inspec tion procedures, approval procedures, 
production and quarantine regimes, and pro cedures relating to tolerance limits for 
pesticides; 
  (b)  the Party’s risk assessment procedures and the factors it considers when conducting 
the assessment and in establishing its appr opriate levels of protection;  and 
 
 (c)  membership and participation in intern ational and regional sanitary and phytosanitary 
organizations and systems, and in bilatera l and multilateral arrangements within the 
scope of this Chapter; the provisions of t hose organizations, systems, and agreements; 
and the location of notices published pursuant to this Chapter or where such information can be obtained. 
 
2.  When a Party designates more than one inquiry point, it shall notify the other Party of the 
scope of the responsibilities of each inquiry point.   3.  Each Party shall ensure that where copies of  documents are requested by the other Party or by 
interested persons in accordance with this Chapte r, they are supplied at the domestic purchase price 
plus the cost of delivery. 
 
Article 5-11 
 
Limitations on the Provision of Information 
 
 Further to the provisions contained in Article  21-03, nothing in this Chapter shall be 
construed to require a Party to furnish any confidential information, the disclosure of which could 
prejudice the legitimate commercial interests of an enterprise. 
 
Article 5-12 
 
Committee on Sanitary and Phytosanitary Measures  
1.  The Parties hereby establish a Committe e on Sanitary and Phytosanitary Measures, 
comprising representatives of each Party holding  responsibilities for sanitary and phytosanitary 
matters. The Committee shall be established within 90 days after this Agreement comes into force.  
  The Committee shall oversee application of the provisions of this Chapter and the 
achievement of its objectives, and shall issue e xpeditious recommendations on specific sanitary and 
phytosanitary problems.  2.  The Committee shall:  
 (a)  Establish adequate term s and conditions for the coordination and solution of matters 
submitted to it; 
  WT/REG206/1 
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 (b)  facilitate agricultural trade between the Pa rties, promoting an improvement of sanitary 
and phytosanitary conditions in the territory of the Parties; 
  (c)  promote the activities indicated by the Parties, pursuant to Articles 5-04, 5-05, 5-06, 
5-07 and 5-15; 
 
 (d)  facilitate consultations on specific ma tters relating to sanitary or phytosanitary 
measures; 
  (e)  establish working groups on animal and plant health and food safety, establishing 
their mandates, objectives, and lines of action;  and 
  (f) meet once a year, unless otherwise agreed, and report annually to the Commission on 
the application of this Chapter. 
 
Article 5-13 
 
Technical Cooperation
 
 1.  The Parties shall:  
 (a)  Facilitate the provision of technical advice, information and assistance, on mutually 
agreed terms and conditions, to enhance their sanitary and phytosanitary measures 
and related activities, including research, processing technologies, infrastructure and the establishment of national regulatory bodies. Such assistance may include credits, 
donations and grants for the acquisition of t echnical expertise, training and equipment 
that will facilitate adjustment to and co mpliance with a sanitary or phytosanitary 
measure adopted by a Party;  and 
  (b)  provide information on their technical  cooperation programmes regarding sanitary or 
phytosanitary measures relating to specific areas of interest. 
 
2.  Expenses arising from technical assistance activ ities shall be subject to the availability of 
funds and each Party’s priorities on this issue. Expenses arising from control or inspection and 
approval procedures shall be borne by the interested parties.  
Article 5-14 
 
Technical Consultations 
 
1.  A Party may request consultations with the ot her Party on any matter covered by this Chapter.  
 2.  Where a Party requests consultations regarding the application of this Chapter to a sanitary or 
phytosanitary measure adopted by the other Party, and so notifies the Committee on Sanitary and 
Phytosanitary Measures, the Committee may facilita te the consultations. If the Committee does not 
consider the matter itself, it shall refer th e matter for non-binding technical advice or 
recommendations to an ad hoc working group, or to another forum.
 
 3. Each Party may use the good offices of releva nt international standa rdizing organizations, 
including those referred to in Article 5-04, for advice and assistance on sanitary and phytosanitary 
matters within their respective mandates.  
 WT/REG206/1 
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Article 5-15 
 
Dispute Settlement
 
1. Where a Party considers that a sanitary or ph ytosanitary measure of the other Party is being 
interpreted or applied inconsistently with the prov isions of this Chapter, it shall be required to 
demonstrate such inconsistency. 
 2.  Where the Parties have had recourse to c onsultations under Article 5-14 (1) and (2), the 
consultations shall, on the agreement of the Parties involved, constitu te consultations under 
Article 20-05.  
 
 
CHAPTER VI: RULES OF ORIGIN 
 
Article 6-01 
 
Definitions
 
 
 For the purposes of this Chapter:   good means  any merchandise, product, article or material; 
 
 fungible goods  means goods that are interchangeab le for commercial purposes and the 
properties of which are essentially identical and cannot be differentiated by a simple visual examination;  
 identical or similar goods "means "identical goods " and "similar goods", respectively, as 
defined in the Customs Valuation Code;   goods wholly obtained or produced entirely in the territory of one or both Parties means  
 
 (a) Mineral goods extracted in the territory of either or both of the Parties;  
 (b) vegetable goods harvested in the te rritory of either or both Parties; 
  (c) live animals born and raised in the territory of either or both Parties; 
 
 (d) goods obtained from hunting or fishing in the territory of either or both Parties; 
  (e) fish, shellfish and other marine species taken from the sea by vessels registered or 
recorded with a Party and flying its flag; 
  (f) goods produced on board factory ships from the goods referred to in subparagraph (e) 
provided such factory ships are registered or recorded with a Party and fly its flag; 
  (g) goods taken by a Party or a person of a Party from the seabed or beneath the seabed 
outside territorial waters, provided that a Party has rights to exploit such seabed; 
 
 (h) waste and scrap derived from: 
 
(i) production in the territory of either or both Parties;  or 
  WT/REG206/1 
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 (ii) used goods collected in the territory of either or both Parties, provided  such 
goods are fit only for the recovery of raw materials;  and 
  (i) goods produced in the territory of either or both Parties exclusively from goods 
referred to in subparagraphs (a) through (h), or from their derivatives, at any stage of 
production; 
  packing materials and containers for shipment means goods that are used to protect a good 
during transportation, other than packaging materials and containers for retail sale; 
 
 shipping and repacking costs means the costs incurred in the repacking and transportation of 
a good outside the territory in which the producer or exporter of the good is located; 
 
 sales promotion, marketing and after-sales service costs means the following costs related 
to sales promotion, marketing and after-sales service: 
 
 (a) Sales and marketing promotion;  media a dvertising; advertising and market research; 
promotional and demonstration materials;  exhibits;  market research;  promotional 
and demonstration materials;  exhibits;  sales promotion conferences;  trade shows and conventions;  banners;  marketing displa ys;  free samples; sales, marketing and 
after-sales service literature such as product brochures, catalogues, technical 
literature, price lists, service manuals, sales aid information; establishment and 
protection of logos and trademarks;  spons orships;  wholesale and retail restocking 
charges;  entertainment; 
  (b)  merchandise sales and marketing incentives;   consumer, retailer or wholesaler rebates; 
 
 (c) for sales promotion, marketing and afte r-sales service personnel:  wages and salaries, 
sales commissions and bonuses;  medical insu rance and pension benefits;  travelling 
and living expenses;  membership and professional fees; 
  (d)  recruitment and training of sales pr omotion, marketing and after-sales service 
personnel, and after-sales training of customers’ employees; 
  (e) product liability insurance premiums;   (f) office supplies for sales promotion, marketing and after-sales service; 
 
 (g)  telephone, mail and other communications media for sales promotion, marketing and 
after-sales service; 
  (h)  rental and depreciation of sales promo tion, marketing and after-sales service offices 
and distribution centres; 
 
 (i)  property insurance premiums, taxes, utilit y costs, office and distribution centre repair 
and maintenance costs;  and 
  (j) payments by the producer to other persons in respect of warranty repairs;  
 
 net cost means total cost less sales promotion, marketing and after-sales service costs, 
royalties, shipping and repackaging costs and non-allowable interest costs, pursuant to Annex 6-04; 
 
 non-allowable interest costs means interest costs incurred by a producer on its financial 
liabilities that are more than 10 basis points abov e the applicable federal or central government WT/REG206/1 
Page 48  
 
interest rate, as the case may be, of the Party in w hose territory the producer is located, as established 
in Annex 6-04.  
 
 total cost means the sum of the following elements as established in Annex 6-04. 
 
 (a) The cost of direct materials used in the production of the good; 
  (b) the cost of direct labour used in the production of the good;  and     (c) direct and indirect overheads reasonabl y allocated to the production of the good, 
except for the following: 
  (i) the costs and expenses of a service provided by the producer of the good to 
another person, where the service is not related to the good; 
 
 (ii) the costs and losses resulting from a sale  of a part of the producer’s enterprise, 
which constitutes a discontinued operation; 
  (iii) costs relating to the cumulative ef fect of changes in the application of 
generally accepted accounting principles; 
 
 (iv) costs and losses resulting from the sa le of the producer’s capital assets; 
  (v) costs and expenses arising from acts of God or force majeure ; and 
  (vi) profits obtained by the producer of  the good, regardless of whether they were 
retained by the producer or paid to other persons as dividends, and the taxes 
paid on such profits, including taxes on capital gains; 
  direct overhead  means expenses incurred during a given period, directly related to the good, 
other than direct material and labour costs; 
 
 indirect overhead means  expenses incurred during a period, other than direct overhead, 
direct labour costs and direct material costs; 
 
 f.o.b. means free on board  
 
 place where the producer is located means,  in relation to a good, the production plant of 
that good;   material means a good that is used in the production of another good; 
 
 self-produced material means a material that is produced by the producer of a good and used 
in the production of that good; 
  fungible materials means  materials that are interchangeable for commercial purposes and 
whose properties are essentially identical 
 
 indirect material  means a good used in the production, testing or inspection of a good, but 
not physically incorporated into the good;  or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including: 
  (a) Fuel and energy; 
  WT/REG206/1 
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 (b) tools, dies and molds;   (c)  spare parts and materials used in the maintenance of equipment and buildings;   (d) lubricants, greases, compounding and other materials used either in production or to 
operate equipment and buildings; 
  (e) gloves, glasses, footwear, clothing, safety equipment and supplies;   (f) equipment, devices and supplies used  for testing or inspecting the goods; 
 
 (g) catalysts and solvents;  or   (h) any other goods that are not incorporated into the good itself but whose use in the 
production of the good can reasonably be de monstrated to be a part of that 
production; 
  intermediate material  means a material that is self-produced pursuant to Article 6-07;  
  related person  means a person related to anot her person on the basis that: 
 
 (a)  One of them is an officer or director of one of the other’s businesses; 
  (b) they are legally recognized partners in business;   (c) they are employer and employee; 
 
 (d) one of them directly or indirectly owns, controls or holds 25 per cent or more of the 
outstanding voting stock or shares of each of them; 
  (e) one of them directly or indirectly controls the other;  
 (f) both of them are directly or indirectly controlled by a third person; 
  (g) together they directly or indirectly control a third person;  or   (h) they are members of the same family (children, brothers, sisters, parents, 
grandparents, or spouses); 
  generally accepted accounting principles means the recognized consensus or substantial 
authoritative support in the territory of a Party with  respect to the recording of revenues, expenses, 
costs, assets and liabilities, disclosure of informati on and preparation of financial statements These 
standards may encompass broad guidelines of gene ral application as well as detailed standards, 
practices and procedures; 
  production  means cultivating, rearing, mining, harvesting, fishing, hunting, manufacturing, 
processing or assembling a good; 
 
 producer  means a person who cultivates, rears, mine s, harvests, fishes, hunts, manufactures, 
processes or assembles a good;   royalties means the payments made as consideration for the use of intellectual property; 
 
 used  means used or consumed in the production of goods; WT/REG206/1 
Page 50  
 
  transaction value of a good  means the price actually paid or payable for a good with respect 
to a transaction of the producer of the good, pursuant to the principles of Article 1 of the Customs Valuation Code, adjusted in accordance with the pr inciples of Articles 8.1, 8.3 and 8.4 thereof, 
regardless of whether the good is sold for export. Fo r the purposes of this definition, the seller referred 
to in the Customs Valuation Code 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 of the producer of the good,  pursuant to the principles of Article 1 of the 
Customs Valuation Code, adjusted in accordance w ith the principles of Articles 8.1, 8.3 and 8.4 
thereof, regardless of whether the material is sold  for export. For the purposes of this definition, the 
seller referred to in the Customs Valuation Code sh all be the supplier of the material, and the buyer 
referred to in the Customs Valuation C ode shall be the producer of the good; 
 
Article 6-02 
 
Interpretation and Application
 
 For the purposes of this Chapter: 
  (a) The basis for tariff classification is the Harmonized System;  
 (b) the determination of transaction value of  a good or of a material shall be made in 
accordance with the principles of th e Customs Valuation Code;  and 
  (c)  all costs referred to in this Chapter shall be recorded and maintained in accordance 
with the generally accepted accounting principl es applicable in the territory of the 
Party in which the good is produced. 
 
Article 6-03
∗ 
 
Originating goods  
1. A good shall be considered originating where: 
  (a) It is wholly obtained or produced entirely in the territory of one or both Parties, as 
defined in Article 6-01; 
 
 (b) it is produced entirely in the territory of one or both Parties, exclusively from 
materials that qualify as originating pursuant to this Chapter; 
  (c)  it is produced in the territory of one or both of the Parties from non-originating 
materials that undergo a change in tariff classification, comply with a regional value 
content or meet other requirements, as specified in Annex 6-03, and the good satisfies 
all other applicable provisions of this Chapter; 
  (d)  it is produced in the territory of one  or both of the Parties, from non-originating 
materials that undergo a change in tari ff classification and comply with other 
requirements, and the good complies with a regional value content as specified in 
Annex 6-03 and satisfies all other applic able provisions of this Chapter;  
 
                                                     
 
  ∗ See footnote on page 1.  WT/REG206/1 
 Page 51 
 
 
 (e)  it is produced in the territory of one or both of the Parties, complies with a regional 
value content as specified in Annex 6-03 a nd satisfies all other applicable provisions 
of this Chapter;  or 
  (f) except for a good provided for in Chapte rs 61 through 63 of the Harmonized System, 
the good is produced entirely in the territory of  one or both Parties, but one or more of 
the non-originating materials used in the production of the good does 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 the Harmonized System;  or 
  (ii) the heading for the good provides for both the good itself and its parts and is 
not further subdivided into subheadings, or the subheading for the good 
provides for  the good itself and its parts,  
    provided that the regional value content of the good, determined in accordance with 
Article 6-04, unless otherwise provided in Artic les 6-15 or 6-20 is not less than 50 per 
cent when the transaction value method is u sed, or 41.66 per cent when the net cost 
method is used, and the good satisfies other a pplicable provisions of this Chapter.  
 
2.  For the purposes of this Chapter, the produc tion of a good from non-originating materials that 
undergo an applicable change in tariff classificati on and satisfy other requirements, as specified in 
Annex 6-03, shall occur entirely in  the territory of one or both Parties and every regional value 
content of a good shall be entirely satisfied in the territory of one or both Parties. 
 
Article 6-04 
 
Regional Value Content
 
1. Except as provided in paragraph 5, each Party sh all provide that the regional value content of 
a good shall be calculated, at the choice of the expor ter or producer of the good, on the basis of either 
the transaction value method set out in paragraph 2 or the net cost method set out in paragraph 4. 
 2.  For the purpose of calculating the regional value content of a good by the transaction value method, the following formula shall be applied:  
TV - VNM 
RVC = -------------- x 100 
TV 
 where:  
RVC is the regional value content, expressed as a percentage; 
 TV is the transaction value of the good adjusted to an f.o.b. basis, except as provided in paragraph 3; 
and  
VNM is the value of non-originating materials used by the producer in the production of the good, 
determined pursuant to Article 6-05.  WT/REG206/1 
Page 52  
 
3. For the purposes of paragraph 2, when the pr oducer of the good does not export it directly, the 
transaction value of the good shall be adjusted to  the point where the buyer receives the good in the 
territory where the producer is located.  4. For the purpose of calculating the regional valu e content of a good by the net cost method, the 
following formula shall be applied: 
 
NC - VNM 
RVC= -------------- x 100 
NC 
 
where:  RVC is the regional value content, expressed as a percentage;  
NC is the net cost of the good; and 
 VNM is the value of non-originating materials used by the producer in the production of the good, determined pursuant to Article 6-05.  5. Each Party shall provide that an exporter or producer shall calculate the regional value 
content of a good solely on the basis of the net cost method set out in paragraph 4 where: 
  (a) There is no transaction value because the good is not the subject of a sale;   (b) the transaction value of the good cannot be determined because there are restrictions 
on the disposition or use of the good by the buyer, other than restrictions that: 
  (i) are imposed or required by law or by the public authorities of the Party where 
the buyer of the good is located; 
  (ii) limit the geographical area in which the good may be resold;  or 
 
 (iii) do not substantially affect the value of the good;   (c) the sale or price is subject to a conditi on or consideration for which a value cannot be 
determined with respect to the good; 
 (d) part of the proceeds of any subsequent resale, disposal or use of the good by the buyer 
will accrue directly or indirectly to the se ller, unless the proper adjustment pursuant to 
Article 8 of the Customs Valuation Code can be made; 
  (e) the buyer and seller are related pers ons and their relati onship between them 
influenced the price, except as provided in Article 1.2 of the Customs Valuation 
Code; 
  (f) the good is sold by the producer to a related person, and the volume, by units of 
quantity, of sales of identical or similar goods to related persons  during the six-month 
period immediately preceding the month in which the producer sold the good exceeds 
85 per cent of the producer’s total sales of such goods during that period; 
  (g) the exporter or producer chooses to accumulate the regional value content of the good 
pursuant to Article 6-08;  WT/REG206/1 
 Page 53 
 
 
 (h)  the good is:   (i) a motor vehicle provided for in heading 87.01 or 87.02, subheading 8703.21 
through 8703.90, or heading 87.04, 87.05 or 87.06;  or 
 
 (ii)  identified in Annex 6-15(1) or Annex 6-15(2) and is for use in a motor 
vehicle provided for in heading 87.01 or 87.02, subheading 8703.21 through 8703.90, or heading 87.04, 87.05 or 87.06;  or 
  (i) the good is designated as an intermediate material and is subject to a regional value 
content requirement. 
 
Article 6-05 
 
Value of Materials
 
1.  The value of a material: 
  (a) Shall be the transaction value of the material;  or   (b) in the event that there is no transaction va lue or the transaction value of the material is 
unacceptable under Article 1 of the Customs Va luation Code, shall be determined in 
accordance with the principles set out in  Articles 2 through 7 of the Customs 
Valuation Code. 
 2.  Where not included under paragraphs 1(a) or  (b), the value of a material shall include: 
 
 (a) Freight, insurance, packing and all other costs incurred in transporting the material to 
the importation port in the territory of the Party where the producer of the good is located, except as provided in paragraph 3;  and 
  (b) the cost of waste and spoilage resulting from the use of the material in the production 
of the good, less any costs recovered, provided the recovery does not exceed 30 per 
cent of the value of the material, determ ined in accordance with paragraph 1.  
 3. Where the producer of a good buys a non-originating material in the territory of the Party where the producer is located, the value of the non-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. 
  4.  To calculate the regional value content unde r Article 6-04, except as provided in Article 6-15 
(2), for a motor vehicle identified in Article 6-15 (3) or a component identified in Annex 6-15(2), the 
value of the non-originating materials used by the producer in the production of a good shall not include the value of the non-originating materials used by:  
 
 (a) Another producer in the production of an  originating material, which is acquired and 
used by the producer of the good in the production of such good;  or 
  (b) the producer of the good in the productio n of an originating intermediate material. 
 WT/REG206/1 
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Article 6-06 
 
De minimis
 
 1. A good shall be considered to be an origin ating good if the value of all non-originating 
materials used in the production of the good that do not undergo the applicable change in tariff 
classification set out in Article 6-03 is not more than 7 per cent of the transaction value of the good, adjusted on the basis of Article 6-04 (2) or (3) as appropriate, or in the cases referred to in Article 6-
04 (5)(a) through (e), if the value of all non-originati ng materials is not more than 7 per cent of the 
total cost of the good. 
 
2. Where that same good is also subject to a regional value content, the value of such non-originating materials shall be taken into account in determining the regional value of the good, and the 
good shall be required to satisfy all other applicable requirements under this Chapter. 
 
3. A good that is subject to a regional value- content requirement as established in Annex 6-03 
shall not be required to satisfy such requirement if  the value of all non-originating materials is not 
more than 7 per cent of the transaction value of th e good, adjusted on the basis of Article 6-04 (2) or 
(3) as appropriate, or in the cases referred to in Article 6-04 (5)(a) th rough (e) , if the value of all non-
originating materials is not more than 7 per cent of the total cost of the good.  
 4.  Paragraph 1 does not apply to: 
  (a) A good provided for in chapters 50 through 63 of the Harmonized System;  or   (b) a non-originating material used in the production of goods provided for in chapters 01 
through 27 of the Harmonized System, except where the non-originating material is 
provided for in a different subheading to the good for which the origin is being determined under this Article. 
  5.  A good provided for in chapters 50 through 63 of the Harmonized System that does not originate because certain fibres or yarns used in the production of the material that determines the 
tariff classification of the good do not undergo an app licable change in tariff classification as set out 
in Annex 6-03, shall nonetheless be considered to orig inate if the total weight of all such fibres or 
yarns in that material is not more than 7 pe r cent of the total weight of that material.  
 
 
Article 6-07 
 
Intermediate materials
 
1. For the purpose of calculating the regional value content under Article 6-04, the producer of a 
good may designate as an intermediate material any self-produced material used in the production of 
the good, provided such material is an originati ng good as established in Article 6-03, except for the 
components listed in Annex 6-15(2) and the goods pr ovided for in heading 87.06, intended for use in 
motor vehicles included in Article 6-15 (3).  2.  Where an intermediate material is subject  to a regional value content under Annex 6-03, the 
value shall be calculated on the basis of the net cost method established in Article 6-04. 
 
 3.  For the purpose of determining the regiona l value content of the good, the value of the 
intermediate material shall be the total cost that  can be reasonably allocated to that intermediate 
material pursuant to Annex 6-04.   WT/REG206/1 
 Page 55 
 
 
 4.  Where a material that has been designated as intermediate material is subject to a regional 
value content, no other self-produced material su bject to a regional value content used in the 
production of such intermediate material may, at the same time, be designated by the producer as 
intermediate material.  
 5.  Where one of the goods listed in Article 6-15 (2) is designated as inte rmediate material, that 
designation shall apply only to the calculation of the net cost of the good, and the value of non-originating materials shall be calcu lated pursuant to Article 6-15 (2). 
 
Article 6-08 
 
Accumulation
 
 
 For the purpose of determining whether a good is an originating good, a producer may accumulate its production of materials incorporated in the good with that of one or more producers in 
the territory of one or both Parties, such that the production of materials be considered to have been 
performed by that producer, provided that th e provisions of Article 6-03 are satisfied. 
 
Article 6-09 
 
Fungible Goods and Materials
 
1.  For the purpose of determining whether a good is an originating good, where originating and 
non-originating fungible materials that are commingled  in an inventory are used in the production of 
the good, the origin of the materials may be dete rmined using one of the inventory management 
methods set out in paragraph 3.  
2. Where originating and non-originating fungible goods are commingled and, prior to 
exportation, do not undergo any pr oduction process or any operation in the territory of the Party 
where they were commingled other than unloading , loading or any other operation necessary to 
preserve the goods in good condition or to transport them to the territory of the other Party, the origin 
of the good may be determined on the basis of an y of the inventory management methods set out in 
paragraph 3. 
 
3. The inventory management methods for fungibl e goods or materials shall be the following: 
  (a) "FIFO method" (first in-first out) — the inventory management method by which the 
origin of the number of fungible goods or ma terials first received in the inventory is 
considered to be the origin of the same number of fungible goods or materials first 
withdrawn from the inventory; 
  (b) "LIFO method" (last in-first out) — the inventory management method by which the 
origin of the number of fungible goods or ma terials last received in the inventory is 
considered to be the origin of the same number of fungible goods or materials first 
withdrawn from the inventory;  or  
  (c) "average method" — the inventory mana gement method by which, except as provided 
in paragraph 4, the origin of fungible goods  or materials is determined through the 
following formula: 
 
TOM 
AOM = --------------- x 100 
TONM 
 WT/REG206/1 
Page 56  
 
where:  AOM is the average of originati ng fungible materials or goods; 
 TOM is the total units of fungible originating goods  or materials in the inventory prior to the 
shipment; and 
 TONM is the total sum of units of fungible origina ting and non-originating goods or materials in the 
inventory prior to the shipment.  
 4.  Where a good is subject to a regional valu e content, the determination of non-originating 
fungible materials shall be made through the following formula:  
TNM 
ANM = --------------- x 100 
TONM 
 where:  ANM is the average of non-originating materials;  
TNM is the total value of fungible non-originating ma terials in the inventory prior to the shipment; 
and  TONM is the total value of fungible originating and non-originating materials in the inventory prior to 
the shipment. 
 
 5.  Once an inventory management method set out  in paragraph 3 has been chosen, it shall be 
used throughout the fiscal year or period.  
Article 6-10 
 
Sets and Assortments of Goods
 
1. Sets and assortments of goods classified as pursuant to 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 ru les of origin established 
in this Chapter. 
 2.  Notwithstanding paragraph 1, a set or assortme nt of goods shall be cons idered as originating, 
if the value of all non-originating goods used in th e set or assortment does not exceed 7 per cent of the 
transaction value of the set or assortment, adjusted to the basis set out in Article 6-04 (2) or (3), as the 
case may be, or in the cases referred to in Article 6-04 (5)(a) through (e), if the value of all such non-
originating goods is not more than 7 per cent of the total cost of the set or assortment. 
  The provisions of this Article shall prevail over the specific rules set out in Annex 6-03.   WT/REG206/1 
 Page 57 
 
 
Article 6-11 
 
Indirect Materials  
 Indirect materials shall be considered to be  originating without regard to where the good is 
produced, and the value of such materials shall be their cost as reported in the accounting records of 
the producer of the good. 
 
Article 6-12 
 
Accessories, Spare Parts and Tools  
1. Accessories, spare parts or tools delivered with the good as part of the good’s standard 
accessories, spare parts or tools, shall be disregar ded in determining whether all the non-originating 
materials used in the production of the good undergo the applicable change in  tariff classification as 
set out in Annex 6-03, provided that:  
 (a) The accessories, spare parts or tool s are not invoiced separately from the good, 
irrespective of whether they are separ ately in the commercial invoice;  and 
  (b) the quantities and value of the accessories, spar e parts or tools are customary for the 
good. 
 
2.  If the good is subject to a regional value cont ent, the value of the accessories, spare parts or 
tools 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 6-13 
 
Packaging Materials and Containers for Retail Sale
 
1. The packaging materials and containers in wh ich a good is packaged for retail sale shall, if 
classified with the good, be disregarded in determin ing whether all the non-originating materials used 
in the production of the good undergo the applicable  change in tariff classification as set out in 
Annex 6-03. 
 2. If the good is subject to a regional value cont ent requirement, the value of such packaging 
materials and containers shall be ta ken into account as originating or non- originating materials, as the 
case may be, in calculating the regional value content of the good.  
 
Article 6-14 
 
Packing Materials and Containers for Shipment
 
1. The packing materials and containers in wh ich the good is packed for shipment shall be 
disregarded in determining whether the non-origina ting materials used in the production of the good 
undergo an applicable change in tariff classification as set out in Annex 6-03.  
 2. If the good is subject to a regional value cont ent requirement, the value of such packaging 
materials and containers shall be ta ken into account as originating or non- originating materials, as the 
case may be, in calculating the regional value conten t of the good, and the value of those materials 
shall correspond to their costs as reported in the accounts of the producer of the good. 
 WT/REG206/1 
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Article 6-15 
 
Automotive Goods
 
1. For the purposes of this Article: 
 
 underbody means the floor pan of a motor vehicle; 
  class of motor vehicles means  any one of the following categories of motor vehicles: 
  (a)  Motor vehicles provided for in subheading 8701.20, tariff item 8702.10.03 or 
8702.90.04 or, in the case of Nicaragua, s ubheadings 8702.10 or 8702.90 (vehicles for 
the transport of 16 or more persons), or subheadings 8704.10, 8704.22, 8704.23, 
8704.32 or 8704.90, or headings 87.05 and 87.06; 
  (b)  motor vehicles provided for in subh eadings 8701.10 or 8701.30 through 8701.90; 
 
 (c)  motor vehicles provided for in Mexican tariff items 8702.10.01, 8702.10.02, 
8702.90.01, 8702.90.02 or 8702.90.03 or, in the case of Nicaragua, subheadings 
8702.10 or 8702.90 (vehicles for the transport of up to 15 persons), or subheadings 8704.21 and 8704.31;  or  
 
 (d) motor vehicles provided for in subheadings 8703.21 through 8703.90;  
  motor vehicle assembler means  a producer of motor vehicles and any related persons or joint 
ventures in which the producer participates;   
 original equipment means the material incorporated into  a motor vehicle before the first 
transfer of ownership or consignment of the motor vehicle to a person other than an assembler of motor vehicles. Such material is:   (a)  A good included in Annex 6-15(1);  or  
 (b)  a set of motor vehicle components, a mo tor vehicle component, or an item of material 
listed in Annex 6-15(2); 
  model line means a group of motor vehicles having the same platform or model name;  
 
 model name means  the word, group of words, letter or letters, number or numbers or similar 
designation assigned to a motor vehicle by a mark eting division of a motor vehicle assembler to: 
  (a) Differentiate the motor vehicle from othe r motor vehicles that use the same platform 
design; 
 
 (b)  associate the motor vehicle with other motor vehicles that use different platform 
designs;  or 
  (c)  to denote a platform design;  
 platform means  the primary load-bearing structural assembly of a motor vehicle that 
determines the basic size of the motor vehicle, and is the structural base that supports the driveline 
and links the suspension components of the motor ve hicle for various types of frames, such as the 
body-on-frame or space-frame, and monoblocks;   WT/REG206/1 
 Page 59 
 
 
 motor vehicle means  a good provided for in headings 87.01, 87.02, 87.03, 87.04, 87.05 or 
87.06;  2.  For the purpose of calculating the regional va lue content, in accordance with the net cost 
method set out in Article 6-04 for  
 
 (a)  A good that is a motor vehicle provided for in Mexican tariff items 8702.10.01, 
8702.10.02, 8702.90.01,  8702.90.02 or 8702.90.03 or, in the case of Nicaragua, 
subheadings 8702.10 or 8702.90 (vehicles for the transport of up to 15 persons), or subheadings 8704.21 through 8703.90, 8703.21 or 8704.31;  or 
 
 (b)  a good that is a motor vehicle provided fo r in the annex to this Article where the good 
is subject to a regional value content require ment and is for use as original equipment 
in the production of a good provided for in Mexican tariff items 8702.10.01, 8702.10.02, 8702.90.01,  8702.90.02 or 8702.90.03 or, in the case of Nicaragua, 
subheadings 8702.10 or 8702.90 (vehicles for the transport of up to 15 persons), or 
subheadings 8703.21 through 8703.90, 8704.21 or 8704.31,  
  The value of non-originating materials used by the producer in the production of the good shall be the sum of the values of non-originating ma terials, determined in accordance with Article 6-
05 (1) and (2) that are imported from outside the territories of the Parties under the tariff provisions 
listed in Annex 6-15(1) and are used in the production of the good or in the production of any material 
used in the production of the good.  3. For the purpose of calculating the regional value content under the net cost method set out in Article 6-04, for a good that is a motor vehicle pr ovided for in heading 87.01, Mexican tariff items 
8702.10.03 or 8702.90.04 or, in the case of Nicarag ua, in subheadings 8702.10 or 8702.90 (vehicles 
for the transport of 16 or more persons), s ubheadings 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90, 
or headings 87.05 or 87.06, or for a component identified in Annex 6-15(2) for use as original 
equipment in the production of the motor vehicle described in this paragraph, the value of non-
originating materials used by the producer in the production of the good shall be the sum of:  
 (a) For each material used by the producer listed in Annex 6-15(2), whether or not 
produced by that producer, at the choice of the producer and determined in accordance with Article 6-05 or Article 6-07 (3), either: 
  (i) the value of such material that is non- originating;  or  
 
 (ii)  the value of non-originating materials used in the production of such 
material;  and  
  (b) the value of any other non-originating ma terial used by the producer of the good that 
is not listed in Annex 6-15(2), determin ed in accordance with Article 6-05 or 
Article 6-07 (3). 
  4.  For the purpose of calculating the regional value content of a motor vehicle identified in 
paragraph 2 or 3, the producer may average its calcu lation over its fiscal year or period, using any one 
of the following categories, on the basis of either all motor vehicles in the category or only those 
motor vehicles in the category that are exported to the territory of the other Party: 
  (a) The same model line of motor vehicles in  the same class of vehicles produced in the 
same plant in the territory of a Party; 
 WT/REG206/1 
Page 60  
 
 (b)  the same class of motor vehicles produced in  the same plant in the territory of a Party;  
or 
  (c) the same model line of motor vehicles produced in the territory of a Party.  
5. For the purpose of calculating the regional valu e content for any or all goods provided for in a 
tariff provision listed in Annex 6-15(1), or a com ponent or material identified in Annex 6-15(2), 
produced in the same plant, the producer of the good may:   (a) Average its calculation: 
 
 (i) over the fiscal year or period of the motor vehicle producer to whom the 
good is sold; 
 
(ii) over any quarter or month;  or 
 
 (iii) over its fiscal year or period, if th e good is sold as an aftermarket or spare 
part; 
  (b)  calculate the average referred to in subparagraph (a) separately for any or all goods 
sold to one or more motor vehicle producers;  or 
 
 (c) with respect to any calculation under this paragraph, calculate separately those goods 
that are exported to the territory of the other Party. 
 6. Notwithstanding Annex 6-03(1), the regi onal value-content requirement shall be: 
 
 (a) For a good that is a motor vehicle provided for in heading 87.01, Mexican tariff items 
8702.10.03 or 8702.90.04 or, in the case of Nicaragua, subhe adings 8702.10 or 
8702.90 (vehicles for the transport of 16 or more persons), subheadings 8704.10, 
8704.22, 8704.23, 8704.32 or 8704.90, or headings 87.05 or 87.06, 35 per cent according to the net cost method, for the fi scal year or period of a producer that 
begins on the date closest to 1 July 1998 un til the fiscal year or period ending on the 
date closest to 1 July 2000; and 
  (b) for the goods listed in Article 6-15(1), subj ect to a regional content value and destined 
for use in motor vehicles included in paragraphs 2 and 3, except for goods provided 
for in headings 84.07, 84.08 or subheading 8708.40, when destined for use in motor 
vehicles included in paragraphs 2 and 3, in  which case the applicable regional content 
will be as defined in footnotes 4 and 32 of section B of Annex 6-03, except for 
heading 87.06, in which case the provisions established in subparagraph (a) shall be 
applicable: 
 
 (i) 40 per cent, according to the net cost method, for the fiscal year or period of 
a producer beginning on the day closest  to 1 July 1998 until the  fiscal 
year or period ending on the day closest to 1 July 2003; and 
  (ii) 50 per cent, according to the net cost method, for the fiscal year or period of 
a producer that begins on the date cl osest to 1 July 2003 until the fiscal 
year or period of a producer that ends  on the date closest to 1 July 2008.  
  WT/REG206/1 
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Article 6-16 
 
Non-Qualifying Operations and Practices  
1. A good shall not be considered to be an originating good merely by reason of: 
 
 (a) Dilution with water or another subs tance that does not materially alter the 
characteristics of the good; 
  (b) simple operations for the maintenance of  the good during transportation or storing, 
such as ventilation, refrigeration, removal of damaged parts, drying or addition of 
substances; 
  (c) removal of dust, sieving, classification, selection, washing;   (d) packing, repacking or packaging for retail sale; 
 
 (e) collection of goods to form sets or assortments;   (f) application of stamps, labels or similar distinctive signs;   (g) washing, including removal of oxi de, oil, paint or other coverings; and 
 
 (h) mere collection of parts and components classified as a good, according to Rule 2(a) 
of the General Rules of Interpretation of the Harmonized System. This shall not apply 
to originating goods previously assembled and then disassembled for considerations 
of packaging, handling or transportation. 
 
2.  A good shall not be considered originating merely by a production or pricing practice in 
respect of which it may be demonstrated, on the b asis of a preponderance of evidence, that the object 
was to circumvent this Chapter.  3. The provisions of this Article shall prevail over the specific rules set out in the Annex 6-03. 
 
Article 6-17 
 
Transhipment and Direct Expedition
 
1. A good shall not be considered to be an orig inating good, even if it has undergone production 
that satisfies the requirements of Article 6-03 if, su bsequent to that production, the good undergoes 
further production or any other operation outside the territories of the Parties, other than unloading, 
reloading or any other operation necessary to preserve  it in good condition or to transport the good to 
the territory of the other Party.  2. A good shall not lose its originating status wher e, in transit through the territory of one or 
more non-Party countries, with or without tranship ment or temporary storage, under surveillance of 
the customs authorities of such countries:   (a) Transit is justified by geographical or  transportation requirement considerations; 
 
 (b) the good is not destined for trade or use in the transit countries; and 
  (c)  during transportation and storage the good is not submitted to operations other than 
packing, packaging, loading, unloading or  handling to preserve it in good condition. WT/REG206/1 
Page 62  
 
 
Article 6-18 
 
Consultation and Modifications
 
1. The Parties hereby establish a Committee on Rules of Origin and Customs Procedures, 
comprising representatives of each Party, which shall meet on the request of either Party. 
 2. The Committee shall:   (a) Ensure the effective implementation and administration of this Chapter;  
 
 (b) agree on the interpretation, application and administration of this Chapter;   (c)  in relation to non-allowable interest costs, annually review the percentage points 
above the highest interest rate on government  bonds issued by the federal or central 
government, as the case may be; and 
  (d) consider any other matter as the Parties may agree.  3. The Parties shall consult regularly and shall coope rate to ensure that this Chapter is applied in 
an effective and uniform manner, in accordance with  the spirit and the objectives of this Agreement. 
 
4. If a Party considers that this Chapter re quires modification because of changes in the 
development of productive processes or other matters , it may submit to the Committee a modification 
proposal for its consideration, providing reasons an d studies to substantiate it. The Committee shall 
submit a report to the Commission, and the latter shal l make such recommendations to the Parties as it 
deems appropriate. 
 
Article 6-19 
 
Interpretation
 
 For the purposes of this Chapter, when applyi ng the Customs Valuation Code to determine 
the origin of a good: 
  (a) The principles of the Customs Valuatio n Code 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 pr evail over the Customs Valuation Code to the 
extent of any difference. 
 
Article 6-20 
 
Transitory Provisions on Regional Value Content 
 
1. For the purpose of calculating the regional va lue content of a good under that requirement, the 
good produced in the territory of one or both of the Parties should have a regional value content no 
less than:  
 (a) 45 per cent under the transaction value method, or 37.5 per cent under the net cost 
method, effective 1 July 1998 until 30 June 2001; 
  WT/REG206/1 
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 (b) 46 per cent under the transaction value method, or 38.5 per cent under the net cost 
method, effective from 1 July 2001 through 30 June 2002; and 
  (c) 47.5 per cent under the transaction value method, or 40 per cent under the cost 
method, effective from 1 July 2002 through 30 June 2003. 
 
2. Effective 1 July 2003, the percentage re gional value content shall be as established in 
Annex 6-03.  3. The provisions contained in this Article sha ll not be applicable for calculating the regional 
value content of the goods listed in Article 6-15. 
  
ANNEX 6-04 
 
Calculation of Net Cost
 
Section A - Definitions  
 
 For the purposes of this Annex: 
  allocation base means  any of the following allocation bases used by the producer to calculate 
the cost ratio with respect to the good: 
  (a) The sum of the direct labour costs and the direct material costs of the good;   (b) the sum of the direct labour costs, the di rect material costs and the direct overhead of 
the good; 
  (c) direct labour hours or direct labour costs;   (d) units produced;  
 (e) machine-hours; 
  (f) sales amount;   (g) floor space;  or 
 
 (h) any other allocation bases that are considered reasonable and measurable;    non-allowable costs means sales promotion, marketing and after-sales service costs; 
royalties; shipping and packing costs;  and non-allowable interest costs;  and   
 for internal management purposes means any cost allocation pr ocedure that is used for 
purposes relating to tax reporting, financial reporting, internal control, financial planning, decision-
making, pricing, cost recovery, cost control management or performance measurement.  
Section B - Calculation of the Net Cost
 
 
1. The net cost is calculated by the following formula:  
NC = TC - NAC 
 WT/REG206/1 
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where:  NC is net cost;  TC is total cost; and 
 
NAC is non-allowable costs.  2.  For the purpose of calculating the total cost:  
 (a) The producer of the good may choose to av erage the total cost with respect to the 
good and other identical or similar goods produced in a single plant by the producer over: 
  (i) a month;  or 
 
 (ii) during any period longer than one mont h within that producer’s fiscal year or 
period; 
  (b)  for the purposes of subparagraph (a), th e producer of the good shall consider all the 
good’s units produced within the chosen period. The producer may not rescind or 
modify that period, once chosen;  
  (c) for the purpose of calculating total cost, where, for internal management purposes, the 
producer of the good is using a method to allocat e the direct material  costs, the direct 
labour costs, or the direct or indirect overhead or part thereof to the good, and that 
method reasonably reflects the direct material costs, the direct labour costs or direct or 
indirect overhead incurred in the producti on of the good, it shall be considered as a 
reasonable method to allocate costs and shall be used to allocate the costs to the good; 
  (d) the producer of the good may determine a reasonable amount of costs, when those 
costs have not been allocat ed to the good, as follows: 
 
 (i) with respect to direct material cost s and direct labour costs, on the basis of 
any method that reasonably reflects the material and labour directly used in the production of the good; and 
 
 (ii) with respect to direct and indirect overhead, the producer of the good may 
choose one or more allocation bases that reflect a relationship between the overhead and the  good, in accordan ce with subparagraphs (f) and (g); 
  (e)  the producer of the good may choose any reasonable cost allocation method, which 
shall be used throughout the producer’s fiscal year or period; 
 
 (f) with respect to each allocation base, the pr oducer may chose to calculate a cost ratio 
for each good produced, in accordance with the following formula: 
 
AB 
PC = ---------- x100 
TAB 
 where:  
CR is the cost ratio with respect to the good;  WT/REG206/1 
 Page 65 
 
 
 AB is the allocation base for the good; and  TAB is the total allocation base for all the goods produced by the producer of the good. 
 
 (g) the costs with respect to which an allo cation base is chosen are allocated to a good 
in accordance with the following formula: 
  
CAG = CA x CR 
 
where:  CAG is the costs allocated to the good;  
CA is the costs to be allocated; and 
 CR is the cost ratio with respect to the good.   (h) for the purpose of calculating the net co st, where non-allowable costs are included in 
the total cost to be allocated to a good, the cost ratio used to allocate those costs to 
the good shall also be used to determine the amount of non-allowable costs to be 
subtracted from the total cost allocated to the good; and 
  (i) any costs allocated in accordance with  any reasonable cost allocation method used 
for internal management purpose are cons idered not to be reasonably allocated, 
when it may be demonstrated, on the basis of a preponderance of evidence, that the 
object was to circumvent the provisions of this Chapter. 
 3. For the purpose of calculating non-allowable in terest costs, the producer of the good shall: 
  (a) consider, for the calculation of non-allo wable interest, only loans contracted at a 
fixed or variable interest rate above the hi ghest interest rate on bonds issued by the 
federal or central government, as the case may be, plus 10percentage points; 
  (b) calculate the rate of interest accrue d in the period chosen by the producer, in 
accordance with paragraph 2 (a), by applying the following formula: 
 
IPP 
TID = ---------- x 100 
MPP 
 
where: 
 
TID is the rate of interest accrued in the period;  IPP is the amount of interest accrued in the period; and  
MPP is the amount of loans accruing interest in the period. 
  For the purposes of this subparagraph, the amount of loans accruing interest and the amount of interest accrued shall be those corresponding to lo ans as established in subparagraph (a); and, if the 
accrued interest does not correspond to the whole period chosen by the producer for calculating the WT/REG206/1 
Page 66  
 
total cost, only the proportion of the loan corres ponding to the period in which the interest accrued 
shall be considered.    (c) shall use the following formula to calcul ate the rate of non-allowable interest, based 
on the calculation of the rate of interest accrued, as established in subparagraph (a): 
 
TIN = TID - (TOG + 10) 
 where:  
TIN is the rate of non-allowable interest; 
 TID is the rate of interest accrued in the period; and  TOG is the interest rate on bonds issued by the Federal or central government, as the case may be; 
 
 (d) use the following formula to calcu late non-allowable interest costs: 
 
CIN= TIN x MPP 
 where: 
 
CIN is the non-allowable interest costs;  TIN is the non-allowable interest rate; and  
MPP is the amount of loans accruing interest in the period. 
  For the purposes of this subparagraph, the am ount of loans accruing interest in the period 
shall be calculated in accordance with the provisions of subparagraph (b).  4. Where the producer of a good has calculated the regional value content of the good under the 
net cost method on the basis of estimated costs, in cluding standard costs, budgeted forecasts or other 
similar estimating procedures, before or during the chosen period, as set out in paragraph 2(a), the 
producer shall perform the calculation based on the ac tual costs incurred over that period with respect 
to the production of the good.  
 
CHAPTER VII: CUSTOMS PROCEDURES 
 
Article 7-01 
 
Definitions
 
 
1. For the purposes of this Chapter:   competent authority  means the authority that, according to  the legislation of each Party, is 
responsible for the administration of  its customs laws and regulations; 
  
 identical goods means  "identical goods", as defined in the Customs Valuation Code; 
  determination of origin means  a ruling issued as a result of verification conducted in 
accordance with Article 7-07, establishing whether the good qualifies as originating;  and 
  WT/REG206/1 
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 preferential tariff treatment means  the duty rate applicable to an originating good in 
accordance with the Tariff Elimination Programme;  2.  This Chapter includes the definitions est ablished in Chapter VI (Rules of Origin). 
 
Article 7-02 
 
Declaration and Certification of Origin
 
1. For the purposes of this Chapte r, before the date on which th is Agreement comes into force, 
the Parties shall prepare a single form for the certifi cate of origin and a single form for the declaration 
of origin,  
 2. The certificate of origin referred to in paragraph 1 shall serve to certify that a good exported from the territory of one Party to the territory of the other Party qualifies as an originating good.  
 
3. Each Party shall require its exporters to co mplete 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 completes and signs a 
certificate of origin on the basis of the declar ation 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.  
 
5. Each Party shall provide that a certificate of origin that has been completed and signed by the 
exporter is applicable to:   (a) A single importation of one or more goods;  or  
 (b) multiple importations of identical goods  within a specified period, set out in the 
certificate by the exporter, not exceeding the period established in paragraph 6. 
 6. Each Party shall provide that the certificate of origin be accepted by the competent authority 
of the importing Party for one year counted from the date of its signing. 
 
Article 7-03 
 
Obligations Regarding Importations
 
1. Each Party shall require an importer that claims preferential tariff treatment for a good 
imported into its territory from the territory of the other Party to: 
 
 (a) Make a written statement in the import document envisaged in its legislation, based 
on a valid certificate of origin, that the good qualifies as an originating good; 
  (b)  have the certificate in its possession at the time the statement is made; 
 
 (c)  provide, on the request by the competent authority, a copy of the certificate; and  WT/REG206/1 
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 (d)  promptly make a corrected statement and pay any duties owing where the importer 
has reason to believe that a certificate on which a statement was based contains information that is not correct. Where the importer submits such a statement before 
the authorities begin a revision it shall not be subject to penalties. 
 
2. Each Party shall provide that, where an importe r fails to comply with any of the requirements 
established in this paragraph 1, 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 apply fo r a refund of any excess duties paid, pursuant to the 
legislation of each Party, as the result of the g ood not having been accorded preferential tariff 
treatment, on presentation of:  
 (a)  A written statement that the good qualified as an originating good 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 the competent 
authority may require. 
 
Article 7-04 
 
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 a ffect the accuracy or validity of the certificate or 
declaration and, in accordance with its legislation, its competent authority. In such cases, the exporter 
or producer shall not be subject to penalties for having presented an incorrect certificate or declaration. 
 
 3.  The competent authority of the exporting Party shall inform the competent authority of the importing Party in writing of the notification by the exporter or producer refe rred to in paragraph 2. 
 4. Each Party shall provide that a false certifi cation or statement by an exporter or a producer 
that a good to be exported to the territory of the ot her Party qualifies as an originating good shall have 
the same legal consequences, with appropriate m odifications, as would apply to an importer in its 
territory for a contravention of its customs laws  and regulations regarding the making of a false 
statement or representation.    WT/REG206/1 
 Page 69 
 
 
Article 7-05 
 
Exceptions  
 
 Provided that an importation does not form part of two or more importations that have been 
undertaken or arranged for the purpose of avoiding the certification requirements of Articles 7-02 and 
7-03, the Parties shall not require a certificate of origin in the following cases:   (a) A commercial importation of a good who se customs value does not exceed US$1,000 
or its equivalent in the Party’s currency, except that it may require that the invoice 
accompanying the importation include a stat ement by the importer or exporter 
certifying that the good qualifies as an originating good; 
  (b)  a non-commercial importation of a good whose value does not exceed US$1,000 or 
its equivalent in the Party’s currency; and 
 
 (c) an importation of a good for which the importing Party has waived the requirement 
for a certificate of origin. 
 
Article 7-06 
 
Accounting Records
 
 Each Party shall provide that: 
  (a) Its exporter or producer that completes and signs a certificate or declaration of origin 
shall maintain in its territory, for a minimum of five years after the date on which the 
certificate or declaration was signed, all records and documents relating to the origin 
of a good, including records associated with: 
  (i) the purchase of, cost of, value of, and payment for, the good that is exported 
from its territory; 
 
 (ii) the purchase of, cost of, value of, and payment for, all materials used  in the 
production of the good that is e xported from its territory; and 
  (iii) the production of the good in the form in which the good is exported from 
its territory;  
 
 (b) for the purpose of the verification proce dure established in Article 7-07, the exporter 
or producer shall provide to the competent authority of the importing Party the records and documents referred to in s ubparagraph (a). When the records and 
documents are not in the possession of the exporter or producer, the exporter may request from the producer or supplier of the materials the records and documents to be 
delivered by it to the competent author ity to perform the verification;  and 
  (c) an importer claiming preferential tariff treatment for a good imported into the Party’s 
territory from the territory of the other Party shall maintain, for a minimum of five years after the date of importation of the good, the certificate of origin and all 
documentation relating to the importation of the good, as the importing Party may 
require. WT/REG206/1 
Page 70  
 
Article 7-07 
 
Procedures for Origin Verifications 
 
1. The importing Party may request informati on from the exporting Party on the origin of a 
good, through its competent authority. 
 
2. For the purpose of determining whether a good im ported into its territory from the territory of 
the other Party qualifies as an originating good, a Pa rty may, through its competent authority, conduct 
a verification by means of:  
 (a) Written questionnaires to an exporter or a pr oducer in the territory of the other Party; 
or 
  (b) verification visits to the premises of an exporter or a producer in the territory of the 
other Party to review the records and doc uments that demonstrate compliance with 
the rules of origin, pursuant to Article 7-06 and to observe the facilities used in the 
production of the good and, as the case may be , the facilities used in the production of 
the materials used in the production of the good. 
 3. The provisions of paragraph 2 shall be without prejudice to any review that the importing Party may conduct on its own impor ters, exporters or producers. 
 
 4.  On receipt of a questionnaire pursuant to paragraph 2(a), the exporter or producer shall reply to it and return it within 30 days of having recei ved it. During that period, the exporter or producer 
may request in writing from the importing Party an ex tension, which, if gr anted may not be longer 
than 30 days. This request shall not result in  the denial of preferential tariff treatment. 
 
5. Should the exporter or producer not reply to or return the questionnaire within the established 
deadline, the importing Party may deny preferential tariff treatment subject to a ruling under the terms 
of paragraph 11.  6. Prior to conducting a verification visit unde r paragraph (2)(b), the importing Party shall, 
through its customs administration, deliver a written notification of its intention to conduct the visit. 
The notification shall be sent to the exporter or pr oducer 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 the other 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. 
 7.  The notification referred to in paragraph 6 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; 
  (c)  the date and place of the proposed verification visit;   (d) the object and scope of the proposed verification visit, including specific reference to 
the period and the good or goods subject of the verification referred to in the 
certificates of origin;  
  (e)  the names, identification and titles of th e officials performing the verification;  and  
  WT/REG206/1 
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 (f) the legal authority for the verification visit.  8. Any modification to the information referred to in paragraph 7(e), shall be notified in writing, 
prior to the verification visit, to the exporter or  producer, and to the competent authority of the 
exporting Party. Any modification to the information re ferred to in paragraphs 7(a), (b), (c), (d) and 
(f) shall be notified in accordance with the terms of paragraph 6. 
 9. If within 30 days from the date of the notifi cation of the proposed visit under paragraph 6, the 
exporter or producer has not given its written consent to such a visit, the importing Party may deny 
preferential tariff treatment to the good or goods th at would have been the subject of the visit. 
 
10. Each Party shall provide that, where its competent authority receives a notification pursuant to paragraph 6, it may, within 15 days of receipt of the notification, postpone the proposed verification 
visit for a period not exceeding 60 days from the date of such receipt, or for such a longer period as 
the Parties may agree. 
 
 11.  A Party shall not deny preferential ta riff treatment to a good based solely on the 
postponement of a verification vi sit pursuant to paragraph 10. 
 12. The Party conducting a verification visit sha ll permit an exporter or a producer whose good or 
goods are the subject of a verification visit, to desi gnate two observers to be present during the visit, 
provided that the observers do not participate in a manner other than as observers. Failure by the 
exporter or producer to designate observers shall not result in the postponement of the visit.  
  13.  Within 120 days following the completion of  the verification visit, the competent authority 
shall provide the exporter or producer whose g ood is subject to the verification, a written 
determination of whether or not the good qualifies as  an originating good, including findings of fact 
and the legal basis for the determination.   14. Where the verification completed by a Party indicates that an exporter or a producer has repeatedly made false or unsupported representations  that a good imported into its territory qualifies 
as an originating good, the Party may withhold pref erential tariff treatment to identical goods exported 
or produced by such person until that person est ablishes compliance with Chapter VI (Rules of 
Origin).  15. Each Party shall maintain the confidentiality of  information collected in the origin verification 
process, in accordance with its legislation.  
 
Article 7-08 
 
Review and Appeal
 
1.  Each Party shall grant the same rights of revi ew and appeal of determinations of origin and 
advance rulings by its competent authority as it provid es to importers in its territory to exporters or 
producers from the other Party who: 
  (a)  Complete and sign a certificate or declaration of origin for a good that has been the 
subject of a determination of origin;  or 
 
 (b)  have received an advance ruling pursuant to Article 7-10. 
 2.  The rights referred to in paragraph 1 include  access to at least one level of administrative 
review independent of the official or office respons ible for the determination or ruling under review, WT/REG206/1 
Page 72  
 
and access to judicial or quasi-judicial review of th e determination or decision taken at the final level 
of administrative review, in accordance with the legislation of each Party.  
Article 7-09 
 
Penalties
 
 
 Each Party shall establish or maintain measures imposing criminal, civil or administrative penalties for violations of its laws and regulations relating to this Chapter. 
 
Article 7-10 
 
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. The advance rulings shall 
be issued to its importer or to the exporter or produ cer in the territory of the other Party, on the basis 
of the facts and circumstances presented by them concerning the origin of the goods. 
 2. Advance rulings shall relate to:   (a) Whether non-originating materials used  in the production of a good undergo the 
corresponding change in tariff classification as set out in Annex 6-03; 
  (b) whether the good satisfies the regional va lue-content requirement under Chapter VI 
(Rules of Origin); 
 
 (c) whether the method for value to be applied by an exporter or a producer in the 
territory of the other Party, in accord ance with the principles of the Customs 
Valuation Code, for calculating the transacti on value of the good or of the materials 
used in the production of a good for whic h an advance ruling is requested, is 
appropriate for the purpose of determini ng whether a good satisfies a regional value-
content requirement under Chapter VI (Rules of Origin); 
 
 (d) whether the method applied by the exporter or producer in the territory of the other 
Party, for reasonably allocating costs in  accordance with the Annex 6-04, is 
appropriate for the purpose of determini ng whether a good satisfies a regional value-
content under Chapter VI (Rules of Origin); 
 
 (e)  whether the country of origin marking made or proposed for the good satisfies the 
provisions of Article 3-12; 
  (f) whether the good qualifies as an originati ng good under Chapter VI (Rules of Origin); 
and 
 
 (g) such other matters as the Parties may agree.   3.  Each Party shall adopt or maintain proce dures for the issuance of advance rulings, prior to 
their publication, including:  
 
 (a)  Information reasonably required to process an application for a ruling; 
  WT/REG206/1 
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 (b) the right of its competent authority to request, at any time during the course of an 
evaluation of an application for an advan ce ruling, supplemental information from the 
person requesting the ruling; 
  (c) the obligation of the competent authority to issue the advance ru ling within 120 days, 
after it has obtained all necessary informa tion from the person requesting the ruling; 
and 
  (d)  the obligation to provide a full explan ation of the reasons for the advance ruling. 
 
 4.  Each Party shall apply advance rulings to im portations into its territo ry beginning on the date 
of their issuance or such later date as may be sp ecified in the ruling, unless the advance ruling is 
modified or revoked under paragraph 6.   5.  Each Party shall provide to any person requesting an advance ruling the same treatment, 
including the same interpretation and application of provisions of Chapter VI (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 circumstan ces are identical in all material respects. 
 6. An advance 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 materials;  or 
 
  (iii)  in the application of a regional value-content requirement;    (b)  where the ruling is not in accordance wi th an interpretation agreed upon by the Parties 
or a modification with regard to Article 3-12 or Chapter VI (Rules of Origin); 
 
 (c) where there is a change in the material  facts or circumstances on which the ruling is 
based;  or 
  (d)  to comply with an administrative or judicial decision.  
7.  Each Party shall provide that any modifica tion 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 
not be applied to importations of a good that have  occurred prior to those dates, unless the person to 
whom the advance ruling was issued has not act ed in accordance with its terms and conditions. 
 8. Notwithstanding paragraph 7, the Party issui ng the advance ruling shall postpone the date of 
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  has acted thereon in good faith.  
  9.  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 assess 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 are consistent with the material facts and 
circumstances on which the advance ruling is based;  and WT/REG206/1 
Page 74  
 
  (c) the supporting data and computations used in applying the basis or method for 
calculating value or allocating costs were correct in all material respects. 
 10. Each Party shall provide that where its comp etent authority determines that any requirement 
in paragraph 10 has not been satisfied, it ma y modify or revoke the advance ruling as the 
circumstances may warrant.  11. Each Party shall provide that where its cu stoms administration determines that an advance 
ruling was based on incorrect information, the person to whom it was issued shall not be subject to 
penalties, provided that person demonstrates that it used reasonable care and acted in good faith in 
presenting the facts and circumstances on which the ruling was based.  12. Each Party shall provide that where an a dvance ruling is issued to a person that has 
misrepresented or omitted material facts or circum stances on which the ruling is based, or has failed 
to act in accordance with the terms and conditions of the ruling, the customs administration that issued 
the ruling may apply such measures as the circumstances may warrant.  13. The validity of an advance ruling shall be s ubject to the permanent obligation of the holder 
thereof to inform the competent authority of any su bstantial change in the facts or circumstances on 
which the ruling was based. 
 
 14.  Each Party shall maintain the confidentiality  of the information gathered in the process of 
issuing advance rulings in accordance with its legislation.  
Article 7-11 
 
Customs Procedures Committee
 
1. The Parties hereby establish the Customs Procedures Committee, comprising representatives 
of each of the Parties, which shall meet at least twice a year, and at the request of either of the Parties. 
 2. The Committee shall: 
 
 (a) Endeavour to agree on:   (i) the interpretation, application and administration of this Chapter; 
 
 (ii) tariff classification and customs valu ation matters relating to determinations 
of origin; 
  (iii) procedures for the request, approval, modification, revocation and 
implementation of advance rulings; 
 
 (iv) modifications to the certificate or de claration of origin mentioned in Article 
7-02, and 
  (v) any other matter raised by one of the Parties; and  
 (b) examine proposals for administrative or operational modifications in customs-related 
matters that could affect trade flows between the Parties. 
  WT/REG206/1 
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3. The Parties shall establish and implement, through their respective laws and regulations, 
criteria which, on matters of interpretation, appli cation and administration, maybe agreed upon by this 
Committee.   
CHAPTER VIII: SAFEGUARDS 
 
Article 8-01 
 
Definitions
 
 
 For the purposes of this Chapter: 
  threat of serious injury means  serious injury that is clearly imminent, taking into 
consideration all relevant factors of an objective a nd quantifiable nature, in re lation to the situation of 
a domestic industry, particularly in accordance with Article 8-10. A determination of the existence of 
a threat of serious injury shall be based on fact s and not merely on presumptions, conjectures or 
remote possibilities;    investigating authority means "investigating authority" as defined in Chapter IX (Unfair 
International Trade Practices); 
 
 directly competing good means  a good which, although not identical or a similar to the good 
with which it compares, is essentially equivalent for commercial purposes, by being intended for the 
same use and interchangeable with it;    similar good means  a good which, although not alike in all respects, has similar 
characteristics and similar component materials which enable it to perform the same functions and to 
be commercially interchangeable with  the good to which it is compared; 
  serious injury means a general and significant overall impairment of a domestic industry; 
  bilateral actions means  safeguard measures pursuant to Articles 8-03, 8-04 and other 
applicable provisions of this Chapter; 
  global actions means emergency actions on imports of  goods pursuant to Article XIX of 
GATT 1994 and the WTO Safeguards Agreement;  
 tariff elimination period means the period of elimination a pplicable to each good, as set out 
in the Tariff Elimination Programme; and   domestic industry means the producers as a whole of the similar or directly competitive 
products operating in the territory of a Party;  
 
Article 8-02 
 
Safeguards Regime
 
 The Parties may apply to the importation of  goods under this Agreement, a regime of 
safeguards, the application of which shall be based  on clear, objective and strict criteria, and for a 
predefined period. The safeguards regime involves bilateral or global actions.  WT/REG206/1 
Page 76  
 
Section A - Bilateral Actions
 
 
Article 8-03 
 
Conditions of Application  
 If, as a result of a Party’s application of th e Tariff Elimination Programme, one or more 
originating goods from the other Party are being impor ted into that Party’s territory at a rate, and 
under such conditions as, on their own, to cause or threaten to cause serious injury to the domestic 
industry that produces like or directly competitive products, the importing Party may adopt bilateral 
actions, which shall be applied in accordance with the following rules:  
 
 (a) Where strictly necessary to counteract the ser ious injury or threat of serious injury 
caused by imports from the other Party of one or more originating goods, a Party may 
adopt bilateral actions within the tariff elimination period; 
 
 (b) bilateral actions shall be tempor ary and exclusively tariff-based. Under no 
circumstances may the tariff determined be  greater than the lower of the most-
favoured nation tariff for that good at the time  when the bilateral action is adopted and 
the most-favoured nation tariff corresponding to the good on the day before the entry into force of the Tariff Elimination Programme;  
 
 (c) bilateral actions may be applied for a period of up to one year, and may be renewed 
once only, for up to an equal and consecutive period, provided it is shown that the conditions justifying it persist;  
  (d) in justified cases, a bilateral action can be  maintained for a third year when the Party 
applying it determines that: 
  (i) the domestic industry affected has made competitive adjustments;  and   (ii)  requires a second year of renewal.  
  In such cases, it will be essential that the increased tariff in the first year of 
application of the bilateral action is subs tantially reduced when the second year of 
renewal begins;  and 
  (e) on expiry of the bilateral action, the ra te or tariff shall be that corresponding to the 
good subject to the bilateral action at that date under the Tariff Elimination 
Programme. 
 
 
Article 8-04 
 
Compensation for bilateral actions
 
1. A Party intending to take a bilateral action sh all provide mutually agreed compensation to the 
affected Party, in the form of additional tariff c oncessions having effects on the trade of the exporting 
country that are equivalent to the im pact of the bilateral action taken.  
 
2. The Parties shall agree upon the terms of th e compensation referred to in paragraph 1 during 
the stage of prior consultations established in Article 8-14.   WT/REG206/1 
 Page 77 
 
 
3. Should the Parties fail to reach agreement on compensation, the Party proposing to take the 
bilateral action shall be empowered to do so, and the exporting Party may impose tariff measures that 
have equivalent trade effects to t hose of the bilateral action taken. 
 
Section B- Global Actions  
 
Article 8-05 
 
WTO Rights  
 The Parties retain their rights and obligat ions under Article XIX of GATT 1994 and the WTO 
Safeguards Agreement, except those relating to co mpensation or retaliation, and exclusion from a 
global action, when incompatible with the provisions of this section, in relation to any global action 
taken by a Party.  
Article 8-06 
 
Criteria for Taking a Global Action
 
1.  When a Party decides to take a global action, it may only apply it to the other Party when the 
imports of a good from that Party, considered indi vidually, represent a substantial fraction of total 
imports and contribute significantly to the serious inju ry or threat of serious injury to the domestic 
industry of the importing Party. 
 
2. For the purposes of paragra ph 1, the following criteria shall be taken into account: 
  (a) Imports of the good from the other Party are normally not considered substantial if 
that Party is not among the main suppliers , whose exported jointly account for 80 per 
cent of total imports of the similar or  directly competitive good of the importing 
country;  and 
  (b) imports from a Party shall not normally be deemed to contribute significantly to 
serious injury, or the threat thereof, if the growth rate of such imports during the 
period in which the injurious surge in imports  occurred is appreciably lower than the 
growth rate of total imports of the simi lar or directly competitive good of the Party 
proposing to take the global action, from all sources over the same period. 
 
Article 8-07 
 
Compensation for Global Emergency Actions
 
1.  The Party intending to take a global action sh all provide mutually agreed compensation to the 
affected Party, in the form of additional tariff c oncessions having effects on the trade of the exporting 
country that are equivalent to the impact of the bilateral action take. 
 2. The Parties shall agree upon the terms of th e compensation referred to in paragraph 1 during 
the stage of prior consultations established in Article 8-14. 
 3. Should the Parties fail to reach agreement on compensation, the Party proposing to take the 
global action shall be empowered to do so, and the exporting Party may impose tariff measures that 
have equivalent trade effects to t hose of the bilateral action taken. 
 WT/REG206/1 
Page 78  
 
Section C - Procedure
 
 
Article 8-08 
 
Procedures for Taking Emergency Action  
 The Party intending to take an emergency bila teral global action under th is Chapter shall fulfil 
the procedure set out in this section.  
Article 8-09 
 
Investigation
 
 
1. To determine the basis for application of a safeguard measure, the investigating authority of 
the importing Party shall carry out an investigation,  either on its own initiative or on request of the 
Party. 
 
2. An investigation that could result in the taki ng of a bilateral action sh all not be initiated unless 
the investigating authority has determined that th e request is supported by domestic producers whose 
joint production represents at least 35 per cent of the total production of the similar or directly 
competitive good.  
3. The investigation shall: 
  (a) Evaluate the volume of and conditions  under which imports of the good in question 
are made;   
 
 (b) verify the existence of serious injury or  threat of serious injury to the domestic 
industry;  and 
  (c) verify the existence of a relation of dir ect causality between the increase in imports of 
the good and the serious injury or threat thereof to the domestic industry. 
 
4. Safeguard measures shall be applied in a ccordance with the legislation of each Party. 
 
Article 8-10 
 
Determination of Serious Injury or Threat Thereof
 
 For the purpose of verifying the existence of seri ous injury or threat thereof, the investigating 
authority shall evaluate all objective and quantif iable factors relating to the affected domestic 
industry, in particular, the rate and amount of th e increase in imports of the good in question, in both 
absolute and relative terms; the share of the domes tic market taken by the increased imports, changes 
in the level of sales, domestic prices, production, productivity, capacity utilization, profits and losses, 
and employment. 
 
Article 8-11 
 
Effect of Other Factors  
 
 Where other factors are present, apart from the in crease in imports of an originating good, or 
of a good from the other Party, as the case may be, which simultaneously damage the domestic industry, the serious injury or threat thereof cause d by such factors may not be attributed to the 
imports in question.  WT/REG206/1 
 Page 79 
 
 
 
Article 8-12 
 
Publication and Notification  
 The Parties shall publish the rulings mentione d in this Chapter, in  accordance with Annex 8-
12, and shall notify the exporting Party thereof on the day following their publication. 
 
Article 8-13 
 
Content of the Notification  
 On launching an investigation, the investig ating authority shall fulfil the notification 
requirements referred to in Article 8-12. Such not ification shall contain sufficient information to 
substantiate and justify the launch of the investigation, including: 
  (a) The names and addresses of domestic producers of similar or directly competitive 
goods representative of the domestic industr y; their share in domestic production of 
those goods and the reasons why they are considered representative of that sector; 
  (b) a clear and complete description of the goods subject to the investigation, the tariff 
items in which they are classified and the current tariff treatment, as well as the identification of similar or directly competitive goods;  
 
 (c) import data for each of the three years prio r to  the launch of the investigation, which 
provide the basis for the allegation that the good in question is being imported in 
increasingly large amounts, either in absolu te terms or relative to total domestic 
production of similar or directly competitive goods; 
 
 (d) data on total domestic production of sim ilar or directly competitive goods for the 
three years prior to the launch of the investigation;  
  (e) data showing that the imports are causi ng serious injury or threat thereof to the 
domestic industry in question, together w ith a listing and description of the causes of 
the serious injury or threat thereof, and a summary of the basis for the allegation that 
increased imports of those goods, in absolute  terms or relative to domestic production 
of similar or directly competitive goods is the cause thereof; 
  (f)  where appropriate, criteria and objective information demonstrating fulfilment of the 
prerequisites for application of a global emergency action to the other Party, as 
established in this Chapter; and 
  (g) the duration of the intended safeguard measure.  
Article 8-14 
 
Prior Consultations
 
1. A Party launching proceedings under this Chapte r shall notify the other Party in writing in the 
terms set out in Articles 8-12 and 8-13, and shall al so request prior consultations as provided for in 
this Chapter. 
 WT/REG206/1 
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2. The importing Party shall provide adequate opportunities for prior consultations. The period 
of prior consultations shall start on the day followi ng receipt by the exporting Party of notification 
containing the request for such consultations.  3. The period of prior consultations shall l ast for 30 working days, unless otherwise agreed 
between the Parties. 
 4. Safeguard measures may only be adopted once the period of prior consultations has ended. 
 
Article 8-15 
 
Confidential Information
 
1. The consultation procedure shall not oblige th e Parties to furnish any information provided to 
them on a confidential basis, disclosure of which could violate their laws on this subject or damage legitimate commercial interests. 
 
2. Without prejudice to the above, the importing Party intending to apply the emergency action 
shall submit a non-confidential summary of the confidential information.   
Article 8-16 
 
Observations by the Exporting Party
 
 During the period of prior consultations, the e xporting Party shall formulate such observations 
as it considers relevant, in particular, regarding th e basis for invoking the safeguard and the safeguard 
measures proposed.  
Article 8-17 
 
Extension
 
  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 exporting Party of its intention 
to extend the measure, at least 60 days in advan ce of its expiry. The extension procedure shall be 
carried out in accordance with the provisions establish ed in this Chapter for the adoption of safeguard 
measures.   
ANNEX 8-12 
 
 The Parties shall fulfil the publication requi rements mentioned in this Chapter in the 
following communications media:   (a)  Mexico, in the Official Gazette of the Federation ("Diario Oficial de la Federación"); 
and 
  (b) Nicaragua, in a daily newspaper of nati onal circulation, without prejudice to its 
subsequent publication in the Official Gazette ("La Gaceta, Diario Oficial"). 
 
  WT/REG206/1 
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CHAPTER IX: UNFAIR INTERNATIONAL TRADE PRACTICES 
 
Article 9-01 
 
Definitions  
 
 For the purposes of this Chapter:   WTO Agreements means the Agreement on Implementati on of Article VI of the General 
Agreement on Tariffs and Trade of 1994 and th e Agreement on Subsidies and Countervailing 
Measures of the WTO; 
  competent authority means the authority indicated by each Party in Annex 1 to this Article; 
  investigating authority means The authority indicated by each  Party in Annex 2 this Article; 
 
 injury means a significant injury caused to a domestic industry, threat of significant injury to 
a domestic industry, or a significant setback in the creation of this industry;   f.o.b. means "f.o.b.", as defined in Chapter VI (Rules of Origin); 
 
 Interested Parties means the producers, importers and exporters of the good subject to 
investigation, as well as domestic or foreign persons that  have a direct interest in the investigation in 
question, including the government of the Party who se good is subject to an investigation. Any such 
interest should be made known in writing;  
 serious injury means "serious injury", as defined in the WTO Agreement on Subsidies and 
Countervailing Measures;   resolution launching the investigation means  the resolution issued  by the competent 
authority formally declaring the launch of the investigation;  
 preliminary determination means  the determination issued by the competent authority as to 
whether or not there is a basis for imposi ng a provisional counter vailing measure;  and 
  final determination means  the determination issued by the competent authority as to whether 
or not there is a basis for imposing definitive countervailing measures; 
 
Article 9-02 
 
General Provisions
 
 The Parties hereby reject any unfair intern ational trade practice that contravenes the 
provisions of this Chapter. 
 
Article 9-03 
 
Export Subsidies  
1.  Effective from the entry into  force of this Agreement, the Parties may not increase subsidies 
above 7 per cent of the f.o.b. export value. 
 WT/REG206/1 
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2.  As from the moment at which tariffs on originating agricultural products reach zero in accordance with the Tariff Elimination Programme, and in no circumstances later than 1 July 2007, 
the Parties may not maintain export subsidies on ag ricultural products in their reciprocal trade. 
 3. Notwithstanding the above, as from the date of en try into force of this Agreement, the Parties 
may not maintain in their reciprocal trade expor t subsidies on agricultural products included in 
Article 5 of Export Promotion Decree 37-91 of Ni caragua, and those subject to tariff quotas under the 
Tariff Elimination Programme.  
Article 9-04 
 
Rights and Obligations of Interested Parties
 
 Each Party shall ensure that the interested pa rties in the administrative investigation have the 
same rights and obligations, and that these shall be  respected and observed, both during the procedure 
and in the administrative mechanisms and a ppeals lodged against final determinations. 
 
Article 9-05 
 
Countervailing Measures  
 In accordance with its domestic legislation,  this Agreement and WTO agreements, the 
importing Party may establish and apply countervailing measures, when its investigating authority, 
through an objective review based on positive evidence: 
  (a) Determines the existence of imports:    (i) under conditions of dumping;  or 
 
  (ii) goods that have benefited from export subsidies;   (b) proves the existence of:    (i) injury;  or 
 
  (ii) serious injury;  and   (c) proves that the injury or serious injury, as the case may be, is a direct consequence of 
imports of identical or similar goods of the other Party, under dumping or subsidy 
conditions. 
 
Article 9-06 
 
Sending of Copies
 
 Interested parties in the investigation shall, at  their own expense, send to the other interested 
parties copies of the public version of each of the reports, documents and means of evidence they 
submit to the investigating authority in the course of the investigation.   WT/REG206/1 
 Page 83 
 
 
Article 9-07 
 
Publication  
 1. The Parties shall publish the determinations re ferred to in this Chapte r, in accordance with the 
annex to this Article. 
 2. Resolutions requiring publication are as follows:   (a) Resolutions launching the investigation a nd the preliminary and final determinations; 
 
 (b) resolutions declaring the investigation concluded:   (i) as a result of commitments with the exporting Party or with the exporters, as 
the case may be; and 
 
 (ii) as a result of commitments arising from the holding of conciliatory hearings.  
Article 9-08 
 
Content of Resolutions
 
 Resolutions launching the preliminary and defin itive investigation shall contain the following 
at least:   (a) Identity of the investigating authority, and the place and date at which the resolution 
is issued; 
 
 (b)  the name or official designation and address of the requester, and those of other 
domestic producers of identical or similar goods; 
  (c) indication of the imported good subject to  the procedure and its tariff classification;  
 
 (d) the elements and evidence used to determ ine the existence of the margin of dumping 
or the amount of the subsidy; the injury or serious injury and its causal relation; 
  (e) the considerations of fact and law that  led the competent authority to launch an 
investigation or to impose a countervailing measure;  and 
 
 (f) the legal argument, data, facts or circumstances that substantiate and justify the 
determination in question. 
 
Article 9-09 
 
Notifications and Deadlines
 
1. Each Party shall notify the determination on this issue directly to its importers and the 
exporters of the other Party of which it has knowledge , to the competent authority, to the diplomatic 
mission of the exporting Party accredited in the Pa rty undertaking the investigation, and, where 
appropriate, the government of the exporting Party. Th e Parties shall also take action to identify and 
locate persons with an interest in the procedure to guarantee due process and equality between such 
persons.  WT/REG206/1 
Page 84  
 
2. Once the Party has made sure that there is sufficient evidence to justify launching an 
investigation, it shall notify the exporting Part y, before issuing the resolution launching the 
investigation.  3. Notification of the resolution launching the i nvestigation shall be made within five working 
days following its publication. 
 4. Notification of the resolution launching th e investigation shall contain the following 
information at least:  
 (a) The time-limits and place for presen tation of allegations, evidence and other 
documents;  and 
  (b) the name, address and telephone number of the office at which information can be 
obtained, consultations made and the case record inspected. 
 
5. Together with the notification, exporters shall be sent a copy of:   (a) The respective publication referred to in paragraph 3;   (b) the written document containing the allega tion and the public version of its annexes; 
and 
  (c) the corresponding questionnaires.  6.  The importing Party shall grant all interested  persons of whom it has knowledge, at least 30 
working days from the day following the publication of  the resolution launching an investigation, to 
make such representations as they deem fit. Subj ect to prior substantiated written request by the 
interested person, the deadline of 30 days ma y be extended for up to one further equal period. 
 
Article 9-10 
 
Deadlines for Provisional Measures
 
 Neither Party shall impose a provisional counter vailing measure before 60 working days have 
elapsed from the date of publication of the resolution launching investigation.  
Article 9-11 
 
Adoption and Publication of the Preliminary Determination
 
1. Within 130 working days following publication of the resolution launching the investigation, 
the competent authority shall issue a preliminary dete rmination. This shall indicate whether or not the 
investigation will continue and, if appropriate, whether or not provisional measures will be imposed. 
The determination should be substan tiated, based on the evidence contained in the administrative case 
record and published in accordance with Article 9-07. 
 2. Provisional countervailing measures shall take  the form of a guarantee, pursuant to the 
legislation of each Party. The amount of such guarantee shall be equal to the amount of the 
provisional countervailing measure. 
  WT/REG206/1 
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Article 9-12 
 
Content of the Preliminary Determination  
 In addition to the information set out in Article 9-08, as appropriate, the corresponding 
preliminary determination shall contain the following: 
 
 (a) The normal value, export price, margin  of dumping or, as the case may be, the amount 
of the subsidy and its incidence on the e xport price obtained by the investigating 
authority, together with a description of  the methodology used to determine them; 
 
 (b) a description of: 
  (i) injury;  or   (ii) serious injury, and a description of the analysis of each of the factors taken 
into account; 
  (c) a description of the determination of a causal relation;  and   (d) where appropriate, the amount of the provisional countervailing measure, that will 
have to be guaranteed. 
 
Article 9-13 
 
Conciliatory Hearings
 
 During the course of the investigation, any interested person may ask the investigating 
authority to hold conciliatory hearings in  order to achieve a satisfactory solution. 
 
Article 9-14 
 
Information Meetings  
1. Subject to prior written request from interest ed persons, the investigating authority of the 
importing Party shall hold informati on meetings to disseminate inform ation pertaining to the content 
of the preliminary and final determinations.  2. The requests referred to in paragraph 1 sh ould be presented within five working days 
following the publication of respective determination.  In both cases, the investigating authorities shall 
hold the meeting within 15 working days  following the presentation of the request. 
 3. The meeting shall be held in the headquarters  of the investigating authority of the importing 
Party.  4. At the information meetings referred to in pa ragraphs 1 and 2, inter ested persons shall have 
the right to review reports or technical papers , the methodology, calculation spreadsheets and, in 
general, any element of which the co rresponding determination has been based. 
 WT/REG206/1 
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Article 9-15 
 
Public Hearings
 
1.  Subject to prior written request by any of th e interested persons, the investigating authority 
shall hold public hearings which interested pers ons may attend and question their counterparties 
regarding such information or evidence as the inves tigating authority deems appropriate. It shall also 
give interested persons an opportuni ty to submit pleas after the public hearing even though the period 
for evidence may have ended. Such pleas shall cons ist of written presentation of conclusions relating 
to the information and arguments used in the course  of the investigation. Notification to interested 
persons of the holding of a public hearing shall be made at least 15 working days before the date of 
the hearings. 
 2. The public hearing shall be held at the headquarters of the investigating authority of the importing Party.  
Article 9-16 
 
Obligation to Terminate an Investigation
 
1. The importing Party shall te rminate an investigation: 
  (a)  With regard to an interested person, when its competent authority determines that: 
 
 (i)  the margin of dumping or the amount of the subsidy is de minimis ;  or 
  (ii)  there is insufficient evidence of dumping, subsidy, injury, serious injury, or 
causal relation;  or 
 
 (b) when its competent authority determin es that the volume of imports subject to 
dumping or subsidy, or the injury, are insignificant. 
 2. For the purposes of paragraph 1,  it shall be considered that: 
 
 (a) The margin of dumping is de minimis  when it is less than 2 per cent of the export 
price; 
  (b) the amount of the subsidy is de minimis  when it is less than 1 per cent ad valorem ; 
and 
 
(c) the volume of imports subject to dumping or subsidies, or the injury, are insignificant 
if they represent less than 3 per cent of total imports of identical or similar goods by the importing Party. 
 
Article 9-17 
  
Period of Validity of Countervailing Measures
 
1.  A final countervailing measure shall be elim inated automatically if, after five years have 
elapsed since the day following publication of the fi nal resolution, none of the interested persons has 
requested its review, and the competent authorit y has not initiated a review on its own initiative. 
 
2.  When a Party initiates a review on its ow n initiative it shall immediately notify the other 
Party.  WT/REG206/1 
 Page 87 
 
 
 
Article 9-18 
 
Refund or Drawback  
 If a final ruling determines a countervailing measu re below that determined provisionally, the 
competent authority of the importing Party shall instruct the corresponding authorities to return 
amounts paid in excess within a maximum period of 60 working days, counted from the day following publication of the final ruling, in accordan ce with the legislation of each Party. 
 
Article 9-19 
 
Clarifications
 
 
 Once the countervailing measure has been imposed , whether provisional or final, interested 
persons may request, in writing, that the investiga ting authority determines whether a good is subject 
to the measure being imposed, or clarify any aspect of the corresponding resolution. 
 
Article 9-20 
 
Review  
 
1. Final countervailing measures may be reviewed annually, subject to written request by any of 
the interested persons, and at any time, by the competent authority on its own initiative following a 
change of circumstances. The countervailing meas ures may be ratified, modified, or eliminated 
depending on the outcome of the review.  
2. The procedure for review of definitive count ervailing measures shall abide by the substantive 
provisions and procedures set out in this Chapter.  3. The review procedure may be requested in writi ng by interested persons that participated in 
the procedure giving rise to the final counterva iling measure, or by any producer, importer, or 
exporter which, without having participated in th e procedure, can accredit legal interest in writing 
before the investigating authority. 
 
Article 9-21 
 
Access to the Case Record
 
 Interested persons shall have access to the admi nistrative record of the procedure in question, 
at the headquarters of the investigating authority. 
 
Article 9-22 
 
Access to Other Records  
 In the course of an investigation, the inv estigating authority of each Party shall allow 
interested persons access to public information cont ained in the administrative record of any other 
investigation, once 60 working days have elapsed since the day following the publication of the final 
determination.  WT/REG206/1 
Page 88  
 
Article 9-23 
 
Access to Confidential Information
 
1. The investigating authority of each Party sh all allow access to confidential information, in 
accordance with its legislation, when reciprocity exists in the other Party regarding access to such 
information. 
 2. Confidential information shall only be available to the legal representatives of the interested 
persons accredited before the investigating author ity in the administrative investigation. Such 
information shall be for strictly personal use and shall not be transferable for any reason. 
 
3. In the event of such information being discl osed or used for personal benefit, the legal 
representative shall be entitled to claim criminal, civ il, and administrative sanctions pursuant to the 
legislation of each Party.  
Article 9-24 
 
Reforms to Domestic Legislation
 
1.  When a Party decides to reform, add to, or repeal its laws on unfair practices, it shall notify 
the other Party in writing immediately following publication.  
2. Reforms, additions or repeals shall be compa tible with the international regulations cited in 
Article 9-05.  3. Where a Party considers that such reforms, a dditions, or repeals violate the provisions of this 
Chapter, it may have recourse to the disput e settlement mechanism of Chapter XX (Dispute 
Settlement). 
  
ANNEX 9-01(1) 
 
Competent authority 
 
Competent authority  means 
  (a) For Mexico:  the Ministry of Trade and Industrial Development (SECOFI), or its 
successor;  and 
 
 (b) for Nicaragua:  the Ministry of Economic Affairs and Development (MEDE), or its 
successor. 
  
ANNEX 9-01(2) 
 
Investigating authority 
 
  Investigating authority  means the national authority responsible for conducting 
investigations into unfair international trade practices:  
 (a)  For Mexico:  the International Trade Pr actices unit of SECOFI, or its successor;  and 
  WT/REG206/1 
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 (b) for Nicaragua:  the Directorate General of Economic Integration of MEDE, or, as 
appropriate, the directorate with jurisdicti on over matters relating to Central American 
economic integration, or the unit respons ible for investigation of unfair trade 
practices, or its successor. 
 
 
ANNEX 9-07 
 
Publication  
 
 The Parties shall publish the determinations  referred to in this Chapter as follows: 
  (a) Mexico, in the Official Gazette of the Federation (Diario Oficia l de la Federación); 
  (b) Nicaragua, in a daily newspaper of nati onal circulation, without prejudice to its 
subsequent publication in the Official Gazette (La Gaceta, Diario Oficial). 
  
PART THREE: TRADE IN SERVICES  
 
CHAPTER X: GENERAL PRINCIPLES ON TRADE IN SERVICES 
 
Article 10-01 
 
Definitions
 
 
 For the purposes of this Chapter: 
  trade in services 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 consumer of the other Party; 
  (c) by service providing enterprises of a Party located in the territory of the other Party; 
and 
 
 (d) by physical persons of a Party in the territory of the other Party; 
  service provider of a Party means  a person of a Party that seeks to provide or provides a 
service;  and   quantitative restriction means a non-discriminatory measure that imposes restrictions 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, wh ether in the form of a quota or an economic 
needs test, or by any other quantitative means;  and 
  professional services means services, the provision of which requires specialized post-
secondary education, or equivalent training or e xperience, and for which the right to practice is 
granted or restricted by a Party, but does not include services provided by tradespersons or vessel and 
aircraft crew members. WT/REG206/1 
Page 90  
 
 
Article 10-02 
 
Scope and Coverage
 
1.  This Chapter applies to measures adopted or maintained by a Party relating to services 
provided by service providers of the other Party, including measures regarding: 
  (a)  The production, distribution, marketing, sale and delivery of a service;   (b) the purchase or use of, or payment for, a service; 
 
 (c) access to and use of distribution and tr ansportation systems in connection with the 
provision of a service; 
  (d)  access to and use of public telecommunications networks and services; 
 
 (e) the presence in its territory of a service provider of the other Party;  and   (f) the provision of a bond or other form of financial security as a condition for the 
provision of a service. 
 
2.  A reference to federal, state or regiona l governments includes any non-governmental body in 
the exercise of any regulatory, administrative or ot her governmental authority delegated to it by those 
governments.   3.  This Chapter does not apply to: 
 
 (a)  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;  
 (b)  subsidies or grants provided by a Part y or by a state enterprise, including government-
supported loans, guarantees and insurance; 
  (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;  or  
 
 (d)  financial services.   4.  Nothing in this Agre ement shall be construed: 
 
 (a)  To impose any obligation on a Party w ith 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 th at national with respect to such access or 
employment;  or 
  WT/REG206/1 
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 (b) to impose any obligation or grant any right to a Party in respect of public sector 
procurement made by a Party or state enterprise. 
 5. The provisions of this Chapter shall apply to services-related measures set out in the annexes, 
only to the extent of and under the terms stipulated in those annexes. 
 
Article 10-03 
 
Most-Favoured-Nation Treatment
 
1. Each Party shall accord to the services and service providers of the other Party treatment no 
less favourable than it accords, in similar circumstan ces, to the services and service providers of any 
other country, whether or not a Party to this Agreement.  2. The provisions of this Chapter shall not be construed as preventing a Party from conferring or 
according advantages to neighbouring countries in order to facilitate exchange, limited to contiguous 
border zones, of services that are produced and consumed locally. 
 
Article 10-04 
 
National Treatment
 
1. Each Party shall accord to service providers of the other Party treatment no less favourable 
than that it accords, in similar circumstances, to its own services or service providers. 
 2.  The treatment accorded by a Party under paragraph 1 means, with respect to a state or region, treatment no less favourable than the most favourable  treatment accorded, in similar circumstances, 
by that State to service providers of the Party of which it forms a part. 
 
Article 10-05 
 
Non-Compulsory Local Presence
 
 Neither Party may require a service provider of  the other Party to establish or maintain a 
representative office or any form of enterprise, or to  be resident, in its territory as a condition for the 
provision of a service 
 
Article 10-06 
 
Consolidation of Measures  
1. Neither Party shall increase the degree of non-conformity of its measures with respect to 
Articles 10-03, 10-04 and 10-05. Any reform of any such measure shall not reduce the degree of conformity of the measure existing immediately before the reform.  2. Within a period not exceeding one year following the entry into force of this Agreement, the 
Parties shall register in their schedule, contained in Annex 10-06, any federal or central measures that 
are not in conformity with Articles 10-03, 10-04 and 10-05. 
 3. For any state or regional measures that are not in conformity with Articles 10-03, 10-04 and 10-05, the deadline for registering them in the Schedul e to Annex 10-06, shall be no greater than two 
years following the entry into force of this Agreement. 
 
4. The Parties are not required to register municipal measures. WT/REG206/1 
Page 92  
 
 
Article 10-07 
 
Transparency
 
 
1. Further to the provisions contained in Artic le 18-02, each Party shall publish promptly and, 
except in situations of emergency, no later than the date of their entry into force, all relevant laws, 
regulations and administrative directives and other decisions, resolutions or generally applicable 
measures that relate to or affect the operation of  this Chapter, and have been implemented by 
institutions at any level of government or by a non- governmental regulatory body. It shall also publish 
any international agreements that relate to or affect  trade in services and those to which a Party to this 
treaty is a signatory.   2. Whenever it is not feasible or practicab le to publish the information referred to in 
paragraph 1, it shall be made ava ilable to the public in another way. 
 
3. Each Party shall promptly inform the other Party, at least annually, of the establishment of 
any new laws, regulations or administrative direc tives that considerably affect trade in services 
covered by their specific commitments under this Chapter, or of any modifications made to pre-existing commitments.  
4. Each Party shall reply promptly to any requ est for specific information submitted by the other 
Party regarding any of its measures referred to in paragraph 1. The other Party shall establish one or 
more inquiry centres to furnish information on the m easures referred to in paragraph 1, at the request 
of the other Party, and on which it has an obligation to notify under paragraph 3.  
5. Wherever possible, each Party shall provide  the other Party and interested persons a 
reasonable chance to make observations on the measures proposed.  
Article 10-08 
 
Quantitative restrictions
 
1.  Periodically, and at least once every two year s, the Parties shall endeavour to negotiate the 
liberalization or removal of:   (a)  The existing quantitative restrictions maintained by:  
 (i)  a Party at the federal or central le vel as set out in the Schedule to Annex 10-
08, in accordance with paragraph 2; and 
  (ii)  a State or region, as indicated by a Party in the Schedule to Annex 10-08, in 
accordance with paragraph 2; and 
 
 (b)  any quantitative restrictions adopted by a Party after this Agreement comes into force. 
 2. Each Party shall have one year from the date  on which is agreement enters into force to 
indicate in its Schedule to Annex 10-08 any quantitative  restrictions maintained by a State or region, 
not including those maintained by municipal governments. 
 
3. Each Party shall notify the other Party of any quantitative restriction adopted after this 
Agreement enters into force, except those of munici pal governments, and shall register the restriction 
in its Schedule to Annex 10-08.   WT/REG206/1 
 Page 93 
 
 
Article 10-09 
 
Future Liberalization  
1.  The Commission shall convene future negotia tions through which the Parties will deepen the 
liberalization achieved in the different services sectors,  in order to eliminate remaining restrictions 
registered in accordance with Article 10-06 (2) and (3). 
 2.  The elimination of barriers to land transport flows between the Parties shall be subject to the 
provisions set out in Annex 10-09.  
Article 10-10 
 
Liberalization of Non-discriminatory Measures
 
 Each Party shall indicate in its Schedule to Annex 10-10 its commitments to phase out 
quantitative restrictions, licensing requirement s and other non-discriminatory measures. 
 
Article 10-11 
 
Procedures  
 
 The Commission shall establish procedures for: 
 
 (a)  A Party to notify the other Party and include in its relevant Schedule: 
  (i)  federal or central measures pursu ant to Article 10-06 (2) and amendments 
thereto; 
 
 (ii)  state or regional measures, pursu ant to Article 10-06 (3) and amendments 
thereto; 
  (iii)  non-discriminatory quantitative restrictions pursuant to Article 10-08;  
 (iv) measures pursuant to Article 10-10; and 
  (b)  the holding of future negotiations pursuant to Article 10-09  
Article 10-12 
 
Limitations on the Provision of Information 
 
 Further to the provisions of Article 21-03, nothing in this Chapter shall be construed to 
require a Party to furnish any information the disclosure of which could prejudice the legitimate commercial interests of a public or private enterprise.  
Article 10-13 
 
Licensing and Certification 
 
1. With a view to ensuring that any measure adopted or maintained by a Party relating to the 
licensing or certification of nationals of the other Party does not constitute an unnecessary barrier to 
trade, each Party shall endeavour to ensure that any such measure:  
 WT/REG206/1 
Page 94  
 
 (a) Is based on objective and transparent cr iteria, such as competence and the ability to 
provide a service;  
  (b) is not more burdensome than necessary to ensure the quality of a service;  and  
 (c)  does not constitute a disguised restriction on the cross-border provision of a service. 
 2. Where a Party, unilaterally or by agreemen t, recognizes education, experience, licenses or 
certifications obtained in the territory of the other Party or of a non-Party:   
 (a)  Nothing in Article 10-03 shall be cons trued to require the Party to accord such 
recognition to education, experience, licenses or certifications obtained in the territory 
of the other Party;  and 
  (b)  the Party shall afford the other Party an adequate opportunity to demonstrate that 
education, experience, licenses or certifications  obtained in that other Party’s territory 
should also be recognized, or to negotiate or conclude an agr eement or arrangement 
of comparable effect. 
  3.  Within two years from the date of entry in to force of this Agreement, each Party shall 
eliminate any citizenship or permanent residency requirement that it maintains for the licensing or 
certification of professional service providers of the other Party. Where a Party does not comply with 
this obligation with respect to a particular sector, th e other Party may, in the same sector and for such 
period as the noncomplying Party maintains its require ment, solely have recourse to maintaining an 
equivalent requirement set out in its Sc hedule to Annex 10-06, or reinstating:  
 
 (a)  Any such requirement at the federal or cen tral level that it eliminated pursuant to this 
Article;  or 
  (b)  on notification to the non-complying Part y, any such requirement at the state or 
regional level existing on the date of entry into force of this Agreement. 
 
 4.  Annex 10-13 sets out procedures for recogni zing the education, experience, standards and 
requirements governing providers of professional services.  
Article 10-14 
 
Denial of Benefits
 
 Subject to prior notification and consultation, a Party may deny the benefits of this Chapter to 
a service supplier of the other Party where the Party establishes that the service is being provided by an enterprise that is owned or controlled by persons of a non-Party and that has no substantial 
business activities in the territory of either Party.   
Article 10-15 
 
Exceptions
 
 
 Further to the provisions of Article 21-01, no pr ovision in this Chapter shall be construed as 
preventing a Party from adoptin g or applying necessary measures to implement the rules and 
regulations of internationa l agreements for the conservation of th e environment of which the Party is a 
signatory, provided such measures are not applied in such a way as to constitute a measure of 
arbitrary or unjustifiable discrimination between countries in similar conditions, or a disguised 
restriction on trade in services between the Parties.  WT/REG206/1 
 Page 95 
 
 
 
Article 10-16 
 
Future Work Programme  
1. The Commission shall determine procedures to  establish the necessary disciplines relating to: 
 
 (a)  Emergency safeguard measures;   (b)  subsidies that distort trade in services;  and  
 (c)  monopoly service providers. 
 2.  For the purposes of paragraph 1, account shall be  taken of the work of relevant international 
organizations.  
Article 10-17 
 
Relation with Multilateral Agreements on Services
 
1.  The Parties shall apply, with respect to each  other, the provisions on services contained in the 
multilateral agreements to which they are signatories.  
2. Notwithstanding paragraph 1, in the event of any inconsistency between those agreements and 
this Agreement, the latter shall prevail to the extent of the inconsistency. 
 
Article 10-18 
 
Technical Cooperation
 
 The Parties shall establish, no later than one y ear after this Agreement enters into force, a 
system to provide service providers with information on their markets in relation to:   (a) Commercial and technical aspects of the provision of services;  
 (b)  the possibility of obtaining services technology;  and 
  (c)  any aspects that the Commission ma y identify with respect to services. 
  
ANNEX 10-13 
 
Professional Services
 
1.  Definitions 
 
 For the purposes of this Annex, professional practice means the habitual undertaking of any 
professional act or the provision of any service pertaining to any profession that requires 
governmental authorization. 
 
2.  Objective 
  This Annex sets out the rules to be observed by the Parties to reduce and gradually eliminate 
the barriers to the provision of professional  services that exist in their territory. WT/REG206/1 
Page 96  
 
 
3. Scope and coverage 
 
 This Annex shall apply to all measures relate d to criteria for according mutual recognition of 
licences and certificates for professional practice. 
 
 4.  Preparation of professional standards and criteria 
 
 (a) The Parties agree that the process of mutual granting and recognition of licences and 
certificates for the practice of a profession in their territory shall be based on raising 
the quality of professional services, by estab lishing standards and criteria for granting 
certificates and licences, and at the same time protecting consumers and safeguarding the public interest. 
  (b)  Among other things, the Parties shall en courage the relevant organizations, competent 
government agencies, and professional associations and colleges to: 
   (i)  prepare such criteria and standards;  and    (ii)  develop and submit recommendati ons on mutual recognition to the Parties. 
 
 (c)  The preparation of criteria and standards referred to in paragra phs 1 and 2, may take 
the following elements into account: education, examinations, experience, conduct and ethics, professional development and re- certification, scope of practice, local 
knowledge, and consumer protection.
 
 
 (d)  To implement the provisions of paragraph 1 through 3, the Parties shall provide the 
detailed information necessary for the aw arding and mutual recognition professional 
licences and certificates, including information on academic courses, study guides and materials, payment of fees, dates of examinations, timetables, location and membership in professional societies or  colleges. This information includes 
legislation, administrative guidelines and gene rally applicable measures of a federal, 
central, state, regional nature, and those prepared by government and non-
governmental organizations. 
 
 5.  Review  
  (a)  Based on the review of recommendations received by the Parties, and provided they 
are consistent with the provisions of this  Agreement, each Party shall encourage the 
competent authority to adopt those recommendations. 
  (b)  The Parties shall periodically, and at  least once every three years, review the 
implementation of this Annex.  
 
 
ANNEX 10-09 
 
Removal of Barriers to Land Transport Flows 
 
 The Parties shall undertake a programme of work  to remove barriers to land transport flows 
between their territories. This shall take into acc ount, among other things, the work that both Parties 
have undertaken on land transport, and the agreemen ts or conventions that the Parties have signed 
with other countries.   WT/REG206/1 
 Page 97 
 
 
 
 CHAPTER XXI: TELECOMMUNICATIONS 
 
Article 11-01 
 
Definitions  
 
 For the purposes of this Chapter:   Intra-corporate communications means the telecommunications through which an 
enterprise communicates: 
  (a)  Internally, or with or among its subsidiaries, branches or affiliates;  or 
  (b)  on a non-commercial basis with other persons that are fundamental to the economic 
activity of the enterprise and that have a c ontinuing contractual relationship with it,  
  but does not include telecommunications services provided to persons other than those described herein;    technically qualified entity means an entity defined by the corresponding law of each Party 
as responsible for performing laboratory tests. Su ch entities must be accredited by the competent 
authorities of each Party.   authorized equipment means terminal or other equipment that has been approved for 
attachment to the public telecommunications network in accordance with a Party’s conformity 
assessment procedures;  
  terminal equipment means  any digital or analog device capable of processing, receiving, 
switching, signalling or transmitting signals by electro magnetic means and that is connected by radio 
or wire to a public telecommunications  transport at a termination point.  
 
 standards-related measure means  "standards-related measure" as defined in Chapter XIV 
(Standards-Related Measures);   conformity assessment procedure means "conformity assessment procedure" as defined in 
Chapter XIV (Standards-Related Measures); 
 
 protocol means  a set of rules and formats that govern the exchange of information between 
two peer entities for the purpose of transferring signalling or data information;    network termination point means  the final demarcation of the public telecommunications 
network at the customer’s premises;  
 
 private network means a telecommunications transport network that is used exclusively for 
intra-corporate communications;   public telecommunications network means  the public telecommunications infrastructure 
that permits telecommunications betwee n defined network termination points; 
  radio broadcasting services means services that broadcast radio and television programmes;  
  enhanced or value-added services means telecommunications services employing computer 
processing applications that: WT/REG206/1 
Page 98  
 
  (a) Act on the format, content, code, prot ocol 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.   public telecommunications service means  any telecommunications service required by a 
Party, explicitly or in effect, to be offered to th e public generally, including telegraph, telephone, telex 
and data transmission, that typically involves the real-time transmission of customer-supplied 
information between two or more points without any end-to-end change in the form or content of the 
customer’s information   cross subsidy means economic transfer of the production of a service to the expenses of 
another service. 
  flat rate pricing means pricing on the basis of a fixed charge per period of time regardless of 
the amount of use; and   telecommunications means the transmission and reception of signals by any electromagnetic 
means. 
 
Article 11-02 
 
Scope and Coverage 
 
1.  Recognizing the dual role of telecommunications services, as a specific sector of economic 
activity and as a means of providing services for other economic activities, this Chapter applies to:   (a)  Measures adopted or maintained by a Party relating to the provision of public 
telecommunications services; 
 
 (b)  measures adopted or maintained by a Pa rty relating to continuous access to and use of 
public telecommunications networks or ser vices by persons of the other Party, 
including access and use by such persons ope rating private networks for the purpose 
of intra-corporate communications. 
 
 (c) measures adopted or maintained by a Party relating to the provision of enhanced or 
value-added services by persons of the ot her Party in the territory, or across the 
borders, of a Party;  and 
  (d)  standards-related measures relating to a ttachment of terminal or other equipment to 
public telecommunications transport networks. 
 
2.  Nothing in this Chapter shall be construed:   (a)  To require a Party to authorize a pers on of the other Party to establish, construct, 
acquire, lease, operate or provide tel ecommunications networks or services; 
 
 (b)  to require a Party, or require a Party to compel any person, to establish, construct, 
acquire, lease, operate or provide tel ecommunications transport networks or 
telecommunications transport services not offered to the public generally; 
  WT/REG206/1 
 Page 99 
 
 
 (c)  prevent a Party from prohibiting person s operating private networks from using their 
networks to provide public telecommunicati ons transport networks or services to third 
persons;  or 
  (d)  require a Party to compel any person enga ged in the cable or broadcast distribution of 
radio or television programming to make ava ilable its cable or broadcast facilities as a 
public telecommunications network. 
 
Article 11-03 
 
Access to and Use of Public Telecommunications Networks and Services 
 
1. Each Party shall ensure that persons of th e other Party have access to and use of any public 
telecommunications transport network or service, in cluding private leased circuits, offered 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 paragraphs 2 through 8.  
 
2. Subject to Article 11-02 (2)(c) and paragraphs 7 and 8, each Part y shall ensure that persons of 
the other Party are permitted to:   (a)  Purchase or lease, and attach terminal  or other equipment that interfaces with the 
public telecommunications network; 
 
 (b) interconnect private leased or owne d circuits with public telecommunications 
networks in the territory, or across the borders, of that Party, including for use in providing dial-up access to and from their customers or users, or with circuits leased or owned by another person on terms a nd conditions mutually agreed by those 
persons; 
  (c) perform switching, signalling and processi ng functions subject to the current laws of 
each Party;  and 
  (d) use operating protocols of their choice. 
 
3. Each Party shall ensure that:    (a)  The pricing of public telecommunications services reflects economic costs directly 
related to providing the services, as appr oved by the competent authority;  and 
 
 (b)  private leased circuits are available on an established flat-rate pricing basis.   4.  Nothing in this paragraph shall be constr ued to prevent cross-subsidization between public 
telecommunications services.  
5. Each Party shall ensure that persons of the other Party may use public telecommunications 
networks or services for the movement of informatio n in its territory or across its borders, including 
for intra-corporate communications, and for access to information contained in data bases or 
otherwise stored in machine-readable fo rm in the territory of either Party. 
 
6.  Each Party may adopt any measure needed to ensure the confidentiality and security of 
messages and protection of the privacy of networ k subscribers or public telecommunication services. 
 WT/REG206/1 
Page 100  
 
 Each Party shall, in accordance with its legisl ation, ensure that no condition is imposed on 
access to and use of public telecommunications networ ks or services, other than that necessary to: 
  (a)  Safeguard the public service responsibilities of providers of public 
telecommunications networks or services, in  particular their ability to make their 
networks or services available to the public generally;  or 
  (b)  protect the technical integrity of p ublic telecommunications networks or services. 
  8.  Provided that conditions for access to a nd use of public telecommunications networks or 
services satisfy the criteria set out in paragraph 7, such conditions may include: 
  (a)  Restrictions on resale or shared use of such services;   (b)  requirements to use specified technical  interfaces, including interface protocols, for 
interconnection with such networks or services; 
  (c)  restrictions on interconnection of private leased or owned circuits with such networks 
or services or with circuits leased or owne d by another person, where the circuits are 
used in the provision of public telecommunications transport networks or services; and 
 
 (d)  licensing, permit, registration or no tification procedures which, if adopted or 
maintained, are transparent and applications filed thereunder are processed expeditiously. 
 
Article 11-04 
 
Conditions for the Provision of En hanced or Value-Added Services 
 
1.  Each Party shall ensure that:  
  (a)  Any licensing, permit, registration or no tification procedure that it adopts or maintains 
relating to the provision of enhanced or value-added services is transparent and non-
discriminatory, and that applications file d thereunder are processed expeditiously; and 
  (b) the information required is consistent with the requirements and procedures requiring 
technical and financial capacity to provid e the service, as established in each Party’s 
respective law and regulations. 
 2.  No Party may require a person providing such services to:   (a)  Provide them to the public generally;  
 (b)  cost-justify its rates; 
  (c)  file a tariff;   (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. 
  WT/REG206/1 
 Page 101 
 
 
 3.  Notwithstanding paragraph 2(c), a Party may require the filing of a tariff by:   (a)  Such provider 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 to which Article 11-06 applies. 
  
Article 11-05 
 
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 telecomm unications transport netw orks, including measures 
relating to the use of testing and measuring e quipment for conformity assessment procedures, are 
adopted or maintained only to the extent necessary to:  
 
 (a) Prevent technical damage to public  telecommunications transport networks; 
  (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;  or  
 (e) ensure users’ safety and access to public telecommunications networks or services. 
 2.  Each Party may require approval for the attachment to the public telecommunications 
network of terminal or other equipment that is not authorized, provided that the criteria for that 
approval are consistent  with paragraph 1. 
 
3. Each Party shall ensure that the network te rmination points for its public telecommunications 
networks are defined on a reasonable and transparent basis.  4. No Party may require separate authoriza tion for equipment that is connected on the 
customer’s side of authorized equipment that serves as a protective device in public 
telecommunications networks fulfilling the criteria of paragraph 1. 
 5. Each Party shall:   (a)  Ensure that its conformity assess ment 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 fo r terminal or other equipment to be 
attached to the public telecommunications transport 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. 
 WT/REG206/1 
Page 102  
 
6.  No later than one year after the date of en try into force of this Agreement, each Party shall 
adopt, as part of its conformity assessment proce dures, the provisions necessary to accept the test 
results performed in laboratories located in the te rritory of the other Party, based on its standards-
related measures and procedures.   
7. The Telecommunications Standards Subcomm ittee established under Ar ticle 14-17 (5) shall 
perform the functions set out in Annex 11-05, in addition to any others assigned by the Committee on 
Standards Related Measures.  
Article 11-06 
 
Monopolies
 
 
1. Where a Party maintains or designates a monopoly to provide public telecommunications 
networks or services, and the monopoly, directly or through an affiliate, competes in the provision of 
enhanced or value-added services or ot her telecommunications-related services or 
telecommunications-related goods, the Party sha ll ensure that the monopoly does not use its 
monopoly position to engage in anticompetitive conduct 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 
conduct may include cross-subsidization, predat ory conduct and the discriminatory provision of 
access to public telecommunications networks or services. 
 
2. To prevent such anticompetitive conduct, 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 acco rds its competitors access to and use of its 
public telecommunications networks or services on terms a nd conditions no less 
favourable than those it accords to itself or its affiliates;  or 
 
 (d) rules to ensure the timely discl osure of technical changes to public 
telecommunications networks and their interfaces. 
 
Article 11-07 
 
Relation to International Or ganizations and Agreements 
 
1. The Parties shall do their utmost to stim ulate the role of regional and subregional 
organizations and promote them as forums for st imulating telecommunicati ons development in the 
region.  
2. The Parties recognize the importance of inte rnational standards for global compatibility and 
interoperability of telecommunica tion networks or services, and th ey undertake to promote those 
standards through the work of relevant inte rnational bodies, including the International 
Telecommunication Union and the Internati onal Organization for Standardization.  
  WT/REG206/1 
 Page 103 
 
 
Article 11-08 
 
Technical Cooperation and Other Consultations  
1. To encourage the development of interopera ble telecommunications services infrastructure, 
the Parties shall cooperate in the exchange of tec hnical information, the development of government-
to-government training programmes and other related activities. In implementing this obligation, the 
Parties shall give special emphasis to existing exchange programmes.  2. The Parties shall consult on the feasibility  of further liberalization of trade in all 
telecommunications services. 
 
Article 11-09 
 
Transparency
 
 
 Each Party shall publish its measures re lating to access to and use of public 
telecommunications networks or servi ces, including measures relating to: 
  (a) Tariffs and other terms and conditions of service;   (b) specifications of technical interfaces with those 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 terminal or other equipment to the public 
telecommunications network;  and 
  (e) any notification, permit, registration or licensing requirements. 
 
Article 11-10 
 
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.   
ANNEX 11-05 
 
Telecommunications Standards Subcommittee
 
1. The Telecommunications Standards Subcommitte e shall, within one year following the date 
of entry into force of this Agreement, develop a work programme, including a timetable, for making 
compatible, to the greatest extent practicable, sta ndards-related measures for authorized equipment.  
 
2. The Subcommittee may address other appropr iate standards-related matters respecting 
telecommunications equipment or services and su ch other matters as it considers appropriate. 
 3. The Subcommittee shall take into account releva nt work carried out by the Parties in other 
forums, and that of non-governmental standardizing bodies. 
 
 WT/REG206/1 
Page 104  
 
CHAPTER XII: TEMPORARY ENTRY FOR BUSINESS PERSONS 
 
Article 12-01 
 
Definitions
 
 
 For the purposes of this Chapter:   temporary entry means  entry into the territory of a Party by a business person of the other 
Party without the intent to establish permanent residence. 
 
 business person means a citizen of a Party who is e ngaged in trade in goods, the provision of 
services or the conduct of investment activities;   national means a "national", but does not include permanent residents; and 
 
 in force means the compulsory status of legislative precepts of the Parties at the time of entry 
into force of this Agreement.  
Article 12-02 
 
General Principles
 
 This Chapter reflects the preferential trading re lationship between the Parties, the desirability 
of facilitating temporary entry on a reciprocal basis and of establishing transparent criteria and procedures for that purpose, and the need to ensure  border security and to protect the domestic labour 
force and permanent employment in their respective territories.  
 
Article 12-03 
 
General Obligations 
 
1. Each Party shall apply its measures relating to  the provisions of this  Chapter in accordance 
with the foregoing Article and, in particular, sha ll expeditiously apply those measures so as to avoid 
unduly impairing or delaying trade in goods or ser vices or 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 12-04 
 
Authorization 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, includi ng the provisions of Annex 12-04. 
 2. A Party may refuse to issue an immigration document authorizing employment to a business 
person where the temporary entry of that person might adversely affect:  
 
 (a) The settlement of any labour dispute that  is in progress at the place or intended place 
of employment;  or 
  WT/REG206/1 
 Page 105 
 
 
 (b) the employment of any person who is involved in such dispute.  3. When, pursuant to paragraph 2, a Party refuses to issue an immigration document authorizing 
employment, it shall:   
 (a) Inform the business person in writing of the reasons for the refusal;  and 
  (b) promptly notify in writing the Party wh ose business person has been refused entry 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.   
Article 12-05 
 
Provision of Information 
 
1. Further to the provisions of  Article 18-02, each Party shall: 
  (a) Provide to the other Party such materi als as will enable them to become acquainted 
with its measures relating to this Chapter;  and 
 
 (b) no later than one year after the date of entry into force of this Agreement, prepare, 
publish and make available in its own territory , and in the territory of the other Party, 
explanatory material in a consolidated  document regarding the requirements for 
temporary entry under this Chapter in su ch a manner as will enable business persons 
of the other Party to become acquainted with them. 
 
2. Each Party shall collect and maintain, and ma ke available to the other Party in accordance 
with its domestic law, data respecting the granting of temporary entry under this Chapter to business 
persons of the other Party who have been issued immigration documentation, including data specific 
to each occupation, profession or activity.   
Article 12-06 
 
Committee on Temporary Entry 
 
 
1.  The Parties hereby establish a Committee on Temporary Entry, comprising representatives of 
each Party, including immigration officials 
 2.  The Committee shall meet at least once each year to consider: 
  (a)  The implementation and administration of this Chapter;   
 (b) the development of measures to further facilitate temporary entry of business persons 
on a reciprocal basis; 
  (c) the waiving of labour certification tests or procedures of similar effect for spouses of 
business persons who have been granted temporary entry for more than one year 
under Section B, or C of the Annex 12-04;  and 
  (d)  proposed modifications or additions to this Chapter.  WT/REG206/1 
Page 106  
 
Article 12-07 
 
Dispute Settlement
 
1.  The Parties may not initiate proceedings under Article 20-06 regarding a refusal to grant 
temporary entry under this Chapter or a particul ar case arising under Article 12-03 (1) unless:  
 
 (a)  The matter involves a pattern of practice;  and   (b)  the business person has exhausted the av ailable administrative remedies regarding the 
particular matter. 
 
2.  The remedies referred to in paragraph 1(b)  shall be deemed to be exhausted if a final 
determination in the matter has not been issued by  the competent authority within one year of the 
institution of an administrative proceeding, and the fa ilure to issue a determination is not attributable 
to delay caused by the business person. 
 
Article 12-08 
 
Relation to Other Chapters 
 
 Except as provided in this Chapter and in  Chapters I (Initial Provisions), II (General 
Definitions), XVIII (Transparency), XX (Disput e Settlement) and XXII (Final Provisions), no 
provision of this Agreement shall impose any ob ligation on a Party regarding its immigration 
measures.    
ANNEX 12-04 
 
Temporary Entry for Business Persons
 
Section A - Business Visitors  
 1. Each Party shall grant temporary entry to a business person who, upon request by an 
enterprise of the other Party registered in the bila teral registry of enterprises mentioned in paragraph 
7, seeks to engage in a business activity set out in  Appendix 1 to this Annex, without requiring a 
person to obtain an employment authorization, provi ded that, in addition to complying with existing 
immigration measures applicable to temporary entry, on presentation of: 
  (a) Proof of citizenship of a Party;  
 
 (b) documentation accrediting prior request by an  enterprise established in the territory of 
a Party; 
  (c) documentation demonstrating that th e business person will be so engaged and 
describing the purpose of entry;  and  
 
 (d) 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. 
  WT/REG206/1 
 Page 107 
 
 
2. Each Party shall provide that a busin ess person may satisfy the requirements of 
paragraph 1(d) by demonstrating that:    (a) The primary source of remuneration for the proposed 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, remain outside such territory. 
 3. A Party shall normally accept an oral declar ation as to the principal place of business and 
accrual of profits. Where the Party requires further proof, it shall normally consider a letter from the 
employer registered in the bilateral registry of en terprises attesting to these matters as sufficient proof.  
  4.  Each Party shall grant temporary entry to a business person seeking to engage in a business 
activity other than those set out in Appendix 1 to th is Annex, on a basis no less favourable than that 
provided under the existing provisions of the measur es set out in Appendix 2 to  this Annex, provided 
that the business person otherwise complies with existing immigration measures applicable to 
temporary entry.   5. Neither Party may:  
 (a) As a condition for temporary entry under  paragraph 1 or 3, require prior approval 
procedures, petitions, 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 or 4. 
 6. 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. Before imposing a visa requirement, 
the Party shall consult with the other Party with a view to avoiding the imposition of the requirement. 
With respect to an existing visa requirement, a Party shall consult with the other Party with a view to 
its removal.  
 7. For the purposes of this Section, the Parti es shall establish and keep up-to-date the Bilateral 
Register of Enterprises - Visitors.  
Section B - Traders and Investors 
 
 1. Each Party shall grant temporary entry a nd provide confirming documentation to a business 
person seeking to:    (a) Carry on substantial trade in goods or services principally between the territory of the 
Party of which the business person is a citizen and the territory of the 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 the business person or the business person’s 
enterprise has committed, or is in the pro cess of committing, a substantial amount of 
capital, provided that the business pe rson otherwise complies with existing 
immigration measures applicable to temporary entry. 
 WT/REG206/1 
Page 108  
 
2.  Neither Party may:    (a) As a condition for 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 ma y, within an established time frame, review a 
business person’s proposed investment to assess whet her the investment complies applicable legal 
provisions. 
 4. 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.   
Section C - Intra-Company Transferees
  
 
1.  Each Party shall grant temporary entry a nd provide confirming documentation to a business 
person employed by an enterprise registered in the B ilateral Registry of Enterprises, referred to in 
paragraph 4, who seeks to render services to that enterp rise or a subsidiary or affiliate thereof, in a 
capacity that is managerial, executive or involves specialized knowledge, provided that the business 
person otherwise complies with existing immigrati on measures applicable to temporary entry.  A 
Party may require the business person to have been employed continuously by the enterprise for one 
year within the three-year period immediately preced ing the date of the application for admission.  
 2.  Neither Party may:  
 
 (a) As a condition for 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. Before imposing a visa requirement, 
the Party shall consult with a Party with a view to avoiding the imposition of the requirement With 
respect to an existing visa requirement, a Party sha ll consult, on request, with the other Party with a 
view to its removal.  
 4. For the purposes of this Section, the Party shall establish and keep up-to-date the Bilateral 
Register of Enterprises-Intra-Company Transferees.   
APPENDIX 1 TO ANNEX 12-04 
 
Business Visitors
 
I.  Definitions 
 
 For the purposes of the Appendix to Section A: 
   tour bus operator means  a natural person, including re lief personnel accompanying or 
following to join, necessary for the operation of a tour bus for the duration of a trip;  and  
  WT/REG206/1 
 Page 109 
 
 
 transportation operator means a natural person, other than  a tour bus operator, including 
relief personnel accompanying or fo llowing to join, necessary for the operation of a vehicle for the 
duration of a trip.   
II.  Research and design  
 
 - Technical, scientific and statistical re searchers conducting independent research or 
research for an enterprise located in the territory of the other Party.  
 
III. Growth, manufacture and production  
 
 - Harvester owner supervising a harves ting crew admitted under applicable law. 
  - Purchasing and production manage ment personnel conducting commercial 
transactions for an enterprise located in  the territory of the other Party. 
 
IV. Marketing  
 
 - Market researchers and analysts conduc ting independent researc h or analysis or 
research or analysis for an enterprise located  in the territory of the other Party.  
 
 -  Trade fair and promotional pe rsonnel attending a trade convention. 
 
V. Sales 
36 
 
 - Sales representatives and agents taking or ders or negotiating contracts for goods or 
services for an enterprise located  in the territory of the ot her Party but not delivering 
goods or providing services.  
  - Buyers purchasing for an enterprise locate d in the territory of the other Party.  
 
VI. Distribution 
 
 -  Transportation operators tr ansporting goods or passengers to the territory of a Party 
from the territory of the other Party, or loading and transporting goods or passengers 
from the territory of a Party, with no unloadi ng in that territory, to the territory of the 
other Party.  
 
 - Customs brokers providing consulting services for the purpose of facilitating the 
import or export of goods. 
 
VII. After sales service  
  - Installers, repair and maintenance pers onnel, and supervisors, possessing specialized 
knowledge essential to a seller’s contractual obligat ion, performing services or training workers to 
perform services, pursuant to a warranty or other serv ice contract incidental to the sale of commercial 
or industrial equipment or machinery, including computer software, purchas ed 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.  
 
                                                     
 
  36 Business visitors in this category for Nicaragua are subject to Article 24 of the Tax and Commercial 
Justice Law (Ley de Justicia Tributaria y Comercial) published in the Official Gazette (La Gaceta, Diario 
Oficial) on 6 June 1997. WT/REG206/1 
Page 110  
 
VIII. General services  
 
 - Management and supervis ory personnel engaging in a commercial transaction for an 
enterprise located in the territory of the other Party.  
 
 -  Financial services personnel (insurers, ba nkers or investment brokers) engaging in 
commercial transactions for an enterprise located  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.  
 
 - Tour bus operators entering the territory of a Party: 
  (a) With a group of passengers on a bus tour  that has begun in, and will return to, 
the territory of the other Party;  
  (b) to meet a group of passengers on a bus tour that will end in, and the 
predominant portion of which will take place in, the territory of the other 
Party;  or 
  (c)  with a group of passengers on a bus tour  to a destination in the territory of the 
other Party, and either returning with  no passengers or reloading with the 
group.  
  -  Translators or interpreters performing services as employees of an enterprise located 
in the territory of the other Party.  
  
APPENDIX 2 TO ANNEX 12-04 
 
Current Immigration Provisions
 
1.  In the case of Mexico, Chapter III of th e General Demography Law (Ley General de 
Población), 1974, as amended.  
 
2.  In the case of Nicaragua, the Immigrati on 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).  
CHAPTER XIII: FINANCIAL SERVICES 
 
Article 13-01 
 
Definitions
 
 For the purposes of this Chapter: 
  public entity means  the central bank or monetary authority of a Party, or any financial 
institution owned or controlled by a Party;  WT/REG206/1 
 Page 111 
 
 
  financial institution means any financial intermediary or ot her enterprise that is authorized to 
do business and regulated or supervised as a financia l institution under the law of the Party in whose 
territory it is located  
 financial institution of the other Party means  a financial institution established pursuant to 
the legislation of each Party, located in the territory  of a Party, that is controlled by persons of the 
other Party;   Investment means  
 
 (a)  An enterprise;   (b)  an equity security of an enterprise;   
 (c)  a debt security of an enterprise: 
  (i)  where the enterprise is an affiliate of the investor;  or   (ii)  where the original maturity of the debt security is at least three years, but 
does not include a debt security, regardless of original maturity, of a state 
enterprise; 
  (d)  a loan to an enterprise:   (i)  where the enterprise is an affiliate of the investor;  or 
 
 (ii)  where the original maturity of the loan is at least three years, but does not 
include a loan, regardless of original  maturity, to a state enterprise; 
  (e)  an interest in an enterp rise that entitles the owner to share in the income or profits of 
the enterprise; 
 
 (f)  an interest in an enterprise that entitl es the owner to share in the assets of that 
enterprise on dissolution, other than a debt security or a loan excluded from subparagraphs (c) or (d); 
 
 (g)  real estate or other property, tangible or intangible, acquired in the expectation, or 
used for the purpose, of economic benefit or other business purposes; 
  (h)  interests arising from the commitment of capital or other resources in the territory of 
the other Party to economic activity in such territory, such as under: 
 
 (i) contracts involving the presence of an investor’s property in the territory of 
the other Party, including turnkey or construction contracts, or concessions, 
or 
  (ii)  contracts where remuneration depends substantially on the production, 
revenues or profits of an enterprise;  and 
  (i) a loan to or debt security issued by a financial institution is an investment only where 
it is treated as regulatory capital by the Party in whose territory the financial institution is located; 
  WT/REG206/1 
Page 112  
 
 investment does not mean:   (j)  monetary claims that do not involve the kinds of interests set out in the subparagraphs 
defining investment 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 
  (ii)  the extension of credit in connec tion with a commercial transaction, such as 
trade financing, other than a loan covered by subparagraph (d); 
  (k) any other monetary claims that do not involve the kinds of interests set out in the 
subparagraphs defining investment; 
 
 investment of an investor of a Party means an investment owned or controlled directly or 
indirectly by an investor of such Party;   investor of a Party means a Party or state enterprise thereo f, or a national or an enterprise of 
such Party, that seeks to make, is making or has made an investment;  
 disputing investor means  an investor that makes a claim under the provisions of Article 13-
20;   new financial service means  a financial service not provided in the Party’s territory that is 
provided within the territory of the other Party, including any new form of delivery of a financial 
service or the sale of a financial product that is not sold in the Party’s territory; 
  self-regulatory organization means any non-governmental bod y, including any securities or 
futures exchange or market, clearing agency, or ot her organization or association, that exercises its 
own or delegated regulatory or s upervisory authority over financia l service providers or financial 
institutions; 
 
 person of a Party means a national or an enterprise of a Party, and, for greater certainty, does 
not include a branch of an enterprise of a non-Party;   
 cross-border provision of a financial service or cross-border trade in financial services 
means  the provision of a financial service: 
  (a) From the territory of a Party into the territory of the other Party;   (b)  in the territory of a Party by a person of that Party to a person of the other Party;  or 
 
 (c) by a national of a Party in the territory of the other Party;  
  financial service provider of a Party means  a person of a Party that is engaged in the 
business of providing a financial service within the territory of the other Party;  
 cross-border financial service provider of a Party means a person of a Party that is 
engaged in the business of providing a financial service within the territory of that Party and seeks to 
provide or provides cross-border provision of services;  and   financial service means a service of a financial nature, in cluding insurance, reinsurance, and 
any service incidental or auxiliary to a service of a financial nature.  WT/REG206/1 
 Page 113 
 
 
 
Article 13-02 
 
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 investments of such investors in financial institutions in the 
other Party’s territory;  and 
 
 (c)  cross-border trade in financial services.  2.  Nothing in this Chapter shall be construed to prevent a Party, including its public entities, 
from exclusively conducting or providing in its territory: 
 
 (a)  Activities or services forming part of public retirement plans or public social security 
systems; 
  (b) use of the financial resources of the Party;  or  
 (c)  other activities or services for the a ccount or with the guarantee of the Party, 
including its public entities ; 
 
3. The Parties shall progressively and gradually phase out all their mutual financial restrictions 
or exclusions, with the aim of furtheri ng economic complementation between them. 
 
4. The provisions of this Ch apter shall take precedence over th ose of other Chapters, except 
where express reference is made to those Chapters.  
Article 13-03 
 
Self-regulatory Organizations
 
 When a Party requires that a financial ins titution 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 13-04 
 
Right of Establishment  
1. The Parties recognize the principle that the i nvestors of a Party, engaged in the business of 
providing financial services in its territory, must be  allowed to establish a financial institution in the 
territory of the other Party, through any of th e 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 13.06  WT/REG206/1 
Page 114  
 
Article 13-05 
 
Cross-border Trade
 
1. No Party shall increase the degree of non-conf ormity of its measures relating to cross-border 
trade in financial services conducted by the other Part y’s providers of cross-border financial services, 
following the entry into force of this Agreement. 
 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. This do es not require a Party to permit such providers to do 
business or advertise in its territory. Subject to th e provisions of paragraph 1, each Party may define 
the terms "do business" and "advertise" for the purpose of this obligation. 
 3. Without prejudice to other means of prudentia l regulation of cross-border trade in financial 
services, either Party may require the registration of  cross-border financial service providers of the 
other Party and of financial instruments. 
 
Article 13-06 
 
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 establishment, purchase, expansion, administration, 
conduct, operation, sale and other forms of disposal of 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 investors in like financial institutions in respect of the 
establishment, purchase, expansion, administration,  conduct, operation, sale and other forms of 
disposal of financial institutions and investments.  3. Pursuant to Article 13.05, 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 fina ncial services in respect of the provision of that 
service.  4. The treatment granted by a Party to like fi nancial institutions and pr oviders of 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 consis tent with paragraphs 1 through 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, in like circumstances, it places the other Party’s like financial institutions and 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 fina ncial institutions and provi ders of like services to 
provide such services.    WT/REG206/1 
 Page 115 
 
 
Article 13-07 
 
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, in like circumstances, to investors, 
financial institutions, investments of investors in lik e financial institutions and providers of like cross-
border financial services of the other Party or of a non-Party.  
Article 13-08 
 
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;  or   (c)  based on an agreement with the other Party or a non-Party.  
2.  A Party that accords recognition of pruden tial 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 prude ntial measures under pa ragraph 1, 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 negotiate a similar 
agreement or arrangement.  
Article 13-09 
 
Exceptions
 
1.  Nothing in this Chapter shall be construe d to prevent a Party from adopting or maintaining 
reasonable prudential measures such as:  
 (a)  Protection of investors, depositors, fina ncial 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;  or 
 
 (c)  ensuring the integrity and stability of a Party’s financial system.  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 pa ragraph shall not effect either Party’s obligations under Articles 16-
05 and 16-08 in respect of the measures covered by Chapter XVI (Investment) or Article 13-17. 
 WT/REG206/1 
Page 116  
 
3. Article 13-06 shall not apply to any exclusiv e rights that a Party may grant to a financial 
institution to provide one of the financial services referred to in Article 13-02 (2)(a). 
 4. Notwithstanding the provisions of Article 13-17 (1) through (3), a Party may prevent or limit 
transfers by a financial institution or provider of cr oss-border financial services, or for the benefit of 
an affiliate or person related to such ins titution or service provider, through proper and non-
discriminatory application of measures relating to ma intenance of the safety, soundness, integrity or 
financial responsibility of financial institutions 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 13-10 
 
Transparency
 
 
1.  Further to Article 18-02, each Party shall en sure 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 sh all make available to those interested the 
requirements for completing 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 that authority requires furthe r information from the applicant, it shall so inform 
the applicant without undue delay.  
4. Each regulatory authority shall issue an admi nistrative decision within 120 days 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 applic ant 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 deci sion within 120 days, the regulatory authority shall 
so inform the applicant without undue delay and shall endeavour to issue the decision within a 
reasonable period.  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 pub lic interest or harm legitimate business 
interests of specific enterprises. 
 
6. Each Party shall maintain or establish one or  more inquiry points within one year following 
the entry into force of this Agreement, to res pond in writing as soon as practicable to all reasonable 
inquiries from interested persons regarding measures of general application that may be adopted by 
that Party under this Chapter. 
  WT/REG206/1 
 Page 117 
 
 
Article 13-11 
 
Financial Services Committee  
 
1. The Parties hereby establish the Financia l Services Committee comprising representatives of 
the competent authorities indicated in Annex 13-11. 
 2.  The Committee shall:   (a)  Supervise the implementation of this  Chapter and its subsequent development; 
 
 (b)  consider issues regarding financial services that are referred to it by a Party;   (c)  participate in dispute settlement pr ocedures pursuant to Articles 13-19 and 13-20;  
and 
 
 (d)  facilitate the exchange of informati on between supervisory authorities and provide 
cooperative assistance in prudential regulation, with the aim of harmonizing regulatory frameworks and other po licies, as deemed appropriate.  
  3.  The Committee shall meet at least once a year  to review the implementation of this Chapter. 
 
Article 13-12 
 
Consultations
 
 
1. Either Party may request cons ultations with the other Party regarding any matter arising under 
this Agreement that affects financial services.  The other Party shall give sympathetic consideration to 
any such request.  The consulting Party shall report th e results of its consultations to the Committee at 
its meetings.  2.  Representatives of the competent authorities listed in Annex 13-11 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 the operations of financial instituti ons or providers of cross-border financial services 
in the territory of the Party seeking consultation. 
  4.  Nothing in this Article shall be construe d to require regulatory 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 needs 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/REG206/1 
Page 118  
 
Article 13-13 
 
New Financial Services and Data Processing
 
1. Each Party shall permit a financial institution of the other Party to pr ovide 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 in similar circumstances.  The Party ma y determine the institutional and juridical form in 
which the service may be provided and may require authorization for the provision of the service. Where such authorization is required, a decision shall be made within a reasonable time and the 
authorization may only be refused for prudential reasons.  
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.   
Article 13-14 
 
Senior Management and 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 board of dir ectors of a financial institution of the other Party 
be comprised of nationals of the Party, resident s in its territory or a combination of the two. 
 
Article 13-15 
 
Reservations and Specific Commitments
 
1.  Within one year from the date of entry into fo rce of this Agreement, the Parties shall negotiate 
reservations to Articles 13-04, 13-05, 13-06, 13 -07, 13-13 and 13-14 and include them in their 
Schedule of Annex 13-15.   2.  In the negotiations referred to in paragraph 1,  the Parties shall endeavour to reach agreements 
aimed at achieving global balance in the concessions granted. 
 
 3.  The Parties shall progressively and gradually phase out all their mutual financial restrictions 
or exclusions, included in the Schedules referred to in paragraph 1, with the aim of furthering 
economic complementation between them.  
4. Neither Party shall increase the degree of  non-conformity of its reserved measures under 
paragraph 1, following their registration in those Schedules.  5. A reservation entered in Chapters X (Gen eral Principles on Trade in Services) and XVI 
(Investment) in respect of local presence, cross-border trade, national treatment, most-favoured-nation treatment, new financial services and data processing,  or senior management and boards of directors, 
shall be deemed a reservation on Articles 13-04 thr ough 13-07, 13-13 and 13-14 of this Chapter, as 
the case may be, to the extent that the measure , sector, subsector or activity specified in the 
reservation, is covered by this Chapter.   WT/REG206/1 
 Page 119 
 
 
Article 13-16 
 
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 accordance with Articles 13-10 and 13-12, where the 
Party determines that the service is being provided by an enterprise that does not conduct substantial 
trade activities in the territory of either Party, or  is owned or controlled by persons of a non-Party. 
 
Article 13-17 
 
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 its partial or 
complete liquidation; 
  (c)  payments made under a contract entered in to by the investor, or investment thereof; 
  (d)  payments arising from compensation for expropriation pursuant to Article 16-09;  or 
 
 (e)  payments arising from the applica tion of a dispute settlement mechanism under 
Article 13-20. 
 2.  Without prejudice to Article 13-18, each Party shall permit transfers to be made in a freely usable currency at the market rate of exchange preva iling on the date of transfer with respect to spot 
transactions in the currency to be transferred.  
 3. Neither Party may require its investors to transf er, or penalize its investors that fail to transfer, 
the income, earnings, profits or other amounts derive d from, or attributable to, investments in the 
territory of the other Party. 
 
 4.  Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, 
non-discriminatory and good faith appl ication of its laws relating to: 
  (a)  Bankruptcy, insolvency or the protection of the rights of creditors;  
 (b)  issuing, trading or dealing in securities; 
  (c)  criminal or administrative offences;    (d)  reports of transfers of currency or other monetary instruments; 
 
 (e)  ensuring the satisfaction of judgments in adjudicatory proceedings;  or  WT/REG206/1 
Page 120  
 
 (f)  the establishment of instruments or mech anisms needed to ensure the payment of 
income taxes, in relation to dividends a nd other items, through mechanisms such as 
withholding. 
  5.  Paragraph 3 shall not be construed to prevent a Party from imposing any measure through the 
equitable, non-discriminatory and good faith applica tion of its laws relating to the matters set out in 
paragraph 4(a) through (e).  
Article 13-18 
 
Balance of Payments and Safeguards
 
1. Each Party may adopt or maintain a measure to  suspend, for a reasonable time, some or all of 
the benefits contained in this Ch apter and in Article 16-08, when: 
  (a) The application of any provision of th is Chapter or Article 16-08 causes a serious 
economic and financial disturbance in the terr itory of the Party, which it is impossible 
to resolve adequately through an y other alternative measure;  or 
  (b)  the balance of payments of a Party, in cluding the state of its monetary reserves, is 
seriously threatened or faces serious difficulties. 
 
2.  A Party that suspends or intends to suspend be nefits contained in this Chapter shall inform the 
competent authority of the other Party as soon as possible:   (a)  Of the nature of the serious economic a nd financial disturbance caused by application 
of this Chapter or Article 16-08, as the case may be, or the nature and scope of the 
serious threats to its balance of payments;  
  (b)  the situation of the Party’s economy and external trade;   (c)  the alternative measures it has av ailable to correct the problem;  and 
 
 (d)  the economic policies it is adopting to  address the problems mentioned in paragraph 
1, and how such policies will directly contribute to solving those problems. 
  3.  The measure adopted or maintained by the Party at all times shall:  
 (a)  Avoid unnecessary damage to the commercial, economic or financial interests of the 
other Party; 
  (b) be no more burdensome than necessary to deal with the difficulties that give rise to 
the measure being adopted or maintained; 
 
 (c)  be temporary and be phased out progr essively as the balance-of-payments situation 
improves, or the economic and financial situation of the Party, as the case may be, improves;  
  (d) at all times ensure its application does not discriminate between the Parties;  and 
 
 (e) seek to be consistent with  internationally accepted criteria. 
  WT/REG206/1 
 Page 121 
 
 
4.  A Party that adopts a measure to suspend bene fits contained in this Chapter or in Article 16-
08, shall inform the other Party of the evolution of  the events that gave rise to the adoption of the 
measure in question.   5.  For the purposes of this Article, reasona ble time means that time for which the events 
described in paragraph 1 persist. 
 
Article 13-19 
 
Dispute Settlement Between the Parties
 
1.  Chapter XX (Dispute Settlement), as modified by this Article, applies to the settlement of 
disputes between the Parties arising under this Chapter.  2.  The Committee on Financial Services shall maintain by consensus a roster of up to ten 
individuals, including up to five 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 
XX (Dispute Settlement), the roster members shall ha ve specialized knowledge in  the area of finance, 
and broad experience gained from holding responsibiliti es in the financial sector or financial 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 chair shall be selected from the roster. 
  4.  In any dispute in which the arbitral pane l finds a measure to be inconsistent with the 
obligations of this Chapter, and where suspensi on of benefits under Chapte r XX (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 services sector, the complaining Party may not 
suspend benefits in the financial services sector. 
 
Article 13-20 
 
Settlement of Disputes between a Party and an Investor of the Other Party
 
1.  Except as provided for in this Article, the cl aims lodged by a disputing investor against a 
Party in relation to the obligations  contained in this Chapter, sha ll be settled in accordance with the 
provisions established in Section B of Chapter XVI (Investment). For this purpose, the provisions of 
Section B of Chapter XVI (Investment) are hereby in corporated into this Chapter and made part 
thereof.  2. Where the Party against whic h the claim is lodged invokes an y of the exceptions listed in 
Article 13-09, the following procedure shall be observed: 
  (a)  The arbitral panel shall refer the matte r to the Financial Services Committee for its 
decision. The panel shall not proceed until it has received a decision from the WT/REG206/1 
Page 122  
 
Committee pursuant to this Article, or until 60 days have elapsed since the date of referral to the Committee;  and 
  (b)  once the matter has been referred, th e Committee shall decide whether and to what 
extent the exception invoked under Article  13-09 is a valid defence against the 
investor’s claim, and shall send a copy of its decision to the arbitral panel and to the 
Commission. Such decision shall be binding for the panel. 
  
ANNEX 13-11 
 
Competent Authorities
 
1.  The Financial Services Committee shal l comprise representatives appointed by: 
  (a)  In the case of Mexico, the Ministry of Finance and Public Credit, or its successor;  
and 
  (b)  in the case of Nicaragua, the Ministry of Economic Affairs and Development, the 
Ministry of Finance, the Central Bank and the Banking Superintendency, or their 
successors. 
 
2.  Each Party’s principle representative sha ll be the person so appointed by each Party. 
  
PART FOUR: TECHNICAL BARRIERS TO TRADE 
 
CHAPTER XIV: STANDARDS-RELATED MEASURES 
 
Article 14-01 
 
Definitions
 
 
1. For the purposes of this Chapter, the terms set  out in the sixth edition of ISO/IEC Guide 2: 
1991, "General terms and definitions concerning sta ndardization and related act ivities," shall have the 
same meaning when used in this Chap ter, unless defined differently herein. 
 2. For the purposes of this Chapter: 
 
 risk assessment means  an evaluation of the potential for adverse effects on human, animal 
and plant health and safety, or on the environment, arising from a product or service that is traded between the Parties;   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 another or fulfil the same 
purpose, to enable the goods and services to be traded between the Parties;   standards-related measures means  standards, technical regulation and conformity 
assessment procedures;  
  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 met hods, with which compliance is not mandatory. It  WT/REG206/1 
 Page 123 
 
 
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 guarantee for safety or protection of human, animal or plant 
life or health, the environment, or the preven tion of practices which may mislead consumers, 
including issues related to identifying goods or se rvices, considering, among other things, where 
appropriate, fundamental climatic or other geographical factors, technological or infrastructural 
factors, or scientific justification;   standardizing body means a body whose activities in sta ndardization are recognized by the 
government of each Party, respectively  
 
 international standardizing body means a standardizing body whose membership is open to 
the relevant bodies of at least all parties to th e WTO Agreement on Technical Barriers to Trade, 
including the International Organization for Standa rdization (ISO), the International Electrotechnical 
Commission (IE(C), the Codex Alimentarius Commission, the World Health Organization (WHO), 
the International Organization of Legal Metrology (IOLM), or any other body that the Parties may 
designate; 
   conformity assessment procedure means any procedure used, di rectly or indirectly, to 
determine that the relevant requirements establishe d by the technical regulations or standards are 
fulfilled, including sampling, testing, inspection, evaluation, verification, assurance of conformity, 
registration, accreditation, used for such purposes,  but does not mean an approval procedure;  
  approval procedure means  any registration, notification or other mandatory administrative 
procedure for granting permission for a good or service to be produced, marketed or used for a stated 
purpose or under stated conditions;  
 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 technical reasons;   technical regulation means  a document that lays down the characteristics of goods, services, 
or their related processes and production methods, in cluding the applicable administrative provisions, 
with which compliance is mandatory. It may also include or deal exclusively with terminology, 
symbols, packaging, marking or labelling requirements as they apply to a good, service, related process or production or operating method; and   service means any service within the scope of a pplication of this Agreement, except for 
financial services. 
  
Article 14-02 
 
Scope and Coverage 
 
1.  This Chapter applies to the standards-rela ted and metrology-related measures of the Parties 
and related measures that may, directly or indir ectly, affect trade in goods or services among them. 
This Chapter does not apply to sanitary and phytosanitary measures.  WT/REG206/1 
Page 124  
 
2.  Each Party shall comply with this Chapter and adopt such measures as are necessary to ensure 
their compliance by state, regional, and municipal governments; and, as far as possible, shall adopt 
measures to that end with respect to non-governme ntal standardization organizations that are duly 
accredited in its territory.  
Article 14-03 
 
Reaffirmation of International Rights and Obligations
 
 The Parties reaffirm their current rights and obligations in relation to standards-related 
measures arising from the WTO Agreement on Technical Barriers to Trade, and all other international 
agreements on security, protection of human, animal  and plant life and the environment, and of 
practices that avoid misleading consumers, to which the Parties subscribe.  
Article 14-04 
 
Basic Rights and Obligations
 
1. Neither Party may prepare, adopt, maintain or apply any standards-related measure with a 
view to, or with the effect of creating an unnecess ary obstacle to trade between them. To that end, 
standards-related measures shall not restrict trade more than is  necessary to fulfil a legitimate 
objective, taking into account the risks that not fulfilling it would create.   
2.  With respect to standards-related measur es, an unnecessary obstacle to trade shall not be 
deemed to be created where:   (a)  The demonstrable purpose of the measure is to achieve a legitimate objective;  and 
 
 (b)  the measure does not operate to exclude  goods of the other Party that meet that 
legitimate objective. 
  3.  Notwithstanding any other provision of th is Chapter, each Party may, in pursuing its 
legitimate objectives, establish the levels of  protection that it considers appropriate. 
 
 4.  Pursuant to paragraph 3, each Party may prepare, adopt, maintain and apply any standards-
related measures that enables it to ensure its leve l of protection, as well as measures that guarantee the 
application and fulfilment of such standards-re lated measures, including the relevant approval 
procedures.  
 5.  With respect to standards-related measur es, each Party shall accord the goods and service 
providers of the other Party nationa l treatment and treatment no less favourable than that it accords to 
similar goods and services from any other country.  
Article 14-05 
 
Use of International Standards
 
1.  Each Party shall use existing internationa l standards, or standards whose adoption is 
imminent, as the basis for its own standards-re lated measures, unless such standards are not an 
effective or appropriate means of fulfilling its legitimate objectives; for example, because of fundamental climatic, geographical, te chnological or infrastructural f actors, as provided for in this 
Chapter. 
  WT/REG206/1 
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2. Any standards-related measure of a Party that conforms to an international standard shall be 
presumed to be consistent with Article 14-04 (1), (2) and (5). 
  3.  In pursuing its legitimate objectives, each  Party may adopt, maintain or apply any standards-
related measure that achieves a higher level of prot ection then it would have obtained if the measure 
was based on an international st andard, because of fundamental climatic, geographical, technological, 
infrastructural or other factors.  
Article 14-06 
 
Compatibility and Equivalence
 
1.  Recognizing the crucial role of standard s-related measures in promoting and protecting 
legitimate objectives, the Parties shall, pursuant to this Chapter, collaborate to enhance the level of 
safety and of protection of human, animal and plan t life and health, and the environment, and to 
prevent practices that could mislead consumers. 
 
2.  Without prejudice to the rights conferred under this Chapter, a nd taking into account 
international standardization and metrology activiti es, the Parties shall, to the greatest extent 
practicable, make their respective standards-rela ted and metrology-related measures compatible 
without reducing the level of safety or of protectio n of human, animal or plant life or health, the 
environment or consumers.  
 
 3.  A Party shall, on request of the other Party, as far as possible adopt reasonable measures to promote the compatibility of specific standards ma intained in its territory with the standards 
maintained in the territory of the other Party, bear ing in mind international standardization activities.  
 
4. Each Party shall treat a technical regulati on adopted or maintained by the other Party as 
equivalent to its own, where the exporting Part y, in cooperation with the importing Party, 
demonstrates to the satisfaction of the importing Part y that its technical regulation adequately fulfils 
the importing Party’s legitimate objectives, and, wher e appropriate will review it. The importing Party 
shall provide to the exporting Party, on request, its reasons in writing for not treating a technical regulation as equivalent. 
 
5. Each Party shall, wherever possible, accept the results of conformity assessment procedures 
conducted in the territory of the other Party, even  if those procedures differ from its own, provided 
that it is satisfied that the proce dures offer an assurance, equivalent to  that provided by the procedures 
it conducts or procedures conducted in its territory, the results of which it accepts, that the relevant 
good or service complies with the applicable tec hnical regulations or standards prepared or 
maintained in the Party’s territory, and, where appr opriate, will review the standards-related measure 
in question.   6. Prior to accepting the results of a conformity  assessment procedure pursuant to paragraph 5, 
and to enhance confidence in th e continued reliability of each othe r’s conformity assessment results, 
the Parties may consult on such matters as the technical competence of the conformity assessment 
bodies involved, including verified compliance w ith relevant international standards and 
recommendations.   
Article 14-07 
 
Conformity Assessment 
 
1.  The Parties recognize the desirability of achie ving reciprocal recognition of their conformity 
assessment systems, including organizations accredite d by the corresponding body, for the purpose of WT/REG206/1 
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facilitating trade in goods and services between them , and they shall endeavour to achieve this 
objective.  2. Further to paragraph 1, and recognizing the existence of differences between the conformity 
assessment procedures in their respective territories, the Parties shall as far as practicable make their 
respective conformity assessment systems and procedures compatible, with the aim of making them 
mutually recognizable under this Chapter.  3. For the mutual benefit of the Parties, and on a reciprocal basis, each Party shall, through the 
competent institutions: 
 
 (a) Assess and recognize the national accreditation system of the other Party;  and   (b) accredit, approve, license or otherwise recognize the conformity assessment bodies in 
the territory of the other Party on term s no less favourable than those accorded to 
conformity assessment bodies in its territory.  
 4. Each Party shall look favourably on requ ests presented by the other Party to negotiate 
agreements on mutual recognition of the results of  that Party’s conformity assessment procedures. 
 5. When requested to undertake a confor mity assessment procedure, each Party shall: 
 
 (a)  Not adopt or maintain any procedure th at is stricter, nor apply the procedure more 
strictly, than necessary to give it confidence that a good or a service conforms with an applicable technical regulation or standard, taking into account the risks that non-conformity would create;  
 
 (b)  initiate and complete the procedure as expeditiously as possible;    (c)  establish a non-discriminatory order for processing requests;    (d)  publish the normal processing period for each such procedure or communicate the 
anticipated processing period to  an applicant on request;  
  (e)  ensure that the competent body:   (i)  on receipt of an application, promptly examines the completeness of the 
documentation and informs the applican t in a precise and complete manner 
of any deficiency;  
  (ii)  transmits to the applicant as soon as possible the results of the conformity 
assessment procedure in a form that is precise and complete so that the applicant may take any necessary corrective action; 
 
 (iii)  where the application is deficien t, proceeds as far as practicable with the 
procedure, if the applicant so requests;  and  
  (iv) informs the applicant, on request, of the status of the application and the 
reasons for any delay;  
  (f)  limit the information the applicant is re quired to supply to that necessary to conduct 
the procedure and to determine appropriate  fees, in accordance with its current 
legislation;  
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 (g)  accord confidential information arisin g from, or supplied in connection with, the 
procedure: 
  (i) the same treatment as that for a national product or service;  and  
 (ii)  in any event, treatment that pr otects the applicant’s legitimate commercial 
interests; 
  (h)  ensure that any fee it imposes for assessing the conformity of a good or service 
exported from the other Party is no greater than any such fee imposed for assessing 
the conformity of an identical or similar domestic good or service, taking into account 
communication, transportation and other related costs;  
  (i) ensure that the location of facilities at  which a conformity assessment procedure is 
conducted does not cause unnecessary inconvenien ce to an applicant or its agent;  
 
 (j) wherever possible ensure that the procedur e is carried out at that location, and where 
appropriate, issue a badge of conformity; 
  (k) limit the procedure, for a good or servi ce modified as a result of a conformity 
assessment determination, to that necessary to determine that the good or service 
continues to conform to the applicable t echnical regulations or standards;  and 
  (l)  limit any requirement regarding samples of a good to that which is reasonable, and 
ensure that the selection of samples do es not cause unnecessary inconvenience to an 
applicant or its agent, in accordance with internationally used and approved sampling 
procedures.  
 6. Each Party shall apply, with such modificati ons as may be necessary, the relevant provisions 
of paragraph 5 to its approval procedures.   7. Each Party shall, on request of the other Pa rty, take such reasonable measures as may be 
available to it to facilitate conformity assessment activities.  
 
Article 14-08 
 
Notification, Publication and Provision of Information
 
1. Each Party shall notify the other Party of th e standards-related measures that it intends to 
establish pursuant to this Chapter, before they ente r into force and no later th an its own nationals are 
informed thereof.   2. Each Party proposing to adopt or m odify a standards-related measure, shall: 
 
 (a)  At least 60 days prior to the adoption or modification of the measure, other than a 
law, publish a notice and notify in writing the other Party of the proposed measure in such a manner as to enable interested pers ons to become acquainted with the proposed 
measure, except in the case of any such measure relating to perishable goods, in 
which case the Party shall, to the greatest  extent practicable, publish the notice and 
provide the notification at least 30 days prior to the adoption or modification of the 
measure, at the same time as notifi cation is provided to domestic producers; 
  (b) identify in the notice and notification the good or service to which the measure would 
apply, and provide a brief d escription of the objective of, and reasons for the measure;  WT/REG206/1 
Page 128  
 
  (c) provide a copy of the proposed measure to the other Party or any interested person 
that so requests, and shall, wherever possi ble, identify any provision that deviates in 
substance from relevant in ternational standards; 
 
 (d) without discrimination, allow the othe r Party and interested persons to make 
comments in writing, and shall, on requ est, discuss the comments and take the 
comments and the results of the discussions into account;  and 
  (e)  ensure that, in adopting the measure, this is published expeditiously or otherwise 
made available to interested persons in the Party to enable them to become acquainted 
with it. 
 3. Where an international standard relevant to  the proposed measure does not exist or is not 
about to be issued, or the standards-related meas ure in question is not substantially the same as an 
international standard, and where the measure may ha ve a significant effect on the trade of the other 
Party, each Party shall:    (a)  At an early appropriate stage, publish a notice and provide a notification of the type 
required in paragraphs 2(a) and (b);  and  
 
 (b) observe paragraphs 2(c) and (d).  
 4. With respect to technical regulations of st ate, regional, and municipal governments, each 
Party shall:   
 (a) At an early appropriate stage, publish a notice and provide a notification to the other 
Party of its intention to adopt or modify the regulation in question; 
  (b) identify, in the notice and notification, the good or service to which the measure will 
apply, and provide a brief d escription of the objective of, and reasons for the measure; 
 
 (c)  provide a copy of the proposed measure to the other Party or any interested person 
that so requests;  and 
  (d) take such reasonable measures as may be av ailable to it to ensure that, in adopting the 
technical regulation, this is published expe ditiously or otherwise made available to 
interested persons in the Party to enab le them to become acquainted with it. 
 5. Each Party shall advise that the other Part y every year of its standardization plans and 
programmes.  6.  Where a Party considers it necessary to address an urgent problem relating to the safety or 
protection of human, animal or plant life or health, or the environment, or practices that could mislead 
consumers, it may omit any of the steps set out in paragraphs 2 (a) and (b),  provided that on adoption 
of the standards-related measure it shall:    (a)  Immediately provide to the other Pa rty a notification of the type required under 
paragraph 2(b), including a brief description of the urgent problem;  
  (b)  provide a copy of the measure to the other Party or any interested person that so 
requests;  
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 (c) without discrimination, allow the othe r Party and interested persons to make 
comments in writing, and shall, on request, discuss the comments and take the results of such discussions into account;  and 
  (d) ensure that the measure is published expeditiously, or otherwise made available 
interested persons to enable them  to become acquainted with it. 
 7. Each Party shall, except where necessary to a ddress one of the urgent pr oblems referred to in 
paragraph 6, allow a reasonable period between the publication of a standards-related measure and the 
date that it becomes effective to allow time for interested persons to adapt to the measure.  
 
8. Where a Party allows non-governmental pers ons in its territory to be present during the 
process of development of standards-related measu res, it shall also allow non-governmental persons 
from the territories of the other Party to be present.   
9. Each Party shall designate a government aut hority responsible for the implementation at the 
federal or central level of the no tification provisions of this Artic le, and shall notify the other Party 
thereof no later than three months following the entr y into force of this Agreement. Where a Party 
designates two or more government authorities for th is purpose, it shall provide to the other Party 
complete and unambiguous information on the scope of responsibility of each such authority.  
 
10. Where a Party administratively rejects a sh ipment or the provision of services because of non-
compliance with the standards-relation measure, it sha ll promptly notify, in writing, the owner of the 
shipment or the service provider of the technical justification for the rejection.  11. Once the information referred to in para graph 10 has been prepared, the Party shall 
immediately forward it to the standards-related inquiry point or points located in the territory of that 
Party, which, in turn, will forward it to the inquiry point or points of the other Party. 
 
Article 14-09 
 
Inquiry Points
 
1. Each Party shall ensure that there is at l east one inquiry point in its territory capable of 
responding to all reasonable questions  and inquiries from the other Party and interested persons and of 
providing relevant docum entation regarding:  
  (a) Any standards-related measur e, adopted or proposed in its territory by its federal or 
central, state, regional, or municipal government bodies. 
  (b) the membership and participation of that Party, and its relevant federal or central, 
state, regional, or municipal government al bodies in international and regional 
standardizing bodies and conformity assessment  systems, in bilateral and multilateral 
arrangements on standards-rela ted measures, and the provisions of such systems and 
arrangements; 
  (c)  the location of notices published pursuant to this Chapter or where the information 
can be obtained; 
 
 (d) the location of the inquiry points;  and 
  (e) the Party’s procedures for assessment of risk, and the factors it considers in 
conducting the assessment and in establishing, pursuant to Article 14-04(3), the levels 
of protection that it considers appropriate.  WT/REG206/1 
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 2. Where a Party designates more than one inquiry point, it shall:    (a) Provide to the other Party complete a nd unambiguous information on the scope of 
responsibility of each inquiry point;  and  
 
 (b)  ensure that any inquiry addressed to an incorrect inquiry point is promptly conveyed 
to the correct inquiry point.  
 3. Each Party shall take such reasonable measures as may be available to it to ensure that there is 
at least one inquiry point capable of answering all reasonable inquiries from other Parties and 
interested persons and providing re levant documents, or information on where they can be obtained, 
regarding:    (a) Any conformity assessment standard or procedure proposed, adopted or maintained 
by non-governmental standardizi ng bodies in its territory;  and 
  (b)  the membership and participation of re levant non-governmental bodies in its territory 
in international and regional standardizi ng bodies and conformity assessment systems.  
 4. Each Party shall ensure that where copies of the documents referred to paragraph 1 are 
requested by the other Party or by interested persons  pursuant to this Chapter, they are supplied at the 
same price, apart from the actual cost of de livery, as the price for domestic purchase.  
 
Article 14-10 
 
Limitations on the Provision of Information 
 
 Further to Article 21-03, nothing in this Chap ter shall be construed to require a Party to 
furnish any confidential information the discl osure of which would prejudice the legitimate 
commercial interests of a particular enterprise.  
Article 14-11 
 
Metrological Standards
 
 In order to prevent each Party’s metrol ogical standards constituting unnecessary barriers to 
trade, the Parties shall make these compatible, as far as possible, based on current international 
standards. 
 
Article 14-12 
 
Protection of Health  
1. Medicines, medical equipment and instrument s, pharmaceutical products and other inputs for 
human, animal and plant health; foodstuffs; toxi c products and substances; radioactive products, 
materials, sources and equipment; sources and equipmen t that emit ionizing radiation that are subject 
to registration in the territory of the Party, sha ll, where appropriate, be registered, recognized or 
evaluated by the Party’s competent authority, based on a single national system of a federal or central nature of mandatory observance.  
2. Certificates of assessment of the conformity of  the goods referred to in  paragraph 1 shall be 
accepted only if they have been issued by each Pa rty’s competent governmental or non-governmental 
conformity assessment bodies.  WT/REG206/1 
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 3. The Party shall establish a system of mutual  technical cooperation th at will operate on the 
basis of the following work programme:   (a) Identification of specific needs relating to: 
 
 (i) application of good manufacturing pr actices in the preparation and approval 
of medicines for human, animal or plant use; 
  (ii) application of good laboratory practices in systems analysis and evaluation 
set forth in current relevant intern ational standards and guidelines; and 
  (iii) development of common systems of identification and nomenclature for 
auxiliary health products and medical instruments; 
 
 (b) harmonization of labelling requirements and strengthening of standardization and 
surveillance systems in relation to advisory labelling; 
  (c) training programmes, including the organization of a common system for training, 
continuous education, training and evaluation of the health officials and inspectors; 
 
 (d) development of a system of mutual accreditation for verification units and test 
laboratories; 
  (e)  upgrading of legal regulatory frameworks; and  
 (f)  strengthening of formal communication systems to oversee and regulate trade in 
products related to human, animal or plant health. 
 4. For the purpose of undertaking the activities proposed in paragraph 3, the Committee on 
Standards-Related Measures shall establish a techni cal subcommittee, pursuant to Article 14-16 (5) 
and (6), to monitor and organize such activities,  issue guidelines and make recommendations to the 
Parties as and when they request. 
 
Article 14-13 
 
Risk Assessment
 
1. Pursuant to Article 14-04 (3) and (4), each  Party may conduct risk assessments within its 
territory as and when it deems appropriate. In condu cting a risk assessment, it shall take into account 
risk assessment techniques and methodologies deve loped by international or standardizing 
organizations, and ensure that its technical regula tions and standards are based on an assessment risks 
to human, animal or plant safety, and their environment.  
2. When conducting a risk assessment, the Party shall take into account all relevant scientific 
evidence, available technical information, the inte nded final use, processes or methods of production, 
operation, inspection, quality, sampling or  testing, or environmental conditions. 
 3. Once it has established the level of protecti on it considers appropriate, when a Party conducts 
a risk assessment, pursuant to Article 14-04 (3), it shall avoid distinctions between similar goods and 
services, in the level of protection it cons iders appropriate, if such distinctions: 
  (a) Result in arbitrary or unjustifiable discrimination against goods or services of the 
other Party; WT/REG206/1 
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  (b)  constitute a disguised restriction on trade between the Parties;  or   (c) discriminate between similar goods or ser vices intended for the same use, under the 
same conditions, that pose the same level of risk and provide similar benefits.  
 
4. Where a Party conducting a risk assessment de termines that available scientific evidence or 
other information is insufficient to complete th e assessment, it may adopt a provisional technical 
regulation on the basis of available relevant inform ation. Once information sufficient to complete the 
risk assessment is presented to it, the Party sha ll complete its assessment, as quickly as possible, 
review and, where appropriate, revise the provisi onal technical regulation in the light of that 
assessment.   
Article 14-14 
 
Environmental Protection and the Hand ling of Hazardous Substances and Waste
 
1. For the care and protection of its environm ent, each Party shall apply, further to the 
provisions contained in its legislation, the provisions, guidelines or recommendations issued by the United Nations Organization and rele vant international agreements to  which both Parties subscribe. 
 2. Each Party shall regulate and control th e production, introduction and marketing of 
pharmaceutical or agrotoxic products, or any other su bstances that are hazardous to human, animal or 
plant health or to the environment, in accordance  with its legislation and the provisions of this 
Agreement.   3. Pursuant to its own legislation, each Party shall regulate the introduction, acceptance, deposit, 
transportation and transit through its territory of hazardous, radioactive or other waste material of 
domestic or foreign origin, the characteristics of which constitute a hazard for the health of its 
population, fauna, flora or environment.   
Article 14-15 
 
Labelling
 
 
1. Labelling requirements for goods and services are subject to the provisions of this Chapter. 
 2. Each Party shall apply its relevant labelling requirements pursuant to the provisions of this 
Chapter. 
 3. The Parties shall develop common labelling re quirements. The proposals made by each Party 
shall be evaluated by the Labelling, Packaging an d Packing Standards Subcommittee, pursuant to 
Article 14-16 (5).  
 4.  The Labelling, Packaging and Packing Standards Subcommittee may study and make 
recommendations on:   (a)  The establishment of a common symbol and pictogram system for the Parties;  
 (b)  definitions and terminology; 
  (c)  presentation of information, includi ng that relating to language, measurement 
systems, ingredients and sizes;  or 
  WT/REG206/1 
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 (d) other related issues.  
Article 14-16 
 
Committee on Standards-Related Measures
 
1. The Parties hereby establish a Committee on Standards-Related Measures, comprising 
representatives of each Party.   2. The Committee’s functions shall include:  
 (a)  Monitoring the implementation, comp liance and administration of this Chapter, 
including the progress of Subcommittees est ablished pursuant to paragraph 5, the 
operation of inquiry centres established pursuan t to Article 14-09 (1), and on the basis 
of updating to ISO/IEC Guide 2:1991; 
 
 (b)  facilitating the process by which the Par ties make their standards-related measures 
and measurement systems compatible; 
  (c)  providing a forum for the Parties to c onsult on issues relating to standards-related 
measures and measurement systems 
 
 (d)  encouraging the relevant competent ins titutions to take account of events concerning 
standards-related measures at the gover nmental, non-governmental, regional and 
multilateral level, including those of the WTO Agreement on Technical Barriers to Trade; 
 
 (e) developing the procedural mechanisms needed to achieve mutual recognition of 
conformity assessment bodies;  and 
  (f)  reporting annually to the Commission on the application of this Chapter; 
 3. The Committee: 
 
 (a)  Shall comprise an equal number of  representatives from the competent governmental 
institutions of each Party. Each Party sh all establish its own procedures for selecting 
its representatives; 
 
 (b) unless the Parties agree otherwise, the Committee will meet: 
   (i) at least once a year; and    (ii) when requested by either Party;  
 (c) shall establish its regulations;  and 
  (d) shall take its decisions by consensus.  4. Each Party shall take the measures needed to  enable representatives of state, regional or 
municipal governments to participate in the work  of the Committee as and when it deems necessary. 
 5. The Committee shall establish:   (a)  The Health Standards Subcommittee; WT/REG206/1 
Page 134  
 
  (b)  the Subcommittee on Labelling, Packaging and Packing Standards;   (c)  the Telecommunications Standards Subcommittee;  and  
 (d)  any other Subcommittee that it consider s appropriate to analyze the following issues, 
among others: 
  (i)  identification and nomenclature for goods and services subject to standards-
related measures,  
 
 (ii)  quality and identity sta ndards and technical regulations; 
  (iii)  product approval and post-market surveillance programmes,   
 (iv)  principles for the accreditation and recognition of testing facilities, 
inspection agencies and conformity assessment bodies;  
  (v)  development and implementation of a uniform chemical hazard 
classification and communication system;  
 
 (vi) enforcement programmes, including training and inspections by regulatory, 
analytical and enforcement personnel;  
  (vii)  promotion and implementation of good laboratory practices;  
 (viii) promotion and implementati on of good manufacturing practices; 
  (ix)  criteria for assessment of poten tial environmental hazards of goods or 
services; 
  (x)  analysis of procedures for simplifying import requirements for specific 
goods or services; 
  (xi) methodologies for assessment of risk;    (xii) guidelines for testing of chemicals, including industrial and agricultural 
chemicals, pharmaceuticals and biologicals; 
  (xiii)  methods by which consumer pr otection, including matters relating to 
consumer redress, can be facilitated;  and 
  (xiv)  any other issue, pursuant to th e mandate determined by the Committee. 
 
6.  Each Subcommittee shall be comprised of representatives of each Party, and may: 
  (a)  As it considers necessary, include or consult with:  
 (i)  representatives of non-governmental bodies, including standardizing bodies, 
or private sector chambers and associations; 
  (ii)  representatives of higher academic, research and scientific centres;  
 (iii)  technical experts;  WT/REG206/1 
 Page 135 
 
 
  (iv)  representatives of governmental institutions; and   (b)  determine its own work programme, taking account of relevant international 
activities. 
 
Article 14-17 
 
Technical Cooperation
 
 
1.  At the request of a Party, the other Party may, within its possibilities: 
  (a) Provide to that Party information and technical assistance on mutually agreed terms 
and conditions to enhance that Party’s standards-related measures, and related 
activities, processes and systems;  and 
 
 (b)  provide to that Party information on its technical cooperation programmes regarding 
standards-related measures relating to specific areas of interest. 
 2. Each Party shall encourage standardizing bodies in its territory to cooperate, where 
appropriate, with the standardizing bodies in the territory of the other Party, such as through 
membership in international standardizing bodies. 
 
Article 14-18 
 
Technical Consultations 
 
 
1. When a Party has questions regarding the interp retation or application of this Chapter the on 
standardization-related measures and measurement systems of the other Party, or measures related thereto, it may have recourse either to the Committe e or to the mechanism established in Chapter XX 
(Dispute Settlement). A Party may not use both mechanisms simultaneously.  
2. When a Party decides to appl y to the Committee, it must notify the other Party to enable it to 
consider the matter and refer it to a subcommittee or  to another competent forum, for the purpose of 
obtaining technical advice or non-binding recommendations.  3. The Committee shall consider any matter re ferred to it under paragraphs 1 and 2 as 
expeditiously as possible, and promptly forward to the Parties any technical advice or 
recommendations that it develops or receives on th e matter. The Parties involved shall provide a 
written response to the Committee concerning the te chnical advice or recommendations within such 
time as the Committee may request.
 
 4. Pursuant to paragraphs 2 and 3, if the technical recommendation issued by the Committee 
fails to resolve the difference between the Parti es, these may invoke the mechanism established in 
Chapter XX (Dispute Settlement). Consultations f acilitated by the Committee shall, on the agreement 
of the Parties involved, constitute consultations under Article 20-05.  
 5. A Party asserting that a standards-related measur e of the other Party is inconsistent with this 
Chapter shall have the burden of establishing such inconsistency.  
  WT/REG206/1 
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PART FIVE: GOVERNMENT PROCUREMENT  
 
CHAPTER XV : GOVERNMENT PROCUREMENT 
 
Section A - Definitions
 
 
Article 15-01 
 
Definitions  
 
1.  For the purposes of this Chapter: 
  planned procurement means the procurement in resp ect of which an entity listed 
Annexes 15-02(2) and (3) publishes a procuremen t notice pursuant to Article 15-11 (4), and 
subsequently invites suppliers that have expressed inte rest in the procurement to confirm their interest 
pursuant to Article 15-11 (5): 
  entity means an entity included in Annex 15-02 (1), (2) or (3); 
  technical specification means  a specification that sets out the characteristics of goods or their 
related processes and production met hods, or the characteristics of services or their related operating 
methods, including any applicable administrative prov isions. It may also include or deal exclusively 
with terminology, symbols, packaging, marking or  labelling requirements as they apply to a product, 
service, process or production method;   standard means "standard" as defined in Article 14-01 
 
 international standard means "international standard" as defined in Article 14-01; 
  tendering procedures means open tendering procedures, selective tendering procedures and 
limited tendering procedures.  
 open tendering procedures means  those procedures under which all interested suppliers may 
submit a tender;   limited tendering procedures means procedures where an entity contacts suppliers 
individually, only in the circumstances and unde r the conditions specified in Article 15-16;  
 
 selective tendering procedures means procedures under which, pursuant to Article 15-12(3), 
suppliers invited by an entity to submit a tender may do so;   supplier means  a person that has provided or could provide goods or services in response to 
an entity’s call for tender; 
 
 locally established supplier includes a natural person resident in the territory of the Party, an 
enterprise organized or established under the Party’s law, and a branch or representative office located 
in the Party’s territory;  
 services means the services specified in the appendix to Annex 15-02 (5), and those specified 
in the appendix to Annex 15-02 (6), ex cept where specified otherwise;  and  
  construction services means the services specified in the appendix to Annex 15-02 (6). 
  WT/REG206/1 
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Section B - Scope and Coverage  
 
Article 15-02 
 
Scope and Coverage  
1.  This Chapter applies to measures adopted or  maintained by a Party relating to procurement: 
  (a)  By a federal or central government  entity listed in Annex 15-02(1); a government 
enterprise or autonomous body listed in Anne x 15-02(2);  or a state, regional or 
municipal government body indicated in A nnex 15-02(3), pursuant to Article 15-24; 
 
 (b) of goods, pursuant to An nex 15-02(4); of services, purs uant to Annex 15-02(5); of 
construction services, pursuan t to Annex 15-02(6);  and 
  (c)  where the value of the contract to be awarded is estimated to be equal to or greater 
than a threshold calculated and adjusted in line with the U.S. inflation rate as set out 
in Annex 15-02(7), for: 
  (i)  for federal or central government entities, US$50,000 for contracts for 
goods, services or any combination thereof, and US$6.5 million for contracts for construction services; 
 
 (ii)  for government enterprises and autonomous bodies, US$250,000 for 
contracts for goods, services or any combination thereof, and US$8.0 million for contracts for construction services; and 
 
 (iii)  for state, regional and municipal government entities, the applicable 
threshold, as set out in Annex 15-02(3), pursuant to Article 15-24. 
 2.  Paragraph 1 is subject to the transitional provisions set out in Annex 15-02(8), and to the 
general notes set out in Annex 15-02(9).  
 3.  Subject to paragraph 4, where a contract to  be awarded by an entity is not covered by this 
Chapter, this Chapter shall not be construed to cove r any good or service component of that contract.  
 4. Neither Party may prepare, design or otherwise structure any procurement contract in order to 
avoid the obligations of this Chapter. 
 
5. Procurement includes procurement by such methods as purchase, lease or rental, with or without an option to buy. Procurement does not include:   (a) Non-contractual agreements or any form of government assistance, including 
cooperative agreements, grants, loans, equity  infusions, guarantees, fiscal incentives, 
and government provision of  goods and services to persons or state, regional or 
municipal governments;  or 
  (b) the acquisition of fiscal agency or depository services, liquidation and management 
services for regulated financial institutions and sale and distribution services for 
government debt. 
 6. The provisions contained in this Chapter estab lish the general principles to be observed by the 
entities of each Party in their procurement procedures.  WT/REG206/1 
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7. The Parties shall ensure that the measures a pplied by their entities ar e in accordance with the 
provisions of this Chapter.  
Article 15-03 
 
Valuation of Contracts 
 
1.  Each Party shall ensure that, in determining wh ether a contract is covered by this Chapter, its 
entities apply paragraphs 2 through 7 when calculating the value of that contract.  
 2.  The value of a contract shall be estimated at the time of publicati on of a notice pursuant to 
Article 15-11.  
 3. In calculating the value of a contract, an entity shall take into account all forms of remuneration, including premiums, fees, commissions and interest.   
4. Further to Article 15-02 (4), an entity may not select a valuation method, or divide 
procurement requirements into separate contracts, to avoid the obligations of this Chapter.  
  5.  Where an individual requirement for a proc urement results in the award of more than one 
contract, or in contracts being awarded in separate parts, the basis for valuation shall be either:  
 
 (a)  The actual value of similar recurring contracts concluded over the previous fiscal year 
or 12 months, adjusted, where possible, fo r anticipated changes in quantity and value 
over the subsequent 12 months;  or 
  (b) the estimated value of recurring contracts in the fiscal year or 12 months subsequent 
to the initial contract. 
 6. In the case of a contract for l ease or rental, with or without an option to buy, or in the case of 
a contract that does not specify a total pr ice, the basis for valuation shall be:  
  (a) In the case of a fixed-term contract, the total contract value, for its duration;  or 
 
 (b) in the case of a contract for an indefinite period, the estimated monthly instalment 
multiplied by 48.  
  If the entity is uncertain as to whether a contract  is for a fixed or an indefinite term, the entity 
shall calculate the value of the contract us ing the method set out in subparagraph (b).  
 7. Where tender documentation includes option clauses allowing quotations for optional or 
alternative goods or services, the basis for valuat ion shall be the total value of the maximum 
permissible procurement, including all possible optional purchases.   
Article 15-04 
 
National Treatment and Non-Discrimination 
 
1. With respect to measures covered by this Ch apter, each Party shall accord to goods of the 
other Party, to the suppliers of such goods and to service suppliers of the other Party, treatment no less 
favourable than the most favourable tr eatment that the Party accords to:  
  (a) Its own goods and suppliers;  and   WT/REG206/1 
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 (b) goods and suppliers of the other Party.  2. With respect to measures covered by  this Chapter, neither Party may:  
  (a) Treat a locally established supplier less  favourably than another locally established 
supplier on the basis of degree of fore ign affiliation or ownership;  or 
  (b) discriminate against a locally establishe d supplier on the basis that the goods or 
services offered by that supplier for the pa rticular procurement are goods or services 
of the other Party. 
 
3. Paragraph 1 shall not apply to measures resp ecting customs duties or other charges of any 
kind imposed on or in connection with the method of levying such duties or charges or other import regulations, including restri ctions and formalities.  
 
4. The Parties shall not establish requirement s for local representation or presence that 
discriminate or aim to discriminate in favour of national producers.  
Article 15-05 
 
Rules of Origin
 
 For the purposes of government procurement cove red by this Chapter, neither Party shall 
apply rules of origin to goods imported from the ot her Party that are different from or inconsistent 
with the rules of origin that the Party applies in the normal course of trade.  
 
Article 15-06 
 
Denial of Benefits  
1. Subject to prior notification and consultation, a Party may deny the benefits of this Chapter to 
a service supplier of the other Party where the Party establishes that the service is being provided by an enterprise that is owned or controlled by pe rsons of a non-Party that has no substantial business 
activities in the territory of either Party.  
 
 
Article 15-07 
 
Prohibition of Offsets
 
 Each Party shall ensure that its entities do not,  in the qualification and selection of suppliers, 
goods or services, or in the evaluation of bids or the award of contracts, consider, seek or impose offsets. For the purposes of this Article, offsets mean s conditions imposed or considered by an entity, 
prior to or in the course of its procurement process,  that encourage local development or improve its 
Party’s balance of payments accounts, by means of requirements of local content, licensing of technology, investment, counter-tra de or similar requirements.  
 
Article 15-08 
 
Technical Specifications 
 
1. Each Party shall ensure that its entities do not prepare, adopt or apply any technical 
specification with the purpose or the effect of creating unnecessary obstacles to trade.  
 WT/REG206/1 
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2.  Each Party shall ensure that any technical  specification prescribed by its entities is, where 
appropriate:   (a) Specified in terms of performance criteria rather than design or descriptive 
characteristics;  and 
 
 (b) based on international standards, natio nal technical regulations, recognized national 
standards, or building codes. 
 3. Each Party shall ensure that the technical  specifications prescribed by its entities neither 
require nor refer to a particular trademark or name; patent, design or type; specific origin or producer 
or supplier; unless there is no sufficiently precise or intelligible way of otherwise describing the 
procurement requirements, and provided that, in such cases, wording such as "or equivalent" are 
included in the tender documentation.   
4. Each Party shall ensure that its entities do not  seek or accept, in a manner that would have the 
effect of precluding competition, advice that may be  used in the preparation or adoption of any 
technical specification for a specific procurement from a person that may have a commercial interest in that procurement.   
Section C - Tendering Procedures 
 
 
Article 15-09 
 
Tendering Procedures  
1. Entities shall implement procurement processe s through open, selective or limited tenders. 
Without prejudice to the provisions of Article 15-16, the entities of each Party may choose open or 
selective tendering procedures, provided the c hosen procedure guarantees the maximum possible 
competition.  2. Each Party shall ensure that the te ndering procedures of its entities are:  
 
 (a)  Applied in a non-discriminatory manner;  and 
  (b)  consistent with this Artic le and Articles 15-10 through 15-16. 
 3. In this regard, each Party shall ensure that its entities: 
 
 (a) Do not provide to any supplier information with regard to a specific procurement in a 
manner that would have the effect of precl uding competition or give an advantage to a 
specific supplier;  and 
  (b) provide all suppliers equal access to info rmation with respect to a procurement during 
the period prior to the issuance of any notice or tender documentation. 
 
Article 15-10 
 
Qualification of Suppliers
 
1. Pursuant to Article 15-04, no entity of a Part y may, in the process of qualifying suppliers in a 
tendering procedure, discriminate be tween suppliers of the other Part y or between domestic suppliers 
and suppliers of the other Party.    WT/REG206/1 
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2. The qualification procedures followed by an entit y shall be consistent with the following:  
  (a) Conditions for participation by suppliers  in tendering procedures shall be published 
sufficiently in advance so as to provide the s uppliers adequate time to initiate and, to 
the extent that it is compatible with effi cient operation of the procurement process, to 
complete the qualification procedures;  
  (b) conditions for participatio n by suppliers in tendering procedures, including financial 
guarantees, technical qualifications and information necessary for establishing the financial, commercial and technical capacity  of suppliers, as well as the verification 
of whether a supplier meets those conditio ns, shall be limited to those that are 
essential to ensure the fulfilment of the contract in question;  
  (c) the financial, commercial and technical capacity of a supplier shall be judged both on 
the basis of that supplier’s global busin ess activity, including its activity in the 
territory of the Party of the suppliers, and its  activity, if any, in the territory of the 
Party of the procuring entity;  
  (d) an entity shall not misuse the process of, including the time required for, qualification 
in order to exclude suppliers of the othe r Party from a suppliers’ list or from being 
considered for a particular procurement;  
 
 (e) an entity shall recognize as qualified suppliers those suppliers of the other Party that 
meet the conditions for participation in a particular procurement;  
  (f) an entity shall consider for a particular procurement those suppliers of the other Party 
that request to participate in the procurem ent and that are not yet qualified, provided 
there is sufficient time to complete the qualification procedure;  
  (g)  an entity that maintains a permanent list of qualified suppliers shall ensure that 
suppliers may apply for qualification at a ny time, that all qualified suppliers so 
requesting are included in the list within a reasonably short period of time and that all 
qualified suppliers included in the list are notif ied of the termination of the list or of 
their removal from it;  
  (h) where, after publication of a notice in ac cordance with Article 15-11, a supplier that is 
not yet qualified requests to participate in a particular procurement, the entity shall 
promptly start the qualification procedure;  
  (i) an entity shall advise any supplier that re quests to become a qualified supplier of its 
decision as to whether that supplier has become qualified;  and 
  (j) where an entity rejects a supplier’s ap plication to qualify or ceases to recognize a 
supplier as qualified, the entity shall, on re quest of the supplier, promptly provide 
pertinent information concerning the entity’s reasons for doing so. 
 3. Each Party shall:  
 (a) Ensure that each of its entities uses a single qualification procedure, although the 
procedure for evaluating suppliers will vary according to the nature of the aspects to 
be analysed. Where the entity determines th e need for a different procedure and is 
prepared, on request of the other Party, to demonstrate that need, it may use additional 
qualification procedures;  and 
 WT/REG206/1 
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 (b) endeavour to minimize di fferences in the qualification procedures of its entities. 
 4. Nothing in paragraphs 2 and 3 shall preven t an entity from excluding a supplier on grounds 
such as bankruptcy or false declarations.   
Article 15-11 
 
Invitation to Participate
 
1. Except as otherwise provided in Article 15- 16, an entity shall publish an invitation to 
participate for all procurements in accordance w ith paragraphs 2, 3 and 5, in the appropriate 
publication referred to in Annex 15-19(1). 
 2. The invitation to participate shall take the form  of a notice of proposed procurement that shall 
contain the following information:   
 (a) A description of the nature and quantit y of the goods or services to be procured, 
including any options for further procurement and, if possible,  
  (i)  an estimate of when such options may be exercised;  and   (ii) in the case of recurring contracts, an estimate of when the subsequent 
notices will be issued; 
  (b) a statement as to whether the tender is open or selective;   (c) where relevant, the date for starting or completion of delivery of the goods or services 
to be procured; 
  (d) where appropriate, the address to which an application to be invited to tender or to 
qualify for the suppliers’ lists must be subm itted, and the final date for receiving the 
application;  
 
 (e) the address to which tenders must be submitted, and the final date for receiving 
tenders;  
  (f) the address of the entity that will awar d the contract and that will provide any 
information necessary for obtaining sp ecifications and other documents;  
 
 (g) a statement of any economic or tec hnical requirements and of any financial 
guarantees, information and docum ents required from suppliers;  
  (h) the amount and terms of payment of a ny sum payable for the tender documentation; 
and 
 
 (i) a statement as to whether the entity is in viting offers for purchase, lease or rental, with 
or without an option to buy. 
 3. In the case of a selective tender, the invita tion to participate will contain the following 
information in addition to th at set out in paragraph 2: 
  (a) The address to which an application to be invited to tender or to qualify for the 
suppliers’ lists must be submitte d, and the final date for recei ving the application;  and  
  WT/REG206/1 
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 (b) when no suppliers list is involved, th e deadlines for submitting applications to be 
invited to tender.  
 4. Notwithstanding paragraphs 2 and 3, an entit y listed in Annex 15-02(2) or (3) may use as an 
invitation to participate a notice of planned procurem ent that shall contain as much of the information 
referred to in paragraphs 2 and 3 as is available to the entity, but that  shall include, at a minimum, the 
following information:    (a) A description of the subject matter of the procurement;  
 (b) the time-limits set for the receipt of tenders, or, in the case of selective tenders, 
applications to be invited to tender; 
  (c) the address to which requests for documen ts relating to the procurement should be 
submitted;  
 
 (d) a statement that interested suppliers shou ld express their interest in the procurement to 
the entity;  and 
  (e) the identification of a contact point w ithin the entity from which further information 
may be obtained. 
 
5. An entity that uses a notice of planned proc urement as an invitation to participate shall 
subsequently invite suppliers that have expressed an interest in the procurement to confirm their 
interest on the basis of information provided by the entity,  which shall include at least the information 
referred to in paragraphs 2 and 3.  
 
6.  Notwithstanding paragraphs 2 and 3, an entit y listed in Annex 15-02(2) or (3) may use as an 
invitation to participate a notice regarding a qualifi cation system. An entity that uses such a notice 
shall, subject to the considerations referred to  Article 15-15 (8), provide in a timely manner 
information that allows all suppliers that have  expressed an interest in participating in the 
procurement to have a meaningful opportunity to assess their interest. The information shall normally 
include the information required for notices referred to in paragraphs 2 and 3. Information provided to 
any interested supplier shall be provided in a non-discriminatory manner to all other interested 
suppliers.   7. In the case of selective tendering procedures, an entity that maintains a permanent list of 
qualified suppliers shall publish an nually in the appropriate publica tion referred to in Annex 15-19(1) 
a notice containing the following information:    (a) An enumeration of any such lists mainta ined, including their headings, in relation to 
the goods or services or categories of goods or services to be procured through the 
lists; 
 
 (b) the conditions to be fulfilled by suppliers with a view to their inscription on those lists 
and the methods according to which each of those conditions will be verified by the 
entity concerned;  and 
 
 (c)  the period of validity of the lists  and the formalities for their renewal.  
 8. Where, after publication of an invitation to par ticipate, but before the time set for the opening 
or receipt of tenders as specified in the notices or  the tender documentation, an entity finds that it has 
become necessary to amend or reissue the notice or tender documentation, the entity shall ensure that 
the amended or reissued notice or tender documentati on is given the same circulation as the original. WT/REG206/1 
Page 144  
 
Any significant information given by an entity to a supplier with respect to a particular procurement 
shall be given simultaneously to all other interest ed suppliers and sufficiently in advance so as to 
provide all suppliers concerned adequate time to consider the information and to respond.  
  9.  An entity shall indicate in the notices referr ed to in this Article that the procurement is 
covered by this Chapter. 
 
Article 15-12 
 
Selective Tendering Procedures
 
1.  In selective tendering procedures, the entity shall publish an invitation to participate in 
accordance with Article 15-11.  2.  To ensure optimum effective competition betw een the suppliers of the Parties under selective 
tendering procedures, an entity sha ll, for each procurement, invite  tenders from the maximum number 
of domestic suppliers and suppliers of the other Party, consistent w ith the efficient operation of the 
procurement system.   3. An entity may restrict, on the basis of objectiv e criteria and for fully substantiated reasons, the 
number of bids to be evaluated when analysis of  all bids received could significantly impair the 
efficient functioning of the procurement system, pr ovided suppliers of the other Party are guaranteed 
fulfilment of Article 15-04.  
  4.  Subject to paragraphs 1 and 5, an entity th at maintains a permanent list of qualified suppliers 
may select suppliers to be invited to tender for a particular procurement from among those listed. In 
the process of making a selection, the entity shall provide for equitable opportunities for suppliers on 
the list.  
 5. Subject to Article 15-10 (2)(f) and (h), an entity shall allow a supplier that requests to participate in a particular procurement to submit a tender and shall consider th e tender. The number of 
additional suppliers permitted to participate shall be limited only by the efficient operation of the 
procurement system.  
 
6.  Where an entity does not invite or admit a supp lier to tender, the entity shall, on request of the 
supplier, promptly provide pertinent informa tion concerning its reasons for not doing so.  
 
Article 15-13 
 
Time-limits for Tendering and Delivery 
 
1. An entity shall:  
  (a) In prescribing a time-limit, provide adequate  time to allow suppliers of the other Party 
to prepare and submit tenders before th e closing of the tendering procedures;  
 
 (b)  in determining a time-limit, consistent  with its own reasonable needs, take into 
account such factors as the complexity of the procurement, the extent of subcontracting anticipated, and the time normally required for transmitting tenders by 
mail from foreign as well as domestic points;  and 
 
 (c) take due account of publication delays when setting the final date for receipt of 
tenders or applications to  be invited to tender. 
  WT/REG206/1 
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2. An entity shall provide that:    (a) In open tendering procedures, the period for the receipt of tenders is no less than 
40 days from the date of publication of a notice in accordance with Article 15-11;  
 
 (b) in selective tendering procedures not involv ing the use of a permanent list of qualified 
suppliers, the period for submitting an applica tion to be invited to tender is no less 
than 25 days from the date of publication of a notice in accordance with Article 15-11, and the period for receipt of tenders is no less than 40 days from the date of issuance of the invitation to tender;  and 
 
 (c)  in selective tendering procedures involvi ng the use of a permanent list of qualified 
suppliers, the period for receipt of tenders is no less than 40 days from the date of the initial issuance of invitations to tender, but where the date of initial issuance of 
invitations to tender does not coincide with the date of publication of a notice in 
accordance with Article 15-11, there shall not be less than 40 days between those two 
dates. 
 3.  An entity may reduce the periods referred to in  paragraph 2 in accordance with the following:  
  (a)  Where a notice referred to Article 15-11 (4) or (6) has been published for a period of 
no less than 40 days and no more than 12 months, the 40-day limit for receipt of 
tenders may be reduced to no less than 24 days;  
  (b) in the case of the second or subsequent publications dealing with recurring contracts 
within the meaning of Article 15-11(2), the 40-day limit for receipt of tenders may be 
reduced to no less than 24 days;  
  (c)  where an unforeseeable state of urgenc y, duly substantiated by the entity, renders 
impracticable the periods in question, these  may be reduced to no less than 10 days from the date of publication of a notice in accordance with Article 15-11;  or 
 
 (d) where an entity listed in Annex 15-02(2) or  (3) is using as an invitation to participate 
a notice referred to in Article 15-11 (6), the periods may be fixed by mutual agreement between the entity and all selected  suppliers; nonetheless, in the absence of 
agreement, the entity may fix periods that shall be sufficiently long to allow for 
responsive bidding and in any event shall be no less than 10 days. 
 
4. An entity shall, in establishing a delivery da te for goods or services and consistent with its 
own reasonable needs, take into account such factors as the complexity of the procurement, the extent 
of subcontracting anticipated and the time real istically required for production, destocking and 
transport of goods from the points of supply.   
Article 15-14 
 
Tender Documentation
 
1. Where an entity provides tender documentation to suppliers, the documentation shall contain 
all information necessary to permit suppliers to submit responsive tenders , including information 
required to be published in the notice referred to in Article 15-11 (2), except for the information 
required under Article 15-11 (2)(h). The documentation shall also include:    (a) The address of the entity to which tenders should be sent;  WT/REG206/1 
Page 146  
 
 (b)  the address to which requests for suppl ementary information should be submitted; 
  (c)  the closing date and time for receipt of tenders and the lengt h of time during which 
tenders should be validated;  
 
 (d) the persons, other than participating supp liers, authorized to be present at the opening 
of tenders, and the date, ti me and place of the opening; 
  (e) a description of any economic or technical conditions, and of any financial 
guarantees, information and docum ents required from suppliers; 
 
 (f)  a complete description of the goods or services to be procured, and any other 
requirement, including technical specifications, conformity certification and necessary plans, drawings and instructional materials;  
 
 (g)  the criteria for awarding the contract, incl uding any factors other than price that are to 
be considered in the evaluation of tenders;  and the cost elements to be considered in 
evaluating tender prices, such as transportation, insurance and inspection costs, and in the case of goods or services of the othe r Party, customs duties and other import 
charges, taxes and the currency of payment;  
 
 (h)  the terms of payment;  and 
  (j) any other terms or conditions.  2.  An entity shall:  
 
 (a) Forward tender documentation on the requ est of a supplier that is participating in 
open tendering procedures or has requested to participate in selective tendering procedures, and reply promptly to any r easonable request for explanations relating 
thereto;  and 
 
 (b)  entities shall reply promptly to any reasonable request for relevant information 
submitted by a supplier participating in th e tendering procedure, on condition that 
such information does not give that supplie r an advantage over its competitors in the 
procedure for the award of the contract. 
 
Article 15-15 
 
Submission, Receipt and Opening of Tenders and Awarding of Contracts
 
1. An entity shall use procedures for the subm ission, receipt and opening of tenders and the 
awarding of contracts that are consistent with the following:  
 (a) Tenders shall normally be submitted in writing directly or by mail; 
  (b)  where tenders by telex, telegram, fax or other means of electronic transmission are 
permitted, the tender submitted thereby must  include all the information necessary for 
the evaluation of the tender, in particular the definitive price proposed by the supplier 
and a statement that the supplier agrees to all the terms and conditions of the 
invitation to tender;  
  (c)  a tender made by telex, telegram, fax or other means of electronic transmission must 
be confirmed within the time-limit set out  in the tender notice or documents, by  WT/REG206/1 
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sending the original document of the tender or  a signed copy of the telex, telegram, 
fax or electronic message;  
  (d)  the content of the telex, telegram, fax or electronic message shall prevail where there 
is a difference or conflict between that c ontent and the content of any documentation 
received after the time-limit for submission of tenders; 
  (e)  tenders presented by te lephone shall not be permitted; 
  (f)  requests to participate in selective te ndering procedures may be submitted by telex, 
telegram or fax, and, if permitted, may be submitted by other means of electronic 
transmission;  and 
  (g)  the opportunities that may be given to suppliers to correct unintentional errors of 
form, such as arithmetical or other errors that do not affect the essence of the tender, 
between the opening of tenders and the awardi ng of the contract shall not be used in a 
manner that would result in discrimination between suppliers.  
  For the purposes of this paragraph, "means of  electronic transmission" consists of means 
capable of producing for the recipient at the destin ation of the transmission a printed copy of the 
tender.  
 
2. No entity may penalize a supplier for reasons  exclusively imputable to the entity itself. 
 3. All tenders solicited by an entity under ope n or selective tendering procedures shall be 
received and opened under procedur es and conditions guaranteeing th e regularity of the opening of 
tenders. The entity shall retain the information on the opening of tenders. The information shall 
remain at the disposal of participants with leg itimate interest and the competent authorities of the 
Party, for use, if required, under Article 15-17,  Article 15-19 or Chapter XX (Dispute Settlement 
Procedures).   4. An entity shall award contract s in accordance with the following: 
 
 (a) To be considered for award, a tender mu st, at the time of opening, conform to the 
essential requirements of the notices or te nder documentation and be from a supplier 
which complies with the conditions for participation; 
 
 (b) if the entity has received a tender that is  abnormally lower in price than other tenders 
submitted, the entity may inquire of the supplie r to ensure that it can comply with the 
conditions of participation and is or will be capable of fulfilling the terms of the 
contract; 
  (c)  unless the entity decides in the public in terest not to award the contract, the entity 
shall make the award to the supplier that h as been determined to be fully capable of 
undertaking the contract and whose tender is either the lowest or the most 
advantageous in terms of the specific evaluation criteria set out in the notices or tender documentation;  
 
 (d)  awards shall be made in accordance with  the criteria and requirements specified in the 
tender documentation;  and 
  (e)  option clauses shall not be used in a manner that circumvents this Chapter. 
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5. No entity of a Party may make it a condition of  the awarding of a contract that the supplier 
has previously been awarded one or more contracts by an entity of that Party or that the supplier has 
prior work experience in the territory of that Party.   6. An entity shall:  
 
 (a) On request, promptly inform suppliers  participating in tendering procedures of 
decisions on contract awards and, if so requested, inform them in writing;  and 
  (b)  on request of a supplier whose tender w as not selected for award, provide pertinent 
information to that supplier concerning the reasons for not selecting its tender, the 
relevant characteristics and advantages of the tender selected and the name of the winning supplier. 
 7.  Within a reasonable period of time after the award of a contract, an entity shall publish a 
notice in the appropriate publication mentioned in  Annex 15-19(1) that shall contain the following 
information:    (a) A description of the nature and quantity of  goods or services in the contract award; 
  (b) the name and address of the entity awarding the contract; 
 
 (c) the date of award;   (d) the name and address of the winning tenderer;  
 (e)  the value of the contract;  and 
  (f) the tendering procedure used.  8. Notwithstanding paragraphs 1 through 7, an entity may withhold certain information on the 
award of a contract where disclosure of the information: 
 
 (a) Could impede law enforcement or otherw ise be contrary to the public interest; 
  (b)  would prejudice the legitimate commerc ial interest of a particular person;  or 
 
 (c)  would be prejudicial to fair competitio n between suppliers. In no circumstances shall 
subparagraphs (b) and (c) prevail when info rmation is requested on matters of public 
interest. 
 
Article 15-16 
 
Limited Tendering Procedures 
 
1. An entity of a Party may, in the circumst ances and subject to the conditions set out in 
paragraph 2, use limited tenderi ng procedures and thus derogate from Articles 15-10 through 15-15, 
provided that such limited tendering procedures are not used with a view to avoiding maximum 
possible competition or in a manner that would constitute a means of discrimination between 
suppliers of the other Party or pr otection of domestic suppliers.  
  WT/REG206/1 
 Page 149 
 
 
2.  An entity may use limited tendering procedures in the following circumstances and subject to the following conditions, as applicable:   (a)  In the absence of tenders in response to an open or selective call for tenders;  or where 
the tenders submitted either have resulted from collusion;  or do not conform to the 
essential requirements of the tender documen tation;  or where the tenders submitted 
come from suppliers that do not comply with the conditions for participation provided for in accordance with this Chapter, on c ondition that the requirements of the initial 
procurement are not substantially modi fied in the contract as awarded; 
 
 (b)  where the goods or services can be s upplied only by a particular supplier and no 
reasonable alternative or substitute exists; fo r works of art;  or for reasons connected 
with the protection of patents, copyrights or other exclusive rights;  or proprietary information;  or where there is an absence of competition for technical reasons; 
 
 (c) in so far as is strictly necessary when, for reasons of extreme urgency brought about 
by events unforeseeable by the entity, the goods or services could not be obtained in 
time by means of open or selective tendering procedures;  
  (d)  for additional deliveries by the orig inal supplier that are intended either as 
replacement parts or continuing services for existing supplies, services or 
installations, or as the extension of existing supplies, services or installations, where a 
change of supplier would compel the entity to procure equipment or services not meeting requirements of interchangeabilit y with already existing equipment or 
services, including software to the extent th at the initial procurement of the software 
was covered by this Chapter;  
 
 (e) where an entity procures a prototype or a first good or service that is developed at its 
request in the course of, and for, a particular contract for research, experiment, study or original development. Where such c ontracts have been fulfilled, subsequent 
procurement of goods or services shall be  subject to Articles 15-10 through 15-15. 
Original development of a first good may include limited production in order to 
incorporate the results of field testing and to demonstrate that the good is suitable for 
production in quantity to acceptable quality standards, but does not include quantity 
production to establish commercial viability or  to recover research and development 
costs;  
 
 (f)  for goods purchased on a commodity market, whose prices quoted on an international 
market; 
  (g) for purchases made under exceptionally adva ntageous conditions that only arise in the 
very short term, but not routine purchases from regular suppliers. Exceptionally advantageous conditions means conditions that are substantially advantageous for the 
purchasing entity in relation to normal market conditions, such as unusual disposals 
by enterprises that are not normally suppliers ;  or the disposal of assets of businesses 
in liquidation or receivership; 
  (h)  for a contract to be awarded to the winner of an architectural design contest, on 
condition that the contest is: 
  (i) organized in a manner consistent with the principles of this Chapter, 
including regarding publication of an invitation to suitably qualified 
suppliers to participate in the contest;  
 WT/REG206/1 
Page 150  
 
 (ii)  organized with a view to awarding the design contract to the winner;  and   (iii)  to be judged by an independent jury;  and   (i)  where an entity needs to procure consulting services regarding matters of a 
confidential nature, the disclosure of wh ich could reasonably be expected to 
compromise government confidences, cause economic disruption or similarly be contrary to the public interest. 
 3.  Entities shall justify the reasons for using lim ited tendering, and prepare a report in writing on 
each contract awarded by it under paragraph 2. Each  report shall contain the name of the procuring 
entity, indicate the value and kind of goods or servi ces procured, the name of the country of origin, 
and a statement indicating the circumstances and conditi ons described in paragraph 2 that justified the 
use of limited tendering. The entity shall retain  each report in a case record along with full 
documentation on the contract. These shall remain at the disposal of the competent authorities of the 
Party for use, as required, under Article 15-17, Article 15-19 or Chapter XX (Dispute Settlement 
Procedures).   
Section D - Bid Challenge 
 
 
Article 15-17 
 
Bid Challenge  
1.  In order to promote fair, open and impartia l procurement procedures, each Party shall adopt 
and maintain bid challenge procedures for procurem ent covered by this Chapter in accordance with 
the following:  
 
 (a) Each Party shall establish a procedure whereby suppliers may submit bid challenges 
concerning any aspect of the procurement process, which for the purposes of this 
Article begins after an entity has deci ded on its procurement requirement and 
continues through the contract award;  
 
 (b) a Party may encourage a supplier to seek a resolution of any complaint with the entity 
concerned prior to initiating a bid challenge;  
  (c) each Party shall ensure that its entities accord fair and timely consideration to any 
complaint regarding procurement covered by this Chapter; 
 
 (d)  whether or not a supplier has attempted to resolve its complaint with the entity, or 
following an unsuccessful attempt at such a resolution, no Party may prevent the 
supplier from initiating a bid challenge  or seeking any other relief;  
  (e) a Party may require a supplier to notif y the entity on initiation of a bid challenge; 
 
 (f) a Party may limit the period within which a supplier may initiate a bid challenge
1;  but 
in no case shall the period be less than ten wo rking days from the time when the basis 
of the complaint became known or reasonably should have become known to the supplier;  
 
                                                     
 
  1 Or seek annulment for the case of Nicaragua.  WT/REG206/1 
 Page 151 
 
 
 (g)  each Party shall establish or designate  a reviewing authority with no substantial 
interest in the outcome of procurements to receive bid challenges and make findings 
and, where appropriate, recommendations concerning them;  
  (h) on receipt of a bid challenge, the review ing authority shall expeditiously investigate 
the challenge; 
  (i)  the reviewing authority shall limit its considerations to the bid challenge itself;    (j) the reviewing authority shall issue a recommendation to resolve the challenge, which 
may include directing the entity to re-evalu ate offers, terminate or re-compete the 
contract in question; 
  (k) entities normally shall follow the recommendations of the reviewing authority;  
 (l)  each Party should authorize its reviewin g authority, following the conclusion of a bid 
challenge procedure, to make additiona l recommendations in writing to an entity 
respecting any facet of the entity’s procurement process that is identified as problematic during the investigation of the challenge, including recommendations for 
changes in the procurement procedures of the entity to bring them into conformity with this Chapter; 
 
 (m) the reviewing authority shall provide its findings and recommendations respecting bid 
challenges in writing and in a timely manner, and shall make them available to the Parties and interested persons; 
 
 (n) each Party shall specify in writing and shall make generally available all its bid 
challenge procedures;  and 
  (o)  each Party shall ensure that each of  its entities maintains complete documentation 
regarding each of its procurements, includi ng a written record of all communications 
substantially affecting each procurement, for at least three years from the date the 
contract was awarded, to allow verification that the procurement process was carried 
out in accordance with this Chapter. 
 2.  A Party may require that a bid challenge be  initiated only after the notice of procurement has 
been published or, where a notice is not publis hed, after tender documentation has been made 
available. Where a Party imposes such a require ment, the ten-working-day period described in 
paragraph 1(f) shall begin no earlier than the da te that the notice is published or the tender 
documentation is made available.   
Section E - General Provisions 
 
 
Article 15-18  
 
Exceptions  
 
1. Nothing in this Chapter shall be construed to prevent either Party from taking any action or 
not disclosing any information whic h it considers necessary for the protection of its essential security 
interests relating to the procurement of arms, ammunition or war materials, or to any other 
procurement essential for national security  or for national defence purposes. 
 2.  Subject to the requirement that such me asures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable di scrimination between the Parties where the same WT/REG206/1 
Page 152  
 
conditions prevail, or a disguised restriction on inte rnational trade, nothing in this Chapter shall be 
construed to prevent either Party fr om imposing or enforcing measures: 
  (a) Necessary to protect public morals, order or safety;  
 (b)  necessary to protect human, animal or plant life or health; 
  (c) necessary to protect intellectual property;  or   (d)  relating to goods or services of handi capped persons, of philant hropic institutions or 
of prison labour. 
 
Article 15-19 
 
Provision of Information
 
1. In accordance with Article 18-02, each Party shall promptly publish any law, regulation, 
precedential judicial decision, administrative ruli ng of general applicatio n and any procedure, 
including standard contract clauses, regarding govern ment procurement covered by this Chapter in the 
appropriate publications re ferred to in Annex 15-19(2). 
 2. Each Party shall: 
 
 (a)  On request, explain to the other Pa rty its government procurement procedures; 
  (b)  ensure that its entities, on request from a supplier, promptly explain their procurement 
practices and procedures;  and 
 
 (c)  designate no later than the date on whic h this Agreement enters into force, one or 
more contact points to:  
  (i) facilitate communication between the Parties; and  
 (ii) answer all reasonable inquiries fro m the other Party to provide relevant 
information on matters covered by this Chapter. 
 3. A Party may seek such additional informati on on the award of the contract as may be 
necessary to determine whether the procurement was made in accordance with the provisions of this 
Chapter regarding unsuccessful tenderers. To this end,  the Party of the procur ing entity shall provide 
information on the characteristics and relative advantag es of the winning tender and the contract price. 
Where release of this information would prejudice co mpetition in future tenders, the information shall 
not be released by the requesting Party except afte r consultation with and the agreement of the other 
Party .   
4. Upon request, each Party shall provide to the ot her Party information available to that Party 
and its entities concerning covered procurement of it s entities and the individual contracts awarded by 
its entities.  5. No Party may disclose confidential information the disclosure of which could prejudice the 
legitimate commercial interests of a particular person or might prejudice fair competition between 
suppliers, without the formal authorization of the pe rson that provided the information to that Party.  
  WT/REG206/1 
 Page 153 
 
 
6. With a view to ensuring effective monitoring of procurement covered by this Chapter, each 
Party shall collect statistics and provide to the ot her Parties an annual report in accordance with the 
following reporting requirements, unless the Parties otherwise agree:   (a) Statistics on the estimated value of all contracts awarded, both above and below the 
applicable threshold values, broken down by entities;  
  (b) statistics on the number and total value of  contracts above the applicable threshold 
values, broken down by entities, by categories of goods and services established in accordance with classification systems de veloped under this Chapter and by the 
country of origin of the goods and services procured; 
  (c) statistics on the number and total valu e of contracts awarded under Article 15-16, 
broken down by entities, by categories of goods and services, and by country of origin of the goods and services procured;  and 
 
 (d) statistics on the number and total value of  contracts awarded under derogations to this 
Chapter set out in Annex 15-02(9) broken down by entities. 
 7. Each Party may organize by state, municipa lity or region any portion of the report mentioned 
in paragraph 6 that pertains to  entities listed in Annex 15-02(3). 
 
Article 15-20 
 
Technical Cooperation
 
1. The Parties shall cooperate, on mutually agr eed terms, to increase understanding of their 
respective government procurement systems, w ith a view to maximizing access to government 
procurement opportunities for their suppliers.  2.  Each Party shall provide to the other Party and to its suppliers, on a cost recovery basis, 
information concerning training and orientation programmes regarding its government procurement 
system, and access on a non-discriminator y basis to any programme it conducts. 
 
 3.  The training and orientation progra mmes referred to in paragraph 2 include: 
  (a)  Training of government personnel dir ectly involved in government procurement 
procedures; 
  
 (b) training of suppliers interested in pursuing government procurement opportunities;   (c) an explanation and description of speci fic elements of each Party’s government 
procurement system, such as its bid challenge mechanism;  and 
 
 (d) information about government procurement market opportunities. 
 4. Each Party shall establish, no later than the date  on which this Agreement enters into force, at 
least one contact point to provide information on the training and orientati on programmes referred to 
in this Article. 
 WT/REG206/1 
Page 154  
 
Article 15-21 
 
Joint Programmes for Microenterprise and Small and Medium-sized Business
 
1.  Upon entry into force of this Agreemen t, the Parties shall establish the Committee on 
Microenterprise, and Small and Medium-sized Bu siness, comprising representatives of each Party. 
The Committee shall meet as mutually agreed, but  not less than once each year, and shall report 
annually to the Commission on the efforts of th e Parties to promote government procurement 
opportunities for their microenterprises, and small and medium-sized businesses.   2.  The Committee shall work to facilitate  the following activities of the Parties: 
 
 (a)  Identification of available opportunities for the training of personnel of 
microenterprises, and small and medi um-sized businesses, in government 
procurement procedures; 
 
 (b) identification of microenterprises, and small and medium-sized businesses interested 
in becoming trading partners of microe nterprises, and small and medium-sized 
businesses in the territory of the other Party; 
  (c)  development of databases of micr oenterprises, and small and medium-sized 
businesses in the territory of each Party for use by entities of the other Party wishing 
to procure from small businesses; 
  (d)  consultations regarding the factors that  each Party uses in establishing its eligibility 
criteria for programmes for microenterprises, and small and medium-sized businesses; and 
 
 (e)  activities to address any related matter.  
Article 15-22 
 
Rectifications or Modifications 
 
1. A Party may modify its coverage under th is Chapter only in exceptional circumstances. 
 2. Where a Party modifies its coverage under this Chapter, that Party shall: 
  (a) Notify the other Party and its Section of the Secretariat of the modification; 
 
 (b)  reflect the change in the appropriate Annex;  and   (c) propose to the other Party appropriate co mpensatory adjustments to its coverage in 
order to maintain a level of coverage co mparable to that existing prior to the 
modification. 
 
 3.  Notwithstanding paragraphs 1 and 2, a Part y may make rectifications of a purely formal 
nature and minor amendments to its Schedules to  Annexes 15-02(1) through (6), and (9), provided 
that it notifies such rectifications to the other Par ties and its Section of the Secretariat, and the other 
Party does not object to such proposed rectificati on within 30 days. In such cases, compensation need 
not be proposed. 
  4.  Notwithstanding any other provision of this  Chapter, a Party may undertake reorganizations 
of its government procurement entities covered by this Chapter, including programmes through which  WT/REG206/1 
 Page 155 
 
 
the procurement of such entities is decentralized or the corresponding government functions cease to 
be performed by any government entity whether or  not subject to this Chapter. In such cases, 
compensation need not be proposed. Neither Party may undertake such reorganizations or programmes for the purpose of avoiding their obligations under this Chapter.   
 5.  A Party may have recourse to the pro cedure established in Chapter XX (Dispute Settlement) 
when it considers that:   (a) An adjustment proposed under paragra ph 2(c) is not adequate to maintain a 
comparable level of mutually agreed coverage;  or 
 
 (b)  a rectification or a minor amendmen t under paragraph 3 or a reorganization under 
paragraph 4 does not meet the applicable re quirements of those paragraphs and should 
require compensation.  
 
Article 15-23 
 
Divestiture of Entities 
 
1. Nothing in this Chapter sha ll be construed to prevent a Part y from divesting an entity covered 
by this Chapter.  
2. If, on the public offering of shares of an entity listed in Annex 15-02(2), or through other 
methods, the entity is no longer subject to federal or  central government control, the Party may delete 
the entity from its Schedule to that Annex, and wit hdraw the entity from the coverage of this Chapter, 
on notification to the other Parties and its Section of the Secretariat  
3. Where a Party objects to the withdrawal on the grounds that the entity remains subject to 
federal or central government control, that Part y may have recourse to procedures under Chapter XX 
(Dispute Settlement ).   
Article 15-24 
 
Further Negotiations
 
1. The Parties shall commence negotiations with a view to the further liberalization of their 
respective government procurement market s when the Commission so decides. 
 2. In such negotiations, the Parties shall revi ew all aspects of their government procurement 
practices for the purposes of: 
  (a) Assessing the functioning of their government procurement systems;   (b) seeking to expand the coverage of this Chapter, by adding:  
 (i) other government enterprises, aut onomous bodies, decentralized entities or 
other type of public enterprise;  and 
  (ii) procurement otherwise subject to legislated or administrative exceptions; 
and 
 
 (c) reviewing thresholds.  WT/REG206/1 
Page 156  
 
3. Prior to such review, the Parties shall end eavour to consult with their state, regional or 
municipal governments with a view to obtaining commi tments, on a voluntary and reciprocal basis, to 
include within this Chapter procurement by stat e and provincial government entities and enterprises. 
 
ANNEX 15-02(1) 
 
Federal and Central Government Entities
 
Schedule of Mexico 
 
1. Secretaría de Gobernación (Ministry of Government)  
 
 -  Centro Nacional de Desarrollo Municipa l (National Centre for Municipal Studies) 
 -  Comisión Calificadora de Publicaciones y Revistas Ilustradas (Illustrated Periodicals 
and Publications Classification Commission) 
 -  Consejo Nacional de Poblac ión (National Population Council) 
 -  Archivo General de la Nación (General Archives of the Nation) 
 -  Instituto Nacional de Estudios Histór icos de la Revolución Mexicana (National 
Institute of Historical Studies on the Mexican Revolution) 
 -  Patronato de Asistencia para la Reincor poración Social por el Empleo en el Distrito 
Federal (Social Reintegration Assistance Foundation through Employment in Mexico 
City)  
 -  Centro Nacional de Prevención de Desastres (National Disaster Prevention Centre) 
 2.  Secretaría de Relaciones Exteriores (Ministry of Foreign Relations)  3.  Secretaría de Hacienda y Crédito Púb lico (Ministry of Finance and Public Credit) 
 
 -  Comisión Nacional Bancaria y de Valores (National Banking and Securities 
Commission) 
 -  Comisión Nacional de Seguros y Fianzas (National Insurance and Bonds 
Commission) 
 -  Instituto Nacional de Estadística, Geog rafía e Informática (National Institute of 
Statistics, Geography and Informatics) 
  4.  Secretaría de Agricultura, Ganadería y Desa rrollo Rural (Ministry of Agriculture, Livestock 
and Rural Development),  
 
 -  Apoyos y Servicios a la Comercializ ación Agropecuaria (ASERCA) (Agricultural 
Marketing Support Services) 
  5.  Secretaría de Comunicaciones y Transportes (including the Comisión Federal de 
Telecomunicaciones, the Instituto Mexicano de Comunicaciones and the Instituto Mexicano 
de Transporte) (Ministry of Communicati ons and Transport, including the Federal 
Telecommunications Commission, the Mexican In stitute of Communications and the Mexican 
Institute of Transportation)  
 6.  Secretaría de Comercio y Fomento Indus trial (Ministry of Commerce and Industrial 
Development) 
 
7. Secretaría de Educación Pública (Ministry of Public Education)  
  -  Instituto Nacional de Antropología e Histor ia (National Institute of Anthropology and 
History)  WT/REG206/1 
 Page 157 
 
 
 -  Instituto Nacional de Bellas Artes y Litera tura (National Institute of National Arts and 
Literature) 
 -  Radio Educación (Radio Education)  -  Centro de Ingeniería y Desarrollo Indu strial (Engineering and Industrial Development 
Centre) 
 -  Consejo Nacional para la Cultura y l as Artes (National Council for Culture and the 
Arts) 
 8. Secretaría de Salud (Ministry of Health)   
 -  Administración del Patrimonio de la Be neficencia Pública (Public Charity Fund 
Administration) 
 -  Centro Nacional de la Transfusión Sanguínea (National Blood Transfusion Centre) 
 -  Gerencia General de Biológicos y R eactivos (Office of General Management for 
Biologicals and Reagents)  
 -  Dirección General de Obras, Conservación y Mantenimiento (Directorate General of 
Works, Conservation and Maintenance) 
 -  Instituto de la Comunicación Humana Dr. Andrés Bustamante Gurría (Dr. Andrés 
Bustamante Gurría Institute of Human Communication)  
 -  Instituto Nacional de Medicina de la Rehabilitación (National Rehabilitative Medicine 
Institute)  
 -  Instituto Nacional de Ortopedi a (National Orthopaedics Institute)  
 -  Consejo Nacional para la Prevención y Control del Síndrome de Inmunodeficiencia 
Adquirida (Conasida). (National Council for the Prevention and Control of the 
Autoimmune Deficiency Syndrome) 
 
9. Secretaría del Trabajo y Previsión Social  (Ministry of Labour and Social Welfare)  
  -  Procuraduría Federal de la Defensa de l Trabajo (Office of the Federal Attorney for 
Labour Defence) 
 10. Secretaría de la Reforma Agraria (Ministry of Agrarian Reform)  
 
 -  Instituto Nacional de Desarrollo Ag rario (National Institute of Agrarian 
Development) 
 11.  Secretaría de Medio Ambiente, Recursos  Naturales y Pesca (Ministry of Environment, 
Natural Resources and Fisheries) 
  -  Instituto Nacional de la Pesca (National Institute of Fisheries)  -  Instituto Mexicano de Tecnología del Agua  12.  Procuraduría General de la República (O ffice of the Attorney General of the Republic) 
 
13.  Secretaría de Energía (Ministry of Energy)   -  Comisión Nacional de Seguridad Nuclear y Salvaguardias (National Commission on 
Nuclear Safety and Safeguards) 
 -  Comisión Nacional para el Ahorro de  Energía (National Commission for Energy 
Conservation) 
 14.  Secretaría de Desarrollo Social (Ministry of Social Development)  
15.  Secretaría de Turismo (Ministry of Tourism) WT/REG206/1 
Page 158  
 
 16.  Secretaría de Contraloría y Desarrollo Admi nistrativo (Ministry of the Comptroller General 
and Administrative Development) 
 17.  Secretaría de la Defensa Nacional (Ministry of National Defence) 
 
18.  Secretaría de Marina (Ministry of the Navy)  
Schedule of Nicaragua 
 1.  Asamblea Nacional (National Assembly) 
 2.  Consejo Supremo Electoral (Supreme Electoral Council)  3.  Corte Suprema de Justicia (Supreme Court) 
 
4.  Contraloría General de la República (Offi ce of the Comptroller General of the Republic) 
 5.  Presidencia de la República (Office of the President of the Republic)   -  Vice-Presidencia (Office of the Vice President) 
 
6. Dirección de Comunicación Social (Social Communication Directorate)  7.  Radio Nicaragua  
8.  Fondo de Inversión Social de Emerge ncia (Emergency Social Investment Fund) 
 9.  Ministerio de Acción Social (Ministry of Social Action) (does not include procurement of 
agricultural goods acquired for agricultural support programmes or human consumption)  
 10.  Instituto de Atención a las Víctimas de Gu erra (Institute for the Care of War Victims) 
 
11.  Instituto Nicaragüense de la Mu jer (Nicaraguan Institute for Women) 
 12.  Fondo Nicaragüense de la Niñez y la Fam ilia (Nicaraguan Fund for Children and the Family) 
 
13.   Ministerio de Salud (Ministry of Health) 
 14.   Ministerio de Educación (Ministry of Education)  15.   Ministerio del Trabajo (Ministry of Labour)  
16. Instituto Nacional Tecnológico (INA TEC) (National Technological Institute) 
 17. Ministerio de Finanzas (Ministry of Finance)  18. Instituto Nicaragüense de Administración Pública (Nicaraguan Public Administration 
Institute) 
 19. Ministerio de Economía y Desarrollo (Min istry of Economic Affairs and Development) 
 20. Instituto Nicaragüense de Estadísticas y Ce nsos (Nicaraguan Institute of Statistics and 
Censuses)  WT/REG206/1 
 Page 159 
 
 
 21. MEDE – PESCA   22. .  Ministerio de Construcción y Trans porte (Ministry of Cons truction and Transport) 
 
23.  Instituto Nicaragüense de Estudios Territori ales (Nicaraguan Institute for Territorial Studies) 
 24.  Ministerio de Turismo (Ministry of Tourism)  25.  Teatro Nacional Rubén Darío (Rubén Darío National Theatre) 
 
26.  Instituto Nicaragüense de Cultura  (Nicaraguan Institute of Culture) 
 27.  Ministerio de Agricultura y Ganadería (Ministry of Agriculture)  
28.  Instituto Nicaragüense de Tecnología Agrop ecuaria (Nicaraguan Institute of Agricultural 
Technology) 
 29.  Instituto Nicaragüense de Reforma Agrari a (Nicaragua Institute of Agrarian Reform) 
 30.  Ministerio de Relaciones Exteriores (Ministry of Foreign Relations) 
 
31.  Ministerio de Cooperación Extern a (Ministry for External Cooperation) 
 32.  Ministerio de Defensa (Ministry of Defence)  
33.  Ministerio de Gobernación (Ministry of Governance) 
 34.  Ministerio del Ambiente y Recursos Natu rales (Ministry of the Environment and Natural 
Resources) 
 35.  Procuraduría General de Justic ia (Office of the Prosecutor General) 
 
36.  Instituto Nicaragüense Juventud y Deportes (Nicaraguan Institute of Youth and Sport) 
 37.  Programa Nacional de Desarrollo Rura l (National Rural Development Programme) 
 
38.  Programa de Apoyo a Micro Empresa (PAMIC) (Microenterprise Support Programme) 
 39.  Consejo Nacional Agropecuaria (C ONAGRO) (National Agricultural Council) 
 40.  Casa de la Cultura  
 
ANNEX 15-02(2) 
 
Government Enterprises and Autonomous Bodies
 
 
Schedule of Mexico  Printing and editorial   
1. Talleres Gráficos de Mé xico (National Printers) 
 WT/REG206/1 
Page 160  
 
2.  Productora e Importadora de Papel, S.A. de C.V. (PIPSA) (Producer and Importer of Paper, 
S.A. de C.V.)  
  3.  Comisión Nacional de los Libros de Te xto Gratuitos (National Free Textbook Commission) 
 Communications and transportation  
 
 4.  Aeropuertos y Servicios Auxiliares (ASA) (Airports and Auxiliary Services) 
 5.  Caminos y Puentes Federales de Ingresos y Servicios Conexos (CAPUFE) (Federal Toll 
Roads and Bridges and Related Services) 
 6.  Servicio Postal Mexicano (Mexican Postal Service)  7.  Ferrocarriles Nacionales de México (FERRONALES) (National Railways of Mexico) 
 
 8.  Telecomunicaciones de México ( TELECOM) (Telecommunications of Mexico)  
 
Industry  
 
 9.  Petróleos Mexicanos (Pemex) (Mexican Petrol eum) (Not including procurements of fuels or 
gas)  
  -  PEMEX Exploración y Producción (PEMEX Exploration and Production)   -  PEMEX Refinación (PEMEX Refining) 
 
 -  PEMEX Gas y Petroquímica Básica (PEMEX Gas and Basic Petrochemicals)   - PEMEX Petroquímica (PEMEX Petrochemicals)  
10. Comisión Federal de Electricidad (CFE) (Federal Electricity Commission)  
 
Commerce 
 
 11.  Consejo de Recursos Minerales (Mineral Resources Council)  
 12.  Procuraduría Federal de l Consumidor (Office of the Federal Attorney for Consumers) 
 
Social security 
 
 14.  Instituto de Seguridad y Servicios Social es de los Trabajadores del Estado (ISSSTE) (Institute 
of Social Security and Services for Government Workers) 
 
15. Instituto Mexicano del Seguro Social (IM SS) (Mexican Social Security Institute) 
 16. Sistema Nacional para el Desarrollo Integral  de la Familia (DIF) (National System for 
Integrated Family Development) (Not including  procurements of agricultural goods made in 
furtherance of agricultural support programm es or goods for human feeding programmes) 
 17. Instituto de Seguridad Social para las Fu erzas Armadas Mexicanas (Soc ial Security Institute 
for the Mexican Armed Forces) 
 
 18.  Instituto Nacional Indigenista (INI) (National Institute of Indian Peoples)  WT/REG206/1 
 Page 161 
 
 
 19. Instituto Nacional para la Educación de los A dultos (National Institute for Adult Education) 
  20.  Centros de Integración Juve nil (Youth Integration Centres) 
 
 21.  Instituto Nacional de la Sen ectud (National Institute on Old Age) 
  22.  Distribuidora e Impulsora Commercial C onasupo S.A. de C.V. (Conasupo Commercial 
Distribution and Promotion S.A. de C.V.) (Diconsa) 
 
23.  Leche Industrializada Conasupo, S.A. de C.V. (LICONS(A) (Conasupo Industrialized Milk, 
S.A. de C.V.) (Not including procurements of  agricultural goods made in furtherance of 
agricultural support programmes or goods for human feeding programmes.)  
 
Others 
 24.  Comité Administrador del Programa Fede ral de Construcción de Escuelas (CAPFCE) 
(Administrative Committee of the Scho ol Construction Federal Programme) 
 25.  Comisión Nacional del Agua (C NA) (National Water Commission) 
 
26. Comisión para la Regularización de la Te nencia de la Tierra (Commission for the 
Regularization for Land Tenure) 
 27. Consejo Nacional de Ciencia y Tecnología (CONACYT) (National Science and Technology 
Council) 
 
28. NOTIMEX, S.A. de C.V.  29. Instituto Mexicano de Cinematografía (Mexican Institute of Cinematography) 
 30. Lotería Nacional para la Asistencia Púb lica (National Lottery for Public Assistance) 
 
31. Pronósticos para la Asiste ncia Pública (Sports Lottery) 
 32. Comisión Nacional de Zonas Aridas (National Commission on Arid Zones)  
33. Comisión Nacional de Derechos Humanos (National Commission on Human Rights) 
 34. Consejo Nacional de Fomento Educativo (National Educational Development Council). 
 35. Compañía Nacional de Subsistencia Popular es (Conasupo) (Not including procurements of 
agricultural goods made in furtherance of agricultural support programmes or goods for 
human feeding programmes.)  
 36. Bodegas Rurales Conasupo, S.A. de C.V.  
Schedule of Nicaragua 
 
1. Empresa Nicaragüense de Telecomunicaci ones (ENITEL) (Nicaraguan Telecommunications 
Company) 
 2.  Instituto Nicaragüense de Telecomunicacion es y Correos (TELCOR) (Nicaraguan Institute of 
Telecommunications and Postal Services) WT/REG206/1 
Page 162  
 
  3.  Empresa Nicaragüense de Electricidad (ENEL) (Nicaraguan Electricity Company)   4.  Instituto Nicaragüense de Energía (INE) (Nicaraguan Energy Institute)  
 5.  Empresa Nicaragüense de Importaciones (ENIMPORT) (Nicaraguan Import Company) (Not 
including procurements of agricultural goods made in furtherance of agricultural support 
programmes or goods for human feeding programmes.)  
 6.  National Lottery 
 
7. Empresa Nacional de Abastecimientos (ENABAS) (national provisions enterprise) Not 
including procurements of agricultural goods made in furtherance of agricultural support 
programmes or goods for human feeding programmes.)  
 
8. Empresa Nacional de Aeropuertos (National Airports Enterprise) 
 9. Correos de Nicaragua (Postal Services of Nicaragua)  10. Cruz Roja Nicaragüense (Nicaragua and Red Cross)  
11. Instituto Nicaragüense de Acueductos y Alcantarillados (INAA) (Nicaraguan Water and 
Sewerage Institute ) 
 12. Instituto Nicaragüense de Seguridad Social (INSS) (Nicaraguan Social Security Institute) 
 
13. Instituto Nicaragüense de Fomento M unicipal (INIFOM) (Nicaraguan Municipal 
Development Institute) 
  
ANNEX 15-02(3) 
 
State, Regional or Municipal Government Entities
 
 
ANNEX 15-02(4) 
 
List of Goods  
Section A - General Provisions  
 
1.  This Chapter applies to all goods procured by the entities listed in Annexes 15-02 (1) through 
(3).  2. With respect to Mexico, the strategic goods lis ted in Section B purchased by the Ministry of 
National Defence and the Ministry of the Navy ar e excluded from the coverage of this Chapter, 
pursuant to Article 15-18.    3.  With respect to Nicaragua, the strategic goods listed in Section B purchased by the Ministry of Defence and the Ministry of Governance are excl uded from the coverage of this Chapter, pursuant 
to Article 15-18.  
  WT/REG206/1 
 Page 163 
 
 
Section B - List of Certain Goods  
  -  Weaponry.  -  Nuclear war material.  -  Fire control equipment. 
 -  Ammunition and explosives. 
 -  Guided missiles.  -  Aircraft and components of aircraft structures.  -  Components and accessories for aircraft.  -  Equipment for takeoff, landing, and on-ground handling of aircraft. 
 -  Space vehicles. 
 -  Vessels, small structures, rafts and floating piers.  -  Maritime vessels and equipment.   
ANNEX 15-02(5) 
 
Services
 
 
 Without prejudice to the coverage provided for in Chapter X (General Principles on Trade in 
Services), this Chapter shall apply to all services no later than one year after the entry into force of 
this Agreement. For these purposes, the Parties sh all establish a workgroup that will continue to 
review relevant technical issues, including the common classification system for services.  
  
APPENDIX TO ANNEX 15-02(5) 
 
Common Classification System for Services
 
 Group = 1 digit 
 Subgroup = 2 digits  Class = 4 digits  A  Research and development 
 
Definition of research and development contracts 
 
 Procurement of research and development ser vices include the acquisition of specialized 
expertise for the purposes of increasing knowledge  in science; applying increased scientific 
knowledge or exploiting the potential of scientific  discoveries and improvements in technology to 
advance the state of art;  and systematically us ing increases in scientific knowledge and advances in 
state of art to design, develop, test, or evaluate new products or services.  
R&D codes 
 The R&D code is composed of two alphabetic digits. The first digit is always the letter "A" to identify 
R&D, the second digit is alphabetic "A to Z" to identify the major sub-group.  
Code   Descriptions 
 AA    Agriculture  
AB    Community services and development  AC   Defence systems  AD    Defence - other  WT/REG206/1 
Page 164  
 
AE    Economic growth and productivity  AF    Education  AG   Energy  AH   Environmental protection  AJ    General science and technology  
AK    Housing  
AL    Income security AM   International affairs and cooperation  AN    Medical  AP   Natural resources  
AQ   Social services  
AR   Space  AS   Transportation- Modal  AT    Transportation - general  AV    Mining activities  
AZ   Other research and development 
 
B  Studies and analysis - (not R&D) 
 
Definition of studies and analysis:  
 Procurement of special studies and analyses are organized, analytic assessments that provide 
insights for understanding complex issues or im proving policy development or decision making. 
Output obtained in such acquisitions is a form al, structured document including data or other 
information that form the basis for conclusions or recommendations.    B0  Natural Sciences  
   B000   Chemical/biological studies and analyses  
   B001  Endangered species studies - plant and animal  
B002  Animal and fisheries studies  B003   Grazing/range studies  B004   Natural resource studies  B005   Oceanological studies  
B009  Other natural sciences studies  
  B1  Environmental Studies  
B100   Air quality analyses  B101 Environmental studies devel opment of environmental impact 
statements and assessments  
B102  Soil studies  B103   Water quality studies  B104  Wildlife studies  B109 Other environmental studies  
 
 B2  Engineering Studies  
   B200  Geological studies     B201   Geophysical studies  
B202  Geotechnical studies  B203  Scientific data studies  
B204  Seismological studies  
B205  Building technology studies  B206  Energy studies  B207  Technology studies   WT/REG206/1 
 Page 165 
 
 
B208  Housing and community development studies (incl. 
Urban/town planning studies)  
B219  Other engineering studies  
  B3   Administrative Support Studies  
B300  Cost benefit analyses 
B301  Data analyses (other than scientific) B302  Feasibility studies (non-construction) B303  Mathematical/statistical analyses B304   Regulatory studies 
B305   Intelligence studies  
B306   Defence studies B307   Security studies (physical and personal)  B308   Accounting/financial management studies  B309   Trade issue studies  
B310   Foreign policy/national security policy studies  
B311   Organization/administrative/personnel studies  B312  Mobilization/preparedness studies  B313   Manpower studies  B314   Acquisition policy/procedures studies  B329   Other administrative support studies  
 
 B4   Space studies     B400  Aeronautic/space studies    B5  Social studies and humanities  
B500   Archaeological/palaeontological studies  
B501  Historical studies  B502  Recreation studies  B503   Medical and health studies  B504   Educational studies and analyses  B505  Elderly/handicapped studies  
B506  Economic studies  
B507  Legal studies  
   B509  Other studies and analyses   
C  Architect and engineering services 
  C1   Architect and engineering services - related to construction  
  C11  Building and Facility Structures  
C111  Administrative and service buildings  C112   Airfield, communication and missile facilities  
C113  Educational buildings  
C114  Hospital buildings  C115  Industrial buildings  C116  Residential buildings  C117  Warehouse buildings  
C118  Research and development facilities  
C119  Other buildings   
 C12  Non-Building Structures  
C121  Conservation and development  
C122  Highways, roads, streets, bridges and railways  WT/REG206/1 
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C123  Electric power generation (EPG)  C124  Utilities  C129  Other non-building structures  C130  Restoration  
 
 C2  Architect and engineering services - not related to construction  
C211  Architect - engineer services (incl. landscaping,  interior 
layout and designing)  
C212  Engineering drafting services  C213  A&E inspection services  
C214   A&E management engineering services  
C215   A&E production engineeri ng services (incl. design and 
control and building programming)  
C216  Marine architect and engineering services  C219  Other architect and engineering services  
 
D  Information processing and rel ated telecommunications services 
 
 D301  ADP facility operation and maintenance services  
 D302  ADP systems development services   D303  ADP data entry services  
D304  ADP telecommunications and transmission services  
D305  ADP teleprocessing and timesharing services  D306   ADP systems analysis services  D307   Automated information system design and integration 
Services 
D308   Programming services    
D309   Information and data br oadcasting or data distribution 
Services  
D310   ADP backup and security services  D311  ADP data conversion services  D312   ADP optical scanning services  
D313   Computer aided design/computer aided manufacturing 
(CAD/CAM) services  
D314   ADP system acquisition support services (Includes 
preparation of statement of work, benchmarks, specifications, etc.)  
D315   Digitizing services (Includes cartographic and geographic 
information)  
D316   Telecommunications network management services  D317 Automated news services, da ta services, or other information 
services. buying data (the electronic equivalent of books, periodicals, newspapers, etc.)  
D399   Other ADP and telecommunications services (incl. data 
storage on tapes, compact disk (CD), etc. 
 
E  Environmental services 
 
E101   Air quality support services  
E102   Industrial investigation su rveys and technical support related 
to air pollution  
E103   Water quality support services  E104   Industrial investigation su rveys and technical support related 
to water pollution   WT/REG206/1 
 Page 167 
 
 
E106   Toxic substances support services  E107   Hazardous substance analysis  E108   Hazardous substance remova l, cleanup, and disposal services 
and operational support  
E109   Leaking underground storage tank support services  
E110   Industrial investigations, surveys and technical support for 
multiple pollutants  
E111  Oil spill response including cleanup, removal, disposal and 
Operational support  
E199   Other environmental services  
 
F  Natural resources services 
 
 F0   Agriculture and forestry services  
F001 Forest/range fire suppress ion/presuppression services (incl. 
water bombing)  
F002   Forest/range fire rehab ilitation services (non-construction)  
F003  Forest tree planting services  F004   Land treatment practices Services (ploughing/clearing, etc.)  F005   Range seeding services (ground equipment)  F006   Crop services (incl. seed collection and production services)  
F007   Seedling production/transplanting services  
F008   Tree breeding services (incl. ornamental shrub)  F009  Tree thinning services  F010  Other range/forest improveme nts services (non-construction)  
F011  Pesticides/insecticides support services  
 
 F02  Animal care / control services  
F020  Other wildlife management services  F021  Veterinary/animal care services (incl. livestock services)  F029  Other animal care/control services  
 
 F03  Fisheries and ocean services  
F030  Fisheries resources management services  F031  Fish hatchery services  
  F04   Mining  
F040  Surface mining reclamation services (non-construction)  
F041   Well drilling  F042   Other services incidental to mining except those listed in 
F040 and F041  
 
 F05  Other natural resources services  
F050   Recreation site maintena nce services (non-construction)  
F051   Survey line clearing services  F059   Other natural resources and conservation services  
 
G  Health and social services 
  G0  Health services  
G001  Health care  G002   Internal medicine  G003  Surgery  
G004   Pathology  WT/REG206/1 
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G009   Other health services  
  G 1  Social services  
G100  Care of remains and/or funeral services  G101  Chaplain services  
G102  Recreational services (incl. Entertainment Services)  
G103  Social rehabilitation services  G104  Geriatric services  G199  Other social services  
 H  Quality control, testing, inspectio n and technical representative services 
 
 HO  Technical representative services     H1   Quality control services  
H2  Equipment and materials testing  
H3  Inspection services (incl. commercial testing and laboratory 
services, except medical/dental)  
H9  Other quality control, testing, inspection and technical 
representative services  
 
J  Maintenance, repair, modification, rebuilding and installation of goods/equipment 
 
 JO  Maintenance, repair, modifica tion, rebuilding and installation of 
goods/equipment; includes as examples: 
  1.   Textile finishing, dying and printing 
 2.   Welding services not related to construction (see CPC 5155 
for construction welding)  
  J998 Non-nuclear ship repair (including overhauls and 
conversions)  
 K  Custodial operations and related services 
 
 K0 Personal care services (incl. services su ch as barber and beauty shop, shoe 
repairs and tailoring etc.)  
 
 K1  Custodial services  
   K100  Custodial - janitorial services     K101  Fire protection services     K102   Food services  
K103  Fuelling and other petroleum services - excluding storage  K104   Trash/garbage collection services - including portable 
sanitation services  
K105   Guard services  K106  Insect and rodent control services  K107   Landscaping/groundskeeping services  K108  Laundry and dry cleaning services  
K109  Surveillance services  
K110  Solid fuel handling services  K111   Carpet cleaning  K112   Interior plantscaping  K113  Snow removal/salt service (a lso spreading aggregate or other 
snow melting material)   WT/REG206/1 
 Page 169 
 
 
K114  Waste treatment and storage  K115   Preparation and disposal of excess and surplus property  K116   Other salvage services  K199   Other custodial and related services  
 L  Financial and related services 
 
   L000  Government life insurance programmes     L001  Government health insurance programmes     L002  Other government insurance programmes  
L003  Non-government insurance programmes  
L004   Other insurance services  L005  Credit reporting services  L006   Banking services  L007  Debt collection services  
L008   Coin minting  
L009   Banknote printing  L099  Other financial services   
M  Operation of government-owned facilities 
 
M110  Administrative facilities and service buildings  
M120  Airfield, communications, and missile facilities  M130  Educational buildings  M140   Hospital buildings  M150  Industrial buildings  
M160  Residential buildings  
M170   Warehouse buildings  M180  Research and development facilities  M190   Other buildings  M210   Conservation and development facilities  M220  Highways, roads, streets, bridges and railways  
M230  Electric power generation (EPG) facilities  
M240   Utilities  M290  Other non-building facilities   
R  Professional, administrative and management support services 
 
 R0  Professional services  
R001  Specifications development services  R002  Technology sharing/utilization services  R003  Legal services  R004  Certifications and accredit ations for products and institutions 
other than educational institutions  
R005  Technical assistance  R006   Technical writing services  R007  Systems engineering services  R008  Engineering and technical services (incl. mechanical,
 electrical, chemical, electronic engineering)  
R009  Accounting services  R010  Auditing services  R011  Ongoing audi t operations support  
R012   Patent and trade mark services  
R013   Real property appraisals services  WT/REG206/1 
Page 170  
 
R014  Operations research studies / quantitative analysis studies R015  Simulation  R016  Personal services contracts  R019  Other professional services  
 
 R1  Administrative and management support services  
R100   Intelligence services  R101   Expert witness  R102   Weather reporting/observation services  R103   Courier and messenger services  
R104   Transcription services  
R105  Mailing and distribution services (excluding post office 
services)  
R106  Post office services  R107  Library services  
R108   Word processing/typing services  
R109   Translation and interpreting services (including sign 
language)  
R110   Stenographic services  R111   Personal property management services  R112   Information retrieval (non-automated)  
R113  Data collection services  
R114  Logistics support services  R115  Contract, procurement, and acquisition support services  R116  Court reporting services  R117   Paper shredding services  
R118  Real estate brokerage services  
R119   Industrial hygienics  R120  Policy review/development services  R121   Programme evaluation studies  R122   Programme management/support services  R123  Programme review/development services  
 R199   Other administrative and management support services  
  R2   Personnel Recruitment     R200  Military personnel recruitment    R201   Civilian personnel recruitment (incl. services of employment 
agencies)  
S  Utilities 
 
S000  Gas services  
S001   Electric services  S002  Telephone and/or communications services (incl. telegraph, 
telex and cablevision service)  
S003  Water services  S099  Other utilities 
 
T  Communications, photographic, mappi ng, printing and publication services 
 
T000  Communications studies  
T001   Market research and public opinion services (formerly 
telephone and field interview services incl. focus testing, syndicated and attitude surveys)  
T002  Communications services (incl. exhibit services)   WT/REG206/1 
 Page 171 
 
 
T003   Advertising services  T004 Public relations services (incl. writing services, event 
planning and management, me dia relations, radio and TV 
analysis, press services)  
T005  Arts/graphics services  
T006   Cartography services  
T007  Charting services  T008   Film processing services  T009   Film/video tape production services  T010  Microfiche services  
T011  Photogrammetry services  
T012   Aerial photographic services  T013  General photographic services - still  T014   Print/binding services  T015  Reproduction services  
T016  Topography services  
T017  General photographic services - motion  T018   Audio/visual services  T019   Land surveys, cadastral services (non-construction)  T099  Other communication, photographic, mapping, printing and 
publication services  
 
U Educational and Training Services 
 
U001  Lectures for training  
U002  Personnel testing  
U003  Reserve training (military)  
U004  Scientific and management education  
U005  Tuition, registration, and membership fees  U006   Vocational/technical  U007  Faculty salaries for schools overseas  U008   Training/curriculum development  
U009  Informatics training  
U010  Certifications and accreditati ons for educational institutions  
U099  Other education and training services  
 
V  Transportation, Travel and Relocation Services 
  V0  Land transport services  
V000  Motor pool operations  V001  Motor freight  V002  Rail freight  V003  Motor charter for things  
V004   Rail charter for things  
V005   Motor passenger service  V006   Rail passenger service  V007  Passenger motor charter service  V008  Passenger rail charter service  
V009  Ambulance service  
V010   Taxicab services  V011   Security vehicle service  
  V1  Water transport services  
V100   Vessel freight  WT/REG206/1 
Page 172  
 
V101   Marine charter for things  V102   Marine passenger service  V103   Passenger marine charter service   
 V2   Air transport services 
V200  Air freight  
V201   Air charter for things  V202   Air passenger service  V203  Passenger air charter service  V204   Specialty air services including aerial fertilization, spraying 
and seeding  
  V3   Space transportation and launch services    V4   Other transport services  
V401   Other transportation travel and relocation services  
V402   Other cargo and freight services  V403   Other vehicle charter for transportation of things  
  V5  Supporting and auxiliary transport services     V500   Stevedoring  
V501   Vessel towing service  
V502   Relocation services  V503  Travel agent services  V504  Packing/crating services  V505   Warehousing and storage services  
V506   Salvage of marine vessels  
V507  Salvage of aircraft  V508  Navigational aid and pilotage services  
 
W Lease and rental of equipment 
    WO  Lease or rental of equipment 
  
ANNEX 15-02(6) 
 
Construction Services
 
 Without prejudice to the coverage provided for in Chapter X (General Principles on Trade in 
Services), this Chapter shall apply to all construc tion services no later than one year after the entry 
into force of this Agreement. For these purposes, the Parties shall establish a workgroup that will 
continue reviewing relevant technical issues, including the common classification system for construction services. 
 
 
APPENDIX TO ANNEX 15-02(6) 
 
Common Classification System for Construction Services
 
Note:  Based on the  United Nations Central Product Classification  (CPC) Division 51.  
  For the purposes of this Chapter, construc tion services mean any pre-erection work; new 
construction and repair, a lteration, restoration and maintenance work on residential buildings, non- WT/REG206/1 
 Page 173 
 
 
residential buildings or civil engineering works. This work can be carried out either by general 
contractors who do the complete construction work for the owner of the project, or on own account;  
or by subcontracting parts of the construction work to contractors specializin g, e.g., in installation 
work, where the value of work done by subcontract ors becomes part of the main contractor s work. 
The products classified here are services which ar e essential in the production process of the different 
types of constructions, the final output of construction activities. 
 
Code  Descriptions  
 
511  Pre-erection work at construction sites  5111  Site investigation work 
5112  Demolition work 5113  Site formation and clearance work 5114  Excavating and earthmoving work 5115  Site preparation work for mining (except for mining of oil and gas). 
5116   Scaffolding work 
512  Construction work for buildings  5121   For one and two dwelling buildings  5122  For multi-dwelling buildings 5123  For warehouses and industrial buildings 5124  For commercial buildings 
5125  For public entertainment buildings 
5126  For hotel, restaurant and similar buildings 5127  For educational buildings 5128  For health buildings 5129  For other buildings 
513  Construction work for civil engineering 
5131  For highways (except elevated highways), streets , roads, railways and airfield 
runways 
5132  For bridges, elevated highways, tunnels ,subways and railroads 5133  For waterways, harbours, dams and other water works 5134   For long distance pipelines, communication and power lines (cables) 
5135   For local pipelines and cables; ancillary works 
5136  For constructions for mining and manufacturing 5137  For constructions for sport and recreation 5138  Dredging services 5139  For engineering works n.e.c. 
514  Assembly and erection of prefabricated construction 
515  Special trade construction work 5151  Foundation work, including pile driving 5152  Water well drilling 5153  Roofing and water proofing 5154  Concrete work 
5155  Steel bending and erection, including welding 
5156  Masonry work 5159  Other special trade construction work 516  Installation work 5161  Heating, ventilation and air conditioning work 
5162  Water plumbing and drain laying work 
5163  Gas fitting construction work 5164  Electrical work 5165  Insulation work (electrical wiring, water, heat, sound) 5166  Fencing and raili ng construction work 
5169  Other installation work WT/REG206/1 
Page 174  
 
517  Building completion and finishing work 5171  Glazing work and window glass installation work 5172  Plastering work 5173  Painting work 5174  Floor and wall tiling work 
5175  Other floor laying, wall covering and wall papering work 
5176  Wood and metal joinery and carpentry work 5177  Interior fitting decoration work 5178  Ornamentation fitting work 5179  Other building completion and finishing work 
518   Renting services related to equipment for construction 
  
ANNEX 15-02(7) 
 
Indexation and Conversion of Thresholds 
 
1.  The calculations referred to in Article 15- 02 (1) (c) shall be made in accordance with the 
following:    (a)  The U.S. inflation rate shall be measu red by the Producer Price Index for Finished 
Goods published  by the U.S. Bureau of Labour Statistics;  
 
 (b)  the first adjustment for inflation, to ta ke effect on 1 January 2000, shall be calculated 
using the period from 1 November 1997 through 31 October 1999; 
  (c) all subsequent adjustments shall be cal culated using two-year  periods, each period 
beginning 1 November and shall take eff ect on 1 January of the year immediately 
following the end of the two-year period;  and 
  (d)  the inflationary adjustment shall be es timated according to the following formula:  
 
T
0 x (1+p i)= T 1 
 
  where:    T
0 =  threshold value at base period; 
    P
i =  accumulated U.S. inflation rate for the ith two year-period; and 
 
   T 1 =  new threshold value.  
 2.  The exchange rate to be used in calculating threshold valu es for the purposes of this Chapter 
shall be the current value of the Mexican peso a nd the Nicaraguan córdoba in relation to the United 
States dollar as of 1 December and 1 June each year, or the first working day thereafter. The 
conversion rate as of 1 December shall apply from 1 January to 30 June of the following year, and the 
conversion rate as of 1 June sha ll apply from 1 July to 31 December of that year. The Parties shall 
calculate and convert the value of the thresholds in to their own currencies. These calculation shall be 
based on the official exchange rates of the Banc of  Mexico (Banco de México) and the Central Bank 
of Nicaragua. 
 
  WT/REG206/1 
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ANNEX 15-02(8) 
 
Transitional Provisions  
 Notwithstanding any other provision of this Chapter, Annexes 15-02 (1) through (6) are 
subject to the following: 
 
Schedule of Mexico 
 Petróleos Mexicanos (PEMEX), Federal El ectricity Commission (CFE) and non-energy 
construction  
 1.  Mexico may set aside from the obligations of this Chapter for a calendar year set out in 
paragraph 2, the percentage specified in that paragraph of:    (a) The total value of procurement contr acts for goods and services and any combination 
thereof and construction services procured by  Pemex in the year that are above the 
thresholds set out in Article 15-02 (1) (c); 
  (b) the total value of procurement contr acts for goods and services and any combination 
thereof and construction services procured by  CFE in the year that are above the 
thresholds set out in 15-02 (1) (c);  
 
 (c)  the total value of procurement contract s for construction services procured in the year 
that are above the thresholds set out in Article 15-02 (1) (c), excluding procurement 
contracts for construction services procured by Pemex and CFE. 
 
2. The calendar years to which paragraph 1 ap plies, and the percentages for those calendar 
years, are as follows: 
 
    1998  1999  2000 
    40%  35%  35% 
 
    2001  2002 2003 and thereafter     30%  30%  0% 
  3.  The value of procurement contracts that are financed by loans from regional and multilateral 
financial institutions shall not be included in th e calculation of the total value of procurement 
contracts under paragraphs 1 and 2. Procurement contr acts that are financed by  such loans shall also 
not be subject to any restrictions set out in this Chapter.   4.  Mexico shall ensure that the total valu e of procurement contracts under any single class of 
products that are set aside by Pemex or CFE under paragraphs 1 and 2 for any year does not exceed 
10 per cent of the total value of the procurement cont racts that may be set aside by Pemex or CFE for 
that year.  
 
Pharmaceuticals  
 
 5.  Until 1 January 2002, this Chapter shall not apply to the procurement by the Secretaría de 
Salud, IMSS, ISSSTE, Secretaría Defensa Nacional and the Secretaría de Marina of drugs that are not 
currently patented in Mexico or whose Mexican pate nts have expired. Nothing in this paragraph shall 
prejudice rights under Chapter XVII (Intellectual Property).  
 WT/REG206/1 
Page 176  
 
Schedule of Nicaragua 
 Empresa Nicaragüense de Electricidad (ENEL) a nd the Instituto Nicaragüense de Acueductos y 
Alcantarillados (INAA) and non-energy construction  
1. Nicaragua may set aside from the obligations of  this Chapter for a calendar year set out in 
paragraph 2, the percentage specified in that paragraph of:   (a) The total value of procurement contr acts for goods and services and any combination 
thereof, construction services procured  by ENEL and INAA, and non-energy 
construction in the year that are above the thresholds set out in Article 15-02 (1)(c); 
and 
  (b) the total value of construction services procured in the year that are above the 
thresholds set out in Article 15-02 (1)(c),  excluding construction services procured by 
ENEL and INAA. 
 2. The years to which paragraph 1 applies and the percentages for those years are as follows: 
 
    1998  1999  2000 
    40%  35%  35%  
 
    2001  2002  2003 and thereafter 
    30%  30%  0% 
 
 3.  The value of procurement contracts that are financed by loans from regional and multilateral 
financial institutions shall not be included in th e calculation of the total value of procurement 
contracts under paragraphs 1 and 2. Procurement contr acts that are financed by  such loans shall also 
not be subject to any restrictions set out in this Chapter.  4. Nicaragua shall ensure that the total value of procurement contracts in a given product 
category that are set aside by ENEL and INAA or the non-energy construction sector under 
paragraphs 1 and 2, for any year, does not exceed 10 per cent of the total value of the procurement 
contracts that may be set aside by ENEL and INAA or the non-energy construction sector for that 
year.   Pharmaceuticals  
 
5.  Until 1 January 2002, this Chapter shall not apply to the procurement by the Ministerio de 
Salud, Instituto Nicaragüense de Seguridad Social and Ministerio de Gobernación for drugs that are 
not currently patented in Nicaragua or whose Ni caraguan patents have expired. Nothing in this 
paragraph shall prejudice rights under Chapter XVII (Intellectual Property). 
 
Thresholds applicable to the procurement of good s and services by central government entities. 
 
6. Nicaragua shall apply the following threshol ds expressed in United States dollars for goods 
and services purchased by the entities listed in Annex 15-02(1). 
 
Thousands of dollars 
 
  1998  1999  2000  2001  2002  2003 and thereafter 
  100  90  80  70  60  50   WT/REG206/1 
 Page 177 
 
 
 
ANNEX 15-02(9) 
 
General Notes  
 Schedule of Mexico 
 
1.  This Chapter does not a pply to procurements made: 
  (a) With a view to commercial resale by government- owned retail stores; 
 
 (b)  pursuant to loans from regional or multilate ral financial institutions to the extent that 
different procedures are imposed by such institutions (except for national content 
requirements);  or 
 
 (c) by one entity from another entity of Mexico. 
 2.  This Chapter does not apply to the procurement of transportation services that form a part of, 
or are incidental to, a procurement contract.    3.  National security exceptions include procur ements made in support of safeguarding nuclear 
materials or technology.  
  4.  Notwithstanding any other provision in this  Chapter, Mexico may set aside procurement 
contracts from the obligations of this Chapter, subject to the following:  
 (a)  The total value of the contracts set as ide by Pemex and CFE under this paragraph may 
not exceed the Mexican peso equivalent of: 
   (i) US$1 billion in each year up to 31 December 2002;  and    (ii)  US$1.2 billion in each year beginning 1 January 2003;  
 
 (b) no contract may be set aside under this pa ragraph by Pemex or CFE prior to 1 January 
2003;  
  (c) the total value of the contracts set aside  by Pemex and CFE under this paragraph may 
not exceed the Mexican peso equivalent of  US$300 million, in each year beginning 1 
January 2003;  
  (d)  the total value of contracts under any single Federal Supply Classification (FSC) 
class, or other classification system agreed by the Parties, that may be set aside under 
this paragraph in any year shall not exceed 10 per cent of the total value of contracts 
that may be set aside under this paragraph for that year;  and 
  (e)  no entity subject to subparagraph (a) may set  aside contracts in any year of a value of 
more than 20 per cent of the total value of contracts that may be set aside for that year. 
 
 The values indicated in subparagraphs (a) and (c) are for 1994. Accordingly they should be 
updated pursuant to paragraph 5.   5.  Effective 1 January 2000, the dollar valu es mentioned in paragraph 4 shall be adjusted 
annually in line with cumulative inflation sin ce November 1, 1997, based on the implicit price WT/REG206/1 
Page 178  
 
deflator for the U.S. Gross Domestic Product ( GDP) or any successor index published by the Council 
of Economic Advisors in "Economic Indicators". Th e dollar values adjusted for cumulative inflation 
up to January of each year following 1999 shall be e qual to the original dollar values multiplied by the 
ratio of:
 
 
 (a) The implicit GDP price deflator or an y successor index published by the Council of 
Economic Advisors in "Economic Indicators", current as of January of that year;  to  
  (b)  the implicit GDP price deflator or any successor index published by the Council of 
Economic Advisors in "Economic Indicat ors", valid as of November 1, 1997, 
provided the price deflators indicated in subpa ragraphs (a) and (b) have the same base 
year.  
  The resulting adjusted dollar values shall be rounded to the nearest million dollars.  
 
6.  Notwithstanding any other provision of this  Chapter, an entity may impose a local content 
requirement of no more than:   (a) 40 per cent, for labour-intensive turnkey or major integrated projects;  or   (b) 25 per cent, for capital-intensive turnkey or major integrated projects. 
 
 For the purposes of this paragraph, a 'turnkey or major integrated project' means, in general, a construction, supply or installation project undertaken  by a person pursuant to a right granted by an 
entity, with respect to which:  
 (a) The prime contractor is vested with the authority to select the general contractors or 
subcontractors; 
  (b) neither the Government of Mexico nor its entities fund the project;   (c) the person bears the risks associated with non-performance;  and 
 
 (d) the facility will be operated by an entity or through a procurement contract of that 
entity. 
 7.  In the event that Mexico exceeds in any give n year the total value of the contracts it may set 
aside for that year in accordance with paragraph 4 or the reserved procurement under paragraphs 1, 2 
or 4 of Annex 15-02(8), Mexico shall consult with  the other Parties with a view to agreement on 
compensation in the form of additional procurement opportunities during the following year. The consultations shall be without prejudice to th e rights of either Party under Chapter XX (Dispute 
Settlement).   Schedule of Nicaragua  
1.  This Chapter does not a pply to procurements made: 
  (a) With a view to commercial resale by government owned retail stores; 
 
 (b)  pursuant to loans from regional or multilate ral financial institutions to the extent that 
different procedures are imposed by such institutions (except for national content 
requirements);  or 
 
 (c) by one entity from another entity of.  WT/REG206/1 
 Page 179 
 
 
 2. This Chapter does not apply to  the procurement of transportation services that form a part of, 
or are incidental to, a procurement contract.   3.  National security exceptions include procur ements made in support of safeguarding nuclear 
materials or technology. 
  4.  Notwithstanding any other provision in this  Chapter, Nicaragua may set aside procurement 
contracts from the obligations of this Chapter, for an amount equivalent to 5.5 per cent of its total 
annual procurements. 
 
5. Notwithstanding any other provision of this Chapter, an entity may impose a local content requirement of no more than:   (a) 40 per cent, for labour-intensive turnkey or major integrated projects;  or 
 
 (b) 25 per cent, for capital-intensive turnkey or major integrated projects.   For the purposes of this paragraph, a 'turnkey or  major integrated project’ means, in general, a 
construction, supply or installation project undertaken  by a person pursuant to a right granted by an 
entity with respect to which: 
 
 (a) The prime contractor is vested with the authority to select the general contractors or 
subcontractors; 
  (b) neither the Government of Nicaragua nor its entities fund the project; 
 
 (c) the person bears the risks associated with non-performance;  and   (d) the facility will be operated by an entity or through a procurement contract of that 
entity. 
 
6. In the event that Nicaragua exceeds in any given year the total value of the contracts it may 
set aside for that year in accordance with paragra ph 3 or the reserved procurement under paragraphs 1, 
2 or 4 of the Schedule of Nicaragua in Annex 15-02(8 ), Nicaragua shall consult with the other Parties 
with a view to agreement on compensation in the form of additional procurement opportunities during 
the following year. The consultations shall be wit hout prejudice to the rights of either Party under 
Chapter XX (Dispute Settlement).  
 
 
ANNEX 15-19(1) 
 
Publications for Notices of Procurement
 
Schedule of Mexico 
 
 The specialized section the Official Gazette of the Federation (Diario Oficial de la 
Federación).   
 List of Nicaragua  
1.  Two daily newspapers of national circulation  
 WT/REG206/1 
Page 180  
 
2.  Nicaragua shall endeavour to establish a speci alized publication for the purposes of notices of 
procurement, no later than two years following th e entry into force of this Agreement. When 
established, that publication shall substitute for those referred to in paragraph 1.  
  
ANNEX 15-19(2) 
 
Publications for Measures
 
Schedule of Mexico 
 
1.  Official Gazette of the Federati on (Diario Oficial de la Federación). 
 2.  Judicial Weekly of the Federation (Semanario Judicial de la Federación) (for precedential judicial decisions only).  Schedule of Nicaragua 
 
1.  Official Gazette (La Gaceta, Diario Oficial).  2.  Nicaragua shall endeavour to establish a specialized publication for the purposes of the 
information mentioned in Article 15-19 (1). When  established, that publication shall substitute for 
those referred to in paragraph 1.  
  
PART SIX: INVESTMENT 
 
CHAPTER XVI: INVESTMENT 
 
Section A - Investment
 
 
Article 16-01 
 
Definitions  
 
 For the purposes of this Chapter: 
  ICSID means  the International Center for the Settlement of Investment Disputes; 
 
 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;   Inter-American Convention means the Inter-American C onvention on International 
Commercial Arbitration, done at Panama, 30 January 1975; 
 
 New York Convention means the United Nations Conve ntion on the Recognition and 
Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;   claim means the claim made by the disputing investor , based on a presumed violation of the 
provisions of this Chapter; 
  enterprise of a Party means an enterprise of a Party and a br anch located in the territory of a 
Party and carrying out business activities there;   WT/REG206/1 
 Page 181 
 
 
 investment  includes: 
  (a)  An enterprise;   (b)  shares in an enterprise; 
 
 (c) debt securities of an enterprise :   (i)  where the enterprise is an affiliate of the investor;  or  
 (ii)  where the original maturity of th e debt security or loan is at least three 
years, but does not include a debt security  of a state enterprise, regardless of 
original maturity;  
  (d)  a loan to an enterprise:  
 
 (i)  where the enterprise is an affiliate of the investor;  or   (ii)  where the original maturity of the loan is at least three years, but does not 
include a loan to a state enterprise,  regardless of original maturity;  
 
 (e)  an interest in an enterp rise that entitles the owner to share in income or profits of the 
enterprise;  
  (f)  an interest in an enterprise that entitl es the owner to share in the assets of that 
enterprise on dissolution, other than a debt security or a loan excluded from 
subparagraph (c) or (d);  
  (g)  real estate;   (h)  other property, tangible or intangible, acquired in the expectation, or used for the 
purpose, of economic benefit or other business purposes; 
 
 (i)  interests arising from the commitment of capital or other resources in the territory of a 
Party to economic activity in su ch territory, such as under: 
  (i) contracts involving the presence of an investor’s property in the territory of 
the Party, including turnkey or constr uction contracts, or concessions;  or 
  (ii)  contracts where remuneration depends substantially on the production, 
revenues or profits of an enterprise;  and 
  (j)  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;  
  but investment does not mean:   
 (k)  monetary claims that do not involve the kinds of interests set out in the subparagraphs 
that define investment, arising 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/REG206/1 
Page 182  
 
  (ii)  the extension of credit in connec tion with a commercial transaction, such as 
trade financing, other than a loan  covered by subparagraph (d);  
  (l)  any other monetary claim that does not involve the kinds of interests set out in the 
subparagraphs defining investment;  
  investment of an investor of a Party means an investment owned or controlled directly or 
indirectly by an investor of such Party;   
 investor of a Party means 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;    disputing investor means an investor that makes a claim under Section B;  
 
 disputing Party means the Party against which a claim is made under Section B;  
  disputing party means the disputing investor or the disputing Party;  
  disputing parties means the disputing investor and the disputing Party;  
 
 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 international transfers and payments; 
  tribunal means an arbitration tribunal established under Article 16-21; and 
  consolidation tribunal means an arbitration tribunal established under Article 16.27. 
 
Article 16-02 
 
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) the investments of investors of the othe r Party in the territory of the Party;  and 
  (c) with respect to Article 16-05, all investments in the territory of the Party. 
 
2.  This Chapter does not apply to:   (a)  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 16-02 no 
later than one year after the entry into force of this Agreement; 
  (b)  any measure on financial services adopted  or maintained by a Party pursuant to 
Chapter XII (Financial Services), to the exte nt that such measure is covered by that 
Chapter;  or   WT/REG206/1 
 Page 183 
 
 
  (c) measures adopted by a Party to restrict th e participation of investments of investors of 
the other Party in its territory for reas ons of public policy or national security. 
 
Article 16-03 
 
National Treatment
 
1. Each Party shall accord to investors of the othe r Party, and to the investments of the investors 
of the other Party, treatment no less favourable than that it accords, in simila r circumstances, to its 
own investors and the investments of those investors.  
 
2. Each Party shall accord to investors of th e other Party non-discriminatory treatment with 
respect to measures it adopts or maintains relating to losses suffered by investments in its territory 
owing to armed conflict, civil strife, acts of God or force majeure . 
 
Article 16-04  
 
Most-Favoured-Nation Treatment  
1.  Each Party shall accord to investors of the ot her Party, and to the investments of the investors 
of the other Party, treatment no less favourable than that it accords, in simila r circumstances, to the 
investors and investments of the investors of the other Party or a non-Party, except as provided in 
paragraph 2.  
 2.  Where a Party has granted special treatment to  the investors and investments of the investors 
of a non-Party, under agreements establishing fr ee trade zones, customs unions, common markets, 
economic or monetary unions, and similar institutions, and arrangement s to avoid double taxation, the 
Party shall not be required to pr ovide special treatment to the inv estors or the investments of the 
investors of the other Party.  
Article 16-05  
 
Performance Requirements
 
1.  Neither Party may impose or enforce any of  the following requirements or commitments in 
connection with an investment in its territory:    (a) To export a given level or pe rcentage 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 valu e of imports to the volume or value of exports 
or to the amount of foreign exchange in flows associated with such investment;  
  (e)  to restrict sales of goods or services in its territory that such investment produces or 
provides, by relating such sales in any way to the volume or value of its exports or 
foreign exchange earnings;  
 
 (f)  to transfer technology, a production process or other proprietary knowledge to a 
person in its territory, except when the requi rement is imposed or the commitment or WT/REG206/1 
Page 184  
 
undertaking is enforced by a court, administrative tribunal or competition authority to remedy an alleged violation of competition la ws or to act in a manner not inconsistent 
with other provisions of this Agreement;  or  
  (g)  to act as the exclusive supplier of the goods it produces or services it provides to a 
specific region or world market.  
  This paragraph does not apply to any requ irement other than those set out herein. 
 2.  Neither Party may condition the receipt or continued receipt of an advantage, in connection 
with an investment in its territory, on comp liance with any of the following requirements: 
  (a) To purchase, use or accord a preferen ce to goods produced in its territory, or to 
purchase goods from producers in its territory; 
 
 (b) to achieve a given level or  percentage of domestic content; 
  (c)  to relate in any way the volume or valu e of imports to the volume or value of exports 
or to the amount of foreign exchange infl ows associated with such investment;  or 
  (d)  to restrict sales of goods or services in its territory that such investment produces or 
provides, by relating such sales in any way to the volume or value of its exports or 
foreign exchange earnings.  
  This paragraph does not apply to any requ irement other than those set out herein. 
 
 3.  Nothing in this Article shall be construe d to prevent a Party from imposing, in connection 
with an investment in its territory, a requirement to locate production, train or employ workers, or 
carry out research and development, in its territory.  
Article 16-06 
 
Senior Management and Boards of Directors 
 
 A Party may impose restrictions on the number or proportion of foreign nationals that can 
work in, or fulfil senior management functions in an enterprise, in accordance its laws, provided such 
restrictions do not impede or obstruct the ability of the investor to exercise control over its investment. 
 
Article 16-07 
 
Reservations and Exceptions  
1. Articles 16-03 throug h 16-06 do not apply to any non-c onforming measure maintained or 
adopted by a Party, at any level of government. Within one year of the date of entry into force of this 
Agreement, the Parties shall set out such me asures in their Schedules to Annex 16-07. Any non-
conforming measure adopted by a Party following the en try into force of this Agreement, may not be 
less conforming than those existing when the measure is introduced. 
 2.  Articles 16-03, 16-04 and 16-06 do not apply to:  
 (a)  Procurement by a Party or a state enterprise;  or 
  (b)  subsidies or grants provided by a Party or a state enterprise, including government 
supported loans, guarantees and insurance, except as provided in Article 16-03 (2).  WT/REG206/1 
 Page 185 
 
 
3. The provisions of:    (a)  Articles 16-05 (1)(a), (b) and (c), a nd (2)(a) and (b) do not apply to qualification 
requirements for goods or services with respect to export promotion programmes;  
 
 (b) Articles 16-05 (1)(b), (c), (f) and (g), a nd (2)(a) and (b) do not apply to procurement 
by a Party or a state enterprise;  and 
  (c) Articles 16-05 (2)(a) and (b) do not apply to requirements imposed by an importing 
Party relating to the content of goods necess ary to qualify for preferential tariffs or 
preferential quotas. 
 
Article 16-08 
 
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 freel y 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;  
 
 (c)  payments made under a contract entered into by the investor or its investment;  
  (d)  payments in compensation for expr opriation pursuant to Article 16-09;  or 
  (e) proceeds from a dispute settlement procedure pursuant to section B.  
2.  Each Party shall permit transfers to be made  in a freely convertible currency, at the market 
exchange rate prevailing on the date of transfer for spot transactions in the currency to be transferred, 
without prejudice to Article 13-18.    3.  No Party may require its investors to tran sfer 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)  issuing, trading or dealing in securities;   (c)  criminal or administrative offences;  
 (d)  reports of transfers of currency or other monetary instruments; 
  (e)  ensuring the execution of judgeme nts and rulings handed down in dispute 
proceedings;  or 
 WT/REG206/1 
Page 186  
 
 (f)  establishing the instruments or mechanisms  needed to ensure the payment of income 
tax, through measures such as withholding of the corresponding amount from dividends and other items.  
 
Article 16-09 
 
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;   (b)  on a non-discriminatory basis;   
 (c)  in accordance with due process of law;  and 
  (d)  on payment of compensation in accordance with paragraphs 2 through 4.   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 
criteria shall include the tax value of tangible prop erty, and other criteria, as appropriate, to determine 
fair market value.    3.  Compensation shall be paid without delay and be fully realizable. 
 
 4.  The amount paid shall be no less than the e quivalent of what would have been paid in a 
currency that is freely convertible on the internationa l financial market, on the date of expropriation, if 
such currency had been converted at the market ra te of exchange prevaili ng on that date, plus any 
interest that would have accrued at a commercially reasonable rate for that currency chosen by the 
Party, in accordance with international pa rameters, until the date of payment.  
 
Article 16-10 
 
Special Formalities and Information Requirements 
 
1.  Nothing in Article 16-03 sha ll be construed to prevent a Part y 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 that i nvestments be legally constituted under the laws or 
regulations of the Party, provided that such fo rmalities do not materially impair the protections 
afforded by a Party pursuant to this Chapter.   2.  Notwithstanding Articles 16-03 or 16-04, a Party may require an investor of the other Party, 
or its investment in its territory, to provide routin e 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.    WT/REG206/1 
 Page 187 
 
 
Article 16-11 
 
Relation to Other Chapters  
 In the event of any inconsistency between this  Chapter and another Chapter, the other Chapter 
shall prevail to the extent of the inconsistency.  
 
Article 16-12  
 
Denial of Benefits  
 Subject to prior notification and consultation with the other Party, a Party may deny the 
benefits of this Chapter to an in vestor of the other Party that is an enterprise of such Party and to 
investments of such investors, where the Party dete rmines that investors of a non-Party own or control 
the enterprise and the enterprise has no substantia l business activities in the territory of the Party 
under whose law it is constituted or organized.   
 
Article 16-13  
 
Extra-Territorial Application of the Legislation of a Party
 
1.  A Party may not exercise jurisdiction or adopt any measure that results in the extra-territorial 
application of its legislation, or obstruct trade betw een the Parties, or between a Party and a non-Party, 
in relation to the investments of its investors c onstituted and organized under the laws and regulations 
of the other Party.  2.  Should either of the Parties fail to comply w ith paragraph 1, the Party in whose territory the 
investment has been constituted, may, at its discre tion, adopt such measures and take such actions as it 
considers necessary, to render without effect the le gislation or measure in question and any trade 
barriers arising therefrom.   
Article 16-14  
 
Environmental Measures
 
1.  Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or 
enforcing any measure otherwise consistent with this  Chapter that it considers appropriate to ensure 
that investment activity in its territo ry observes environmental legislation. 
 2.  The Parties recognize that it is inappropriat e to encourage investment by relaxing domestic 
health, safety or environmental measures. Accordingl y, a Party should not waive , or offer to waive 
such measures as an encouragement for the establishm ent, acquisition, expansion or retention of an 
investment in its territory. If a Party considers that the other Party has offered such an encouragement, 
it may request consultations with the other Party.  
Article 16-15  
 
Investment Promotion and Exchange of Information
 
1.  With the aim of significantly increasing recipr ocal participation in investment, the Parties 
shall prepare documents to promote investment opportunities and design mechanisms to disseminate 
them; the Parties shall also maintain and upgrade fi nancial mechanisms to make the investments of a 
Party viable in the territory of the other Party. WT/REG206/1 
Page 188  
 
 2.  The Parties shall publish detailed information on:   (a)  Investment opportunities in their territo ry, which could be developed by investors of 
the other Party; 
 
 (b)  opportunities for strategic partnerships between investors of the Parties, through 
research and compilation of interests and partnership opportunities;  and  
  (c)  investment opportunities in specific economic sectors that are of interest to the Parties 
and their investors, following an explicit request made by either of the Parties. 
 3.  The Parties shall keep each other informed and up-to-date regarding:   (a)  The investment opportunities referred to  in paragraph 2, including the dissemination 
of available financial instruments that help  to increase investment in the territory of 
the Parties; 
  (b)  laws, regulations or provisions that dir ectly or indirectly affect foreign investment, 
including exchange rate and tax regimes;  and 
 
 (c) the behaviour of foreign investment in their respective territories. 
 
 Article 16-16 
 
Double Taxation
 
 In order to promote investments within th eir respective territories by eliminating fiscal 
barriers and overseeing tax compliance via the excha nge of tax data, the Parties shall enter into 
negotiations aimed at signing agreements to prevent double taxation, pursuant to a calendar 
established between the competent authorities of the Parties.  
Section B - Settlement of Disputes Between a Party and an Investor of the Other Party 
 
 
Article 16-17  
 
Purpose  
 
 This Section sets out a mechanism for settling le gal disputes between a Party and an investor 
of the other Party arising from the breach of an obligation under Section A of this Chapter. The 
mechanism applies to events that  occurred after this Agreement h as entered into force, and assures 
both equal treatment among investors of the Parties,  in accordance with the principle of reciprocity, 
and proper observance of the safeguards of public he aring and defence as part of a due process of law 
before an impartial tribunal. 
 
Article 16-18  
 
Claim by an Investor of a Party on Behalf of an Enterprise  
1.  Pursuant to this section, an investor of a Party, on its own account or on behalf of an 
enterprise of the other Party that is a juridical person owned or directly or indirectly controlled by the 
investor, may submit to arbitration under this Secti on a claim on the grounds that the other Party, or 
an enterprise controlled directly or indirectly by that Party, has breached an obligation under this  WT/REG206/1 
 Page 189 
 
 
Chapter, whenever the enterprise has suffered losses or injury by reason of or arising from that 
violation.  2.  An investor may not make a claim under this Section, if more than three years have elapsed 
from the date on which the investor first acquired,  or should have first ac quired, knowledge of the 
alleged breach and knowledge that the i nvestor has incurred loss or damage.  
  3.  Where an investor makes a claim on behalf of  an enterprise that is a juridical person under its 
ownership or under its direct or indirect control,  and a non-controlling investor in the enterprise 
makes a claim on its own account arising out of the sa me events, or two or more of the claims are 
submitted to arbitration with regard to the same measure adopted by a Party, the claims should be 
heard together by a consolidation tribunal, unless the consolidation tribunal finds that the interests of a 
disputing Party would be prejudiced thereby.   4.  An investment may not submit a claim to arbitration under this Section. 
 
Article 16-19 
 
Settlement of a Claim through Consultation and Negotiation
 
 The disputing parties shall first attempt to settle a claim through consultation or negotiation. 
 
Article 16-20  
 
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. Such notice shall specify: 
 
 (a)  The name and address of the disputing investor and, where a claim is made on behalf 
of an enterprise, the name and address of that enterprise; 
  (b)  the provisions of this Chapter that are alleged to have been breached and any other 
relevant provisions; 
 
 (c)  the factual basis for the claim;  and   (d)  the relief sought and the approximate amount of damages claimed.  
Article 16-21 
 
Submission of a Claim to Arbitration
 
1.  Provided that six months have elapsed since the events giving rise to the claim, a disputing 
investor may submit the claim to arbitration under:  
 (a)  The ICSID Convention, provided that both the disputing Party and the Party of the 
investor are parties to that Convention; 
  (b)  the Additional Facility Rules of ICSID, provided that either the disputing Party or the 
Party of the investor, but not both, is a party to the ICSID Convention;  or 
 
 (c) the UNCITRAL Arbitration Rules.  WT/REG206/1 
Page 190  
 
2. When an enterprise of a Party that is a ju ridical person owned or controlled, directly or 
indirectly, by an investor of the other Party, alleg es in proceedings before a judicial or administrative 
tribunal that the other Party has breached an obliga tion under section A, the investor or investors of 
that enterprise may not present the claim in  arbitration proceedings under section B.  
 
3. Except as provided by Article 16-27, and provided that both the disputing Party and the 
disputing investor’s Party are States Parties of th e ICSID Convention, any dispute between them shall 
be subject to paragraph 1 (a).   4. The arbitration rules chosen under this Chapter shall be applicable, except as modified by this 
Section. 
 
Article 16-22 
 
Conditions Precedent to Submission of a Claim to Arbitration 
 
1.  A disputing investor, on its own account, and an investor acting on behalf of an enterprise, 
may submit a claim to arbitrati on under this section only if: 
  (a) When acting on its own account, the invest or consents to arbitration in accordance 
with the terms and procedures set out in this section; 
 
 (b)  when the investor is acting on behalf of an enterprise, both the investor and the 
enterprise agreed to submit to arbitration under the term s and procedures established 
in this section;  and 
  (c) both the investor and an enterprise of th e other Party waive their right to initiate or 
continue before any administrative tribunal or  court of either Party, any proceedings 
with respect to the measure that is allege d to be a breach of the provisions of this 
Chapter, unless administrative remedies be fore the executing authorities of the 
measure that is alleged to be a breach are exhausted, as provided for under the 
disputing Party’s law.  
 
2.  The consent and waiver required by this Article  shall be in writing, shall be delivered to the 
disputing Party and shall be included in the submission of the claim to arbitration.   
Article 16-23  
 
Consent to Arbitration 
 
1.  Each Party consents to the submission of  a claim to arbitratio n in accordance with the 
procedures and requirements set out in this Agreement.   2. The submission by a disputing investor of a cl aim to arbitration shall satisfy the requirement 
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. 
   WT/REG206/1 
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Article 16-24  
 
Number of Arbitrators and Method of Appointment  
 Except as provided by Article 16-27, and unless the disputing parties agree otherwise, the 
arbitral tribunal shall comprise three arbitrators, one arbitrator appointed by each of the disputing 
parties and a third, who shall be the presiding arb itrator, appointed by agreement of the disputing 
parties, but not a national of either Party.   
Article 16-25 
 
Constitution of a Tribunal When a Party Fails to Appo int an Arbitrator or the Disputing Parties Are 
Unable to Agree on a Presiding Arbitrator  
1.  The Secretary-General shall serve as appoi nting authority for an arbitration under this 
Section.  
2.  If a tribunal, other than a tribunal establis hed under Article 16-27, h as not been constituted 
within 90 days from the date that a claim is submi tted to arbitration, the Secretary-General, on the 
request of any of the disputing parties, shall appoint the arbitrator or arbitrators not yet appointed, at 
his discretion, except that the presiding arbitrator sh all be appointed in accordance with paragraph 3.  
 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 shall not be a national of 
the disputing Party or a national of the Party of the disputing investor. In the event that no such 
presiding arbitrator is available to serve, the Secr etary-General shall appoint, from the ICSID Panel of 
Arbitrators, a presiding arbitrator who neither a na tional of the disputing Party nor a national of the 
Party of the disputing investor.  
 
 4.  On the date of entry into force of this Agreement, the Parties shall establish, and thereafter 
maintain, a roster of five presiding arbitrators me eting the qualifications of  the Convention and rules 
mentioned in Article 16-21 and experienced in inte rnational law and investment matters. The roster 
members shall be appointed by consensu s and without regard to nationality.  
 
Article 16-26 
 
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 prejudi ce to an objection to an arbitrator based on 
Article 16-25 (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 Convention or th e ICSID Additional Facility Rules;  and 
 
(b) a disputing investor, either on its own acc ount or on behalf of an enterprise, may 
submit a claim to arbitration, or continue a claim, under the ICSID Convention or the 
ICSID Additional Facility Rules, only on condition that the disputing investor, and where appropriate the enterprise that it re presents, agree in writing to the appointment 
of each individual member of the tribunal. 
 WT/REG206/1 
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Article 16-27 
 
Consolidation 
 
1. A tribunal established pursuant this Ar ticle shall be established under the UNCITRAL 
Arbitration Rules and shall conduct its proceedi ngs in accordance with t hose Rules, except as 
modified by this Section.  
 2. Where a consolidation tribunal is satisfied that the claims submitted to arbitration under 
Article 16-22 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, assume 
jurisdiction over, and hear and determine: 
  (a) All or part of the claims together;  or   (b)  one or more of the claims, the determ ination 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 and address of the disputin g Parties against which the order is sought; 
 
 (b)  the nature of the order sought;  and   (c)  the grounds on which the order is sought.  
4.  Within 60 days of receipt of the request, the Secretary-General shall establish a tribunal 
comprising three arbitrators. The Secretary-Genera l shall appoint the presiding arbitrator from the 
roster referred to in Article 16-25 (4 ), who shall not be a national of the disputing Party or the national 
of the Party of the disputing investor. In the even t that no such presiding arbitrator is available to 
serve, the Secretary-General shall appoint, from the IC SID Panel of Arbitrators, a presiding arbitrator, 
who shall not be a national of the disputing Party or a national of th e Party of the disputing investor. 
The Secretary-General shall appoint the two other members from the roster referred to in Article 16-
25 (4), and to the extent not available from that rost er, from the ICSID Panel of Arbitrators, and to the 
extent not available from that Panel, at the discreti on of the Secretary-General. One member shall be a 
national of the disputing Party and the other member  shall be a national of a Party of the disputing 
investors.  
 
5. Where a consolidation tribunal has been establis hed, the disputing investor that has submitted 
a claim to arbitration and that has not been named in a request made under paragraph 3 may make a 
written request to the consolidation tribunal that it be included in an order made under paragraph 2, 
and shall specify in the request:   
 (a)  The name and address of the disputing i nvestor, and, where appropriate, the name or 
trade name, and address of the enterprise. 
  (b)  the nature of the consolidation order sought;  and  
 (c)  the grounds on which the order is sought.  
 6.  The consolidation tribunal shall provide, at th e interested investor’s expense, a copy of the 
consolidation request to all disputing investor s against which the accumulation agreement is 
requested.   WT/REG206/1 
 Page 193 
 
 
 7.  A tribunal established under Article 16-21 shall not have jurisdiction to decide a claim, or a 
part of a claim, over which a consolidation tribunal has assumed jurisdiction.    8.  On application of a disputing Party, a cons olidation tribunal may order that the proceedings of 
a tribunal established under Article 16-21 be stayed , pending its decision under paragraph 2, unless 
the latter tribunal has already adjourned its proceedings.  
 
Article 16-28 
 
Notice to the Secretariat
 
1.  A disputing Party shall deliver to the Secretar iat, within 15 days of receipt from the disputing 
Party:   (a)  A request for arbitration made under Article 36 (1) of the ICSID Convention;  
 
 (b)  a notice of arbitration made under Artic le 2 of Schedule C of the ICSID Additional 
Facility Rules;  or 
  (c)  a notice of arbitration given under the UNCITRAL Arbitration Rules.   
2.  A disputing Party shall deliver to the Secret ariat a copy of a request made under Article 16-27 
(3):    (a)  Within 15 days of receipt of the request , in the case of a request made by a disputing 
investor;  or 
 
 (b)  within 15 days of making the request, in  the case of a request made by the disputing 
Party.  
 3.  A disputing Party shall deliver to the Secret ariat a copy of a request made under Article 16-27 
(6) within 15 days of receipt of the request.  
 
 4.  The Secretariat shall maintain a public regist er of the documents refe rred to in this Article. 
 
Article 16-29 
 
Notice to the Other Party
 
 The disputing Party shall deliver to the other Party:  
  (a)  Written notice of a claim that has been s ubmitted to arbitration no later than 30 days 
after the date on which the claim is submitted;  and 
 
 (b) copies of all pleadings filed in the arbitration.  
 
Article 16-30 
 
Participation by a Party 
 
 On written notice to the disputing parties, a Party may make submissions to any tribunal 
established under this Section on a question of interpretation of this Agreement.  
 WT/REG206/1 
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Article 16-31 
 
Documents 
 
 
1.  A Party shall be entitled, at its own e xpense, to receive from the disputing Party: 
 
 (a)  The evidence that has been tendered to  any tribunal established under this Section; 
and 
  (b)  the written argument of the disputing parties.  
 
2.  A Party receiving information pursuant to para graph 1 shall treat the information as if it were 
a disputing Party.  
Article 16-32 
 
Place of Arbitration 
 
 The arbitration process shall be held in th e territory of the disputing Party, unless the 
disputing parties agree otherwise, in which case any tribunal established under this section shall hold 
the arbitration procedure in the territory of a Party that is a State 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 16-33 
 
Governing Law 
 
1.  A tribunal established under this Section sha ll decide the issues in dispute in accordance with 
this Agreement and applicable rules of international law.  
 
2.  An interpretation by the Commission of a pr ovision of this Agreement shall be binding on a 
tribunal established under this Section.   
Article 16-34 
 
Interpretation of Annexes 
 
1.  Where a disputing Party asserts as a defence that  the measure alleged to be a breach is within 
the scope of a reservation or exception set out in A nnex 16-07, on request of the disputing Party, any 
tribunal established under this section shall request th e interpretation of the Commission on the issue. 
The Commission shall submit its interpretation to the tribunal in writing, within 60 days of delivery of 
the request.  
 2.  The Commission interpretation submitted under paragraph 1 shall be binding on any tribunal 
established under this section. If the Commission fails to submit an interpretation within 60 days, the 
tribunal shall decide the issue.  
  WT/REG206/1 
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Article 16-35 
 
Interim Measures of Protection  
A tribunal established under this Section may ask the na tional courts, or order the disputing parties, to 
impose interim measures of protection to preserve the ri ghts of a disputing party, or to ensure that the 
tribunal’s jurisdiction is made fully effective. A tribunal may not order attachment or enjoin the 
application of the measure alle ged to constitute a breach referred to in Article 16-18. 
 
Article 16-36 
 
Final Award  
1. Where a tribunal established under this secti on makes a final award against a Party, the 
tribunal may only award:   (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 applicab le interest in lieu of restitution.  
 2. Where the claim is made by an investor on behalf of an enterprise:  
 (a) An award of restitution of property sha ll provide that restitution be made to the 
enterprise;  and 
  (b)  an award of monetary damages and any ap plicable interest shall provide that the sum 
be paid to the enterprise. 
 
 3.  The award shall provide that it is made without prejudice to any right that any person may 
have in the relief under applicable domestic law.  
 
Article 16-37 
 
Finality and Enforcement of an Award 
 
1. An award made by a tribunal shall have no bi nding force except between the disputing parties 
and in respect of the particular case.   2.  Subject to paragraph 3 and the applicable re view procedure for an interim award, a disputing 
party shall abide by and comply with an award without delay.  
 3.  A disputing party may seek enforc ement of a final, provided that:  
  (a) In the case of a final award made under the ICSID Convention:  
 (i)  120 days have elapsed from th e date the award was rendered and no 
disputing party has requested revision or annulment of the award;  or 
  (ii)  revision or annulment proceed ings have been completed;  and 
 
 (b)  in the case of a final award under the ICSID Additional Facility Rules or the 
UNCITRAL Arbitration Rules: 
 WT/REG206/1 
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 (i)  three months have elapsed from the date the award was rendered and no 
disputing party has commenced a proceeding to revise, set aside or annul the award;  or 
  (ii)  a court of the disputing Party has dismissed or allowed an application to 
revise, set aside or annul the award, submitted by one of the disputing 
parties to the national courts under its legislation, and no further appeal is 
possible.  
 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, shall establish a panel 
under Chapter XX (Dispute Settlement). The reques ting Party may seek in such proceedings:  
 
 (a)  A determination that the failure to abide by or comply with the final award is 
inconsistent with the obligati ons of this Agreement;  and 
  (b)  a recommendation that the Party abid e by or comply with the final award.  
 6.  A disputing investor may seek enforcemen t of an arbitration award under the ICSID 
Convention, the New York Convention or the In ter-American Convention, regardless of whether 
proceedings have been ta ken 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 purpo ses of Article I of the New York Convention and 
Article I of the Inter-American Convention.  
 
Article 16-38 
 
General Provisions
 
Time when a claim is submitted to arbitration  
 
1.  A claim is submitted to arbitration under this Section when:   (a)  The request for arbitration under Article 36 (1) 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 arbitrati on given under the UNCITRAL Arb itration Rules is received by 
the disputing Party.  
 
Service of documents  
 
2.  Delivery of notice and other documents on a Party shall be made to the place named by each 
Party in Annex 16-38.  
 
Receipts under insurance or guarantee contracts  
 
3.  In an arbitration under this Section, a Party shall not assert, as a defence, counterclaim, right 
of set-off or otherwise, that the disputing inv estor has received or will receive, pursuant to an  WT/REG206/1 
 Page 197 
 
 
insurance or guarantee contract, indemnification or other compensation for all or part of its alleged 
damages.   
Publication of an award  
 
 4.  Final awards shall be published only if there is a written agreement between the Parties to do 
so.  
Article 16-39 
 
Exclusions 
 
 
 The dispute settlement provisions set out in this Section and those of Chapter XX (Dispute 
Settlement) shall not apply in the ci rcumstances set out in Annex 16-39. 
 
 
ANNEX 16-38 
 
Service of Documents  
  Delivery of notice and other documents shall be made: 
 
 (a)  In the case of Mexico, at the Directorate General of Foreign Investment (Dirección 
General de Inversión Extranjera) of the Mini stry of Trade and Industrial Development 
(Secretaría de Comercio y Fomento Industr ial), or any other place designated by the 
Secretariat by giving notice to the other Party;  and 
 
 (b)  in the case of Nicaragua, at its Section of the Secretariat.   
ANNEX 16-39  
Exclusions of Mexico
 
 
 The dispute settlement mechanisms set out in section B of this Chapter, and those contained 
in Chapter XX (Dispute Settlement), shall not a pply to resolutions adopted by a Party under 
Article 16-02 (2), or to a resolution prohibiting or restricting the acquisition of an investment in its territory that is owned or controlled by nationals of that Party, by an investor of the other Party, under 
the legislation of each Party.  
  WT/REG206/1 
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PART SEVEN: INTELLECTUAL PROPERTY 
  
CHAPTER XVII: INTELLECTUAL PROPERTY 
 
Section A - General Provisions and Basic Principles
 
 
Article 17-01 
 
Definitions  
 
 For the purposes of this Chapter: 
  Brussels Convention means  the Convention Relating to the Distribution of Programme-
Carrying Signals Transmitted by Satellite, 1974;  
 Rome Convention means the International Convention for the Protection of Performers, 
Producers of Phonograms and Broa dcasting Organizations, 1961; 
  Berne Convention means the Berne Convention for the Protection of Literary and Artistic 
Works, 1971;  
 Geneva Convention means the Convention for the Protection of Producers of Phonograms 
against Unauthorized Duplication of their Phonograms, 1971;   Paris Convention means  the Paris Convention for the Protection of Industrial Property, 1967;  
 
 intellectual property right means all categories of intellectual property that are subject 
protection under this Chapter, under the terms indicated herein;   nationals of the other Party means,  in respect of the relevant intellectual property right, 
persons who would meet the criteria for eligibility for protection provided for in the Berne convention, the Geneva Convention, the Rome Convention, the Brussels Convention and, where 
appropriate, the Paris Convention; 
  public includes, with, respect to rights of communicati on and performance of works provided 
for under Articles 11, 11bis(1) and 14(1)(ii) of th e Berne Convention, with respect to dramatic, 
dramatico-musical, musical and cinematographic wo rks, at least, any aggregation of individuals 
intended to be the object of, and capable of per ceiving, communications or performances of works, 
regardless of whether they can do so at the same or different times or in the same or different places, 
provided that such an aggregation is larger than a family and its immediate circle of acquaintances or 
is not a group comprising a limited number of individuals having similarly close ties that has not been formed for the principal purpose of receiving such  performances and communications of works;  and  
 
 encrypted programme-carrying satellite signal means  a signal that is transmitted in a form 
whereby the aural or visual characteristics, or bot h, are modified or altered for the purpose of 
preventing reception by persons without the authori zed equipment that is designed to eliminate the 
effects of such modification or alteration,  of a programme carried in that signal;  
 
  WT/REG206/1 
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Article 17-02 
 
Protection of Intellectual Property Rights  
1. Each Party shall provide in its territory to  the nationals of the other Party adequate and 
effective protection and enforcement of intellectua l property rights, while ensuring that measures to 
enforce intellectual property rights do not them selves become barriers to legitimate trade.  
 2.  Each Party may implement in its domestic law more extensive protection of intellectual 
property rights than is required under this Agreement,  provided that such protection is not inconsistent 
with this Agreement.  
 
 3.  The Parties shall be free to establish the most suitable method for applying the provisions of this Chapter in the framework of their own legal system and practice.  
Article 17-03 
 
Provisions on Intellectual Property Rights
 
1. To provide adequate and eff ective protection and enforcement of intellectual property rights, 
each Party shall, at a minimum, give effect to th is Chapter and to the substantive provisions of:  
  (a)  The Berne Convention for the Protecti on of Literary and Artistic Works, 1971  
  (Berne Convention);  
  (b)  the Geneva Convention for the Protection of Producers of Phonograms Against 
Unauthorized Duplication of their Phonograms, 1971 (Geneva Convention);  
 
 (c) the International Convention for th e Protection of Performers, Producers of 
Phonograms and Broadcasting Organi zations, 1961 (Rome Convention); 
  (d) the Paris Convention for the Protection of Industrial Property 1967 (Paris 
Convention);  and 
 
 (e) the Convention Relating to the Dist ribution of Programme-Carrying Signals 
Transmitted by Satellite, 19 74 (Brussels Convention). 
 2. In relation to paragraphs 1(a) , (b) and (c), if a Party is not a State Party to the abovementioned 
conventions and agreements, at the date of entry into force of this Agreement, the substantive 
provisions of those agreements shall be  applied as established in Annex 17-03. 
 
Article 17-04 
 
National Treatment 
 
1. Each Party shall accord to nationals of the ot her Party treatment no less favourable than that it 
accords to its own nationals with regard to the pr otection and enforcement of  all intellectual property 
rights considered in this Chapter, including patent s, utility models and indus trial designs, and, where 
appropriate, plant varieties, subject to the excepti ons provided for in the Berne Convention, the Rome 
Convention, and the Paris Convention.  
2.  Neither Party may, as a condition of accordi ng national treatment under this Article, require 
right holders of the other Party to comply with an y formalities or conditions in  order to acquire rights 
in respect of copyright and related rights.  WT/REG206/1 
Page 200  
 
 
Article 17-05 
 
Exceptions
 
 
 Each Party may have recourse to the exceptions  set out in Article 17-04 in relation to its 
judicial and administrative procedures for the protec tion or enforcement of intellectual property rights, 
including the requirement to designate an address or appoint an agent in the Party’s territory, provided 
that such exception:   
 (a)  Is necessary to secure compliance with measures that are not inconsistent with this 
Chapter; and 
  (b) is not applied in a manner that would constitute a disguised restriction on trade.   
Article 17-06 
 
Most-Favoured-Nation Treatment
 
 With regard to the protection of the intellectual property rights referred to in this Chapter, any 
advantage, favour, privilege or imm unity granted by a Party to the na tionals of any non-Party country 
shall be accorded immediately and unconditionally to the nationals of  the other Party. Exempted from 
this obligation are any advantage, favour, pr ivilege or immunity accorded by a Party: 
  (a)  Deriving from international agreements on judicial assistance or law enforcement of a 
general nature and not particularly confined  to the protection of intellectual property; 
 
 (b)  granted in accordance with the provisions of the Berne Convention or the Rome 
Convention authorizing that the treatment  accorded be a function not of national 
treatment but of the treatment accorded in another country;  and 
  (c)  in respect of the rights of performers, producers of sound recordings and broadcasting 
organizations not provided for under this Chapter. 
 
Article 17-07 
 
Control of Abusive or Anticompetitive Practices or Conditions
 
 The Parties may apply appropriate measures, provi ded they are compatible with this Chapter, 
to prevent the abuse of intellectual property rights  by their holders or practices that unjustifiably 
restrict trade or impede international technology transfer.  
Article 17-08 
 
Cooperation to Eliminate Trade in Infringing Goods
 
 
 The Parties shall cooperate to eliminate trad e in goods that infringe intellectual property 
rights. To that end, the Party shall establish and publicize information centr es, for the purpose of 
exchanging information on trade in such goods.   WT/REG206/1 
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Section B - Trademarks  
 
Article 17-09 
 
Protection  
1. A trademark consists of any sign or combina tion of signs, capable of distinguishing the goods 
or services of one person from those of another, becau se it is considered sufficiently distinctive, or 
suitable for identifying the goods or services in questi on, compared to others of the same type or 
category. Trademarks shall include service marks a nd collective marks, and may include certification 
marks. A Party may require, as a condition for regist ration, that a sign be visually perceptible, or 
susceptible to graphic representation. 
 2.  Notwithstanding paragraph 1, each Party may, in accordance with its legislation, deny the 
registration of trademarks which:  
 (a)  Include, among other things, national sy mbols or symbols of other public national or 
international bodies, signs, words or expressions  that are contrary to morality, public 
order or decorum; 
  (b)  could be misleading in terms of origin, nature and quality;  or 
 
 (c)  suggest a connection with other trad emarks, which risks causing confusion or 
association.  
 3. A Party may make registrability depend on use.  However, actual use of a trademark shall not 
be a condition for filing an application for registra tion. No Party may refuse an application solely on 
the ground that intended use has not  taken place before the expiry of a period of three years from the 
date of application for registration.   4. The nature of the goods or services to which a trademark is to be applied shall in no case form 
an obstacle to the registration of the trademark.   
5. The Parties shall publish each trademark before its registration or soon afterwards, in 
accordance with its legislation, giving interested  persons a reasonable opportunity to oppose its 
registration or request cancellation thereof. 
 
Article 17-10 
 
Rights Conferred
 
 The owner of a registered trademark shall have the right to prevent all third Parties not having 
the owner’s consent from using in the course of trad e identical or similar signs for goods or services 
which are identical or similar to those in respect of  which the trademark is registered, where such use 
would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or 
services, the likelihood of confusion shall be presu med. The rights described above shall not prejudice 
any existing prior rights, nor shall they affect the possibility of the Parties making rights available on 
the basis of use.  WT/REG206/1 
Page 202  
 
Article 17-11 
 
Well-Known Trademarks
 
1. Each Party shall, on its own initiative if its dom estic law so permits, or at the request of an 
interested person, deny or invalidate registration and prohibit the use of a trademark that represents 
the reproduction, imitation or translation of a well-known trademark that is used for identical or 
similar goods and is thus likely to cause confusion.  A trademark shall be considered well known in a 
Party when a given sector of the public or of comme rcial circles in the Party knows the trademark as a 
consequence of commercial activities undertaken within  or outside that Party by a person using the 
trademark in relation to its goods or services. To demonstrate that a trademark is well known, all 
evidence admitted by the Party in which the intentio n is to show that it is well known may be used.  
 
2. The Parties shall not register as a trademark si gns that are identical or similar to a well-known 
trademark, for application to any good or service, wh en the use of a trademark by the person applying 
for its registration could create confusion or risk  of association with the person that uses that 
trademark in relation to its goods or services; cons titutes unfair exploitation of the prestige of the 
trademark;  and suggests a connection therewith, and could damage the interests of that person. This 
provision shall not apply when the applicant fo r the trademark is the holder of the well-known 
trademark in a Party.   3.  A person who brings an action to cancel  the registration of a trademark granted in 
contravention of paragraph 2, sha ll be required to provide evidence of having requested in a Party the 
registration of the well-known trademark, ownership of which is being claimed. 
 
Article 17-12 
 
Exceptions
 
  The Parties may provide limited exceptions to the rights conferred by a trademark, such as 
fair use of descriptive terms, provided that such ex ceptions take account of the legitimate interests of 
the trademark owner and of third parties.  
Article 17-13 
 
Duration of Protection
 
 Initial registration of a trademark shall have th e duration of ten years counted from the date on 
which the application was filed or the date on which it was granted, and may be renewed indefinitely 
for successive 10-year periods, provided the conditions for renewal are satisfied. 
 
Article 17-14 
 
Use of the Trademark  
1. Each Party shall require the use of a trademar k to maintain its registration. A trademark shall 
be considered to be in use when the goods or ser vices that it distinguishes have been placed on the 
market or are available on the market with that trademark, in normal quantity and form, considering 
the nature of the goods and services in question a nd the modalities in which they are traded on the 
market.  
2. Registration may be cancelled or declared expired on the grounds of non-use only after an 
uninterrupted period of no more than five years of non-use has elapsed, unless valid reasons based on the existence of obstacles to such use are shown by  the trademark owner. Each Party shall recognize  WT/REG206/1 
 Page 203 
 
 
as valid reasons for non-use, circumstances arising independently of the will of the trademark owner that constitute an obstacle to the use of the trad emark, such as import restrictions on, or other 
government requirements for, goods or services identified by the trademark.  3. When subject to the control of its owner,  use of a trademark by another person shall be 
recognized as use of the trademark for th e purpose of maintaining the registration. 
 
 
Article 17-15 
 
Other Requirements  
 The use of a trademark in the course of trade shall not be encumbered by special 
requirements, such as use that diminishes the functi on of the trademark as an indication of origin, use 
with another trademark, or use in a manner detrim ental to its capability to distinguish the goods or 
services of one person from those of other persons.  
Article 17-16 
 
Licensing and Assignment
 
 Each Party may determine conditions on the licensing and assignment of trademarks. 
Compulsory licensing of trademarks shall not be pe rmitted, and the owner of a registered trademark 
shall have the right to assign the trademark with or without the transfer of the enterprise to which the 
trademark belongs. Nonetheless, each Party may condition the transfer of a trademark when this 
forms part of the commercial name of the transferor, in which case it may only be transferred with the enterprise or establishment th at the name identifies. 
 
Section C - Geographical Indications and Appellations of Origin 
 
 
Article 17-17 
 
Protection of Geographical Indica tions and Appellations of Origin  
 For the purposes of this Chapter, appellation of origin means the geographic name of the 
country, region or locality that designates a good as orig inating in the territory of a country, or in a 
region or locality of such territory, the quality or characteristics of which arise exclusively from the 
geographic environment in question, including natural and human factors.  2. For the same purposes, geographic indication or origin means the geographic name of a 
country, region or locality that is used in a good’s presentation to indicate its place of origin, 
provenance, preparation, collection or extraction. 
 3. Appellations of origin that are protected in a Party shall not be considered common or generic 
in distinguishing a good while they are protected in their country of origin.  4. The Parties, on their own motion if their legislation so permits, or at the request of an 
interested Party, shall deny or invalidate the registra tion of a trademark that contains or consists of a 
geographic indication or appellation of origin, with respect to goods that do not originate in the 
territory so indicated, if the use of that indication in the trademark for those goods, in that country, is 
such as to mislead the public regarding their true place of origin.  
 WT/REG206/1 
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Section D - Protection of Undisclosed Information
 
 
Article 17-18 
 
Protection of Undisclosed Information  
1. The Parties shall grant protection for i ndustrial or trade secrets, when these contain 
information of industrial or commercial use, wh ich, while confidential, confer a competitive 
advantage to their holder in relation to thir d parties in undertaking economic activities.  
 2. Each Party shall provide the legal means for the holder of an industrial or trade secret to 
prevent such secret from being disclosed to, acquired by , or used by others without the consent of the 
person lawfully in control of the information, in  a manner contrary to ho nest commercial practices, 
such as breach of contract, abuse of trust, instig ation to violation and the acquisition of undisclosed 
information by persons that knew, or ought to have known, that its acquisition entailed such practices, 
insofar as:
 
  (a) The information is secret in the sense th at it is not, as a body or in the precise 
configuration and assembly of its compone nts, generally known among or readily 
accessible to persons that normally deal w ith the kind of information in question; 
  (b)  the information has actual or potential commercial value because it is secret;  and  
 
 (c) the person lawfully in control of the information has taken reasonable steps under the 
circumstances to keep it secret. 
 3. A Party may require that, to qualify for prot ection, a trade secret must be evidenced in 
documents, electronic or magnetic means, optical discs, microfilms, films or other similar 
instruments.   4. No Party may limit the duration of protection for industrial or trade secrets, so long as the 
conditions described in paragraphs  2 (a), (b) and (c) persist. 
 
5. No Party may discourage or impede the volunt ary licensing of industrial or trade secrets by 
imposing excessive or discriminatory conditions on such  licenses or conditions that dilute the value of 
the industrial or trade secrets in question.   6. If a Party requires, as a condition for approving the marketing of pharmaceutical or 
agrochemical products that use new chemical entities, the submission of undisclosed test or other data 
necessary to determine whether the use of such produc ts is safe and effective, the Party shall protect 
against disclosure of the data of persons making such  submissions, where the origination of such data 
involves considerable effort, except where the discl osure is necessary to protect the public or unless 
steps are taken to ensure that the data is  protected against unfair commercial use.  
 
 
Section E - Copyright
 
 
Article 17-19 
 
Copyright  
1.  Each Party shall protect the works covered by Article 2 of the Berne Convention, including 
any other works that embody original expression within  the meaning of that Convention; in particular,  WT/REG206/1 
 Page 205 
 
 
compilations of data or other material, which by  reason of the selection or arrangement of their 
contents constitute intellectual creations.  2. The protection a Party provides to compilations of  data shall not extend to the data or material 
itself, or prejudice any copyright subsisting in that data or material.  
 
 3.  Each Party shall provide to authors and thei r successors in interest those rights enumerated in 
the Berne Convention in respect of works covered by paragraphs 1 and 2, including the right to 
authorize or prohibit:   
 (a)  Graphic editing; 
  (b)  translation into any language or dialect;   (c)  adaptation and inclusion in sound reco rding, videograms, cinematographic films and 
other audiovisual works; 
  (d)  communication to the public;   (e)  reproduction through any medium or in any form;  
 (f)  the first public distribution of the original  and each copy of the work by sale, rental or 
otherwise; 
  (g)  the importation into the Party’s territory of copies of the work made without the right 
holder’s authorization;  and 
 
 (h) any form of use, process or system that is known or becomes known.   4.  At least with respect to computer program s, the Parties shall grant the authors and their 
successors the right to authorize or prohibit commercial rental to the public of the originals or copies 
of their copyrighted works. 
 
 5.  In the case of computer programs, authoriza tion by the author or successor thereof shall not 
be necessary when the copy of the computer progr am does not in itself constitute the essential purpose 
of the rental.  
6.  Each Party shall provide that for copyright and related rights:  
  (a)  Any person acquiring or holding economic rights may freely and separately transfer 
such rights by contract, for the purpose of their exploitation and enjoyment by the transferee;  and 
 
 (b)  any person acquiring or holding such economic rights by virtue of a contract, 
including contracts of employment underlying the creation of works and sound recordings, shall be able to exercise those rights in its own name and enjoy fully the 
benefits derived from those rights.  
 
7.  Each Party shall confine limitations or excepti ons to the rights provided for in this Article to 
certain special cases that do not conflict with  a normal exploitation of the work and do not 
unreasonably prejudice the legitimate interests of the right holder.   8.  Copyright lasts permanently throughout the author’s life. After the author’s death, persons 
that have legitimately acquired the corresponding righ ts shall enjoy them for at least 50 years. When WT/REG206/1 
Page 206  
 
the term of protection of a work is  calculated on a basis of other than the life of a physical person, that 
term shall be:   (a) Not less than 50 years from the end of the calendar year of publication or authorized 
dissemination of the work;  or 
 
 (b)  failing such publication or authorized dissemination, 50 years from the end of the year 
in which the work was completed.  
 
Section F - Related Rights
 
 
Article 17-20 
 
Performers  
1. Each Party shall grant to performers the right to authorize or prohibit: 
 
 (a)  The fixation, of their unfixed perfo rmances, and reproduction of such fixation; 
  (b) communication to the public, broadc asting and rebroadcasting through wireless 
media;  and 
 
 (c) any other form of use of their performances. 
 2.  Paragraph 1 shall not be applicable when a performer has consented to the performance being 
included in a visual or audiovisual fixation.  
Article 17-21 
 
Producers of Sound Recordings
 
1.  Each Party shall provide to the producer of a sound recording the right to authorize or 
prohibit:   
 (a)  The direct or indirect reproduction of the sound recording;  
  (b) the importation into the Party’s territo ry of copies of the sound recording made 
without the producer’s authorization;  and 
 
 (c)  the first public distribution of the original and each copy of the sound recording by 
sale, rental or otherwise.  
 2. Each Party shall grant to producers of sound recordings and all other holders of rights over 
sound recordings, as determined by its legislation, th e right to authorize or prohibit commercial rental 
to the public of the originals or copies of their protected sound recordings. Nonetheless, if on the date 
of entry into force of this Agreement, a Party is  operating a fair system of remuneration for right 
holders in respect of the rental of sound recordings , it may maintain that system provided such rental 
does not significantly impair the exclusive reproduction rights of those right holders.    WT/REG206/1 
 Page 207 
 
 
Article 17-22 
 
Broadcasting Organizations  
1. Each Party shall grant to broadcasting orga nizations the right to authorize or prohibit: 
 
 (a) The fixation and reproduction of  fixations of their broadcasts; 
  (b)  rebroadcasting, subsequent distribu tion and communication to the public of their 
broadcasts;  and 
 
 (c)  reception of their broadcasts in connection with commercial activities. 
 2.  Violations of the rights set out in paragra ph 1 shall give rise to civil liability, jointly or 
otherwise with criminal liability, depend ing on the legislation of each Party. 
 
Article 17-23 
 
Term of Protection of Related Rights
 
 The term of protection granted under this Chapter to performers and producers of sound 
recordings may not be less than 50 years from the end of the calendar year of the fixation or performance. The term of protection granted to broadcasting organizations may not be less than 
20 years from the end of the calendar year in which the first broadcast was made. 
 
Article 17-24 
 
Limitations or Exceptions to Related Rights
 
1. The protection provided for under this Chapte r with regard to the rights of performers, 
producers of sound recordings and br oadcasting organizations shall in no way affect the protection of 
copyright on literary or artistic works, nor may it be interpreted as detracting from such protection. 
 2.  Each Party shall confine limitations or excepti ons to the rights provided for in this Article to 
certain special cases that do not conflict with  a normal exploitation of the work and do not 
unreasonably prejudice the legitimate interests of th e right holder, insofar as permitted by the Rome 
Convention.  
Article 17-25 
 
Miscellaneous Provisions
 
1.  Each Party may grant protection to rights over: 
  (a)  The titles or headlines of a newspaper,  magazine, cinematographic news programme 
and, in general, any period ical publication or broadcast; 
 
 (b)  fictitious or symbolic personalities in lite rary works, comic strips or any periodical 
publication, when these display distinct origin ality and are habitually or periodically 
used;  
  (c)  human characterization personalities used  in performances, stage names and artistic 
denominations;  
 WT/REG206/1 
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 (d) original graphic features that are distin ctive of a work or collection in its use;  
  (e)  features of publicity promotions that display distinct originality, excluding 
commercial advertisements. 
 
2. The term of protection for such rights shall be determined by the legislation of each Party. 
 
 
Section G - Application of Intellectual Property Rights 
 
 
Article 17-26 
 
General Obligations  
1. The Parties shall ensure th at enforcement procedures as provided in this in Articles 17-27 
through 17-30, regarding the intellectual property ri ghts referred to in this Chapter, are available 
under their law so as to permit effective action to be taken against any act of infringement of such 
rights, including expeditious remedies to prevent infringements and remedies which constitute an 
effective deterrent to further infringements.  These pr ocedures shall be applied in such a manner as to 
avoid the creation of barriers to legitimate trade a nd to provide for safeguards against their abuse.. 
 2.  Procedures concerning the enforcement of intellectual property rights shall be fair and 
equitable.  They shall not be unnecessarily complicat ed or costly, or entail unreasonable time-limits or 
unwarranted delays.  3. Decisions on the merits of a case shall preferably be in writing and state the reasons. They shall be made available at least to the parties to the proceeding without undue delay.  Decisions shall 
be based only on evidence in respect of which par ties were offered the opportunity to be heard. 
  4.  Parties to a proceeding shall have an opportu nity for review by a judicial authority of final 
administrative decisions and, subject to jurisdic tional provisions in a Party’s law concerning the 
importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case. 
However, there shall be no obligation to provide an  opportunity for review of acquittals in criminal 
cases. 
 5. It is understood that the application of intellectual property rights does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct 
from that for the enforcement of law in general, nor does it affect the capacity of the Parties to enforce 
their law in general.  Nor does it create any obligati on with respect to the distribution of resources as 
between enforcement of intellectual property ri ghts and the enforcement of law in general. 
 
Article 17-27 
 
Specific Procedural Aspects and Remedies in Civil and Administrative Proceedings
 
1.  The Parties shall make available to right holders civil judicial procedures concerning the 
enforcement of any intellectual property right cove red by this Chapter, and shall provide that:  
  (a) Defendants shall have the right to wr itten notice which is timely and contains 
sufficient detail, including the basis of the claim; 
 
 (b) parties shall be allowed to be represented by independent legal counsel; 
  WT/REG206/1 
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 (c) procedures shall not impose overly burde nsome requirements concerning mandatory 
personal appearances;  
  (d)  all parties to such procedures shall be du ly entitled to substantiate their claims and to 
present all relevant evidence;  and 
 
 (e) the procedure shall provide a means to identify and protect confidential information. 
 2.  Each Party shall ensure that its  judicial authorities have authority: 
 
 (a)  Where a Party has presented reasonably available evidence sufficient to support its 
claims and has specified evidence relevant to  substantiation of its claims which lies in 
the control of the opposing Party, to order that this evidence be produced by the opposing Party, subject in appropriate cases to conditions which ensure the protection 
of confidential information. 
 
 (b)  to make preliminary and final determ inations, affirmative or negative, in cases in 
which a Party to a proceeding voluntarily and without good reason refuses access to, 
or otherwise does not provide necessary information within a reasonable period, or significantly impedes a procedure relating to  a case brought in defence of intellectual 
property rights.  Such determinations shall be issued on the basis of the information 
presented to them, including the complaint or the allegation presented by the Party 
adversely affected by the denial of access to  information, subject to providing the 
Parties an opportunity to be heard on the allegations or evidence. 
  (c)  to order a party in a proceeding to desist from the presumed infringement, at least 
until a final ruling has been issu ed in the case, inter alia to  prevent the entry into the 
channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right.  Any such order shall be enforceable at 
least immediately after customs clearance of such goods;  
  (d)  to order the infringer of an intellectual property right to pay the right holder damages 
adequate to compensate for the injury the right holder has suffered because of the 
infringement where the infringer knew or had reasonable grounds to know that it was 
engaged in an infringing activity;  
  (e)  to order an infringer of an intellectual property right to pay the right holder’s 
expenses, which may include appr opriate attorney’s fees;  and 
  (f)  to order a party in a proceeding at wh ose request measures were taken and who has 
abused enforcement procedures to provide  adequate compensation to any party 
wrongfully enjoined or restrained in the proceeding for the injury suffered because of 
such abuse and to pay that party’s expenses,  which may include appropriate attorney’s 
fees.  
  3.  With respect to the authority referred to in paragraph 2 (c), no Party shall be obliged to 
provide such authority in respect of protected subj ect matter that is acquired or ordered by a person 
before that person knew or had reasonable grounds to know that dealing in that subject matter would 
entail the infringement of an intellectual property right.  
  4.  With respect to the authority referred to in  subparagraph 2 (d), a Party may, at least with 
respect to copyrighted works and sound recordings, au thorize the judicial authorities to order recovery 
of profits or payment of pre-established damages, or both, even where the infringer did not know or 
had no reasonable grounds to know that it was engaged in an infringing activity.  WT/REG206/1 
Page 210  
 
  5.  Each Party shall provide that, in order to create an effective deterrent to infringement, its 
judicial authorities shall have the authority to order that:    (a)  Goods that they have found to be in fringing be, without compensation of any sort, 
disposed of outside the channels of commerc e in such a manner as to avoid any injury 
caused to the right holder or, unless this w ould be contrary to existing constitutional 
requirements, destroyed;  and 
  (b)  materials and implements the predominan t use of which has been in the creation of 
the infringing goods be, without compensation of any sort, disposed of outside the 
channels of commerce in such a manner as to minimize the risks of further infringements.  
 6. In considering whether to issue such an order,  the judicial authorities of each Party shall take 
into account the need for proportionality between  the seriousness of the infringement and the 
remedies ordered as well as the interests of other persons, including those of the right holder.  In 
regard to counterfeit goods, the simple removal of  the trademark unlawfully affixed shall not be 
sufficient to permit customs clearance of the goods, other than in exceptiona l cases, such as when the 
authority decides to donate the goods to a charity.   
7. In respect of the administration of any law pertaining to the protection or enforcement of 
intellectual property rights, each Party shall only exempt both public authorities and officials from 
liability to appropriate remedial measures where ac tions are taken or intended in good faith in the 
course of the administration of such laws.   
8. Notwithstanding the other provisions of Artic les 17-26 through 17-30, where a Party is sued 
with respect to an infringement of an intellectual property right as a result of its use of that right or use on its behalf, that Party may limit the remedies availa ble against it to the payment to the right holder 
of adequate remuneration in the circumstances of  each case, taking into account the economic value 
of the use.   
9. Each Party shall provide that, where a civil remedy can be ordered as a result of 
administrative procedures on the merits of a case,  such procedures shall conform to principles 
equivalent in substance to those set out in this Article.   10. The application of paragra phs 2 (a) and (b) and paragraph 9 shall take into account the 
provisions of Annex 17-27. 
 
Article 17-28 
 
Provisional Measures 
 
1. Each Party shall provide that its judicial authorities shall have the authority to order prompt 
and effective provisional measures to:  
  (a)  Prevent an infringement of any intellectua l property right, and in particular to prevent 
the entry into the channels of commerce in  their jurisdiction of allegedly infringing 
goods, including measures to prevent the entry of imported goods at least immediately 
after customs clearance;  and 
  (b)  preserve relevant evidence in regard to the alleged infringement.   WT/REG206/1 
 Page 211 
 
 
2.  Each Party shall provide that its judicial authorities shall have the authority to require any 
applicant for provisional measures to provide to the judicial authorities any evidence reasonably 
available to that applicant that those authorities cons ider necessary to enable them to determine with a 
sufficient degree of certainty whether:   
 (a)  The applicant is the right holder;  
  (b)  the applicant’s right is being infring ed or such infringement is imminent;  and 
  (c)  any delay in the issuance of such meas ures is likely to cause irreparable harm to the 
right holder, or there is a demonstrable risk of evidence being destroyed.  
  3.  For the purposes of paragraph 2, each Party shall provide that its judicial authorities shall 
have the authority to require the applicant to provide  a security or equivalent assurance sufficient to 
protect the interests of the defendant and to prevent abuse. 
 
 4.  Each Party shall provide that its judicial authorities shall have the authority to require an 
applicant for provisional measures to provide other information necessary for the identification of the 
relevant goods by the authority that will execute the provisional measures.    5.  Each Party shall provide that its judici al authorities shall have the authority to order 
provisional measures on an ex parte basis, in partic ular where any delay is likely to cause irreparable 
harm to the right holder, or where there is a de monstrable risk of evidence being destroyed.  
 6.  Each Party shall provide that where provisiona l measures are adopted by that Party’s judicial 
authorities on an ex parte basis:  
 
 (a)  A person affected shall be given noti ce of those measures without delay but in any 
event no later than immediately after the execution of the measures;  and 
  (b)  a defendant shall, on request, have tho se measures reviewed by that Party’s judicial 
authorities for the purpose of deciding, within a reasonable period after notice of 
those measures is given, whether the measures shall be modified, revoked or 
confirmed.  
 7. Without prejudice to paragraph 6, each Pa rty shall provide that, on the request of the 
defendant, the Party’s judicial authorities shall re voke or otherwise cease to apply the provisional 
measures taken on the basis of paragraphs 1 throu gh 5 if proceedings leading to a decision on the 
merits are not initiated:    (a)  Within a reasonable period as determined by the judicial authority ordering the 
measures where the Party’s domestic law so permits;  or 
 
 (b)  in the absence of such a determinati on, within a period of no more than 20 working 
days or 31 calendar days, whichever is longer. 
 8. Each Party shall provide that, where the pr ovisional measures are revoked or where they lapse 
due to any act or omission by the applicant, or where the judicial authorities subsequently find that 
there has been no infringement or threat of infringement of an intellectual property right, the judicial 
authorities shall have the authority to order the app licant, on request of the defendant, to provide the 
defendant appropriate compensation for any injury caused by these measures.  
 WT/REG206/1 
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9. Each Party shall provide that, where a provisional measure can be ordered as a result of administrative procedures, such procedures shall c onform to principles equivalent in substance to 
those set out in this Article.   
Article 17-29 
 
Criminal Procedures and Penalties 
 
1. Each Party shall provide criminal procedures and penalties to be applied at least in cases of 
wilful trademark counterfeiting or copyright piracy on a commercial scale.  Each Party shall provide 
that penalties available include imprisonment or m onetary fines, or both, sufficient to provide a 
deterrent, consistent with the le vel of penalties applied for crimes of a corresponding gravity.  
 2.  Each Party shall provide that, in appropria te cases, its judicial authorities may order the 
forfeiture and destruction of infringing goods and of  any materials and implements the predominant 
use of which has been in the commission of the offence.  
 
3. For the purposes of paragraph 2, the judicial authorities shall take into account the need for 
proportionality between the seriousness of the infri ngement and the remedies ordered, as well as the 
interests of other persons, including those of the ri ght holder.  In regard to counterfeit goods, the 
simple removal of the trademark unlawfully affixed shall not be sufficient to permit release of the goods from customs, other than in exceptional cases, such as where the authority decides to donate 
them to charity.  
 4. A Party may provide for criminal proce dures and penalties to be applied in cases of 
infringement of intellectual property rights, other th an those in paragraph 1, where they are committed 
wilfully and on a commercial scale.  
 
Article 17-30 
 
Enforcement of Intellectual Property Rights at the Border 
 
1. Each Party shall, in conformity with this Article, adopt procedures to enable a right holder, 
who has valid grounds for suspecting that the im portation of counterfeit tr ademark goods or pirated 
copyright goods may take place, to lodge an application in writing with its competent authorities, 
whether administrative or judicial, for the suspensi on by the customs administration of the release of 
such goods into free circulation.  Neither Party sh all be obliged to apply those procedures to goods in 
transit.  A Party may permit such an application to  be made in respect of goods that involve other 
infringements of intellectual property rights, provided th at the requirements of this Article are met.  A 
Party may also provide for corresponding proce dures concerning the suspension by the customs 
administration of the release of infringing goods destined for exportation from its territory  2. Each Party shall provide that its competent au thorities shall have the authority to require an 
applicant who initiates procedures under paragr aph 1 to provide adequate evidence:  
 
 (a)  To satisfy that Party’s competent au thorities that, under the domestic laws of the 
country of importation, there is prima facie an infringement of its intellectual property 
right;  and 
  (b)  to supply a sufficiently detailed desc ription of the goods to make them readily 
recognizable by the customs administration. 
  WT/REG206/1 
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3. Each Party shall provide that its competent authorities shall inform the applicant within a 
reasonable period whether they have accepted the a pplication and, if so, the period for which the 
customs administration will take action.  4. Each Party shall provide that its competent au thorities shall have the authority to require an 
applicant under paragraph 1 to provide a security or equivalent assurance sufficient to protect the 
defendant and the competent authorities and to preven t abuse.  Such security or equivalent assurance 
shall not unreasonably deter recourse to these procedures.   5. Each Party shall provide that the owner, im porter or consignee of goods involving industrial 
or trade secrets shall be entitled to their relea se from customs on the posting of a security or 
equivalent assurance in an amount sufficient to pr otect the right holder against any infringement, 
provided that:   (a)  Pursuant to an application under pro cedures adopted pursuant to this Article, its 
customs administration suspends the release of such goods into free circulation, on the 
basis of a decision other than by a judicial or other independent authority; 
  (b)  the period provided for in paragraphs 8,  9, 10 and 11 has expired without the granting 
of provisional relief by the duly empowered authority;  and 
 
 (c) provided that all other conditions for importation have been complied with. 
 6. Payment of such security shall not prejudice an y other remedy available to the right holder, it 
being understood that the security shall be released if the right holder fails to pursue its right of action 
within a reasonable period of time.  
 
7. Each Party shall provide that its customs administration shall promptly notify the importer 
and the applicant when the customs administra tion suspends the release of goods pursuant to 
paragraph 1.  8. Each Party shall provide that its customs administration shall release goods from suspension, 
provided that all other conditions for the importation or exportation had been met, if within a period 
not exceeding 10 working days after the applicant under paragraph 1 has been served notice of the suspension the customs administrati on has not been informed that:  
  (a)  A party other than the defendant has init iated proceedings leading to a decision on the 
merits of the case;  or 
  (b)  a competent authority for this purpo se has taken provisional measures prolonging the 
suspension. 
 9.  For the purposes of paragraph 8, each Party shall provide that, in appropriate cases, its 
customs administration shall have the authority to extend the suspension by another 10 working days. 
 10.  If proceedings leading to a decision on the merits of the case have been initiated, a review, 
including the defendant’s right to be heard, shall ta ke place on request of the defendant, with a view to 
deciding, within a reasonable period, whether the measures shall be modified, revoked or confirmed.  
 
11.  Notwithstanding paragraphs 8, 9 and 10, wh ere the suspension of the release of goods is 
carried out or continued in accordance with a provi sional judicial measure, Article 17-28 (7) shall 
apply.   WT/REG206/1 
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12. Each Party shall provide that its competent authorities shall have the authority to order the 
applicant under paragraph 1 to pay the importer, th e consignee and the owner of the goods appropriate 
compensation for any injury caused to them through the wrongful detention of goods or through the detention of goods released pursu ant to paragraphs 8 and 9.  
 
13. Without prejudice to the protection of confiden tial information, each Party shall provide that 
its competent authorities shall have the authority to:   (a) Give the right holder sufficient opportunity to have any goods detained by the 
customs administration inspected in order to substantiate the right holder’s claim;  and 
 
 (b) give the importer an equivalent oppor tunity to have any such goods inspected. 
 14. Where the competent authorities have made a positive determination on the merits of a case, a 
Party may provide the competent authorities the author ity to inform the right holder of the names and 
addresses of the consignor, the importer and the c onsignee, and of the quantity of the goods in 
question.   15. Where a Party requires its competent authoriti es to act on their own initiative and to suspend 
the release of goods in respect of which they have  acquired prima facie evidence that an intellectual 
property right is being infringed:  
 
 (a) The competent authorities may at any tim e seek from the right holder any information 
that may assist them to exercise those powers; 
  (b) the importer and the right holder shall be  promptly notified of the suspension by the 
Party’s competent authorities, and where th e importer lodges an appeal against the 
suspension with competent authorities, th e suspension shall be subject to the 
conditions, with such modifications as may be  necessary, set out in paragraphs 8, 9, 
10 and 11;  and 
  (c) the Party shall only exempt both public authorities and officials from liability to 
appropriate remedial measures where acti ons are taken or intended in good faith. 
 16. Without prejudice to other rights of action open to the right holder and subject to the defendant’s right to seek judicial review, each Part y shall provide that its competent authorities shall 
have the authority to order the destruction or di sposal of infringing goods in accordance with the 
principles set out in Article 17-27 (5) and (6). In regard to counterfeit goods, the authorities shall not 
allow the re-exportation of the infringing goods in an  unaltered state or subject them to a different 
customs procedure, other than in exceptional circumstances.  
 17. Each Party may exclude from the applicati on of paragraphs 1 through 12 small quantities of 
goods of a non-commercial nature contained in tr avellers’ personal luggage or sent in small 
consignments that are not repetitive. 
 18. This Article shall be app lied taking account of the provisions established in Annex 17-30. 
 
Article 17-31 
 
Protection of Programme-Carrying Satellite Signals
 
 Within one year following the date of entry in to force of this Agreement, each Party shall 
make it a civil and/or criminal offence, according to its laws, to manufacture, import, sell, lease or  WT/REG206/1 
 Page 215 
 
 
perform any act to make available devices that are primarily of assistance in decoding an encrypted 
programme-carrying satellite signal without the authori zation of the lawful distributor of that signal. 
 
Section H - Technical Cooperation  
 
Article 17-32 
 
Technical Cooperation  
 The Parties shall provide technical c ooperation under the terms of Annex 17-32. 
 
 
ANNEX 17-03 
 
Intellectual Property Conventions  
 Nicaragua shall make every effort to comply  with the following conventions within a period 
of 18 months following the date of entry into force of this Agreement: 
  (a)  The Berne Convention;  (b)  the Rome Convention; and  (c)  the Geneva Convention. 
 
 
ANNEX 17-04 
 
Plant Varieties
 
 This provision shall not be construed to require either Party to protect plant varieties, if that 
Party has not legislated on this issue. 
  
ANNEX 17-27 
 
Enforcement of Intellectual Property Rights
 
 Nicaragua shall make every effort to implement the measures set out in Article 17-27 (2)(a) 
and (b) and Article 17-27 (9), no later than 1 July 2000. 
ANNEX 17-30 
 
Enforcement of Intellectual Property Rights at the Border  
 Nicaragua shall make every effort to implement the measures set out in Article 17-30, no later 
than 1 July 2000.   
ANNEX 17-32 
 
Technical Cooperation
 
1.  In order to facilitate implementation of th is Chapter, Mexico, in coordination with other 
international cooperation programmes,  shall provide technical assistance to Nicaragua, on request and 
under mutually agreed terms and conditions. Such assistance shall include:  WT/REG206/1 
Page 216  
 
 (a) Support in adapting procedures and regula tions to implement the Paris Convention; 
  (b)  exchange of patent documentation;   (c)  training on procedures for granting and registering patents, industrial designs and 
utility models; 
  (d)  assistance in relation to plant varieties;    (e)  assistance and training on automated. search and procedures for trademark 
registration; 
  (f)  exchange of information on Mexico’s  experience in establishing the Instituto 
Mexicano de la Propiedad Industrial (M exican Industrial Property Institute); 
 
 (g)  exchange of information on updating the legal framework governing intellectual 
property rights; 
  (h) assistance in relation to copyright and related rights;  and   (i)  assistance in relation to automation for granting registration and conservation of 
industrial property rights. 
 2. The technical assistance referred to in para graph 1 shall not imply any commitment by 
Mexico in terms of financial support. 
 
 
PART EIGHT: ADMINISTRATIVE PROVISIONS  
 
CHAPTER XVIII: TRANSPARENCY 
 
Article 18-01 
 
Contact Points
 
1.  Each Party shall designate a contact point to facilitate communications among the Parties on 
any matter covered by this Agreement.  
2. On the request of the other Party, the cont act point shall identify the office or official 
responsible for the matter and assist, as necessary,  in facilitating communication with the requesting 
Party.  
Article 18-02 
 
Publication
 
 
1. Each Party shall ensure that its laws, regul ations, procedures and administrative rulings of 
general application, respecting an y matter covered by this Agreement, are promptly published or 
otherwise made available to the ot her Party and interested persons. 
 
2. To the extent possible, each Party shall:    (a)  Publish in advance any such measure that it proposes to adopt;  and 
  WT/REG206/1 
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 (b) provide interested persons and the othe r Party a reasonable opportunity to comment 
on such proposed measures.  
 
Article 18-03 
 
Notification and Provision of Information  
1.  To the extent possible, each Party shall notify the other Party of any proposed or actual 
measure that the Party considers might affect or s ubstantially affects the other Party’s interests under 
this Agreement.  
2. On request of the other Party, a Party sh all promptly provide information and respond to 
questions pertaining to any actual or proposed meas ure, whether or not that other Party has been 
previously notified of that measure.   3. Any notification or information provided unde r this Article shall be without prejudice as to 
whether the measure is consiste nt with this Agreement.  
  
Article 18-04 
 
Safeguards of Hearings, Legality and Due Process
 
1. The Parties reaffirm the safeguards of heari ngs, legality and due process enshrined in their 
respective laws.  2. Each Party shall maintain judicial or administrative tribunals and procedures, for the purpose of reviewing and, where warranted, correcting final administrative decisions in relation to this 
Agreement.  
 3. Each Party shall ensure that in judicial  and administrative procedures relating to the 
implementation of any measure affecting the functio ning of this Agreement, the essential formalities 
of the procedure are observed, and th eir legal basis is substantiated.  
 
CHAPTER XIX: ADMINISTRATION OF THE AGREEMENT 
 
Article 19-01 
 
Administrative Commission of the Agreement
 
1. The Parties hereby establish the Administ rative 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 implem entation of this Agreement and oversee its 
development; 
  (c) resolve any dispute that may arise re garding its interpretation or application; 
 
 (d)  supervise the work of all committees es tablished under this Agreement and included 
in Annex 19-01 (2);  and WT/REG206/1 
Page 218  
 
  (e) consider any other matter that may affe ct the operation of this Agreement, and any 
other matter referred to it by the Parties. 
 3. The Commission may: 
 
 (a)  Create ad hoc or standing committees and groups of experts; 
  (b) seek the advice of non-governmental persons or groups;  and  
 (c)  take such other action in the exercise of its functions as the Parties may agree. 
 4. All decisions of the Commission shall be taken by mutual agreement.  5. The Commission shall convene at least once a y ear. Meetings shall be chaired alternately by 
each Party. 
  
Article 19-02 
 
Secretariat
 
 
1. Each Party shall establish an office to serve as the national Section of its Secretariat, and shall 
notify the other Party of: the name and position of th e official responsible for its Section;  and the 
address of its Section to which communications should be sent. 
 
2. The Commission shall coordinate the func tioning of the Parties’ national Sections. 
 3. The national Sections shall:   (a)  Provide assistance to the Commission;  
 (b)  provide administrative assistance to arbitral panels; 
  (c)  support the work of the committees  established under this Agreement as the 
Commission may direct; 
 
 (d)  be responsible for the remuneration and payment of expenses of panellists and experts 
appointed under this Agreement, as set out in Annex 19-02;  and 
  (e)  carry out other functions referred by the Commission.   
ANNEX 19-01(1) 
 
 Staff of the Administrative Commission
 
 The officials referred to in Article 19-01 are: 
 
 (a)  For Mexico, the Minister of Trade and Industrial Development, or successor thereof; 
and  
  (b)  for Nicaragua, the Minister of Econom ic Affairs and Development, or successor 
thereof.  WT/REG206/1 
 Page 219 
 
 
 
ANNEX 19-01(2) 
 
Committees  
 
Committees 
  -  Committee on Agricultural Trade  -  Committee on Sanitary and Phytosanitary Measures  -  Committee on Rules of Origin 
 -  Committee on Customs Procedures 
 -  Committee on Temporary Imports  -  Committee on Financial Services  -  Committee on Standards-Related Measures  -  Committee on Microenterprise, Small and Medium-sized Business 
 
Subcommittees:   - Health Standards Subcommittee   -  Subcommittee on Labelling, Packaging and Packing Standards 
 -  Telecommunications Standards Subcommittee 
 
 
ANNEX 19-02 
 
Remuneration and Payment of Expenses
 
1. The Commission shall establish the amounts of remuneration and expenses that will be paid 
to arbitral panellists and experts.  2. The remuneration of panellists, experts and their assistants, their travel and lodging expenses, 
and all general expenses of panels sha ll be borne equally by the Parties. 
 
3. Each panellist and expert shall keep 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.   
PART NINE: DISPUTE SETTLEMENT 
 
CHAPTER XX: DISPUTE SETTLEMENT 
 
Article 20-01 
 
Cooperation
 
 
 The Parties shall at all times endeavour to ag ree on the interpretation and application of this 
Agreement, and shall make every attempt throug h cooperation and consulta tions to arrive at a 
mutually satisfactory resolution of any matter that might affect its operation. 
 WT/REG206/1 
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Article 20-02 
 
Scope 
 
 Except as otherwise provided in this Agreement,  the provisions of this Chapter shall apply: 
 
 (a)  With respect to the avoidance or se ttlement of all disputes between the Parties 
regarding the application or interp retation 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 obligations of this Agreement or cause nullification or 
impairment in the sense of Annex 20-02. 
 
Article 20-03 
 
WTO Dispute Settlement
 
1.  Any matter arising under both this Agreem ent and the WTO Agreement may be settled in 
either forum at the discretion of the complaining Party.  2.  Once dispute settlement proceedings have  been initiated under Article 20-06 or under the 
WTO Agreement, the forum selected shall be  used to the exclusion of the other.  
 
 3.  For the purposes of this Article, disput e settlement proceedings under the WTO Agreement 
are deemed to be initiated by a Party’s request  for a panel, such as under Article 6 of the 
Understanding on Rules and Procedures Governing the Settlement of Disputes, which is part of the 
WTO Agreement  
Article 20-04 
 
Perishable Goods
 
 The Parties, the Commission and the arbitral tri bunal shall do their utmost to deal with issues 
relating to perishable goods as expeditiously as possibl e. For this purpose, the Parties shall endeavour 
to reach agreement on reducing the time-limits established in this Chapter. 
 
Article 20-05 
 
Consultations  
 
1. Either Party may request in writing consultati ons 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 20.02.  2. The requesting Party shall deliver  the request to its Section of the Secretariat and to the other 
Party.  
 
3. The Parties shall:   (a) Provide each other with sufficient inform ation to allow for a full examination of how 
the actual or proposed measure or other matter might affect the operation of this 
Agreement;  and 
  WT/REG206/1 
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 (b)  treat any confidential information excha nged in the consultations on the same basis as 
the Party providing the information. 
 
Article 20-06 
 
Intervention of the Commission, Good Offices, Conciliation and Mediation  
1.  If the Parties fail to resolve a matter pursuant to Article 20-05 within 45 days of the delivery 
of a request for consultations, either Party may request in writing a meeting of the Commission.  
 
2. A Party may also request in writing a meeti ng of the Commission when consultations have 
been held under Articles 5-14 and 14-18. 
 3. The requesting Party shall state in the request  the measure or other matter complained of and 
indicate the provisions of this Agreement that it cons iders relevant, and shall deliver the request to its 
Section of the Secretariat and to the other Party. 
 
4. The Commission shall convene within 10 days of delivery of the request, for the purpose of 
reaching a mutually satisfactory settlement of the dispute, and may:    (a) Call on such technical advisers or crea te such expert groups as it deems necessary; 
 
 (b) have recourse to good offices, conciliati on, mediation or such other dispute resolution 
mechanisms;  or 
   (c) make recommendations.  
Article 20-07 
 
Request for an Arbitral Panel
 
1. Where the Commission has convened pursuant to Article 20-06 (4) and the matter has not 
been resolved within 45 days thereafter, either Party may request in writing the establishment of an 
arbitral panel. The requesting Party shall deliver the request to its Section of the Secretariat and to the 
other Party. 
 2. On delivery of the request, the Commiss ion shall establish an arbitral panel. 
 3. Unless otherwise agreed by the Parties, the panel shall be established and perform its 
functions in a manner consistent w ith the provisions of this Chapter 
 
Article 20-08 
 
Roster
 
1. The Commission shall establish a roster of up to 20 individuals who are willing and able to 
serve as panellists. The roster members shall be appoi nted by consensus for terms of three years, and 
may be reappointed.  2. Roster members shall:  
 (a)  Have expertise or experience in law, in ternational trade, other matters covered by this 
Agreement or the resolution of disputes aris ing under international trade agreements;  
 WT/REG206/1 
Page 222  
 
 (b) be chosen strictly on the basis of objectivity, reliability and sound judgment;  
  (c) be independent of, and not be affiliated with or take inst ructions from, either Party; 
and 
 
 (d) comply with a code of conduct to be established by the Commission. 
 3. The roster shall include experts w ho are not nationals of the Parties. 
 
Article 20-09 
 
Qualifications of Panellists
 
1. All panellists shall meet the qualifi cations set out in Article 20-08 (2). 
 2. Individuals may not serve as panellists for a di spute in which they have participated pursuant 
to Article 20-06 (4). 
 
Article 20-10 
 
Panel Selection
 
1. The panel shall comprise five members. 
 
2. The Parties shall endeavour to agree on the ch air of the panel within 15 days of the delivery 
of the request for the establishment of the panel. If the Parties are unable to agree on the chair within 
this period, one of them, chosen by lot, shall select the chair within five days. Should that Party fail to 
select the chair, the other Party shall do so. The chair of the arbitral panel may not be a citizen of the 
selecting Party. 
  3.  Within 15 days of selection of the chair, each Party shall select two panellists, who are citizens of the other Party.  4. If a Party fails to select a panellist within such  period, such panellist shall be selected by lot 
from roster members who are citizens of the other Party. 
 5. Panellists shall normally be selected from the roster. A Party may exercise a peremptory 
challenge against any individual not on the roster who is proposed as a panellist by a disputing Party 
within 15 days after the individual has been proposed.  
 
6.  If a Party believes that a panellist is in viol ation of the Code of Conduct, the Parties shall 
consult and, if they agree, the panellist shall be removed and a new panellist shall be selected in 
accordance with this Article.  
Article 20-11 
 
Model Rules of Procedure 
 
1.  The Commission shall establish Model Rules of Procedure, in accordance with the following 
principles:   
 (a)  The procedures shall assure a right to at least one hearing before the panel as well as 
the opportunity to provide initial a nd rebuttal written submissions;  and 
  WT/REG206/1 
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 (b)  the panel’s hearings, deliberations a nd initial report, and all written submissions to 
and communications with the panel shall be confidential.  
 2. Unless the disputing Parties agree otherwi se, the panel shall conduct its proceedings in 
accordance with the Model Rules of Procedure. 
 
3. The mission of the arbitral panel, set out in its terms of reference, shall be: 
  "To examine, in the light of the relevant pr ovisions of the Agreement, the matter referred to 
the Commission (as set out in the request for a Commission meeting) and to make findings, 
determinations and recommendations as pr ovided in Articles 20-13 and 20-14."  
  4.  If a complaining Party wishes to argue that a matter has nullified or impaired benefits, in the 
sense of Annex 20-02, the terms of reference shall so indicate.   
5. If a Party wishes the panel to make findings as to the degree of adverse trade effects on a 
Party of any measure found not to conform with the obligations of the Agreement or to have caused 
nullification or impairment in the sense of Annex 20 -02, the terms of reference shall so indicate.  
 
Article 20-12 
 
Role of Experts
 
 On request of a disputing Party, or on its own initiative, the panel may seek information and 
technical advice from any person or body that it deems appropriate.  
Article 20-13 
 
Preliminary determination
 
1. The arbitral panel shall issue an prelimin ary determination based on the submissions and 
arguments of the Parties and on any inform ation before it pursuant to Article 20-12. 
 2. Unless the disputing Parties agree otherwise, th e panel shall, within 90 days after the last 
panellist is selected, present to the Parties an preliminary determination containing: 
  (a) Findings of fact, including any findings pursuant to a request under Article 20-11 (5); 
  (b) the determination as to whether the measure at issue is or would be inconsistent with 
the obligations of this Agreement or cause nullification or impairment in the sense of 
Annex 20-02, and 
  (c)  the draft determination.  3. Panellists may furnish separate opini ons on matters not unanimously agreed. 
 
4. The Parties may submit written comments to the panel on its preliminary determination 
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 initiative 
or on the request of either Party, may:  
  (a) Make any further examination that it considers appropriate;  and 
 WT/REG206/1 
Page 224  
 
 (b) reconsider its determination.   
Article 20-14 
 
Final determination
 
 
1.  The arbitral panel shall communicate to the Commission its final determination, including any separate opinions on matters not unanimously ag reed, within 30 days of presentation of the 
preliminary determination.  
 
2.  Neither the preliminary determination nor the final determination shall disclose which panellists are associated with majority or minority opinions.   3.  The final determination sh all be published 15 days after it is  communicated to the disputing 
Parties.  
 
Article 20-15 
 
Implementation of the Final Determination
 
1.  The final determination shall be binding on th e disputing Parties in the terms and time periods 
that the determination orders.  
 2. Where a final determination by an arbitral pa nel finds that the measure is inconsistent with 
this Agreement, the Party complained against sh all not implement the measure or shall revoke it. 
 
3. Where the final determination of the arbitral panel determines that the measure is cause of 
nullification or impairment in the sense of Annex 20- 02, it shall determine the level of nullification or 
impairment and may suggest adjustments it cons iders mutually satisfactory for the Parties. 
 
Article 20-16 
 
Non-Implementation - Suspension of Benefits
 
1. The complaining Party may suspend application of  benefits of equivalent effect to the Party 
complained against if the 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 determination within the period set 
by the arbitral panel;  or 
  (b) that a measure is the cause nullificati on or impairment in the sense of Annex 20-02 
and the Parties are unable to reach a mutua lly satisfactory settlement of the dispute 
within the time period set by the arbitral panel. 
 
2. Benefits shall be suspended until such time as the Party complained against complies with the 
final determination of the arbitral panel or until th e Parties reach a mutually satisfactory settlement of 
the dispute.  
 3.  In considering what benefits to suspend pursuant to paragraph 1:  
  (a) The complaining Party should first seek to  suspend benefits in the same sector or 
sectors as that or those affected by the measure or other matter that the panel has  WT/REG206/1 
 Page 225 
 
 
found to be inconsistent with the obligati ons of this Agreement or to have caused 
nullification or impairment as set out in Annex 20-02;  and 
  (b) the complaining Party that considers it is not practicable or effective to suspend 
benefits in the same sector or sectors may suspend benefits in other sectors. 
 
4.  On the written request of a Party delivered to the other Party and its Section of the Secretariat, the Commission shall establish a panel to determine whether the level of benefits suspended by a 
Party pursuant to paragraph 1 is manifestly excessive.  
 5.  The panel proceedings pursuant to paragr aph 3 shall be conducted in accordance with the 
Model Rules of Procedure. The panel shall present its  determination within 60 days after the last 
panellist is selected or such other period as the Parties may agree.   
Article 20-17 
 
Domestic Proceedings and Private Commercial Dispute Settlement
 
1. If an issue of interpretation or application of this Agreement arises in any domestic judicial or 
administrative proceeding of a Party, that the other Pa rty considers would merit its intervention, or if a 
court or administrative body of a Party solicits th e views of the other Party, the Party in whose 
territory the body is located shall notify the othe r Party and its Section of the Secretariat. The 
Commission shall endeavour to agree on an a ppropriate response as expeditiously as possible. 
 2. The Party in whose territory the court or administrative body is located shall submit any 
agreed interpretation of the Commission to the c ourt or administrative body in accordance with the 
rules of that forum. 
 
 3.  If the Commission is unable to agree, either Party may submit its own views to the court or administrative body in accordance with  the rules of that forum.  
 
Article 20-18 
 
Alternative Dispute Resolution
 
1. Each Party shall, to the maximum extent possible, encourage and facilitate the use of 
arbitration and other means of alternative disput e resolution for the settlement of international 
commercial disputes between private parties.  
2. To this end, each Party sha ll provide appropriate legal framework to ensure observance of 
agreements to arbitrate and for the recognition and en forcement by courts of arbitral awards in such 
disputes.  3. A Party shall be deemed to be in compliance with paragraph 2 if it is a Party to and is in 
compliance with the 1958 United Nations Conventio n on the Recognition and Enforcement of Foreign 
Arbitral Awards (the New York Convention), or the 1975 Inter-American Convention on International 
Commercial Arbitration (the Panama Convention).   4.  The Commission shall establish an Adviso ry Committee on Private Commercial Disputes 
comprising persons with expertise or experience in the resolution of private international commercial 
disputes. The Committee shall report and provide recommendations to the Commission respecting the 
availability, use and effectiveness of arbitration and other procedures for the resolution of such 
disputes.  WT/REG206/1 
Page 226  
 
 
ANNEX 20-02 
 
Nullification and Impairment
 
1. A Party may have recourse to dispute settlement  under this Chapter if it considers that any 
benefit it could reasonably ha ve expected to accrue to it under any provision of: 
  (a)  Part Two (Trade in Goods);   (b)  Chapter X (General Principles on Trade in Services); 
 
 (c)  Part Four (Technical Barriers to Trade);    (d)  Part Five (Government Procurement);  and  
(d) Part Seven (Intellectual Property); 
 
is being nullified or impaired as a result of the appli cation of any measure that is not inconsistent with 
this Agreement.   2.  Paragraph 1 shall be applicable even when  the Party appealed against invokes one of the 
general exceptions set out in Article 21-01, excep t in the case of an excepti on applicable to cross-
border trade in services.   
PART TEN: OTHER PROVISIONS 
 
CHAPTER XXI: EXCEPTIONS 
 
Article 21-01 
 
General Exceptions
 
1.  GATT 1994 Article XX and its interpretative not es, are hereby incorporated into, and made 
part of, this Agreement for the purposes of: 
  (a)  Part Two (Trade in Goods), except to the extent that a provision of that Part applies to 
services or investment;  and 
 
 (b)  Part Four (Technical Barriers to Trade), except to the extent that a provision of that 
Part applies to services. 
 2.  Nothing in Part Four (Technical Barriers to  Trade), and Chapters X (General Principles on 
Trade in Services) and XI (Telecommunications), excep t insofar as a provision of that Part or those 
Chapters applies to goods, shall be construed to  prevent either Party adopting or implementing 
measures necessary to: 
  (a)  Protect public morals or maintain public order;    (b)  protect human, animal or plant life or health; 
 
 (c)  secure compliance with laws or regula tions which are not inconsistent with the 
provisions of this Agreement including those relating to: 
  WT/REG206/1 
 Page 227 
 
 
 (i)  the prevention of deceptive and fra udulent practices or to deal with the 
effects of a default on services contracts; 
  (ii) the protection of the privacy of in dividuals in relation to the processing and 
dissemination of personal data and th e protection of confidentiality of 
individual records and accounts;  and  
  (iii) safety,  provided that such measures are not applied in a ma nner that would constitute a means of arbitrary or 
unjustifiable discrimination between countries wher e the same conditions prevail or a disguised 
restriction on trade between the Parties.  
Article 21-02 
 
National Security
 
1.  Further to Article 21-01, nothing in  this Agreement shall be construed: 
  (a) To require either Party to furnish or a llow access to any information the disclosure of 
which it determines to be contrary to its essential security interests; 
 
 (b) to prevent either Party from taking an y actions that it considers necessary for the 
protection of its essential security interests: 
  (i) relating to traffic in arms, ammun ition 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 em ergency in internatio nal relations;  and 
  (iii) relating to the implementation of national policies or international 
agreements respecting the non-prolifer ation of nuclear weapons or other 
nuclear explosive devices;  or 
  (c) to prevent either Party from taking action in pursuance of its obligation under the 
United Nations Charter for maintenance of international peace and security. 
 
Article 21-03 
 
Exceptions to the Disclosure of Information 
 
 Nothing in this Agreement shall be construed to require a Party to fu rnish or allow access to 
information the disclosure of which would impede co mpliance with or be contrary to its Constitution, 
public interest, or laws protecting personal privacy  or the financial affairs and bank accounts of 
individual customers of financ ial institutions, among others.  
  WT/REG206/1 
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CHAPTER XXII: FINAL PROVISIONS 
 
Article 22-01  
 
Annexes
 
 
 The Annexes to this Agreement constitute an integral part of this Agreement. 
 
Article 22-02 
 
Amendments  
 
1. The Parties may agree on any modification of or addition to this Agreement.  2. When so agreed, and approved in accordance with the applicable legal procedures of each 
Party, a modification or addition shall constitute  an integral part of this Agreement.  
 
Article 22-03 
 
Entry into Force
 
 This Agreement shall enter into force on 1 Ju ly 1994, on an exchange of written notifications 
certifying the completion of necessary legal procedures.  
 
Article 22-04 
 
Reservations  
 
 This Agreement shall not be subject to r eservations or interpretative statements on the 
occasion of its ratification. 
 
Article 22-05 
 
Accession  
 
1. Any country or group of countries may accede to  this Agreement subject to such terms and 
conditions as may be agreed between such count ry or countries and the Commission, and following 
approval in accordance with the applicable legal procedures of each country. 
 
2.  This Agreement shall not apply as between e ither Party and any acceding country or group of 
countries if, at the time of accession, either  does not consent to such application. 
 3. Accession shall take effect on an exchange of  written notifications certifying the completion 
of necessary legal procedures. 
 
Article 22-06 
 
Withdrawal
 
 
1. Either Party may withdraw from this Agreemen t. Withdrawal shall become effective 180 days 
after the other Parties are notified, unless the Parties agree to a different period.   WT/REG206/1 
 Page 229 
 
 
2. Regardless of whether a Party has withdrawn from the Agreement, in the event of accession 
by a country or group of countries, pursuant to Article 20-05, it shall remain in force for the other Parties. 
 
Article 22-07 
 
Evaluation of the Agreement
 
 The Parties shall periodically evaluate the deve lopment of this Agreement in order to improve 
it and consolidate the integration process in th e region, encouraging active participation from 
productive sectors. 
 
  Done in the city of Managua, on the 18th day of December 1997, in two equally authentic originals.  
The President of the United Mexican States, The President of the Republic of Nicaragua, 
Ernesto Zedillo Ponce de León 
 Arnoldo Alemán 
 
 
__________