AGREEMENT BETWEEN JAPAN AND MONGOLIAFOR AN ECONOMIC PARTNERSHIP
Table of Contents
Preamble

Chapter 1

General Provisions

Article 1.1

Objective

Article 1.2

General Definitions

Article 1.4

Public Comment Procedures

Article 1.6

Review and Appeal

Article 1.3
Article 1.5
Article 1.7
Article 1.8
Article 1.9

Transparency

Administrative Procedures
Measures against Corruption
Confidential Information
Taxation

Article 1.10

Exceptions

Article 1.12

Implementing Agreement

Article 1.11
Article 1.13
Article 1.14
Article 1.15

Chapter 2

Section 1

Relation to Other Agreements
Joint Committee
Sub-Committees
Communications

Trade in Goods

General Rules

Article 2.1

Definitions

Article 2.2

Classification of Goods

Article 2.4

Elimination or Reduction of Customs

Article 2.3

National Treatment
Duties

Article 2.5

Customs Valuation

Article 2.7

Import and Export Restrictions

Article 2.6

Export Subsidies- 1 -Section 2

Safeguard Measures

Article 2.8

Application of Bilateral Safeguard

Article 2.9

Conditions and Limitations

Article 2.11

Notification and Consultations

Article 2.10
Article 2.12
Article 2.13
Article 2.14
Article 2.15
Article 2.16

Section 3

Measures

Investigation
Compensation

Provisional Bilateral Safeguard Measures
Relation to Safeguard Measures under the
WTO Agreement

Communications
Review

Other Provisions

Article 2.17
Article 2.18
Article 2.19
Article 2.20

Anti-Dumping and Countervailing Measures
Measures to Safeguard the Balance ofPayments

Sub-Committee on Trade in Goods

Operational Procedures for Trade in
Goods

Article 2.21

Cooperation with respect to Exports

Article 3.1

Definitions

Chapter 3

Rules of Origin

Article 3.2

Originating Goods

Article 3.4

Qualifying Value Content

Article 3.3
Article 3.5
Article 3.6
Article 3.7

Wholly Obtained Goods
Accumulation
De Minimis

Non-Qualifying Operations

Article 3.8

Consignment Criteria

Article 3.10

Fungible Goods and Materials

Article 3.9

Unassembled or Disassembled Goods- 2 -Article 3.11

Indirect Materials

Article 3.13

Packaging Materials and Containers for

Article 3.12

Accessories, Spare Parts and Tools
Retail Sale

Article 3.14

Packing Materials and Containers for

Article 3.15

Claim for Preferential Tariff Treatment

Article 3.17

Obligations regarding Exportations

Article 3.16
Article 3.18
Article 3.19
Article 3.20

Transportation and Shipment

Certificate of Origin

Request for Checking of Certificate ofOriginVerification Visit

Determination of Origin and Preferential
Tariff Treatment

Article 3.21

Confidentiality

Article 3.23

Penalties and Measures against False

Article 3.22

Minor Errors
Declaration

Article 3.24

Miscellaneous

Article 3.26

Operational Procedures for Rules of

Article 3.25

Chapter 4

Sub-Committee on Rules of Origin
OriginCustoms Procedures and Trade Facilitation

Article 4.1

Scope and Objectives

Article 4.3

Transparency

Article 4.2

Definition

Article 4.4

Customs Clearance

Article 4.6

Advance Rulings

Article 4.5
Article 4.7

Temporary Admission and Goods in Transit
Cooperation and Exchange of Information- 3 -Article 4.8
Chapter 5

Sub-Committee on Customs Procedures andTrade Facilitation

Sanitary and Phytosanitary Measures

Article 5.1

Scope

Article 5.2

Reaffirmation of Rights and Obligations

Article 5.4

Equivalence

Article 5.3
Article 5.5
Article 5.6
Article 5.7

Chapter 6

Harmonization

Enquiry Point

Sub-Committee on Sanitary andPhytosanitary Measures

Non-Application of Chapter 16

Technical Regulations, Standards andConformity Assessment Procedures

Article 6.1

Scope

Article 6.3

Definitions

Article 6.2

Objectives

Article 6.4

Reaffirmation of Rights and Obligations

Article 6.6

Technical Regulations

Article 6.5
Article 6.7
Article 6.8
Article 6.9

International Standards

Acceptance of Results of Conformity
Assessment Procedures

Enquiry Point

Sub-Committee on Technical Regulations,Standards and Conformity Assessment
Procedures

Article 6.10

Non-Application of Chapter 16

Article 7.1

Scope

Article 7.3

National Treatment

Chapter 7

Trade in Services

Article 7.2
Article 7.4

Definitions

Most-Favored-Nation Treatment- 4 -Article 7.5

Market Access

Article 7.7

Schedule of Specific Commitments

Article 7.6
Article 7.8
Article 7.9

Additional Commitments
Domestic Regulation
Recognition

Article 7.10

Monopolies and Exclusive Service

Article 7.11

Business Practices

Article 7.13

Restrictions to Safeguard the Balance ofArticle 7.12

Suppliers

Payments and Transfers
Payments

Article 7.14

Transparency

Article 7.16

Sub-Committee on Trade in Services

Article 7.15
Article 7.17

Chapter 8

Denial of Benefits

Review of Commitments

Movement of Natural Persons

Article 8.1

General Principles

Article 8.3

Definition

Article 8.2

Scope

Article 8.4

Specific Commitments

Article 8.6

Sub-Committee on Movement of Natural

Article 8.5

Requirements and Procedures
Persons

Article 8.7

Dispute Settlement

Article 9.1

General Provisions

Article 9.3

Customs Duties

Chapter 9

Electronic Commerce

Article 9.2
Article 9.4
Article 9.5

Definitions

Non-Discriminatory Treatment of Digital
Products

Electronic Signature- 5 -Article 9.6

Consumer Protection

Article 9.7

Unsolicited Commercial E-mailArticle 9.9

Domestic Regulation

Article 9.8
Article 9.10

Paperless Trade Administration
Prohibition on Requirement concerning
the Location of Computing Facilities

Article 9.11

Source Code

Article 9.13

Sub-Committee on Electronic Commerce

Article 9.12
Chapter 10

Cooperation

Investment

Article 10.1

Scope

Article 10.3

National Treatment

Article 10.2
Article 10.4
Article 10.5
Article 10.6
Article 10.7
Article 10.8
Article 10.9

Definitions

Most-Favored-Nation Treatment
General Treatment

Access to the Courts

Prohibition of Performance Requirements
Non-Conforming Measures

Expropriation and Compensation

Article 10.10

Protection from Strife

Article 10.12

Subrogation

Article 10.11
Article 10.13

Transfers

Settlement of Investment Disputes

between a Party and an Investor of the
Other Party

Article 10.14

Temporary Safeguard Measures

Article 10.16

Denial of Benefits

Article 10.15
Article 10.17
Article 10.18

Prudential Measures

Health, Safety and Environmental
Measures and Labor Standards

Sub-Committee on Investment- 6 -Article 10.19

Relation to the Bilateral Investment

Article 10.20

Duration and Termination

Article 11.1

Anticompetitive Activities

Chapter 11

Agreement

Competition

Article 11.2

Cooperation on Controlling

Anticompetitive Activities

Article 11.3

Non-Discrimination

Article 11.5

Transparency

Article 11.4
Article 11.6
Chapter 12

Procedural Fairness
Non-Application of Paragraph 2 ofArticle 1.8 and Chapter 16Intellectual Property

Article 12.1

General Provisions

Article 12.3

National Treatment

Article 12.2
Article 12.4
Article 12.5
Article 12.6

Definition

Procedural Matters
Transparency

Promotion of Public Awareness concerning
Protection of Intellectual Property

Article 12.7

Patents

Article 12.9

Trademarks

Article 12.8

Industrial Designs

Article 12.10

Copyright and Related Rights

Article 12.12

Unfair Competition

Article 12.11
Article 12.13
Article 12.14
Article 12.15
Article 12.16
Article 12.17

Geographical Indications

Protection of Undisclosed Information
Enforcement – Border Measures
Enforcement – Civil Remedies

Enforcement – Criminal Remedies

Enforcement – In the Digital Environment- 7 -Article 12.18

Sub-Committee on Intellectual Property

Article 12.19

Security Exceptions

Article 13.1

Procurement Principle

Article 13.3

Further Negotiations

Chapter 13

Government Procurement

Article 13.2
Article 13.4
Article 13.5

Chapter 14

Negotiation on Non-Discrimination

Sub-Committee on Government Procurement

Improvement of the Business Environment

Article 14.1
Article 14.2
Article 14.3
Article 14.4

Chapter 15

Exchange of Information

Basic Principles

Sub-Committee on Improvement of theBusiness Environment

Liaison Office

Non-Application of Chapter 16

Cooperation

Article 15.1

Basic Principles

Article 15.3

Costs of Cooperation

Article 15.2
Article 15.4
Article 15.5

Chapter 16

Areas and Forms of Cooperation
Sub-Committee on Cooperation

Non-Application of Chapter 16

Dispute Settlement

Article 16.1

Scope

Article 16.3

Choice of Forum

Article 16.2
Article 16.4
Article 16.5
Article 16.6
Article 16.7
Article 16.8
Article 16.9

Article 16.10

General Principle
Consultations

Good Offices, Conciliation or Mediation
Establishment of Arbitral Tribunals
Composition of Arbitral Tribunals
Functions of Arbitral Tribunals

Proceedings of Arbitral Tribunals

Termination of the Proceedings- 8 -Article 16.11

Implementation of Award

Article 16.13

Expenses

Article 16.12
Article 16.14

Chapter 17

Modification of Time Periods
Language

Final Provisions

Article 17.1

Table of Contents and Headings

Article 17.3

Amendment

Article 17.2
Article 17.4
Article 17.5
Article 17.6

Annexes and Notes
Entry into Force
Termination

Authentic Texts

Annex 1 referred to in Chapter 2

Schedules in relation

Annex 2 referred to in Chapter 3

Product Specific Rules

Annex 3 referred to in Chapter 3

Annex 4 referred to in Chapter 7
Annex 5 referred to in Chapter 7
Annex 6 referred to in Chapter 7

to Article 2.4

Minimum Data

Requirement for

Certificate of Origin

Financial Services
Telecommunications
Services

Schedules of SpecificCommitments and List of
Most-Favored-Nation

Annex 7 referred to in Chapter 8Treatment Exemptions

Specific Commitments
for the Movement of
Natural Persons- 9 -Annex 8 referred to in Chapter 10

Reservations for

Measures referred to in
Paragraph 1 of Article

Annex 9 referred to in Chapter 10

10.8

Reservations for

Measures referred to in
Paragraph 3 of Article
10.8

Annex 10 referred to in Chapter 10 Expropriation- 10 -

Preamble
Japan and Mongolia,
Conscious of their warm relationship and strong
economic and political ties that have developed throughgrowing trade and investment and mutually beneficial
cooperation between the Parties;
Realizing that a dynamic and rapidly changing global
environment brought about by globalization and closer
integration among economies in the world presents many new
economic challenges and opportunities to the Parties;
Recognizing that the economies of the Parties areendowed with conditions to complement each other and that
this complementarity should contribute to further promoting
the sustainable economic development in the Parties, bymaking use of their respective economic strengths throughbilateral trade and investment activities;
Realizing the differences between the Parties in termsof their level of economic development;
Seeking to create a clearly established and secured
trade and investment framework through mutuallyadvantageous rules to govern trade and investment between
the Parties;
Further seeking to enhance the competitiveness andsupply capacity of the economies of the Parties, make theirmarkets more efficient and vibrant, ensure predictablecommercial environment for further expansion of trade andinvestment between them, and contribute to further economic
efficiency and growth of the Parties;
Noting the important roles of private sectors forfurther enhancing commercial and economic relations between
the Parties and believing that this Agreement will create
new trade and investment opportunities for such private
sectors;- 11 -

Believing that the implementation of this Agreement
will contribute to creating new and better employment
opportunities through human resource development and thus
will improve living standard, including consumer welfares,of the peoples of the Parties;
Reaffirming the view that this Agreement will not only
contribute to strengthening the existing political andeconomic ties between the Parties but also become one of
the significant steps in building Japan-Mongolia “StrategicPartnership”;
Recalling Article XXIV of the GATT 1994 and Article Vof the GATS;
Convinced that this Agreement would open a new era forthe relationship between the Parties; andDetermined to establish a legal framework forstrengthening the economic partnership between the Parties;
HAVE AGREED as follows:- 12 -

Chapter 1
General Provisions
Article 1.1
Objective
The objective of this Agreement is to create a new
economic dynamism between the Parties by means of thefollowing, taking into account the stage of development andeconomic needs of the Parties:(a)liberalizing and facilitating trade in goods andservices between the Parties;(b)facilitating movement of natural persons between
the Parties;(c)increasing investment opportunities andstrengthening protection for investments andinvestment activities in the Parties;(d)enhancing protection of intellectual property;(e)promoting cooperation and coordination for theeffective enforcement of competition laws in eachParty;(f)establishing a framework for further reinforcing,broadening and deepening bilateral cooperation in
all fields relevant to trade and investment andimprovement of the business environment; and(g)creating effective procedures for the
implementation and operation of this Agreement
and for the prevention and resolution of
disputes.
Article 1.2
General Definitions

For the purposes of this Agreement, unless otherwise
specified:- 13 -

(a)the term “Agreement on Customs Valuation” means
the Agreement on Implementation of Article VII of
the General Agreement on Tariffs and Trade 1994
in Annex 1A to the WTO Agreement;(b)

the term “Area” means:(i)for Japan, the territory of Japan, and theexclusive economic zone and the continental
shelf with respect to which Japan exercises
sovereign rights or jurisdiction inaccordance with international law; and(ii)

for Mongolia, the territory of Mongolia;

Note:

(c)

Nothing in this subparagraph shall affectthe rights and obligations of the Parties
under international law, including thoseunder the UNCLOS.

the term “commercial presence” means any type ofbusiness or professional establishment, including
through:(i)the constitution, acquisition or maintenanceof a juridical person; or(ii)

the creation or maintenance of a branch or arepresentative office,within the Area of a Party for the purposes ofsupplying a service;
(d)

(e)

the term “customs authority” means the authority
that, according to the legislation of each Partyor a non-Party, is responsible for theadministration and enforcement of customs laws
and regulations:(i)for Japan, the Ministry of Finance, or its
successor; and(ii)

for Mongolia, the Customs General
Administration, or its successor;

the term “days” means calendar days, including
weekends and holidays;- 14 -

(f)the term “enterprise” means any juridical person
or any other entity duly constituted or organizedunder the applicable laws and regulations,
whether or not for profit, and whether private or
government owned or controlled, including any
corporation, trust, partnership, sole
proprietorship, joint venture, association,organization or company;(g)the term “enterprise of a Party” means anenterprise constituted or organized under theapplicable laws and regulations of that Party;(h)the term “GATS” means the General Agreement on
Trade in Services in Annex 1B to the WTO
Agreement;(i)the term “GATT 1994” means the General Agreement
on Tariffs and Trade 1994 in Annex 1A to the WTO
Agreement. For the purposes of this Agreement,
references to articles in the GATT 1994 include
the interpretative notes;(j)the term “Harmonized System” or “HS” means the
Harmonized Commodity Description and Coding
System set out in the Annex to the International
Convention on the Harmonized Commodity
Description and Coding System, and adopted andimplemented by the Parties in their respective
laws;

(k)

the term “investment” means every kind of asset
owned or controlled, directly or indirectly, by
an investor, including:(i)an enterprise and a branch of an enterprise;(ii)

shares, stocks or other forms of equity
participation in an enterprise, including
rights derived therefrom;(iii)

bonds, debentures, loans and other forms ofdebt, including rights derived therefrom;(iv)

rights under contracts, including turnkey,
construction, management, production orrevenue-sharing contracts;- 15 -

(v)claims to money and to any performance undercontract having a financial value;(vi)

intellectual property;
Note:Intellectual property means that set
out in Article 12.2.

(vii)

rights conferred pursuant to laws andregulations or contracts such asconcessions, licenses, authorizations andpermits, including, but not limited to,those for the supply of financial services,
the supply of telecommunications services,the production of nuclear energy and the
exploration and exploitation of natural
resources; and(viii)

any other tangible and intangible, movableand immovable property, and any related
property rights, such as leases, mortgages,
liens and pledges;

Note:

(l)

An investment includes the amount yieldedby an investment, in particular, profit,
interest, capital gains, dividends,
royalties and fees. A change in the form
in which assets are invested does notaffect their character as an investment.

the term “investor of a Party” means:(i)a natural person who is a national of a
Party under the law of the Party; or(ii)

an enterprise of that Party,

that seeks to make, is making or has madeinvestments in the Area of the other Party;(m)the term “juridical person” means any legal
entity duly constituted or otherwise organizedunder applicable law, whether for profit orotherwise, and whether private or government
owned, including any corporation, trust,
partnership, joint venture, sole proprietorshipor association;- 16 -

(n)a juridical person is:(i)“owned” by persons if more than 50 percentof the equity interest in it is beneficiallyowned by the persons; and(ii)“controlled” by persons if the persons havethe power to name a majority of its
directors or otherwise to legally direct its
actions;(o)

the term “originating good” means a good which
qualifies as an originating good under theprovisions of Chapter 3;(p)the term “Parties” means Japan and Mongolia andthe term “Party” means either Japan or Mongolia;(q)

the term “person” means a natural person or an
enterprise/juridical person, as the case may be;(r)

the term “service supplier” means any person that
supplies or seeks to supply a service;
Note:

(s)

Where the service is not supplied orsought to be supplied directly by ajuridical person but through other formsof commercial presence such as a branch ora representative office, the service
supplier (i.e. the juridical person)
shall, nonetheless, through suchcommercial presence be accorded thetreatment provided for service suppliers
under Chapter 7. Such treatment shall be
extended to the commercial presence
through which the service is supplied orsought to be supplied and need not be
extended to any other parts of the service
supplier located outside the Area of a
Party where the service is supplied orsought to be supplied.

the term “SPS Agreement” means the Agreement on
the Application of Sanitary and Phytosanitary
Measures in Annex 1A to the WTO Agreement;- 17 -

(t)the term “state enterprise” means a juridical
person owned or controlled by a Party;(u)the term “TRIPS Agreement” means the Agreement on
Trade-Related Aspects of Intellectual Property
Rights in Annex 1C to the WTO Agreement;(v)

the term “UNCLOS” means the United Nations
Convention on the Law of the Sea, done at Montego
Bay, December 10, 1982; and(w)

the term “WTO Agreement” means the Marrakesh
Agreement Establishing the World Trade
Organization, done at Marrakesh, April 15, 1994.
Article 1.3
Transparency

1.
Each Party shall promptly publish, or otherwise makepublicly available, its laws, regulations and judicial
decisions of general application as well as international
agreements to which the Party is a party, with respect toany matter covered by this Agreement.
2.
Each Party shall make easily available to the public
the names and addresses of the competent authorities
responsible for the laws and regulations referred to inparagraph 1.
3.
Each Party shall, upon request of the other Party,
within a reasonable period of time, respond to specificquestions from, and provide information to, the other Party
with respect to matters referred to in paragraph 1, in the
English language to the extent possible.
4.
When introducing or changing its laws or regulations
that significantly affect the implementation and operationof this Agreement, each Party shall endeavor to provide,except in emergency situations and to the extent covered byits domestic laws, a reasonable interval between the time
when such laws or regulations are published or madepublicly available and the time when they enter into force.

- 18 -

Article 1.4
Public Comment Procedures
Each Party shall, in accordance with its laws andregulations and to the extent practicable, maintain publiccomment procedures with respect to any matter covered bythis Agreement.
Article 1.5
Administrative Procedures
1.
Upon receiving an application submitted by a person
who seeks an administrative decision which pertains to oraffects the implementation and operation of this Agreement,
the competent authorities of a Party shall, in accordancewith the laws and regulations of the Party:(a)inform the applicant of the decision within areasonable period of time after the submission of
the application considered complete in accordancewith the laws and regulations of the Party,
taking into account the established standard
period of time referred to in paragraph 3; and(b)provide, within a reasonable period of time,
information concerning the status of theapplication, upon request of the applicant.

2.
The competent authorities of a Party shall, in
accordance with the laws and regulations of the Party,
establish criteria for reviewing the application referred
to in paragraph 1. The competent authorities shall makesuch criteria:(a)as specific as possible; and(b)publicly available except when it would
extraordinarily raise administrative difficulties
for the Party.

3.
For the purposes of reviewing the applications
referred to in paragraph 1, the competent authorities of a
Party shall, in accordance with the laws and regulations of
the Party:- 19 -

(a)endeavor to establish standard periods of time
between the receipt of the applications and theadministrative decisions taken in response to theapplications; and(b)make publicly available such periods of time, if
established.

4.
The competent authorities of a Party shall endeavor
to, in accordance with the laws and regulations of theParty, prior to any final decision which imposes
obligations on or restricts legal rights of a person,
provide that person with:(a)a reasonable notice, including a description of
the nature of the measure, specific provisions
upon which such measure will be based, and thefacts which may be a cause of taking suchmeasure; and(b)a reasonable opportunity to present facts andarguments in support of position of such person,

provided that time, nature of the measure and public
interest permit.
Article 1.6
Review and Appeal
1.
Each Party shall maintain courts or procedures for the
purpose of prompt review and, where warranted, correctionof administrative actions regarding matters covered by thisAgreement. Such courts or procedures shall be impartial andindependent of the authorities entrusted with theadministrative enforcement of such actions.
2.
Each Party shall ensure that the parties in any suchcourts or procedures are provided with the right to:(a)a reasonable opportunity to support or defend
their respective positions; and(b)a decision based on the evidence and submissionsof record.

- 20 -

3.
Each Party shall ensure, subject to appeal or further
review as provided in its laws and regulations, that suchdecision is implemented by the relevant authorities withrespect to the administrative action at issue.
Article 1.7
Measures against Corruption
Each Party shall, in accordance with its laws andregulations, take appropriate measures to prevent andcombat corruption of its public officials regarding matters
covered by this Agreement.
Article 1.8
Confidential Information
1.
Each Party shall, in accordance with its laws andregulations, maintain the confidentiality of information
provided in confidence by the other Party in accordancewith this Agreement.
2.
Unless otherwise provided for in this Agreement,
nothing in this Agreement shall require a Party to provide
confidential information, the disclosure of which would
impede the enforcement of its laws and regulations, orotherwise be contrary to the public interest, or which
would prejudice legitimate commercial interests ofparticular enterprises, public or private.
Article 1.9
Taxation
1.
Unless otherwise provided for in this Agreement, theprovisions of this Agreement shall not apply to any
taxation measures.
2.
Nothing in this Agreement shall affect the rights andobligations of either Party under any tax convention. In
the event of any inconsistency between this Agreement andany such convention, that convention shall prevail to theextent of the inconsistency.

- 21 -

3.
Articles 1.3 and 1.8 shall apply to taxation measures,to the extent that the provisions of this Agreement are
applicable to such taxation measures.
Article 1.10
Exceptions
1.
For the purposes of this Agreement except Chapters 7,
8 and 12, Articles XX and XXI of the GATT 1994 areincorporated into and form part of this Agreement, mutatis
mutandis.
2.
For the purposes of Chapters 7, 8, 9 and 10, Articles
XIV and XIV bis of the GATS are incorporated into and form
part of this Agreement, mutatis mutandis.
3.
The Parties may consult with each other on issues
related to the situation where:(a)the export earnings of a Party the economy ofwhich depend on exports of a small number ofprimary commodities may be seriously reduced by adecline in the sales or the world prices of suchcommodities; or(b)promoting the establishment of a particularindustry of a Party may be required with a viewto raising the general standard of living of its
people.

Note: For the purposes of this Article, it is understoodthat subparagraph (b) of Article XX of the GATT 1994
and subparagraph (b) of Article XIV of the GATS
include environmental measures necessary to protect
human, animal or plant life or health, and thatsubparagraph (g) of Article XX of the GATT 1994
applies to measures related to the conservation ofliving and non-living exhaustible natural resources.
Article 1.11
Relation to Other Agreements
1.
The Parties reaffirm their rights and obligations
under the WTO Agreement or any other agreements to which
both Parties are party.

- 22 -

2.
In the event of any inconsistency between thisAgreement and the WTO Agreement, the WTO Agreement shallprevail to the extent of the inconsistency.
3.
In the event of any inconsistency between thisAgreement and any agreement other than the WTO Agreement towhich both Parties are party, the Parties shall immediately
consult with each other with a view to finding a mutuallysatisfactory solution, taking into consideration generalprinciples of international law.
Article 1.12
Implementing Agreement
The Governments of the Parties shall conclude a
separate agreement setting forth the details and proceduresfor the implementation of this Agreement, which thereby
shall be complementary to this Agreement (hereinafterreferred to as “Implementing Agreement”).
Article 1.13
Joint Committee
1.
The Parties hereby establish a Joint Committee under
this Agreement.
2.

The functions of the Joint Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Agreement and, when necessary,
making appropriate recommendations to theParties;(b)considering and recommending to the Parties any
amendments to this Agreement;(c)supervising and coordinating the work of all SubCommittees established under this Agreement;(d)adopting:(i)the Operational Procedures for Trade inGoods and the Operational Procedures for
Rules of Origin referred to in Article 2.20
and Article 3.26, respectively; and- 23 -

(ii)
(e)
3.

any necessary decisions; andcarrying out other functions as the Parties may
agree.

The Joint Committee:(a)shall be composed of representatives of theGovernments of the Parties;(b)

may establish other Sub-Committees than those
provided for in Article 1.14; and(c)may delegate its responsibilities to SubCommittees.

4.
The Joint Committee shall establish its rules andprocedures.
5.
The Joint Committee shall hold the first meeting on
the date of entry into force of this Agreement, andthereafter, meet at such times and venues or by means, as
may be agreed by the Parties.
Article 1.14
Sub-Committees
1.
The following Sub-Committees shall be established on
the date of entry into force of this Agreement:(a)Sub-Committee on Trade in Goods, as provided forin Article 2.19;(b)

Sub-Committee on Rules of Origin, as provided forin Article 3.25;(c)

Sub-Committee on Customs Procedures and Trade
Facilitation, as provided for in Article 4.8;(d)Sub-Committee on Sanitary and Phytosanitary
Measures, as provided for in Article 5.6;(e)Sub-Committee on Technical Regulations, Standards
and Conformity Assessment Procedures, as provided
for in Article 6.9;

- 24 -

(f)Sub-Committee on Trade in Services, as provided
for in Article 7.16;(g)

Sub-Committee on Movement of Natural Persons, as
provided for in Article 8.6;(h)

Sub-Committee on Electronic Commerce, as provided
for in Article 9.13;(i)

Sub-Committee on Investment, as provided for in
Article 10.18;(j)Sub-Committee on Intellectual Property, as
provided for in Article 12.18;(k)

Sub-Committee on Government Procurement, as
provided for in Article 13.5;(l)

Sub-Committee on Improvement of the Business
Environment, as provided for in Article 14.2; and(m)

Sub-Committee on Cooperation, as provided for in
Article 15.4.

2.
The Sub-Committees shall carry out the functions
specified in the corresponding Articles referred to inparagraph 1.
Article 1.15
Communications
Each Party shall designate a contact point tofacilitate communications between the Parties on any matter
related to this Agreement.

- 25 -

Chapter 2
Trade in Goods
Section 1
General Rules
Article 2.1
Definitions
For the purposes of this Chapter:(a)the term “Agreement on Agriculture” means theAgreement on Agriculture in Annex 1A to the WTO
Agreement;(b)

the term “Agreement on Anti-Dumping” means theAgreement on Implementation of Article VI of theGeneral Agreement on Tariffs and Trade 1994 in
Annex 1A to the WTO Agreement;(c)the term “Agreement on Safeguards” means theAgreement on Safeguards in Annex 1A to the WTO
Agreement;(d)the term “Agreement on Subsidies andCountervailing Measures” means the Agreement on
Subsidies and Countervailing Measures in Annex 1A
to the WTO Agreement;(e)the term “bilateral safeguard measure” means abilateral safeguard measure provided for inparagraph 2 of Article 2.8;(f)

the term “customs duty” means any customs orimport duty imposed in connection with theimportation of a good, but does not include any:(i)charge equivalent to an internal tax imposedconsistently with the provisions ofparagraph 2 of Article II and paragraph 2 ofArticle III of the GATT 1994;- 26 -

(ii)anti-dumping or countervailing duty applied
pursuant to a Party’s law and appliedconsistently with the provisions of Article
VI of the GATT 1994, the Agreement on AntiDumping and the Agreement on Subsidies andCountervailing Measures; or(iii)

fees or other charges commensurate with thecost of services rendered;(g)the term “customs value of goods” means the valueof goods for the purposes of levying ad valorem
customs duties on imported goods;(h)the term “domestic industry” means the producers
as a whole of the like or directly competitive
goods operating in a Party, or those whose
collective output of the like or directlycompetitive goods constitutes a major proportionof the total domestic production of those goods;(i)the term “provisional bilateral safeguard
measure” means a provisional bilateral safeguard
measure provided for in paragraph 1 of Article
2.13;

(j)

the term “serious injury” means a significant
overall impairment in the position of a domestic
industry; and(k)the term “threat of serious injury” means serious
injury that, on the basis of facts and not merelyon allegation, conjecture or remote possibility,
is clearly imminent.
Article 2.2
Classification of Goods

The classification of goods in trade between theParties shall be in conformity with the Harmonized System.

- 27 -

Article 2.3
National Treatment
Each Party shall accord national treatment to thegoods of the other Party in accordance with Article III of
the GATT 1994, and to this end Article III of the GATT 1994
is incorporated into and forms part of this Agreement,
mutatis mutandis.
Article 2.4
Elimination or Reduction of Customs Duties
1.
Unless otherwise provided for in this Agreement, eachParty shall eliminate or reduce its customs duties on
originating goods of the other Party in accordance with its
Schedule in Annex 1.
2.
Upon request of either Party, the Parties shallnegotiate on issues such as improving market access fororiginating goods designated for negotiation in the
Schedules in Annex 1, in accordance with the terms andconditions set out in such Schedules.
3.
In accordance with subparagraph 1(b) of Article II of
the GATT 1994, the goods traded between the Parties shallbe exempt from other duties or charges of any kind imposedon or in connection with the importation.
4.
Nothing in this Article shall prevent a Party from
imposing, at any time, a charge equivalent to an internaltax, any anti-dumping or countervailing duty, or fees orother charges referred to in subparagraphs (f)(i) through(iii) of Article 2.1, respectively, on the importation of
any good of the other Party.
5.
If, as a result of the elimination or reduction of its
customs duty on a particular good on a most-favored-nationbasis, the most-favored-nation applied rate for the good
becomes equal to, or lower than, the rate of customs duty
to be applied in accordance with paragraph 1 on theoriginating good which is classified under the same tariffline as that particular good, each Party shall notify theother Party of such elimination or reduction without delay.

- 28 -

6.
In cases where its most-favored-nation applied rate ofcustoms duty on a particular good becomes lower than therate of customs duty to be applied in accordance withparagraph 1 on the originating good which is classified
under the same tariff line as that particular good, eachParty shall apply the lower rate with respect to thatoriginating good.
Article 2.5
Customs Valuation
For the purposes of determining the customs value ofgoods traded between the Parties, the provisions of Part Iof the Agreement on Customs Valuation shall apply mutatis
mutandis.
Article 2.6
Export Subsidies
Neither Party shall introduce or maintain any export
subsidies, which are inconsistent with its obligations
under the WTO Agreement, on any agricultural good, which islisted in Annex 1 to the Agreement on Agriculture.
Article 2.7
Import and Export Restrictions
1.
Neither Party shall introduce or maintain any
prohibition or restriction other than customs duties on theimportation of any good of the other Party or on theexportation or sale for export of any good destined to theother Party, which is inconsistent with its obligations
under the relevant provisions of the WTO Agreement.

- 29 -

2.
In the case that a Party introduces a prohibition or
restriction other than customs duties taken consistently
with the provisions of the WTO Agreement with respect tothe importation from, or the exportation to, the otherParty of a good upon which the Parties agree, the former
Party shall make available, and endeavor to notify,
relevant information to the other Party, prior to theintroduction of such prohibition or restriction, or as soon
as possible thereafter, in a manner consistent with thelaws and regulations of the former Party. This paragraphshall apply unless the sharing of such information isconsidered by the former Party as prejudicial to public
interest.
Note: A Party may comply with this paragraph byproviding the relevant information to the otherParty through the relevant procedures under the
WTO Agreement.
Section 2
Safeguard Measures
Article 2.8
Application of Bilateral Safeguard Measures
1.
Subject to the provisions of this Section, a Party may
apply a bilateral safeguard measure, to the minimum extent
necessary to prevent or remedy the serious injury to its
domestic industry and to facilitate adjustment thereof, if
an originating good of the other Party, as a result of theelimination or reduction of a customs duty in accordancewith Article 2.4, is being imported into the former Partyin such increased quantities, in absolute terms or relative
to domestic production, and under such conditions that theimports of that originating good constitute cause ofserious injury, or threat of serious injury, to a domestic
industry of the former Party.
2.

A Party may, as a bilateral safeguard measure:(a)suspend the further reduction of any rate ofcustoms duty on the originating good provided forin this Chapter; or- 30 -

(b)increase the rate of customs duty on theoriginating good to a level not to exceed thelesser of:(i)the most-favored-nation applied rate ofcustoms duty in effect on the day when thebilateral safeguard measure is applied; and(ii)

the most-favored-nation applied rate ofcustoms duty in effect on the day
immediately preceding the date of entry into
force of this Agreement.
Article 2.9
Conditions and Limitations

1.
No bilateral safeguard measure shall be maintained
except to the extent and for such period of time as may benecessary to prevent or remedy serious injury and to
facilitate adjustment, provided that such period of timeshall not exceed a period of three years. However, inhighly exceptional circumstances, a bilateral safeguard
measure may be extended, provided that the total durationof the bilateral safeguard measure, including suchextensions, shall not exceed six years. In order tofacilitate adjustment in a situation where the expected
duration of a bilateral safeguard measure is over one year,
the Party maintaining the bilateral safeguard measure shallprogressively liberalize the bilateral safeguard measure at
regular intervals during the period of application.
2.
No bilateral safeguard measure shall be applied again
to the import of a particular originating good which has
been subject to such a bilateral safeguard measure, for aperiod of time equal to the duration of the previous
bilateral safeguard measure or one year, whichever islonger.
3.
Upon the termination of a bilateral safeguard measure,
the rate of customs duty for the originating good subject
to the measure shall be the rate which would have been in
effect if the bilateral safeguard measure had never been
applied.

- 31 -

4.
A bilateral safeguard measure shall not be applied
against an originating good of the exporting Party as longas its share of imports of the good concerned in theimporting Party does not exceed three percent.
5.
Each Party shall adopt or maintain equitable, timely,transparent and effective procedures relating to bilateralsafeguard measures.
Article 2.10
Investigation
1.
A Party may apply a bilateral safeguard measure only
after an investigation has been carried out by thecompetent authorities of that Party in accordance with thesame procedures as those provided for in Article 3 andparagraph 2 of Article 4 of the Agreement on Safeguards.
2.
The investigation referred to in paragraph 1 shall,
except in special circumstances, be completed within one
year, and in no case more than 18 months, following its
date of initiation.
Article 2.11
Notification and Consultations
1.
A Party shall immediately make a written notice to theother Party upon:(a)initiating an investigation referred to inparagraph 1 of Article 2.10 related to serious
injury, or threat of serious injury, and thereasons therefor; and(b)taking a decision to apply or extend a bilateralsafeguard measure.

2.
The Party making the written notice referred to inparagraph 1 shall provide the other Party with all
pertinent information, which shall include:- 32 -

(a)in the written notice referred to in subparagraph1(a), the reason for the initiation of theinvestigation, a precise description of theoriginating good subject to the investigation andits subheading under the Harmonized System, theperiod subject to the investigation and the dateof initiation of the investigation; and(b)in the written notice referred to in subparagraph1(b), evidence of serious injury or threat ofserious injury caused by the increased imports of
the originating good, a precise description of
the originating good subject to the proposed
bilateral safeguard measure and its subheading
under the Harmonized System, a precise
description of the proposed bilateral safeguard
measure, and the proposed date of theintroduction and expected duration of thebilateral safeguard measure.

3.
A Party proposing to apply or extend a bilateralsafeguard measure shall provide adequate opportunity forprior consultations with the other Party with a view toreviewing the information arising from the investigationreferred to in paragraph 1 of Article 2.10, exchanging
views on the bilateral safeguard measure and reaching anagreement on compensation set out in Article 2.12.
Article 2.12
Compensation
1.
A Party proposing to apply or extend a bilateralsafeguard measure may agree on adequate means of tradecompensation in the form of concessions of customs duties
whose value is substantially equivalent to that of theadditional customs duties expected to result from thebilateral safeguard measure.

- 33 -

2.
If the Parties are unable to agree on the compensation
within 30 days after the commencement of the consultationsin accordance with paragraph 3 of Article 2.11, the Party
to whose originating good the bilateral safeguard measure
is applied shall be free to suspend the application ofconcessions of customs duties under this Agreement, which
are substantially equivalent to the bilateral safeguard
measure. The Party exercising the right of suspension may
suspend the application of concessions of customs duties
only for the minimum period necessary to achieve thesubstantially equivalent effects and only while thebilateral safeguard measure is maintained.
Article 2.13
Provisional Bilateral Safeguard Measures
1.
In critical circumstances, where delay would cause
damage which it would be difficult to repair, a Party may
apply a provisional bilateral safeguard measure, whichshall take the form of the measure set out in subparagraph2(a) or 2(b) of Article 2.8, pursuant to a preliminary
determination that there is clear evidence that increased
imports of an originating good of the other Party havecaused or are threatening to cause serious injury to adomestic industry of the former Party.
2.
A Party shall make a written notice to the other Partyprior to applying a provisional bilateral safeguard
measure. Consultations between the Parties on theapplication of the provisional bilateral safeguard measure
shall be initiated immediately after the provisional
bilateral safeguard measure is applied.
3.
The duration of a provisional bilateral safeguard
measure shall not exceed 200 days. During that period, thepertinent requirements of Article 2.10 shall be met. The
duration of the provisional bilateral safeguard measure
shall be counted as a part of the period referred to inparagraph 1 of Article 2.9.

- 34 -

4.
Paragraphs 3 through 5 of Article 2.9 shall apply,
mutatis mutandis, to a provisional bilateral safeguard
measure. The customs duty imposed as a result of theprovisional bilateral safeguard measure shall be refunded
if the subsequent investigation referred to in paragraph 1
of Article 2.10 does not determine that increased importsof an originating good of the other Party have caused or
threatened to cause serious injury to a domestic industry.
Article 2.14
Relation to Safeguard Measures under the WTO Agreement1.
Nothing in this Section shall prevent a Party fromapplying a safeguard measure to an originating good of theother Party in accordance with:(a)

Article XIX of the GATT 1994 and the Agreement on
Safeguards; or(b)Article 5 of the Agreement on Agriculture.

2.
A Party applying a safeguard measure to theimportation of an originating good of the other Party inaccordance with Article XIX of the GATT 1994 and theAgreement on Safeguards, or Article 5 of the Agreement on
Agriculture, shall not apply at the same time a bilateralsafeguard measure under this Section to that importation.
3.
In the case that a Party has applied a bilateralsafeguard measure under this Section to the importation ofan originating good of the other Party prior to theapplication of a safeguard measure in accordance with
Article XIX of the GATT 1994 and the Agreement on
Safeguards, or Article 5 of the Agreement on Agriculture,
the duration of the latter safeguard measure shall becounted as a part of the total duration of the bilateralsafeguard measure. The Party may resume the application of
the bilateral safeguard measure to that importation upon
the termination of the latter safeguard measure up to theremaining period of the bilateral safeguard measure.

- 35 -

Article 2.15
Communications
A written notice referred to in paragraph 1 of Article
2.11 and paragraph 2 of Article 2.13 and any othercommunication between the Parties in accordance with thisSection shall be made in the English language.
Article 2.16
Review
The Parties shall review the provisions of thisSection, if necessary, 10 years after the date of entry
into force of this Agreement.
Section 3
Other Provisions
Article 2.17
Anti-Dumping and Countervailing Measures
Nothing in this Chapter shall be construed to preventa Party from taking any measure in accordance with theprovisions of Article VI of the GATT 1994, the Agreement on
Anti-Dumping and the Agreement on Subsidies andCountervailing Measures.
Article 2.18
Measures to Safeguard the Balance of Payments
1.
Nothing in this Chapter shall be construed to preventa Party from taking any measure for balance-of-payments
purposes. A Party taking such measure shall do so inaccordance with the conditions established under Article
XII of the GATT 1994 and the Understanding on the Balanceof-Payments Provisions of the General Agreement on Tariffs
and Trade 1994 in Annex 1A to the WTO Agreement.
2.
Nothing in this Chapter shall preclude the use by a
Party of exchange controls or exchange restrictions inaccordance with the Articles of Agreement of theInternational Monetary Fund.

- 36 -

Article 2.19
Sub-Committee on Trade in Goods
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Trade in Goods (hereinafter referred to inthis Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)considering any other matter related to this
Chapter as the Parties may agree;(c)reviewing and making appropriate recommendations,as necessary, to the Joint Committee on the
Operational Procedures for Trade in Goods
referred to in Article 2.20;(d)reporting the findings of the Sub-Committee to
the Joint Committee; and(e)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
Article 2.20
Operational Procedures for Trade in Goods
Upon the date of entry into force of this Agreement,
the Joint Committee shall adopt the Operational Procedures
for Trade in Goods that provide detailed regulations
pursuant to which the relevant authorities of the Parties
shall implement their functions under this Chapter.

- 37 -

Article 2.21
Cooperation with respect to Exports
The Parties shall, in accordance with the provisionsof Chapter 15, cooperate with each other in the field ofused four-wheeled motor vehicles exported from theexporting Party.

- 38 -

Chapter 3
Rules of Origin
Article 3.1
Definitions
For the purposes of this Chapter:(a)the term “competent governmental authority” means
the authority that, according to the legislationof each Party, is responsible for the issuing ofa Certificate of Origin or for the designation ofcertification entities or bodies;(b)

the term “exporter” means a person located in an
exporting Party who exports a good from theexporting Party;(c)the term “factory ships of the Party” or “vesselsof the Party” respectively means factory ships orvessels:(i)which are registered in the Party;(ii)

which sail under the flag of the Party; and(iii)

which meet one of the following conditions:

(d)

(A)

they are at least 50 percent owned bynationals of the Parties; or(B)they are owned by a juridical person
which has its head office and its
principal place of business in either
Party and which does not own any vesselor ship registered in a non-Party;

the term “fungible originating goods of a Party”
or “fungible originating materials of a Party”
respectively means originating goods or materials
of a Party that are interchangeable forcommercial purposes, whose properties are
essentially identical;- 39 -

(e)the term “Generally Accepted Accounting
Principles” means the recognized consensus or
substantial authoritative support within a Party
at a particular time as to which economic
resources and obligations should be recorded asassets and liabilities, which changes in assets
and liabilities should be recorded, how theassets and liabilities and changes in them shouldbe measured, what information should be disclosed
and how it should be disclosed, and which
financial statements should be prepared. Thesestandards may be broad guidelines of generalapplication as well as detailed practices andprocedures;(f)the term “importer” means a person who imports agood into the importing Party;(g)the term “indirect materials” means goods used in
the production, testing or inspection of anothergood but not physically incorporated into thegood, or goods used in the maintenance ofbuildings or the operation of equipment
associated with the production of another good,including:(i)

fuel and energy;(ii)

tools, dies and molds;(iii)

spare parts and goods used in themaintenance of equipment and buildings;(iv)

lubricants, greases, compounding materials
and other goods used in production or used
to operate equipment and buildings;(v)

gloves, glasses, footwear, clothing, safety
equipment and supplies;(vi)

equipment, devices and supplies used fortesting or inspecting the good;(vii)

catalysts and solvents; and- 40 -

(viii)any other goods that are not incorporated
into another good but whose use in the
production of the good can reasonably bedemonstrated to be a part of that
production;(h)the term “material” means a good that is used in
the production of another good;(i)the term “non-originating material” means amaterial which does not qualify as originating
under this Chapter;(j)

the term “originating material” means a material
which qualifies as originating under this
Chapter;(k)

the term “packing materials and containers fortransportation and shipment” means goods that areused to protect a good during transportation,other than packaging materials and containers forretail sale referred to in Article 3.13;(l)the term “preferential tariff treatment” means
the rate of customs duties applicable to an
originating good of the exporting Party inaccordance with paragraph 1 of Article 2.4;(m)

the term “producer” means a person who engages in
the production of goods or materials; and(n)the term “production” means a method of obtaining
goods including manufacturing, assembling,processing, raising, growing, breeding, mining,
extracting, harvesting, fishing, trapping,gathering, collecting, hunting and capturing.
Article 3.2
Originating Goods

Unless otherwise provided for in this Chapter, a goodshall qualify as an originating good of a Party where:(a)the good is wholly obtained or produced entirelyin the Party, as defined in Article 3.3;

- 41 -

(b)the good is produced entirely in the Party
exclusively from originating materials of theParty; or(c)the good satisfies the product specific rules(change in tariff classification, qualifying
value content or specific manufacturing orprocessing operation) set out in Annex 2, as
well as all other applicable requirements ofthis Chapter, when the good is produced entirelyin the Party using non-originating materials.
Article 3.3
Wholly Obtained Goods

For the purposes of subparagraph (a) of Article 3.2,
the following goods shall be considered as being wholly
obtained or produced entirely in a Party:(a)live animals born and raised in the Party;(b)animals obtained by hunting, trapping, fishing,gathering or capturing in the Party;(c)goods obtained from live animals in the Party;(d)plants and plant products harvested, picked orgathered in the Party;(e)minerals and other naturally occurring
substances, not included in subparagraphs (a)through (d), extracted or taken in the Party;(f)goods of sea-fishing and other goods taken by
vessels of the Party from the sea outside theterritorial seas of the Parties;(g)goods produced on board factory ships of theParty outside the territorial seas of the Parties
from the goods referred to in subparagraph (f);(h)

goods taken from the seabed or subsoil thereof
outside the territorial sea of the Party,
provided that the Party has rights to exploit
such seabed or subsoil in accordance with theprovisions of the UNCLOS;- 42 -

(i)articles collected in the Party which can nolonger perform their original purpose in the
Party nor are capable of being restored or
repaired and which are fit only for disposal orfor the recovery of parts or raw materials;(j)scrap and waste derived from manufacturing orprocessing operations or from consumption in the
Party and fit only for disposal or for therecovery of raw materials;(k)parts or raw materials recovered in the Party
from articles which can no longer perform their
original purpose nor are capable of being
restored or repaired; and(l)goods obtained or produced in the Party
exclusively from the goods referred to in
subparagraphs (a) through (k).
Article 3.4
Qualifying Value Content

1.
For the purposes of subparagraph (c) of Article 3.2,
the qualifying value content of a good shall be calculatedon the basis of one or the other of the following methods:(a)Method based on value of non-originating
materials (“Build-down method”)
Q.V.C. =(b)

F.O.B. – V.N.M.
----------------------------- x 100
F.O.B.

Method based on value of originating materials(“Build-up method”)
V.O.M. + Direct Labor Cost
+ Direct Overhead Cost + Profit
Q.V.C. = -------------------------------- x 100
F.O.B.

Where:
Q.V.C. is the qualifying value content of a good, expressed
as a percentage;- 43 -

F.O.B. is, except as provided for in paragraph 2, the freeon-board value of the good payable by the buyer of the goodto the seller of the good, regardless of the mode of
shipment, not including any internal excise taxes reduced,
exempted or repaid when the good is exported;
V.N.M. is the value of non-originating materials used in
the production of the good; andV.O.M. is the value of originating materials used in the
production of the good.
Note: For the purposes of calculating the qualifying
value content of a good, the Generally Accepted
Accounting Principles in the exporting Party
shall apply.
2.

F.O.B. referred to in paragraph 1 shall be the value:(a)adjusted to the first ascertainable price paid
for a good from the buyer to the producer of thegood, if there is free-on-board value of thegood, but it is unknown and cannot be
ascertained; or(b)determined in accordance with Articles 1 through8 of the Agreement on Customs Valuation, if there
is no free-on-board value of a good.

3.
For the purposes of calculating the qualifying value
content of a good in accordance with paragraph 1, the valueof material used in the production of the good in a Party:(a)shall be determined in accordance with theAgreement on Customs Valuation, and shall include
freight, insurance where appropriate, packing andall the other costs incurred in transporting thematerial to the importation port in the Party
where the producer of the good is located; or- 44 -

(b)if such value is unknown and cannot be
ascertained, shall be the first ascertainable
price paid for the material in the Party, but may
exclude all the costs incurred in the Party intransporting the material from the warehouse of
the supplier of the material to the place where
the producer is located such as freight,
insurance and packing as well as any other known
and ascertainable cost incurred in the Party.

4.
For the purposes of calculating the qualifying value
content of a good to determine whether the good qualifies
as an originating good of a Party:(a)V.N.M. of the good under subparagraph 1(a) shallnot include the value of non-originating
materials used in the production of originating
materials of the Party which are used in the
production of the good; and(b)

V.O.M. of the good under subparagraph 1(b) shall
include the value of non-originating materials
used in the production of originating materialsof the Party which are used in the production of
the good.

5.
For the purposes of subparagraph 2(b) or 3(a), in
applying the Agreement on Customs Valuation to determine
the value of a good or a material, the Agreement on Customs
Valuation shall apply mutatis mutandis to domestictransactions or to the cases where there is no transactionof the good or the material.
Article 3.5
Accumulation
For the purposes of determining whether a goodqualifies as an originating good of a Party:(a)an originating good of the other Party which isused as a material in the production of the goodin the former Party may be considered as an
originating material of the former Party;(b)

the production in the other Party may beconsidered as that in the former Party; and- 45 -

(c)the production carried out at different stages by
one or more producers within the Party or in theother Party may be taken into account, when thegood is produced using non-originating materials,

provided that such good has undergone its last production
process in the exporting Party and such production process
goes beyond the operations provided for in Article 3.7.
Article 3.6
De Minimis
1.
For the application of the product specific rules set
out in Annex 2, non-originating materials used in the
production of a good that do not satisfy an applicable rule
for the good shall be disregarded, provided that the
totality of such materials does not exceed specificpercentage in value, weight or volume of the good and such
percentage is set out in the applicable product specificrule for the good.
2.
Paragraph 1 shall not apply to a non-originating
material used in the production of a good provided for in
Chapters 1 through 24 of the Harmonized System, except
where such non-originating material is provided for in a
subheading which is different from that of the good forwhich the origin is being determined under this Article.
Article 3.7
Non-Qualifying Operations
1.
A good shall not be considered as an originating goodof a Party merely by reason of:(a)operations to ensure the preservation of products
in good condition during transport and storage(such as drying, freezing, keeping in brine) andother similar operations;(b)changes of packaging and breaking-up and assemblyof packages;(c)disassembly;- 46 -

(d)placing in bottles, cases, boxes and other simple
packaging operations;(e)collection of parts and components classified asa good in accordance with Rule 2(a) of theGeneral Rules for the Interpretation of theHarmonized System;(f)mere making-up of sets of articles; or(g)any combination of operations referred to in
subparagraphs (a) through (f).

2.
Paragraph 1 shall prevail over the product specificrules set out in Annex 2.
Article 3.8
Consignment Criteria
1.
An originating good of the other Party shall be deemed
to meet the consignment criteria when it is transported:(a)directly from the other Party; or(b)through one or more non-Parties for the purposeof transit or temporary storage in warehouses insuch non-Parties, provided that it does notundergo operations other than unloading,reloading and any other operation to preserve it
in good condition.

2.
If an originating good of the other Party does notmeet the consignment criteria referred to in paragraph 1,
the good shall not be considered as an originating good of
the other Party.

- 47 -

Article 3.9
Unassembled or Disassembled Goods
1.
Where a good satisfies the requirements of therelevant provisions of Articles 3.2 through 3.7 and isimported into a Party from the other Party in an
unassembled or disassembled form but is classified as an
assembled good in accordance with Rule 2(a) of the General
Rules for the Interpretation of the Harmonized System, sucha good shall be considered as an originating good of theother Party.
2.
A good assembled in a Party from unassembled ordisassembled materials, which were imported into the Party
and classified as an assembled good in accordance with Rule2(a) of the General Rules for the Interpretation of theHarmonized System, shall be considered as an originating
good of the Party, provided that the good would havesatisfied the applicable requirements of the relevant
provisions of Articles 3.2 through 3.7 if each of the nonoriginating materials among the unassembled or disassembled
materials had been imported into the Party separately andnot as an unassembled or disassembled form.
Article 3.10
Fungible Goods and Materials
1.
For the purposes of determining whether a goodqualifies as an originating good of a Party, where fungible
originating materials of the Party and fungible nonoriginating materials that are commingled in an inventory
are used in the production of the good, the origin of thematerials may be determined in accordance with an inventory
management method under the Generally Accepted Accounting
Principles in the Party.
2.
Where fungible originating goods of a Party andfungible non-originating goods are commingled in an
inventory and, prior to exportation, do not undergo any
production process or any operation in the Party where they
were commingled other than unloading, reloading and anyother operation to preserve them in good condition, theorigin of the good may be determined in accordance with aninventory management method under the Generally Accepted
Accounting Principles in the Party.

- 48 -

Article 3.11
Indirect Materials
Indirect materials shall be, without regard to where
they are produced, considered as originating materials of a
Party where the good is produced.
Article 3.12
Accessories, Spare Parts and Tools
1.
In determining whether all the non-originating
materials used in the production of a good undergo theapplicable change in tariff classification or a specificmanufacturing or processing operation set out in Annex 2,
accessories, spare parts or tools delivered with the goodthat form part of the good’s standard accessories, spareparts or tools, shall be disregarded, provided that:(a)the accessories, spare parts or tools are notinvoiced separately from the good, without regard
to whether they are separately described in theinvoice; and(b)the quantities and value of the accessories,
spare parts or tools are customary for the good.

2.
If a good is subject to a qualifying value content
requirement, the value of the accessories, spare parts ortools shall be taken into account as the value oforiginating materials of a Party where the good is produced
or non-originating materials, as the case may be, in
calculating the qualifying value content of the good.
Article 3.13
Packaging Materials and Containers for Retail Sale
1． Packaging materials and containers for retail sale,
which are classified with the good in accordance with Rule
5 of the General Rules for the Interpretation of theHarmonized System, shall be disregarded in determining theorigin of the good, provided that:(a)the good is wholly obtained or entirely produced
as defined in subparagraph (a) of Article 3.2;

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(b)the good is produced exclusively from originating
materials, as defined in subparagraph (b) of
Article 3.2; or(c)the good has undergone the applicable change intariff classification or a specific manufacturing
or processing operation set out in Annex 2.

2.
If a good is subject to a qualifying value content
requirement, the value of packaging materials andcontainers for retail sale shall be taken into account as
the value of originating materials of a Party where thegood is produced or non-originating materials, as the casemay be, in calculating the qualifying value content of thegood.
Article 3.14
Packing Materials and Containers
for Transportation and Shipment
Packing materials and containers for transportationand shipment of a good shall not be taken into account indetermining the origin of the good.
Article 3.15
Claim for Preferential Tariff Treatment
1.
The importing Party shall grant preferential tariff
treatment in accordance with this Agreement to an
originating good of the exporting Party on the basis of a
Certificate of Origin.
2.

Notwithstanding paragraph 1:- 50 -

(a)the importing Party shall not require a
Certificate of Origin from the importer for an
importation of an originating good of theexporting Party whose aggregate customs value
does not exceed 1,500 United States dollars or
its equivalent amount in the importing Party’s
currency, or such higher amount as may beestablished by the importing Party, provided thatthe importation does not form part ofimportations that may reasonably be considered tohave been made separately for the purpose of
avoiding the requirement for a Certificate ofOrigin; and(b)

the importing Party may waive the requirement fora Certificate of Origin in accordance with its
laws and regulations.

3.
The importing Party may require, where appropriate,
the importer to submit other evidence that the goodqualifies as an originating good of the exporting Party.
4.
Where an originating good of the exporting Party isimported through one or more non-Parties, the importing
Party may require the importer who claims preferential
tariff treatment for that good to submit:(a)a copy of the through bill of lading; or(b)a certificate or any other information given by
the customs authorities of such non-Parties orother relevant entities, which evidences that thegood has not undergone operations other thanunloading, reloading and any other operation topreserve it in good condition in those nonParties.
Article 3.16
Certificate of Origin

1.
A Certificate of Origin referred to in paragraph 1 of
Article 3.15 shall be issued by the competent governmental
authority of the exporting Party upon request having been
made by the exporter or its authorized agent. Such
Certificate of Origin shall include minimum data specified
in Annex 3.

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2.
For the purposes of this Article, the competent
governmental authority of the exporting Party may designate
other entities or bodies to be responsible for the issuanceof Certificate of Origin, under the authorization given inaccordance with the applicable laws and regulations of theexporting Party.
3.
Where the competent governmental authority of theexporting Party designates other entities or bodies tocarry out the issuance of Certificate of Origin, theexporting Party shall notify in writing the other Party ofits designees.
4.
For the purposes of this Chapter, upon the entry into
force of this Agreement, the Parties shall establish eachParty’s format of Certificate of Origin in the English
language in the Operational Procedures for Rules of Origin
referred to in Article 3.26.
5.
A Certificate of Origin shall be completed in the
English language.
6.
A Certificate of Origin shall be in a printed format
or such other medium agreed upon by the Parties.
7.
An issued Certificate of Origin shall be applicable toa single importation of originating goods of the exporting
Party into the importing Party and be valid for 12 months
from the date of issuance.
8.
Where the exporter of a good is not the producer ofthe good in the exporting Party, the exporter may request a
Certificate of Origin on the basis of:(a)a declaration provided by the exporter to thecompetent governmental authority or its designees
based on the information provided by the producerof the good to that exporter; or(b)a declaration voluntarily provided by the
producer of the good directly to the competent
governmental authority or its designees by therequest of the exporter.

- 52 -

9.
A Certificate of Origin shall be issued only after theexporter who requests the Certificate of Origin, or the
producer of a good in the exporting Party referred to in
subparagraph 8(b), proves to the competent governmental
authority of the exporting Party or its designees that thegood to be exported qualifies as an originating good of theexporting Party.
10. The competent governmental authority of the exporting
Party shall provide the importing Party with specimen
signatures and impressions of stamps used in the offices of
the competent governmental authority or its designees.
11. Each Party, in accordance with its laws andregulations, shall ensure that the competent governmental
authority or its designees shall keep a record of issued
Certificate of Origin for a period of five years after thedate on which the Certificate was issued. Such record
includes all supporting documents presented to prove thequalification as an originating good of the exporting
Party.
12. The competent governmental authority of the exporting
Party shall, when it cancels the decision to issue a
Certificate of Origin, promptly notify the cancellation to
the exporter to whom the Certificate of Origin has been
issued, and to the customs authority of the importing
Party, except where the Certificate of Origin has beenreturned to the competent governmental authority.
Article 3.17
Obligations regarding Exportations
Each Party shall, in accordance with its laws andregulations, ensure that an exporter to whom a Certificateof Origin has been issued, or the producer of a good in theexporting Party referred to in subparagraph 8(b) of Article
3.16 shall:(a)notify in writing the competent governmental
authority of the exporting Party or its designees
without delay, when such exporter or producer
knows that the good for which the Certificate ofOrigin has been issued does not qualify as an
originating good of the exporting Party; and- 53 -

(b)keep the records related to the origin of thegood for five years after the date on which theCertificate of Origin was issued.

Article 3.18
Request for Checking of Certificate of Origin
1.
In order to ensure the proper application of this
Chapter, the Parties shall assist each other to check theinformation related to a Certificate of Origin, in
accordance with this Agreement and their respective laws
and regulations.
2.
For the purposes of determining whether a good
imported from the exporting Party under preferential tariff
treatment qualifies as an originating good of the exporting
Party, the customs authority of the importing Party may
request information related to the origin of the good fromthe competent governmental authority of the exporting Partyon the basis of a Certificate of Origin.
3.
For the purposes of paragraph 2, the competent
governmental authority of the exporting Party shall, in
accordance with the laws and regulations of the exporting
Party, provide the requested information in a period notexceeding four months after the date of receipt of therequest. If the customs authority of the importing Party
considers necessary, it may require additional information
related to the origin of the good. If additional
information is requested by the customs authority of theimporting Party, the competent governmental authority ofthe exporting Party shall, in accordance with the laws andregulations of the exporting Party, provide the requested
information in a period not exceeding two months after thedate of receipt of the request.
4.
For the purposes of paragraph 3, the competent
governmental authority of the exporting Party may request
the exporter to whom the Certificate of Origin has been
issued, or the producer of the good in the exporting Party
referred to in subparagraph 8(b) of Article 3.16, toprovide the former with the requested information.

- 54 -

Article 3.19
Verification Visit
1.
If the customs authority of the importing Party is notsatisfied with the outcome of the request for checking inaccordance with Article 3.18, it may request the exporting
Party to:(a)collect and provide information related to theorigin of a good, and check, for that purpose,the facilities used in the production of thegood, through a visit by the competent
governmental authority of the exporting Party
along with the customs authority of the importing
Party to the premises of the exporter to whom theCertificate of Origin has been issued, or the
producer of the good in the exporting Party
referred to in subparagraph 8(b) of Article 3.16;
and

(b)

provide information related to the origin of thegood in the possession of the competent
governmental authority of the exporting Party or
its designee, during or after the visit referred
to in subparagraph (a).

2.
When requesting the exporting Party to conduct a visitin accordance with paragraph 1, the customs authority of
the importing Party shall deliver a written communication
with such request to the exporting Party at least 40 daysin advance of the proposed date of the visit, the receiptof which is to be confirmed by the exporting Party. The
competent governmental authority of the exporting Party
shall request the written consent of the exporter, or the
producer of the good in the exporting Party, whose premises
are to be visited.
3.
The communication referred to in paragraph 2 shall
include:(a)the identity of the customs authority issuing thecommunication;(b)

the name of the exporter, or the producer of thegood in the exporting Party, whose premises arerequested to be visited;- 55 -

(c)the proposed date and place of the visit;(d)the objective and scope of the proposed visit,
including specific reference to the good subjectof the verification referred to in theCertificate of Origin; and(e)the names and titles of the officials of thecustoms authority of the importing Party to bepresent during the visit.

4.
The exporting Party shall respond in writing to theimporting Party, within 30 days after the receipt of thecommunication referred to in paragraph 2, whether it
accepts or refuses to conduct the visit requested inaccordance with paragraph 1.
5.
The competent governmental authority of the exporting
Party shall, in accordance with the laws and regulations of
the exporting Party, provide within 45 days or any othermutually agreed period after the last day of the visit, tothe customs authority of the importing Party the
information obtained in accordance with paragraph 1.
Article 3.20
Determination of Origin and Preferential Tariff Treatment
1.
The customs authority of the importing Party may denypreferential tariff treatment to a good for which animporter claims preferential tariff treatment where thegood does not qualify as an originating good of theexporting Party or where the importer fails to comply withany of the relevant requirements of this Chapter.
2.
The customs authority of the importing Party may
determine that a good does not qualify as an originating
good of the exporting Party and may deny preferential
tariff treatment where it receives the notification fromthe competent governmental authority of the exporting Party
to cancel the decision to issue the Certificate of Origin
for the good in accordance with paragraph 12 of Article
3.16.

- 56 -

3.
The customs authority of the importing Party may
determine that a good does not qualify as an originating
good of the exporting Party and may deny preferential
tariff treatment, and a written determination thereof shallbe sent to the competent governmental authority of theexporting Party where:(a)the competent governmental authority of theexporting Party fails to provide the information
within the period referred to in paragraph 3 ofArticle 3.18 or paragraph 5 of Article 3.19;(b)

the exporting Party refuses to conduct a visit,or that Party fails to respond to thecommunication referred to in paragraph 2 ofArticle 3.19 within the period referred to inparagraph 4 of Article 3.19; or(c)the information provided to the customs authorityof the importing Party in accordance with Article
3.18 or 3.19 is not sufficient to prove that thegood qualifies as an originating good of theexporting Party.

4.
After carrying out the procedures outlined in Article
3.18 or 3.19 as the case may be, the customs authority of
the importing Party shall provide the competent
governmental authority of the exporting Party with awritten determination of whether or not the good qualifies
as an originating good of the exporting Party, including
findings of fact and the legal basis for the determination.
The competent governmental authority of the exporting Party
shall inform such determination by the customs authority of
the importing Party to the exporter, or the producer of thegood in the exporting Party, whose premises were subject ofthe visit referred to in Article 3.19.
Article 3.21
Confidentiality
1.
Each Party shall maintain, in accordance with its laws
and regulations, the confidentiality of information
provided to it as confidential in accordance with this
Chapter, and shall protect that information from disclosurethat could prejudice the competitive position of thepersons providing the information.

- 57 -

2.
Information obtained by the customs authority of theimporting Party in accordance with this Chapter:(a)may only be used by such authority for the
purposes of this Chapter; and(b)shall not be used by the importing Party in any
criminal proceedings carried out by a court or ajudge, unless the information is requested to theexporting Party and provided to the importing
Party through the diplomatic channels or otherchannels established in accordance with theapplicable laws and regulations of the exporting
Party.
Article 3.22
Minor Errors

The customs authority of the importing Party shalldisregard minor errors, such as slight discrepancies oromissions, typing errors or protruding from the designatedfield, provided that these minor errors are not such as tocreate doubts concerning the accuracy of the information
included in the Certificate of Origin.
Article 3.23
Penalties and Measures against False Declaration
1.
Each Party shall establish or maintain, in accordancewith its laws and regulations, appropriate penalties orother sanctions against its exporters to whom a Certificateof Origin has been issued and the producers of a good in
the exporting Party referred to in subparagraph 8(b) of
Article 3.16, for providing false declaration or documents
to the competent governmental authority of the exporting
Party or its designees prior to the issuance of Certificateof Origin.

- 58 -

2.
Each Party shall, in accordance with its laws andregulations, take measures which it considers appropriate
against its exporters to whom a Certificate of Origin has
been issued and the producers of a good in the exporting
Party referred to in subparagraph 8(b) of Article 3.16, forfailing to notify in writing to the competent governmental
authority of the exporting Party or its designees without
delay after having known, after the issuance of Certificateof Origin, that the good for which the Certificate ofOrigin has been issued does not qualify as an originating
good of the exporting Party.
Note: For greater certainty, the exporters to whom a
Certificate of Origin has been issued and the
producers of a good in the exporting Party
referred to in subparagraph 8(b) of Article 3.16
are not subject to the measures referred to inthis paragraph, in accordance with the laws andregulations of each Party, provided that they
notify in writing to the competent governmental
authority of the exporting Party or its
designees without delay after having known,
after the issuance of Certificate of Origin,that the good for which the Certificate ofOrigin has been issued does not qualify as an
originating good of the exporting Party.
Article 3.24
Miscellaneous
Communications between the importing Party and theexporting Party shall be conducted in the English language.
Article 3.25
Sub-Committee on Rules of Origin
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Rules of Origin (hereinafter referred toin this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and making appropriate recommendations,as necessary, to the Joint Committee on:- 59 -

(i)the implementation and operation of this
Chapter;(ii)

any amendments to Annex 2 or 3, proposed byeither Party; and(iii)

the Operational Procedures for Rules ofOrigin referred to in Article 3.26;(b)considering any other matter as the Parties may
agree related to this Chapter;(c)reporting the findings of the Sub-Committee to
the Joint Committee; and(d)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
Article 3.26
Operational Procedures for Rules of Origin
Upon the date of entry into force of this Agreement,
the Joint Committee shall adopt the Operational Proceduresfor Rules of Origin that provide detailed regulations
pursuant to which the customs authorities, the competent
governmental authorities and other relevant authorities of
the Parties shall implement their functions under this
Chapter.

- 60 -

Chapter 4
Customs Procedures and Trade Facilitation
Article 4.1
Scope and Objectives
1.
This Chapter shall apply to customs procedures
required for the clearance of goods traded between theParties.
2.
This Chapter shall be implemented by the Parties inaccordance with the laws and regulations of each Party andwithin the available resources of their respective customs
authorities.
3.
The objectives of this Chapter are to establish aframework to ensure transparency, proper application ofcustoms laws and prompt clearance of goods and to promote
cooperation in the field of customs procedures, with a viewto facilitating trade in goods between the Parties.
Article 4.2
Definition
For the purposes of this Chapter, the term “customs
laws” means such laws and regulations administered andenforced by the customs authority of each Party concerning
the importation, exportation and transit of goods, as they
relate to customs duties, charges and other taxes, or toprohibitions, restrictions and other similar controls withrespect to the movement of controlled items across theboundary of the customs territory of each Party.
Article 4.3
Transparency
1.
Each Party shall ensure that all relevant informationof general application pertaining to its customs laws isreadily available to any interested person.

- 61 -

2.
When information that has been made available must be
revised due to changes in its customs laws, each Party
shall make the revised information readily available,
whenever possible in advance of the entry into force of thechanges, to enable interested persons to take account ofthem.
3.
Upon request of any interested person of the Parties,
each Party shall provide, as quickly and accurately as
possible, information related to the specific customs
matters raised by the interested person and pertaining to
its customs laws. Each Party shall supply not only the
information specifically requested but also any otherpertinent information which it considers the interested
person should be made aware of.
4.
Each Party shall designate one or more enquiry points
to answer reasonable enquiries from any interested personof the Parties concerning customs matters, and shall makepublicly available, including through its website, thenames and addresses of such enquiry points.
Article 4.4
Customs Clearance
1.
The Parties shall apply their respective customs
procedures in a predictable, consistent and transparent
manner.
2.
For prompt customs clearance of goods traded between
the Parties, each Party shall:(a)make use of information and communications
technology;(b)simplify its customs procedures;(c)harmonize its customs procedures, to the extent
possible, with relevant international standards
and recommended practices such as those madeunder the auspices of the Customs Co-operation
Council; and(d)promote cooperation, where appropriate, between
its customs authority and:- 62 -

(i)other national authorities of the Party;(ii)

the trading communities of the Party; and(iii)

the customs authorities of non-Parties.

3.
Each Party shall provide affected parties with easily
accessible processes of judicial or administrative review
related to the action on the customs matters taken by the
Party. Such review shall be independent of the authorities
entrusted with the administrative enforcement of suchactions and shall be carried out in an impartial and fairmanner.
Article 4.5
Temporary Admission and Goods in Transit
1.
Each Party shall continue to facilitate the proceduresfor the temporary admission of goods traded between theParties in accordance with its laws, regulations andinternational obligations.
2.
Each Party shall continue to facilitate customs
clearance of goods in transit from or to the other Party inaccordance with paragraph 3 of Article V of the GATT 1994.
3.
The Parties shall endeavor to promote, througharrangements such as seminars and courses, the use of
A.T.A. carnets in accordance with the international
obligations and the facilitation of customs clearance ofgoods in transit in the Parties or non-Parties.
4.

For the purposes of this Article:(a)the term “A.T.A. carnet” shall have the same
meaning as in:(i)for Japan, the Customs Convention on A.T.A.
Carnet for the Temporary Admission of Goods,
done at Brussels on December 6, 1961; and(ii)

for Mongolia, the Convention on Temporary
Admission, done at Istanbul on June 26,
1990; and- 63 -

(b)the term “temporary admission” means customs
procedures under which certain goods may bebrought into a customs territory conditionally,
relieved totally or partially from the payment ofcustoms duties. Such goods shall be imported fora specific purpose and shall be intended for reexportation within a specified period and without
having undergone any change except normal
depreciation due to the use made of them.
Article 4.6
Advance Rulings

Where a written application is made in accordance with
relevant laws, regulations or procedures adopted or
maintained by the importing Party and the importing Party
has no reasonable grounds to deny the issuance, theimporting Party shall endeavor to, prior to the importationof the good, issue a written advance ruling on:(a)the tariff classification;(b)

the customs valuation; and(c)the qualification of the good as an originating
good of the exporting Party under the provisionsof Chapter 3.
Article 4.7
Cooperation and Exchange of Information

1.
The Parties shall cooperate and exchange information
with each other in the field of customs procedures,
including combating the trafficking of prohibited goods andthe importation and exportation of goods suspected of
infringing intellectual property rights.
2.
Such cooperation and exchange of information shall be
implemented as provided for in the Implementing Agreement.
3.
Paragraph 2 of Article 1.8 shall not apply to theexchange of information under this Article.

- 64 -

Article 4.8
Sub-Committee on Customs Procedures and Trade Facilitation
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Customs Procedures and Trade Facilitation(hereinafter referred to in this Article as “the SubCommittee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

identifying areas, related to this Chapter, to be
improved for facilitating trade between theParties;(c)reporting the findings of the Sub-Committee to
the Joint Committee; and(d)carrying out other functions as may be delegatedby the Joint Committee.

3.
The composition of the Sub-Committee shall be
specified in the Implementing Agreement.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.

- 65 -

Chapter 5
Sanitary and Phytosanitary Measures
Article 5.1
Scope
This Chapter shall apply to all sanitary andphytosanitary (hereinafter referred to as “SPS”) measuresof the Parties under the SPS Agreement, that may, directly
or indirectly, affect trade in goods between the Parties.
Article 5.2
Reaffirmation of Rights and Obligations
The Parties reaffirm their rights and obligations
related to SPS measures under the SPS Agreement.
Article 5.3
Harmonization
The Parties shall endeavor to cooperate on the mattersrelated to the harmonization of SPS measures, on as wide abasis as possible, as prescribed under Article 3 of the SPS
Agreement. Such cooperation shall be conducted without
requiring either Party to change its appropriate level ofprotection of human, animal or plant life or health that
the Party has determined in accordance with Article 5 of
the SPS Agreement.
Article 5.4
Equivalence
1.
An importing Party shall accept an exporting Party’s
SPS measures as equivalent, if the exporting Party
objectively demonstrates to the importing Party that its
measures achieve the importing Party’s appropriate level of
SPS protection.
2.
Each Party shall, upon request of the other Party,
enter into consultations with the aim of achieving
bilateral arrangements related to recognition of theequivalence of specified SPS measures.

- 66 -

Article 5.5
Enquiry Point
Each Party shall designate an enquiry point to answer
all reasonable enquiries from the other Party regarding SPS
measures and, where appropriate, to provide the other Party
with relevant information.
Article 5.6
Sub-Committee on Sanitary and Phytosanitary Measures
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on SPS Measures (hereinafter referred to inthis Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

exchanging information on such matters as change
or introduction of SPS-related regulations andstandards of the Parties and occurrences of SPS
incidents in the Areas of the Parties, which may,directly or indirectly, affect trade in goods
between the Parties;(c)undertaking science-based technical consultations
to address matters related to harmonization,equivalence, adaptation to regional conditions,and control, inspection and approval proceduresas referred to in the SPS Agreement with theobjective to achieve mutually acceptable
solutions;(d)discussing technical cooperation between theParties on SPS measures including capacity
building, technical assistance and exchange ofexperts;(e)

discussing any other issues related to this
Chapter;(f)reporting the findings of the Sub-Committee tothe relevant bodies; and- 67 -

(g)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties with appropriate
participation of relevant experts.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
Article 5.7
Non-Application of Chapter 16
Chapter 16 shall not apply to this Chapter.

- 68 -

Chapter 6
Technical Regulations, Standards and Conformity
Assessment Procedures
Article 6.1
Scope1.
This Chapter shall apply to technical regulations,standards and conformity assessment procedures as definedin the TBT Agreement, that may affect trade in goods
between the Parties.
2.

This Chapter shall not apply to:(a)purchasing specifications prepared bygovernmental bodies for production or consumption
requirements of such bodies; or(b)

SPS measures as defined in Annex A of the SPS
Agreement.
Article 6.2
Objectives

The objectives of this Chapter are to:(a)increase and facilitate trade between theParties, through the improvement of theimplementation of the TBT Agreement;(b)ensure that technical regulations, standards andconformity assessment procedures do not create
unnecessary obstacles to trade; and(c)enhance joint cooperation between the Parties.
Article 6.3
Definitions

For the purposes of this Chapter:(a)the term “TBT Agreement” means the Agreement on
Technical Barriers to Trade in Annex 1A to the
WTO Agreement; and- 69 -

(b)the terms and definitions set out in Annex 1 of
the TBT Agreement shall apply.
Article 6.4
Reaffirmation of Rights and Obligations

The Parties reaffirm their rights and obligations
related to technical regulations, standards and conformity
assessment procedures under the TBT Agreement.
Article 6.5
International Standards
1.
Each Party shall use relevant international standards
and guides or recommendations to the extent provided inparagraph 4 of Article 2 and paragraph 4 of Article 5 of
the TBT Agreement, as a basis for its technical regulations
and conformity assessment procedures.
2.
Each Party shall encourage its national standardizing
bodies to cooperate with the relevant national
standardizing bodies of the other Party in international
standardizing activities. Such cooperation may take placein regional and international standardizing bodies of which
they are both members.
Article 6.6
Technical Regulations
1.
Upon request of a Party that has an interest in
developing a technical regulation similar to a technicalregulation of the other Party, such other Party shallprovide, to the extent practicable, relevant information,
including studies or documents, except for confidential
information, on which it has relied in its development.
2.
Each Party shall give positive consideration toaccepting as equivalent technical regulations of the otherParty, even if these regulations differ from its own,
provided it is satisfied that these regulations adequately
fulfill the objectives of its own regulations.

- 70 -

3.
Where a Party does not accept a technical regulationof the other Party as equivalent to its own, it shall, uponrequest of the other Party, explain the reasons therefor.
Article 6.7
Acceptance of Results of Conformity Assessment Procedures
1.
The Parties recognize that a broad range of mechanisms
exists to facilitate the acceptance in a Party of theresults of conformity assessment procedures conducted in
the other Party. Each Party shall, upon request of theother Party, provide information on the range of suchmechanisms used in its Area.
2.
Each Party shall ensure, whenever possible, that
results of the conformity assessment procedures in theother Party are accepted, even when those procedures differ
from its own, provided it is satisfied that the procedures
offer an assurance of conformity with applicable technicalregulations or standards equivalent to its own procedures.
3.
Where a Party does not accept the results of aconformity assessment procedure conducted in the otherParty, it shall, upon request of the other Party andsubject to the laws and regulations of that Party, explain
the reasons therefor so that corrective action may be takenby the other Party where appropriate.
4.
Each Party shall, whenever possible, accredit,
designate or recognize conformity assessment bodies in theother Party on terms no less favorable than those it
accords to conformity assessment bodies in its Area. If a
Party accredits, designates or recognizes a body assessing
conformity with a particular technical regulation or
standard in its Area and it refuses to accredit, designate
or recognize a body in the other Party assessing conformity
with that technical regulation or standard, it shall, uponrequest, explain the reasons therefor.

- 71 -

Article 6.8
Enquiry Point
Each Party shall designate an enquiry point to answer
all reasonable enquiries from the other Party regarding
technical regulations, standards and conformity assessment
procedures and, where appropriate, to provide the otherParty with other relevant information which it considers
the other Party should be made aware of.
Article 6.9
Sub-Committee on Technical Regulations, Standards
and Conformity Assessment Procedures
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Technical Regulations, Standards andConformity Assessment Procedures (hereinafter referred toin this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)enhancing joint cooperation in the development
and improvement of technical regulations,standards and conformity assessment procedures;(c)exchanging information on technical regulations,standards and conformity assessment procedures;(d)undertaking consultations on issues related totechnical regulations, standards and conformity
assessment procedures;(e)exchanging information on the work in regionaland multilateral fora engaged in activities
related to technical regulations, standards andconformity assessment procedures;(f)discussing technical cooperation between theParties on matters related to this Chapter;- 72 -

(g)discussing any issues including those which may
cause disputes between the Parties related tothis Chapter with the objective of finding
mutually acceptable solutions;(h)reporting the findings of the Sub-Committee tothe relevant bodies; and(i)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
5.
For the purposes of this Article, the Sub-Committee
shall be coordinated by:(a)for Japan, the Ministry of Foreign Affairs, or
its successor; and(b)for Mongolia, the Ministry of Industry, or its
successor.
Article 6.10
Non-Application of Chapter 16

Chapter 16 shall not apply to this Chapter.

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Chapter 7
Trade in Services
Article 7.1
Scope1.
This Chapter shall apply to measures adopted or
maintained by a Party affecting trade in services.
2.

This Chapter shall not apply to:(a)cabotage in maritime transport services;(b)with respect to air transport services, measures
affecting traffic rights, however granted, or
measures affecting services directly related tothe exercise of traffic rights;(c)government procurement;(d)subsidies provided by a Party or a state
enterprise, including grants, governmentsupported loans, guarantees and insurance;(e)measures pursuant to immigration laws andregulations;(f)measures affecting natural persons of a Party
seeking access to the employment market of theother Party, or measures regarding nationality or
citizenship, or residence or employment on apermanent basis; and(g)services supplied in the exercise of governmental
authority.

3.
Notwithstanding subparagraph 2(b), this Chapter shallapply to measures affecting:(a)aircraft repair and maintenance services;(b)the selling and marketing of air transport
services; and(c)computer reservation system services.

- 74 -

4.
Annex 4 provides supplementary provisions to this
Chapter on financial services, including scope anddefinitions.
5.
Annex 5 provides supplementary provisions to this
Chapter on telecommunications services, including scope anddefinitions.
Article 7.2
Definitions
For the purposes of this Chapter:(a)the term “aircraft repair and maintenanceservices” means such activities when undertaken
on an aircraft or a part thereof while it iswithdrawn from services and does not include socalled line maintenance;(b)

the term “computer reservation system services”
means services provided by computerized systems
that contain information about air carriers’
schedules, availability, fares and fare rules,
through which reservations may be made or tickets
may be issued;(c)the term “existing” means in effect on the dateof entry into force of this Agreement;(d)the term “juridical person of the other Party”
means a juridical person which is either:(i)constituted or otherwise organized under thelaw of the other Party; or(ii)

in the case of the supply of a service
through commercial presence, owned orcontrolled by:(A)

natural persons of the other Party; or(B)juridical persons of the other Party
identified under subparagraph (i);- 75 -

(e)the term “measure” means any measure, whether inthe form of a law, regulation, rule, procedure,
decision, administrative action or any other
form;
Note:

(f)

(g)

The term “measure” shall include taxation
measures to the extent covered by theGATS.

the term “measure adopted or maintained by a
Party” means any measure adopted or maintainedby:(i)any level of government or authority of a
Party; and(ii)

non-governmental bodies in the exercise of
powers delegated by any level of government
or authority of a Party;

the term “measures by a Party affecting trade inservices” includes measures with respect to:(i)the purchase, payment or use of a service;(ii)

the access to and use of, in connection withthe supply of a service, services which arerequired by the Party to be offered to the
public generally; and(iii)

the presence, including commercial presence,of persons of the other Party for the supply
of a service in the Area of the former
Party;(h)the term “monopoly supplier of a service” means
any person, public or private, which in therelevant market of the Party, is authorized or
established formally or in effect by that Party
as the sole supplier of that service;(i)the term “natural person of a Party” means anational of a Party under the law of the Party;- 76 -

(j)the term “selling and marketing of air transport
services” means opportunities for the air carrier
concerned to sell and market freely its airtransport services including all aspects ofmarketing such as market research, advertisingand distribution. These activities do not include
the pricing of air transport services nor theapplicable conditions;(k)the term “service supplied in the exercise ofgovernmental authority” means any service which
is supplied neither on a commercial basis nor incompetition with one or more service suppliers;(l)the term “supply of a service” includes the
production, distribution, marketing, sale anddelivery of a service;(m)the term “trade in services” means the supply ofa service:(i)from the Area of a Party into the Area ofthe other Party (“cross-border supply
mode”);(ii)

in the Area of a Party to the service
consumer of the other Party (“consumption
abroad mode”);(iii)

by a service supplier of a Party, throughcommercial presence in the Area of the otherParty (“commercial presence mode”); or(iv)

by a service supplier of a Party, throughpresence of natural persons of that Party in
the Area of the other Party (“presence of
natural persons mode”); and- 77 -

(n)the term “traffic rights” means the rights forscheduled and non-scheduled services to operate
and/or to carry passengers, cargo and mail for
remuneration or hire from, to, within, or over a
Party, including points to be served, routes tobe operated, types of traffic to be carried,capacity to be provided, tariffs to be charged
and their conditions, and criteria fordesignation of airlines, including such criteria
as number, ownership and control.
Article 7.3
National Treatment

1.
In the sectors inscribed in its Schedule of SpecificCommitments in Annex 6, and subject to any conditions andqualifications set out therein, each Party shall accord toservices and service suppliers of the other Party, withrespect to all measures affecting the supply of services,
treatment no less favorable than that it accords to its own
like services and service suppliers.
Note: Specific commitments assumed under this Article
shall not be construed to require either Party
to compensate for any inherent competitive
disadvantages which result from the foreign
character of the relevant services or service
suppliers.
2.
A Party may meet the requirement of paragraph 1 byaccording to services and service suppliers of the otherParty, either formally identical treatment or formallydifferent treatment to that it accords to its own like
services and service suppliers.
3.
Formally identical or formally different treatment
shall be considered to be less favorable if it modifies theconditions of competition in favor of services or service
suppliers of a Party compared to like services or service
suppliers of the other Party.

- 78 -

Article 7.4
Most-Favored-Nation Treatment
1.
Each Party shall accord to services and service
suppliers of the other Party treatment no less favorable
than that it accords to like services and service suppliersof any non-Party.
2.
Each Party may maintain measures inconsistent withparagraph 1 provided that such measures are listed in, andmeet the conditions of, the List of Most-Favored-Nation
Treatment Exemptions in Annex 6.
Article 7.5
Market Access
1.
With respect to market access through the modes ofsupply identified in subparagraph (m) of Article 7.2, aParty shall accord services and service suppliers of theother Party treatment no less favorable than that provided
for under the terms, limitations and conditions agreed andspecified in its Schedule of Specific Commitments inAnnex 6.
Note: If a Party undertakes a market-access commitment
in relation to the supply of a service throughthe mode of supply referred to in subparagraph(m)(i) of Article 7.2 and if the cross-border
movement of capital is an essential part of theservice itself, that Party is thereby committed
to allow such movement of capital. If a Party
undertakes a market-access commitment inrelation to the supply of a service through themode of supply referred to in subparagraph(m)(iii) of Article 7.2, it is thereby committed
to allow related transfers of capital into its
Area.
2.
In sectors where market-access commitments areundertaken, the measures which a Party shall not maintainor adopt either on the basis of a regional subdivision or
on the basis of its entire Area, unless otherwise specified
in its Schedule of Specific Commitments in Annex 6, aredefined as:- 79 -

(a)limitations on the number of service suppliers
whether in the form of numerical quotas,
monopolies, exclusive service suppliers or therequirements of an economic needs test;(b)limitations on the total value of service
transactions or assets in the form of numericalquotas or the requirement of an economic needs
test;

(c)

limitations on the total number of service
operations or on the total quantity of service
output expressed in terms of designated numericalunits in the form of quotas or the requirement ofan economic needs test;
Note:

This subparagraph does not cover measuresof a Party which limit inputs for the
supply of services.

(d)limitations on the total number of natural
persons that may be employed in a particularservice sector or that a service supplier may
employ and who are necessary for, and directly
related to, the supply of a specific service inthe form of numerical quotas or the requirementof an economic needs test;(e)measures which restrict or require specific typesof legal entity or joint venture through which a
service supplier may supply a service; and(f)limitations on the participation of foreign
capital in terms of maximum percentage limit on
foreign shareholding or the total value ofindividual or aggregate foreign investment.
Article 7.6
Additional Commitments

The Parties may negotiate commitments with respect tomeasures affecting trade in services not subject toscheduling under Articles 7.3 and 7.5, including thoseregarding qualifications, standards or licensing matters.
Such commitments shall be inscribed in a Party’s Scheduleof Specific Commitments in Annex 6.

- 80 -

Article 7.7
Schedule of Specific Commitments
1.
Each Party shall set out in a schedule the specificcommitments it undertakes under Articles 7.3, 7.5 and 7.6.
With respect to sectors or sub-sectors where suchcommitments are undertaken, each Schedule of SpecificCommitments in Annex 6 shall specify:(a)terms, limitations and conditions on market
access;(b)conditions and qualifications on national
treatment;(c)undertakings related to additional commitments;
and

(d)

where appropriate, the time-frame for
implementation of such commitments.

2.
With respect to sectors or sub-sectors where thespecific commitments are undertaken and which are indicatedwith “SS”, any terms, limitations, conditions andqualifications, referred to in subparagraphs 1(a) and 1(b),other than those based on measures pursuant to immigration
laws and regulations, shall be limited to those based on
existing non-conforming measures.
3.
Measures inconsistent with both Articles 7.3 and 7.5
shall be inscribed in the column related to Article 7.5. In
this case the inscription will be considered to provide a
condition or qualification to Article 7.3 as well.
Article 7.8
Domestic Regulation
1.
Each Party shall ensure that all measures of generalapplication affecting trade in services are administered ina reasonable, objective and impartial manner.

- 81 -

2.
Where authorization is required by a Party for the
supply of a service, the competent authorities of that
Party shall, within a reasonable period of time after thesubmission of an application is considered complete under
the laws and regulations of that Party, inform theapplicant of the decision concerning the application. Upon
request of the applicant, the competent authorities of that
Party shall provide, without undue delay, information
concerning the status of the application.
3.
With a view to ensuring that any measure adopted or
maintained by a Party in any services sector related to theauthorization, qualification requirements and procedures,
technical standards and licensing requirements of service
suppliers of the other Party does not constitute an
unnecessary barrier to trade in services, each Party shallensure that such measure:(a)

is based on objective and transparent criteria,such as the competence and ability to supply theservice;(b)

is not more burdensome than necessary to ensure
the quality of the service; and(c)does not constitute a disguised restriction on
the supply of the service.
Article 7.9
Recognition

1.
A Party may recognize the education or experienceobtained, requirements met, or licenses or certifications
granted in the other Party for the purposes of thefulfillment, in whole or in part, of its standards orcriteria for the authorization, licensing or certificationof service suppliers of the other Party.
2.
Recognition referred to in paragraph 1, which may beachieved through harmonization or otherwise, may be based
upon an agreement or arrangement between the Parties or may
be accorded unilaterally.

- 82 -

3.
Where a Party recognizes, by agreement or arrangement
between the Party and a non-Party or unilaterally, theeducation or experience obtained, requirements met, or
licenses or certifications granted in the non-Party:(a)nothing in Article 7.4 shall be construed torequire the Party to accord such recognition to
the education or experience obtained,
requirements met, or licenses or certifications
granted in the other Party;(b)

the Party shall accord the other Party anadequate opportunity to negotiate the accessionof that other Party to such an agreement or
arrangement or to negotiate a comparable one with
it between the Parties; and(c)where the Party accords such recognition
unilaterally, the Party shall accord the otherParty an adequate opportunity to demonstrate thatthe education or experience obtained,
requirements met, or licenses or certifications
granted in the other Party should also berecognized.
Article 7.10
Monopolies and Exclusive Service Suppliers

1.
A Party shall ensure that any monopoly supplier of aservice in its Area does not, in the supply of the monopoly
service in the relevant market, act in a mannerinconsistent with that Party’s obligations under Articles
7.3, 7.4 and 7.5.
2.
Where a Party’s monopoly supplier competes, either
directly or through an affiliated company, in the supply ofa service outside the scope of its monopoly rights, in anarea subject to its Specific Commitments, that Party shallensure that such a supplier does not abuse its monopoly
position to act in the Area of that Party in a mannerinconsistent with such commitments under Articles 7.3 and
7.5.

- 83 -

3.
If a Party has a reason to believe that a monopoly
supplier of a service of the other Party is acting in amanner inconsistent with paragraph 1 or 2, the former Party
may request the other Party to provide specific information
concerning the relevant operations.
4.
This Article shall also apply to cases of exclusive
service suppliers, where a Party, formally or in effect:(a)authorizes or establishes a small number ofservice suppliers; and(b)substantially prevents competition among those
suppliers in its Area.
Article 7.11
Business Practices

1.
The Parties recognize that certain business practicesof service suppliers, other than those falling under
Article 7.10, may restrain competition and thereby restrict
trade in services.
2.
A Party shall, upon request of the other Party, enter
into consultations with a view to eliminating practices
referred to in paragraph 1. The Party addressed shallaccord full and sympathetic consideration to such a request
and shall cooperate through the supply of publicly
available non-confidential information of relevance to thematter in question. The Party addressed shall also provide
other information available to the requesting Party,
subject to its laws and regulations and to the conclusionof a satisfactory agreement concerning the safeguarding of
its confidentiality by the requesting Party.
Article 7.12
Payments and Transfers
1.
Except under the circumstances envisaged in Article
7.13, a Party shall not apply restrictions on internationaltransfers and payments for current transactions related to
trade in services.

- 84 -

2.
Nothing in this Chapter shall affect the rights andobligations of the Parties as members of the International
Monetary Fund under the Articles of Agreement of theInternational Monetary Fund, including the use of exchange
actions which are in conformity with the Articles ofAgreement of the International Monetary Fund. However, aParty shall not impose restrictions on any capitaltransactions inconsistently with its Specific Commitments
regarding such transactions, except under Article 7.13 orupon request of the International Monetary Fund.
Article 7.13
Restrictions to Safeguard the Balance of Payments
1.
In the event of serious balance-of-payments andexternal financial difficulties or threat thereof, a Party
may adopt or maintain restrictions on trade in services,
including on payments or transfers for transactions.
2.

The restrictions referred to in paragraph 1 shall:(a)be applied on the basis of national treatment andmost-favored-nation treatment;(b)

be consistent with the Articles of Agreement of
the International Monetary Fund;(c)avoid unnecessary damage to the commercial,economic and financial interests of the otherParty;(d)not exceed those necessary to deal with thecircumstances described in paragraph 1; and(e)be temporary and be phased out progressively as
the situation specified in paragraph 1 improves.

3.
In determining the incidence of such restrictions, aParty may give priority to the supply of services which are
more essential to its economic or development programs.
However, such restrictions shall not be adopted or
maintained for the purposes of protecting a particularservice sector.

- 85 -

4.
Any restrictions adopted or maintained underparagraph 1, or any changes therein, shall be promptly
notified to the other Party.
Article 7.14
Transparency
Each Party shall prepare a non-legally binding list
providing all relevant measures affecting the obligations
under Articles 7.3, 7.4 and 7.5 in all sectors. The list
shall be exchanged with the other Party and made publicly
available within five years from the date of entry into
force of this Agreement and shall also be subject to future
review and revision where necessary or as agreed between
the Parties. The list shall include the following elements:(a)sector and sub-sector or matter;(b)

type of inconsistency (i.e. national treatment,
most-favored-nation treatment and/or market
access);(c)legal source or authority of the measure; and(d)brief description of the measure.

Note: The list under this Article is made solely for the
purposes of transparency, and shall not be construed
to affect the rights and obligations of a Party under
this Chapter. Any review or revision under this
Article is solely for the purposes of updating such
list.
Article 7.15
Denial of Benefits
1.
A Party may deny the benefits of this Chapter to aservice supplier of the other Party that is a juridical
person of the other Party, where the denying Party
establishes that the juridical person is owned orcontrolled by persons of a non-Party, and the denying
Party:(a)does not maintain diplomatic relations with thenon-Party; or- 86 -

(b)adopts or maintains measures regarding the nonParty that:(i)prohibit transactions with the juridical
person; or(ii)would be violated or circumvented if thebenefits of this Chapter were accorded tothe juridical person.

2.
Subject to prior notification and consultation, aParty may deny the benefits of this Chapter to a service
supplier of the other Party that is a juridical person of
the other Party, where the denying Party establishes thatthe juridical person is owned or controlled by persons of a
non-Party and has no substantial business activities in the
Area of the other Party.
Article 7.16
Sub-Committee on Trade in Services
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Trade in Services (hereinafter referred toin this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

discussing any issues related to this Chapter;(c)reporting the findings of the Sub-Committee to
the Joint Committee; and(d)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.

- 87 -

Article 7.17
Review of Commitments
1.
With the objective of further liberalizing trade inservices between the Parties, including the possibility of
renegotiating the format of schedules, the Parties shallconsider in due course undertaking a review of this Chapter
and the Annexes referred to therein on occasions as may be
agreed by the Parties.
2.
If, after the entry into force of this Agreement, aParty has undertaken further liberalization autonomously in
any of the services sectors, sub-sectors or activities, it
shall consider in due course requests from the other Party
to incorporate such liberalization into this Agreement.

- 88 -

Chapter 8
Movement of Natural Persons
Article 8.1
General Principles
1.
This Chapter reflects the preferential trading
relationship between the Parties, the desire of the Parties
to facilitate entry and temporary stay of natural persons
on a mutually beneficial basis and to establish transparent
criteria and procedures for entry and temporary stay, andthe need to ensure border security and to protect thedomestic labor force and permanent employment in eachParty.
2.
Each Party shall apply its measures related to theprovisions of this Chapter in accordance with the generalprinciples referred to in paragraph 1, and, in particular,
shall apply those measures expeditiously so as to avoid
unduly impairing or delaying trade in goods or services orinvestment activities under this Agreement.
Article 8.2
Scope1.
This Chapter shall apply to measures affecting theentry and temporary stay of natural persons of a Party whoenter the other Party and fall under one of the categories
referred to in paragraph 1 of Article 8.4.
2.
This Chapter shall not apply to measures affecting
natural persons of a Party seeking access to the employment
market of the other Party, nor shall it apply to measures
regarding nationality or citizenship, or residence or
employment on a permanent basis.
3.
This Chapter shall not prevent a Party from applying
measures to regulate the entry and temporary stay ofnatural persons of the other Party, including thosemeasures necessary to protect the integrity of, and toensure the orderly movement of natural persons across, itsborders, provided that such measures are not applied insuch a manner as to nullify or impair the benefits accruingto the other Party under the terms of specific commitments
set out in Annex 7.

- 89 -

Note: The sole fact of requiring a visa for natural
persons of the other Party and not for those ofcertain non-Parties shall not be regarded asnullifying or impairing benefits under the termsof specific commitments set out in Annex 7.
Article 8.3
Definition
For the purposes of this Chapter, the term “natural
person of a Party” means a natural person who resides in a
Party or elsewhere and who under the law of the Party is anational of the Party.
Article 8.4
Specific Commitments
1.
Each Party shall set out in Annex 7 the specificcommitments it undertakes for:(a)short-term business visitors of the other Party;(b)

intra-corporate transferees of the other Party;(c)investors of the other Party;(d)natural persons of the other Party who engage inprofessional services;(e)natural persons of the other Party who engage insupplying services, which require technology or
knowledge at an advanced level on the basis of acontract with public or private organizations in
the former Party; and(f)spouse and children accompanying those natural
persons set out in subparagraphs (b) through (e).

2.
Natural persons covered by the categories referred toin paragraph 1 shall be granted entry and temporary stay inaccordance with the terms and conditions set out in Annex7, provided that the natural persons comply withimmigration laws and regulations applicable to entry andtemporary stay which are not inconsistent with theprovisions of this Chapter.

- 90 -

3.
Neither Party shall impose or maintain any limitationon the number of natural persons to be granted entry andtemporary stay under paragraph 1.
Article 8.5
Requirements and Procedures
1.
Each Party shall publish or otherwise make available
to the other Party upon the date of entry into force of
this Agreement, with respect to natural persons covered bythat Party’s specific commitments set out in Annex 7,
information on requirements and procedures necessary for aneffective application by natural persons of the other Party
for the grant of:(a)entry into the former Party;(b)initial temporary stay in the former Party;(c)renewal of temporary stay in the former Party;(d)where applicable, permission to work in theformer Party; and(e)change of status of temporary stay in the former
Party.

2.
Each Party shall endeavor to provide, upon request by
a natural person of the other Party, information onrequirements and procedures referred to in paragraph 1.
3.
Each Party shall endeavor to promptly inform the otherParty of the introduction of any new requirements andprocedures, or changes in any existing requirements andprocedures referred to in paragraph 1 that affect theeffective application by natural persons of the other Party
for the grant of entry, temporary stay or permission
referred to in subparagraphs 1(a) through (e).
4.
Each Party shall ensure that fees charged by its
competent authorities on application referred to inparagraph 1 do not in themselves represent an unjustifiable
impediment to entry and temporary stay of natural personsof the other Party under this Chapter.

- 91 -

5.
Each Party shall endeavor, to the maximum extent
possible, to take measures to simplify the requirements andto facilitate and expedite the procedures related to theentry and temporary stay of natural persons of the otherParty subject to its laws and regulations.
Article 8.6
Sub-Committee on Movement of Natural Persons
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Movement of Natural Persons (hereinafterreferred to in this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)considering the development of measures tofurther facilitate the entry and temporary stayof natural persons on a reciprocal basis;(c)exchanging information on measures affecting
entry and temporary stay of natural persons
referred to in Annex 7;(d)discussing any issues related to this Chapter as
may be agreed upon;(e)reporting the findings of the Sub-Committee to
the Joint Committee; and(f)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.

- 92 -

Article 8.7
Dispute Settlement
1.
The dispute settlement procedures provided for in
Chapter 16 shall not apply to this Chapter unless:(a)the matter involves a pattern of practice; and(b)the natural persons of a Party affected by thatmatter have exhausted the available domestic
administrative remedies of the other Party.

2.
The remedies referred to in subparagraph 1(b) shall bedeemed to be exhausted if a final determination in thematter has not been issued by the competent authority ofthe other Party within one year after the date of theinstitution of the administrative remedy, and the failure
to issue such a determination is not attributable to thedelay caused by the natural persons.

- 93 -

Chapter 9
Electronic Commerce
Article 9.1
General Provisions
1.
The Parties recognize the economic growth andopportunities provided by electronic commerce, and theimportance of avoiding unnecessary barriers to its use anddevelopment.
2.
The objective of this Chapter is to contribute tocreating an environment of trust and confidence in the useof electronic commerce and to promote electronic commerce
between the Parties and the wider use of electroniccommerce globally.
3.
The Parties recognize the principle of technologicalneutrality in electronic commerce.
4.
In the event of any inconsistency between this Chapter
and Chapter 2, 7, 10 or 12, the Chapter other than this
Chapter shall prevail to the extent of the inconsistency.
Article 9.2
Definitions
For the purposes of this Chapter:(a)the term “digital products” means computer
programs, text, video, images, sound recordings
and other products, that are digitally encoded,
regardless of whether they are fixed on a carrier
medium or transmitted electronically;(b)

the term “electronic certificate” means anelectromagnetic record prepared for certifyingthat matters used to confirm that the user has
performed the electronic signature are pertaining
to such user;(c)the term “electronic signature” means a measuretaken with respect to information that can berecorded in an electromagnetic record and which
fulfills both of the following requirements:- 94 -

(d)(i)

that the measure indicates that suchinformation has been approved by a person
who has taken such measure; and(ii)

that the measure confirms that suchinformation has not been altered; andthe term “trade administration documents” means
forms that a Party issues or controls and thatmust be completed by or for an importer orexporter in connection with the importation orexportation of goods.
Article 9.3
Customs Duties

Each Party shall maintain its practice of not imposing
customs duties on electronic transmissions between theParties.
Article 9.4
Non-Discriminatory Treatment of Digital Products
1.

2.

Neither Party shall adopt or maintain:(a)measures that accord less favorable treatment todigital products of the other Party than it
accords to its own like digital products; and(b)measures that accord less favorable treatment todigital products of the other Party than it
accords to like digital products of a non-Party.

Paragraph 1 shall not apply to:(a)government procurement;(b)subsidies provided by a Party or a state
enterprise, including grants, governmentsupported loans, guarantees and insurance;(c)measures maintained by a Party in accordance withparagraph 2 of Article 7.4;

- 95 -

(d)(e)

measures adopted or maintained by a Party within
the scope of Article 7.3 or 7.5 which are:(i)related to the sectors not committed in its
Schedule of Specific Commitments in Annex 6;
or

(ii)

not inconsistent with the terms,
limitations, conditions and qualifications
agreed and specified in its Schedule ofSpecific Commitments in Annex 6; andnon-conforming measures adopted or maintained bya Party in accordance with Article 10.8.

3.
In implementing its obligations under paragraph 1,each Party shall, where necessary, determine in good faith
whether a digital product is a digital product of a Party,of the other Party or of a non-Party. Such determination
shall be made in a transparent, objective, reasonable andfair manner.
4.
Each Party shall, upon request of the other Party,
explain how it determines the origin of a digital productwhere it determines such origin in implementing its
obligations under paragraph 1.
5.
The Parties shall cooperate in internationalorganizations and fora to foster the development of
criteria for the determination of the origin of a digitalproduct, with a view to considering the incorporation ofsuch criteria into this Agreement.
Article 9.5
Electronic Signature
1.
Neither Party shall adopt or maintain measuresregulating electronic signature that would:(a)prohibit parties to an electronic transaction
from mutually determining the appropriate
electronic signature methods for theirtransaction; or- 96 -

(b)prevent parties to an electronic transaction fromhaving the opportunity to prove in court that
their electronic transactions comply with any
legal requirements.

2.
Notwithstanding paragraph 1, each Party may require
that, for a particular category of electronic transactions,the electronic signatures meet certain performancestandards or are based on a specific electronic certificate
issued by a supplier of certification services accredited
or recognized in accordance with the laws and regulationsof the Party, provided that the requirement:(a)serves a legitimate policy objective; and(b)

is substantially related to achieving that
objective.
Article 9.6
Consumer Protection

1.
The Parties recognize the importance of adopting andmaintaining transparent and effective consumer protection
measures for electronic commerce as well as measuresconducive to the development of consumer confidence.
2.
The Parties recognize the importance of cooperation
between their respective competent authorities in charge ofconsumer protection on activities related to electroniccommerce in order to enhance consumer protection.
3.
The Parties shall adopt or maintain measures, inaccordance with their respective laws and regulations, toprotect the personal data of electronic commerce users.
Article 9.7
Unsolicited Commercial E-mailEach Party shall endeavor to take appropriate andnecessary measures to regulate unsolicited commercial
e-mail for advertising purposes.

- 97 -

Article 9.8
Paperless Trade Administration
1.
Each Party shall endeavor to make all tradeadministration documents available to the public inelectronic form.
2.
Each Party shall endeavor to accept tradeadministration documents submitted electronically as thelegal equivalent of the paper version of such documents.
3.
The Parties shall cooperate bilaterally and ininternational fora to enhance the acceptance of electronic
versions of trade administration documents.
Article 9.9
Domestic Regulation
Each Party shall ensure that all its measures
affecting electronic commerce are administered in atransparent, objective, reasonable and impartial manner,and are not more burdensome than necessary to meet
legitimate policy objectives.
Article 9.10
Prohibition on Requirement concerning the Locationof Computing Facilities
1.

Neither Party shall require:(a)a service supplier of the other Party;(b)

an investor of the other Party; or(c)an investment of an investor of the other Partyin the Area of the former Party,

as a condition for conducting its business in the Area ofthe former Party, to use or locate computing facilities inthat Area.

- 98 -

2.
Notwithstanding paragraph 1, nothing in this Article
shall be construed to prevent a Party from adopting ormaintaining measures affecting the use or location ofcomputing facilities necessary to achieve a legitimate
public policy objective, provided that such measures are
not applied in a manner which would constitute a means ofarbitrary or unjustifiable discrimination or a disguised
restriction on trade.
Article 9.11
Source Code1.
Neither Party shall require the transfer of, or accessto, source code of software owned by a person of the otherParty, as a condition of the import, distribution, sale oruse of such software, or of products containing such
software, in its Area.
2.
For the purposes of this Article, software subject toparagraph 1 is limited to mass-market software or products
containing such software, and does not include software
used for critical infrastructure.
Article 9.12
Cooperation
1.
The Parties shall, where appropriate, cooperatebilaterally and participate actively in regional andmultilateral fora to promote the development of electroniccommerce.
2.
The Parties shall, where appropriate, share
information and experiences, including on related laws,
regulations and best practices with respect to electroniccommerce, related to, inter alia, consumer confidence,cyber-security, combatting unsolicited commercial e-mail,intellectual property, electronic government and personal
data protection.
3.
The Parties shall cooperate to overcome obstacles
encountered by small and medium enterprises in the use ofelectronic commerce.

- 99 -

4.
Each Party shall encourage, through existing means
available to it, the activities of non-profit organizationsin that Party aimed at promoting electronic commerce,
including the exchange of information and views.
5.
The Parties recognize the importance of working tomaintain cross-border flows of information as an essential
element for a vibrant electronic commerce environment.
6.
The Parties recognize the importance of further
enhancement of trade in digital products.
Article 9.13
Sub-Committee on Electronic Commerce
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Electronic Commerce (hereinafter referred
to in this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

discussing any issues related to this Chapter
including, where appropriate, the possible review
of Article 9.4;

(c)seeking new opportunities to further enhance
trade in digital products;(d)reporting the findings of the Sub-Committee to
the Joint Committee; and(e)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.

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Chapter 10
Investment
Article 10.1
Scope1.
This Chapter shall apply to measures adopted or
maintained by a Party related to:(a)investors of the other Party;(b)

investments of investors of the other Party in
the Area of the former Party; and(c)with respect to Articles 10.7 and 10.17, allinvestments in the Area of the former Party.

Note 1: For greater certainty, this Chapter shall also
apply to measures adopted or maintained by a
Party related to investments made by investorsof the other Party in the Area of the former
Party prior to the entry into force of thisAgreement.
Note 2: For greater certainty, this Chapter shall not
apply to claims arising out of events which
occurred prior to the entry into force of thisAgreement.
2.
In the event of any inconsistency between this Chapter
and Chapter 7:(a)with respect to matters covered by Articles 10.3,
10.4 and 10.7, Chapter 7 shall prevail to theextent of the inconsistency; and(b)with respect to matters not falling undersubparagraph (a), this Chapter shall prevail tothe extent of the inconsistency.

3.
Nothing in this Chapter shall impose any obligation oneither Party regarding measures pursuant to immigration
laws and regulations.

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Article 10.2
Definitions
For the purposes of this Chapter:(a)the term “Bilateral Investment Agreement” means
the Agreement between Japan and Mongolia
concerning the Promotion and Protection of
Investment signed at Tokyo on February 15, 2001;(b)

an enterprise is:(i)“owned” by an investor if more than 50
percent of the equity interest in it isowned by the investor; and(ii)“controlled” by an investor if the investor
has the power to name a majority of its
directors or otherwise to legally direct its
actions;(c)the term “existing” means in effect on the dateof entry into force of this Agreement;(d)the term “freely usable currency” means freely
usable currency as defined under the Articles ofAgreement of the International Monetary Fund;(e)the term “investment activities” means
establishment, acquisition, expansion, operation,
management, maintenance, use, enjoyment and saleor other disposal of an investment; and(f)the term “measure” means any measure, whether inthe form of a law, regulation, rule, procedure,
decision, administrative action or any otherform.
Article 10.3
National Treatment

1.
Each Party shall in its Area accord to investors of
the other Party and to their investments treatment no lessfavorable than the treatment it accords in likecircumstances to its own investors and to their investmentswith respect to investment activities.

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2.
Paragraph 1 shall not be construed to prevent a Party
from adopting or maintaining a measure that prescribes
special formalities in connection with investment
activities of investors of the other Party in its Area,
provided that such special formalities do not impair thesubstance of the rights of such investors under this
Chapter.
Article 10.4
Most-Favored-Nation Treatment
Each Party shall in its Area accord to investors of
the other Party and to their investments treatment no lessfavorable than the treatment it accords in likecircumstances to investors of a non-Party and to theirinvestments with respect to investment activities.
Article 10.5
General Treatment
1.
Each Party shall in its Area accord to investments ofinvestors of the other Party treatment in accordance withinternational law, including fair and equitable treatment
and full protection and security.
Note 1: This paragraph prescribes the customaryinternational law minimum standard oftreatment of aliens as the minimum standard oftreatment to be afforded to investments ofinvestors of the other Party. The concepts of“fair and equitable treatment” and “fullprotection and security” do not require
treatment in addition to or beyond that whichis required by the customary international law
minimum standard of treatment of aliens. A
determination that there has been a breach ofanother provision of this Agreement, or of aseparate international agreement, does notestablish that there has been a breach of thisparagraph.

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Note 2: “Fair and equitable treatment” includes theobligation of the Party not to deny justice incriminal, civil or administrative adjudicatory
proceedings in accordance with the principleof due process of law.
2.
Each Party shall observe any written obligation it may
have entered into with respect to a specific investment by
an investor of the other Party, which the investor could
have relied on at the time of establishment, acquisition or
expansion of such investment.
3.

This Article shall apply to taxation measures.
Article 10.6
Access to the Courts

1.
Each Party shall in its Area accord to investors of
the other Party treatment no less favorable than thetreatment it accords in like circumstances to its own
investors or to investors of a non-Party with respect toaccess to the courts and administrative agencies in all
degrees of jurisdiction, both in pursuit and in defense ofsuch investors’ rights.
2.

This Article shall apply to taxation measures.
Article 10.7
Prohibition of Performance Requirements

1.
Neither Party shall impose or enforce any of thefollowing requirements, or enforce any commitment or
undertaking, in connection with investment activities of aninvestor of a Party or of a non-Party in its Area to:(a)export a given level or percentage of goods orservices;(b)achieve a given level or percentage of domestic
content;(c)purchase, use or accord a preference to goods
produced or services provided in its Area, or topurchase goods or services from persons in its
Area;- 104 -

(d)relate in any way the volume or value of imports
to the volume or value of exports or to theamount of foreign exchange inflows associatedwith an investment of the investor;(e)restrict sales of goods or services in its Area
that an investment of the investor produces orprovides by relating such sales in any way to thevolume or value of its exports or foreignexchange earnings;(f)restrict the exportation or sale for export;(g)appoint, as executives, managers or members ofboards of directors, individuals of any
particular nationality;(h)locate the headquarters of that investor for a
specific region or the world market in its Area;(i)hire a given number or percentage of its
nationals;(j)supply one or more of the goods that the investor
produces or the services that the investor
provides to a specific region or the world
market, exclusively from the Area of the former
Party; or(k)adopt:(i)given rate or amount of royalty under alicense contract; or(ii)

a given duration of the term of a license
contract,with respect to any license contract freely
entered into between the investor and a person in
its Area, whether it has been entered into or
not, provided that the requirement is imposed or
the commitment or undertaking is enforced by an
exercise of governmental authority of the Party.

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Note:

A “license contract” referred to in thissubparagraph means any license contract
concerning transfer of technology, a
production process, or other proprietaryknowledge.

2.
Neither Party shall condition the receipt or continued
receipt of an advantage, in connection with investment
activities of an investor of a Party or of a non-Party in
its Area, on compliance with any of the following
requirements to:

3.

(a)

achieve a given level or percentage of domestic
content;(b)purchase, use or accord a preference to goods
produced or services provided in its Area, or topurchase goods or services from persons in its
Area;

(c)

relate in any way the volume or value of imports
to the volume or value of exports or to theamount of foreign exchange inflows associatedwith an investment of the investor;(d)restrict sales of goods or services in its Area
that an investment of the investor produces orprovides by relating such sales in any way to thevolume or value of its exports or foreignexchange earnings; or(e)restrict the exportation or sale for export.

(a)Nothing in paragraph 2 shall be construed toprevent a Party from conditioning the receipt orcontinued receipt of an advantage, in connection
with investment activities of an investor of a
Party or of a non-Party in its Area, on
compliance with a requirement to locate
production, supply a service, train or employ
workers, construct or expand particularfacilities, or carry out research anddevelopment, in its Area.

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(b)Subparagraph 1(k) shall not apply when therequirement is imposed or the commitment or
undertaking is enforced by a court or competition
authority to remedy an alleged violation of laws
controlling the anti-competitive activities.

(c)

Subparagraphs 1(a), 1(b), 1(c), 2(a) and 2(b)shall not apply to qualification requirements forgoods or services with respect to foreign aid
programs.

(d)

Subparagraphs 2(a) and 2(b) shall not apply torequirements imposed by an importing Party
related to the content of goods necessary toqualify for preferential tariffs or preferential
quotas.

4.
Paragraphs 1 and 2 shall not apply to any requirement
other than the requirements set out in those paragraphs.
Article 10.8
Non-Conforming Measures
1.

Articles 10.3, 10.4 and 10.7 shall not apply to:(a)any existing non-conforming measure that ismaintained by the central government of a Party,
as set out in its Schedule in Annex 8;(b)any existing non-conforming measure that ismaintained by a local government of a Party;(c)

the continuation or prompt renewal of any nonconforming measure referred to in subparagraphs(a) and (b); or(d)an amendment or modification to any nonconforming measure referred to in subparagraphs(a) and (b), to the extent that the amendment or
modification does not decrease the conformity ofthe measure, as it existed immediately before theamendment or modification, with Articles 10.3,
10.4 and 10.7.

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2.
If a Party considers that the non-conforming measurereferred to in subparagraph 1(b) and adopted or maintainedby a prefecture or the city of Ulaanbaatar or a province ofthe other Party creates an impediment to investment
activities of an investor of the former Party, that former
Party may request consultations with respect to theapplication of that measure with a view to achieving
mutually satisfactory solution.
3.
Articles 10.3, 10.4 and 10.7 shall not apply to any
measure that a Party adopts or maintains with respect tosectors, sub-sectors or activities, as set out in its
Schedule in Annex 9.
4.
Neither Party shall, under any measure adopted after
the date of entry into force of this Agreement and coveredby its Schedule in Annex 9, require an investor of theother Party, by reason of its nationality, to sell orotherwise dispose of an investment that exists at the time
when the measure becomes effective.
5.
In cases where a Party makes an amendment or amodification to any existing non-conforming measure set out
in its Schedule in Annex 8 or where a Party adopts any new
or more restrictive measure with respect to sectors, subsectors or activities set out in its Schedule in Annex 9
after the date of entry into force of this Agreement, theParty shall, prior to the implementation of the amendment
or modification or the new or more restrictive measure, orin exceptional circumstances, as soon as possible
thereafter:(a)notify the other Party of detailed information onsuch amendment, modification or measure; and(b)hold, upon request of the other Party,
consultations in good-faith with the other Party
with a view to achieving mutual satisfaction.

6.
Each Party shall endeavor, where appropriate, toreduce or eliminate the non-conforming measures specified
in its Schedules in Annexes 8 and 9 respectively.

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7.
Articles 10.3 and 10.4 shall not apply to any measure
covered by the exceptions to, or derogations from,obligations under Articles 3 and 4 of the TRIPS Agreement,as specifically provided in Articles 3 through 5 of the
TRIPS Agreement.
8.
Articles 10.3, 10.4 and 10.7 shall not apply to any
measure that a Party adopts or maintains with respect togovernment procurement.
Article 10.9
Expropriation and Compensation
1.
Neither Party shall expropriate or nationalize an
investment in its Area of investors of the other Party or
take any measure equivalent to expropriation or
nationalization (hereinafter referred to as“expropriation”) except:(a)for a public purpose;(b)in a non-discriminatory manner;(c)upon payment of prompt, adequate and effective
compensation in accordance with paragraphs 2
through 4; and(d)in accordance with due process of law and Article
10.5.

2.
The compensation shall be equivalent to the fairmarket value of the expropriated investment at the time
when the expropriation was publicly announced or when the
expropriation took place, whichever is earlier. The fairmarket value shall not reflect any change in value
occurring because the intended expropriation had become
publicly known earlier.
3.
The compensation shall be paid without delay and shall
include interest at a commercially reasonable rate, taking
into account the length of time until the time of payment.
It shall be effectively realizable and freely transferable,
and shall be freely convertible into the currency of theParty of the investors concerned and into freely usable
currencies at the market exchange rate prevailing on thedate of expropriation.

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4.
Without prejudice to the provisions of Article 10.13,
the investors affected by expropriation shall have a rightof access to the courts or administrative agencies of theParty making the expropriation to seek a prompt review of
the investors’ case and the amount of compensation inaccordance with the principles set out in this Article.
5.
This Article shall apply to taxation measures, to theextent that such taxation measures constituteexpropriation.
6.
This Article shall be interpreted in accordance with
Annex 10.
Article 10.10
Protection from Strife
1.
Each Party shall accord to investors of the otherParty that have suffered loss or damage related to theirinvestments in the Area of the former Party due to armed
conflict or a state of emergency such as revolution,
insurrection, civil disturbance or any other similar eventin the Area of that former Party, treatment, as regards
restitution, indemnification, compensation or any othersettlement, that is no less favorable than the treatment it
accords to its own investors or to investors of a nonParty, whichever is more favorable to the investors of theother Party.
2.
Any payment as a means of settlement referred to inparagraph 1 shall be effectively realizable, freelytransferable and freely convertible at the market exchange
rate into the currency of the Party of the investors
concerned and freely usable currencies.
3.
Notwithstanding the provisions of Article 1.10,
neither Party shall be relieved of its obligation underparagraph 1 by reason of its measures taken in accordancewith that Article.

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Article 10.11
Transfers
1.
Each Party shall ensure that all transfers related toinvestments in its Area of an investor of the other Party
may be freely made into and out of its Area without delay.
Such transfers shall include, in particular, though not
exclusively:(a)the initial capital and additional amounts tomaintain or increase investments;(b)

profits, interest, capital gains, dividends,
royalties, fees and other current incomes
accruing from investments;(c)payments made under a contract including loan
payments in connection with investments;(d)proceeds of the total or partial sale or
liquidation of investments;(e)earnings and remuneration of personnel from theother Party engaged in activities in connection
with investments in the Area of the former Party;(f)payments made in accordance with Articles 10.9
and 10.10; and(g)payments arising out of the settlement of adispute under Article 10.13.

2.
Each Party shall further ensure that such transfers
may be made without delay in freely usable currencies at
the market exchange rate prevailing on the date of thetransfer.
3.
Notwithstanding paragraphs 1 and 2, a Party may delay
or prevent a transfer through the equitable, nondiscriminatory and good-faith application of its laws andregulations related to:(a)bankruptcy, insolvency or the protection of therights of creditors;(b)issuing, trading or dealing in securities;- 111 -

(c)criminal or penal offenses; or(d)ensuring compliance with orders or judgments in
adjudicatory proceedings.
Article 10.12
Subrogation

If a Party or its designated agency makes a payment to
any investor of that Party under an indemnity, guarantee orinsurance contract, pertaining to an investment of suchinvestor in the Area of the other Party, the latter Party
shall recognize the assignment to the former Party or its
designated agency of any right or claim of such investor on
account of which such payment is made and shall recognize
the right of the former Party or its designated agency to
exercise by virtue of subrogation any such right or claim
to the same extent as the original right or claim of theinvestor. As regards payment to be made to that former
Party or its designated agency by virtue of such assignmentof right or claim and the transfer of such payment, theprovisions of Articles 10.9, 10.10 and 10.11 shall apply
mutatis mutandis.
Article 10.13
Settlement of Investment Disputes between a Party
and an Investor of the Other Party
1.

For the purposes of this Article:(a)the term “disputing investor” means an investor
who is a party to an investment dispute;(b)the term “disputing Party” means a Party that isa party to an investment dispute;(c)the term “disputing parties” means the disputing
investor and the disputing Party;(d)the term “ICSID Convention” means the Convention
on the Settlement of Investment Disputes between
States and Nationals of Other States, done at
Washington, March 18, 1965;- 112 -

(e)the term “ICSID Additional Facility Rules” means
the Rules Governing the Additional Facility for
the Administration of Proceedings by the
Secretariat of the International Centre for
Settlement of Investment Disputes;(f)

the term “investment dispute” means a dispute
between a Party and an investor of the otherParty that has incurred loss or damage by reasonof, or arising out of, an alleged breach of any
obligation of the former Party under this Chapter
with respect to the investor of that other Partyor its investment in the Area of the former
Party; and(g)the term “New York Convention” means theConvention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York, June
10, 1958.

2.
Subject to subparagraph 6(a)(i), nothing in this
Article shall be construed to prevent a disputing investor
from seeking administrative or judicial settlement within
the Area of the disputing Party.
3.
An investment dispute shall, as far as possible, besettled amicably through consultations between thedisputing parties.
4.
If the investment dispute cannot be settled throughsuch consultations within 120 days from the date on which
the disputing investor requested in writing the disputing
Party for the consultations, the disputing investor may,subject to paragraph 6, submit the investment dispute toone of the following international arbitrations:(a)arbitration in accordance with the ICSID
Convention, so long as the ICSID Convention is inforce between the Parties;(b)arbitration under the ICSID Additional Facility
Rules, provided that either Party, but not both,
is a party to the ICSID Convention;(c)arbitration under the Arbitration Rules of theUnited Nations Commission on International Trade
Law; and- 113 -

(d)if agreed with the disputing Party, any
arbitration in accordance with other arbitration
rules.

5.
The applicable arbitration rules shall govern thearbitration set forth in paragraph 4 except to the extent
modified in this Article.
6.

(a)

(b)

Notwithstanding paragraphs 4 and 8, no claim may
be submitted to the arbitration set forth inparagraph 4 unless:(i)the disputing investor gives the disputing
Party written waiver of any right toinitiate before any court under the law ofeither Party or other dispute settlement
procedures including the investment disputesettlement procedures under the Bilateral
Investment Agreement, any proceedings withrespect to any measure of the disputing
Party alleged to constitute a breachreferred to in subparagraph 1(f); and(ii)

the disputing investor has not initiatedbefore the investment dispute settlement
procedures under the Bilateral Investment
Agreement, any proceedings with respect toany measure of the disputing Party alleged
to constitute a breach referred to in
subparagraph 1(f).

Notwithstanding subparagraph (a), the disputing
investor may initiate or continue an action thatseeks interim injunctive relief that does not
involve the payment of monetary damages before
any competent court of the disputing Party.

7.
The disputing investor who intends to submit theinvestment dispute to arbitration in accordance withparagraph 4 shall give to the disputing Party written
notice of intent to do so at least 90 days before theinvestment dispute is submitted. The notice of intent shallspecify:(a)the name and address of the disputing investor;- 114 -

8.

(b)

the specific measures of the disputing Party at
issue and a brief summary of the factual andlegal basis of the investment dispute sufficient
to present the problem clearly, including theobligations under this Chapter alleged to havebeen breached;(c)arbitration set forth in paragraph 4 which thedisputing investor chooses to invoke; and(d)the relief sought and the approximate amount ofdamages claimed.

(a)Each Party hereby consents to the submission of
investment disputes by a disputing investor toarbitration set forth in paragraph 4 chosen by
the disputing investor.

(b)

The consent given under subparagraph (a) and thesubmission by a disputing investor of aninvestment dispute to arbitration shall satisfy
the requirements of:(i)

Chapter II of the ICSID Convention or the
ICSID Additional Facility Rules, for writtenconsent of the parties to a dispute; and(ii)

Article II of the New York Convention for anagreement in writing.

9.
Notwithstanding paragraph 8, no investment disputes
may be submitted to arbitration set forth in paragraph 4,
if more than three years have elapsed since the date on
which the disputing investor acquired or should have firstacquired, whichever is the earlier, the knowledge that the
disputing investor had incurred loss or damage referred toin subparagraph 1(f).

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10. Unless the disputing parties otherwise agree, anarbitral tribunal established under paragraph 4 shallcomprise three arbitrators, one arbitrator appointed byeach of the disputing parties and the third, who shall be
the presiding arbitrator, appointed by agreement of the
disputing parties. If the disputing investor or the
disputing Party fails to appoint an arbitrator or
arbitrators within 60 days from the date on which theinvestment dispute was submitted to arbitration, theSecretary-General of the International Centre for
Settlement of Investment Disputes in the case ofarbitration referred to in subparagraph 4(a) or 4(b), or
the Secretary-General of the Permanent Court of
Arbitration, at The Hague in the case of arbitrationreferred to in subparagraph 4(c) or 4(d), may be requested
by either of the disputing parties, to appoint thearbitrator or arbitrators not yet appointed, subject to therequirements of paragraph 11.
11. Unless the disputing parties otherwise agree, thethird arbitrator shall not be a national of either Party,
nor have his or her usual place of residence in either
Party, nor be employed by either of the disputing parties,
nor have dealt with the investment dispute in any capacity.
12. Unless the disputing parties otherwise agree, thearbitration shall be held in a country that is a party to
the New York Convention.
13. An arbitral tribunal established under paragraph 4
shall decide the issues in dispute in accordance with this
Chapter and other provisions of this Agreement as
applicable and applicable rules of international law.
14.

The disputing Party shall deliver to the other Party:(a)written notice of the investment disputesubmitted to the arbitration no later than 30days after the date on which the investment
dispute was submitted; and(b)copies of all pleadings filed in the arbitration.

- 116 -

15. The Party which is not the disputing Party may, upon
written notice to the disputing parties, make submissions
to the arbitral tribunal on a question of interpretation ofthis Chapter and other provisions of this Agreement as
applicable.
16. The arbitral tribunal may order an interim measure ofprotection to preserve the rights of the disputing
investor, or to facilitate the conduct of arbitralproceedings, including an order to preserve evidence in thepossession or control of either of the disputing parties.
The arbitral tribunal shall not order attachment or enjoin
the application of the measure alleged to constitute a
breach referred to in subparagraph 1(f).
17. Before ruling on the merits, the arbitral tribunal
shall address and, if warranted, decide as a preliminary
question any objection by the disputing Party to thejurisdiction of the arbitral tribunal and to theadmissibility of the claim of the disputing investor. Whenthe arbitral tribunal decides such an objection as apreliminary question, it may, if warranted, award to theprevailing disputing party reasonable costs and attorney’s
fees incurred in submitting or opposing the objection. In
determining whether such an award is warranted, thearbitral tribunal shall consider whether either the
disputing investor’s claim or the disputing Party’s
objection was frivolous. In doing so, the arbitral tribunal
shall provide the disputing parties a reasonable
opportunity to comment.
18.

The arbitral tribunal may award only:(a)a judgment whether or not there has been a breachby the disputing Party of any obligation under
this Chapter with respect to the disputing
investor and its investment; and(b)

one or both of the following remedies, only ifthere has been such a breach:(i)monetary damages and applicable interest;and- 117 -

(ii)restitution of property, in which case theaward shall provide that the disputing Party
may pay monetary damages and any applicableinterest, in lieu of restitution.

The arbitral tribunal may also award costs andattorneys’ fees in accordance with this Article and theapplicable arbitration rules.
19. The disputing Party may make available to the public
in a timely manner all documents, including an award,
submitted to, or issued by, an arbitral tribunal
established under paragraph 4, subject to redaction of:(a)confidential business information;(b)

information which is privileged or otherwise
protected from disclosure under the applicablelaws and regulations of either Party; and(c)information which shall be withheld in accordancewith the relevant arbitration rules.

20. The award rendered by the arbitral tribunal shall befinal and binding upon the disputing parties. This award
shall be executed in accordance with the applicable laws
and regulations, as well as relevant international law
including the ICSID Convention and the New York Convention,
concerning the execution of award in force in the country
where such execution is sought.
21. Neither Party shall give diplomatic protection, or
bring an international claim, with respect to an investment
dispute which the other Party and an investor of the former
Party have consented to submit or submitted to arbitration
set forth in paragraph 4, unless the other Party has failed
to abide by and comply with the award rendered in suchinvestment dispute. Diplomatic protection, for the purposesof this paragraph, shall not include informal diplomatic
exchanges for the sole purpose of facilitating a settlementof the investment dispute.
22. This Article shall apply to disputes regarding
taxation measures to the extent covered by Article 10.5,
10.6 or 10.9.

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Article 10.14
Temporary Safeguard Measures
1.
A Party may adopt or maintain restrictive measureswith respect to cross-border capital transactions as wellas payment and transfers related to investments:

2.

(a)

in the event of serious balance-of-payments andexternal financial difficulties or threat
thereof; or(b)in exceptional cases where movements of capitalcause or threaten to cause serious difficulties
for macroeconomic management, in particularmonetary and exchange rate policies.

Restrictive measures referred to in paragraph 1:(a)shall be applied on the basis of national
treatment and most-favored-nation treatment;(b)shall be consistent with the Articles ofAgreement of the International Monetary Fund;(c)shall avoid unnecessary damage to the commercial,economic and financial interests of the otherParty;(d)shall not exceed those necessary to deal with thecircumstances described in paragraph 1; and(e)shall be temporary and be phased out
progressively as the situation specified inparagraph 1 improves.

3.
Any restrictions adopted or maintained in accordancewith paragraph 1, or any changes therein, shall be promptly
notified to the other Party.
4.
Nothing in this Article shall be construed to alter
the rights enjoyed and obligations undertaken by a Party as
a party to the Articles of Agreement of the International
Monetary Fund.

- 119 -

Article 10.15
Prudential Measures
1.
Notwithstanding any other provisions of this Chapter,a Party shall not be prevented from adopting or maintaining
measures related to financial services for prudential
reasons, including measures for the protection of
investors, depositors, policy holders or persons to whom afiduciary duty is owed by an enterprise supplying financial
services, or to ensure the integrity and stability of its
financial system.
2.
Where the measures adopted or maintained by a Party inaccordance with paragraph 1 do not conform with this
Chapter, they shall not be used as a means of avoiding theobligations of the Party under this Chapter.
Article 10.16
Denial of Benefits
1.
A Party may deny the benefits of this Chapter to an
investor of the other Party that is an enterprise of theother Party and to its investment if the enterprise isowned or controlled by an investor of a non-Party and thedenying Party:(a)does not maintain diplomatic relations with thenon-Party; or(b)adopts or maintains measures with respect to the
non-Party that prohibit transactions with theenterprise or that would be violated or
circumvented if the benefits of this Chapter wereaccorded to the enterprise or to its investment.

2.
A Party may deny the benefits of this Chapter to an
investor of the other Party that is an enterprise of theother Party and to its investment if the enterprise isowned or controlled by an investor of a non-Party and theenterprise has no substantial business activities in the
Area of the other Party.

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Article 10.17
Health, Safety and Environmental Measuresand Labor Standards
The Parties shall refrain from encouraging investment
by investors of each Party or of a non-Party by relaxing
their respective health, safety or environmental measures
or by lowering its labor standards. To this effect eachParty should not waive or otherwise derogate from suchmeasures or standards as an encouragement for theestablishment, acquisition or expansion in its Area ofinvestments by investors of each Party or of a non-Party.
Article 10.18
Sub-Committee on Investment
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Investment (hereinafter referred to inthis Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

exchanging information on any matters related tothis Chapter;(c)discussing any issues related to this Chapter;(d)reporting the findings and the outcome of
discussions of the Sub-Committee to the Joint
Committee; and(e)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee may invite representatives of
relevant entities other than the Governments of the Parties
with the necessary expertise relevant to the issues to be
discussed.

- 121 -

5.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
6.
This Article shall apply to matters regarding taxation
measures to the extent covered by Article 10.5, 10.6 or
10.9.
Article 10.19
Relation to the Bilateral Investment Agreement1.
Notwithstanding paragraph 2 of Article 17 of the
Bilateral Investment Agreement, the Bilateral Investment
Agreement shall be terminated upon the date of entry into
force of this Agreement.
2.
The Parties confirm that with respect to investments
and returns acquired prior to the date of termination of
the Bilateral Investment Agreement, the provisions ofArticles 1 through 16 of the Bilateral Investment Agreement
shall continue to be effective for a further period of 15
years from that date in accordance with paragraph 3 ofArticle 17 of the Bilateral Investment Agreement.
3.
For the purposes of paragraph 2, nothing in thisAgreement shall affect the rights and obligations of a
Party under the relevant provisions of the Bilateral
Investment Agreement.
Article 10.20
Duration and Termination
With respect to investments acquired prior to the dateof termination of this Agreement, the provisions of this
Chapter, as well as provisions of this Agreement which are
directly related to this Chapter, shall continue to beeffective for a period of 10 years from the date of
termination of this Agreement.

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Chapter 11
Competition
Article 11.1
Anticompetitive Activities
1.
Each Party shall, in accordance with its laws andregulations, take measures which it considers appropriate
against anticompetitive activities, in order to facilitate
trade and investment flows between the Parties through theefficient functioning of its markets.
2.
For the purposes of this Chapter, the term
“anticompetitive activities” means any conduct ortransaction that may be subject to penalties or relief
under the competition laws and regulations of therespective Parties.
Article 11.2
Cooperation on Controlling Anticompetitive Activities
1.
The Parties shall, in accordance with their respective
laws and regulations, cooperate and assist each other forcontrolling anticompetitive activities within theirrespective available resources.
2.
The details and procedures concerning theimplementation of cooperation under this Article shall be
specified in the Implementing Agreement.
Article 11.3
Non-Discrimination
Each Party shall apply its competition laws andregulations in a manner which does not discriminate between
persons in like circumstances on the basis of theirnationality.

- 123 -

Article 11.4
Procedural Fairness
Each Party shall implement administrative and judicial
procedures in a fair manner to control anticompetitive
activities, in accordance with its relevant laws andregulations.
Article 11.5
Transparency
Each Party shall promote transparency of theimplementation of its competition laws and regulations andits competition policy.
Article 11.6
Non-Application of Paragraph 2 of Article 1.8
and Chapter 16
Paragraph 2 of Article 1.8 and Chapter 16 shall not
apply to this Chapter.

- 124 -

Chapter 12Intellectual Property
Article 12.1
General Provisions
1.
The Parties shall grant and ensure adequate, effective
and non-discriminatory protection of intellectual property
and provide for measures for the enforcement ofintellectual property rights against infringement thereof,in accordance with the provisions of this Chapter and theinternational agreements related to intellectual property
to which both Parties are party.
2.
The Parties shall also promote efficiency andtransparency in the administration of intellectual propertysystem.
3.
Nothing in this Chapter shall derogate from existingrights and obligations that the Parties have under the
TRIPS Agreement or other international agreements related
to intellectual property to which both Parties are party.
Article 12.2
Definition
The term “intellectual property” referred to in this
Chapter shall mean all categories of intellectual property
that are under the TRIPS Agreement.
Article 12.3
National Treatment
Each Party shall accord to nationals of the otherParty treatment no less favorable than the treatment it
accords to its own nationals with regard to the protectionof intellectual property in accordance with Articles 3 and
5 of the TRIPS Agreement.
Note: For the purposes of this Article:(a)the term “nationals” shall have the same meaning
as in the TRIPS Agreement;- 125 -

(b)the term “protection” shall include mattersaffecting the availability, acquisition, scope,
maintenance and enforcement of intellectual
property rights as well as those mattersaffecting the use of intellectual property
rights specifically addressed in this Chapter;
and

(c)

for greater certainty, the term “protection of
intellectual property” shall include therepression of unfair competition as provided forin Article 12.12.
Article 12.4
Procedural Matters1.
For the purposes of providing efficient administrationof intellectual property system, each Party shall takeappropriate measures to improve its administrative
procedures concerning intellectual property rights.
2.
Neither Party shall require the authentication of
signatures or other means of self-identification on
documents to be submitted to the competent authority of theParty, including applications, translations into a language
accepted by such authority of any earlier application whose
priority is claimed, powers of attorney and certificationsof assignment, in the course of application procedure orother administrative procedures on patents, utility models,industrial designs or trademarks.
3.

Notwithstanding paragraph 2, a Party may require:(a)the authentication of signatures or other meansof self-identification, if the law of the Party
so provides, where the signatures or other meansof self-identification concern the surrender of apatent or a registration of utility models,industrial designs or trademarks; and- 126 -

(b)the submission of evidence if there is reasonable
doubt as to the authenticity of signatures orother means of self-identification on documents
submitted to the competent authority of theParty. Where the competent authority notifies the
person that the submission of evidence isrequired, the notification shall state the reason
for requiring the submission.

4.
Neither Party shall require that the submission of apower of attorney be completed together with the filing of
the application as a condition for according a filing dateto the application.
5.
Each Party shall endeavor to improve patent attorney
or registered intellectual property rights authorized
representative system.
6.
Where the acquisition of an intellectual property
right is subject to the right being granted or registered,each Party shall ensure that, irrespective of whether anapplication for the granting or registration of an
intellectual property right is filed as a national or as aninternational application in accordance with the applicableinternational agreement, the procedures for granting or
registration of the right, subject to compliance with thesubstantive conditions for acquisition of the right,
provide the granting or registration within a reasonable
period of time so as to avoid undue curtailment of theperiod of protection.
7.
Each Party shall provide a system for the registrationof trademarks, industrial designs and patents which shall
include:(a)a requirement to provide to the applicant a
communication in writing, which may beelectronic, of the decision with reasons for arefusal of the application;(b)

an opportunity for the applicant to appeal
against administrative refusal;(c)an opportunity for the applicant to ask forjudicial review of the final administrativerefusal; and- 127 -

(d)an opportunity for interested parties, if so
provided in its laws and regulations:(i)to petition to oppose an application or aregistration; and(ii)

to seek cancellation or invalidation of theregistration.
Article 12.5
Transparency

For the purposes of further promoting transparency inthe administration of its intellectual property system,
each Party shall take appropriate measures available to theextent possible in accordance with its laws and regulations
to:(a)publish information on, at least:(i)

intention to grant patents, or applications
for and grant of patents;(ii)

registrations of utility models;(iii)

intention to grant rights of industrial
designs, or registrations of industrial
designs; and(iv)

registrations of trademarks and/or
applications therefor,and provide the relevant information contained in
the files thereof at least to interested persons
upon request; and(b)make available to the public information on its
efforts to ensure effective enforcement ofintellectual property rights and otherinformation with respect to its intellectual
property system.

- 128 -

Article 12.6
Promotion of Public Awareness concerning Protection ofIntellectual Property
The Parties shall take necessary measures to enhance
public awareness of protection of intellectual property
including educational and dissemination projects on the useof intellectual property as well as on the enforcement ofintellectual property rights.
Article 12.7
Patents
1.
Each Party shall ensure that any patent application is
not rejected solely on the ground that the subject matterclaimed in the application is related to a computer
program. Nevertheless, the provision of this Article shallnot prejudice the autonomy of each Party to exclude frompatentability computer programs as such in accordance withthe laws and regulations of each Party.
2.
Each Party shall ensure that an applicant may, on its
own initiative, divide a patent application containing morethan one invention into a certain number of divisional
patent applications within the time limit provided for in
the laws and regulations of the Party.
Article 12.8
Industrial Designs
Each Party shall provide adequate and effective
protection of industrial designs of an article as a whole,and, where appropriate, of a part thereof.

- 129 -

Article 12.9
Trademarks
1.
Each Party shall refuse or cancel the registration ofa trademark, which is identical or similar to a trademark
well-known in either Party as indicating the goods orservices of the owner of the well-known trademark, if useof that trademark is for unfair intentions, inter alia,
intention to gain an unfair profit or intention to cause
damage to the owner of the well-known trademark, and/or ifsuch use would result in a likelihood of confusion.
Note: Each Party may determine in accordance with its
laws and regulations whether a trademark is awell-known trademark.
2.
Each Party shall ensure that an applicant may file arequest to the competent authority that examination of its
application for registration of a trademark be accelerated,subject to reasonable grounds and procedural requirements.
Where such a request has been filed, the competentauthority shall, where appropriate, accelerate theexamination of the application.
Article 12.10
Copyright and Related Rights
1.
Each Party shall provide to authors, performers andproducers of phonograms the right to authorize the making
available to the public of their works, performances fixedin phonograms and phonograms respectively, by wire or
wireless means, in such a way that members of the public
may access them from a place and at a time individuallychosen by them.
2.
Each Party shall provide to broadcasting organizations
the right to prohibit the following acts when undertaken
without their consent:(a)the rebroadcasting of their broadcasts;(b)

the fixation of their broadcasts; or(c)the reproduction of fixations of theirbroadcasts.

- 130 -

3.
Each Party shall, in accordance with its laws andregulations, take appropriate measures to facilitate theactivities to be conducted by the collective management
organizations for copyright and related rights in that
Party.
Article 12.11
Geographical Indications
Each Party shall ensure adequate and effective
protection of geographical indications in accordance with
its laws and regulations and with the TRIPS Agreement.
Article 12.12
Unfair Competition
1.
Each Party shall provide for effective protection
against acts of unfair competition in accordance with
Article 10 bis of the Paris Convention.
2.
Each Party shall ensure that provisions of Article 10
bis of the Paris Convention shall apply mutatis mutandis
with respect to services.
3.
For the purposes of this Article, the term “Paris
Convention” means the Paris Convention for the Protectionof Industrial Property of March 20, 1883, as revised at
Brussels on December 14, 1900, at Washington on June 2,
1911, at The Hague on November 6, 1925, at London on June2, 1934, at Lisbon on October 31, 1958, and at Stockholm on
July 14, 1967 and as amended on September 28, 1979.
Article 12.13
Protection of Undisclosed Information
Each Party shall ensure, in its laws and regulations,adequate and effective protection of undisclosed
information in accordance with paragraph 2 of Article 39 of
the TRIPS Agreement including not taking measures that
limit the duration of protection of the undisclosed
information stipulated in private contracts, or measuresthat force the disclosure of undisclosed information
without legitimate reasons.

- 131 -

Article 12.14
Enforcement – Border Measures
1.
Each Party shall adopt or maintain procedures withrespect to import shipments under which:(a)its customs authorities may act upon their own
initiative to suspend the release of goods
suspected of infringing rights to trademarks
and/or copyrights and related rights (hereinafterreferred to in this Article as “suspected
goods”); and(b)a right holder may request that Party’s competentauthorities to suspend the release of suspected
goods.

2.
Each Party shall adopt or maintain procedures by which
its competent authorities may determine, within areasonable period after the initiation of the procedures
described in paragraph 1, whether the suspected goods
infringe rights to trademarks and/or copyrights and related
rights.
3.
In the case of the suspension with respect to import
shipments in accordance with paragraph 1, the importer andthe right holder shall be promptly notified of thesuspension and shall be provided with all the information
available about suspected goods.
Article 12.15
Enforcement – Civil Remedies
Each Party shall ensure that a right holder ofintellectual property has the right to claim against the
infringer damages adequate to compensate for the injury theright holder has suffered because of an infringement ofthat person’s intellectual property right by an infringer
who knowingly, or with reasonable grounds to know, engaged
in infringing activity.

- 132 -

Article 12.16
Enforcement – Criminal Remedies
1.
Each Party shall provide for criminal procedures andpenalties to be applied at least in cases of willful
trademark counterfeiting or copyright piracy on acommercial scale in accordance with Article 61 of the TRIPS
Agreement.
2.
With respect to the offences specified in paragraph 1,each Party shall provide that its competent authorities
have the authority in accordance with its laws andregulations to order the forfeiture or destruction of all
infringing goods.
Article 12.17
Enforcement – In the Digital Environment
Each Party’s enforcement procedures shall apply to
infringement of copyright or related rights over digital
networks, which may include the unlawful use of means ofwidespread distribution for infringing purposes. These
procedures shall be implemented in a manner that avoids thecreation of barriers to legitimate activity, including
electronic commerce, and, consistent with the laws andregulations of that Party, preserves fundamental principles
such as freedom of expression, fair process and privacy.
Article 12.18
Sub-Committee on Intellectual Property
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Intellectual Property (hereinafterreferred to in this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;- 133 -

(b)discussing any issues related to intellectual
property with a view to enhancing protection of
intellectual property and enforcement ofintellectual property rights in accordance withthe provisions of this Chapter and to promoting
efficient and transparent administration of
intellectual property system;(c)reporting the findings and the outcome of
discussions of the Sub-Committee to the Joint
Committee; and(d)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
Article 12.19
Security Exceptions
For the purposes of this Chapter, Article 73 of the
TRIPS Agreement is incorporated into and forms part of thisAgreement, mutatis mutandis.

- 134 -

Chapter 13
Government Procurement
Article 13.1
Procurement Principle
Recognizing the importance of government procurementin furthering the expansion of production and trade so as
to promote growth and employment, each Party shall ensuretransparency of the measures regarding government
procurement in accordance with its laws and regulations.
The Parties also recognize the need to take into accountthe development, financial and trade needs of the Parties.
Each Party shall ensure a fair and effective implementationof the measures regarding government procurement.
Article 13.2
Exchange of Information
The Parties shall at the central government level,
subject to their respective laws and regulations, exchange
information, to the extent possible in the English language
and in a timely manner, on their respective laws andregulations, policies and practices on government
procurement, as well as on any reforms to their existing
government procurement regimes.
Article 13.3
Further Negotiations
The Parties shall enter into negotiations to review
this Chapter with a view to achieving a comprehensive
Chapter on Government Procurement, when Mongolia expresses
its intention to become a party to the Agreement on
Government Procurement in Annex 4 to the WTO Agreement(hereinafter referred to in this Article as “the GPA”).
Note: If the GPA is amended or is superseded by anotheragreement, “the GPA”, for the purposes of this
Article, shall refer to the GPA as amended or suchother agreement.

- 135 -

Article 13.4
Negotiation on Non-Discrimination
In the event that, after the entry into force of thisAgreement, a Party offers a non-Party any advantages ofaccess to its government procurement market or any
advantageous treatment concerning the measures regarding
government procurement, the former Party shall, uponrequest of the other Party, afford adequate opportunity toenter into negotiations with the other Party with a view toextending these advantages or advantageous treatment to theother Party on a reciprocal basis.
Article 13.5
Sub-Committee on Government Procurement1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Government Procurement (hereinafterreferred to in this Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing and monitoring the implementation andoperation of this Chapter;(b)

analyzing available information on each Party’s
government procurement market;(c)cooperating on e-procurement and human resource
development;(d)reporting the findings of the Sub-Committee to
the Joint Committee; and(e)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.

- 136 -

Chapter 14
Improvement of the Business Environment
Article 14.1
Basic Principles
1.
Each Party shall, in accordance with its laws andregulations，take appropriate measures to further improvethe business environment for the persons of the other Party
conducting their business activities in the former Party.
2.
The Parties shall, in accordance with their respective
laws and regulations, promote cooperation to further
improve the business environment in the respective Parties.
Article 14.2
Sub-Committee on Improvement of the Business Environment1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Improvement of the Business Environment(hereinafter referred to in this Chapter as “the SubCommittee”).
2.

The functions of the Sub-Committee shall be:(a)reviewing findings reported by a Liaison Officeon Improvement of the Business Environment(hereinafter referred to in this Chapter as “theLiaison Office”) to be designated by each Partyin accordance with Article 14.3;(b)addressing, and seeking ways to promptly resolve,
issues related to the business environment on its
own initiative or based on the findings reportedby the Liaison Office;(c)reporting its findings and making
recommendations, including those on measures thatshould be taken by the Parties, to the Parties;(d)reviewing, where appropriate, the measures takenby the Parties related to such recommendations
referred to in subparagraph (c);- 137 -

(e)making available to the public, in an appropriatemanner, the recommendations referred to in
subparagraph (c) and the results of the review
referred to in subparagraph (d);(f)

cooperating, in an appropriate manner, with other
Sub-Committees established under this Agreement,with a view to avoiding unnecessary duplicationof works. The forms of such cooperation may
include:(i)informing the results of its consideration
to such other Sub-Committees;(ii)seeking opinions from such other SubCommittees;(iii)

inviting to the Sub-Committee the members ofsuch other Sub-Committees; and(iv)

where appropriate, transferring the relevant
issues to such other Sub-Committees;(g)reporting promptly the findings andrecommendations referred to in subparagraph (c)to the Joint Committee; and(h)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall be composed of representativesof the Governments of the Parties including officials of
relevant Ministries or Agencies in charge of the issues tobe addressed. The Sub-Committee may invite representativesof relevant entities other than the Governments of theParties with the necessary expertise relevant to the issues
to be addressed.
4.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
Article 14.3
Liaison Office1.
Each Party shall designate and maintain a Liaison
Office for the purposes of this Chapter.

- 138 -

2.
The functions and other details of the Liaison Officeshall be set forth in the Implementing Agreement.
Article 14.4
Non-Application of Chapter 16
Chapter 16 shall not apply to this Chapter.

- 139 -

Chapter 15
Cooperation
Article 15.1
Basic Principles
The Parties shall, in accordance with their respective
laws and regulations, promote cooperation under thisAgreement for their mutual benefit, in order to further
liberalize and facilitate trade in goods and services aswell as investment between the Parties and to promote thewell-being of the people and sustainable development of theParties. For this purpose, the Parties shall enhancefurther cooperation between their Governments, andencourage and facilitate mutual cooperation between
relevant entities of the Parties, one or both of whom areentities other than the Governments of the Parties, in thefollowing fields:(a)agriculture, forestry and fisheries, including
matters related to SPS measures referred to in
Chapter 5;(b)manufacturing industry, including matters related
to technical regulations, standards andconformity assessment procedures referred to in
Chapter 6;(c)small and medium enterprises;(d)trade and investment;(e)infrastructure, construction and urban
development;(f)science and technology and intellectual property;(g)financial services;(h)education and human resource development;(i)tourism;(j)environment;(k)mining and energy;- 140 -

(l)healthcare;(m)competition;(n)

information and communications technology; and(o)other fields to be mutually agreed upon by theGovernments of the Parties.
Article 15.2
Areas and Forms of Cooperation

The areas and forms of cooperation under this Chapter
shall be set forth in the Implementing Agreement.
Article 15.3
Costs of Cooperation
1.
The Parties shall initiate discussion, after the entry
into force of this Agreement, to explore potential
cooperation activities in the fields referred to in Article
15.1 and to ensure timely, efficient and effective
implementation of cooperation activities under this
Chapter.
2.
The Parties shall endeavor to make available thenecessary funds and other resources for the implementationof cooperation under this Chapter in accordance with theirrespective laws and regulations.
3.
Costs for cooperation under this Chapter shall beborne in such a manner to be mutually agreed upon by theParties through efficient and effective utilization offunds and resources.
Article 15.4
Sub-Committee on Cooperation
1.
For the purposes of the effective implementation andoperation of this Chapter, the Parties hereby establish a
Sub-Committee on Cooperation (hereinafter referred to inthis Article as “the Sub-Committee”).
2.

The functions of the Sub-Committee shall be:- 141 -

(a)reviewing and monitoring the effective
implementation and operation of this Chapter;(b)

exchanging information on cooperation in each of
the fields referred to in Article 15.1;(c)identifying ways for further cooperation between
the Parties;(d)discussing any issues related to this Chapter;(e)discussing proposals on cooperation presented byother Sub-Committees established under thisAgreement;(f)making recommendations to the Joint Committee,
where appropriate, on cooperation activities
under this Chapter;(g)reporting to the Joint Committee the findings andoutcome of discussions of the Sub-Committee
regarding the implementation of this Chapter,
including the measures to be taken by theParties; and(h)carrying out other functions as may be delegatedby the Joint Committee.

3.
The Sub-Committee shall, where appropriate, recognize
and share information with the Parties’ existing
consultation mechanisms for Official Development Assistanceand other cooperation schemes to ensure timely, effective
and efficient implementation of cooperation activities
under this Agreement.
4.
The Sub-Committee shall be composed of representativesof the Governments of the Parties. The Sub-Committee may
invite representatives of relevant entities other than the
Governments of the Parties with the necessary expertise
relevant to the issues to be discussed.
5.
The Sub-Committee shall hold meetings at such times
and venues or by means, as may be agreed by the Parties.
The Sub-Committee shall endeavor to hold the first meeting
within one year after the entry into force of thisAgreement.

- 142 -

Article 15.5
Non-Application of Chapter 16
Chapter 16 shall not apply to this Chapter.

- 143 -

Chapter 16
Dispute Settlement
Article 16.1
Scope
Unless otherwise provided for in this Agreement, thedispute settlement procedure of this Chapter shall apply
with respect to the avoidance and the settlement ofdisputes between the Parties arising out of theinterpretation and/or application of this Agreement.
Article 16.2
General Principle
The Parties shall at all times endeavor to agree on
the interpretation and application of this Agreement. They
shall make every attempt through cooperation, consultations
or other means to arrive at a prompt and mutuallysatisfactory resolution of any matter concerning theinterpretation and/or application of this Agreement.
Article 16.3
Choice of Forum1.
Nothing in this Chapter shall prejudice any rights of
the Parties to have recourse to dispute settlement
procedures available under any other international
agreement to which both Parties are party, including theWTO Agreement. The complaining Party may select the forum
in which to settle the dispute.
2.
Notwithstanding paragraph 1, once the complaining
Party has requested the establishment of an arbitral
tribunal under this Chapter or any other international
agreement to which both Parties are party, including apanel under the Understanding on Rules and Procedures
Governing the Settlement of Disputes in Annex 2 to the WTO
Agreement with respect to a particular dispute, thearbitral tribunal or panel selected shall be used to the
exclusion of any other procedure for that particular
dispute.

- 144 -

Article 16.4
Consultations
1.
Either Party may request in writing consultations to
the other Party with respect to any matter on theinterpretation and/or application of this Agreement.
2.
In the request for consultations referred to inparagraph 1, the complaining Party shall set out thereasons for the request, including identification of themeasure at issue and an indication of the legal and factual
basis of the complaint.
3.
The Party complained against shall promptly respond inwriting to such request and enter into consultations withthe complaining Party in good faith within 40 days after
the date of receipt of the request. In cases of urgency,
including those which concern perishable goods, the Party
complained against shall enter into consultations within 20
days after the date of receipt of the request.
4.
The Parties shall make every effort to arrive at amutually satisfactory resolution of the matter throughconsultations under this Article. During the consultations
the Parties shall provide to each other sufficient
information to enable a full examination of the matter.
5.
During the consultations under this Article, theParties shall endeavor to make available personnel of theirrelevant agencies and organizations with expertise in thematter subject to the consultations.
6.
The consultations under this Article shall be
confidential and without prejudice to the rights of either
Party in any further proceedings.
7.
The consultations under this Article may be held in
person or by any technological means available to theParties upon agreement by the Parties. If the Parties agree
to hold consultations in person, the consultations shall beheld in a venue agreed upon by the Parties, or if there isno agreement on the venue, in the capital of the Party
complained against.

- 145 -

Article 16.5
Good Offices, Conciliation or Mediation
1.
Good offices, conciliation or mediation may berequested at any time by either Party. They may begin at
any time by agreement of the Parties, and be terminated at
any time upon request of either Party.
2.
If the Parties agree, good offices, conciliation or
mediation may continue while procedures of the arbitral
tribunal provided for in this Chapter are in progress.
3.
Proceedings involving good offices, conciliation or
mediation and positions taken by the Parties during theseproceedings shall be confidential and without prejudice tothe rights of either Party in any further proceedings.
Article 16.6
Establishment of Arbitral Tribunals
1.
The complaining Party may request in writing theestablishment of an arbitral tribunal to the Party
complained against if:(a)the Party complained against does not enter into
consultations under Article 16.4 within 40 days,
or within 20 days in cases of urgency, including
those which concern perishable goods, after thedate of receipt of the request for suchconsultations; or(b)

the Parties fail to resolve the dispute throughconsultations under Article 16.4 within 60 days,
or within 30 days in cases of urgency, including
those which concern perishable goods, after thedate of receipt of the request for suchconsultations,provided that the complaining Party considers that any
benefit accruing to it directly or indirectly under thisAgreement is being nullified or impaired as a result of the
failure of the Party complained against to carry out its
obligations under this Agreement, or as a result of theapplication by the Party complained against of measures
which are in conflict with its obligations under thisAgreement.

- 146 -

2.
Any request to establish an arbitral tribunal inaccordance with this Article shall identify the reasons forthe request including:(a)the legal basis of the complaint including theprovisions of this Agreement alleged to have beenbreached and any other relevant provisions of theapplicable international law; and(b)

the factual basis of the complaint.
Article 16.7
Composition of Arbitral Tribunals

1.
An arbitral tribunal shall comprise three arbitrators,
who should have relevant technical or legal expertise.
2.
Each Party shall, within 30 days after the date ofreceipt of the request for the establishment of an arbitral
tribunal, appoint one arbitrator who may be its national
and propose up to three candidates to serve as the third
arbitrator who shall be the chair of the arbitral tribunal.
The third arbitrator shall not be a national of either
Party, nor have his or her usual place of residence ineither Party, nor be employed by either Party, nor havedealt with the dispute in any capacity.
3.
The Parties shall endeavor to agree on and appoint thethird arbitrator within 45 days after the date of receiptof the request for the establishment of an arbitral
tribunal, taking into account the candidates proposed inaccordance with paragraph 2.
4.
If a Party has not appointed the one arbitrator inaccordance with paragraph 2, or if the Parties fail toagree on the third arbitrator in accordance with paragraph
3, the arbitrator or arbitrators not yet appointed shall bechosen within 10 days by lot from the candidates proposedin accordance with paragraph 2.
5.
The date of the establishment of an arbitral tribunal
shall be the date on which the chair is appointed.

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6.
If an arbitrator appointed under this Article resigns,
dies or otherwise becomes unable to act, a replacement
arbitrator shall be appointed in the same manner asprescribed for the appointment of the original arbitrator.
The replacement arbitrator shall have all the powers andduties of the original arbitrator. The work of the arbitral
tribunal shall be suspended until the replacement
arbitrator is appointed.
Article 16.8
Functions of Arbitral Tribunals
1.
The functions of the arbitral tribunal established inaccordance with Articles 16.6 and 16.7 shall be to:(a)make an objective assessment of the matter before
it, including an objective assessment of thefacts of the case and the applicability of andconformity with this Agreement;(b)consult regularly with the Parties offering themequal opportunities for such consultations andprovide adequate opportunities for thedevelopment of a mutually satisfactory
resolution;(c)make its award in accordance with this Agreement
and applicable rules of international law;(d)include in its award, its findings of law andfact, together with the reasons for the findings;
and

(e)

attach to its award suggested implementation
options including suggested period of time for
implementing the award, for the Parties toconsider in conjunction with Article 16.11, if
requested by either Party.

2.
The arbitral tribunal may seek, from the Parties, such
relevant information as it considers necessary andappropriate. The Parties shall respond promptly and fully
to any request by the arbitral tribunal for suchinformation as the arbitral tribunal considers necessary
and appropriate.

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3.
The arbitral tribunal may seek information from any
relevant source and may consult experts to obtain theiropinion on certain aspects of the matter. With respect tofactual issues concerning a scientific or other technicalmatter raised by a Party, the arbitral tribunal may request
advisory reports in writing from experts.
4.
Any information obtained by the arbitral tribunal inaccordance with paragraph 3 shall be made available to theParties.
Article 16.9
Proceedings of Arbitral Tribunals
1.
The arbitral tribunal shall meet in closed session.
The Parties shall be present at the meetings only wheninvited by the arbitral tribunal to appear before it.
2.
The venue for the proceedings of the arbitral tribunal
shall be decided by mutual consent of the Parties, failingwhich it shall alternate between the Parties with the firstmeeting of the arbitral tribunal proceedings to be held in
the capital of the Party complained against.
3.
The deliberations of the arbitral tribunal and the
documents submitted to it shall be kept confidential.
4.
Notwithstanding paragraph 3, either Party may makepublic statements as to its views regarding the dispute,but shall treat as confidential, information and written
submissions submitted by the other Party to the arbitral
tribunal which that other Party has designated asconfidential. Where a Party has provided information or
written submissions designated as confidential, the otherParty may request a non-confidential summary of theinformation or written submission which may be disclosed
publicly. The Party to which such a request is made may
agree to the request and submit such a summary, or refuse
the request without needing to ascribe any reasons or
justification.

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5.
The Parties shall be given the opportunity to attend
any of the presentations, statements or rebuttals in theproceedings. Any information or written submissions
submitted by a Party to the arbitral tribunal, including
any comments on the descriptive part of the draft award andresponses to questions put by the arbitral tribunal, shallbe made available to the other Party.
6.
The award of the arbitral tribunal shall be drafted
without the presence of the Parties.
7.
The arbitral tribunal shall, within 120 days, orwithin 60 days in cases of urgency including those which
concern perishable goods, after the date of its
establishment, submit to the Parties its draft award,
including both the descriptive part and its findings andconclusions, for the purposes of enabling the Parties toreview it. When the arbitral tribunal considers that it
cannot submit its draft award within the aforementioned 120
days or 60 days period, it may extend that period with theconsent of the Parties. However, in no case should theperiod from the establishment of the arbitral tribunal to
the submission of the draft award to the Parties exceed 150
days. Either Party may submit comments in writing to thearbitral tribunal on the draft award within 30 days after
the date of submission of the draft award.
8.
The arbitral tribunal shall present its award to theParties within 45 days after the date of submission of thedraft award.
9.
The arbitral tribunal shall attempt to make its
decisions, including its award, by consensus, but may also
make its decisions, including its award, by majority vote.
10. The award of the arbitral tribunal shall be final andbinding on the Parties.

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Article 16.10
Termination of the Proceedings
The Parties may agree to terminate the proceedings ofthe arbitral tribunal by jointly so notifying the chair of
the arbitral tribunal at any time before the issuance of
the award to the Parties, in which case the chair shallterminate the proceedings of the arbitral tribunal without
delay.
Article 16.11
Implementation of Award
1.
Unless the Parties otherwise agree, the Party
complained against shall promptly comply with the award of
the arbitral tribunal issued in accordance with Articles
16.8 and 16.9. If this is not practicable, the Party
complained against shall comply with the award within areasonable period of time.
2.
The reasonable period of time referred to in paragraph1 shall be mutually determined by the Parties, taking into
account, where appropriate, the suggested period of time
attached to the award by the arbitral tribunal. Where theParties fail to agree on the reasonable period of timewithin 45 days after the date of issuance of the award of
the arbitral tribunal, either Party may refer the matter toan arbitral tribunal, which shall determine the reasonable
period of time.
3.

(a)If the Party complained against considers it
impracticable to comply with the award within thereasonable period of time, the Party complained
against shall, no later than the expiry of that
period, enter into consultations with thecomplaining Party, with a view to developing
mutually satisfactory compensation or any
alternative arrangement.

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(b)If no satisfactory compensation or any
alternative arrangement has been agreed within 30
days after the date of expiry of the reasonable
period of time, the complaining Party may suspend
the application to the Party complained againstof concessions or other obligations under thisAgreement, after giving notification of suchsuspension 30 days in advance.

4.
If the complaining Party considers that the Party
complained against has failed to comply with the award
within the reasonable period of time and if the Party
complained against has not entered into consultations inaccordance with subparagraph 3(a), the complaining Party
may suspend the application to the Party complained againstof concessions or other obligations under this Agreement,
after giving notification of such suspension 30 days inadvance.
5.
The suspension of the application of concessions orother obligations under paragraph 3 or 4 shall:(a)

not be effected if, with respect to the disputeto which the suspension relates, consultations orproceedings before the arbitral tribunal are in
progress;(b)

be temporary, and be discontinued when theParties reach a mutually satisfactory resolution
or where compliance with the award is effected;(c)be restricted to the same level of nullification
or impairment that is attributable to the failure
to comply with the award; and(d)be restricted to the same sector or sectors towhich the nullification or impairment relates,
unless it is not practicable or effective tosuspend the application of concessions or otherobligations in such sector or sectors.

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6.
If the Party complained against considers that therequirements for the suspension of the application ofconcessions or other obligations under this Agreement by
the complaining Party set out in paragraph 3, 4 or 5 havenot been met, it may request consultations with thecomplaining Party. The complaining Party shall enter into
consultations within 10 days after the date of receipt of
the request. If the Parties fail to resolve the matterwithin 30 days after the date of receipt of the request for
consultations in accordance with this paragraph, the Party
complained against may refer the matter to an arbitral
tribunal, which then shall determine whether the said
requirements have been met.
7.
The arbitral tribunal that is established for the
purposes of this Article shall, whenever possible, have as
its arbitrators, the arbitrators of the original arbitral
tribunal. If this is not possible, then the arbitrators to
the arbitral tribunal that is established for the purposesof this Article shall be appointed in accordance withparagraphs 2, 3 and 4 of Article 16.7. Unless the Parties
agree on a different period, the arbitral tribunal
established under this Article shall make its
determinations within 60 days after the date when thematter is referred to it. Such determinations shall befinal and binding on the Parties.
Article 16.12
Modification of Time Periods
Any time period provided for in this Chapter may be
modified for a particular dispute by mutual consent of theParties.
Article 16.13
Expenses
Each Party shall bear the costs of the arbitrator
appointed by it and its representation in the proceedingsof the arbitral tribunal. The other costs of the arbitral
tribunal shall be borne by the Parties in equal shares,
unless the Parties otherwise agree.

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Article 16.14
Language
All proceedings of the arbitral tribunal and all
documents and information submitted to the arbitral
tribunal shall be in the English language.

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Chapter 17
Final Provisions
Article 17.1
Table of Contents and Headings
The table of contents and headings of the Chapters,
Sections and Articles of this Agreement are inserted forconvenience of reference only and shall not affect theinterpretation of this Agreement.
Article 17.2
Annexes and Notes
The Annexes and Notes to this Agreement shall form an
integral part of this Agreement.
Article 17.3
Amendment
1.
This Agreement may be amended by written agreement
between the Parties.
2.
Such amendment shall be approved by the Parties inaccordance with their respective legal procedures, andshall enter into force on the date to be agreed upon by theParties and by means of diplomatic notes exchanged between
the Governments of the Parties informing each other that
their respective legal procedures necessary for its entry
into force have been completed.
3.
Notwithstanding paragraph 2, amendments related only
to the following may be made by diplomatic notes exchanged
between the Governments of the Parties:(a)Annex 1, provided that the amendments are made inaccordance with the amendment of the Harmonized
System, and include no change on the rates ofcustoms duty to be applied by a Party to theoriginating goods of the other Party inaccordance with Annex 1;(b)

Annex 2; and- 155 -

(c)Annex 3.
Article 17.4
Entry into ForceThis Agreement shall enter into force on the thirtieth
day after the date on which the Governments of the Parties
exchange diplomatic notes informing each other that theirrespective legal procedures necessary for entry into forceof this Agreement have been completed. It shall remain inforce unless terminated as provided for in Article 17.5.
Article 17.5
Termination
Either Party may terminate this Agreement by giving
one year’s advance notice in writing through the diplomaticchannel to the other Party.
Article 17.6
Authentic Texts
1.
The texts of this Agreement in the Japanese, Mongolian
and English languages shall be equally authentic.
2.

Notwithstanding paragraph 1:
(a)

(b)

(i)

Part 2 of Annex 1 is in the Japanese andEnglish languages, such texts being equallyauthentic; and(ii)Part 3 of Annex 1 is in the Mongolian andEnglish languages, such texts being equallyauthentic;(i)Part 1A and Part 2 of Annex 6 are in theJapanese and English languages, such texts
being equally authentic; and(ii)Part 1B of Annex 6 is in the Mongolian andEnglish languages, such texts being equallyauthentic;- 156 -

(c)

(d)

(i)

Part 1 of Annex 7 is in the Japanese andEnglish languages, such texts being equallyauthentic; and(ii)Part 2 of Annex 7 is in the Mongolian andEnglish languages, such texts being equallyauthentic; and(i)Part 1 of Annex 8 and Part 1 of Annex 9 arein the Japanese and English languages, suchtexts being equally authentic; and(ii)Part 2 of Annex 8 and Part 2 of Annex 9 arein the Mongolian and English languages, suchtexts being equally authentic.

3.
In the event of any divergence among the texts, theEnglish text shall prevail.

IN WITNESS WHEREOF, the undersigned, being duly
authorized by their respective Governments, have signed
this Agreement.
DONE at Tokyo on this tenth day of February in theyear 2015 in duplicate in the Japanese, Mongolian andEnglish languages.

For Japan:

For Mongolia:
Chimed Saikhanbileg

安倍晋三- 157 -