Enter as many years as necessary to show the duration of the impact (see point 1.6)

Enter as many years as necessary to show the duration of the impact (see point 1.6)

◻ The proposal/initiative requires application of the flexibility instrument or revision of the multiannual financial framework.

◻ The proposal/initiative will entail reprogramming of the relevant heading in the multiannual financial framework.

The human resources required will be met by staff from the DG who are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

Enter as many years as necessary to show the duration of the impact (see point 1.6)

The appropriations required for human resources and other expenditure of an administrative nature will be met by appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the DG, together if necessary with any additional allocation which may be granted to the managing DG under the annual allocation procedure and in the light of budgetary constraints.

Enter as many years as necessary to show the duration of the impact (see point 1.6)

☑ The proposal/initiative requires the use of appropriations of an administrative nature, as explained below:

◻ The proposal/initiative does not require the use of appropriations of an administrative nature

Enter as many years as necessary to show the duration of the impact (see point 1.6)

Enter as many years as necessary to show the duration of the impact (see point 1.6)

Enter as many years as necessary to show the duration of the impact (see point 1.6)

If more than one heading is affected by the proposal / initiative:

Enter as many years as necessary to show the duration of the impact (see point 1.6)

As per the provisions of the framework agreement concluded with the organisation concerned. In addition, DG Trade’s anti-fraud strategy, which contains a dedicated chapter on financial management, will apply.

Given the estimated financial impact, no substantive quantifiable costs or benefits can be identified. The contribution will be part of DG Trade’s overall control system.

2.2.3.Estimate of the costs and benefits of the controls and assessment of the expected level of risk of error

As per the provisions of the framework agreement concluded with the organisation concerned. In particular, the applicable verification rules.

As per the provisions of the framework agreement concluded with the organisation concerned.

As per the provisions of the framework agreement concluded with the organisation concerned.

As regards the financial handling of the ICS in the EU-Vietnam IPA, a contribution will be given to an “existing structure” (namely, the ICSID) so that it channels the retainer fees to be paid to the judges composing the ICS. It is only in case that a dispute arises that the fees for case management could materialize, the services of ICSID as secretariat being otherwise free of charge.

If more than one management mode is indicated, please provide details in the ‘Comments’ section.

◻ persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the TEU, and identified in the relevant basic act.

◻ bodies governed by the private law of a Member State that are entrusted with the implementation of a public-private partnership and that provide adequate financial guarantees;

◻ bodies governed by private law with a public service mission to the extent that they provide adequate financial guarantees;

Implementation with a start-up period from 2019 (subject to ratification in the Council and the European Parliament).

In 2016, total EU FDI stock in Vietnam amounted to € 8.3 billion. As one of the largest foreign investors in the country, the EU will benefit from the enhanced investment climate that the IPA will provide for. The agreement further contains all the innovations of the EU’s new approach to investment protection and its enforcement mechanisms that are not present in the 21 existing bilateral investment treaties between Vietnam and EU Member States that the IPA will be replacing.

The IPA brings legal certainty and predictability that is expected to help the EU and Vietnam attract and maintain investment to underpin their economy.

The agreement establishes an Investment Court System (ICS) designed to meet the high expectations of citizens and industry for a fairer, more transparent and institutionalised system of settling investment disputes. The provisions in the EU-Vietnam IPA having an impact on the EU budget relate precisely to the setting up and running costs of the ICS.

The objective of the EU-Vietnam Investment Protection Agreement (IPA) is to enhance the investment climate between the EU and Vietnam. The agreement will bring benefits to European investors by ensuring a high level protection of their investments in Vietnam, while at the same time safeguarding the EU’s rights to regulate and pursue legitimate public policy objectives such as the protection of public health, safety and the environment.

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

The proposal can be framed in the first of the ten Juncker priorities – Jobs, Growth and Investment.

This Decision shall enter into force on the day of its adoption.

The Council Secretariat General shall establish the instrument of full powers to sign the Agreement on behalf of the Union, subject to its conclusion, for the person(s) indicated by the negotiator of the Agreement.

The signing of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part (the 'Agreement') is hereby approved on behalf of the Union, subject to the conclusion of the Agreement.

(5)Therefore, the Agreement should be signed on behalf of the Union, subject to its conclusion at a later date,

(4)The negotiations for an Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part (the 'Agreement') have been concluded.

(3)On 15 October 2013, the Council authorised the Commission to extend the on-going bilateral negotiations with ASEAN countries to cover also investment protection.

(2)On 22 December 2009, the Council authorised the Commission to pursue bilateral FTA negotiations with individual ASEAN countries. In June 2012, the Commission launched bilateral negotiations on an FTA with Vietnam to be conducted in accordance with the existing negotiating directives.

(1)On 23 April 2007, the Council authorised the Commission to negotiate a free trade agreement ('FTA') with countries of the Association of Southeast Asian Nations (ASEAN). That authorisation provided for the possibility of bilateral negotiations.

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 207(4), in conjunction with Article 218(5) thereof,

on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part

The Commission is mindful of the balance to be struck between moving forward with the reformed EU investment policy and the sensitivities of EU Member States as regards the possible exercise of shared competence on these matters. The Commission has not, therefore made a proposal to provisionally apply the investment protection agreement. Nonetheless, should Member States wish to see a proposal for provisional application of the investment protection agreement, the Commission stands ready to make such a proposal.

Also in line with the negotiating directives, the IPA negotiated by the Commission will offer investors the option of a modern and reformed investment dispute resolution mechanism. This system ensures that investment protection rules are adhered to and seeks to strike a balance between protecting investors in a transparent manner and safeguarding the right of a State to regulate in order to pursue public policy objectives. The agreement sets up a standing international and fully independent dispute resolution system, consisting of a permanent First Instance and an Appeal Tribunal that will conduct dispute settlement proceedings in a transparent and impartial manner.

In line with the objectives set by the negotiating directives, the Commission ensured that EU investors and their investments in Vietnam will be granted fair and equitable treatment and not be discriminated against compared to Vietnamese investments that are in like situations. At the same time, the IPA protects EU investors and their investments in Vietnam from expropriation, unless it is for public purposes, in accordance with due process, on a non-discriminatory basis and against payment of prompt, adequate, and effective compensation according to fair market value of the expropriated investment.

The agreement contains all the innovations of the EU’s new approach to investment protection and its enforcement mechanisms that are not present in the 21 existing bilateral investment treaties between Vietnam and EU Member States. It is a very important feature of the IPA that it replaces and hence improves the 21 existing bilateral investment treaties.

The EU-Vietnam IPA will ensure a high level of investment protection, while safeguarding the EU’s and Vietnam’s rights to regulate and pursue legitimate public policy objectives such as the protection of public health, safety and the environment.

(8)a swift dispute resolution mechanisms through either panel arbitration or with the help of a mediator.

(7)a comprehensive chapter on trade and sustainable development, which aims at ensuring that trade supports labour rights, environmental protection and social development and promotes the sustainable management of forests and fisheries. It includes commitments on effective application of international standards and on efforts towards ratification of a number of international conventions. The chapter also sets out how social partners and civil society will be involved in its implementation and monitoring; and

(6)a high level protection of intellectual property rights, including with regard to the enforcement of these rights, also at the border, and a TRIPs-plus level of protection of EU GIs;

(5)Vietnam’s commitment to reduce or eliminate its tariffs on imports from the EU, and a cheaper access of European businesses and consumers to products originating in Vietnam;

(3)the removal of technical and regulatory trade barriers to trade in goods, such as duplicative testing, in particular by promoting the use of technical and regulatory standards familiar in the EU in the sectors of motor vehicles, pharmaceuticals and medical devices, as well as green technologies;

(2)new tendering opportunities for EU bidders in Vietnam, who is not a member of the WTO Agreement on Government Procurement;

(1)the comprehensive liberalisation of services and investment markets, including cross-cutting rules on licensing and for the mutual recognition of diplomas, and sector-specific rules designed to ensure a level playing field for EU businesses;

Both of these objectives have been fully met: the agreement goes beyond existing WTO commitments in many areas, such as services, procurement, non-tariff barriers and the protection of intellectual property, including geographical indications (GI). In all of these areas Vietnam also agreed to new commitments which go significantly beyond what Vietnam has so committed in other agreements, including in CPTPP.

In negotiating the EU-Vietnam FTA, the Commission pursued two principal objectives: first, to provide the best possible terms of access for EU operators to Vietnam's market; and, second, to set a valuable second point of reference (after the agreements with Singapore) for the EU’s other negotiations in the region.

Certain actions will need to be taken in order to ensure implementation of the Agreement. These will be put in place in time for the application of the Agreement. These are a Commission implementing regulation to be adopted pursuant to Article 58(1) of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code opening the tariff rate quotas provided for by the Agreement.

As emphasised in the “Trade for All” Communication, the Commission is dedicating increasing resources to the effective implementation and enforcement of trade and investment agreements. In 2017, the Commission published the first annual FTA Implementation Report. The main purpose of the report is to convey an objective picture on the implementation of EU FTAs, highlighting the progress made and the shortcomings that need to be addressed. The objective is for the report to serve as the basis for open debate and engagement with Member States, the European Parliament and the civil society at large on the functioning of the FTAs and their implementation. As an annual exercise, the publication of the report will allow regular monitoring of developments, registering also how identified priority issues have been addressed. The report will cover the EU-Vietnam FTA as of its entry into force.

The institutional chapter of the IPA establishes a Committee with the main task to supervise and facilitate the implementation and application of the agreement. Among other tasks, the Committee may, subject to the completion of each side’s respective legal requirements and procedures, decide to appoint the Members of the ICS Tribunals, fix their monthly remuneration, and adopt binding interpretations of the agreement.

The Trade Committee has also the task to communicate with all interested parties, including private sector and civil society, in relation to the functioning and implementation of the agreement. In the agreement, both sides recognise the importance of transparency and openness and commit to consider the views of members of the public in order to draw on a broad range of perspectives in the implementation of the agreement.

The institutional chapter of the FTA establishes a Trade Committee that has as its main task to supervise and facilitate the implementation and application of the agreement. The Trade Committee is comprised of representatives of the EU and of Vietnam who will meet every year or at the request of either side. The Trade Committee will be in charge of supervising the work of all specialised committees and working groups established under the agreement (Committee on Trade in Goods; Committee on Customs; Committee on Sanitary and Phytosanitary Measures; Committee on Investment, Trade in Services, Electronic Commerce and Government Procurement; Committee on Trade and Sustainable Development; Working Group on Intellectual Property Rights, including Geographical Indications; and Working Group on Motor Vehicles and Parts).

The EU-Vietnam FTA and IPA include institutional provisions that lay down an implementing bodies’ structure to continuously monitor the implementation, operation and impact of the agreements. The agreements being an integral part of the overall bilateral relation between the EU and Vietnam as governed by the PCA, the mentioned structures will form part of a common institutional framework with the PCA.

The EU-Vietnam IPA is expected to have a financial impact on the EU budget on the side of the expenditures. The agreement will be the EU’s third (after the EU-Canada Comprehensive Economic and Trade Agreement, and the EU-Singapore) to incorporate the Investment Court System (ICS) for the resolution of disputes between investors and states. An amount of € 700,000 of additional yearly expenditure is foreseen from 2019 onwards (subject to the entry into force of the agreement) to finance the permanent structure comprising a First Instance and an Appeal Tribunal. At the same time, the agreement entails the use of administrative resources under budget line XX 01 01 01 (Expenditure related to officials and temporary staff working with the Institution), considering that it is estimated that one Administrator will be dedicated as full-time equivalent to the tasks inherent to this agreement. This is indicated in the Legislative Financial Statement and is subject to the conditions mentioned in it.

The EU-Vietnam FTA will have a financial impact on the EU budget on the side of the revenues. It is estimated that foregone duties could reach an amount of € 1.7 billion upon full implementation of the agreement. The estimate is based on average imports projected for 2035 in the absence of an agreement and represents the annual loss in revenues resulting from the elimination of EU tariffs on imports originating in Vietnam.

The proposal does not affect the protection of fundamental rights in the Union.

The EU-Vietnam FTA and IPA are not subject to REFIT procedures. They nevertheless contain a number of provisions that will simplify trade and investment procedures, reduce export and investment related costs and will therefore enable more small firms to do business in both markets. Among the expected benefits are: less burdensome technical rules, compliance requirements, customs procedures and rules of origin, the protection of intellectual property rights, or the reduction in cost of litigation under the Investment Court System for claimants that are SMEs.

The TSIA, conducted by an external contractor and finalised in 2009, concluded that an ambitious EU-ASEAN FTA would deliver important positive impacts (in terms of GDP, income, trade and employment) for both the EU and Vietnam. National income effects on the EU side were estimated at € 13 billion and for Vietnam at € 7.6 billion.

A Trade Sustainability Impact Assessment of the FTA between the EU and ASEAN was carried out by the external contractor “Ecorys”.

Prior and during negotiations, the EU Member States were regularly informed and consulted orally and in writing on the different aspects of the negotiation via the Council’s Trade Policy Committee. The European Parliament was also regularly informed and consulted via its Committee on International Trade (INTA), and notably its EU-Vietnam FTA Monitoring Group. The texts progressively resulting from the negotiations were circulated throughout the process to both institutions.

A roundtable with stakeholders on human rights and sustainable development in the context of bilateral relations between the EU and Vietnam was held in May 2015. The Commission then carried out a dedicated analysis addressing the possible impact of the FTA on human rights and sustainable development.

In addition, in June 2012, the Commission conducted a public consultation on the future bilateral agreement with Vietnam that included a questionnaire prepared to obtain information from stakeholder that later helped the Commission in establishing priorities and taking decisions throughout the negotiating process. 62 replies were received, of which 43 from industry federations and associations, 16 from individual companies and three from Member States. Replies covered a wide range of sectors, including agri-food, ICT, textiles, services, pharmaceuticals, chemicals, metals, green energy, automotive, machinery and wood-paper. The written consultation was followed with meetings with a selected number of respondents to the questionnaire identified as representing the most sensitive sectors for the negotiations with Vietnam (textile, alcoholic beverages, pharmaceuticals, automotive and ICT).

Both, the TSIA report and the consultations held in the context of its preparation, provided the Commission with input that has been of great value in all bilateral trade and investment negotiations launched since with individual ASEAN countries.

In the framework of the preparation of the TSIA, the contractor consulted internal and external experts, organised public consultations in Brussels and in Bangkok, and held bilateral meetings and interviews with civil society in the EU and in ASEAN. Consultations in the framework of the TSIA provided a platform for the involvement of key stakeholders and the civil society in a dialogue on trade policy in relation to Southeast Asia.

Prior to the launch of bilateral negotiations with Vietnam, a Trade Sustainability Impact Assessment (TSIA) of the FTA between the EU and the ASEAN was conducted by an external contractor to study the potential economic, social and environmental impact of a closer economic partnership between both regions.

The results of the quantitative analysis presented above may be considered to underestimate the real economic impact of the agreement, as they do not take into account the foreseeable benefits linked to the strengthening of the protection and enforcement of intellectual property rights or the liberalisation of FDIs in the manufacturing sectors and of public procurement. Furthermore, synergies in global supply chains that may derive from the EU-Vietnam FTA, particularly in the broader context of an ongoing effort to further strengthen the EU's economic relationship with the ASEAN region, have not been possible to model but could be expected to be significant.

The economic modelling carried out further estimates that EU national income could grow by more than € 1.9 billion by 2035 as a result of the FTA, while Vietnam's national income could increase by € 6 billion over the same period. The sizeable difference in expected benefits is the result of the large difference in the relative importance of the EU and Vietnam as export destination to each another.

The analysis predicts that the elimination of bilateral tariffs and export taxes together with the reduction of the NTBs that affect the cross-border exchanges of goods and services will boost bilateral trade considerably. EU exports to Vietnam are estimated to rise by more than € 8 billion by 2035, while Vietnam's exports to the EU are expected to grow by € 15 billion. This corresponds to an increase in relative terms of EU exports to Vietnam by almost 29% and of Vietnam exports to the EU by nearly 18%.

After negotiations with Vietnam were completed, a team led by DG Trade’s Chief Economist Unit’s carried out a study of the economic benefits to be expected from the agreement.

This proposal is in accordance with Article 218 TFEU, which envisages the adoption by the Council of decisions on international agreements. There exists no other legal instrument that could be used in order to achieve the objective expressed in this proposal.

This proposal is in line with the vision of Europe 2020 strategy and contributes to the Union's trade and development objectives.

These elements cannot be separated in any coherent way from the substantive provisions or the state-to-state dispute settlement and hence should be included in EU-level agreements.

With regard to the IPA, the Court confirmed that, pursuant to Article 207 TFEU, the EU has exclusive competence with regard to all substantive provisions on investment protection, to the extent that these apply to foreign direct investment. The Court further confirmed the EUs exclusive competence with regard to the state-to-state dispute settlement mechanism in relation to investment protection. Finally, the Court stated that the EU has shared competence with regard to non-direct investment and investor-to-state dispute settlement (replaced later on by the Investment Court System in the IPA), where the Member States act as defendants.

As confirmed by Opinion 2/15 on the EU-Singapore FTA and in analogy thereto, the EU-Vietnam FTA as presented to Council does not cover any matters that fall outside of the EU’s exclusive competence.

The EU-Vietnam IPA is to be signed by the Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent and ratification by the Member States in accordance with their respective internal procedures.

As a result, the EU-Vietnam FTA is to be signed by the Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent.

In view of Opinion 2/15, and considering that the content of the EU-Vietnam FTA is essentially the same contents as that of the EU-Singapore FTA, all the areas covered by the EU-Vietnam FTA would fall within the competence of the EU and, more particularly, within the scope of Articles 91, 100(2) and 207 TFEU. In the same vein, all substantive provisions on investment protection under the EU-Vietnam IPA, to the extent that these apply to foreign direct investment, would be covered under Article 207 TFEU.

Following the Court of Justice of the EU Opinion 2/15, and in light of the subsequent wide-ranging discussions among EU institutions on the architecture of trade and investment agreements, the Commission presents the result of negotiations with Vietnam in the form of two self-standing agreements: an FTA and an IPA, as was the case for the result of negotiations between the EU and Singapore.

The EU-Vietnam FTA and IPA are fully consistent with Union policies and will not require the EU to amend its rules, regulations or standards in any regulated area. Furthermore, like all other trade and investment agreements the Commission has negotiated, the EU-Vietnam FTA and IPA fully safeguard public services and ensure that governments’ right to regulate in the public interest is fully preserved by the agreements and constitutes a basic underlying principle to them.

From the date of its entry into force, the EU-Vietnam IPA will replace and supersede the bilateral investment treaties between Vietnam and EU Member States that are listed in Annex 6 (List of Investment Agreements) to the IPA.

The EU and Vietnam's longstanding trade and economic relationship has until now developed in the absence of a specific legal framework. The FTA and IPA that have been negotiated will constitute specific agreements giving effect to the trade and investment provisions of the PCA and will be an integral part of the overall bilateral relations between the EU and Vietnam.

The negotiations of the FTA and the IPA were preceded by the negotiation, by the European External Action Service, of a Partnership and Cooperation Agreement (PCA) between the European Union and its Member States and the Socialist Republic of Viet Nam, which entered into force in October 2016. The PCA provides the legal framework to further develop the already longstanding and strong partnership between the EU and Vietnam, in a broad range of areas, including political dialogue, trade, energy, transport, human rights, education, science and technology, justice asylum and migration.

The attached proposal for a Council Decision constitutes the legal instrument authorising the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part.

Earlier, the Commission had put forward a proposal for a horizontal safeguard regulation that will be of application, among other agreements, to the FTA between the EU and Vietnam.

–Proposal for a Council Decision on the conclusion of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part.

–Proposal for a Council Decision on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part; and

–Proposal for a Council Decision on the conclusion of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam;

–Proposal for a Council Decision on the signing, on behalf of the European Union, of the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam;

On the basis of the negotiating directives adopted by the Council in 2007, and supplemented in October 2013 to include investment protection, the Commission has negotiated with Vietnam an ambitious and comprehensive FTA and an Investment Protection Agreement (IPA), with a view to creating new opportunities and legal certainty for trade and investment between both partners to develop. The legally reviewed texts of both agreements have been made public and can be found on the following link:

On 15 October 2013, based on a new EU competence under the Lisbon Treaty, the Council authorised the Commission to extend the on-going bilateral negotiations with ASEAN countries to cover also investment protection.

On 22 December 2009, the Council agreed on the principle of launching bilateral negotiations with individual ASEAN countries based on the authorisation and negotiating directives of 2007, whilst preserving the strategic objective of a region-to-region agreement. The Council also authorised the Commission to launch bilateral negotiations first with Singapore, as a first step towards the objective of the timely launch of such negotiations with other relevant ASEAN countries. The EU has thereafter launched bilateral FTA negotiations with Malaysia (2010), Vietnam (2012), Thailand (2013), the Philippines (2015) and Indonesia (2016).

On 23 April 2007, the Council authorised the Commission to enter into negotiations for a region-to-region Free Trade Agreement (FTA) with countries of the ASEAN. It being understood that the objective was to negotiate a region-to-region FTA, the authorisation provided however for the possibility of bilateral negotiations in the event that it was not possible to reach an agreement to negotiate jointly with a grouping of countries of the ASEAN. In light of difficulties encountered in the region-to-region negotiations, both sides acknowledged that an impasse had been reached and agreed to pause these.

Vietnam has become the EU's second biggest trading partner in ASEAN after Singapore and ahead of Malaysia, with trade between the EU and Vietnam worth € 47.6 billion in 2017. Vietnam is one of the fastest growing countries in ASEAN, with an average GDP growth rate of around 6% in the past decade that is forecasted to be maintained in the future. Vietnam is a vibrant economy of more than 90 million inhabitants, with the fastest growing middle class in ASEAN, and a young and dynamic workforce. With its high literacy rate and education levels, comparatively low wages, good connectivity and a central location within ASEAN, more and more foreign investors are choosing Vietnam as their hub to service the Mekong region and beyond.

The dynamically growing Southeast Asian economies, with their over 600 million consumers and a rapidly rising middle class, are key markets for European Union exporters and investors. With a total € 227.3 billion of trade in goods (2017) and € 77 billion of trade in services (2016), the Association of Southeast Asian Nations (ASEAN) taken as a whole is the EU’s third largest trading partner outside Europe, after the US and China. At the same time, a total € 263 billion foreign direct investment stock (2016) in the ASEAN makes the EU the first foreign direct investor in the ASEAN, while the ASEAN as a whole is in its turn the second largest Asian foreign direct investor in the EU – with a total foreign direct investment stock of € 116 billion (2016).

on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part

EUROPEAN COMMISSION Brussels, 17.10.2018 COM(2018) 694 final ANNEX

to the Proposal for a Council Decision on the signing, on behalf of the European Union, of the Investment Protection

Agreement between the European Union and its Member States, of the one part, and the

Socialist Republic of Viet Nam of the other part





INVESTMENT PROTECTION AGREEMENT

BETWEEN THE EUROPEAN UNION

AND ITS MEMBER STATES, OF THE ONE PART,

AND THE SOCIALIST REPUBLIC OF VIET NAM,

OF THE OTHER PART THE EUROPEAN UNION, hereinafter referred to as the "Union" THE KINGDOM OF BELGIUM, THE REPUBLIC OF BULGARIA, THE CZECH REPUBLIC, THE KINGDOM OF DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE REPUBLIC OF ESTONIA, IRELAND,

THE REPUBLIC OF CROATIA THE HELLENIC REPUBLIC, THE KINGDOM OF SPAIN, THE FRENCH REPUBLIC, THE ITALIAN REPUBLIC, THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA, THE REPUBLIC OF LITHUANIA, THE GRAND DUCHY OF LUXEMBURG, HUNGARY,

THE REPUBLIC OF MALTA, THE KINGDOM OF THE NETHERLANDS, THE REPUBLIC OF AUSTRIA, THE REPUBLIC OF POLAND, THE PORTUGUESE REPUBLIC, ROMANIA, THE REPUBLIC OF SLOVENIA, THE SLOVAK REPUBLIC, THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN, and

THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, of the one part, hereinafter jointly referred to as the "EU Party", and THE SOCIALIST REPUBLIC OF VIET NAM of the other part, hereinafter referred to as "Viet Nam", hereinafter jointly referred to as the "Parties", RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Framework Agreement on Comprehensive Partnership and Cooperation between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part, signed in Brussels on 27 June 2012 (hereinafter referred to as the "Partnership and Cooperation Agreement"), and their important economic, trade and investment relationship, including as reflected in the Free Trade Agreement between the European Union and the Socialist Republic of Viet Nam, signed in Brussels on dd/mm/yyyy (hereinafter referred to as the "Free Trade Agreement"); DESIRING to further strengthen their economic relationship as part of, and in a manner coherent with, their overall relations, and convinced that this Agreement will create a new climate for the development of investment between the Parties;

RECOGNISING that this Agreement will complement and promote regional economic integration efforts; DETERMINED to strengthen their economic, trade and investment relationship in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote investment under this Agreement in a manner mindful of high levels of environmental and labour protection and relevant internationally recognised standards and agreements; DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promoting investment;

REAFFIRMING their commitments to the principles of sustainable development in the Free Trade Agreement; RECOGNISING the importance of transparency as reflected in their commitments in the Free Trade Agreement; REAFFIRMING their commitment to the Charter of the United Nations, done at San Francisco on 26 June 1945, and having regard to the principles articulated in The Universal Declaration of Human Rights, adopted by the General Assembly of the United Nations on 10 December 1948;

BUILDING on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization, done at Marrakesh on 15 April 1994 (hereinafter referred to as the "WTO Agreement") and other multilateral, regional and bilateral agreements and arrangements to which they are party, in particular, the Free Trade Agreement; DESIRING to promote the competitiveness of their companies by providing them with a predictable legal framework for their investment relations, HAVE AGREED AS FOLLOWS:

CHAPTER 1 OBJECTIVES AND GENERAL DEFINITIONS ARTICLE 1.1

Objective The objective of this Agreement is to enhance the investment relations between the Parties in accordance with the provisions of this Agreement. ARTICLE 1.2 Definitions For the purposes of this Agreement: (a) "natural person of a Party" means, in the case of the EU Party, a national of one of the Member States of the Union in accordance with its domestic laws and regulations and, in the case of Viet Nam, a national of Viet Nam in accordance with its domestic laws and regulations;

(b) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association; (c) "juridical person of a Party" means a juridical person of the EU Party or a juridical person of Viet Nam, set up in accordance with the domestic laws and regulations of a Member State of the Union, or of Viet Nam, respectively, and engaged in substantive business operations in the territory of the Union or of Viet Nam, respectively; a juridical person is:

(i) "owned" by natural or juridical persons of one of the Parties if more than 50 per cent of the equity interest in it is beneficially owned by persons of the EU Party, or of Viet Nam, respectively; or

(ii) "controlled" by natural or juridical persons of one of the Parties if persons of the EU Party, or of Viet Nam, respectively, have the power to name a majority of its directors or otherwise to legally direct its actions; (d) "services supplied and activities performed in the exercise of governmental authority" means services supplied or activities performed neither on a commercial basis nor in competition with one or more economic operators; (e) "economic activities" includes activities of an industrial, commercial and professional character and activities of craftsmen, but do not include services supplied or activities performed in the exercise of governmental authority; (f) "operation" means, with respect to an investment, the conduct, management, maintenance, use, enjoyment, sale or other forms of disposal of the investment; (g) "measures adopted or maintained by a Party" means measures taken by: (i) central, regional or local governments and authorities; and (ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

(h) "investment" means every kind of asset which is owned or controlled, directly or indirectly, by an investor of a Party in the territory of the other Party, which has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, the assumption of risk and a certain duration; forms that an investment may take include: (i) tangible or intangible, movable or immovable property, as well as any other property rights, such as leases, mortgages, liens and pledges;

(ii) an enterprise as well as shares, stocks and other forms of equity participation in an enterprise, including rights derived therefrom; (iii) bonds, debentures, and loans and other debt instruments, including rights derived therefrom; (iv) turnkey, construction, management, production, concession, revenue-sharing and other similar contracts;

(v) claims to money or to other assets or any contractual performance having an economic value; and (vi) intellectual property rights and goodwill; returns that are invested shall be treated as investments provided that they have the characteristics of an investment and any alteration of the form in which assets are invested or reinvested shall not affect their qualification as investments as long as they maintain the characteristics of an investment;

(i) "investor of a Party" means a natural person of a Party or a juridical person of a Party who has made an investment in the territory of the other Party; (j) "returns" means all amounts yielded by or derived from an investment or reinvestment, including profits, dividends, capital gains, royalties, interest, payments in connection with intellectual property rights, payments in kind and all other lawful income; (k) "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form; (l) "person" means a natural person or a legal person;

(m) "third country" means a country or territory outside the scope of territorial application of this Agreement as defined in Article 4.22 (Territorial Application); (n) "EU Party" means the Union or its Member States or the Union and its Member States within their respective areas of competence as derived from the Treaty on the European Union and the Treaty on the Functioning of the European Union; (o) "Party" means the EU Party or Viet Nam;

(p) "domestic" means with regard to legislation, law or laws and regulations for the Union and its Member States and for Viet Nam, respectively, legislation, law or laws and regulations at central, regional or local level; and (q) "covered investment" means an investment by investor of a Party in the territory of the other Party, in existence as of the date of entry into force of this Agreement or made or acquired thereafter, that has been made in accordance with the other Party's applicable law and regulations. CHAPTER 2 INVESTMENT PROTECTION ARTICLE 2.1 Scope

1. This Chapter applies to: (a) covered investment, and (b) investors of a Party with respect to the operation of their covered investment.

2. Articles 2.3 (National Treatment) and 2.4 (Most-Favoured-Nation Treatment) do not apply to: (a) audio-visual services; (b) mining, manufacturing and processing of nuclear materials; (c) production of or trade in arms, munitions and war material; (d) national maritime cabotage; (e) domestic and international air transport services, whether scheduled or non-scheduled, and services directly related to the exercise of traffic rights, other than: (i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;



(ii) the selling and marketing of air transport services; (iii) computer reservation system services; (iv) ground handling services; and (v) airport operation services; and (f) services supplied and activities performed in the exercise of governmental authority. 3. Articles 2.3 (National Treatment) and 2.4 (Most-Favoured-Nation Treatment) do not apply to subsidies granted by the Parties. 4. This Chapter does not apply to the Parties' respective social security systems or to activities in the territory of each Party, which are connected, even occasionally, with the exercise of official authority.

5. This Chapter does not apply to measures affecting natural persons seeking access to the employment market of a Party, nor does it apply to measures regarding citizenship, residence or employment on a permanent basis. 6. With the exception of Articles 2.1 (Scope), 2.2 (Investment and Regulatory Measures and Objectives) and 2.5 (Treatment of Investment) to 2.9 (Subrogation), nothing in this Agreement shall be construed as limiting the obligations of the Parties under Chapter 9 (Government Procurement) of the Free Trade Agreement or to impose any additional obligation with respect to government procurement. For greater certainty, measures with respect to government procurement that are in compliance with Chapter 9 (Government Procurement) of the Free Trade Agreement shall not be considered a breach of Articles 2.1 (Scope), 2.2 (Investment and Regulatory Measures and Objectives) and 2.5 (Treatment of Investment) to 2.9 (Subrogation).

ARTICLE 2.2 Investment and Regulatory Measures and Objectives 1. The Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, safety, environment or public morals, social or consumer protection, or promotion and protection of cultural diversity.

2. For greater certainty, this Chapter shall not be interpreted as a commitment from a Party that it will not change its legal and regulatory framework, including in a manner that may negatively affect the operation of investments or the investor's expectations of profits. 3. For greater certainty and subject to paragraph 4, a Party's decision not to issue, renew or maintain a subsidy or a grant shall not constitute a breach of this Chapter in the following circumstances: (a) in the absence of any specific commitment to an investor of the other Party or to a covered investment under law or contract to issue, renew, or maintain that subsidy or grant; or (b) in accordance with any terms or conditions attached to the issuance, renewal or maintenance of the subsidy or grant. 4. For greater certainty, nothing in this Chapter shall be construed as preventing a Party from discontinuing the granting of a subsidy or requesting its reimbursement, or as requiring that Party to compensate the investor therefor, where such action has been ordered by one of its competent authorities listed in Annex 1 (Competent Authorities).

ARTICLE 2.3

National Treatment 1. Each Party shall accord to investors of the other Party and to covered investments, with respect to the operation of the covered investments, treatment no less favourable than that it accords, in like situations, to its own investors and to their investments. 2. Notwithstanding paragraph 1 and, in the case of Viet Nam subject to Annex 2 (Exemption for Viet Nam on National Treatment), a Party may adopt or maintain any measure with respect to the operation of a covered investment provided that such measure is not inconsistent with the commitments set out in Annex 8-A (The Union's Schedule of Specific Commitments) or Annex 8-B (Viet Nam's Schedule of Specific Commitments) of the Free Trade Agreement, respectively, where such measure is: (a) a measure that is adopted on or before the date of entry into force of this Agreement; (b) a measure referred to in subparagraph (a) that is being continued, replaced or amended after the date of entry into force of this Agreement, provided the measure is no less consistent with paragraph 1 after it is continued, replaced or amended than the measure as it existed prior to its continuation, replacement or amendment; or

(c) a measure not falling within subparagraph (a) or (b), provided it is not applied in respect of, or in a way that causes loss or damage to, investments made in the territory of the Party before the date of entry into force of such measure. ARTICLE 2.4 Most-Favoured-Nation Treatment 1. Each Party shall accord to investors of the other Party and to covered investments, with respect to the operation of the covered investments, treatment no less favourable than the treatment it accords, in like situations, to investors of a third country and their investments. 2. Paragraph 1 does not apply to the following sectors:

(a) communication services, except for postal services and telecommunication services; (b) recreational, cultural and sporting services;

(c) fishery and aquaculture; (d) forestry and hunting; and (e) mining, including oil and gas. 3. Paragraph 1 shall not be construed as obliging a Party to extend to investors of the other Party or covered investments the benefit of any treatment granted pursuant to any bilateral, regional or international agreement that entered into force before the date of entry into force of this Agreement. 4. Paragraph 1 shall not be construed as obliging a Party to extend to investors of the other Party or covered investments the benefit of: (a) any treatment granted pursuant to any bilateral, regional or multilateral agreement which includes commitments to abolish substantially all barriers to investment among the parties or requires the approximation of legislation of the parties in one or more economic sectors; (b) any treatment resulting from any international agreement for the avoidance of double taxation or other international agreement or arrangement relating wholly or mainly to taxation; or

(c) any treatment resulting from measures providing for the recognition of qualifications, licences or prudential measures in accordance with Article VII of the General Agreement on Trade in Services or its Annex on Financial Services.

5. For greater certainty, the term "treatment" referred to in paragraph 1 does not include dispute resolution procedures or mechanisms, such as those included in Section B (Resolution of Disputes between Investors and Parties) of Chapter 3 (Dispute Resolution), provided for in any other bilateral, regional or international agreements. Substantive obligations in such agreements do not in themselves constitute "treatment" and thus cannot be taken into account when assessing a breach of this Article. Measures by a Party pursuant to those substantive obligations shall be considered "treatment". 6. This Article shall be interpreted in accordance with the principle of ejusdem generis.

ARTICLE 2.5 Treatment of Investment 1. Each Party shall accord fair and equitable treatment and full protection and security to investors of the other Party and covered investments in accordance with paragraphs 2 to 7 and Annex 3 (Understanding on the Treatment of Investments). 2. A Party breaches the obligation of fair and equitable treatment referred to in paragraph 1 where a measure or series of measures constitutes: (a) a denial of justice in criminal, civil or administrative proceedings; (b) a fundamental breach of due process in judicial and administrative proceedings; (c) manifest arbitrariness;

(d) targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; (e) abusive treatment such as coercion, abuse of power or similar bad faith conduct; or (f) a breach of any further elements of the fair and equitable treatment obligation adopted by the Parties in accordance with paragraph 3.

3. Treatment not listed in paragraph 2 may constitute a breach of fair and equitable treatment where the Parties have so agreed in accordance with the procedures provided for in Article 4.3 (Amendments). 4. When applying paragraphs 1 to 3, a dispute settlement body under Chapter 3 (Dispute Settlement) may take into account whether a Party made a specific representation to an investor of the other Party to induce a covered investment that created a legitimate expectation, and upon which the investor relied in deciding to make or maintain that investment, but that the Party subsequently frustrated. 5. For greater certainty, the term "full protection and security" referred to in paragraph 1 refers to a Party's obligations to act as may be reasonably necessary to protect physical security of the investors and the covered investments. 6. Where a Party has entered into a written agreement with investors of the other Party or covered investments that satisfies all of the following conditions, that Party shall not breach that agreement through the exercise of governmental authority. The conditions are: (a) the written agreement is concluded and takes effect after the date of entry into force of this Agreement;

(b) the investor relies on the written agreement in deciding to make or maintain the covered investment other than the written agreement itself and the breach causes actual damages to that investment; (c) the written agreement creates an exchange of rights and obligations in connection to the said investment, binding on both parties; and

(d) the written agreement does not contain a clause on the settlement of disputes between the parties to that agreement by international arbitration. 7. A breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article. ARTICLE 2.6 Compensation for Losses 1. Investors of a Party whose covered investments suffer losses owing to war or other armed conflict, a revolution, a state of national emergency, a revolt, an insurrection or a riot in the territory of the other Party shall be accorded by that other Party, with respect to restitution, indemnification, compensation or other form of settlement, treatment no less favourable than that accorded by that other Party to its own investors or to the investors of any third country.

2. Without prejudice to paragraph 1, investors of a Party who, in any of the situations referred to in paragraph 1, suffer losses in the territory of the other Party shall be accorded prompt, adequate and effective restitution or compensation by the other Party if those losses result from: (a) requisitioning of covered investment or a part thereof by the other Party's armed forces or authorities; or (b) destruction of covered investment or a part thereof by the other Party's armed forces or authorities, which was not required by the necessity of the situation.

ARTICLE 2.7 Expropriation 1. A Party shall not nationalise or expropriate the covered investments of investors of the other Party either directly, or indirectly through measures having an effect equivalent to nationalisation or expropriation (hereinafter referred to as "expropriation"), except: (a) for a public purpose; (b) under due process of law;

(c) on a non-discriminatory basis; and (d) against payment of prompt, adequate and effective compensation. 2. The compensation referred to in paragraph 1 shall amount to the fair market value of the covered investment at the time immediately before the expropriation or the impending expropriation became public knowledge, whichever is earlier, plus interest at a reasonable rate established on a commercial basis, from the date of expropriation until the date of payment. Such compensation shall be effectively realisable, freely transferable in accordance with Article 2.8 (Transfer) and made without delay. 3. Notwithstanding paragraphs 1 and 2, in the case that Viet Nam is the expropriating Party, any measure of direct expropriation relating to land shall be: (a) for a purpose in accordance with the applicable domestic laws and regulations; and

(b) upon payment of compensation equivalent to the market value, while recognising the applicable domestic laws and regulations. 4. The issuance of compulsory licences in relation to intellectual property rights does not constitute an expropriation within the meaning of paragraph 1, to the extent that such issuance is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights contained in Annex 1C of the WTO Agreement (hereinafter referred to as "TRIPS Agreement").

5. An investor affected by an expropriation shall have a right, under the law of the expropriating Party, to prompt review of its claim and of the valuation of its investment, by a judicial or other independent authority of that Party. 6. This Article shall be interpreted in accordance with Annex 4 (Understanding on Expropriation). ARTICLE 2.8 Transfer Each Party shall permit all transfers relating to covered investments to be made in a freely convertible currency, without restriction or delay and at the market rate of exchange applicable on the date of transfer. Such transfers include: (a) contributions to capital, such as principal and additional funds to maintain, develop or increase the investment; (b) profits, dividends, capital gains and other returns, proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment; (c) payments of interest, royalties, management fees, and technical assistance and other fees;



(d) payments made under a contract entered into by the investor, or the covered investment, including payments made pursuant to a loan agreement; (e) earnings and other remuneration of personnel engaged from abroad and working in connection with the investment; (f) payments made pursuant to Article 2.6 (Compensation for Losses) and Article 2.7 (Expropriation); and (g) payments of damages pursuant to an award issued under Section B (Resolution of Disputes between Investors and Parties) of Chapter 3 (Dispute Settlement). ARTICLE 2.9 Subrogation If a Party, or an agency thereof, makes a payment under an indemnity, a guarantee or a contract of insurance it has entered into in respect of an investment made by one of its investors in the territory of the other Party, the other Party shall recognise the subrogation or transfer of any right or title or the assignment of any claim in respect of such investment. The Party or the agency shall have the right to exercise the subrogated or assigned right or claim to the same extent as the original right or claim of the investor. Such rights may be exercised by the Party or an agency thereof, or by the investor only if the Party or an agency thereof so authorises.

CHAPTER 3 DISPUTE SETTLEMENT

SECTION A RESOLUTION OF DISPUTES BETWEEN PARTIES SUB-SECTION 1 OBJECTIVE AND SCOPE ARTICLE 3.1 Objective The objective of this Chapter is to establish an effective and efficient mechanism for avoiding and settling any dispute between the Parties regarding the interpretation and application of this Agreement with a view to arriving at a mutually agreed solution.

ARTICLE 3.2

Scope This Chapter applies with respect to the avoidance and settlement of any dispute between the Parties regarding the interpretation or application of the provisions of this Agreement, except as otherwise provided for in this Agreement. SUB-SECTION 2 CONSULTATIONS AND MEDIATION ARTICLE 3.3 Consultations 1. The Parties shall endeavour to resolve any dispute referred to in Article 3.2 (Scope) by entering into consultations in good faith with the aim of reaching a mutually agreed solution. 2. A Party shall seek consultations by means of a written request to the other Party, copied to the Committee established pursuant to Article 4.1 (Committee), identifying the measure at issue and the relevant provisions of this Agreement.

3. Consultations shall be held within 30 days of the date of receipt of the request referred to in paragraph 2 and take place, unless the Parties agree otherwise, in the territory of the Party to which the request is made. The consultations shall be deemed concluded within 45 days of the date of receipt of the request, unless both Parties agree to continue consultations. Consultations, in particular all information disclosed and positions taken by the Parties, shall be confidential and without prejudice to the rights of either Party in any further proceedings.

4. Consultations on matters of urgency, including those regarding perishable goods, seasonal goods or seasonal services, shall be held within 15 days of the date of receipt of the request referred to in paragraph 2. The consultations shall be deemed concluded within 20 days, unless both Parties agree to continue consultations. 5. The Party that sought consultations may have recourse to Article 3.5 (Initiation of the Arbitration Procedure) if: (a) the other Party does not respond to the request for consultations within 15 days of the date of its receipt; (b) the consultations are not held within the timeframes provided for in paragraphs 3 or 4; (c) the Parties agree not to have consultations; or (d) the consultations have been concluded without a mutually agreed solution.

6. During consultations each Party shall provide sufficient factual information for an examination of the manner in which the measure at issue could affect the operation and application of this Agreement. ARTICLE 3.4 Mediation Mechanism

The Parties may at any time agree to enter into a mediation procedure pursuant to Annex 9 (Mediation Mechanism) with respect to any measure adversely affecting investment between the Parties. SUB-SECTION 3 DISPUTE SETTLEMENT PROCEDURES ARTICLE 3.5 Initiation of the Arbitration Procedure 1. If the Parties fail to resolve the dispute by recourse to consultations as provided for in Article 3.3 (Consultations), the Party that sought consultations may request the establishment of an arbitration panel.

2. The request for the establishment of an arbitration panel shall be made in writing to the other Party and copied to the Committee. The complaining Party shall identify the measure at issue in its request, and explain how that measure is inconsistent with the provisions of this Agreement in such a manner as to clearly present the legal basis for the complaint. ARTICLE 3.6 Terms of Reference of the Arbitration Panel

Unless the Parties agree otherwise within 10 days of the date of the selection of the arbitrators, the terms of reference of the arbitration panel shall be: "To examine, in the light of the relevant provisions of this Agreement cited by the Parties, the matter referred to in the request for the establishment of an arbitration panel pursuant to Article 3.5 (Initiation of the Arbitration Procedure), to rule on the conformity of the measure in question with the provisions referred to in Article 3.2 (Scope), and to set out in its report the findings of fact, the applicability of relevant provisions and the basic rationale for any findings and recommendations, in accordance with Articles 3.10 (Interim Report) and 3.11 (Final Report).".

ARTICLE 3.7 Establishment of the Arbitration Panel 1. An arbitration panel shall be composed of three arbitrators. 2. Within 10 days of the date of receipt by the Party complained against of the request for the establishment of an arbitration panel, the Parties shall consult in order to agree on the composition of the arbitration panel. 3. If the Parties do not agree on the composition of the arbitration panel within the time frame provided for in paragraph 2, each Party may appoint an arbitrator from the sub-list of that Party established under Article 3.23 (List of Arbitrators) within 10 days of the expiry of the time frame provided for in paragraph 2. If a Party fails to appoint an arbitrator from its sub-list the arbitrator shall be selected by lot, upon request of the other Party, by the chair of the Committee, or the chair's delegate, from the sub-list of that Party established under Article 3.23 (List of Arbitrators). 4. If the Parties do not agree on the chairperson of the arbitration panel within the time frame provided for in paragraph 2 the chair of the Committee, or the chair's delegate, shall select by lot, upon request of a Party, the chairperson of the arbitration panel from the sub-list of chairpersons established under Article 3.23 (List of Arbitrators). 5. The chair of the Committee, or the chair's delegate, shall select the arbitrators within five days of the request referred to in paragraphs 3 or 4.



6. The date of establishment of the arbitration panel shall be the date on which the three selected arbitrators have notified the Parties of the acceptance of their appointment in accordance with Annex 7 (Rules of Procedure). 7. If any of the lists provided for in Article 3.23 (List of Arbitrators) have not been established or do not contain sufficient names at the time a request is made pursuant to paragraphs 3 or 4, the arbitrators shall be drawn by lot from among the individuals who have been formally proposed by both Parties or by a Party in the event that only one Party has made a proposal. ARTICLE 3.8 Dispute Settlement Proceedings of the Arbitration Panel 1. The rules and procedures set out in this Article, Annexes 7 (Rules of Procedure) and 8 (Code of Conduct for Arbitrators and Mediators) shall govern the dispute settlement proceedings of an arbitration panel. 2. Unless the Parties agree otherwise, they shall meet the arbitration panel within 10 days of its establishment in order to determine all matters that the Parties or the arbitration panel deem appropriate, including the timetable of the proceedings and the remuneration and expenses of the arbitrators in accordance with Annex 7 (Rules of Procedure). Arbitrators and representatives of the Parties may take part in this meeting via telephone or video conference.

3. The venue of the hearing shall be decided by mutual consent of the Parties. If the Parties do not agree on the venue of the hearing, it shall be held in Brussels if the complaining Party is Viet Nam and in Ha Noi if the complaining Party is the EU Party. 4. Any hearing shall be open to the public unless otherwise provided for in Annex 7 (Rules of Procedure). 5. In accordance with Annex 7 (Rules of Procedure), the Parties shall be given the opportunity to attend any of the presentations, statements, arguments or rebuttals in the proceedings. Any information or written submission submitted to the arbitration panel by a Party, including any comments on the descriptive part of the interim report, responses to questions by the arbitration panel and comments by a Party on those responses, shall be made available to the other Party. 6. Unless the Parties agree otherwise within three days of the date of establishment of the arbitration panel, the arbitration panel may receive, in accordance with Annex 7 (Rules of Procedure), unsolicited written submissions (amicus curiae submissions) from natural or legal person established in the territory of a Party.

7. For its internal deliberations, the arbitration panel shall meet in closed session where only arbitrators take part. The arbitration panel may also permit its assistants to be present at its deliberations. The deliberations of the arbitration panel and the documents submitted to it shall be kept confidential.

ARTICLE 3.9 Preliminary Ruling on Urgency If a Party so requests, the arbitration panel shall give a preliminary ruling within 10 days of its establishment on whether it deems the case to be urgent. ARTICLE 3.10 Interim Report 1. The arbitration panel shall issue an interim report to the Parties setting out the findings of fact, the applicability of relevant provisions and the basic rationale for any findings and recommendations, no later than 90 days from the date of establishment of the arbitration panel. When it considers that this deadline cannot be met, the chairperson of the arbitration panel shall notify the Parties and the Committee in writing, stating the reasons for the delay and the date on which the arbitration panel plans to issue its interim report. The arbitration panel shall, under no circumstances, issue the interim report later than 120 days after the date of establishment of the arbitration panel. 2. A Party may submit a written request, including comments, to the arbitration panel to review precise aspects of the interim report within 14 days of its notification.

3. In cases of urgency, including those involving perishable goods or seasonal goods or services, the arbitration panel shall make every effort to issue its interim report within 45 days and, in any case, no later than 60 days after the date of establishment of the arbitration panel. A Party may submit a written request, including comments, to the arbitration panel to review precise aspects of the interim report, within seven days of the notification of the interim report.

4. After considering any written requests, including comments, by the Parties on the interim report, the arbitration panel may modify its report and make any further examination that it considers appropriate. ARTICLE 3.11 Final Report 1. The arbitration panel shall issue its final report to the Parties and to the Committee within 120 days of the date of establishment of the arbitration panel. When it considers that this deadline cannot be met, the chairperson of the arbitration panel shall notify the Parties and the Committee in writing, stating the reasons for the delay and the date on which the arbitration panel plans to issue its final report. The arbitration panel shall under no circumstances issue the final report later than 150 days from the date of establishment of the arbitration panel.

2. In cases of urgency, including those involving perishable goods or seasonal goods or services, the arbitration panel shall make every effort to notify its final report within 60 days of the date of its establishment. The arbitration panel shall under no circumstances issue the final report later than 75 days from the date of establishment of the arbitration panel. 3. The final report shall include a sufficient discussion of the arguments made at the interim review stage, and shall clearly address the comments of the Parties. ARTICLE 3.12 Compliance with the Final Report The Party complained against shall take any measure necessary to comply promptly and in good faith with the final report.

ARTICLE 3.13 Reasonable Period of Time for Compliance 1. If immediate compliance is not possible, the Parties shall endeavour to mutually agree on the period of time to comply with the final report. In such a case, the Party complained against shall, no later than 30 days after the receipt of the final report, notify the complaining Party and the Committee of the time it will require for compliance (hereinafter referred to as the "reasonable period of time").

2. If there is disagreement between the Parties on the reasonable period of time to comply with the final report, the complaining Party shall, within 20 days of the receipt of the notification made in accordance with paragraph 1 by the Party complained against, request, in writing, the arbitration panel established pursuant to Article 3.7 (Establishment of the Arbitration Panel) (hereinafter referred to as the "original arbitration panel") to determine the length of the reasonable period of time. That request shall be notified to the Party complained against and copied to the Committee. 3. The arbitration panel shall notify its ruling on the reasonable period of time to the Parties and to the Committee within 20 days of the date of the submission of the request referred to in paragraph 2. 4. The Party complained against shall inform, in writing, the complaining Party of its progress to comply with the final report at least 30 days before the expiry of the reasonable period of time. 5. The Parties may agree to extend the reasonable period of time. ARTICLE 3.14 Review of Measure Taken to Comply with the Final Report

1. The Party complained against shall notify the complaining Party and the Committee before the end of the reasonable period of time of any measure that it has taken to comply with the final report.

2. If the Parties disagree on the existence or the consistency of any measure taken to comply with the provisions referred to in Article 3.2 (Scope) and notified under paragraph 1, the complaining Party may request, in writing, the original arbitration panel to rule on the matter. The request shall be notified to the Party complained against and copied to the Committee. The complaining Party shall identify in its request the specific measure at issue, and explain how such measure is inconsistent with the provisions referred to in Article 3.2 (Scope) in a manner sufficient to clearly present the legal basis for the complaint. 3. The arbitration panel shall notify its ruling to the Parties and to the Committee within 45 days of the date of the submission of the request referred to in paragraph 2. ARTICLE 3.15 Temporary Remedies in Case of Non-Compliance 1. If the Party complained against fails to notify the complaining Party and the Committee of any measure taken to comply with the final report before the expiry of the reasonable period of time, or if the arbitration panel rules that no measure to comply with has been taken or that the measure notified under paragraph 1 of Article 3.14 (Review of Measure Taken to Comply with the Final Report) is inconsistent with that Party's obligations under the provisions referred to in Article 3.2 (Scope), the Party complained against shall, if so requested by the complaining Party and after consultations with that Party, present an offer for compensation.

2. If the complaining Party decides not to request an offer for compensation or, in case such request is made, if no agreement on compensation is reached within 30 days of the end of the reasonable period of time or of the issuance of the arbitration panel ruling under Article 3.14 (Review of Measure Taken to Comply with the Final Report) that no measure to comply with has been taken or that a measure taken is inconsistent with the provisions referred to in Article 3.2 (Scope), the complaining Party shall be entitled, upon notification to the other Party and to the Committee, to take appropriate measures within the framework of the preferential trade and investment commitments applicable between the Parties which have an effect equivalent to the nullification or impairment caused by the violation. The notification shall specify such measures. The complaining Party may implement the measures at any moment after the expiry of 10 days from the date of receipt of the notification by the Party complained against, unless the Party complained against has requested arbitration under paragraph 3 of this Article. 3. If the Party complained against considers that the effect of the measures taken by the complaining Party is not equivalent to the nullification or impairment caused by the violation, it may request, in writing, the original arbitration panel to rule on the matter. That request shall be notified to the complaining Party and copied to the Committee before the expiry of the period of 10 days referred to in paragraph 2. The original arbitration panel shall notify its ruling on the measures taken by the complaining Party to the Parties and to the Committee within 30 days of the date of the submission of the request. Obligations shall not be suspended until the original arbitration panel has notified its ruling, and any suspension shall be consistent with that ruling.

4. The measures set out in this Article shall be temporary and shall not be applied after:

(a) the Parties have reached a mutually agreed solution pursuant to Article 3.19 (Mutually Agreed Solution); (b) the Parties have agreed that the measure notified under paragraph 1 of Article 3.14 (Review of Measure Taken to Comply with the Final Report) brings the Party complained against into conformity with the provisions referred to in Article 3.2 (Scope); or (c) any measure found to be inconsistent with the provisions referred to in Article 3.2 (Scope) has been withdrawn or amended so as to bring it into conformity with those provisions, as ruled under paragraph 3 of Article 3.14 (Review of Measure Taken to Comply with the Final Report).

ARTICLE 3.16 Review of Measure Taken to Comply After the Adoption

of Temporary Remedies for Non-Compliance 1. The Party complained against shall notify the complaining Party and the Committee of any measure it has taken to comply with the report of the arbitration panel following the measures applied by the complaining Party or following the application of compensation, as the case may be. With the exception of cases referred to in paragraph 2, the complaining Party shall terminate the measures taken in accordance with Article 3.15 (Temporary Remedies in Case of Noncompliance) within 30 days of the date of the receipt of the notification. In the event that compensation has been applied, and with the exception of cases referred to in paragraph 2, the Party complained against may terminate the application of such compensation within 30 days of its notification that it has complied with the report of the arbitration panel. 2. If the Parties do not agree on whether the notified measure brings the Party complained against into conformity with the provisions referred to in Article 3.2 (Scope), within 30 days of the date of receipt of the notification, the complaining Party shall request, in writing, the original arbitration panel to rule on the matter. That request shall be notified to the Party complained against, copied to the Committee.

3. The ruling of the arbitration panel shall be notified to the Parties and to the Committee within 45 days of the date of the submission of the request. If the arbitration panel rules that the notified measure is in conformity with the provisions referred to in Article 3.2 (Scope), the measures referred to in Article 3.15 (Temporary Remedies in Case of Non-compliance) or the compensation, as the case may be, shall be terminated. Where relevant, the level of suspension of obligations or of compensation shall be adapted in light of the ruling of the arbitration panel. ARTICLE 3.17

Replacement of Arbitrators If during arbitration proceedings the original arbitration panel, or some of its members, are unable to participate, withdraw, or need to be replaced because the member does not comply with the requirements of the Code of Conduct in Annex 8 (Code of Conduct for Arbitrators and Mediators), the procedure set out in Article 3.7 (Establishment of the Arbitration Panel) applies. The time limit for the notification of the reports and rulings, as the case may be, shall be extended by 20 days.

ARTICLE 3.18 Suspension and Termination of Arbitration Proceedings 1. The arbitration panel shall, at the request of both Parties, suspend its work at any time for a period agreed by the Parties not exceeding 12 consecutive months. It shall resume its work before the end of that suspension period at the written request of both Parties. The Parties shall inform the Committee, accordingly. The arbitration panel may also resume its work at the end of the suspension period at the written request of either Party. The requesting Party shall inform the Committee and the other Party, accordingly. If a Party does not request the resumption of the arbitration panel's work at the expiry of the suspension period, the authority of the arbitration panel shall lapse and the proceedings shall be terminated. In the event of a suspension of the work of the arbitration panel, the time frames set out in the relevant provisions of this Chapter shall be extended by the same period of time for which the work was suspended. The suspension and termination of the arbitration panel's work are without prejudice to the rights of either Party in other proceedings subject to Article 3.24 (Choice of Forum). 2. The Parties may agree to terminate the proceedings of the arbitration panel by jointly notifying the chairperson of the arbitration panel and the Committee at any time before the issuance of the final report of the arbitration panel.

ARTICLE 3.19 Mutually Agreed Solution The Parties may reach a mutually agreed solution to a dispute under this Chapter at any time. They shall jointly notify the Committee and the chairperson of the arbitration panel, where applicable, of any such solution. If the solution requires approval pursuant to the relevant domestic procedures of either Party, the notification shall refer to this requirement and the dispute settlement procedure shall be suspended. If such approval is not required, or if the completion of any such domestic procedures is notified, the dispute settlement procedure shall be terminated.

ARTICLE 3.20 Information and Technical Advice At the request of a Party, or upon its own initiative, the arbitration panel may request any information it deems appropriate for the proceedings of the arbitration panel from any source, including the Parties involved in the dispute. The arbitration panel also has the right to seek the opinion of experts, as it deems appropriate. The arbitration panel shall consult the Parties before choosing such experts. Any information obtained under this Article shall be disclosed and submitted to the Parties for their comments within the time frame set by the arbitration panel.

ARTICLE 3.21 Rules of Interpretation The arbitration panel shall interpret the provisions referred to in Article 3.2 (Scope) in accordance with customary rules of interpretation of public international law, including those codified in the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969 (hereinafter referred to as the "Vienna Convention"). The arbitration panel shall also take into account relevant interpretations in reports of panels and of the Appellate Body adopted by the Dispute Settlement Body under Annex 2 of the WTO Agreement (hereinafter referred to as "DSB"). The reports and rulings of the arbitration panel cannot add to or diminish the rights and obligations of the Parties provided for in this Agreement. ARTICLE 3.22 Decisions and Rulings of the Arbitration Panel 1. The arbitration panel shall make every effort to take any decision by consensus. In the event that a decision cannot be reached by consensus, the matter at issue shall be decided by majority vote. Dissenting opinions of arbitrators shall in no case be disclosed.



2. The reports and rulings of the arbitration panel shall be accepted unconditionally by the Parties. They shall not create any rights or obligations with respect to natural or legal persons. The reports and rulings shall set out the findings of fact, the applicability of the relevant provisions referred to in Article 3.2 (Scope) and the basic rationale behind any findings and conclusions. The Committee shall make the reports and rulings of the arbitration panel publicly available in their entirety within 10 days of their issuance, unless it decides not to do so in order to protect confidential information. SUB-SECTION 4 GENERAL PROVISIONS ARTICLE 3.23 List of Arbitrators 1. The Committee shall, no later than six months after the date of entry into force of this Agreement, establish a list of at least 15 individuals who are willing and able to serve as arbitrators. The list shall be composed of three sub-lists: (a) one sub-list for Viet Nam; (b) one sub-list for the Union and its Member States; and

(c) one sub-list of individuals who are not nationals of either Party and do not have permanent residence in either Party and who shall act as chairperson of the arbitration panel.

2. Each sub-list shall include at least five individuals. The Committee shall ensure that the list is always maintained at that minimum number of individuals. 3. Arbitrators shall have demonstrated expertise and experience of law and international trade. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government, or be affiliated with the government of any of the Parties, and shall comply with the Code of Conduct in Annex 8 (Code of Conduct for Arbitrators and Mediators). 4. The Committee may establish an additional list of 10 individuals with demonstrated expertise and experience in specific sectors covered by this Agreement. Subject to the agreement of the Parties, such an additional list shall be used to compose the arbitration panel in accordance with the procedure set out in Article 3.7 (Establishment of the Arbitration Panel). ARTICLE 3.24 Choice of Forum 1. Recourse to the dispute settlement procedure under this Chapter shall be without prejudice to any action in the framework of the World Trade Organization, including dispute settlement action, or under any other international agreement to which both Parties are party.

2. By way of derogation from paragraph 1, a Party shall not, for a particular measure, seek redress for the breach of a substantially equivalent obligation under this Agreement and under the WTO Agreement or under any other international agreement to which both Parties are party in the relevant fora. Once dispute settlement proceedings have been initiated, the Party shall not bring a claim seeking redress for the breach of the substantially equivalent obligation under the other agreement to the other forum, unless the forum selected first fails for procedural or jurisdictional reasons to make findings on the claim seeking redress to that obligation. 3. For the purposes of this Article: (a) dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party's request for the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes;

(b) dispute settlement proceedings under this Chapter are deemed to be initiated by a Party's request for the establishment of an arbitration panel under paragraph 1 of Article 3.5 (Initiation of the Arbitration Procedure); (c) dispute settlement proceedings under any other international agreement are deemed to be initiated in accordance with that agreement. 4. Nothing in this Agreement shall preclude a Party from implementing the suspension of obligations authorised by the DSB. Neither the WTO Agreement nor the Free Trade Agreement shall be invoked to preclude a Party from taking appropriate measures under Article 3.15 (Temporary Remedies in Case of Non-Compliance).

ARTICLE 3.25 Time Limits 1. All time limits laid down in this Section, including the limits for the arbitration panels to notify their reports and rulings, shall be counted in calendar days from the day following the act or fact to which they refer, unless otherwise specified. 2. Any time limit referred to in this Section may be modified by mutual agreement of the Parties to the dispute. The arbitration panel may at any time propose to the Parties to modify any time limit referred to in this Section, stating the reasons for the proposal. ARTICLE 3.26 Review and Amendment

The Committee may review and decide to amend Annexes 7 (Rules of Procedure), 8 (Code of Conduct for Arbitrators and Mediators) and 9 (Mediation Mechanism).

SECTION B Resolution of Disputes between Investors and Parties SUB-SECTION 1 Scope and Definitions ARTICLE 3.27 Scope 1. This Section applies to a dispute between, on the one hand, a claimant of one Party and, on the other hand, the other Party concerning any measure which allegedly constitutes a breach of the provisions of Chapter 2 (Investment Protection) and which allegedly causes loss or damage to the claimant or, where the claim is brought on behalf of a locally established company owned or controlled by the claimant, to the locally established company. 2. For greater certainty, a claimant shall not submit a claim under this Section if its investment has been made through fraudulent misrepresentation, concealment, corruption or conduct amounting to an abuse of process.



3. The Tribunal and the Appeal Tribunal established pursuant to Articles 3.38 (Tribunal) and 3.39 (Appeal Tribunal), respectively, may not decide claims that fall outside the scope of this Article. 4. A claim with respect to restructuring of debt of a Party shall be addressed in accordance with this Section and Annex 5 (Public Debt). ARTICLE 3.28 Definitions For the purposes of this Section, unless otherwise specified: (a) "proceedings" means proceedings before the Tribunal or the Appeal Tribunal under this Section; (b) "disputing parties" means the claimant and the respondent; (c) "claimant of a Party" means: (i) an investor of a Party, as referred to in subparagraph 1(b) of Article 2.1 (Scope), acting on its own behalf; or



(ii) an investor of a Party, as referred to in subparagraph 1(b) of Article 2.1 (Scope), acting on behalf of a locally established company owned or controlled by that investor; for greater certainty, a claim submitted under this subparagraph shall be deemed to relate to a dispute between a Contracting State and a national of another Contracting State for the purposes of Article 25(1) of the ICSID Convention; (d) "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on 18 March 1965; (e) "non-disputing Party" means Viet Nam when the respondent is the Union or a Member State of the Union, or the Union when Viet Nam is the respondent; (f) "respondent" means either Viet Nam or, in the case of the EU Party, either the Union or the Member State concerned pursuant to Article 3.32 (Notice of Intent to Submit a Claim); (g) "locally established company" means a juridical person, established in the territory of a Party, and owned and controlled by an investor of the other Party; (h) "New York Convention of 1958" means the Convention for the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;

(i) "third party funding" means any funding provided by a natural or juridical person who is not a party to the dispute but who enters into an agreement with a disputing party in order to finance part or all of the cost of the proceedings in return for a remuneration dependent on the outcome of the dispute, or any funding provided by a natural or juridical person who is not a party to the dispute in the form of a donation or grant; (j) "UNCITRAL" means the United Nations Commission on International Trade Law; and (k) "UNCITRAL Transparency Rules" means the UNCITRAL Rules on Transparency in Treatybased Investor-State Arbitration. SUB-SECTION 2

ALTERNATIVE DISPUTE RESOLUTION AND CONSULTATIONS ARTICLE 3.29 Amicable Resolution Any dispute should as far as possible be settled amicably through negotiations or mediation and, where possible, before the submission of a request for consultations pursuant to Article 3.30 (Consultations). Such settlement may be agreed at any time, including after the commencement of proceedings under this Section.

ARTICLE 3.30 Consultations 1. Where a dispute cannot be resolved amicably as provided for in Article 3.29 (Amicable Resolution), a claimant of one Party alleging a breach of the provisions referred to in paragraph 1 of Article 3.27 (Scope) shall submit a request for consultations to the other Party. The request shall contain the following information: (a) the name and address of the claimant and, where such request is submitted on behalf of a locally established company, the name, address and place of incorporation of the locally established company; (b) the provisions referred to in paragraph 1 of Article 3.27 (Scope) alleged to have been breached;

(c) the legal and factual basis of the claim, including the measures alleged to breach the provisions referred to in paragraph 1 of Article 3.27 (Scope); (d) the relief sought and the estimated amount of damages claimed; and (e) evidence establishing that the claimant is an investor of the other Party and that it owns or controls the covered investment including the locally established company where applicable, in respect of which a request for consultations was submitted.

When a request for consultations is submitted by more than one claimant, or on behalf of more than one locally established company, the information in subparagraphs 1(a) and 1(e) shall be submitted for each claimant or locally established company, as the case may be. 2. A request for consultations shall be submitted within: (a) three years of the date on which the claimant or, as applicable, the locally established company, first acquired, or should have first acquired, knowledge of the measure alleged to be in breach of the provisions of Chapter 2 (Investment Protection) and knowledge that thereby loss and damages incurred to: (i) the claimant, for claims brought by an investor acting on its own behalf; or (ii) the locally established company, for claims brought by an investor acting on behalf of a locally established company; or (b) two years of the date on which the claimant or, as applicable, the locally established company, ceases to pursue claims or proceedings before a tribunal or court under domestic law and, in any event, no later than seven years after the date on which the claimant first acquired, or should have first acquired knowledge of the measure alleged to be in breach of the provisions of Chapter 2 (Investment Protection) and knowledge that thereby loss and damage incurred to: (i) the claimant, for claims brought by an investor acting on its own behalf; or



(ii) the locally established company, for claims brought by an investor acting on behalf of a locally established company. 3. Unless the disputing parties agree otherwise, the place of consultation shall be: (a) Ha Noi where the consultations concern measures of Viet Nam; (b) Brussels where the consultations concern measures of the Union; or (c) the capital of the Member State of the Union concerned, where the request for consultations concerns exclusively measures of that Member State. Consultations may also take place by videoconference or other means, particularly if a small or medium-sized enterprise is involved. 4. Unless the disputing parties agree to a longer period, consultations shall be held within 60 days of the submission of the request for consultations. 5. In the event that the claimant has not submitted a claim pursuant to Article 3.33 (Submission of a Claim) within 18 months of submitting the request for consultations, the claimant shall be deemed to have withdrawn from proceedings under this Section and may not submit a claim under this Section. This period may be extended by agreement between the parties involved in the consultations.

6. The time limits set out in paragraphs 2 and 5 shall not render claims inadmissible where the claimant can demonstrate that the failure to request consultations or submit a claim is due to the claimant's inability to act as a result of actions deliberately taken by the Party concerned, provided that the claimant acts as soon as reasonably possible after it has become able to act. 7. In case that the request for consultations concerns an alleged breach of the agreement by the Union, or by a Member State of the Union, it shall be sent to the Union. If measures of a Member State of the Union are identified, it shall also be sent to the Member State concerned.

ARTICLE 3.31 Mediation 1. The disputing parties may at any time agree to have recourse to mediation. 2. Recourse to mediation is voluntary and without prejudice to the legal position of either disputing party. 3. Recourse to mediation may be governed by the rules set out in Annex 10 (Mediation Mechanism for Disputes between Investors and Parties). Any time limit mentioned in Annex 10 (Mediation Mechanism for Disputes between Investors and Parties) may be modified by mutual agreement between the disputing parties.

4. The mediator is appointed by agreement of the disputing parties. Such appointment may include appointing a mediator from among the Members of the Tribunal appointed pursuant to Article 3.38 (Tribunal) or the Members of the Appeal Tribunal appointed pursuant to Article 3.39 (Appeal Tribunal). The disputing parties may also request the President of the Tribunal to appoint a mediator from among the Members of the Tribunal who are neither nationals of a Member State of the Union nor of Viet Nam. 5. Once the disputing parties agree to have recourse to mediation, the time limits set out in paragraphs 2 and 5 of Article 3.30 (Consultations), paragraph 6 of Article 3.53 (Provisional Award) and paragraph 5 of Article 3.54 (Appeal Procedure) shall be suspended between the date on which it was agreed to have recourse to mediation and the date on which either party to the dispute decides to terminate the mediation, by way of a letter to the mediator and the other disputing party. Upon request of both disputing parties, if a division of the Tribunal has been established pursuant to Article 3.38 (Tribunal), the division shall stay its proceedings until the date on which either party to the dispute decides to terminate the mediation, by way of a letter to the mediator and the other disputing party.

SUB-SECTION 3 SUBMISSION OF A CLAIM AND CONDITIONS PRECEDENT

ARTICLE 3.32 Notice of Intent to Submit a Claim 1. If the dispute cannot be settled within 90 days of the submission of the request for consultations, the claimant may deliver a notice of intent which shall specify, in writing, the claimant's intention to submit the claim to dispute settlement under this Section and contain the following information: (a) the name and address of the claimant and, where such request is submitted on behalf of a locally established company, the name, address and place of incorporation of the locally established company; (b) the provisions referred to in paragraph 1 of Article 3.27 (Scope) that are alleged to have been breached; (c) the legal and factual basis of the claim, including the measures that are alleged to breach the provisions referred to in paragraph 1 of Article 3.27 (Scope); and

(d) the relief sought and the estimated amount of damages claimed. The notice of intent shall be sent to the Union or to Viet Nam, as the case may be. When a measure of a Member State of the Union is identified, it shall also be sent to the Member State concerned. 2. When a notice of intent has been sent to the Union, the Union shall make a determination of the respondent and, after having made such a determination, it shall inform the claimant within 60 days of the receipt of the notice of intent as to whether the Union or a Member State of the Union shall be the respondent.

3. In case the claimant has not been informed of the determination of the respondent within 60 days of the receipt of the notice of intent: (a) if the measures identified in the notice are exclusively measures of a Member State of the Union, that Member State shall be the respondent; or (b) if the measures identified in the notice include measures of the Union, the Union shall be the respondent. 4. The claimant may submit a claim pursuant to Article 3.33 (Submission of a Claim) on the basis of the determination referred to in paragraph 2, or, if no such determination has been communicated to the claimant within the timeframe provided for in paragraph 2, in accordance with paragraph 3.

5. Where either the Union or its Member State is the respondent following a determination made pursuant to paragraph 2, neither the Union nor the Member State concerned may assert the inadmissibility of the claim, lack of jurisdiction of the Tribunal or otherwise assert that the claim or award is unfounded or invalid on the grounds that the proper respondent should be the Union rather than the Member State or vice versa. 6. The Tribunal and the Appeal Tribunal shall be bound by the determination made pursuant to paragraph 2. 7. Nothing in this Agreement or the applicable rules on dispute settlement shall prevent the exchange of all information relating to a dispute between the Union and the Member State concerned. ARTICLE 3.33 Submission of a Claim 1. If the dispute cannot be settled within six months of the submission of the request for consultations and at least three months have elapsed from the submission of the notice of intent to submit a claim pursuant to Article 3.32 (Notice of Intent to Submit a Claim), the claimant, provided that it satisfies the requirements set out in Article 3.35 (Procedural and Other Requirements for the Submission of a Claim), may submit a claim to the Tribunal established pursuant to Article 3.38 (Tribunal).



2. A claim may be submitted to the Tribunal under one of the following sets of rules on dispute settlement: (a) the ICSID Convention; (b) the Rules on the Additional Facility for the Administration of Proceedings (hereinafter referred to as the "ICSID Additional Facility Rules") by the Secretariat of the International Centre for Settlement of Investment Disputes (hereinafter referred to "Secretariat of ICSID"), where the conditions for proceedings pursuant to subparagraph (a) do not apply; (c) the arbitration rules of UNCITRAL; or (d) any other rules by agreement of the disputing parties. In the event that the claiman