EN EN

EUROPEAN COMMISSION

Brussels, 29.6.2026 COM(2026) 342 final

2026/0184 (NLE)

Proposal for a

COUNCIL DECISION

on the signing of the Investment Protection Agreement between the European Union

and Indonesia

EN 1 EN

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Indonesia is the EU’s 30th largest trading partner for goods globally and the EU’s fifth trading

partner in the Association of Southeast Asian Nations (ASEAN) in 2025, while the EU is

Indonesia’s fourth largest trading partner, accounting for 6% of its total trade. Bilateral trade

between the two partners amounted to EUR 28.9 billion in 2025, with EU exports worth

EUR 10.2 billion and EU imports worth EUR 18.7 billion. Bilateral trade in services between

the EU and Indonesia amounted to EUR 9.3 billion in 2024, with EU exports amounting to

EUR 5.8 billion and imports amounting to EUR 3.5 billion. In 2024, the EU’s foreign direct

investment (FDI) stock in Indonesia amounted to EUR 24.7 billion, while Indonesia’s FDI

stock in the EU was EUR 1.3 billion.

On 23 April 2007, the Council authorised the Commission to negotiate a free trade agreement

with Member States of ASEAN, of which Indonesia is a member. That authorisation provided

for the possibility of bilateral negotiations with members of ASEAN.

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 13 July 2016, the Council authorised the Commission to negotiate a Comprehensive

Economic Partnership Agreement with Indonesia (“CEPA”).

The CEPA negotiations were officially launched on 19 July 2016 by Indonesian Trade

Minister Thomas Lembong and EU ambassador to Indonesia Vincent Guérend. The

negotiations covered investment protection. However, following Opinion 2/15 of 16 May

2017 of the Court of Justice, it was decided that the investment protection part would form the

basis of a stand-alone agreement (the Investment Protection Agreement, hereinafter referred

to as the “IPA”). The Commission informed the Trade Policy Committee of its decision to

split the CEPA and the IPA in 2021 after the resumption of the negotiations following the

COVID-19 pandemic.

The negotiations for a CEPA and an IPA between the European Union and Indonesia were

successfully concluded on 23 September 2025, with a view to creating new opportunities and

legal certainty for trade and investment between both partners.

The legally reviewed texts of the IPA have been made public and can be found at the

following link:

Text of the agreements - Trade and Economic Security - European Commission

The Commission is putting forward the following proposals for Council decisions:

– Proposal for a Council Decision on the signing of the Comprehensive

Economic Partnership Agreement between the European Union and Indonesia;

– Proposal for a Council Decision on the conclusion of the Comprehensive

Economic Partnership Agreement between the European Union and Indonesia;

– Proposal for a Council Decision on the signing of the Investment Protection

Agreement between the European Union and Indonesia;

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– Proposal for a Council Decision on the conclusion of the Investment Protection

Agreement between the European Union and Indonesia.

The attached proposal for a Council Decision constitutes the legal instrument authorising the

signing of the IPA between the European Union and Indonesia.

• Consistency with existing policy provisions in the policy area

Prior to concluding the negotiations for the IPA, the EU and Indonesia had negotiated a

Partnership Cooperation Agreement (PCA), which was signed in Jakarta on 9 November 2009

and entered into force on 1 May 2014. The Agreement provides the basis for cooperating

across a wide spectrum of policy fields, including human rights and trade, and for holding

regular political dialogue and sectoral cooperation.

Once the IPA enters into force, it will coexist with the PCA as a specific agreement and an

integral part of the overall bilateral relations between the EU and Indonesia. The two

agreements have no conflicting provisions.

• Consistency with other Union policies

The IPA is fully consistent with Union policies and will not require the EU to amend its rules,

regulations or standards in any regulated area. Furthermore, the IPA fully safeguards the EU’s

and Indonesia’s right to regulate within their territories to achieve legitimate policy

objectives, such as the protection of public morals, social or consumer protection, privacy and

data protection, sustainable development or promotion and protection of cultural diversity.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Substantive legal basis

Article 207 of the Treaty on the Functioning of the European Union (TFEU) provides for the

negotiation and conclusion of trade agreements as part of the Union’s common commercial

policy, which covers foreign direct investment.

Given that the main objective of the IPA is to create a better climate for the development of

foreign direct investments between the EU and Indonesia, and to lay down the necessary

arrangements for the protection of such investments, the substantive legal basis is Article 207

TFEU.

Given the subject matter of the envisaged agreement, it is appropriate for the Commission

to submit the proposal to the Council.

• Procedural legal basis

Article 218(5) TFEU provides that, where the agreement envisaged does not relate

exclusively or principally to the common foreign and security policy, the Commission

shall submit a proposal to the Council. The Council shall adopt a decision authorising the

signing of the agreement.

The Commission proposes to authorise the signing of the IPA between the European Union

and Indonesia, subject to its conclusion at a later date.

The procedural legal basis for the proposed decision to authorise the signing of the envisaged

agreement is Article 218(5) TFEU.

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• Union competence

In accordance with Opinion 2/15 on the EU-Singapore FTA of the Court of Justice of 16 May

2017, all the areas covered by the IPA would fall within the exclusive competence of the EU

and, more particularly, within the scope of Article 207 TFEU. The Court confirmed the EU’s

exclusive competence under the Common Commercial Policy pursuant to Article 207(1)

TFEU and Article 3(2) TFEU.

As a result, the 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.

• Subsidiarity (for non-exclusive competence)

The IPA as presented to the Council does not cover any matters that fall outside the EU’s

exclusive competence.

• Proportionality

Investment protection agreements are the appropriate means to create a better climate for the

development of foreign direct investments and to lay down the necessary arrangements for the

protection of such investments between the EU and a third country. No alternative exists to

render such protection efforts legally binding.

This initiative pursues directly the Union’s objective in external action and contributes to the

political priority of the ‘EU as a stronger global actor’. It is in line with the EU Global

Strategy’s orientations to engage with others and revamp its external partnerships in a

responsible way, in order to attain the EU's external priorities. It contributes to the EU’s trade

and development objectives.

• Choice of the instrument

This proposal is in accordance with Article 218(5) TFEU, which envisages the adoption by

the Council of decisions on the signature of international agreements. No other legal

instrument exists that could be used in order to achieve the objective expressed in this

proposal.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Stakeholder consultations

Prior to and during the 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, including in its subgroup on services and investment. The European

Parliament was also regularly informed and consulted via its Committee on International

Trade (“INTA”). The texts progressively resulting from the negotiations were circulated

throughout the process to both institutions.

In parallel to the negotiations, the Commission commissioned a Sustainability Impact

Assessment (“SIA”) of the CEPA between the EU and Indonesia.

The SIA, which was completed in September 2019 to support the negotiations for a free trade

and investment protection agreement, examined how the trade and investment provisions of

the CEPA under negotiation could affect economic, social, human rights and environmental

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issues in the EU and in Indonesia. It built on the analysis presented in the SIA carried out in

2009 in support of the region-to-region negotiations for an EU-ASEAN trade agreement,

providing more up-to-date information and a clear focus on the specific features and potential

impacts of bilateral negotiations with Indonesia only.

Overall, the SIA concluded that the agreement was expected to have positive impacts for both

Parties and their societies, across all the key economic indicators (GDP, welfare, global and

bilateral trade), with their comparative magnitude being larger in Indonesia than in the EU,

due to the differences in the relative sizes of the two economies.

In the context of the SIA and throughout the negotiations, the Commission provided the

possibility for civil society organisations to have their voice heard, ask questions, and

contribute to a sound, evidence-based and transparent societal debate, including through

dedicated civil society dialogues, a workshop with local stakeholders in Indonesia, bilateral

meetings, interviews and web-based surveys.

Furthermore, during the negotiations and in line with its transparency policy, the Commission

has published on its website and regularly updated reports of the negotiating rounds, the text

proposals, press releases, facts sheets and background information materials.

• Collection and use of expertise

The SIA of the CEPA was carried out by a consortium of independent consultancy companies

led by Development Solutions and commissioned by the Commission’s Directorate-General

for Trade.

• Impact assessment

The negotiations for bilateral free trade agreements between the EU and Southeast Asian

countries were covered by the impact assessment carried out at the time of the Commission

proposal for a negotiating mandate for and EU-ASEAN free trade agreement.

• Regulatory fitness and simplification

The IPA is not subject to REFIT procedures.

• Fundamental rights

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

4. BUDGETARY IMPLICATIONS

The IPA will not have a financial impact on the EU’s budget.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The IPA includes institutional provisions that lay down the structure for the implementing

bodies to continuously monitor the implementation, operation and impact of the IPA.

The institutional chapter of the IPA establishes a Committee that has as its main task to

supervise and facilitate the implementation and application of the IPA.

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The Committee will exchange views on topics linked to the implementation of the agreement

with civil society representatives participating in a civil society dialogue.

The IPA also establishes domestic advisory groups comprising a balanced representation of

independent civil society organisations, based on a multi-stakeholder approach which includes

relevant interest groups in economic, social and environmental matters. The domestic

advisory groups may submit views and recommendations concerning the functioning and

implementation of the IPA and shall meet at least once a year.

• Explanatory documents (for directives)

Not applicable.

• Detailed explanation of the specific provisions of the proposal

The provisions of the IPA establish the legal framework for the protection of investors and

their investments within the respective territories of the EU and Indonesia. The IPA ensures

an appropriate balance between the protection of investors and their investments, on the one

hand, and governments’ right to regulate in the public interest, on the other.

The substantive obligations contained in the investment protection section closely reflect the

EU’s reformed approach, as incorporated in all EU agreements concluded to date. In

particular, the relevant provisions reaffirm the Parties’ right to regulate and confirm that the

regulatory framework applicable to investments may evolve, including in ways that may

adversely affect specific investments.

The investment protection provisions are based on clear and precise standards that provide

fundamental guarantees to foreign investors when deciding whether to invest in the EU or

Indonesia, respectively. In addition to non-discrimination obligations, these guarantees

include protection against expropriation without compensation, commitments relating to fair

and equitable treatment and physical security, compensation for losses owing to war or other

armed conflict, as well as the free transfer of funds. Importantly, the provisions define with

precision the circumstances under which a Party may be found to have breached the fair and

equitable treatment standard, thereby significantly limiting the scope for discretionary

interpretation in the event of disputes.

These protection standards are further subject to specific exceptions designed to preserve

additional policy space where necessary, including through prudential carve-outs, security

exceptions and general exceptions.

The IPA is further supported by a solid dispute settlement mechanism that consists of a)

investor-state mediation and b) state-state dispute settlement (SSDS). The SSDS mechanism

ensures that the rights and obligations provided for in the Agreement are enforceable. The EU

and Indonesia also undertake to restart negotiations on the settlement of investment disputes

between a Party and an investor of the other Party, as well as on an interpretative guidance on

taxation measures and expropriation, no later than the date of entry into force of the IPA. In

doing so, the two sides agree to take into account the progress on reform of investment

dispute settlement in relevant international fora.

• Signing and text of the Agreement 

The text of the IPA is submitted to the Council together with this proposal.

In accordance with the Treaties, it is for the Commission to ensure the signing of the IPA,

subject to its conclusion at a later date.

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2026/0184 (NLE)

Proposal for a

COUNCIL DECISION

on the signing of the Investment Protection Agreement between the European Union

and Indonesia

THE COUNCIL OF THE EUROPEAN UNION,

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,

Having regard to the proposal from the European Commission,

Whereas:

(1) On 23 April 2007, the Council authorised the Commission to negotiate a free trade

agreement with Member States of the Association of Southeast Asian Nations

(ASEAN), of which Indonesia is a member. That authorisation provided for the

possibility of bilateral negotiations.

(2) In October 2013, the Council extended the scope of its negotiating directives to

include provisions on investment protection.

(3) On 13 July 2016, the Council authorised the Commission to negotiate a

Comprehensive Economic Partnership Agreement with Indonesia, including

investment protection. In view of Opinion 2/15 of 16 May 2017 of the Court of Justice

of the European Union, it was decided to conclude a separate Investment Protection

Agreement.

(4) The negotiations for an Investment Protection Agreement (“the Agreement”) between

the European Union and Indonesia were successfully concluded on 23 September

2025, together with the negotiations for a Comprehensive Economic Partnership

Agreement.

(5) The Agreement should ensure the furtherance of the Union’s common commercial

policy by putting in place an investment protection agreement with Indonesia.

(6) Therefore, the Agreement should be signed,

HAS ADOPTED THIS DECISION:

Article 1

The signing of the Investment Protection Agreement between the European Union and

Indonesia is hereby authorised, subject to the conclusion of that Agreement.

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Article 2

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

Done at Brussels,

For the Council

The President

EN EN

EUROPEAN COMMISSION

Brussels, 29.6.2026 COM(2026) 342 final

ANNEX 1

ANNEX

to the

Proposal for a Council Decision

on the signing of the Investment Protection Agreement between the European Union

and Indonesia

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INVESTMENT PROTECTION AGREEMENT

BETWEEN THE REPUBLIC OF INDONESIA

AND THE EUROPEAN UNION

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PREAMBLE

THE REPUBLIC OF INDONESIA, hereinafter referred to as "Indonesia",

and

THE EUROPEAN UNION, hereinafter referred to as "the Union",

hereinafter individually referred to as a "Party" and 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 Community and its Member States, of the one part, and the Republic of

Indonesia, of the other part, signed in Jakarta on 9 November 2009, and their important economic,

trade and investment relationship, including as reflected in the Comprehensive Economic

Partnership Agreement between the European Union and Indonesia, signed in XX on dd/mm/yyyy

(hereinafter referred to as the "Comprehensive Economic Partnership 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;

DETERMINED to strengthen their economic, trade and investment relations in accordance with the

objective of sustainable development, in its economic, social and environmental dimensions, and to

promote investment under this Agreement;

& /en 2

CONVINCED that this Agreement will create a stable and predictable environment for investment,

thus providing an opportunity to enhance the competitiveness of their companies in global markets;

RECOGNISING the importance of transparency as reflected in their commitments in the

Comprehensive Economic Partnership Agreement;

SEEKING to establish clear and mutually advantageous rules governing investment between the

Parties;

REAFFIRMING their commitment to the Charter of the United Nations signed in 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 both Parties are a party, in particular, the Comprehensive Economic Partnership Agreement,

HAVE AGREED AS FOLLOWS:

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CHAPTER 1

OBJECTIVES AND GENERAL DEFINITIONS

ARTICLE 1.1

Objectives

The Parties, reaffirming their commitment to creating a better climate for the development of

investment between them, hereby lay down the necessary arrangements for the effective protection

of investment.

ARTICLE 1.2

Definitions

For the purposes of this Agreement:

(a) "activities performed or services supplied in the exercise of governmental authority" means

activities performed or services supplied neither on a commercial basis nor in competition

with one or more economic operators;

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(b) "Articles of Agreement of the International Monetary Fund" means the Articles of Agreement

of the International Monetary Fund, adopted in Bretton Woods, New Hampshire,

on 22 July 1944;

(c) "covered investment" means an investment which is

(i) owned, directly or indirectly, or controlled, directly or indirectly1, by an investor of one

Party in the territory of the other Party,

(ii) established in accordance with the applicable laws2, and

(iii) in existence at the date of entry into force of this Agreement or established thereafter;

(d) "days" means calendar days, including weekends and holidays;

(e) "economic activities" means activities, including the supply of services, of an industrial,

commercial or professional character and activities of craftsmen, except for activities

performed or services supplied in the exercise of governmental authority;

1 A juridical person is:

(a) "owned" by a natural or juridical person of a Party if more than 50 % of the equity

interest is beneficially owned by a natural or juridical person of that Party; or

(b) "controlled" by a natural or juridical person of a Party if that natural or juridical person

has the power to appoint a majority of its directors or otherwise to legally direct its

actions. 2 In the case of investments made in Indonesia, "in accordance with applicable laws" may

include specific approval in writing if applicable.

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(f) "freely convertible currency" means a currency which can be freely exchanged against

currencies that are widely traded in international foreign exchange markets and widely used in

international transactions1;

(g) "GATS" means the General Agreement on Trade in Services, contained in Annex 1B to the

WTO Agreement;

(h) "GATT 1994" means the General Agreement on Tariffs and Trade 1994, contained in

Annex 1A to the WTO Agreement;

(i) "IMF" means the International Monetary Fund;

(j) "investment" means every kind of asset which has the characteristics of an investment, such

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) an enterprise;

(ii) shares, stocks and other financial instruments, including rights derived therefrom;

(iii) turnkey, construction, management, production, concession, revenue-sharing, and other

similar contracts;

1 For greater certainty, currencies that are widely traded in international foreign exchange

markets and widely used in international transactions include freely usable currencies as

designated by the International Monetary Fund in accordance with the Articles of Agreement

of the International Monetary Fund.

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(iv) claims to money, or to other assets or to any contractual performance having an

economic value;

(v) intellectual property licences and similar rights conferred pursuant to the law of a Party,

including any concessions to search for, cultivate, extract or exploit natural resources;

and

(vi) other tangible or intangible, movable or immovable property, including intellectual

property, as well as any other property rights, such as leases, mortgages, liens, and

pledges.

Investments that confer neither control nor a lasting interest ("portfolio investment") in a

juridical person of the other Party shall not constitute an investment for the purposes of this

Agreement. For greater certainty:

(A) "claims to money" does not include claims to money that arise solely from commercial

contracts for the sale of goods or services from the territory of a Party to the territory of

the other Party or the financing of such contracts through the extension of credits; and

(B) an order or judgment entered in a judicial or administrative action or an arbitral award

made in an arbitral proceeding shall not constitute in itself an investment.

(k) "investor of a Party" means:

(i) a natural person of a Party, or

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(ii) a juridical person of a Party,

that has made a covered investment in the territory of the other Party;

(l) "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;

(m) "juridical person of a Party" means:

(i) for the Union, a juridical person set up in accordance with the laws and regulations of

the Union or of at least one Member State of the Union and engaged in substantive

business operations1 in the territory of the Union, and

(ii) for Indonesia, a juridical person set up in accordance with the laws and regulations of

Indonesia and engaged in substantive business operations in the territory of Indonesia;

(n) "measure" means any measure by a Party, whether in the form of a law, regulation, rule,

procedure, decision, administrative action, or any other form;

1 In line with its notification of the Treaty establishing the European Community to the WTO

(WT/REG39/1), the Union understands that the concept of "effective and continuous link"

with the economy of a Member State of the Union enshrined in Article 54 of the TFEU is

equivalent to the concept of "substantive business operations".

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(o) "measures of a Party" means any measures adopted or maintained by1:

(i) central, regional or local governments or authorities, and

(ii) non-governmental bodies in the exercise of powers delegated by central, regional or

local governments or authorities;

(p) "natural person of the Union" means a national of one of the Member States of the Union

according to its legislation2 and a "natural person of Indonesia" means a national of Indonesia

according to its legislation3;

(q) "operation" means the conduct, management, maintenance, use, enjoyment or sale or other

disposal of an investment by an investor of one Party in the territory of the other Party;

(r) "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 other lawful income;

1 For greater certainty, "measures of a Party" covers measures by entities listed under

points (o)(i) and (o)(ii), which are adopted or maintained by instructing, directing or

controlling, either directly or indirectly, the conduct of other entities with regard to those

measures. 2 In the case of the Union, the definition of natural person also includes natural persons

permanently residing in the Republic of Latvia who are not citizens of the Republic of Latvia

or any other state but who are entitled, under the laws and regulations of the Republic of

Latvia, to receive a non-citizen's passport. 3 For greater certainty, if a person possesses dual nationality of both Parties, that person shall be

deemed to be exclusively a national of the country of her or his dominant and effective

nationality.

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(s) "service" includes any service in any sector but not services supplied in the exercise of

governmental authority;

(t) "territory" means the area to which this Agreement applies in accordance with Article 6.13;

(u) "TFEU" means the Treaty on the Functioning of the European Union;

(v) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property

Rights, contained in Annex 1C to the WTO Agreement; and

(w) "WTO" means the World Trade Organization.

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CHAPTER 2

INVESTMENT PROTECTION

ARTICLE 2.1

Scope

1. This Agreement applies to:

(a) covered investments; and

(b) investors of a Party in respect of a covered investment,

as regards any measure adopted or maintained by a Party and affecting the operation of such

investment.

2. This Agreement applies to measures adopted or maintained by1:

(a) central, regional or local governments and authorities; and

(b) non-governmental bodies in the exercise of powers delegated by central, regional or local

governments or authorities.

1 For greater certainty, the entities listed under points (a) and (b) of paragraph 2 can adopt or

maintain a measure by instructing or directing other entities with regard to the measure.

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3. Articles 2.3 and 2.4 do not apply to:

(a) audio-visual services;

(b) national maritime cabotage1; and

(c) 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;

(ii) the selling and marketing of air transport services;

(iii) computer reservation system (CRS) services; and

(iv) groundhandling services.

1 Without prejudice to the scope of activities which may be considered as cabotage under the

relevant national legislation, national maritime cabotage under this Chapter covers

transportation of passengers or goods between a port or point located in Indonesia or in a

Member State of the Union and another port or point located also in Indonesia including its

continental shelf, archipelagic waters and exclusive economic zone or also in that same

Member State of the Union, including on its continental shelf, as provided for in the United

Convention on the Law of the Sea, done at Montego Bay on 10 December 1982, and traffic

originating and terminating in the same port or point located in Indonesia or in a Member

State of the Union.

& /en 12

4. For greater certainty and subject to paragraph 6, a Party's decision not to grant, renew or

maintain a subsidy

(a) in the absence of any specific commitment under law or contract to grant, renew, or maintain

that subsidy; or

(b) in accordance with any terms or conditions attached to the granting, renewal or maintenance

of the subsidy,

shall not constitute a breach of this Agreement.

5. Nothing in this Agreement shall be construed as preventing a Party from discontinuing the

granting of a subsidy or requesting its reimbursement, where such action has been ordered by one of

its competent authorities listed in Annex 2-B (Competent Authorities Mentioned in Article 2.1(5)),

or as requiring that Party to compensate the investor therefor.

6. Articles 2.3 and 2.4 do not apply to subsidies granted by the Parties1 and to government

procurement.

7. This Agreement shall not apply to any dispute between the contracting parties to a

government procurement contract arising from a breach of a provision thereto.

1 For the Union, "subsidy" includes "State aid" as defined in Union law. For Indonesia,

"subsidy" includes investment incentive as regulated by Indonesian law.

& /en 13

ARTICLE 2.2

Investment and regulatory measures

1. The Parties reaffirm their right to regulate within their territories to achieve legitimate policy

objectives, such as the protection of public health, safety, the environment including the tackling of

climate change, public morals, social and consumer protection, privacy and data protection,

sustainable development and the promotion and protection of cultural diversity.

2. The provisions of this Agreement 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 covered investments or an investor's expectations of profits.

ARTICLE 2.3

National treatment

1. Each Party shall accord to investors of the other Party and to covered investments, as regards

their operation in its territory, treatment no less favourable than the treatment it accords, in like

situations, to its own investors and their investments.

2. The treatment to be accorded by a Party pursuant to paragraph 1 means, with respect to a

government of a subnational region of Indonesia, treatment no less favourable than the most

favourable treatment accorded in like situations, by that government to investors, and to

investments of investors, of that subnational region.

& /en 14

3. The treatment to be accorded by a Party pursuant to paragraph 1 means, with respect to a

government of or in a Member State of the Union, treatment no less favourable than the most

favourable treatment accorded in like situations, by that government to investors of that Member

State and to their investments in its territory.

ARTICLE 2.4

Most favoured nation treatment

1. Each Party shall accord to investors of the other Party and to covered investments, as regards

their operation in its territory, treatment no less favourable than the treatment it accords, in like

situations, to investors and investments of any third country.

2. Notwithstanding paragraph 1, a Party shall not be obliged to extend to investors of the other

Party or to their covered investments the benefits of any treatment accorded to investors and

investments of any third country pursuant to any international investment treaty or other trade

agreement in force or signed prior to the date of entry into force of this Agreement.

3. Paragraph 1 shall not be construed to oblige a Party to extend to the investors of the other

Party the benefits of any treatment resulting from:

(a) an international agreement for the avoidance of double taxation or other international

agreements or arrangements relating wholly or mainly to taxation; or

& /en 15

(b) measures providing for the recognition of qualifications, licences or prudential measures as

provided for in Article VII of the GATS or its Annex on Financial Services.

4. For greater certainty, the "treatment" referred to in paragraph 1 does not include dispute

settlement procedures provided for in other international investment treaties and other trade

agreements.

5. The substantive provisions in other international investment or trade agreements do not in

themselves constitute "treatment" as referred to in paragraph 1 and thus cannot give rise to a breach

of this Article. However, measures applied pursuant to such provisions can constitute "treatment" as

referred to in paragraph 1 and thus give rise to a breach of this Article.

ARTICLE 2.5

Treatment of investors and of covered investments

1. Each Party shall accord to covered investments and to investors of the other Party with respect

to their covered investments fair and equitable treatment and full protection and security in

accordance with paragraphs 2 to 5.

& /en 16

2. A Party breaches the obligation of fair and equitable treatment referred to in paragraph 1

through measures or series of measures that constitute:

(a) denial of justice in criminal, civil or administrative proceedings1;

(b) fundamental disregard of due process, including a fundamental breach of transparency, in

judicial and administrative proceedings;

(c) manifest arbitrariness2;

(d) targeted discrimination on manifestly wrongful grounds, such as gender, race or religious

belief; or

(e) harassment, coercion, abuse of power or corruptive practices.

3. When applying the above fair and equitable treatment obligations, a tribunal may take into

account whether a Party made a specific representation to an investor to induce a covered

investment, which created a legitimate expectation upon which that investor relied in deciding to

make or maintain a covered investment, and which that Party subsequently frustrated. The mere fact

that a Party takes or fails to take an action that may be inconsistent with an investor's expectations

does not constitute a breach of this Article, even if there is loss or damage to the covered investment

as a result.

1 For greater certainty, the mere fact that an investor's claim was rejected or unsuccessful in

domestic proceedings does not amount to a denial of justice. In determining whether a

measure amounts to a breach of point (a) of paragraph 2, a tribunal should take into account

other relevant facts such as whether the measure involves gross misconduct by that Party. 2 A measure is manifestly arbitrary if it is evident that the measure is not rationally connected

to a legitimate policy objective, or if a measure is based on prejudice or bias rather than on

reason or fact.

& /en 17

4. For greater certainty, the term "full protection and security" refers to the Party's obligations to

take such measures as may be reasonably necessary to ensure the physical protection and security of

covered investments and of investors with respect to their covered investments.

5. A determination that there has been a breach of another provision of this Agreement, or of any

other international agreement, does not in itself 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, revolution, a state of national emergency, revolt, insurrection or riot in the territory of the

other Party shall be accorded by that Party, with respect to restitution, indemnification,

compensation or other form of settlement, treatment no less favourable than that accorded by that

Party to its own investors or to the investors of any third country, whichever is more favourable to

the investors.

& /en 18

2. Without prejudice to paragraph 1, investors of a Party who, in any of the situations referred to

in that paragraph, suffer losses in the territory of the other Party shall be accorded adequate

restitution or compensation by the other Party1, if these losses result from:

(a) requisitioning of their covered investment or a part thereof by the latter's armed forces or

authorities; or

(b) destruction of their covered investment or a part thereof by the latter'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 a covered investment either directly or indirectly

through measures having an effect equivalent to nationalisation or expropriation (hereinafter

referred to as "expropriation") except:

(a) for a public purpose2;

(b) under due process of law;

1 For greater certainty, when a Party provides restitution or compensation under this paragraph,

the value shall not exceed the loss suffered by the investor as a result of the intervention by

the armed forces or authorities of that Party. 2 The Parties acknowledge that the public purpose concept may be referred to in their law

through terms such as "public necessity", "public interest" or "public use".

& /en 19

(c) in a non-discriminatory manner; and

(d) against payment of prompt, adequate and effective compensation1.

This paragraph shall be interpreted in accordance with Annex 2-A (Expropriation).

2. The compensation referred to in paragraph 1 shall amount to the fair market value of the

investment at the time immediately before the expropriation or the impending expropriation became

known, whichever is earlier.

The determination of the fair market value of an investment shall be based on the principles and

criteria recognised in international financial standards, as appropriate.

3. The compensation referred to in paragraph 1 shall also include interest at a normal

commercial rate from the date of expropriation until the date of payment and shall, in order to be

effective for the investor, be paid and made transferable, without delay in a freely convertible

currency in accordance with Article 2.8.

4. Notwithstanding paragraphs 1, 2, and 3, if Indonesia is the expropriating Party, any measure

of direct expropriation relating to land shall be:

(a) for a public purpose in accordance with the applicable Indonesian laws and regulations2; and

1 The Parties understand that there may be legal and administrative processes that need to be

observed before payment can be made. 2 The applicable laws and regulations are, among others, Indonesia's Law No. 2 of 2012 on

Land Acquisition for Development for the Public Interest and Government Regulation No. 19

of 2021 Regulating Implementation of Land Acquisition for Development for the Public

Interest, as at the date of entry into force of this Agreement.

& /en 20

(b) upon payment of compensation equivalent to the market value in accordance with the

applicable Indonesian laws and regulations.

5. The investor affected 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, in accordance with the principles set out in this Article.

6. This Article does not apply to the issuance of compulsory licenses granted in relation to

intellectual property rights in accordance with the TRIPS Agreement, or to the revocation1,

limitation or creation of intellectual property rights to the extent that such revocation, limitation or

creation is consistent with Chapter 12 (Intellectual Property) of the Comprehensive Economic

Partnership Agreement and the TRIPS Agreement.

ARTICLE 2.8

Transfers

1. Each Party shall permit all transfers relating to a covered investment to be made in a freely

convertible currency, without restriction or delay and at the market rate of exchange prevailing on

the date of transfer with regard to the currency to be transferred. Such transfers include:

(a) contributions to capital, such as principal and additional funds to maintain, develop or

increase the investment;

1 For greater certainty, the term "revocation" of intellectual property rights includes the

cancellation or nullification of those rights, and the term "limitation" of intellectual property

rights includes exceptions to those rights.

& /en 21

(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) interest, royalty payments, management fees, and technical assistance and other fees;

(d) payments made under a contract entered into by the investor, or its investment, including

payments made pursuant to a loan agreement;

(e) earnings and other remuneration of personnel engaged from abroad and working in

connection with an investment;

(f) payments made pursuant to Articles 2.6 and 2.7; and

(g) payments of damages pursuant to an award issued by a tribunal.

2. Neither Party may require its investors to transfer, or penalise its investors for failing to

transfer, the income, earnings, profits or other amounts derived from, or attributable to, investments

in the territory of the other Party.

3. This Article shall not be construed as preventing a Party from making returns in kind relating

to a covered investment, which are subject to a written agreement between that Party and a covered

investment or an investor of the other Party, as authorised or specified in that agreement, or from

restricting transfers of returns in kind in circumstances where it could otherwise restrict such

transfers under this Agreement.

& /en 22

ARTICLE 2.9

Subrogation

1. If a Party, or an agency of a Party, makes a payment to an investor of that Party under a

guarantee or contract of insurance or other form of indemnity it has granted on non-commercial risk

in respect of a covered investment, the other Party shall recognise the subrogation or transfer of any

rights or assignment of any claim of the investor under this Agreement in respect of the covered

investment. The investor shall not, unless authorised by the Party or the agency making the

payment, pursue those rights against the other Party.

2. The subrogated or transferred right or assigned claim shall not be greater than the original

right or claim of the investor. The recognition of the subrogation referred to in paragraph 1 shall not

be construed as implying recognition of the merits of any claim or the amount of damages arising

therefrom.

& /en 23

CHAPTER 3

MEDIATION MECHANISM FOR INVESTOR-TO-STATE DISPUTES

ARTICLE 3.1

Objective and scope

1. The objective of the mediation mechanism provided for in this Chapter is to facilitate the

finding of mutually agreed solutions through a comprehensive and expeditious procedure with the

assistance of a mediator.

2. The mediation mechanism referred to in paragraph 1 applies to disputes between an investor

of a Party and the other Party concerning the application of this Agreement (hereinafter referred to

as "disputing parties").

3. Recourse to mediation is voluntary and without prejudice to the legal position of either

disputing party.

& /en 24

ARTICLE 3.2

Initiation of the procedure

1. Either disputing party may, at any time, request the commencement of a mediation procedure.

Such request shall be addressed to the other disputing party in writing, with a copy to the home

State of the investor, for information. Where the request is addressed to the Union, the Union may

involve one or several Member States in the mediation, as appropriate.

2. The party to which such request is addressed shall give sympathetic consideration to the

request and accept or reject it in writing within 30 days after the date of its receipt.

ARTICLE 3.3

Selection of the mediator

1. If both disputing parties agree to a mediation procedure, a mediator shall be selected in

accordance with the procedure set out in paragraphs 2 and 3. The disputing parties shall endeavour

to agree on a mediator within 15 days from the date of receipt of the reply to the request.

2. The Committee shall, upon the entry into force of this Agreement, establish a list of

six individuals, of high moral character and recognised competence in the fields of law, commerce,

industry or finance, who may be relied upon to exercise independent judgment and who are willing

and able to serve as mediators.

& /en 25

3. The mediator shall be appointed by agreement of the disputing parties from the list

established pursuant to paragraph 2, unless otherwise agreed. In the absence of an agreement on the

choice of the mediator, the disputing parties may jointly request the Secretary General of the

Permanent Court of Arbitration to appoint a mediator from that list or, in the absence of a list, from

individuals proposed by either Party.

4. A mediator shall not be a national of either Party, unless the disputing parties agree otherwise.

5. The mediator shall assist, in an impartial and transparent manner, the disputing parties in

reaching a mutually agreed solution.

ARTICLE 3.4

Rules of the mediation procedure

1. Within 10 days after the appointment of the mediator, the disputing party having invoked the

mediation procedure shall present, in writing, a detailed description of the problem to the mediator

and to the other disputing party. Within 20 days after the date of delivery of this submission, the

other disputing party may provide, in writing, its comments to the description of the problem. Either

disputing party may include in its description or comments any information that it deems relevant.

& /en 26

2. The mediator may decide on the most appropriate way of bringing clarity to the measure

concerned. In particular, the mediator may organise meetings between the disputing parties, consult

the disputing parties jointly or individually, seek the assistance of or consult with relevant experts

and stakeholders and provide any additional support requested by the disputing parties. However,

before seeking the assistance of or consulting with relevant experts and stakeholders, the mediator

shall consult with the disputing parties.

3. The mediator may offer advice and propose a solution for the consideration of the disputing

parties which may accept or reject the proposed solution or may agree on a different solution.

However, the mediator shall not advise or give comments on the consistency of the measure at issue

with this Agreement.

4. The procedure shall take place in the territory of the Party concerned, or by mutual agreement

in any other location or by any other means.

5. The disputing parties shall endeavour to reach a mutually agreed solution within 60 days after

the date of the appointment of the mediator. Pending a final agreement, the disputing parties may

consider possible interim solutions.

6. Mutually agreed solutions shall be made publicly available. However, the version disclosed to

the public may not contain any information that a disputing party has designated as confidential.

7. The procedure shall be terminated:

(a) by the adoption of a mutually agreed solution by the disputing parties, on the date of adoption;

& /en 27

(b) by a written declaration of the mediator, after consultation with the disputing parties, that

further efforts at mediation would be to no avail; or

(c) by written notice of a disputing party.

ARTICLE 3.5

Implementation of a mutually agreed solution

1. Where a solution has been agreed, each disputing party shall take the measures necessary to

implement the mutually agreed solution within the agreed timeframe.

2. The implementing disputing party shall inform the other disputing party in writing of any

steps or measures taken to implement the mutually agreed solution.

3. On request of the disputing parties, the mediator shall issue to the disputing parties, in writing,

a draft factual report, providing a brief summary of:

(a) the measure at issue in these procedures;

(b) the procedures followed; and

(c) any mutually agreed solution reached as the final outcome of these procedures, including

possible interim solutions.

& /en 28

4. The mediator shall provide the disputing parties 15 days to comment on the draft report. After

considering the comments of the disputing parties submitted within the period, the mediator shall

submit, in writing, a final factual report to the disputing parties within 15 days. The factual report

shall not include any interpretation of this Agreement.

ARTICLE 3.6

Relationship to dispute settlement

1. The procedure under this mediation mechanism is not intended to serve as a basis for dispute

settlement procedures under this Agreement or another agreement. A disputing party shall not rely

on or introduce as evidence in such dispute settlement procedures, nor shall any adjudicative body

take into consideration:

(a) positions taken by a disputing party in the course of the mediation procedure;

(b) the fact that a disputing party has indicated its willingness to accept a solution to the measure

subject to mediation; or

(c) advice given or proposals made by the mediator.

2. The mediation mechanism is without prejudice to the rights and obligations of the Parties

under Chapter 4 (Dispute Settlement between the Parties).

& /en 29

3. Unless the disputing parties agree otherwise, all steps of the procedure, including any advice

or proposed solution, shall be confidential. However, any disputing party may disclose to the public

that mediation is taking place.

ARTICLE 3.7

Time limits

Any time limit referred to in this Chapter may be modified by mutual agreement between the

disputing parties.

ARTICLE 3.8

Costs

1. Each disputing party shall bear its own expenses deriving from its participation in the

mediation procedure.

2. The disputing parties shall share jointly and equally the expenses deriving from organisational

matters, including the remuneration and expenses of the mediator.

& /en 30

CHAPTER 4

DISPUTE SETTLEMENT BETWEEN THE PARTIES

SECTION A

OBJECTIVE AND SCOPE

ARTICLE 4.1

Objective

The objective of this Chapter is to establish an effective and efficient mechanism for avoiding and

settling any dispute between the Parties concerning the interpretation and application of this

Agreement with a view to reaching, where possible, a mutually agreed solution.

& /en 31

ARTICLE 4.2

Scope

This Chapter shall apply with respect to any dispute between the Parties concerning the

interpretation and application of this Agreement (hereinafter referred to as "covered provisions").1

ARTICLE 4.3

Definitions

1. For the purposes of this Chapter and Annexes 4-A (Rules of Procedure) and 4-B (Code of

Conduct for Panellists and Mediators):

(a) "administrative staff" means individuals, other than assistants, under the direction and control

of a panellist;

(b) "adviser" means an individual retained by a Party to advise or assist that Party in connection

with the panel proceedings;

(c) "assistant" means an individual who, under the terms of appointment and under the direction

and control of a panellist, conducts research or provides assistance to that panellist;

1 For greater certainty, non-violation complaints shall not be permitted under this Agreement.

& /en 32

(d) "candidate" means an individual whose name is on the list of panellists referred to in

Article 4.7 and who is under consideration for selection as a panellist in accordance with

Article 4.6;

(e) "complaining Party" means any Party that requests the establishment of a panel under

Article 4.5;

(f) "mediator" means an individual who has been selected as mediator in accordance with

Article 4.29;

(g) "panel" means a panel established pursuant to Article 4.6;

(h) "panellist" means a member of a panel;

(i) "Party complained against" means the Party that is alleged to be in violation of a covered

provision; and

(j) "representative of a Party" means an employee or any individual appointed by a government

department, agency, or any other public entity of a Party who represents the Party for the

purposes of a dispute under this Agreement.

& /en 33

SECTION B

CONSULTATIONS

ARTICLE 4.4

Consultations

1. The Parties shall endeavour to resolve any dispute referred to in Article 4.2 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, including electronically,

delivered to the other Party identifying the measure at issue and the covered provisions that it

considers applicable.

3. The Party to which the request for consultations is made shall reply to that request promptly,

but no later than 10 days after the date of its receipt. Unless the Parties agree otherwise,

consultations shall be held within 30 days after the date of receipt of the request and take place in

the territory of the Party to which the request is made. The consultations shall be deemed concluded

within 60 days after the date of receipt of the request, unless the Parties agree to continue

consultations.

& /en 34

4. Consultations on matters which the Party seeking consultations considers to be of urgency,

including those regarding perishable goods or seasonal goods or services, shall be held

within 20 days after the date of receipt of the request. The consultations shall be deemed concluded

within those 20 days, unless the Parties agree to continue consultations.

5. During consultations each Party shall provide sufficient factual information so as to allow a

complete examination of the manner in which the measure at issue could affect the application of

this Agreement. Each Party shall endeavour to ensure the participation of personnel of its competent

governmental authorities who have expertise in the matter subject to the consultations.

6. Consultations, including all information disclosed and positions taken by the Parties during

consultations, shall be confidential, and without prejudice to the rights of either Party in any further

proceedings.

& /en 35

SECTION C

PANEL PROCEDURES

ARTICLE 4.5

Initiation of panel procedures

1. The Party that sought consultations pursuant to Article 4.4 may request the establishment of a

panel if:

(a) the Party to which the request is made pursuant to Article 4.4(3) does not respond to the

request for consultations within 10 days after the date of its receipt;

(b) the consultations are not held within the time periods set out Article 4.4(3) or 4.4(4)

respectively;

(c) the Parties agree not to have consultations; or

(d) the consultations have been concluded and no mutually agreed solution has been reached.

2. The request for the establishment of a panel shall be made by means of a written request,

including electronically, delivered to the other Party. The complaining Party shall identify the

measure at issue in its request and explain how that measure constitutes a breach of the covered

provisions in a manner sufficient to present the legal basis for the complaint clearly.

& /en 36

3. If a request is made pursuant to paragraph 1, a panel shall be established in accordance with

Article 4.6.

4. The Committee may decide, if it deems necessary and appropriate, to entrust an external body

with assisting panels under this Chapter, including providing administrative and legal support1.

ARTICLE 4.6

Establishment of a panel

1. A panel shall consist of three panellists.

2. Within 10 days after the date of receipt by the Party complained against of the written request,

including electronically, for the establishment of a panel, the Parties shall consult with a view to

agreeing on the composition of the panel.

3. If the Parties do not agree on the composition of the panel within the time period set out in

paragraph 2, each Party shall, within five days from the expiry of the time period set out in

paragraph 2, appoint a panellist from the sub-list of that Party established pursuant to Article 4.7.

1 This shall cover the provision of research assistance and expertise for panellists on legal

questions throughout the dispute settlement process.

& /en 37

4. If a Party does not appoint a panellist from its sub-list within the time period provided for in

paragraph 3, the co-chair of the Committee from the complaining Party shall, within five days after

the expiry of that time period, select by lot the panellist from the sub-list of that Party. The co-chair

of the Committee from the complaining Party may delegate such selection by lot of the panellist.

5. If the Parties do not agree on the chairperson of the panel within the time period established in

paragraph 2, the co-chair of the Committee from the complaining Party shall, within five days after

the expiry of that time period, select by lot the chairperson of the panel from the sub-list of

chairpersons established pursuant to Article 4.7. The co-chair of the Committee from the

complaining Party may delegate such selection by lot of the chairperson of the panel.

6. The panel shall be deemed to be established 15 days after the three selected panellists have

accepted their appointment in accordance with Rule 6 of Annex 4-A (Rules of Procedure), unless

the Parties agree otherwise.

7. If an individual selected to serve as a panellist is not available or does not accept their

appointment within the time period set out in Rule 6 of Annex 4-A (Rules of Procedure), a new

individual shall be selected in accordance with the same selection method used for the selection of

the individual who was not available or did not accept the appointment.

8. If the list provided for in Article 4.7 has not been established or if a sub-list does not contain

any available individual, at the time a selection by lot is to be made pursuant to paragraphs 4 or 5,

the panellists shall be drawn by lot from the individuals who have been formally proposed by one

Party or both Parties in accordance with Annex 4-A (Rules of Procedure) within five days after the

expiry of the time period set out in paragraph 2 or after the confirmation that no individual is

available, as the case may be.

& /en 38

ARTICLE 4.7

List of panellists

1. The Committee shall, no later than six months after the date of entry into force of this

Agreement, adopt a decision to establish a list of at least 15 individuals who are willing and able to

serve as panellists. The list shall be composed of three sub-lists:

(a) one sub-list of individuals established on the basis of proposals by the Union;

(b) one sub-list of individuals established on the basis of proposals by Indonesia; and

(c) one sub-list of individuals that are not nationals of either Party and who shall serve as

chairperson to the panel.

2. Each sub-list shall include at least five individuals. The Committee shall ensure that each sub-

list is always maintained at this minimum number of individuals.

3. The Committee may establish additional lists of individuals with expertise in specific sectors

covered by this Agreement. Subject to the agreement of the Parties, such additional lists shall be

used to compose the panel in accordance with the procedure set out in Article 4.6.

& /en 39

ARTICLE 4.8

Requirements for panellists

1. Each panellist shall:

(a) have demonstrated expertise in law, international trade or investment, and other matters

covered by this Agreement;

(b) be independent of, and not be affiliated with1, or take instructions from, either Party;

(c) serve in their individual capacities and not take instructions from any organisation or

government with regard to matters related to the dispute; and

(d) comply with Annex 4-B (Code of Conduct for Panellists and Mediators).

2. The chairperson shall also have experience in dispute settlement procedures.

3. In view of the subject-matter of a particular dispute, the Parties may agree to derogate from

the requirements listed in point (a) of paragraph 1.

1 For greater certainty, the fact that a person receives an income from the government of a

Party, was formerly employed by the government of a Party or has a family relationship with

a government official of a Party is not in itself a reason to be considered as being affiliated

with that Party.

& /en 40

ARTICLE 4.9

Functions of the panel

The panel:

(a) shall make an objective assessment of the matter before it, including an objective assessment

of the facts of the case and the applicability of and conformity with the covered provisions;

(b) shall set out, in its decisions and reports, the findings of facts, the applicability of the covered

provisions and the basic rationale behind any findings and conclusions that it makes; and

(c) should consult regularly with the Parties and provide adequate opportunities for the

development of a mutually agreed solution.

& /en 41

ARTICLE 4.10

Terms of reference

1. Unless the Parties agree otherwise within five days after the date of establishment of the

panel, the terms of reference of the panel shall be:

"to examine, in the light of the relevant provisions of the Investment Protection Agreement between

the Republic of Indonesia and the European Union (hereinafter "the Agreement"), cited by the

Parties, the matter referred to in the request for the establishment of the panel and to make findings

on the conformity of the measure at issue with the provisions of the Agreement referred to in

Article 4.2 of the Agreement and to deliver a report in accordance with Articles 4.12 and 4.13 of the

Agreement.".

2. If the Parties agree on other terms of reference, they shall notify the agreed terms of reference

to the panel within the time period set out in paragraph 1.

ARTICLE 4.11

Decision on urgency

1. If a Party so requests, the panel shall decide, within 10 days after its establishment, whether

the dispute concerns matters of urgency.

& /en 42

2. If the Panel decides that the dispute concerns matters of urgency, it shall, after consulting the

Parties, shorten the applicable time periods set out in Section C of this Chapter, except for the time

periods set out in Articles 4.6 and 4.10.

ARTICLE 4.12

Interim report

1. The panel shall deliver an interim report to the Parties, to the extent practicable within 90 days

after the date of establishment of the panel. If the panel considers that this deadline cannot be met,

the chairperson of the panel shall notify the Parties in writing, including electronically, stating the

reasons for the delay and the date on which the panel plans to deliver its interim report. The panel

should, under no circumstances, deliver its interim report later than 120 days after the date of

establishment of the panel. If the complaining Party chooses to deliver a second written submission

pursuant to Rule 11 of Annex 4-A (Rules of Procedure), the time periods set out in this paragraph

shall be extended by 30 days.

2. Each Party may deliver to the panel a written request, including electronically, to review

precise aspects of the interim report within 10 days after its receipt. A Party may comment on the

other Party's request within six days after the delivery of that request.

& /en 43

ARTICLE 4.13

Final report

1. The panel shall deliver its final report to the Parties, to the extent practicable within 120 days

after the date of establishment of the panel. If the panel considers that this deadline cannot be met,

the chairperson of the panel shall notify the Parties in writing, including electronically, stating the

reasons for the delay and the date on which the panel plans to deliver its final report. The panel

should, under no circumstances, deliver its final report later than 150 days after the date of

establishment of the panel. If the complaining Party chooses to deliver a second written submission

pursuant to Rule 11 of Annex 4-A (Rules of Procedure), the time periods set out in this paragraph

shall be extended by 30 days.

2. The final report shall include a discussion of any written request, including electronically,

made by a Party on the interim report, and clearly address the comments of the Parties.

ARTICLE 4.14

Compliance measures

1. The Party complained against shall take any measure necessary to comply promptly with the

findings and conclusions in the final report in order to bring itself in compliance with the covered

provisions.

& /en 44

2. The Party complained against shall, no later than 30 days after the receipt of the final report,

deliver a notification to the complaining Party of the measures which it has taken or which it

envisages to take to comply.

ARTICLE 4.15

Reasonable period of time

1. If immediate compliance is not possible, the Party complained against shall, no later than 30

days after the receipt of the final report, deliver a notification to the complaining Party of the length

of the reasonable period of time it will require for compliance. The Parties shall endeavour to agree

on the length of the reasonable period of time to comply with the final report.

2. If the Parties have not agreed on the length of the reasonable period of time, the complaining

Party may, at the earliest 20 days after the receipt of the notification referred to in paragraph 1,

request in writing, including electronically, the original panel to determine the length of the

reasonable period of time. The panel shall deliver its decision to the Parties within 30 days after the

date of receipt of the request.

3. The Party complained against shall deliver a written notification, including electronically, of

its progress in complying with the final report to the complaining Party at least 30 days before the

expiry of the reasonable period of time.

4. The Parties may agree to extend the reasonable period of time.

& /en 45

ARTICLE 4.16

Compliance review

1. The Party complained against shall, no later than at the date of expiry of the reasonable period

of time, deliver a notification to the complaining Party of any measure that it has taken to comply

with the final report.

2. If the Parties disagree on the existence or the consistency with the covered provisions of any

measure taken to comply, the complaining Party may deliver a written request, including

electronically, to the original panel to decide on the matter. The request shall identify any measure

at issue and explain how that measure constitutes a breach of the covered provisions in a manner

sufficient to present the legal basis for the complaint clearly. The panel shall deliver its decision to

the Parties within 46 days after the date of receipt of the request.

ARTICLE 4.17

Temporary remedies

1. The Party complained against shall, upon request of, and after consultations with, the

complaining Party, present an offer for temporary compensation if:

(a) the Party complained against delivers a notification to the complaining Party that it is not

possible to comply with the final report;

& /en 46

(b) the Party complained against fails to deliver a notification of any measure taken to comply

within the deadline referred to in Article 4.14 or before the date of expiry of the reasonable

period of time; or

(c) the panel finds that no measure taken to comply exists or that the measure taken to comply is

inconsistent with the covered provisions.

2. In any of the situations referred to in points (a) to (c) of paragraph 1, the complaining Party

may deliver a written notification, including electronically, to the Party complained against that it

intends to take appropriate measures if:

(a) the complaining Party decides not to make a request pursuant to paragraph 1; or

(b) the Parties do not agree on the temporary compensation within 30 days after the expiry of the

reasonable period of time or the delivery of the panel decision pursuant to Article 4.16 when a

request pursuant to paragraph 1 is made.

The notification shall specify such measures.

3. The complaining Party may take such measures at the earliest 20 days after the date of

delivery of the notification referred to in paragraph 2, unless the Party complained against made a

request pursuant to paragraph 5.

4. The appropriate measures shall not exceed the level equivalent to the nullification or

impairment caused by the violation.

& /en 47

5. If the Party complained against considers that the notified measures exceed the level

equivalent to the nullification or impairment caused by the violation, it may deliver a written

request, including electronically, to the original panel before the expiry of the 20-day period set out

in paragraph 3 to decide on the matter. The panel shall deliver its decision on the level of the

measures to the Parties within 30 days after the date of the request. The measures shall not be taken

until the panel has delivered its decision. The measures shall be consistent with that decision.

6. The appropriate measures or the compensation referred to in this Article shall be temporary

and shall not be applied after:

(a) the Parties have reached a mutually agreed solution pursuant to Article 4.33;

(b) the Parties have agreed that the measure taken to comply brings the Party complained against

into conformity with the covered provisions; or

(c) any measure taken to comply which the panel has found to be inconsistent with the covered

provisions has been withdrawn or amended so as to bring the Party complained against into

conformity with those provisions.

& /en 48

ARTICLE 4.18

Review of any measure taken to comply after the adoption of temporary remedies

1. The Party complained against shall deliver a notification to the complaining Party of any

measure it has taken to comply following the appropriate measures or following the application of

temporary compensation, as the case may be. With the exception of cases pursuant to paragraph 2,

the complaining Party shall terminate the appropriate measures within 30 days after the date of

receipt of the notification. In cases where compensation has been applied, and with the exception of

cases pursuant to paragraph 2, the Party complained against may terminate the application of such

compensation within 30 days after the date of receipt of its notification that it has complied.

2. If the Parties do not reach an agreement on whether the notified measure brings the Party

complained against into conformity with the covered provisions within 30 days after the date of

receipt of the notification referred to in paragraph 1 the complaining Party shall deliver a written

request, including electronically, to the original panel to decide on the matter. The panel shall

deliver its decision to the Parties within 46 days after the date of receipt of the request. If the panel

finds that the measure taken to comply is in conformity with the covered provisions, the appropriate

measures or compensation, as the case may be, shall be terminated. When relevant, the complaining

Party shall adjust the level of the appropriate measures or of compensation in light of the panel

decision.

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3. If the Party complained against considers that the level of the appropriate measures

implemented by the complaining Party exceeds the level equivalent to the nullification or

impairment caused by the violation, it may deliver a written request, including electronically, to the

original panel to decide on the matter.

ARTICLE 4.19

Replacement of panellists

If during a dispute settlement procedure, a panellist is unable to participate, withdraws or needs to

be replaced because he or she does not comply with the requirements of Annex 4-B (Code of

Conduct for Panellists and Mediators), the procedure provided for in Article 4.6 applies. The time

period for the delivery of the report or decision of the panel shall be extended for the time necessary

for the appointment of the new panellist.

ARTICLE 4.20

Rules of procedure

Panel procedures shall be governed by this Chapter and Annex 4-A (Rules of Procedure). The

hearings of the panel shall be closed for any discussion of confidential information. Otherwise, the

hearings shall be open to the public, unless the Parties to the dispute agree otherwise.

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ARTICLE 4.21

Suspension and termination

1. On request of both Parties or the complaining Party, the panel shall suspend its work at any

time for a period agreed by the Parties and not exceeding 12 consecutive months.

2. The panel shall resume its work before the expiry of the suspension period at the written

request, including electronically, of both Parties or the complaining Party, or at the expiry of the

suspension period at the written request, including electronically, of either Party. The requesting

Party shall deliver a notification to the other Party accordingly. If a Party does not request the

resumption of the panel's work at the expiry of the suspension period, the authority of the panel

shall lapse and the dispute settlement procedure shall be terminated.

3. If the work of the panel is suspended, the relevant time periods set out in Section C of this

Chapter shall be extended by the same period of time for which the work of the panel was

suspended.

ARTICLE 4.22

Receipt of information

1. On request of a Party, or on its own initiative, the panel may seek from the Parties relevant

information it considers necessary and appropriate. The Parties shall respond promptly and fully to

any request by the panel for such information.

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2. On request of a Party or on its own initiative, the panel may seek any information it deems

appropriate from any source. The panel also has the right to seek the opinion of experts, as it deems

appropriate, and subject to any terms and conditions agreed by the Parties, where applicable.

3. The panel shall consider amicus curiae submissions from natural persons of a Party or

juridical persons established in a Party in accordance with Annex 4-A (Rules of Procedure).

4. Any information or expert opinion obtained by the panel pursuant to this Article shall be

disclosed to the Parties and the Parties may provide comments thereon.

ARTICLE 4.23

Rules of interpretation

1. The panel shall interpret the covered provisions in accordance with customary rules of

interpretation of public international law, including those codified in the Vienna Convention on the

Law of Treaties.

2. The panel shall also take into account relevant interpretations in reports of WTO panels and

the Appellate Body adopted by the Dispute Settlement Body of the WTO.

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ARTICLE 4.24

Reports and decisions of the panel

1. The deliberations of the panel shall be kept confidential. The panel shall make every effort to

draft reports and take decisions by consensus. If this is not possible, the panel shall decide the

matter by majority vote. In no case shall separate opinions of panellists be disclosed.

2. The decisions and reports of the panel shall be accepted unconditionally by the Parties.

3. Reports and decisions of the panel cannot add to or diminish the rights and obligations of the

Parties under this Agreement. They shall not create any rights or obligations with respect to natural

or juridical persons.

4. The panel and the Parties shall treat as confidential any information submitted by a Party to

the panel in accordance with Annex 4-A (Rules of Procedure).

ARTICLE 4.25

Choice of forum

1. If a dispute arises regarding a particular measure alleged to breach a covered provision and a

substantially equivalent obligation under another international agreement to which both Parties are

party, including the WTO Agreement, the Party seeking redress shall select the forum in which to

settle the dispute.

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2. Once a Party has selected the forum and initiated dispute settlement procedures under Section

C of this Chapter or under another international agreement, the Party shall not initiate dispute

settlement procedures under any other agreement with respect to the particular measure referred to

in paragraph 1, unless the forum selected first fails to make findings for procedural or jurisdictional

reasons.

3. For the purposes of this Article:

(a) dispute settlement procedures under Section C of this Chapter are deemed to be initiated by a

Party's request for the establishment of a panel pursuant to Article 4.5;

(b) dispute settlement procedures 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, contained in Annex 2 to the WTO

Agreement; and

(c) dispute settlement procedures under any other international agreement are deemed to be

initiated in accordance with the relevant provisions of that agreement.

4. Without prejudice to paragraph 2, nothing in this Agreement shall preclude a Party from

suspending obligations authorised by the Dispute Settlement Body of the WTO or authorised under

the dispute settlement procedures of another international agreement to which the disputing Parties

are party. The WTO Agreement or any other international agreement between the Parties shall not

be invoked to preclude a Party from suspending obligations under Section C of this Chapter.

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SECTION D

MEDIATION MECHANISM

ARTICLE 4.26

Objective

The objective of the mediation mechanism is to facilitate the finding of a mutually agreed solution

to a dispute through a comprehensive and expeditious procedure with the assistance of a mediator.

ARTICLE 4.27

Request for information

1. At any time before the initiation of the mediation procedure, a Party may deliver a written

request, including electronically, for information regarding a measure adversely affecting

investment between the Parties. The Party to which such a request is made shall, within 21 days

after the date of receipt of the request, deliver a written response, including electronically,

containing its comments on the requested information.

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2. If the responding Party considers that it will not be able to deliver a response within 21 days

after the date of receipt of the request, it shall promptly notify the requesting Party, stating the

reasons for the delay and providing an estimate of the shortest period within which it will be able to

deliver its response.

3. A Party is normally expected to avail itself of this provision before the initiation of the

mediation procedure.

ARTICLE 4.28

Initiation of the mediation procedure

1. A Party may at any time request to enter into a mediation procedure with respect to any

measure by a Party adversely affecting investment between the Parties.

2. The request shall be made by means of a written request, including electronically, delivered to

the other Party. The request shall be sufficiently detailed to present the concerns of the requesting

Party clearly and shall:

(a) identify the specific measure at issue;

(b) provide a statement of the adverse effects that the requesting Party considers the measure has,

or will have, on investment between the Parties; and

(c) explain how the requesting Party considers that those effects are linked to the measure.

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3. The mediation procedure may only be initiated by mutual agreement of the Parties in order to

explore mutually agreed solutions and consider any advice and proposed solutions by the mediator.

4. The Party to which the request is made shall give sympathetic consideration to the request and

deliver its written acceptance or rejection, including electronically, to the requesting Party

within 10 days after its receipt. Otherwise, the request shall be regarded as rejected.

ARTICLE 4.29

Selection of the mediator

1. The Parties shall endeavour to agree on a mediator within 10 days after the initiation of the

mediation procedure.

2. If the Parties are unable to agree on the mediator within the time period laid down in

paragraph 1, either Party may request the co-chair of the Committee from the complaining Party to

select the mediator by lot, within five days after the date of the request, from the sub-list of

chairpersons established pursuant to Article 4.7. The co-chair of the Committee from the

complaining Party may delegate such selection by lot of the mediator.

3. Should the sub-list of chairpersons referred to in Article 4.7 not be established at the time a

request is made pursuant to Article 4.28, the mediator shall be drawn by lot from the individuals

formally proposed by one or both Parties for that sub-list.

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4. A mediator shall not be a national of either Party or employed by either Party, unless the

Parties agree otherwise.

5. A mediators shall comply with Annex 4-B (Code of Conduct for Panellists and Mediators).

ARTICLE 4.30

Rules of the mediation procedure

1. Within 10 days after the appointment of the mediator, the Party which invoked the mediation

procedure shall deliver to the mediator and to the other Party a detailed written description of its

concerns, in particular of the operation of the measure at issue and its possible adverse effects on

investment. Within 20 days after the receipt of this description, the other Party may deliver written

comments on this description. Either Party may include any information that it deems relevant in its

description or comments.

2. The mediator shall assist the Parties in a transparent manner in bringing clarity to the measure

concerned and its possible adverse effects on investment. In particular, the mediator may organise

meetings between the Parties, consult the Parties jointly or individually, seek the assistance of, or

consult with, relevant experts and stakeholders and provide any additional support requested by the

Parties. The mediator shall consult with the Parties before seeking the assistance of, or consulting

with, relevant experts and stakeholders.

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3. The mediator may offer advice and propose a solution for the consideration of the Parties. The

Parties may accept or reject the proposed solution, or agree on a different solution. The mediator

shall not advise or comment on the consistency of the measure at issue with this Agreement.

4. The mediation procedure shall take place in the territory of the Party to which the request was

addressed, or by mutual agreement in any other location or by any other means.

5. The Parties shall endeavour to reach a mutually agreed solution within 60 days after the

appointment of the mediator. Pending a final agreement, the Parties may consider possible interim

solutions, particularly if the measure relates to perishable goods or seasonal goods or services.

6. The mutually agreed solution may be adopted by means of a decision of the Committee.

Either Party may make the solution subject to the completion of any necessary internal procedures.

7. Upon request of either Party, the mediator shall deliver a draft factual report to the Parties,

providing:

(a) a brief summary of the measure at issue;

(b) the procedures followed; and

(c) if applicable, any mutually agreed solution reached, including possible interim solutions.

8. The mediator shall allow the Parties 15 days to comment on the draft report. After considering

the comments of the Parties received, the mediator shall, within 15 days, deliver a final factual

report to the Parties. The factual report shall not include any interpretation of this Agreement.

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9. The mediation procedure shall be terminated:

(a) by the adoption of a mutually agreed solution by the Parties, on the date of the adoption

thereof;

(b) by mutual agreement of the Parties at any stage of the procedure, on the date of that

agreement;

(c) by a written declaration of the mediator, after consultation with the Parties, that further efforts

to mediate would be to no avail, on the date of that declaration; or

(d) by a written declaration of a Party after exploring mutually agreed solutions under the

mediation procedure and after having considered any advice and proposed solutions by the

mediator, on the date of that declaration.

ARTICLE 4.31

Confidentiality

Unless the Parties agree otherwise, all steps of the mediation procedure, including any advice or

proposed solution, are confidential. Any Party may disclose to the public the fact that mediation is

taking place.

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ARTICLE 4.32

Relationship to dispute settlement procedures

1. The mediation procedure is without prejudice to the Parties' rights and obligations under

Sections B and C or under dispute settlement procedures under any other agreement.

2. A Party shall not rely on, or introduce as evidence, in other dispute settlement procedures

under this Agreement or under any other agreement, nor shall a panel take into consideration:

(a) positions taken by the other Party in the course of the mediation procedure or information

exclusively gathered pursuant to Article 4.30(2);

(b) the fact that the other Party has indicated its willingness to accept a solution to the measure

subject to mediation; or

(c) advice given or proposals made by the mediator.

3. Unless the Parties agree otherwise, a mediator shall not serve as a panellist in dispute

settlement procedures under this Agreement or under any other agreement involving the same

matter for which he or she has been a mediator.

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SECTION E

COMMON PROVISIONS

ARTICLE 4.33

Mutually agreed solution

1. The Parties may reach a mutually agreed solution at any time with respect to any dispute

referred to in Article 4.2.

2. If a mutually agreed solution is reached during the panel or mediation procedure, the Parties

shall jointly notify that solution to the chairperson of the panel or the mediator, respectively. Upon

such notification, the panel or the mediation procedure shall be terminated.

3. Each Party shall take any measure necessary to implement the mutually agreed solution

within the agreed time period.

4. No later than at the expiry of the agreed time period, the implementing Party shall inform the

other Party in writing, including electronically, of any measure that it has taken to implement the

mutually agreed solution.

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ARTICLE 4.34

Transparency

1. Each Party shall promptly make public:

(a) a request for consultations pursuant to Article 4.4(2);

(b) a request for the establishment of a panel pursuant to Article 4.5(2);

(c) the date of establishment of a panel in accordance with Article 4.6(6), the time-limit for

amicus curiae submissions determined by the panel pursuant to Rule 42 of Annex 4-A (Rules

of Procedure) and the working language for the panel procedure determined in accordance

with Rule 46 of Annex 4-A (Rules of Procedure);

(d) its submissions in the panel procedure or, if a Party decides otherwise, a summary of its

submissions within a short period of time after the issuance of the panel report;

(e) a mutually agreed solution reached pursuant to Article 4.30(6) or Article 4.33 unless the

Parties agree otherwise and subject to the protection of confidential information; and

(f) the final reports and decisions of the panel.

2. Any hearing of the panel shall be closed to the public for the duration of any discussion of

confidential information. Otherwise, the hearing shall be open to the public, unless the Parties to the

dispute agree otherwise.

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3. Natural persons of a Party or juridical persons established in a Party may make amicus curiae

submissions to the panel in accordance with Rule 42 of Annex 4-A (Rules of Procedure).

4. Paragraphs 1 and 2 shall be subject to the protection of confidential information as set out in

Rules 35-38 of Annex 4-A (Rules of Procedure).

ARTICLE 4.35

Time Periods

1. All time periods laid down in this Chapter shall be counted in calendar days from the day

following the act to which they refer.

2. Any time period referred to in this Chapter may be modified by mutual agreement of

the Parties.

3. A panel established under Section C of this Chapter may at any time propose to the Parties to

modify any time period referred to in this Chapter, stating the reasons for the proposal.

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ARTICLE 4.36

Costs

1. Each Party shall bear its own expenses and legal costs derived from the participation in the

panel or mediation procedure.

2. Unless the Parties agree otherwise, the Parties shall be jointly liable for the remuneration and

expenses of panellists and mediators. The Parties shall share such remuneration and expenses

equally. Unless the Parties agree otherwise, the remuneration and expenses of panellists and

mediators shall be determined in accordance with Rule 8 of Annex 4-A (Rules of Procedure).

3. Unless the Parties agree otherwise, other expenses associated with the conduct of the

proceedings shall be borne in equal parts by the Parties to the dispute.

ARTICLE 4.37

Annexes

The Committee may amend the Annexes 4-A (Rules of Procedure) and 4-B (Code of Conduct for

Panellists and Mediators), pursuant to Article 6.2.

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CHAPTER 5

EXCEPTIONS

ARTICLE 5.1

Denial of benefits

1. A Party may deny the benefits of this Agreement to an investor of the other Party or to a

covered investment if the denying Party adopts or maintains measures related to the maintenance of

international peace and security, including measures to address serious human rights violations and

abuses, which:

(a) prohibit transactions with that investor or covered investment; or

(b) would be violated or circumvented if the benefits of this Agreement were accorded to that

investor or covered investment, including where the measures prohibit transactions with a

natural or juridical person who owns or controls either of them.

2. Notwithstanding paragraph 1, Indonesia may under its applicable laws and regulations deny

the benefits of this Agreement to an investor of the Union if a person of a third country owns or

controls the covered investment and Indonesia does not maintain diplomatic relations with that third

country.

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ARTICLE 5.2

General exceptions

1. Subject to the requirement that such measures are not applied in a manner which would

constitute a means of arbitrary or unjustifiable discrimination between countries where like

conditions prevail, or a disguised restriction on covered investment, nothing in Articles 2.3, 2.4

and 2.8 shall be construed to prevent the adoption or enforcement by either Party of measures:

(a) necessary to protect public security1 or public morals or to maintain public order2;

(b) necessary to protect human, animal or plant life or health;

(c) necessary to secure compliance with laws or regulations which are not inconsistent with the

provisions of this Agreement including those relating to:

(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a

default on contracts;

(ii) the protection of the privacy of individuals in relation to the processing and

dissemination of personal data and the protection of confidentiality of individual records

and accounts; or

1 For greater certainty, public security may cover measures taken to protect critical public

infrastructure (whether publicly or privately owned), including communications, power and

water infrastructure, from deliberate attempts intended to disable or degrade such

infrastructure. 2 The public security and public order exceptions may be invoked only where a genuine and

sufficiently serious threat is posed to one of the fundamental interests of society.

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(iii) safety.

2. For greater certainty, the Parties understand that:

(a) the measures referred to in point (b) of Article XX of GATT 1994 and in point (b) of

paragraph 1 of this Article include environmental measures, which are necessary to protect

human, animal or plant life or health; and

(b) point (g) of Article XX of GATT 1994 applies to measures relating to the conservation of

living and non-living exhaustible natural resources.

3. For greater certainty, the Parties understand that this Article can only be invoked with respect

to measures that are otherwise inconsistent with the provisions of the Articles referred to in

paragraph 1.

ARTICLE 5.3

Prudential carve-out

1. Nothing in this Agreement shall prevent a Party from adopting or maintaining measures for

prudential reasons, such as:

(a) the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is

owed by a financial service supplier; or

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(b) ensuring the integrity and stability of a Party's financial system.

2. Where the measures referred to in paragraph 1 do not conform to the other provisions of this

Agreement, they shall not be used as a means of avoiding a Party's commitments or obligations

under such provisions.

3. Nothing in this Agreement shall be construed to require a Party to disclose information

relating to the affairs and accounts of individual consumers or any confidential or proprietary

information in the possession of public entities.

ARTICLE 5.4

Security exceptions

Nothing in this Agreement shall be construed:

(a) to require a Party to furnish or allow access to any information the disclosure of which it

considers contrary to its essential security interests;

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(b) to prevent a Party from taking any action which it considers necessary for the protection of its

essential security interests:

(i) connected to the production of or traffic in arms, ammunition and implements of war

and to such traffic and transactions in other goods and materials, services and

technology, and to economic activities, carried out directly or indirectly for the purpose

of supplying a military establishment;

(ii) relating to fissionable and fusionable materials or the materials from which they are

derived; or

(iii) taken in time of war or other emergency in international relations; or

(c) to prevent a Party from taking any action in pursuance of its obligations under the Charter of

the United Nations signed in San Francisco on 26 June 1945 for the purpose of maintaining

international peace and security.

ARTICLE 5.5

Taxation

1. For the purposes of this Article, the following definitions apply:

(a) "residence" means residence for tax purposes; and

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(b) "tax convention" means a convention for the avoidance of double taxation or any other

international agreement or arrangement relating wholly or mainly to taxation to which the

Union or any of its Member States or Indonesia is party.

A "tax" and a "taxation measure" do not include a customs duty.

2. Each Party retains its right to regulate taxation measures, without prejudice to its rights and

obligations under this Agreement.

3. Nothing in this Agreement shall affect the rights and obligations of either Indonesia or the

Union or any of its Member States, under any tax convention. In the event of any inconsistency

between this Agreement and any such tax convention, that tax convention shall prevail to the extent

of the inconsistency.

4. Article 2.4 shall not apply to an advantage accorded by a Party pursuant to a tax convention.

For the avoidance of doubt, nothing in this Agreement shall oblige a Party to extend to the other

Party the benefit of any treatment, preference or privilege arising from any existing or future tax

convention by which the Party is bound.

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5. Subject to the requirement that taxation measures are not applied in a manner which would

constitute a means of arbitrary or unjustifiable discrimination between countries where like

conditions prevail, or a disguised restriction on trade and investment, nothing in this Agreement

shall be construed to prevent a Party from adopting, maintaining or enforcing any measure which:

(a) aims at ensuring the equitable or effective1 imposition or collection of direct taxes;

1 Measures that are aimed at ensuring the equitable or effective imposition or collection of

direct taxes include measures taken by a Party under its taxation system which:

(i) apply to non-resident investors and service suppliers in recognition of the fact that the

tax obligation of non-residents is determined with respect to taxable items sourced or

located in the Party's territory;

(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the

Party's territory;

(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes,

including compliance measures;

(iv) apply to consumers of services supplied in or from the territory of the other Party in

order to ensure the imposition or collection of taxes on such consumers derived from

sources in the Party's territory;

(v) distinguish investors and service suppliers subject to tax on worldwide taxable items

from other investors and service suppliers, in recognition of the difference in the nature

of the tax base between them; or

(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of

resident persons or branches, or between related persons or branches of the same

person, in order to safeguard the Party's tax base.

Tax terms or concepts in this paragraph and this footnote are determined according to tax

definitions and concepts, or equivalent or similar definitions and concepts, under the law of

the Party taking the measure.

& /en 72

(b) aims at preventing the avoidance or evasion of taxes pursuant to the provisions of any tax

convention or its fiscal legislation; or

(c) distinguishes between taxpayers, who are not in the same situation, in particular with regard

to their place of residence or with regard to the place where their capital is invested.

ARTICLE 5.6

Temporary safeguard measures

In exceptional circumstances of serious difficulties for the operation of economic and monetary

policies, in the case of Indonesia, or for the economic and monetary union, in the case of the Union,

or threat thereof, the Party concerned may adopt or maintain safeguard measures with regard to

capital movements, payments or transfers for a period not exceeding six months1. Such measures

must be strictly necessary to address such difficulties.

1 For greater certainty, such measures can be renewed for additional periods of six months,

provided that it remains strictly necessary under the current circumstances.

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ARTICLE 5.7

Restrictions in case of balance-of-payments or external financial difficulties

1. Where a Party experiences serious balance-of-payments or external financial difficulties, or a

threat thereof, it may adopt or maintain restrictive measures with regard to capital movements,

payments or transfers1.

2. The measures referred to in paragraph 1:

(a) shall be consistent with the Articles of Agreement of the International Monetary Fund, as

applicable;

(b) shall not exceed what is necessary to deal with the circumstances described in paragraph 1;

(c) shall be temporary and shall be phased out progressively as the situation specified in

paragraph 1 improves;

(d) shall avoid unnecessary damage to the commercial, economic and financial interests of the

other Party; and

(e) shall not treat the other Party less favourably than a third country in like situations.

1 In the case of the Union, such measures may be taken by a Member State of the Union in

situations other than those referred to in Article 5.6, which affect the economy of that Member

State. For greater certainty, serious balance-of-payments or external financial difficulties, or a

threat thereof, may be caused, among other factors, by serious difficulties related to monetary

or exchange rate policies, or threats thereof.

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3. In the case of trade in goods, each Party may adopt restrictive measures in order to safeguard

its external financial position or balance-of-payments. These measures shall be in accordance with

the GATT 1994 and the Understanding on the Balance of Payments provisions of the GATT 1994.

4. In the case of trade in services, each Party may adopt restrictive measures in order to

safeguard its external financial position or balance-of-payments. These measures shall be in

accordance with Article XII of the GATS.

5. A Party maintaining or having adopted measures referred to in paragraphs 1 and 2 shall

promptly notify them to the other Party.

6. Where restrictions are adopted or maintained pursuant to this Article, consultations shall be

held promptly in the Committee unless consultations are held in other fora. The consultations shall

assess the balance-of-payments or external financial difficulty that led to the respective measures,

taking into account, inter alia, such factors as:

(a) the nature and extent of the difficulties;

(b) the external economic and trading environment; and

(c) alternative corrective measures which may be available.

The consultations shall address the compliance of any restrictive measures with paragraphs 1 and 2.

All relevant findings of a statistical or factual nature presented by the IMF, where available, shall be

accepted and conclusions shall take into account the assessment by the IMF of the balance-of-

payments and the external financial situation of the Party concerned.

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ARTICLE 5.8

Application of laws and regulations relating to capital movements, payments or transfers

The provisions of Article 2.8 shall not preclude a Party from applying its laws and regulations

relating to:

(a) bankruptcy, insolvency, the protection of the rights of creditors, bank recovery and resolution,

or the prudential supervision of financial institutions;

(b) issuing of, trading or dealing in financial instruments;

(c) financial reporting or record keeping of capital movements, payments or transfers where

necessary to assist law enforcement or financial regulatory authorities;

(d) criminal or penal offences, deceptive or fraudulent practices;

(e) ensuring compliance with orders or judgments in judicial or administrative proceedings; or

(f) social security, public retirement or compulsory savings schemes.

Such laws and regulations shall not be applied in an arbitrary or discriminatory manner, or in a

manner which constitutes a disguised restriction on capital movements, payments, or transfers.

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ARTICLE 5.9

Disclosure of information

1. Nothing in this Agreement shall be construed to require a Party to make available confidential

information, the disclosure of which would impede law enforcement, or otherwise be contrary to the

public interest, or which would prejudice the legitimate commercial interests of particular

enterprises, public or private, except where a panel requires such confidential information in dispute

settlement proceedings under Chapter 4 (Dispute Settlement between the Parties). In such cases, the

panel shall ensure that confidentiality is fully protected.

2. When a Party submits information to the Committee which is considered as confidential under

its laws and regulations, the other Party shall treat that information as confidential, unless the

submitting Party agrees otherwise.

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CHAPTER 6

INSTITUTIONAL AND FINAL PROVISIONS

SECTION A

INSTITUTIONAL PROVISIONS

ARTICLE 6.1

Committee

1. The Parties hereby establish a Committee comprising representatives of the Parties.

2. The Committee shall meet no later than one year after the entry into force of this Agreement.

Thereafter, the Committee shall meet on an annual basis, unless otherwise agreed by the co-chairs

of the Committee.

3. The meetings of the Committee shall take place in the Union or Indonesia alternately, unless

otherwise agreed by the representatives of the Parties. The Committee may meet in person or by

other appropriate means of communication, as agreed by the co-chairs of the Committee.

4. The Committee shall be co-chaired by a representative of Indonesia at ministerial level and

the Member of the European Commission responsible for trade, or their respective designees.

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ARTICLE 6.2

Functions of the Committee

1. In order to ensure that this Agreement operates properly and effectively, the Committee shall:

(a) consider ways to further enhance investment relations between the Parties;

(b) supervise and facilitate the implementation and application of this Agreement, and promote its

general aims;

(c) without prejudice to Chapter 4 (Dispute Settlement between the Parties) seek appropriate

ways and methods of preventing problems that may arise in areas covered by this Agreement,

or of resolving disputes that may arise regarding the interpretation or application of

this Agreement;

(d) consider any other matter of interest relating to an area covered by this Agreement; and

(e) adopt at its first meeting its own rules of procedure.

2. In order to ensure that this Agreement operates properly and effectively, the Committee may:

(a) recommend to the Parties any amendments to this Agreement;

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(b) adopt decisions to amend this Agreement in accordance with Article 6.3, in the following

cases:

(i) Annex 4-A (Rules of Procedure);

(ii) Annex 4-B (Code of Conduct for Panellists and Mediators);

(c) adopt, through decisions, binding interpretations of the provisions of this Agreement, in

accordance with Article 6.3; such decisions on binding interpretations shall enter into force on

the date on which the Parties have exchanged written notifications confirming that they have

completed their respective procedures, and they shall be binding on the Parties and all bodies

established under this Agreement, including any panel referred to under Chapter 4 (Dispute

Settlement between the Parties);

(d) adopt any decisions as envisaged in this Agreement, or make recommendations as provided

for in Article 6.3; and

(e) communicate on matters related to this Agreement with all interested parties including

business, trade unions and civil society organisations.

& /en 80

3. The Committee shall exchange views on topics concerning the implementation of this

Agreement with civil society representatives participating in a Civil Society Forum. The Committee

shall agree at its first meeting on the operational guidelines for the conduct of the Civil Society

Forum. The Civil Society Forum shall meet in conjunction with the meeting of the Committee,

unless otherwise agreed by the representatives of the Parties. Representatives of the Parties shall

facilitate the organisation of the Civil Society Forum including participation by virtual means. The

Civil Society Forum includes members of the domestic advisory groups referred to in Article 6.5

and is open to other relevant independent civil society organisations established in the territories of

the Parties. Each Party shall promote a balanced representation of interest groups in economics,

social and environmental matters with fields of activity and expertise directly relating to the scope

of this Agreement, as appropriate. The Parties may, jointly or individually, publish any formal

statements made at the Civil Society Forum.

4. The Committee shall regularly report to the Trade Committee established under the

Comprehensive Economic Partnership Agreement on its activities, at the regular meetings of the

Trade Committee. The information to be reported may also be provided to the Trade Committee by

representatives designated by the Committee or in writing.

& /en 81

ARTICLE 6.3

Decisions and recommendations of the Committee

1. The Committee shall, for the purpose of attaining the objectives of this Agreement, have the

power to adopt decisions as provided for in this Agreement. The decisions adopted by the

Committee shall be binding upon the Parties and enter into force after the notification in writing of

the completion of their respective applicable legal requirements and procedures. Each Party shall

take all measures necessary to implement the decisions adopted by the Committee.

2. For the purposes of attaining the objectives of this Agreement, the Committee may make

appropriate recommendations in respect of all matters covered by this Agreement.

3. The Committee shall adopt its decisions and make its recommendations by consensus.

ARTICLE 6.4

Contact points

1. Each Party shall designate an "IPA contact point" to facilitate communications between the

Parties on matters pertaining to this Agreement, and shall notify the details of its IPA contact point

to the other Party within 30 days following the entry into force of this Agreement.

& /en 82

2. The designated IPA contact points shall:

(a) unless otherwise provided for in this Agreement, or otherwise agreed by the co-chairs of the

Committee, deliver and receive all notifications and information to be provided between the

Parties pursuant to this Agreement;

(b) facilitate communications between the Parties on any matter covered by this Agreement, as

well as on its implementation; and

(c) coordinate preparations for the meetings of the Committee.

ARTICLE 6.5

Domestic advisory groups

1. Each Party shall create a new or designate an existing domestic advisory group within a year

of the date of entry into force of this Agreement, with the task of providing advice, including on its

own initiative, on matters concerning the implementation of this Agreement. The composition of

each domestic advisory group shall ensure a balanced representation of independent civil society

organisations1, based on a multi-stakeholder approach which includes relevant interest groups in

economic, social and environmental matters.

1 Civil society includes non-governmental organisations, business and employers' organisations

as well as trade unions.

& /en 83

2. Each Party shall convene a meeting with its domestic advisory group at least once a year and

consider the advice or recommendations that the group may provide. Each Party may decide on the

follow-up to the advice or recommendations by its domestic advisory group. Domestic advisory

groups may be convened in different configurations to discuss the implementation of different

Chapters or provisions of this Agreement.

3. The Parties shall promote public awareness of their respective domestic advisory groups and

encourage interaction between them. To this end, each Party shall make publicly available relevant

information on the composition of its domestic advisory group and shall exchange information with

the other Party on the contact point of its own domestic advisory group.

SECTION B

FINAL PROVISIONS

ARTICLE 6.6

Amendments

1. The Parties may agree, in writing, to amend this Agreement. Amendments to this Agreement

constitute integral parts thereof.

& /en 84

2. Amendments shall enter into force on the first day of the second month, or on such later date

as may be agreed by the Parties, following the date on which the Parties exchange written

notifications confirming that they have completed their respective applicable legal requirements for

the entry into force of such amendments.

3. Notwithstanding paragraph 1, the Committee may, in accordance with the respective

applicable legal requirements of the Parties, amend this Agreement, where provided for in point (b)

of Article 6.2(2).

ARTICLE 6.7

Entry into force

1. The Parties shall approve this Agreement in accordance with their respective applicable legal

requirements and procedures.

2. This Agreement shall enter into force on the first day of the second month following the date

on which the Parties exchange written notifications confirming that they have completed their

respective applicable legal requirements for the entry into force of this Agreement. The Parties may

agree on another date of entry into force of this Agreement.

3. Notifications referred to in paragraph 2 shall be sent to the Secretary General of the Council

of the European Union and to the Ministry of Foreign Affairs of Indonesia, or their respective

successors.

& /en 85

ARTICLE 6.8

Relation with other agreements

1. Unless otherwise provided for in this Agreement, the existing agreements between the

Member States of the Union or the European Community or the Union and Indonesia are not

superseded or terminated by this Agreement.

2. This Agreement shall be an integral part of the overall bilateral relations as governed by the

Comprehensive Economic Partnership Agreement and shall form part of the common institutional

framework.

3. The Parties affirm their rights and obligations with respect to each other under the WTO

Agreement. For greater certainty, nothing in this Agreement requires a Party to act in a manner

inconsistent with its obligations under the WTO Agreement.

4. In the event of any inconsistency between this Agreement and any agreement other than the

WTO Agreement to which both Parties are a party, the Parties shall immediately consult with each

other with a view to finding a mutually satisfactory solution.

5. If any of the provisions of the WTO Agreement incorporated into this Agreement is amended,

the Parties shall consult with a view to finding a mutually satisfactory solution, where necessary.

& /en 86

ARTICLE 6.9

Work programme

1. The Parties shall, on the basis of the progress already made, and without prejudice to their

respective positions, restart negotiations on the settlement of investment disputes between a Party

and an investor of the other Party concerning breaches of Chapter 2 (Investment Protection) of this

Agreement, and on an interpretative guidance on taxation measures and expropriation, no later than

on the date of entry into force of this Agreement.

2. In such negotiations, the Parties shall work towards a state-of-the-art dispute settlement

mechanism, considering, inter alia, progress on reforms of investment dispute settlement in relevant

international fora. The Parties share the understanding that any parts of the dispute settlement

mechanism, on which they already reached an agreement in the negotiations towards this

Agreement, will be part of such work.

3. The Parties shall conclude the negotiations within three years after the date of the entry into

force of this Agreement.

ARTICLE 6.10

Duration and termination

1. This Agreement shall remain in force unless terminated pursuant to paragraph 2.

& /en 87

2. A Party may terminate this Agreement by written notification to the other Party. This

notification shall be sent to the Secretary General of the Council of the European Union and to the

Ministry of Foreign Affairs of Indonesia, or their respective successors. This termination shall take

effect six months after the date of receipt of that notification, unless the Parties agree otherwise.

3. In the event that this Agreement is terminated pursuant to paragraph 2, this Agreement shall

continue to be effective for a further period of 10 years from the date of termination, with respect to

investments made before the date of termination of the present Agreement.

ARTICLE 6.11

Fulfilment of obligations

1. Each Party is fully responsible for the observance of all provisions of this Agreement.

2. Each Party shall take all general or specific measures required to fulfil its obligations under

this Agreement. Each Party shall ensure within its territory the observance of all obligations and

commitments under this Agreement by its respective central, regional and local governments and

authorities, and by non-governmental bodies in the exercise of governmental powers delegated

to them.

& /en 88

ARTICLE 6.12

No direct effect

1. Nothing in this Agreement shall be construed as conferring rights or imposing obligations on

persons, other than those created between the Parties under public international law, nor as

permitting this Agreement to be directly invoked in the legal systems of the Parties.

2. A Party shall not expressly provide for a right of action under its law against the other Party

on the ground that a measure of the other Party is inconsistent with this Agreement.

ARTICLE 6.13

Territorial application

1. This Agreement shall apply:

(a) with respect to the Union, to the territories in which the Treaty on European Union and the

TFEU are applied and under the conditions laid down in those Treaties; and

& /en 89

(b) with respect to Indonesia, to its territory, which is defined as the land territories, internal

waters, archipelagic waters, territorial sea, including seabed and subsoil thereof, and airspace

over such territories and waters, as well as continental shelf and exclusive economic zone,

over which Indonesia has sovereignty, sovereign rights or jurisdiction as defined in its laws

and in accordance with international law, including the United Nations Convention on the

Law of the Sea, done at Montego Bay on 10 December 1982.

2. References to "territory" in this Agreement shall be understood in accordance with

paragraph 1, except as otherwise expressly provided.

ARTICLE 6.14

Annexes

1. The Annexes to this Agreement constitute integral parts thereof.

2. Each of the Annexes to this Agreement shall form an integral part of the Chapter that refers to

that Annex or to which reference is made in that Annex.

ARTICLE 6.15

Future accessions to the Union

1. The Union shall notify Indonesia of any request made by a country to accede to the Union.

& /en 90

2. During the negotiations between the Union and the country seeking accession, the Union

should provide, upon request of Indonesia, and to the extent possible, any relevant information

regarding any matter covered by this Agreement.

3. For greater certainty, this Agreement shall apply to trade and investment between the new

Member State of the Union and Indonesia from the date of accession of that new Member State to

the Union.

4. In order to facilitate the implementation of paragraph 3, the Committee shall examine any

effect of the accession to the Union on this Agreement and decide on the necessary amendments to

this Agreement, and on any necessary adjustment or transition measures, sufficiently in advance of

the date of accession of the new Member State to the Union. Such decision shall take effect on the

date of accession of the new Member State to the Union.

5. The Union shall notify Indonesia of the entry into force of any accession to the Union.

& /en 91

ARTICLE 6.16

Authentic texts

This Agreement is drawn up in duplicate and is authentic in the language in which it was

negotiated.

ET ET

EUROOPA KOMISJON

Brüssel, 29.6.2026 COM(2026) 342 final

2026/0184 (NLE)

Ettepanek:

NÕUKOGU OTSUS

Euroopa Liidu ja Indoneesia vahelise investeeringute kaitse lepingu allkirjastamise

kohta

ET 1 ET

SELETUSKIRI

1. ETTEPANEKU TAUST

• Ettepaneku põhjused ja eesmärgid

Indoneesia oli 2025. aastal ELi suuruselt 30. kaubanduspartner maailmas ja ELi viies

kaubanduspartner Kagu-Aasia Maade Assotsiatsiooni (ASEAN) riikide seas, samas kui EL oli

Indoneesia suuruselt neljas kaubanduspartner, kelle arvele langes 6 % kogu tema

kaubandusest. Kahe partneri kahepoolse kaubanduse maht oli 2025. aastal 28,9 miljardit

eurot, kusjuures ELi ekspordi rahaline väärtus oli 10,2 miljardit eurot ja ELi impordi rahaline

väärtus 18,7 miljardit eurot. ELi ja Indoneesia kahepoolse teenuskaubanduse maht oli 2024.

aastal 9,3 miljardit eurot, kusjuures ELi ekspordi maht oli 5,8 miljardit eurot ja impordi maht

3,5 miljardit eurot. 2024. aastal oli ELi välismaiste otseinvesteeringute maht Indoneesias

24,7 miljardit eurot, samal ajal kui Indoneesia välismaiste otseinvesteeringute maht ELis oli

1,3 miljardit eurot.

23. aprillil 2007 andis nõukogu komisjonile loa pidada läbirääkimisi vabakaubanduslepingu

üle Kagu-Aasia Maade Assotsiatsiooni (ASEAN) riikidega, mille hulka kuulub ka Indoneesia.

Selle loaga nähti ette võimalus pidada ASEANi liikmetega kahepoolseid läbirääkimisi.

15. oktoobril 2013 andis nõukogu ELi uue, Lissaboni lepingust tuleneva pädevuse alusel

komisjonile loa ASEANi riikidega käimasolevaid läbirääkimisi laiendada, et käsitleda ka

investeeringute kaitset.

13. juulil 2016 volitas nõukogu komisjoni pidama Indoneesiaga läbirääkimisi laiaulatusliku

majanduspartnerluslepingu üle.

Läbirääkimisi laiaulatusliku majanduspartnerluslepingu üle alustasid Indoneesia

kaubandusminister Thomas Lembong ja ELi suursaadik Indoneesias Vincent Guérend

ametlikult 19. juulil 2016. Läbirääkimised hõlmasid investeeringute kaitset. Pärast Euroopa

Kohtu 16. mai 2017. aasta arvamust 2/15 otsustati siiski, et investeeringute kaitse osa peaks

olema reguleeritud eraldiseisva lepinguga (edaspidi „investeeringute kaitse leping“).

Komisjon teavitas kaubanduspoliitika komiteed oma otsusest eraldada investeeringute kaitse

leping laiaulatuslikust majanduspartnerluslepingust 2021. aastal, kui läbirääkimisi pärast

COVID-19 pandeemiat taasalustati.

Läbirääkimised Euroopa Liidu ja Indoneesia vahelise laiaulatusliku

majanduspartnerluslepingu ning investeeringute kaitse lepingu üle viidi edukalt lõpule 23.

septembril 2025, eesmärgiga luua uusi võimalusi ja õiguskindlust partneritevahelises

kaubanduses ja investeeringutes.

Investeeringute kaitse lepingu õiguslikult läbivaadatud tekst on avalikustatud ja kättesaadav

järgmise lingi kaudu:

Lepingute tekst – Kaubandus ja majandusjulgeolek – Euroopa Komisjon

Komisjon esitab järgmised nõukogu otsuste ettepanekud:

– ettepanek: nõukogu otsus Euroopa Liidu ja Indoneesia vahelise laiaulatusliku

majanduspartnerluslepingu allkirjastamise kohta;

– ettepanek: nõukogu otsus Euroopa Liidu ja Indoneesia vahelise laiaulatusliku

majanduspartnerluslepingu sõlmimise kohta;

ET 2 ET

– ettepanek: nõukogu otsus Euroopa Liidu ja Indoneesia vahelise investeeringute

kaitse lepingu allkirjastamise kohta;

– ettepanek: nõukogu otsus Euroopa Liidu ja Indoneesia vahelise investeeringute

kaitse lepingu sõlmimise kohta.

Lisatud ettepanek nõukogu otsuse kohta on õigusakt Euroopa Liidu ja Indoneesia vahelise

investeeringute kaitse lepingu allkirjastamise kohta.

• Kooskõla poliitikavaldkonnas praegu kehtivate õigusnormidega

Enne investeeringute kaitse lepingu üle peetavate läbirääkimiste lõpuleviimist pidasid EL ja

Indoneesia läbirääkimisi partnerlus- ja koostöölepingu üle, millele kirjutati alla Jakartas 9.

novembril 2009 ja mis jõustus 1. mail 2014. Leping on aluseks koostööle paljudes

valdkondades, sealhulgas inimõiguste ja kaubanduse valdkonnas, ning korrapärasele

poliitilisele dialoogile ja valdkondlikule koostööle.

Kui investeeringute kaitse leping jõustub, kehtib see koos ELi ja Indoneesia vahelise

partnerlus- ja koostöölepinguga kui erileping ning sellest saab ELi ja Indoneesia vaheliste

üldiste kahepoolsete suhete lahutamatu osa. Kahes lepingus ei ole vastuolulisi sätteid.

• Kooskõla muude liidu tegevuspõhimõtetega

Investeeringute kaitse leping on täielikult kooskõlas liidu tegevuspõhimõtetega ega nõua ELi

reeglite, õigusnormide ega standardite muutmist üheski reguleeritud valdkonnas. Lisaks

kindlustatakse investeeringute kaitse lepinguga täielikult ELi ja Indoneesia õigus kehtestada

oma territooriumil õigusnorme, et saavutada selliseid õiguspäraseid poliitilisi eesmärke nagu

avalik kõlblus, sotsiaal- ja tarbijakaitse, eraelu puutumatus ja andmekaitse, kestlik areng ja

kultuurilise mitmekesisuse edendamine ja kaitse.

2. ÕIGUSLIK ALUS, SUBSIDIAARSUS JA PROPORTSIONAALSUS

• Materiaalõiguslik alus

ELi toimimise lepingu artiklis 207 on sätestatud, et liidu ühise kaubanduspoliitika (mis

hõlmab ka välismaiseid otseinvesteeringuid) osaks on kaubanduslepingute üle läbirääkimiste

pidamine ja nende sõlmimine.

Arvestades, et investeeringute kaitse lepingu peamine eesmärk on luua ELi ja Indoneesia

vahel paremad tingimused välismaiste otseinvesteeringute arendamiseks ning kehtestada

selliste investeeringute kaitseks vajalik kord, on materiaalõiguslik alus ELi toimimise lepingu

artikkel 207.

Arvestades kavandatava lepingu eset, on asjakohane, et komisjon esitaks ettepaneku

nõukogule.

• Menetlusõiguslik alus

ELi toimimise lepingu artikli 218 lõikes 5 on sätestatud, et kui kavandatav leping ei ole

seotud eranditult või peamiselt ühise välis- ja julgeolekupoliitikaga, esitab komisjon

nõukogule ettepaneku. Nõukogu võtab vastu otsuse, millega antakse luba leping allkirjastada.

Komisjon teeb ettepaneku anda luba Euroopa Liidu ja Indoneesia vaheline investeeringute

kaitse leping allkirjastada, eeldusel et see hiljem sõlmitakse.

ET 3 ET

Lepingu allkirjastamist lubava kavandatava otsuse menetlusõiguslik alus on ELi toimimise

lepingu artikli 218 lõige 5.

• Liidu pädevus

Vastavalt Euroopa Kohtu 16. mai 2017. aasta arvamusele 2/15 ELi ja Singapuri

vabakaubanduslepingu kohta kuuluksid kõik investeeringute kaitse lepinguga hõlmatud

valdkonnad ELi ainupädevusse ning täpsemalt ELi toimimise lepingu artikli 207

kohaldamisalasse. Kohus kinnitas ELi ainupädevust ühise kaubanduspoliitika raames

vastavalt ELi toimimise lepingu artikli 207 lõikele 1 ja artikli 3 lõikele 2.

Sellest tulenevalt peab liit investeeringute kaitse lepingu allkirjastama vastavalt nõukogu

otsusele, mille aluseks on ELi toimimise lepingu artikli 218 lõige 5, ja leping sõlmitakse

vastavalt nõukogu otsusele, mille aluseks on ELi toimimise lepingu artikli 218 lõige 6, kui

Euroopa Parlamendilt on saadud nõusolek.

• Subsidiaarsus (ainupädevusse mittekuuluva valdkonna puhul)

Investeeringute kaitse lepingus, nagu see on nõukogule esitatud, ei käsitleta küsimusi, mis ei

kuulu ELi ainupädevusse.

• Proportsionaalsus

Investeeringute kaitse leping on sobiv vahend, et luua välismaiste otseinvesteeringute

arenguks parem keskkond ning kehtestada vajalik kord selliste investeeringute kaitseks ELi ja

kolmanda riigi vahel. Puuduvad alternatiivid, mis võimaldaksid sellist kaitset õiguslikult

siduvaks muuta.

Algatusega taotletakse otseselt välistegevuse valdkonnas seatud liidu eesmärki ja toetatakse

poliitilist prioriteeti „EL kui tugevam tegija rahvusvahelisel tasandil“. Algatus on kooskõlas

ELi üldise strateegia eesmärgiga teha koostööd teistega ja töötada vastutustundlikult ümber

oma välised partnerlussuhted, et saavutada ELi välistegevuses seatud sihid. See aitab

saavutada ELi kaubandus- ja arengueesmärke.

• Vahendi valik

Käesolev ettepanek on kooskõlas ELi toimimise lepingu artikli 218 lõikega 5, milles nähakse

ette, et otsused rahvusvaheliste lepingute allkirjastamise kohta võtab vastu nõukogu.

Käesoleva ettepaneku eesmärgi saavutamiseks ei ole võimalik kasutada ühtki muud

õiguslikku vahendit.

3. JÄRELHINDAMISE, SIDUSRÜHMADEGA KONSULTEERIMISE JA MÕJU

HINDAMISE TULEMUSED

• Konsulteerimine sidusrühmadega

Enne ja pärast läbirääkimisi teavitati ELi liikmesriike korrapäraselt ning nendega konsulteeriti

nõukogu kaubanduspoliitika komitee vahendusel, sealhulgas selle teenuseid ja investeeringuid

käsitlevas allkomitees suuliselt ja kirjalikult läbirääkimiste erinevate aspektide üle.

Parlamendi rahvusvahelise kaubanduse komisjoni kaudu hoiti Euroopa Parlamenti

korrapäraselt kursis läbirääkimiste tulemustega ja konsulteeriti temaga. Läbirääkimiste

tulemusena jooksvalt koostatud teksti levitati kogu protsessi vältel mõlemas institutsioonis.

Paralleelselt läbirääkimistega tellis komisjon ELi ja Indoneesia vahelise laiaulatusliku

partnerluslepingu jätkusuutlikkuse mõjuhinnangu.

ET 4 ET

Jätkusuutlikkuse mõjuhinnangus, mis valmis 2019. aasta septembris, et toetada läbirääkimisi

vabakaubandus- ja investeeringute kaitse lepingu üle, uuriti, kuidas läbiräägitava

laiaulatusliku partnerluslepingu kaubandus- ja investeerimissätted võivad mõjutada

majanduslikke, sotsiaalseid, inimõigusalaseid ja keskkonnaküsimusi ELis ja Indoneesias.

Mõjuhinnang tugines analüüsile, mis esitati 2009. aastal tehtud jätkusuutlikkuse

mõjuhinnangus, millega toetati piirkondadevahelisi läbirääkimisi ELi-ASEANi

kaubanduslepingu üle, kuid selles esitati ajakohasemat teavet ning keskenduti selgelt üksnes

Indoneesiaga peetavate kahepoolsete läbirääkimiste eripärale ja võimalikule mõjule.

Üldiselt jõuti jätkusuutlikkuse mõjuhinnangus järeldusele, et lepingul peaks olema positiivne

mõju mõlemale lepinguosalisele ja nende ühiskonnale kõigi peamiste majandusnäitajate

(SKP, heaolu, ülemaailmne ja kahepoolne kaubandus) lõikes, kusjuures nende suhteline ulatus

Indoneesias on kahe riigi majanduse suhtelise suuruse erinevuste tõttu suurem kui ELis.

Jätkusuutlikkuse mõjuhinnangu kontekstis ja läbirääkimiste vältel andis komisjon

kodanikuühiskonna organisatsioonidele võimaluse teha oma hääl kuuldavaks, esitada

küsimusi ning aidata kaasa usaldusväärsele, tõenduspõhisele ja läbipaistvale ühiskondlikule

arutelule. Selleks korraldati spetsiaalsed kodanikuühiskonna dialoogid, seminar Indoneesia

kohalikele sidusrühmadele, kahepoolseid kohtumisi, küsitlusi ja veebipõhiseid uuringuid.

Lisaks on komisjon läbirääkimiste käigus ja oma läbipaistvuspoliitikat järgides oma

veebisaidil avaldanud ja korrapäraselt ajakohastanud läbirääkimisvoorude aruandeid,

tekstiettepanekuid, pressiteateid, teabelehti ja taustteabe materjale.

• Eksperdiarvamuste kogumine ja kasutamine

Laiaulatusliku partnerluslepingu mõjuhinnangu koostas komisjoni kaubanduse

peadirektoraadi tellimusel sõltumatute konsultatsiooniettevõtete konsortsium, mida juhtis

Development Solutions.

• Mõjuhinnang

ELi ja Kagu-Aasia riikide vaheliste kahepoolsete vabakaubanduslepingute üle peetavaid

läbirääkimisi käsitleti mõjuhinnangus, mis koostati ajal, mil komisjon esitas ettepaneku

läbirääkimisvolituste ning ELi ja ASEANi vabakaubanduslepingu kohta.

• Õigusnormide toimivus ja lihtsustamine

Investeeringute kaitse lepingu suhtes ei kohaldata õigusloome kvaliteedi ja tulemuslikkuse

programmi menetlusi.

• Põhiõigused

Ettepanek ei mõjuta põhiõiguste kaitset liidus.

4. MÕJU EELARVELE

Investeeringute kaitse lepingul puudub negatiivne finantsmõju ELi eelarvele.

5. MUU TEAVE

• Rakenduskavad ning järelevalve, hindamise ja aruandluse kord

Investeeringute kaitse leping sisaldab institutsioonilisi sätteid, millega nähakse ette lepingu

rakendamist, toimimist ja mõju pidevalt jälgivate rakendusasutuste struktuur.

ET 5 ET

Investeeringute kaitse lepingu institutsiooniliste sätete peatükiga luuakse komitee, mille

peamine ülesanne on jälgida ja lihtsustada lepingu rakendamist ja kohaldamist.

Komitee vahetab lepingu rakendamisega seotud teemadel arvamusi kodanikuühiskonna

dialoogis osalevate kodanikuühiskonna esindajatega.

Investeeringute kaitse lepinguga luuakse ka sisenõuanderühmad, kus on tasakaalustatult

esindatud sõltumatud kodanikuühiskonna organisatsioonid, ning need on loodud paljusid

sidusrühmi kaasava lähenemisviisi põhjal, hõlmates asjaomaseid majandus-, sotsiaal- ja

keskkonnaküsimustega tegelevaid huvirühmi. Sisenõuanderühmad võivad esitada arvamusi ja

soovitusi investeeringute kaitse lepingu toimimise ja rakendamise kohta ning kohtuvad kord

aastas.

• Selgitavad dokumendid (direktiivide puhul)

Ei kohaldata.

• Ettepaneku sätete üksikasjalik selgitus

Investeeringute kaitse lepingu sätetega kehtestatakse õigusraamistik investorite ja nende

investeeringute kaitseks ELi ja Indoneesia territooriumidel. Investeeringute kaitse leping

tagab sobiva tasakaalu ühelt poolt investorite ja nende investeeringute kaitse ning teiselt poolt

valitsuste õiguse vahel kehtestada avalikes huvides õigusnorme.

Investeeringute kaitset käsitlevas jaos sisalduvad sisulised kohustused kajastavad täpselt ELi

reformitud lähenemisviisi, mis on lisatud kõikidesse seni sõlmitud ELi lepingutesse. Eelkõige

kinnitatakse asjakohastes sätetes lepinguosaliste reguleerimisõigust ja kinnitatakse, et

investeeringute suhtes kohaldatav õigusraamistik võib muutuda, sealhulgas viisil, mis võib

konkreetseid investeeringuid kahjustada.

Investeeringute kaitset käsitlevate sätete aluseks on selged ja täpsed normid, mis annavad

välisinvestoritele põhitagatised otsustamisel, kas investeerida vastavalt ELi või Indoneesiasse.

Lisaks mittediskrimineerimiskohustustele hõlmavad need tagatised kaitset ilma hüvitiseta

sundvõõrandamise eest, õiglase ja võrdse kohtlemise ning füüsilise julgeolekuga seotud

kohustusi, sõja või muu relvastatud konflikti tõttu tekkinud kahju hüvitamist ning rahaliste

vahendite vaba ülekandmist. Oluline on see, et sätetes määratletakse täpselt asjaolud, mille

korral võib lugeda lepinguosalise õiglase ja võrdse kohtlemise standardit rikkunuks, piirates

seeläbi märkimisväärselt kaalutlusõigusel põhineva tõlgendamise võimalusi vaidluste korral.

Nende kaitsenormide suhtes kohaldatakse ka konkreetseid erandeid, mille eesmärk on

säilitada vajaduse korral täiendav poliitiline manööverdamisruum, sealhulgas

usaldatavusnõuetega seotud erandite, julgeolekuerandite ja üldiste erandite kaudu.

Investeeringute kaitse lepingut toetab ka korralik vaidluste lahendamise mehhanism, mis

hõlmab a) investori ja riigi vahelist vahendamist ja b) riikidevaheliste vaidluste lahendamist.

Riikidevaheliste vaidluste lahendamise mehhanismiga tagatakse, et lepingus sätestatud

õigused on kaitstavad ja kohustuste täitmist saab tagada. Samuti kohustuvad EL ja Indoneesia

taasalustama läbirääkimisi ühe lepinguosalise ja teise lepinguosalise investori vaheliste

investeeringuvaidluste lahendamise üle ning maksustamismeetmeid ja sundvõõrandamist

käsitlevate tõlgendamissuuniste üle hiljemalt investeeringute kaitse lepingu jõustumise

kuupäeval. Seda tehes lepivad pooled kokku, et võtavad arvesse asjaomastel rahvusvahelistel

foorumitel investeerimisvaidluste lahendamise reformimisel tehtud edusamme.

• Lepingu allkirjastamine ja tekst 

Investeeringute kaitse lepingu tekst esitatakse nõukogule koos käesoleva ettepanekuga.

ET 6 ET

Vastavalt aluslepingutele tagab komisjon investeeringute kaitse lepingu allkirjastamise,

eeldusel et see hiljem sõlmitakse.

ET 7 ET

2026/0184 (NLE)

Ettepanek:

NÕUKOGU OTSUS

Euroopa Liidu ja Indoneesia vahelise investeeringute kaitse lepingu allkirjastamise

kohta

EUROOPA LIIDU NÕUKOGU,

võttes arvesse Euroopa Liidu toimimise lepingut, eriti selle artikli 207 lõike 4 esimest lõiku

koostoimes artikli 218 lõikega 5,

võttes arvesse Euroopa Komisjoni ettepanekut,

ning arvestades järgmist:

(1) 23. aprillil 2007 andis nõukogu komisjonile loa pidada läbirääkimisi

vabakaubanduslepingu üle Kagu-Aasia Maade Assotsiatsiooni (ASEAN) riikidega,

mille hulka kuulub ka Indoneesia. Selle loaga nähti ette kahepoolsete läbirääkimiste

võimalus.

(2) 2013. aasta oktoobris laiendas nõukogu oma läbirääkimisjuhiste kohaldamisala, et

lisada investeeringute kaitset käsitlevad sätted.

(3) 13. juulil 2016 volitas nõukogu komisjoni pidama Indoneesiaga läbirääkimisi

laiaulatusliku majanduspartnerluslepingu, sealhulgas investeeringute kaitse üle. Võttes

arvesse Euroopa Liidu Kohtu 16. mai 2017. aasta arvamust 2/15, otsustati sõlmida

eraldi investeeringute kaitse leping.

(4) Läbirääkimised Euroopa Liidu ja Indoneesia vahelise investeeringute kaitse lepingu

(edaspidi „leping“) üle viidi edukalt lõpule 23. septembril 2025 nagu laiaulatuslikku

majanduspartnerluslepingut käsitlevad läbirääkimisedki.

(5) Indoneesiaga investeeringute kaitse korra loomise kaudu peaks leping tagama liidu

ühise kaubanduspoliitika edendamise.

(6) Seetõttu tuleks leping allkirjastada,

ON VASTU VÕTNUD KÄESOLEVA OTSUSE:

Artikkel 1

Käesolevaga antakse luba allkirjastada Euroopa Liidu ja Indoneesia vaheline investeeringute

kaitse leping, tingimusel et kõnealune leping sõlmitakse.

ET 8 ET

Artikkel 2

Käesolev otsus jõustub selle vastuvõtmise päeval.

Brüssel,

Nõukogu nimel

eesistuja

EN EN

EUROPEAN COMMISSION

Brussels, 29.6.2026 COM(2026) 342 final

ANNEX 2

ANNEX

to the

Proposal for a Council Decision

on the signing of the Investment Protection Agreement between the European Union

and Indonesia

& /en 1

ANNEX 2-A

EXPROPRIATION

The Parties confirm their shared understanding that:

1. Expropriation may be either direct or indirect:

(a) direct expropriation occurs when an investment is nationalised or otherwise directly

expropriated through formal transfer of title or outright seizure;

(b) indirect expropriation occurs when a measure or series of measures by a Party has an effect

equivalent to direct expropriation, in that it substantially deprives the investor of the

fundamental attributes of property in its investment, including the right to use, enjoy and

dispose of its investment, without formal transfer of title or outright seizure.

2. The determination of whether a measure or series of measures by a Party, in a specific

situation, constitutes an indirect expropriation requires a case-by-case, fact-based inquiry that

considers, among other factors:

(a) the economic impact of the measure or series of measures, although the sole fact that a

measure or series of measures of a Party has an adverse effect on the economic value of an

investment does not establish that an indirect expropriation has occurred;

& /en 2

(b) the duration of the measure or series of measures by a Party;

(c) the character of the measure or series of measures, notably their object and context;

(d) whether the expectations of the investor arising out of the covered investment were distinct

and reasonable.

3. For greater certainty, non-discriminatory measures by a Party that are designed and applied to

protect legitimate policy objectives, such as the protection of public health, safety, the environment

including the tackling of climate change, or public morals, social and consumer protection or

promotion and protection of cultural diversity, do not constitute indirect expropriation, except in

rare circumstances where they are manifestly excessive in light of the above-mentioned objectives.

________________

& /en 1

ANNEX 2-B

COMPETENT AUTHORITIES MENTIONED IN ARTICLE 2.1(5)

In the case of the Union, the competent authorities entitled to order the actions referred to in

Article 2.1(5) are the European Commission or a court or tribunal of a Member State when applying

Union law on State aid.

In the case of Indonesia, the competent authority entitled to order the actions referred to in

Article 2.1(5) is the Government of Indonesia pursuant to its law.

________________

& /en 1

ANNEX 4-A

RULES OF PROCEDURE

I. Notifications

1. Any request, notice, written submission or other document (hereinafter referred to as

"notification") of:

(a) the panel shall be sent to both Parties at the same time;

(b) a Party, which is addressed to the panel, shall be copied to the other Party at the same time;

and

(c) a Party, which is addressed to the other Party, shall be copied to the panel at the same time, as

appropriate.

Unless proven otherwise, such notification shall be deemed to be delivered on the date of its

sending.

2. All notifications shall be addressed to the Directorate-General for Trade and Economic

Security of the European Commission and to the Directorate-General of Legal Affairs and

International Treaties, Ministry of Foreign Affairs of Indonesia, respectively.

& /en 2

3. Minor errors of a clerical nature in a notification related to a panel proceeding may be

corrected by delivery of a new document clearly indicating the changes.

4. If the last day for delivery of a document falls on a non-working day of the institutions of the

Union or of the Government of Indonesia, the time period for the delivery of the document shall end

on the first following working day. For the purpose of determining the beginning and the end of a

calendar day, the time zone of the Party complained against shall be applicable.

II. Appointment of panellists

5. If pursuant to Article 4.6, a panellist is selected by lot, the co-chair of the Committee of the

complaining Party shall promptly inform the co-chair of the Committee of the Party complained

against of the date, time and venue of the selection by lot. The Party complained against may, if it

so chooses, be present during the selection by lot. In any event, the selection by lot shall be carried

out with the Party or Parties that are present.

6. The co-chair of the Committee of the complaining Party shall notify, in writing, including

electronically, each individual who has been selected to serve as a panellist. Each individual shall

confirm their availability to both Parties within five days after the date of receipt of the notification.

& /en 3

7. For the purposes of Article 4.6, the co-chair of the Committee of the complaining Party shall

select by lot the panellist or chairperson:

(a) if a sub-list referred to in point (a) or (b) of Article 4.7(1) has not yet been established, from

those individuals who have been formally proposed by a Party as panellists for its sub-list or,

in the absence of those, from the individuals who have been formally proposed by the other

Party for that Party's sub-list;

(b) if the sub-list referred to in point (c) of Article 4.7(1) has not yet been established, from the

individuals who have been formally proposed by one or both Parties for the sub-list of

chairpersons.

III. Expenses

8. The Parties shall agree, at the latest by the time all the panellists have accepted their

appointment in accordance with Article 4.6(6), on the remuneration and expenses of the panellists

and assistants, prepare any necessary appointment contracts, and ensure their prompt signature. The

Committee may adopt a decision setting out the parameters or other details for the remuneration and

expenses of panellists and of the mediator, including any related expenses that could be incurred in

the panel proceedings. Unless otherwise provided for in such a decision, the remuneration and

expenses of the panellists shall be based on WTO standards. The remuneration of an assistant or

assistants of each panellist shall not exceed 50 % of the remuneration of that panellist. This Rule

applies to mediators mutatis mutandis.

& /en 4

IV. Organisational meeting

9. Unless agreed otherwise, the Parties shall meet the panel within seven days after its

establishment in order to determine such matters as the Parties or the panel deem appropriate,

including working procedures and the timetable of the proceedings.

Panellists and representatives of the Parties may take part in this meeting through any appropriate

means including telephone, video-conference or other electronic means of communication.

V. Written submissions

10. The complaining Party shall deliver its written submission no later than 20 days after the date

of establishment of the panel. The Party complained against shall deliver its written submission no

later than 20 days after the date of receipt of the written submission of the complaining Party.

11. If the Party complained against raises novel issues or defences the complaining Party has not

addressed, the complaining Party may choose to deliver a second written submission within 15 days

after the date of receipt of the first written submission of the Party complained against. The

complaining Party shall assess whether the benefit of a second written submission is sufficient when

weighted against the additional delay. In such case, the Party complained against may submit its

response within 15 days after the date of receipt of the second written submission of the

complaining Party.

& /en 5

VI. Operation of the panel

12. The chairperson of the panel shall preside at all its meetings. The panel may delegate to the

chairperson the authority to make administrative and procedural decisions.

13. Unless otherwise provided in Chapter 4 (Dispute Settlement between the Parties) or in this

Annex, the panel may conduct its activities by any appropriate means, including telephone, video-

conference or other means of electronic communication.

14. Only panellists may take part in the deliberations of the panel, but the panel may permit their

assistants to be present at its deliberations.

15. The drafting of any decision and report shall remain the exclusive responsibility of the panel

and shall not be delegated.

16. Where a procedural question arises that is not covered by Chapter 4 (Dispute Settlement

between the Parties) and its Annexes, the panel, after consulting the Parties, may adopt an

appropriate procedure that is compatible with those provisions.

& /en 6

17. If the panel considers that there is a need to modify any of the time periods for the

proceedings other than the time periods set out in Chapter 4 (Dispute Settlement between the

Parties) or to make any other procedural or administrative adjustment, it shall inform the Parties, in

writing, including electronically, and after consultation of the Parties, of the reasons for the

modification or adjustment and of the time period or adjustment needed. Any Party may propose to

the panel such procedural or administrative adjustments.

VII. Replacement

18. If a Party considers that a panellist does not comply with the requirements of Annex 4-B

(Code of Conduct for Panellists and Mediators) and for this reason should be replaced, that Party

shall notify the other Party within 15 days from the time at which it obtained sufficient evidence of

the panellist's alleged failure to comply with the requirements of Annex 4-B (Code of Conduct for

Panellists and Mediators).

19. The Parties shall consult within 15 days from the date of notification referred to in Rule 18.

They shall inform the panellist of their alleged failure and may request the panellist to take steps to

remedy the failure. They may also, if they so agree, remove the panellist and select a new panellist

in accordance with Article 4.6.

20. If the Parties fail to agree on the need to replace a panellist other than the chairperson of the

panel, either Party may request that this matter be referred to the chairperson of the panel, whose

decision shall be final.

& /en 7

If the chairperson of the panel finds that the panellist does not comply with the requirements of

Annex 4-B (Code of Conduct for Panellists and Mediators), that panellist shall be removed and a

new panellist shall be selected in accordance with Article 4.6.

21. If the Parties fail to agree on the need to replace the chairperson, either Party may request that

this matter be referred to one of the other individuals on the sub-list of chairpersons established

under Article 4.7. Their name shall be selected by lot by the co-chair of the Committee from the

requesting Party, or that co-chair's delegate. The decision by the selected person on the need to

replace the chairperson shall be final.

If this person finds that the chairperson does not comply with the requirements of Annex 4-B (Code

of Conduct for Panellists and Mediators), the chairperson shall be removed and a new chairperson

shall be selected in accordance with Article 4.6.

VIII. Hearings

22. Based on the timetable determined pursuant to Rule 9 of this Annex, after consulting with the

Parties and the other panellists, the chairperson of the panel shall notify the Parties the date, time

and venue of the hearing. This information shall be made publicly available by the Party in which

the hearing takes place, unless the hearing is closed to the public.

& /en 8

23. Unless the Parties agree otherwise, the hearing shall be held in Brussels if the complaining

Party is Indonesia and in Jakarta if the complaining Party is the Union. The Party complained

against shall bear the expenses derived from the logistical administration of the hearing.

24. Notwithstanding Rule 23, the panel may decide, on request of a Party, to hold a virtual or

hybrid hearing and make appropriate arrangements, taking into account the rights of due process

and the need to ensure transparency in accordance with Article 4.34.

25. The panel may convene additional hearings if the Parties so agree.

26. All panellists shall be present during the entirety of the hearing.

27. Unless the Parties agree otherwise, the following persons may attend the hearing, irrespective

of whether the hearing is open to the public or not:

(a) representatives of a Party;

(b) advisers;

(c) assistants and administrative staff;

(d) interpreters, translators and court reporters of the panel; and

(e) experts, as decided by the panel pursuant to Article 4.22(2).

& /en 9

28. No later than five days before the date of a hearing, each Party shall deliver to the panel and

to the other Party a list of the names of the persons who will make oral arguments or presentations

at the hearing on behalf of that Party and of other representatives and advisers who will be attending

the hearing.

29. The panel shall conduct the hearing in the following manner, ensuring that the complaining

Party and the Party complained against are afforded equal time to present the argument and rebuttal

argument:

(a) Argument

(i) argument of the complaining Party;

(ii) argument of the Party complained against.

(b) Rebuttal Argument

(i) reply of the complaining Party;

(ii) counter-reply of the Party complained against.

30. The panel may direct questions to either Party at any time during the hearing.

& /en 10

31. The panel shall arrange for either a transcript or a video and audio recording of the hearing to

be prepared and delivered to the Parties as soon as possible after the hearing. The Parties may

comment on the transcript or on the video and audio recording, and the panel may consider those

comments and deliver any revised version of the transcript to the Parties as soon as possible. The

cost of a full transcript or a video and audio recording shall be jointly shared between the Parties.

32. Each Party may deliver a supplementary written submission concerning any matter that arose

during the hearing within 10 days after the date of the hearing.

IX. Questions in writing

33. The panel may at any time during the proceedings submit questions in writing to one or both

Parties. Any questions submitted to one Party shall be copied to the other Party.

34. Each Party shall provide the other Party with a copy of its responses to the questions

submitted by the panel. The other Party shall have an opportunity to provide comments in writing

on the Party's responses within six days after the receipt of such copy.

X. Confidentiality

35. Each Party and the panel shall treat as confidential information that qualifies as confidential

pursuant to Rule 36. If a Party submits to the panel a written submission which contains

confidential information, it shall also provide, within 15 days, a submission without the confidential

information and which can be disclosed to the public.

& /en 11

36. Confidential information consists of:

(a) confidential business information;

(b) information that is protected against being made available to the public under this Agreement;

(c) information that is protected against being made available to the public, in the case of

information of the complaining Party, under the law of the complaining Party, and in the case

of information of the Party complained against, under the law of the Party complained

against; or

(d) information the disclosure of which would impede law enforcement.

If the Parties disagree on whether information qualifies as confidential, the panel shall decide, on

request of a Party, after consultation with the Parties.

37. Nothing in this Annex shall preclude a Party from disclosing statements of its own positions

to the public to the extent that, when making reference to information submitted by the other Party,

it does not disclose any information designated by the other Party as confidential.

38. The panel shall meet in closed session if the submission and arguments of a Party contain

confidential information. The Parties shall maintain the confidentiality of the panel hearings if the

hearings are held in closed session.

& /en 12

XI. Ex parte contacts

39. The panel shall not meet or communicate with a Party in the absence of the other Party.

40. A panellist shall not discuss any aspect of the subject matter of the proceedings with one Party

or both Parties in the absence of the other panellists.

41. A Party shall not have any contact with a panellist. Any contact between a Party and a person

who is under consideration for selection as a panellist shall be limited to issues relating to the

selection process and appointment.

XII. Amicus curiae submissions

42. The panel may receive unsolicited written submissions from natural persons of a Party or

legal persons established in the territory of a Party who are independent from the governments of

the Parties, provided that they:

(a) are received by the panel by a date determined by the panel and which shall not be later than

the date set for the first written submission of the Party complained against;

(b) are concise and in no case longer than 15 pages, including any annexes, typed at double

space;

& /en 13

(c) are directly relevant to a factual or a legal issue under consideration by the panel and the

natural or legal person concerned explains how the submission would assist the panel in

determining such factual or legal issue by bringing a perspective, particular knowledge, or insight

that is different from that of the Parties;

(d) contain a description of the person making the submission, including for a natural person their

nationality and for a legal person its place of establishment, the nature of its activities, its legal

status, its general objectives and its source of financing;

(e) specify the nature of the interest that the person has in the panel proceedings; and

(f) are drafted in the working language determined in accordance with Rule 46 of this Annex.

The Parties may agree to modify the conditions in points (a) to (f) within five days after the date of

the establishment of the panel.

43. The submissions shall be delivered to the Parties for their comments. The Parties may submit

comments to the panel within 10 days after the date of their receipt.

44. The panel shall list in its report all the submissions it has received pursuant to Rule 42 of this

Annex. The panel shall not be obliged to address in its report the arguments made in such

submissions. If the panel addresses the arguments made therein, it shall also take into account any

comments made by the Parties pursuant to Rule 43 of this Annex.

& /en 14

XIII. Urgent cases

45. In cases of urgency referred to in Article 4.11, the panel, after consulting the Parties, shall

adjust, as appropriate, the time periods set out in this Annex. The panel shall notify the Parties of

those adjustments.

XIV. Translation and interpretation

46. During the consultations referred to in Article 4.4 and no later than the meeting referred to in

Rule 9 of this Annex, the Parties shall endeavour to agree on a working language for the

proceedings before the panel. If the Parties are unable to agree on a working language, the language

in which the Agreement was negotiated shall be the working language for the panel procedure.

47. If a Party submits a document in a language that is not the working language, it shall at the

same time submit a translation in a working language at its own cost.

48. Panel reports and decisions shall be issued in the working language.

49. Any Party may provide comments on the accuracy of the translation of any document into the

working language in accordance with Rule 47.

& /en 15

XV. Other procedures

50. The time periods laid down in this Annex shall be adjusted in line with the special time

periods provided for the adoption of a report or decision by the panel in the proceedings under

Articles 4.15, 4.16, 4.17, 4.18 and 4.19.

________________

& /en 1

ANNEX 4-B

CODE OF CONDUCT FOR PANELLISTS AND MEDIATORS

I. Governing principles

1. In order to preserve the integrity and impartiality of the dispute settlement mechanism, each

candidate and panellist shall:

(a) get acquainted with this Annex;

(b) be independent and impartial;

(c) avoid direct or indirect conflicts of interest;

(d) avoid impropriety or bias and the appearance of impropriety or bias;

(e) observe high standards of conduct; and

(f) not be influenced by self-interest, outside pressure, political considerations, public opinion,

loyalty to a Party or fear of criticism.

2. A panellist shall not, directly or indirectly, incur any obligation or accept any benefit that

would in any way interfere, or appear to interfere, with the proper performance of their duties.

& /en 2

3. A panellist shall not use their position on the panel to advance any personal or private

interests. A panellist shall avoid actions that may create the impression that others are in a special

position to influence them.

4. A panellist shall not allow past or existing financial, business, professional, personal, or social

relationships or responsibilities to influence their conduct or judgement.

5. A panellist shall avoid entering into any relationship or acquiring any financial interest that is

likely to affect their impartiality or that might reasonably create an appearance of impropriety or

bias.

II. Disclosure obligations

6. Prior to the acceptance of their appointment as a panellist pursuant to Article 4.6, a candidate

requested to serve as a panellist shall disclose in writing to the Parties any interest, relationship or

matter that is likely to affect their independence or impartiality or that might reasonably create an

appearance of impropriety or bias in the proceedings. To that end, a candidate shall make all

reasonable efforts to become aware of any such interests, relationships and matters, including

financial, professional, employment or family interests.

7. The disclosure obligation under Rule 6 is a continuing duty which requires a panellist to

disclose any such interests, relationships or matters that may arise during any stage of the

proceedings.

& /en 3

8. A candidate or a panellist shall communicate in writing to the Committee for consideration by

the Parties any matters concerning actual or potential violations of this Annex at the earliest time

they become aware of them.

III. Duties of panellists

9. Upon acceptance of their appointment, a panellist shall be available to perform and shall

perform their duties thoroughly and expeditiously throughout the proceedings, and with fairness and

diligence.

10. A panellist shall consider only the issues that are raised in the proceedings and that are

necessary for a decision or report. A panellist shall not delegate this duty to any other person,

except as provided for in Rule 12 of Annex 4-A (Rules of Procedure).

11. A panellist shall take all appropriate steps to ensure that their assistants and administrative

staff are aware of, and comply with, the obligations of panellists under Parts I, II, III, IV and V of

this Annex.

IV. Obligations of former panellists

12. Each former panellist shall avoid actions that may create the appearance that they were biased

in carrying out their duties or that they derived advantage from any decision or report of the panel.

13. Each former panellist shall comply with the obligations in Part V of this Annex.

& /en 4

V. Confidentiality

14. A panellist shall not, at any time, disclose any confidential or non-public information

concerning the proceedings or acquired during the proceedings for which the panellist has been

appointed. A panellist shall not, in any case, disclose or use such information to gain personal

advantage or advantage for others, or to adversely affect the interest of others.

15. A panellist shall not disclose a decision or report of the panel or parts thereof prior to its

publication in accordance with Chapter 4 (Dispute Settlement between the Parties).

16. A panellist shall not, at any time, disclose the deliberations of the panel, or any panellist's

view, nor make any statements on the proceedings for which the panellist has been appointed or on

the issues in dispute in the proceedings, except to the extent required by law.

VI. Expenses

17. Each panellist shall keep a record and render a final account of the time devoted to the

proceedings and of their expenses, as well as the time and expenses of their assistants and

administrative staff.

VII. Mediators

18. This Annex shall apply to mediators mutatis mutandis.

________________