COM(2025) 811 Ettepanek: NÕUKOGU OTSUS Euroopa Liidu ja Mehhiko Ühendriikide vahelise kaubanduse vahelepingu Euroopa Liidu nimel allkirjastamise kohta

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EUROPEAN COMMISSION

Brussels, 3.9.2025

COM(2025) 811 final

2025/0270 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, of the Interim Agreement on Trade

between the European Union and the United Mexican States

EN 1 EN

EXPLANATORY MEMORANDUM

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The attached proposal constitutes the legal instrument for authorising the signature of the

Interim Agreement on Trade between the European Union and the United Mexican States

(hereinafter referred to as ‘the ITA’).

Relations between the European Union (‘EU’) and the United Mexican States ('Mexico') are

currently based on the Economic Partnership, Political Coordination and Cooperation

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

United Mexican States, of the other part (hereinafter referred to as ‘the Global Agreement’),

which entered into force on 1 October 20001. The trade pillar of the Global Agreement was

expanded by two decisions of the Joint Council: Decision No 2/2000 of the EC-Mexico Joint

Council of 23 March 2000 related to trade in goods2 and Decision No 2/2001 of the EU-

Mexico Joint Council of 27 February 2001 on trade in services3.

Since the entry into force of the Global Agreement, the EU and Mexico have deepened their

relations. In 2008, the EU and Mexico established a Strategic Partnership which introduced a

bilateral dialogue and cooperation in new key policy areas, including multilateral issues,

security and justice, macroeconomic aspects, and human rights.

In the Santiago Declaration of 27 January 2013, the Parties expressed their joint commitment

to modernise and replace the existing Global Agreement to reflect new political and economic

realities and the advancements made in their Strategic Partnership.

At the seventh EU-Mexico Summit in Brussels in June 2015, both sides reaffirmed their

willingness to launch the process of starting negotiations, in accordance with the legal

framework of each side, to modernise the Global Agreement and to reinforce the Strategic

Partnership.

On 4 May 2016, the Council of the European Union authorised the European Commission and

the High Representative of the Union for Foreign Affairs and Security Policy to negotiate a

modernised agreement with Mexico to replace the Global Agreement.

The negotiations were formally launched in May 2016. The negotiations were conducted in

consultation with the Trade Policy Committee. The European Parliament has been kept fully

informed about the outcome of the negotiations.

An agreement was reached on 17 January 2025. Trade negotiations were conducted to unfold

the full potential of the bilateral relationship and help meet current global challenges.

The modernisation of the existing EU-Mexico Global Agreement revolves around two legal

instruments:

1. The Political, Economic and Cooperation Strategic Partnership Agreement (also

known as the ‘Modernised Global Agreement’ and hereinafter referred to as the ‘MGA’),

which will include a) the political and cooperation pillar and b) the trade and investment pillar

(inclusive of investment protection provisions); and

1 OJ L276, 28.10.2000, p. 44-80. 2 OJ L 157, 30.6.2000, p. 10–29. 3 OJ L 70, 12.3.2001, p. 7–50.

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2. the Interim Agreement on Trade (hereinafter referred to as ‘the ITA’ or ‘the

Agreement’) covering trade and investment liberalisation.

The ITA is intended to be signed at the same time as the MGA. The ITA will enter into force

following the respective notifications of the Parties pursuant to Article 33.9 of the ITA. The

ITA will expire and be replaced by the MGA upon the MGA’s full entry into force, following

its full ratification.

• Consistency with existing policy provisions in the policy area

The ITA provides a modernised comprehensive legal framework for EU-Mexico trade and

investment relations and replaces Titles III to V of the current Global Agreement, including a

set of subsequent decision by its institutional bodies, which are listed in Annex 33 to the ITA.

Over the years, the EU and Mexico have concluded, in addition to the Global Agreement,

several bilateral sectoral agreements, including the Agreement between the European

Community and the United Mexican States on the mutual recognition and protection of

designations for spirit drinks signed in Brussels on 27 May 1997 (the ‘1997 Spirits

Agreement’)4.

The 1997 Spirits Agreement is incorporated into the ITA. The other sectoral agreements not

falling within the scope of the ITA will remain in place as separate agreements.

The ITA is fully in line with the overall EU vision for its partnership with Latin America and

the Caribbean, as outlined in the Joint Communication to the European Parliament and the

Council on a New Agenda for Relations between the EU and Latin America and the

Caribbean, adopted on 7 June 2023.

In addition, the ITA is fully in line with the ‘Trade Policy Review - An Open, Sustainable and

Assertive Trade Policy’ of February 2021 which anchors trade and investment policy to

European and universal standards and values, alongside core economic interests, putting a

greater emphasis on sustainable development, human rights, tax evasion, consumer

protection, and responsible and fair trade.

• Consistency with other Union policies

The ITA is fully consistent with European Union policies and will not require the EU to

amend its rules, regulations or standards in any regulated area, e.g. technical rules and product

standards, sanitary or phytosanitary rules, regulations on food and safety, health and safety

standards, rules on GMOs, environmental protection or consumer protection.

The ITA also includes a Chapter on Trade and Sustainable Development, which links the

Agreement to the EU’s overall objectives of sustainable development and specific objectives

in the areas of labour, environment, and climate change.

Furthermore, the ITA fully safeguards public services and ensures that governments’ right to

regulate in the public interest is fully preserved by the Agreement and constitutes a basic

underlying principle thereof.

4 OJ L 152, 11.6.1997, p. 16–26.

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2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

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 ITA fall within the exclusive competence of the EU and in

particular, within the scope of Articles 91, 100(2) and 207 TFEU.

As a result, the ITA is to be signed by the Union pursuant to a decision of the Council based

on Article 218(5) TFEU.

• Subsidiarity (for non-exclusive competence)

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

exclusive competence.

• Proportionality

Trade agreements are the appropriate means to govern market access and the related areas of

comprehensive economic relations with a third country outside the EU. No alternative means

exist to render such commitments and liberalisation efforts legally binding.

This initiative directly pursues the objectives of the Union's external action and contributes to

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

Strategy’s orientations to engage with other countries and to revamp the EU’s 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.

Negotiations for the ITA with Mexico were carried out in accordance with the negotiating

directives set out by the Council. The outcome of the negotiations does not go beyond what is

necessary to achieve the policy objectives set out in the negotiating directives.

• Choice of the instrument

This proposal for a Council decision is submitted in accordance with paragraph 5 of Article

218 TFEU, which provides for the adoption by the Council of a decision authorising the

signing of international agreements. There is no other legal instrument that could be used to

achieve the objective expressed in this proposal.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER

CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

An assessment of six EU Free-Trade Agreements (including Mexico’s) commissioned by the

Commission was carried out in February 2011. An ex-post evaluation of the trade pillar of the

existing Global Agreement and an ex-ante assessment looking at options for modernisation

were completed in 2016.

The analysis of the Global Agreement demonstrated that, while the coverage of the existing

trade pillar was comprehensive at the time, there was scope for further improvements to the

rules and for achieving further market access. It also concluded that it was necessary to update

the Global Agreement to take account of the developments in the global trade landscape.

EN 4 EN

• Stakeholder consultations

The contractor for the external studies undertaken in support of the modernisation organised

numerous consultation and outreach activities, including: (i) a dedicated website for

documents and activities linked to the studies; (ii) an online survey of stakeholders, launched

in October 2014; (iii) a local stakeholder workshop in Mexico, held in July 2015; and (iv)

personal interviews.

As part of the Impact Assessment, DG Trade consulted interested stakeholders about the

modernisation, including businesses, civil society stakeholders, non-governmental

organisations, trade unions, trade associations, chambers of commerce and other private

interests. These stakeholder consultations involved a number of different consultation

activities including an open public online consultation (launched in July 2015).

The external studies, the Impact Assessment and the consultations held in the context of its

preparation, provided the Commission with input that has been of great value in the ITA

negotiations.

During the negotiations, meetings were held to debrief civil society organisations on the status

of the negotiations and to exchange views on the modernisation (meetings in April and

November 2017 in Brussels and in July 2017 in Mexico City).

Negotiations of the ITA were carried out in consultation with the Trade Policy Committee, as

the special committee designated by the Council in accordance with Article 218(4) TFEU.

The European Parliament and the European Economic and Social committee were also

regularly informed through the Committee on International Trade (INTA), notably its

Monitoring Group on Mexico. The texts progressively resulting from the negotiations were

circulated throughout the process to both institutions.

• Collection and use of expertise

The ‘ex-post evaluation of the implementation of the EU-Mexico Free Trade Agreement’ was

carried out by the external contractor ‘Ecorys’.

A ‘Sustainability Impact Assessment (SIA) in support of the negotiations for the

modernisation of the trade pillar of the Global Agreement with Mexico’ was carried out by the

external contractor ‘LSE Enterprise’.

• Impact assessment

The proposal was supported by an Impact Assessment published in January 20165 which

received a positive opinion6.

The Impact Assessment concluded that a comprehensive negotiation would deliver positive

benefits for both the EU and Mexico. Such benefits included increases in GDP, welfare and

exports, employment, wages (for both less skilled and more skilled employees),

competitiveness and an improved position for both the EU and Mexico in respect of other

global competitors. The inclusion of provisions on sustainable development would also have a

positive impact on the promotion and respect of human rights, on the effective

implementation of International Labour Organisation (ILO) core labour standards and on the

progress towards ratification of the fundamental ILO Convention on the right to organise and

collective bargaining not yet ratified by Mexico.

5 http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2015/swd_2015_0290_en.pdf 6 http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2015/sec_2015_0498_en.pdf

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Furthermore, the SIA carried out during the negotiations provides a comprehensive

assessment of the potential economic, social and environmental impacts of increased trade

liberalisation under the ITA in the EU and Mexico. The SIA also analyses the potential

impacts of the modernisation on human rights and on the manufacturing, agriculture and

services sectors. The terms of reference, interim report and final report are available on the

DG TRADE website:

http://ec.europa.eu/trade/policy/policy-making/analysis/policy-evaluation/sustainability-

impact-assessments/index_en.htm

The EU and Mexico have reached an ambitious agreement in line with the most recent trade

agreements such as those concluded by the EU with Canada, Japan, New Zealand and Chile.

The Agreement will open new opportunities for trade and investment in both markets and

support jobs in the EU.

The ITA will inter alia remove most customs duties, extend access to public contracts, open

up the services’ market, offer predictable conditions for investors and help prevent illegal

copying of EU innovations and traditional products. The ITA also contains all the guarantees

to ensure that the economic gains do not come at the expense of fundamental rights, social

standards, governments' right to regulate, environmental protection or consumers' health and

safety.

• Regulatory fitness and simplification

The ITA is not subject to REFIT procedures. It nevertheless contains a framework for

simplified trade and investment procedures, and reduced export and investment related costs

and will therefore increase trade and investment opportunities for small and medium-sized

enterprises (SMEs). Among the expected benefits are increased transparency, less

burdensome technical rules, compliance requirements, customs procedures and rules of origin,

enhanced protection of intellectual property rights and geographical indications, better access

to procurement tender procedures, as well as a special chapter to enable SMEs to maximise

the benefits from the Agreement.

• Fundamental rights

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

4. BUDGETARY IMPLICATIONS

The ITA would have very limited effects on national budgets and the EU budget, notably

through the loss of own resources in the form of foregone customs duties, as most of the

customs duties are already eliminated under the current Global Agreement. The loss from

tariff revenue could be around EUR 18.75 million based on current trade flows. Indirect

positive impacts are expected in terms of increases in resources linked to value added tax and

gross national income.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The ITA includes institutional provisions that set up bodies tasked with monitoring its

implementation, operation and impact.

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The institutional provisions of the ITA establish the specific functions and tasks of the Trade

Council and Trade Committee which will monitor the implementation and application of the

ITA.

The Trade Committee will assist the Trade Council in the performance of its function and

supervise the work of all Sub-Committees and other bodies established under the ITA. The

Trade Committee will be comprised of representatives of the EU and Mexico with

responsibility for trade-related matters who will meet on dates to be mutually agreed.

• Explanatory documents (for directives)

Not applicable.

• Detailed explanation of the specific provisions of the proposal

The ITA broadens the scope of the current bilateral framework and adjusts it to the new

global political and economic challenges, to the new reality of the EU-Mexico partnership and

to the level of ambition of recently concluded trade agreements and negotiations conducted by

the EU and Mexico.

The ITA creates a coherent, comprehensive, up-to-date and legally binding framework for the

EU's trade relations with Mexico. It will foster trade and investment by contributing to the

expansion and diversification of economic and trade relations.

For the first time, the ITA includes a civil society consultation mechanism extended to the

whole Agreement to allow civil society on both sides to make its voice heard on all the

provisions in the Agreement.

The ITA includes a review clause to allow certain specific elements of the agreement to be

discussed again three years after its entry into force.

In line with the objectives set by the negotiating directives, the ITA will seek to fulfil the aims

listed below:

Provide important market access for agricultural and fisheries exports and improved

rules

Under the current Global Agreement, all industrial goods and a considerable amount of

agricultural and fisheries products had already been liberalised. With the modernisation, the

chapter on Trade in Goods fully liberalised more than 98.7% of all tariff lines and removes

95% of the remaining Mexican tariffs on agricultural products.

The text on Trade in Goods contains additional and more extensive rules that will facilitate

trade between the EU and Mexico. This includes provisions on fees and formalities, import

and export licensing, prohibition of export duties, and binding of tariffs for which full duty

elimination is not envisaged (standstill). It also contains new-generation provisions on export

competition, remanufacturing, goods entered after repair and provisions to facilitate the

temporary admission of goods.

Simplify Rules of Origin

The Rules of Origin (RoO) have been reviewed and, in some cases, simplified to take into

consideration the need of industry, for example, for key industrial products such as cars and

pharmaceuticals.

Modernise and simplify border procedures

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The ITA contains an ambitious Chapter on Customs and Trade Facilitation based on the

provisions of the WTO Agreement on Trade Facilitation (TFA) and goes even further in

certain areas. The EU and Mexico undertake to apply simplified, modern and where possible

automated procedures for the efficient and expedited release of goods through streamlined

requirements on data and documentation, pre-arrival processing of customs documentation

and information, and effective and non-discriminatory risk management.

Ensure fair trade and business conditions

In order to be able to deal efficiently and effectively with unfair trading practices, improved

disciplines regarding trade remedies have been agreed. In addition, the ITA contains

provisions to protect domestic industries in the event that increased imports of a product

arising from the Agreement are causing, or risk causing, serious injury to that industry. The

ITA also contains a subsidy chapter which helps to level the playing field between EU and

Mexican companies through (i) increased transparency for subsidies to both goods and

services, (ii) consultations in case subsidies risk having a negative effect on trade, and (iii)

rules on the most harmful subsidies (restructuring aid without restructuring plan and unlimited

guarantees).

The ITA also ensures that companies respect the basic competition principles: no abuse of a

dominant position, no agreements between companies that restrict competition, and scrutiny

of the competitive effects of a merger. At the same time, the ITA will ensure a level playing

field between public and private companies on the market. State-owned enterprises,

enterprises granted special rights or privileges, and designated monopolies must act in a non-

discriminatory manner and in line with commercial considerations when buying and selling

goods and services on the market.

Enhance trade and investment in Critical Raw Materials

The ITA maintains tariff-free trade of critical raw materials, securing cheaper access and

reduced costs for these materials essential for the EU’s green and digital transitions.

Moreover, the new agreement will prohibit export monopolies and unjustified government

intervention in the price setting of raw materials and will ban export or dual pricing where

export prices are set above domestic prices. There are also specific provisions laid down for

cooperation with Mexico in the raw materials value-chains.

Ensure sustainability and gender equality

The ITA contains an ambitious and comprehensive chapter on Trade and Sustainable

Development, to better integrate sustainable development into the Parties’ trade and

investment relationship through legally binding commitments on environmental protection,

climate change and labour rights, provisions on cooperation and dialogue including with civil

society, as well as dispute settlement procedures. This chapter also includes a review clause

which requires the Parties to discuss possible further improvements of the sustainability

provisions, including the provision of countermeasures in case of breaches and the possibility

to consider the inclusion of the Paris Agreement as an essential element of the agreement. The

review will be launched upon entry into force of the agreement and should be concluded

within 12 months.

The Parties have also agreed on a Joint Declaration on trade and gender equality which

includes provisions on the effective implementation of the international obligations

addressing gender equality and women’s rights, and to strengthen cooperation on trade-related

aspects of gender equality policies and measures. The Joint Declaration forms an integral part

of the Agreement.

Focus on the needs of smaller businesses

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The ITA requires the EU and Mexico to set up a website for SMEs which will make it easier

for them to access information and therefore benefit from all provisions of the Agreement.

Contact points in the EU and Mexico will work together to take into account the specific

needs of SMEs and identify ways they can take advantage of new opportunities in each

market.

Provide opportunities for service suppliers and rules for digital trade

The ITA contains comprehensive disciplines covering market access for services and

investment in all sectors of the economy, and specific disciplines covering digital trade. It

aims to create a level playing field especially for EU service suppliers involved in sectors

such as telecommunications and financial services, as well as in areas such as delivery

services and maritime services. The ITA also provides a framework for the Parties to

recognise each other's qualifications in regulated professions such as architects, accountants,

lawyers and engineers in the future. In digital trade, the Agreement establishes disciplines that

apply horizontally (to online trade in goods, services, etc.) and that are indispensable for the

proper functioning of trade online.

Encourage investment

The ITA contains provisions liberalising investment, following the same approach as that set

out in the most ambitious EU trade agreements concluded so far. In particular, all substantive

disciplines under the investment chapter will apply to both services and non-services sectors.

In particular, investors and their investments will be able to benefit from the commitment to

provide non-discriminatory treatment in comparison to domestic or third country investors

and investments, as well as from the ambitious disciplines for market access (addressing

quantitative restrictions such as monopolies and exclusive rights, quotas, and economic needs

tests), as well as prohibition of certain performance requirements. On the energy sector, the

ITA ensures that the Most Favoured Nation principle will be applied both in case of past and

future FTAs that Mexico has entered or will enter into. The agreement therefore ensures that

EU investors will be treated on a par with investors from Mexico’s other preferential trading

partners.

Provide access to Mexican public tenders

The ITA provides for more opportunities for bidders for public procurement contracts.

Mexico has opened up its government tenders to EU companies to a greater extent than to any

of its other trading partners. EU companies will be able to bid to provide goods and services

not only at federal level but also to the most economically important Mexican states, being the

first non-Mexican companies to be able to do so. The EU and Mexico also undertake to

subject their public procurement procedures to a modern set of rules, applying high standards

of transparency, non-discrimination and equal treatment.

Set better protection for innovation and creative works

The ITA creates a level playing field by ensuring that Mexico and the EU also follow a

common approach on enforcing Intellectual Property Rights (IPRs) and by ensuring that both

sides will take action to fight against counterfeiting, piracy and uncompetitive practices. It

ensures a high level of protection and enforcement of IPRs. It also includes the reciprocal

protection of a selected list of Geographical Indications (GIs) of the EU and Mexico. In the

case of the EU, 336 EU GIs will be protected. This is in addition to the EU spirits GIs already

protected under the 1997 EU- Mexico Spirit Agreement, which is incorporated and made part

of the ITA and will enjoy the same level of protection.

Ensure that safe agri-food products are traded without any unnecessary SPS constraints

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The ITA include a comprehensive Chapter on Sanitary and Phytosanitary matters (SPS)

providing many specific trade facilitation measures (including the elimination of pre-

clearance). This should enable faster yet safe trade. Both the EU and Mexico keep their right

to set the level of protection they consider appropriate.

Ensure that technical regulations, standards, and conformity assessment procedures are

non-discriminatory and do not create unnecessary obstacles to trade

The ITA reiterates the commitment of the EU and Mexico to base their technical regulations

on international standards and to agree on an open list of international standards setting

organisations. On conformity assessment, the ITA recognises the different approaches of the

Parties to conformity assessment and their relevant trade facilitation measures: for the EU the

use the supplier’s declaration of conformity and for Mexico the recognition of product

certification carried out in the EU.

Ensure transparency and good regulatory practices

The ITA includes a Chapter on Transparency with ambitious provisions on the publication,

administration, and review and appeal of measures of general application related to trade

matters and a chapter that lays down a set of good regulatory practices that EU and Mexico

will use when developing regulations.

Implement modern procedures on dispute settlement

The ITA includes a Chapter on State-to-State Dispute Settlement that lays down effective and

transparent modern procedures grounded in due process to prevent and solve any disputes

between Mexico and the EU.

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2025/0270 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, of the Interim Agreement on Trade

between the European Union and the United Mexican States

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular

Article 91(1), Article 100(2), and Article 207(4), first subparagraph, in conjunction with

Article 218(5) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1) On 4 May 2016, the Council authorised the European Commission and the High

Representative of the Union for Foreign Affairs and Security Policy to open

negotiations and negotiate the modernisation of the Economic Partnership, Political

Coordination and Cooperation Agreement between the European Community and its

Member States, of the one part, and the United Mexican States, of the other part (‘EU-

Mexico Global Agreement’).

(2) These negotiations were successfully concluded on 17 January 2025.

(3) The modernisation of the existing EU-Mexico Global Agreement foresees two parallel

legal instruments. The first instrument is the Political and Economic Strategic

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

part, and the United Mexican States, of the other part, that includes a Political and

Cooperation pillar and a Trade and Investment pillar (inclusive of investment

protection provisions). The second instrument is the Interim Agreement on Trade

between the European Union and the United Mexican States (hereinafter ‘the

Agreement’) which covers trade and investment liberalisation. The Agreement will

cease to have effect and will be replaced by the Modernised Global Agreement upon

entry into force of the latter.

(4) The objective of the Agreement is to foster increased and sustainable trade and

investment between the Parties by expanding and diversifying their economic and

trade relations and by creating new opportunities for workers and businesses alike, in

particular small businesses, while contributing to the promotion of sustainable

development in its social and environmental dimensions.

(5) Therefore, the Agreement should be signed on behalf of the Union, subject to its

subsequent conclusion,

EN 11 EN

HAS ADOPTED THIS DECISION:

Article 1

The signing of the Interim Agreement on Trade between the European Union and the United

Mexican States ('the Agreement') is hereby authorised, subject to the conclusion of the

Agreement. *

Article 2

This Decision shall enter into force on

Done at Brussels,

For the Council

The President

* The text of the Agreement is published in OJ L, XXXXX, ELI

EN 12 EN

LEGISLATIVE FINANCIAL STATEMENT ‘REVENUE’- FOR PROPOSALS

HAVING BUDGETARY IMPACT ON THE REVENUE SIDE OF THE BUDGET

1. NAME OF THE PROPOSAL:

Proposal for a Council Decision on the conclusion of the Interim Agreement on

Trade between the European Union and the United Mexican States.

2. BUDGET LINES:

Revenue line (Chapter/Article/Item): Chapter 12, Article 120

Amount budgeted for the year concerned (2025): EUR 21 082 004 566

(only in case of assigned revenues):

The revenues will be assigned to the following expenditure line

(Chapter/Article/Item):

3. FINANCIAL IMPACT

 Proposal has no financial implications

X Proposal has no financial impact on expenditure but has a financial impact on

revenue

 Proposal has a financial impact on assigned revenue

The effect is as follows:

(EUR million to one decimal place)

Revenue line Impact on revenue 12 months Year 2026

Chapter 12/Article 120 EUR 18.75 mn Entry into force expected

beginning 2026

0

Chapter 12/Article/120

Situation following action

Revenue line [N+15] [N+16] [N+17] [N+18] [N+19]

Chapter 12/Article 120 EUR 1

billion

EUR 1

billion

EUR 1

billion

EUR 1

billion

EUR 1

billion

Chapter/Article/Item …

(Only in case of assigned revenues, under the condition that the budget line is already

known):

EN 13 EN

Expenditure line7 Year N Year N+1

Chapter/Article/Item

…

Chapter/Article/Item

…

Expenditure line [N+2] [N+3] [N+4] [N+5]

Chapter/Article/Item

…

Chapter/Article/Item

…

4. ANTI-FRAUD MEASURES

5. OTHER REMARKS

The proposed Regulation does not incur additional costs (expenditure) in the EU

budget.

The ITA will have a financial impact on the EU budget on the side of the revenues.

The ITA will lead to an estimated loss of duties of EUR 18.75 million at the entry

into force of the Agreement.8

Indirect positive impacts are expected in terms of increases in resources linked to

value added tax and gross national income.

7 To be used only if necessary. 8 The estimated amount of revenue losses at EUR 18.75 mn is net of collection costs (a 25% has been

deducted from the estimated revenue loss of EUR 25 mn).

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EUROPEAN COMMISSION

Brussels, 3.9.2025

COM(2025) 811 final

ANNEX 1 – PART 1/2

ANNEX

to the

Proposal for a Council Decision

on the signing, on behalf of the European Union, of the Interim Agreement on Trade

between the European Union and the United Mexican States

& /en 1

INTERIM AGREEMENT ON TRADE

BETWEEN THE EUROPEAN UNION

AND THE UNITED MEXICAN STATES

& /en 2

PREAMBLE

The European Union, hereinafter referred to as "the Union" or "the EU",

and

the United Mexican States, hereinafter referred to as "Mexico",

hereinafter jointly referred to as "the Parties" or individually referred to as "Party",

CONSIDERING the strong cultural, political and economic ties which unite them;

MINDFUL of the significant contribution to strengthen those ties made by the Economic

Partnership, Political Coordination and Cooperation Agreement between the European Community

and its Member States, of the one part, and the United Mexican States, of the other part, signed in

Brussels on 8 December 1997;

CONSIDERING their joint commitment expressed in the Santiago Declaration of 27 January 2013

to modernise and replace the existing Economic Partnership, Political Coordination and

Cooperation Agreement to reflect new political and economic realities and the advancements made

in their strategic partnership;

EMPHASISING the comprehensive nature of their relationship and the importance of providing a

coherent framework for its further promotion;

& /en 3

AFFIRMING their status as strategic partners and their determination to further enhance and

deepen their partnership and their international cooperation and dialogue in order to advance their

shared interests and values;

AFFIRMING their commitment to strengthen cooperation on bilateral, regional, bi-regional, and

international issues of common concern;

RECOGNISING the interim character of this Agreement that will strengthen bilateral economic and

trade relations between the Parties, subsumed under the Modernised Global Agreement and that this

Agreement will cease to apply once the latter enters into force;

ACKNOWLEDGING the importance of a strong and effective multilateral system, based upon

international law, in preserving peace, preventing conflicts and strengthening international security

and in tackling common challenges;

REAFFIRMING their commitment to expand and diversify their trade relation in conformity with

the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to as the

"WTO Agreement") and the specific objectives and provisions set out in this Agreement;

CONVINCED that this Agreement will create a climate conducive to growth in sustainable

economic relations between them, in particular in terms of trade and investment, which are essential

to the realisation of economic and social development and technological innovation and

modernisation;

& /en 4

WELCOMING the adoption of the Resolution 70/1 adopted by the General Assembly of the United

Nations on 25 September 2015 containing the outcome document "Transforming our world:

the 2030 Agenda for Sustainable Development" (hereinafter referred to as the "2030 Agenda"), the

Paris Agreement under the United Nations Framework Convention on Climate Change, done at

Paris on 12 December 2015 (hereinafter referred to as the "Paris Agreement"), as well as the Sendai

Framework for Disaster Risk Reduction 2015-2030, adopted at the Third UN World Conference in

Sendai on 18 March 2015, the Addis Ababa Action Agenda of the Third International Conference

on Financing for Development, adopted at Addis Ababa on 13-16 July 2015, the World

Humanitarian Summit Commitments, adopted at the World Humanitarian Summit in Istanbul

on 23-24 May 2016, and the New Urban Agenda, adopted during the UN Conference on Housing

and Sustainable Urban Development (Habitat III) in Quito on 20 October 2016 (hereinafter referred

to as the "New Urban Agenda"), and calling for their swift implementation;

REAFFIRMING their commitment to overcome global challenges by promoting sustainable

development in its economic, social and environmental dimensions, by contributing to the

achievement of the Sustainable Development Goals (hereinafter referred to as the "SDGs") and

targets of the 2030 Agenda;

REAFFIRMING their commitment to promote international trade in such a way as to contribute to

sustainable development in its economic, social and environment dimensions, through partnerships

involving all relevant stakeholders, including civil society and the private sector, and to implement

this Agreement in a manner consistent with their respective laws and international labour and

environmental commitments;

& /en 5

RECOGNISING the importance of strengthening their economic, trade and investment relations,

and of promoting the liberalisation of trade and investment between them, to bring economic

growth, create new opportunities for workers and the business communities of each Party, in

particular small and medium-sized enterprises;

RECOGNISING that this Agreement contributes to enhancing consumer welfare and to ensuring a

high level of living standards and consumer protection;

ENCOURAGING enterprises operating within their territory or subject to their jurisdiction to

respect internationally recognised guidelines and principles of corporate social responsibility,

including the OECD Guidelines for Multinational Enterprises, and to pursue best practices of

responsible business conduct;

RECOGNISING that the provisions of this Agreement preserve the right of the Parties to regulate

within their territories in conformity with their internal legislation and the Parties' flexibility to

achieve legitimate policy objectives, such as public health, safety, environment, public morals and

the promotion and protection of cultural diversity, among others;

RECOGNISING the importance of transparency, good governance and the rule of law in

international trade and investment to the benefit of all stakeholders;

RESOLVED to contribute to the harmonious development and expansion of international trade and

investment by removing obstacles thereto through this Agreement and to avoid creating new

barriers to trade or investment between the Parties that could reduce the benefits of this Agreement;

HAVE AGREED AS FOLLOWS:

& /en 6

CHAPTER 1

GENERAL PROVISIONS

ARTICLE 1.1

Establishment of a Free Trade Area

The Parties establish by virtue of this Agreement a free trade area, consistent with Article XXIV of

GATT 1994 and Article V of GATS.

ARTICLE 1.2

Objectives

The objectives of this Agreement are:

(a) the expansion and diversification of trade in goods, in conformity with Article XXIV of

GATT 1994, between the Parties through the reduction or the elimination of customs duties

and non-tariff barriers to trade;

& /en 7

(b) the facilitation of trade in goods, in particular through the provisions regarding customs and

trade facilitation, standards, technical regulations and conformity assessment procedures as

well as sanitary and phytosanitary measures, while preserving the right of each Party to

regulate within its territory and to achieve public policy objectives;

(c) the liberalisation of trade in services, in conformity with Article V of GATS;

(d) the development of a framework conducive to increased investment flows by providing

transparent, stable and predictable rules governing the conditions for establishment and

operation of enterprises and the related movement of capital, and guaranteeing an appropriate

balance between the liberalisation of investments and the right of each Party to regulate in

order to achieve legitimate policy objectives;

(e) the effective and reciprocal opening of government procurement markets of the Parties;

(f) the promotion of innovation and creativity by ensuring an adequate and effective protection of

intellectual property rights, in accordance with international obligations in force between the

Parties, and the balance between this protection and the public interest;

(g) the conduct of trade and investment relations between the Parties in conformity with the

principle of free and undistorted competition;

& /en 8

(h) the promotion of sustainable development and of the development of international trade in a

manner that contributes to sustainable development, encompassing economic development,

social development and environmental protection;

(i) the establishment of an effective, fair and predictable dispute settlement mechanism to solve

disputes between the Parties on the interpretation or application of this Agreement.

ARTICLE 1.3

Definitions of General Application

For the purposes of this Agreement, and unless otherwise specified:

(a) "administrative ruling of general application" means an administrative ruling or interpretation

that applies to all persons and factual situations that fall generally within the scope of that

administrative ruling or interpretation and that establishes a norm of conduct, but does not

include:

(i) a determination or ruling made in administrative or quasi-judicial proceedings that

applies to a particular person, good or service of the other Party in a specific case; or

(ii) any other ruling that adjudicates with respect to a particular act or practice;

& /en 9

(b) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO

Agreement;

(c) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;

(d) "aircraft repair and maintenance services during which an aircraft is withdrawn from service"

means repair and maintenance activities undertaken on an aircraft or a part thereof while it is

withdrawn from service and do not include line maintenance;

(e) "Anti-dumping Agreement" means the Agreement on Implementation of Article VI of the

General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;

(f) "computer reservation system services" means services provided by computerised systems

that contain information about air carriers' schedules, availability, fares and fare rules, and

through which reservations can be made or tickets may be issued;

(g) "customs duty" means any duty or charge of any kind imposed on or in connection with the

importation of a good, it includes any surtax or surcharge imposed in connection with such

importation; but does not include any:

(i) charge equivalent to an internal tax imposed in accordance with Article 2.3;

& /en 10

(ii) anti-dumping or countervailing1 duty applied in accordance with GATT 1994, the

Anti-dumping Agreement and the SCM Agreement, as appropriate;

(iii) fee or other charge imposed on or in connection with the importation of a good that is

limited in amount to the approximate cost of services rendered; and

(iv) premium offered or collected on an imported good arising out of a tendering system

authorised for the administration of tariff rate quotas pursuant to Appendix 2-A-4

(Tariff Rate Quotas of Mexico);

(h) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of

the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;

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

(j) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of

Disputes, contained in Annex 2 to the WTO Agreement;

(k) "enterprise" 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;

1 For greater certainty, the definition of customs duty does not affect the rights and obligations

of the Parties under Chapter 5 (Trade Remedies).

& /en 11

(l) "existing" means in effect on the date of entry into force of this Agreement;

(m) "freely convertible currency" means a currency which is widely traded in international foreign

exchange markets and widely used in international transactions;

(n) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO

Agreement;

(o) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the

WTO Agreement;

(p) "goods" means both materials and products;

(q) "good of a Party" means a domestic good as this is understood in GATT 1994, and includes

originating goods of that Party;

(r) "ground handling services" means the supply at an airport, on a fee or contract basis, of airline

representation, administration and supervision services, passenger handling, baggage

handling, ramp services, catering,2 air cargo and mail handling, fuelling of an aircraft, aircraft

servicing and cleaning, surface transport, and flight operation, crew administration and flight

planning services; but does not include self-handling, security, line maintenance, aircraft

repair and maintenance; and management or operation of essential centralised airport

infrastructure such as de-icing facilities, fuel distribution systems, baggage handling systems

and fixed intra-airport transport systems;

2 Except the preparation of food.

& /en 12

(s) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding

System, including its General Rules of Interpretation, Section Notes, Chapter Notes and

Subheading Notes and amendments thereto;

(t) "measure" includes any law, regulation, rule, procedure, decision, administrative action,

requirement or practice;3

(u) "Modernised Global Agreement" or "MGA" means the Political, Economic and Cooperation

Strategic Partnership Agreement between the European Union and its Member States, of the

one part and the United Mexican States, of the other part, to be concluded;

(v) "national" means a natural person who has the nationality of one of the Member States of the

European Union or of Mexico according to their respective law or is a permanent resident of a

Party;

(w) "natural person" means4:

(i) in the case of the European Union, a person having the nationality of one of the

Member States of the European Union according to its legislation;5 and

3 For greater certainty, "measure" includes failures to act. 4 This definition applies for the purposes of Chapters 10 to 19. 5 The definition of natural persons of the European Union 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.

& /en 13

(ii) in the case of Mexico, a person having the nationality of Mexico according to its

legislation;

a natural person who is a national of Mexico and has the nationality of one of the

Member States of the European Union is deemed to be exclusively a natural person of the

Party of his or her dominant and effective nationality;

(x) "OECD" means the Organization for Economic Co-operation and Development;

(y) "originating good" means a good qualifying as originating under the rules of origin set out in

Chapter 3 (Rules of Origin and Origin Procedures);

(z) "person" means a natural person or an enterprise;

(aa) "person of a Party" means a national or an enterprise of a Party;

(bb) "preferential tariff treatment" means the rate of customs duty applicable to an originating

good pursuant to Article 2.4 (Elimination or Reduction of Customs Duties);

(cc) "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO

Agreement;

(dd) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in

Annex 1A to the WTO Agreement;

& /en 14

(ee) "selling and marketing of air transport services" means opportunities for the air carrier

concerned to sell and market freely its air transport services, including all aspects of

marketing such as market research, advertising and distribution, but does not include the

pricing of air transport services or the applicable conditions;

(ff) "service supplier" means a person that supplies or seeks to supply a service;

(gg) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary

Measures in Annex 1A to the WTO Agreement;

(hh) "state enterprise" means an enterprise that is owned or controlled by a Party;

(ii) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1A to the

WTO Agreement;

(jj) "territory" means the territory where this Agreement applies pursuant to Article 33.7

(Territorial Application);

(kk) "third country" means a country or territory outside the territorial scope of application of this

Agreement;

(ll) "Trade Council" means the Trade Council established pursuant to Article 33.1 of this

Agreement;

& /en 15

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

Rights in Annex 1C to the WTO Agreement;

(nn) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of

Treaties, done at Vienna on 23 May 1969;

(oo) "TEU" means the Treaty on European Union;

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

(qq) "WTO" means the World Trade Organization; and

(rr) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade

Organization, done at Marrakesh on 15 April 1994.

ARTICLE 1.4

Relation to the WTO Agreement

The Parties affirm their rights and obligations with respect to each other under the WTO

Agreement.

& /en 16

ARTICLE 1.5

References to Laws and other Agreements

1. Unless otherwise indicated, any reference in this Agreement to laws, either generally or by

reference to a specific statute, regulation or directive, shall be construed as a reference to the laws,

as they may be amended.

2. Unless otherwise indicated, any reference, or incorporation by means of a reference in this

Agreement to other agreements or legal instruments in whole or in part shall be construed as

including:

(a) related annexes, protocols, footnotes, interpretative notes and explanatory notes; and

(b) successor agreements to which the Parties are party or amendments that are binding on the

Parties, except where the reference affirms existing rights and obligations.

ARTICLE 1.6

Fulfilment of Obligations

1. Each Party shall adopt any general or specific measures required to fulfil the obligations

under this Agreement, including those required to ensure observance thereof by central, regional or

local governments and authorities, as well as non-governmental bodies in the exercise of powers

delegated to them.

& /en 17

2. If either Party considers that the other Party

– has failed to respect any of the principles, rights or fundamental freedoms referred to in

Article 2 of Part I of the Modernised Global Agreement; or

– has failed to comply with and implement any of its existing obligations under international

disarmament and non-proliferation treaties and agreements or other international obligations

referred to in Article 1.4 of Part II of the Modernised Global Agreement

it may take appropriate measures pursuant to the provisions in Article 2.3 paragraph 3 of Part IV of

the Modernised Global Agreement (fulfilment of obligations). For the purpose of this paragraph,

"appropriate measures" may include the suspension, in part or in full, of this Agreement.

The right conferred by this paragraph may be exercised by either Party, irrespective of whether the

relevant provisions of the Modernised Global Agreement have entered into force or are being

applied provisionally.

3. “Appropriate measures” referred to in paragraph 2 above shall be taken in full respect of

international law and shall be proportionate to the failure to implement the obligations referred to in

paragraph 2. Priority must be given to those which least disturb the functioning of this Agreement.

It is understood that suspension, in part or in full, of this Agreement would be a measure of last

resort.

& /en 18

CHAPTER 2

TRADE IN GOODS

SECTION A

General Provisions

ARTICLE 2.1

Definitions

For the purposes of this Chapter:

(a) "consular transactions" means the procedure of obtaining from a consul of the importing Party

in the territory of the exporting Party or in the territory of a third party a consular invoice or a

consular visa for a commercial invoice, certificate of origin, manifest, shipper's export

declaration or any other customs documentation required on or in connection with the

importation of a good;

& /en 19

(b) "export licensing procedure" means an administrative procedure requiring the submission of

an application or other documentation, other than that generally required for customs

clearance purposes, to the relevant administrative body or bodies of the exporting Party as a

prior condition for exportation from the territory of the exporting Party;

(c) "Import Licensing Agreement" means the Agreement on Import Licensing Procedures, set out

in Annex 1A to the WTO Agreement.

(d) "import licensing procedure" means an administrative procedure requiring the submission of

an application or other documentation, other than that generally required for customs

clearance purposes, to the relevant administrative body or bodies of the importing Party as a

prior condition for importation into the territory of the importing Party;

ARTICLE 2.2

Scope

Unless otherwise provided for in this Agreement, this Chapter applies to trade in goods of a Party.

& /en 20

ARTICLE 2.3

National Treatment

1. Each Party shall accord national treatment to the goods of the other Party in accordance with

Article III of GATT 1994, including its Notes and Supplementary Provisions. To that end,

Article III of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and

made part of this Agreement, mutatis mutandis.

2. For greater certainty, national treatment means, with respect to a level of government in

Mexico other than at the federal level, or a level of government of or in a Member State of the

European Union, treatment no less favourable than that accorded by that level of government to

like, directly competitive or substitutable goods of Mexico or the Member State, respectively.

ARTICLE 2.4

Elimination or Reduction of Customs Duties

1. Unless otherwise provided for in this Agreement, each Party shall eliminate or reduce its

customs duties on originating goods in accordance with Annex 2-A and shall not apply any customs

duty upon the entry into force of this Agreement to originating goods classified in tariff lines of

Chapters 1 to 97 of the Harmonized System other than those included respectively in

Appendices 2-A-1or 2-A-2 to Annex 2-A.

& /en 21

2. Unless otherwise provided for in this Agreement, a Party shall not increase any existing

customs duty, or adopt any new customs duty, on an originating good of the other Party.6

3. If a Party reduces its applied most-favoured-nation customs duty rate, that duty rate shall

apply to originating goods of the other Party for as long as it is lower than the customs duty rate

determined pursuant to Annex 2-A.

4. On request of a Party, the Parties shall consult to consider the possibility of improving the

tariff treatment for market access of originating goods set out in Annex 2-A. The Trade Council

may take a decision to modify Annex 2-A.7

5. For greater certainty, a Party may maintain or increase a customs duty on the originating good

as authorised by the Dispute Settlement Body of the WTO.

6 For greater certainty, following a unilateral reduction of a customs duty, a Party may raise that

customs duty to the level determined for the respective year of the tariff elimination schedule

in accordance with Annex 2-A. 7 For greater certainty; that modification shall supersede any customs duty rate or staging

category set out in Annex 2-A.

& /en 22

ARTICLE 2.5

Export Duties, Taxes or Other Charges

1. A Party shall not adopt or maintain any tax or charge on the exportation of a good to the

territory of the other Party that is in excess of that imposed on that good when destined for domestic

consumption.

2. A Party shall not adopt or maintain any duty or charge of any kind imposed on, or in

connection with, the exportation of a good to the territory of the other Party that is in excess of that

imposed on that good when destined for domestic consumption.

3. Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee

or charge that is permitted under Article 2.6.

ARTICLE 2.6

Fees and Formalities

1. Fees and other charges imposed by a Party on, or in connection with, the importation of a

good of the other Party or exportation of a good to the other Party shall be limited in amount to the

approximate cost of services rendered, and shall not represent an indirect protection to domestic

goods or a taxation of imports or exports for fiscal purposes.

& /en 23

2. A Party shall not apply a customs-processing fee on originating goods.8

3. Each Party shall publish all fees and charges it imposes in connection with importation or

exportation in such a manner as to enable governments, traders and other interested parties to

become acquainted with them.

4. A Party shall not require consular transactions, including related fees and charges, in

connection with the importation of a good of the other Party.9

ARTICLE 2.7

Goods Re-Entered after Repair or Alteration

1. "repair or alteration" means any processing operation undertaken on a good to remedy

operating defects or material damage and entailing the re-establishment of the good to its original

function or to ensure compliance with technical requirements for its use, without which the good

could no longer be used in the normal way for the purposes for which it was intended. Repair of a

good includes restoration and maintenance but does not include an operation or process that:

(a) destroys the essential characteristics of a good, or creates a new or commercially different

good;

8 For Mexico, the customs processing fee refers to the "Derecho de Trámite Aduanero". 9 For greater certainty, the importing Party may require, the consularisation of documents by its

consul with jurisdiction in the territory of the exporting Party:

(a) for investigation or audit purposes, or

(b) for the importation of household effects.

& /en 24

(b) transforms an unfinished good into a finished good; or

(c) is used to substantially change the function of a good.

2. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its

territory after that good has been temporarily exported from its territory to the territory of the other

Party for repair or alteration, regardless of whether such repair or alteration could be performed in

the territory of the Party from which the good was exported for repair or alteration.

3. Paragraph 2 does not apply to a good imported in bond, into free trade zones, or in similar

status, that is then exported for repair and is not re-imported in bond, into free trade zones, or in

similar status.

4. A Party shall not apply a customs duty to a good, regardless of its origin, imported

temporarily from the territory of the other Party for repair or alteration.

& /en 25

ARTICLE 2.8

Remanufactured Goods

1. "remanufactured good" means a good classified in Chapters 84 to 90 or in heading 9402 of

the Harmonized System, except goods included in Annex 2-B, that:

(a) is entirely or partially produced from recovered materials of goods that have been used;

(b) has similar performance and working conditions as well as life expectancy as the like good in

new condition; and

(c) is given the same warranty as the like good in new condition.

2. Unless otherwise provided for in this Agreement, a Party shall not accord to remanufactured

goods of the other Party a treatment that is less favourable than that it accords to like goods in new

condition.

3. Subject to its obligations under this Agreement and the WTO Agreement, a Party may require

that remanufactured goods:

(a) be identified as such for distribution or sale in its territory, including specifically labelled in

order to prevent deception of consumers; and

& /en 26

(b) meet all applicable technical requirements and regulations that apply to like goods in new

condition.

4. For greater certainty, Article 2.9 applies to remanufactured goods. If a Party adopts or

maintains import or export prohibitions or restrictions on used goods, it shall not apply those

measures to remanufactured goods.

ARTICLE 2.9

Import and Export Restrictions

Unless otherwise provided for in Annex 2-C, a Party shall not adopt or maintain any prohibition or

restriction on the importation of any good of the other Party or on the exportation or sale for export

of any good destined for the territory of the other Party, except in accordance with Article XI

of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article XI

of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made

part of this Agreement, mutatis mutandis.

& /en 27

ARTICLE 2.10

Import Licensing

1. Each Party shall adopt and administer any import licensing procedures in accordance with

Articles 1 to 3 of the Import Licensing Agreement.

2. Each Party shall notify to the other Party any new import licensing procedure and any

modification of existing import licensing procedures within 60 days after the date of its publication

and, if possible, no later than 60 days before the new procedure or modification takes effect. The

notification shall include the information specified in paragraph 2 of Article 5 of the Import

Licensing Agreement, as well as the electronic addresses of the official websites, referred to in

paragraph 4 of this Article. A Party shall be deemed to comply with this provision if it notifies the

relevant new import licensing procedure, or any modification thereof, to the Committee on Import

Licensing provided for in Article 4 of the Import Licensing Agreement in accordance with

paragraphs 1 to 3 of Article 5 of the Import Licensing Agreement.

3. On request of a Party, the other Party shall promptly provide any relevant information,

including the information specified in paragraph 2 of Article 5 of the Import Licensing Agreement,

regarding any import licensing procedure that it intends to adopt, has adopted or maintains, or

regarding any modification of existing licensing procedures.

& /en 28

4. Each Party shall publish on the relevant official websites the information it is required to

publish pursuant to subparagraph 4(a) of Article 1 of the Import Licensing Agreement and shall

ensure that the information specified in paragraph 2 of Article 5 of the Import Licensing Agreement

is publicly available.

ARTICLE 2.11

Export Licensing

1. Each Party shall publish any new export licensing procedure, or any modification of an

existing export licensing procedure including, if appropriate, on the relevant official websites. Such

publication shall take place, if practicable, no later than 45 days before the procedure or

modification takes effect, and in any event, no later than the date when the procedure or

modification takes effect.

2. Each Party shall notify to the other Party its existing export licensing procedures

within 60 days after the date of entry into force of this Agreement. Each Party shall notify to the

other Party any new export licensing procedure and any modification of existing export licensing

procedures, within 60 days after the date of its publication. These notifications shall include the

reference to the source where the information required pursuant to paragraph 3 is published and, if

appropriate, the address of the relevant official website.

& /en 29

3. The publication of export licensing procedures shall include the following information:

(a) the texts of its export licensing procedures and any modification thereof;

(b) the goods subject to each export licensing procedure;

(c) for each procedure, a description of the process for applying for an export license and any

criteria an applicant has to fulfil to be eligible to apply for an export license, such as

possessing an activity license, establishing or maintaining an investment, or operating through

a particular form of establishment in a Party's territory;

(d) a contact point or points from which interested persons can obtain further information on the

conditions for obtaining an export license;

(e) the administrative body or bodies to which an application or other relevant documentation is

to be submitted;

(f) a description of any measure or measures being implemented through the export licensing

procedure;

(g) the period during which each export licensing procedure will be in effect, unless the

procedure will remain in effect until it is withdrawn or revised in a new publication;

& /en 30

(h) if the Party intends to use an export licensing procedure to administer an export quota, the

overall quantity, the opening and closing dates of the quota and, if applicable, the value of the

quota; and

(i) any exemptions from or exceptions to the requirement to obtain an export license, how to

request or use those exemptions or exceptions, and the criteria for granting them.

4. For greater certainty, nothing in this Article requires a Party to grant an export license, or

prevents a Party from implementing its obligations or commitments under the United Nations

Security Council Resolutions, as well as multilateral non-proliferation regimes and export control

arrangements.

ARTICLE 2.12

Customs Valuation

The Parties affirm their rights and obligations under the Customs Valuation Agreement.

& /en 31

ARTICLE 2.13

Temporary Admission of Goods

1. Each Party shall grant temporary admission with total conditional relief from import duties, as

provided for in its laws and regulations, for the following goods, regardless of their origin:

(a) goods intended for display or use at exhibitions, fairs, meetings, demonstrations or similar

events;

(b) professional equipment, including equipment for the press or for sound or television

broadcasting, software, cinematographic equipment, and any ancillary apparatus or

accessories for such equipment, that is necessary for carrying out the business activity, trade

or profession of a person visiting the territory of the Party to perform a specified task;

(c) containers, commercial samples, advertising films and recordings and other goods imported in

connection with a commercial operation;

(d) goods imported for sports purposes;

(e) goods imported for humanitarian purposes; and

(f) animals imported for specific purposes.

& /en 32

2. Each Party may require that the goods benefiting from temporary admission in accordance

with paragraph 1:

(a) are intended for re-exportation without having undergone any change except normal

depreciation due to the use made of them;

(b) are used solely by or under the personal supervision of a national of the other Party in the

exercise of the business activity, trade, profession or sport of that person of the other Party;

(c) are not sold or leased while in its territory;

(d) are accompanied by a security, if requested by the importing Party, in an amount no greater

than the charges that would otherwise be owed on entry or final importation, releasable on

exportation of the goods;

(e) can be identified when imported and exported;

(f) are re-exported within a specified period reasonably related to the purpose of the temporary

admission; and

(g) are admitted in no greater quantity than is reasonable for their intended use.

& /en 33

3. Each Party shall permit goods temporarily admitted under this Article to be re-exported

through any customs port or office other than the one through which they were admitted.

4. Each Party shall provide that the importer or other person responsible for goods admitted in

accordance with this Article shall not be liable for failure to export the goods, within the period

fixed for temporary admission, including any lawful extension, on presentation of satisfactory proof

to the importing Party, in accordance with its customs legislation, that the goods were totally

destroyed or irretrievably lost.

ARTICLE 2.14

Cooperation

1. Special provisions on administrative cooperation between the Parties in relation to preferential

tariff treatment are set out in Annex 2-D.

2. The Parties shall annually exchange import statistics starting one year after the entry into

force of this Agreement, until the Committee on Trade in Goods decides otherwise. The exchange

of import statistics shall cover data pertaining to the most recent year available, including value and

volume, at the tariff line level for imports of goods of the other Party benefitting from preferential

duty treatment under this Agreement and of those receiving non-preferential treatment.

& /en 34

ARTICLE 2.15

Committee on Trade in Goods

The Committee on Trade in Goods established by Article 33.4.1(a) (Sub-Committees and Other

Bodies) shall:

(a) monitor the implementation and administration of this Chapter and its Annexes;

(b) promote trade in goods between the Parties, including through consultations on improving

market access tariff treatment under this Agreement and other issues, as appropriate;

(c) provide a forum to discuss and resolve any issues related to this Chapter;

(d) promptly address barriers to trade in goods between the Parties, especially those related to the

application of non-tariff measures and, if appropriate, referring such matters to the Trade

Committee for its consideration;

(e) recommend to the Trade Committee any modification of or addition to this Chapter;

(f) coordinate the data exchange for preference utilisation or any other information exchange on

trade in goods between the Parties that it may decide;

& /en 35

(g) review any future amendments of the Harmonized System to ensure that each Party's

obligations under this Agreement are not altered, and consulting to resolve any related

conflict;

(h) perform any other functions that the Trade Committee may assign to it.

SECTION B

Trade in Agricultural Goods

ARTICLE 2.16

Scope

This Section applies to measures adopted or maintained by a Party relating to trade in agricultural

goods.

& /en 36

ARTICLE 2.17

Cooperation in Multilateral Fora

1. The Parties shall cooperate under the WTO to promote a universal, rules-based, open,

non-discriminatory and equitable multilateral trading system, to advance agriculture negotiations,

and to promote the establishment of any new disciplines facilitating trade in agricultural goods.

2. The Parties recognise that some export measures, such as export prohibitions, export

restrictions or export taxes may have a detrimental effect on critical supplies of agricultural goods.

In this respect, the Parties shall support the establishment of disciplines through an active

participation in the relevant international fora.

ARTICLE 2.18

Export Competition

1. For the purposes of this Article:

(a) "export subsidies" means subsidies within the meaning of paragraph (e) of Article 1 of the

Agreement on Agriculture; and

& /en 37

(b) "measures with equivalent effect" means export credits, export credit guarantees or insurance

programmes, as well as other measures that have an equivalent effect to an export subsidy10.

2. The Parties affirm their commitments in the Decision on Export Competition adopted

on 19 December 2015 by the Ministerial Conference of the WTO in Nairobi to exercise utmost

restraint with regard to any recourse to all forms of export subsidies and all export measures with

equivalent effect and to enhance transparency and to improve monitoring in relation to all forms of

export subsidies and all export measures with equivalent effect.

3. A Party shall not adopt or maintain any export subsidy on any agricultural good that is

exported or incorporated in a good that is exported to the territory of the other Party.

4. A Party shall not maintain, introduce or reintroduce any other measure with equivalent effect

on an agricultural good that is exported or incorporated in a good that is exported to the territory of

the other Party, unless that measure with equivalent effect complies with the terms and conditions

determined in the relevant WTO Agreement, decision or commitment.

5. With the aim of enhancing transparency and improving monitoring in relation to export

subsidies and other measures with equivalent effect, a Party which has a reasonable doubt about an

export subsidy or other measure with equivalent effect applied by the other Party on an agricultural

good destined for export to the former Party, may require the necessary information on the

measures applied from the other Party. The information required shall be provided without delay.

10 In interpreting the term "measures with equivalent effect", for a specific case, the Parties may

seek guidance in the relevant WTO rules as well as in the practice of the WTO membership.

& /en 38

ARTICLE 2.19

Administration of Tariff Rate Quotas

1. A Party applying tariff rate quotas in accordance with Annex 2-A shall:

(a) administer those tariff rate quotas in a timely manner and in a transparent, objective and

non-discriminatory way in accordance with its law; and

(b) make publicly available in a timely and continuous manner all relevant information

concerning quota administration, including the volume available, utilisation rates and

eligibility criteria.

2. The Parties shall consult regarding any matter related to the administration of the tariff rate

quotas. For that purpose, each Party shall designate a contact point to facilitate communication

between the Parties and notify the other Party of its contact details. The Parties shall promptly

notify each other of any changes to those contact details.

& /en 39

ARTICLE 2.20

Sub-Committee on Agriculture

1. The Sub-Committee on Agriculture established by Article 33.4.1(b) (Sub-Committees and

Other Bodies) shall:

(a) monitor the implementation and administration of this Section, and promote cooperation in

order to facilitate trade in agricultural goods between the Parties;

(b) provide a forum for the Parties to discuss developments in their agricultural programs and

trade in agricultural goods between the Parties;

(c) address barriers, including non-tariff barriers, to trade in agricultural goods between the

Parties;

(d) evaluate the impact of this Chapter on the agricultural sector of each Party, as well as the

operation of the instruments of this Chapter, and recommend any appropriate action to the

Committee on Trade in Goods;

(e) provide a forum to consult on matters related to this Section in coordination with other

relevant committees, working groups or any other specialised body under this Agreement;

& /en 40

(f) undertake any other functions that the Committee on Trade in Goods may assign to it; and

(g) report the results of its work under this paragraph to the Committee on Trade in Goods for its

consideration.

3. The Sub-Committee on Agriculture shall meet at least once a year, unless otherwise agreed.

4. When special circumstances arise, on request of a Party, the Sub-Committee on Agriculture

shall meet, by agreement of the Parties, no later than 30 days after the date of such request.

SECTION C

Trade in Wine and Spirits

ARTICLE 2.21

Scope

This Section applies to wine products11 and spirits classified under headings 2204, 2205 and 2208

of the Harmonized System.

11 For greater certainty, "wine products" means wine and other wine products classified under

headings 2204 and 2205 of the Harmonized System.

& /en 41

ARTICLE 2.22

Oenological Practices

1. The European Union shall authorise the importation and marketing in its territory for human

consumption of wine originating in Mexico and produced in compliance with:

(a) product definitions authorised in Mexico by the laws and regulations referred to in Part A of

Annex 2-E and

(b) oenological practices authorised and restrictions applied in Mexico pursuant to the laws and

regulations referred to in Part A of Annex 2-E or otherwise approved for use in wines for

export by the competent authority of Mexico, in so far as they are recommended and

published by the International Organisation of the Vine and Wine (hereafter referred to as

"OIV").

The authorisation of this paragraph is subject to the requirement that no alcohol or spirits are added

to the wines with the exception of liquor wines to which alcohol of vine origin or grape spirit may

be added. This subparagraph is without prejudice to the possibility of adding alcohol different from

alcohol of vine origin in the production of "vino generoso", provided that such an addition is clearly

displayed on the label.

& /en 42

2. Mexico shall authorise the importation and marketing in its territory for human consumption

of wine originating in the European Union and produced in compliance with:

(a) product definitions authorised in the European Union by the laws and regulations referred to

in Part B of Annex 2-E;

(b) oenological practices authorized and restrictions applied in the European Union pursuant to

the laws and regulations referred to in Part B of Annex 2-E; and

(c) the fact that the addition of alcohol or spirits is excluded for all wines other than liqueur wines

to which only alcohol of vine origin or grape spirit may be added.

3. Vine varieties that may be used in wines imported from a Party and marketed in the territory

of the other Party are varieties of plants of the "vitis vinifera" and hybrids thereof, without prejudice

to any more restrictive laws and regulations which a Party may have in respect of wine produced in

its territory.

4. The Trade Council may modify Parts A and B of Annex 2-E for adding, deleting or updating

the references to product definitions, and oenological practices and restrictions.

& /en 43

ARTICLE 2.23

Labelling of Wine Products and Spirits

1. A Party shall not require any of the following dates or their equivalent to be displayed on the

container, label, or packaging of wine products or spirits:

(a) date of packaging;

(b) date of bottling;

(c) date of production or manufacture;

(d) date of expiration, "use by"' date, "use or consume by" date, "expire by" date;

(e) date of minimum durability, "best-by" date, "best quality before" date; or

(f) "sell-by" date.

A Party may require the display of a date of minimum durability in case of the addition of

perishable ingredients or in case of a durability considered by the producer of less than or equal to

twelve months.

& /en 44

2. A Party shall not require translations of trademarks, brand names or geographical indications

to be displayed on containers, labels, or packaging of wine products or spirits.

3. A Party shall permit mandatory information, including translations, to be displayed on a

supplementary label affixed to a container of wine products or spirits. Supplementary labels may be

affixed to imported container of wine or spirit after importation but prior to offering the product for

sale in the Party's territory, provided that the mandatory information of the original label is fully and

accurately reflected.

4. A Party shall permit the use of identification lot codes provided that those codes are preserved

from deletion.

5. A Party shall not apply a labelling measure to wine products and spirits that were marketed in

the territory of that Party prior to the date on which the measure entered into force, except under

exceptional circumstances.

6. A Party shall permit the use of drawings, figures, illustrations and claims or legends on bottles

provided that they do not replace mandatory labelling information and do not mislead the consumer

as to the real characteristics and composition of the wines products and spirits.

7. A Party shall not require that labels of wine products or spirits display allergen labelling with

regard to allergens which have been used in the production and preparation of the wine products or

spirit and which are not present in the final product.

& /en 45

8. For trade in wine between the Parties, wine originating in the European Union may be

labelled in Mexico with an indication of the product type as specified in Part C of Annex 2-E.

9. Each Party shall protect the following names with regard to wine products and spirits, in

conformity with the Paris Convention for the Protection of Industrial Property, done at Paris

on 20 March 1883 (hereinafter referred to as "the Paris Convention"):

(a) the name of a Member State; and

(b) the name of the United Mexican States or Mexico and its States.

10. A Party shall permit labels of wine products or spirits to express the alcoholic content by

volume in the following acronyms:

(a) % Alc. Vol.

(b) % Alc Vol.

(c) % alc. vol.

(d) % alc vol.

& /en 46

(e) % Alc.

(f) % Alc./Vol.

(g) Alc( )%vol.

(h) % alc/vol

(i) alc( )%vol

ARTICLE 2.24

Certification of Wine Products and Spirits

1. A Party may require, for wine products imported from the other Party and placed on its

market, only the documentation and certification set out in Part D of Annex 2-E.

2. A Party shall not submit the import of wine products produced in the territory of the other

Party to more restrictive import certification requirements than those laid down in this Agreement.

& /en 47

3. Each Party may apply its laws and regulations in order to identify adulterated or contaminated

products after their final importation.

4. In case of a dispute, each Party shall recognise as reference methods, the methods of analysis

complying with the standards recommended by international organisations such as the International

Organization for Standardization (ISO) or, in case those methods do not exist, the methods of

the OIV.

5. Each Party shall authorise the importation in its territory of spirits in accordance with the

rules governing import documentation or certification and analysis reports as provided for in its

laws and regulations.

6. The European Union shall require for the importation of Tequila and Mezcal into the

European Union the presentation to its customs authorities of an export authenticity certificate of

those products issued by the conformity assessment bodies accredited and approved by the Mexican

authorities.12 Mexico shall provide models of the export authenticity certificate of Tequila and

Mezcal and notify any changes related to those certificates to the Sub-Committee on Trade in

Wines and Spirits.

12 For greater certainty, this is without prejudice to the laws and regulations of each Party for the

marketing and commercialisation of those products.

& /en 48

7. A Party may introduce temporary additional import certification requirements for wines

products and spirits imported from the other Party in response to legitimate public policy concerns,

such as health or consumer protection, or in order to act against fraud. In such case, the Party shall

provide to the other Party adequate information and sufficient time to permit the fulfilment of the

additional requirements.

Such requirements shall not extend beyond the period of time necessary to respond to the particular

public policy concern or risk of fraud in response to which they were introduced.

8. The Trade Council may modify Part D of Annex 2-E with regard to the documentation and

certification referred to in paragraph 1.

ARTICLE 2.25

Applicable Rules

Unless otherwise provided for in this Agreement, importation and marketing of products covered by

this Section, traded between the Parties, shall be conducted in compliance with the laws and

regulations applying in the territory of the Party of importation.

& /en 49

ARTICLE 2.26

Transitional Measures

Products which, at the date of entry into force of this Agreement, have been produced and labelled

in accordance with the laws and regulations of a Party and the existing agreements between the

Parties, but do not comply with this Section may be marketed in the importing Party under the

following conditions:

(a) by wholesalers or producers, for a period of two years; or

(b) by retailers, until stocks are exhausted.

ARTICLE 2.27

Notifications

Each Party shall ensure timely notification to the other Party of any amendments to laws and

regulations on matters covered by this Section that have an impact on products traded between

them.

& /en 50

ARTICLE 2.28

Cooperation on Trade in Wines and Spirits

1. The Parties shall cooperate on and address matters related to trade in wines and spirits, in

particular:

(a) product definitions, certification and labelling; and

(b) the use of grape varieties in winemaking and labelling thereof.

2. To facilitate mutual assistance between the enforcement authorities of the Parties, each Party

shall designate the competent authorities and bodies responsible for the implementation and

application of matters covered by this Section. If a Party designates more than one competent

authority or body, it shall ensure coordination between those authorities and bodies. In that case, a

Party shall also designate a single liaison authority that should serve as the single contact point for

the authority or body of the other Party.

3. The Parties shall inform each other of the names and addresses of the competent authorities

and bodies referred to in paragraph 2, and any changes thereto, no later than six months after the

date of entry into force of this Agreement.

& /en 51

4. The authorities and bodies referred to in this Article shall closely cooperate and seek ways for

further improving assistance with each other in the application of this Section, in particular in order

to combat fraudulent practices.

ARTICLE 2.29

Sub-Committee on Trade in Wines and Spirits

1. The Sub-Committee on Trade in Wines and Spirits established by

Article 33.4.1(c) (Sub-Committees and Other Bodies) shall:

(a) monitor the implementation and administration of this Section;

(b) provide a forum for cooperation on matters relating to this Section and exchange of

information; and

(c) ensure the proper functioning of this Section.

2. The Sub-Committee on Trade in Wines and Spirits may make recommendations and prepare

decisions for the Trade Council which may be adopted as provided for in this Section.

& /en 52

SECTION D

Non-Tariff Market Access Commitments for Other Sectors

ARTICLE 2.30

Pharmaceuticals

Specific non-tariff market access commitments of each Party relating to pharmaceutical products

and medical devices are set out in Annex 2-F.

ARTICLE 2.31

Motor Vehicles

Specific non-market access commitments of each Party relating to motor vehicles and equipment,

and parts thereof, are set out in Annex 2-G.

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CHAPTER 3

RULES OF ORIGIN AND ORIGIN PROCEDURES

SECTION A

Rules of Origin

ARTICLE 3.1

Definitions

1. For the purposes of this Chapter:

(a) "chapters", "headings" and "subheadings" means the chapters (two-digit codes), the headings

(four-digit codes) and sub-headings (six-digit codes) used in the nomenclature of the

Harmonized System;

(b) "competent governmental authority" means in the case of Mexico, the designated authority

within the Ministry of Economy (Secretaría de Economía), or its successor;

& /en 54

(c) "consignment" means goods which are either sent simultaneously from one exporter to one

consignee or covered by a single transport document covering their shipment from the

exporter to the consignee or, in the absence of such a document, by a single invoice;

(d) "customs authorities" means the governmental authority that is responsible under the law of a

Party for the administration, application and enforcement of customs laws and regulations;

(e) "exporter" means a person located in the territory of a Party who exports from the territory of

that Party and makes out a statement on origin;

(f) "importer" means a person located in the territory of a Party who imports a good and claims

preferential tariff treatment;

(g) "material" means any ingredient, raw material, component, part, or the like, used in the

production of the product;

(h) "non-originating materials" means materials which do not qualify as originating under this

Chapter;

(i) "originating materials" or "originating products" means materials or products which qualify as

originating under this Chapter;

& /en 55

(j) "product" means the product being manufactured, even if it is intended as a material for later

use in the production of another product; and

(k) "production" means any kind of working, processing or specific operations, including

assembly.

ARTICLE 3.2

General Requirements

1. For the purposes of applying the preferential tariff treatment by a Party to the originating good

of the other Party in accordance with this Agreement, the following products shall be considered as

originating in the Party where the last production took place:

(a) products wholly obtained in that Party within the meaning of Article 3.4;

(b) products produced in that Party exclusively from originating materials; or

(c) products produced in that Party incorporating non-originating materials, provided they fulfil

the conditions set out in Annex 3-A.

2. A product considered as originating in a Party in accordance with paragraph 1 has to meet all

other applicable requirements of this Chapter for granting preferential tariff treatment based on a

claim pursuant to Article 3.16.

& /en 56

3. If a product has acquired originating status, the non-originating materials used in the

production of that product shall not be considered non-originating when that product is incorporated

as a material in another product.

4. For the acquisition of the originating status, the product has to be produced as referred to in

subparagraphs 1(a) to 1(c) without interruption in a Party.

ARTICLE 3.3

Cumulation of Origin

1. A product originating in a Party shall be considered as an originating product of the other

Party if it is used as a material in the production of another product in that other Party13.

2. Paragraph 1 does not apply if:

(a) the production of a product does not go beyond the operations referred to in Article 3.6; and

(b) the object of this production, as demonstrated on the basis of a preponderance of evidence, is

to circumvent financial or tax law of the Parties.

13 When the rules of origin for a material differ between the Parties, the origin of that material

shall be determined in accordance with the rules of origin applicable to the exporting Party.

& /en 57

ARTICLE 3.4

Wholly Obtained Products

1. The following products shall be considered as wholly obtained in a Party:

(a) mineral products extracted from its soil or from its seabed;

(b) plants and vegetable products grown or harvested there;

(c) live animals born and raised there;

(d) products from live animals raised there;

(e) products obtained from slaughtered animals born and raised there;

(f) products obtained by hunting or fishing conducted there;

(g) products obtained from aquaculture there, if aquatic organisms, including fish, molluscs,

crustaceans, other aquatic invertebrates and aquatic plants are born or raised from seed stock

such as eggs, roes, fry, fingerlings or larvae, by intervention in the rearing or growth

processes to enhance production such as regular stocking, feeding or protection from

predators;

& /en 58

(h) products of sea fishing and other products taken from the sea outside any territorial sea by a

vessel of a Party;

(i) products produced on board of a factory ship of a Party exclusively from products referred to

in subparagraph (h);

(j) used articles collected there fit only for the recovery of raw materials, including those raw

materials;

(k) waste and scrap resulting from production operations conducted there;

(l) products extracted from the seabed or subsoil thereof outside the territorial sea of a Party,

provided that they have rights to exploit or work such seabed or subsoil; or

(m) goods produced there exclusively from the products specified in subparagraphs (a) to (l).

2. The terms "vessel of a Party" and "factory ship of a Party" in subparagraph 1(h) and 1(i) mean

a vessel or a factory ship which:

(a) is registered in a Member State or in Mexico;

(b) sails under the flag of a Member State or Mexico; and

& /en 59

(c) meets one of the following conditions:

(i) it is at least 50 % owned by nationals of a Member State or Mexico; or

(ii) it is owned by enterprises which:

(A) have their head office and main place of business in the European Union or

Mexico; and

(B) are at least 50 % owned by public entities, nationals or enterprises of a

Member State or Mexico.

ARTICLE 3.5

Tolerances

1. If a product does not satisfy the requirements set out in Annex 3-A due to the use of a non-

originating material in the production, that product shall nevertheless be considered as originating in

a Party provided that:

(a) the total value of that non-originating material does not exceed 10 % of the ex-works price of

the product; and

& /en 60

(b) any of the percentages set out in Annex 3-A for the maximum value or weight of non-

originating materials are not exceeded through the application of this paragraph.

2. Paragraph 1 does not apply to products classified under Chapters 50 to 63, for which the

tolerances set out in Notes 5 and 6 of Section A of Annex 3-A apply.

3. Paragraph 1 does not apply to products wholly obtained in a Party within the meaning of

Article 3.4. If Annex 3-A requires that the materials used in the production of a product are wholly

obtained, the tolerance provided for in paragraph 1 applies to the sum of those materials.

ARTICLE 3.6

Insufficient Working or Processing Operations

1. Notwithstanding Article 3.2.1(c), a product shall not be considered as originating in a Party if

the production of the product in a Party consists only of the following operations performed on

non-originating materials:

(a) operations to ensure the preservation of products in good condition during transport and

storage such as ventilation, spreading out, drying, freezing, chilling, placing in salt, sulphur

dioxide or other aqueous solutions, removal of damaged parts, and like operations;

& /en 61

(b) simple addition of water or dilution that does not materially alter the characteristics of the

product or dehydration or denaturation14 of products;

(c) sifting, screening, sorting, classifying, grading or matching, including the making-up of sets

of articles;

(d) sharpening, simple grinding or simple cutting;

(e) peeling, stoning or shelling of fruits, nuts or vegetables;

(f) husking;

(g) removing of grains;

(h) polishing or glazing of cereals and rice, partial or total milling of rice;

(i) operations to colour or flavour sugar or form sugar lumps; partial or total milling of crystal

sugar;

(j) changes of packaging, breaking up and assembly of packages;

(k) simple packaging operations;

14 Denaturation covers making alcohol unfit for human consumption by the addition of toxic or

foul-tasting substances.

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(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or

their packaging;

(m) washing, cleaning, the removal of dust, oxide, oil, paint or other coverings;

(n) simple painting and polishing operations;

(o) simple mixing of products15, whether or not of different kinds;16

(p) assembly of parts classified as complete or finished article in accordance with General

Interpretative Rule 2(a) of the General Rules for the Interpretation of the Harmonized System

or other simple assembly of parts;

(q) disassembly of a product into parts or components;

(r) ironing or pressing of textiles and textile articles;

(s) slaughter of animals; or

(t) a combination of two or more operations specified in subparagraphs (a) to (s).

15 Simple mixing of products covers mixing of sugar. 16 These operations do not apply to mixing and blending in Chapters 27 to 30, 32 to 35 and 38.

& /en 63

2. For the purposes of paragraph 1, operations shall be considered simple if neither special skills

nor machines, apparatus or tools especially produced or installed for those operations are required

for their performance and the operations resulting from those skills, machines, apparatus or tools do

not confer the essential character or properties of the good.

ARTICLE 3.7

Unit of Qualification

1. For the application of this Chapter the unit of qualification shall be the particular product,

which is considered as the basic unit when classifying the product under the Harmonized System.

2. For a product composed of a group or assembly of articles, which is classified under the terms

of the Harmonized System in a single heading, the whole constitutes the unit of qualification;

3. For a consignment consisting of a number of identical products classified under the same

heading, each product shall be considered individually when applying this Chapter.

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ARTICLE 3.8

Accounting Segregation

1. If originating and non-originating fungible materials are used in the production of a good, the

management of materials may be done by using an accounting segregation method without keeping

the materials in separate stocks.

2. If originating and non-originating fungible products of Chapters 10, 15, 27, 28, 29,

headings 32.01 to 32.07, or headings 39.01 to 39.14 are physically combined or mixed in stocks in a

Party before exportation to the other Party, the management of those products may be done by using

an accounting segregation method without keeping those products in separate stocks.

3. For the purposes of paragraphs 1 and 2, fungible materials or fungible products are materials

or products that are of the same kind and commercial quality, with the same technical and physical

characteristics, and which cannot be distinguished one from another, in the case of materials, once

they are incorporated into the finished product.

4. The accounting segregation method used for managing stocks shall be applied pursuant to a

stock management system which is in accordance with accounting principles generally accepted in

the Party.

& /en 65

5. The stock management system must ensure at any time that the number of products obtained,

which could be considered as originating products in a Party, is no more than the number that would

have been obtained by using a method of physical segregation of the stocks.

6. A manufacturer using a stock management system must keep records of the operation of the

system that are necessary for the customs authorities of the Party concerned to verify compliance

with the provisions of this Chapter.

7. A Party may require that the use of accounting segregation pursuant to this Article is subject

to prior authorisation by the customs authorities of that Party.

8. The customs authorities of a Party may make the granting of the authorisation referred to in

paragraph 7 subject to any conditions they deem appropriate and may withdraw the authorisation if

the manufacturer makes improper use thereof or fails to fulfil any of the other conditions set out in

this Chapter.

ARTICLE 3.9

Accessories, Spare Parts and Tools

1. Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus

or vehicle, which are part of the normal equipment and included in the price thereof or which are

not separately invoiced, shall be regarded as one product with the piece of equipment, machine,

apparatus or vehicle in question.

& /en 66

2. The accessories, spare parts and tools referred to in paragraph 1 shall be disregarded in

determining the origin of the product except for the purposes of calculating the maximum value of

non-originating materials if a product is subject to a maximum value of non-originating materials

set out in Annex 3-A.

ARTICLE 3.10

Sets

Sets, as defined in General Rule 3 for the Interpretation of the Harmonized System, shall be

considered as originating in a Party if all of their components are originating goods. If a set is

composed of originating and non-originating goods, the set as a whole shall be considered as

originating in a Party, provided the value of the non-originating goods does not exceed 15 % of the

ex-works price of the set.

ARTICLE 3.11

Neutral Elements

In order to determine whether a product is originating in a Party, it shall not be necessary to

determine the origin of the following elements which might be used in its production:

(a) fuel, energy, catalysts and solvents;

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(b) equipment, devices and supplies used to test or inspect the product;

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

(d) machines, tools, dies and moulds;

(e) plant, equipment, spare parts and materials used in the maintenance of equipment and

buildings;

(f) lubricants, greases, compounding materials and other materials used in production or used to

operate equipment and buildings; and

(g) other materials which are not incorporated nor intended to be incorporated into the final

composition of the product.

ARTICLE 3.12

Packing Materials, Packaging Materials and Containers

1. Packaging materials and containers in which the product is packaged for retail sale, if

classified with the product pursuant to General Rule 5 for the Interpretation of the Harmonized

System, shall be disregarded in determining the origin of the product, except for the purposes of

calculating the maximum value of non-originating materials if a product is subject to a maximum

value of non-originating materials in accordance with Annex 3-A.

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2. Packing materials and containers in which a product is packed for shipment shall be

disregarded in determining the origin of the product.

ARTICLE 3.13

Returned Goods

If originating goods of a Party exported from that Party to a third country are returned, they shall be

considered as non-originating, unless it can be demonstrated to the satisfaction of the customs

authorities that the goods returned:

(a) are the same goods as those exported; and

(b) have not undergone any operation other than that necessary to preserve them in good

condition while in that third country or while being exported.

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ARTICLE 3.14

Non-Alteration

1. The goods declared for importation in a Party shall be the same goods as exported from the

other Party in which they are considered originating. Those goods shall not have been altered,

transformed in any way or subjected to operations other than operations to preserve them in good

condition, or other than adding or affixing marks, labels, seals or any other distinguishing signs, to

ensure compliance with specific domestic requirements of the importing Party, prior to being

declared for import.

2. Storage of goods or consignments may take place in a third country provided they remain

under customs supervision in that third country.

3. Without prejudice to the provisions of Section B, the splitting of consignments may take place

in a third country if the splitting is carried out by the exporter or under the exporter's responsibility

and provided the goods remain under customs supervision in that third country.

4. Compliance with paragraphs 1 to 3 shall be considered as satisfied unless the customs

authorities have reasons to believe the contrary. In such a case, the importer, in accordance with the

provisions of the law of each Party, shall provide evidence of compliance by appropriate means,

including through contractual transport documents such as bills of lading, factual or concrete

evidence based on marking, numbering of packages, or any evidence related to the goods

themselves.

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ARTICLE 3.15

Exhibitions

1. Originating products sent for exhibition in a third country and sold after the exhibition for

importation in a Party, shall benefit on importation from the provisions of this Agreement provided

it is shown to the satisfaction of the customs authorities that:

(a) an exporter has consigned these products from a Party to the third country in which the

exhibition is held and has exhibited them there;

(b) the products have been sold or otherwise disposed of by that exporter to a person in a Party;

(c) the products have been consigned during the exhibition or immediately thereafter in the same

state in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose

other than demonstration at the exhibition.

2. A statement on origin must be made out in accordance with the provisions of Section B and

submitted to the customs authorities of the importing Party in the normal manner. The name and

address of the exhibition must be indicated thereon.

& /en 71

3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar

public show or display, which is not organised for private purposes in shops or business premises

with a view to the sale of those products, and during which the products remain under customs

control.

4. The customs authorities of the importing Party may require evidence that the products have

remained under customs control in the third country of exhibition, as well as additional

documentary evidence of the conditions under which they have been exhibited.

SECTION B

Origin Procedures

ARTICLE 3.16

Claim for Preferential Tariff Treatment and Statement on Origin

1. The importing Party shall, on importation, grant preferential tariff treatment to a product

originating in the other Party within the meaning of Article 3.2 based on a claim by the importer for

preferential tariff treatment, provided all other applicable requirements of this Chapter are met.

& /en 72

2. The claim for preferential tariff treatment shall be based on a statement on origin issued in

accordance with Article 3.18 provided by the exporter on an invoice or any other commercial

document.

3. The claim for preferential tariff treatment and the statement on origin referred to in

paragraph 2, shall be included in the customs import declaration, in accordance with the laws and

regulations of the importing Party.

4. The importer making a claim based on a statement on origin referred to in paragraph 2 shall

be in possession thereof and, when required, provide a copy of the statement on origin to the

customs authority of the importing Party.

5. Paragraphs 2, 3 and 4 do not apply in the cases specified in Article 3.23.

ARTICLE 3.17

Claims for Preferential Treatment after Importation

1. Each Party shall provide that an importer may claim preferential tariff treatment after the

importation and obtain refund of any excess duties paid for the imported good if the importer did

not make a claim for preferential tariff treatment at the time of importation and the good concerned

would have qualified at the time of importation for such claim as originating in accordance with

Article 3.2.

& /en 73

2. The importer shall make a claim for preferential tariff treatment no later than one year after

the date of importation. As a condition for granting preferential tariff treatment pursuant to

paragraph 1, a Party may require that the importer:

(a) provides a copy of the statement of origin for the good concerned;

(b) submits all other documents necessary for the importation of the good; and

(c) declares that the good was originating at the time of importation.

ARTICLE 3.18

Conditions for Making out a Statement on Origin

1. A statement on origin as referred to in Article 3.16.2 may be made out by an exporter

registered:

(a) in Mexico, as an exporter authorised by the competent governmental authority subject to any

conditions which are considered appropriate to verify the originating status of the goods as

well as the fulfilment of the other requirements of this Chapter; and

(b) in the European Union, as an exporter in accordance with the relevant European Union law

(Registered Exporter System).

& /en 74

2. The customs authorities or the competent governmental authority shall grant to the registered

exporter a number which shall appear on the statement on origin. The customs authorities or the

competent governmental authority shall manage the registration process and may withdraw the

registration in case of improper use by the exporter.

3. A statement on origin as referred to in Article 3.16.2 may be made out by any exporter for any

consignment consisting of one or more packages containing originating products whose total value

does not exceed 6 000 euros.

4. The exporter shall make out a statement on origin using one of the linguistic versions of

Annex 3-B on an invoice or any other commercial document that describes the originating good in

sufficient detail to enable its identification.

5. Statements on origin shall bear the original signature of the exporter in manuscript. An

exporter registered in accordance with paragraph 1 shall not be required to sign such statements

provided that the exporter accepts full responsibility towards the customs authorities or the

competent governmental authority of the exporting Party for any statement on origin which

identifies the exporter as if the statement on origin was signed in manuscript by that exporter.

6. The exporter making out a statement on origin shall be prepared to submit at any time, at the

request of the customs authorities or the competent governmental authority of the exporting Party,

all appropriate documents proving the originating status of the products concerned as well the

fulfilment of the other requirements of this Chapter.

7. The exporter may make out a statement on origin when the goods to which it relates are

exported or after exportation.

& /en 75

ARTICLE 3.19

Validity of the Statement on Origin

1. A statement on origin shall be valid for one year after the date it was made out.

2. A statement on origin may apply to:

(a) a single shipment of a product; or

(b) multiple shipments of identical products within any period specified in the statement on origin

not exceeding 12 months.

ARTICLE 3.20

Importation by Instalments

If, at the request of an importer and in accordance with the conditions laid down by the customs

authorities of the importing Party, dismantled or non-assembled goods within the meaning of

General Rule 2(a) for the interpretation of the Harmonized System falling within Sections XV

to XXI of the Harmonized System are imported by instalments, a single statement on origin for

those goods shall be submitted, as required by the customs authorities, on the importation of the

first instalment.

& /en 76

ARTICLE 3.21

Discrepancies and Minor Errors

1. Minor discrepancies between the statement on origin and the documents submitted to the

customs office for carrying out the formalities for importing the goods shall not, because of that

fact, render the statement on origin null and void, if it is duly established that this document

corresponds to the products concerned.

2. The customs authorities of the importing Party shall not reject a claim for preferential tariff

treatment due to minor errors in the statement on origin, such as typing errors.

ARTICLE 3.22

Record Keeping Requirements

1. An importer claiming preferential tariff treatment for a good imported into a Party shall

possess and keep the statement on origin made out by the exporter for three years after the date of

importation of the product or for a longer period as the importing Party may specify.

& /en 77

2. An exporter who made out a statement on origin shall possess and keep a copy of the

statement on origin, and of all other records demonstrating that the product satisfies the

requirements to obtain originating status, for three years following the making out of that statement

on origin, or for a longer period of time as the exporting Party may specify.

3. The records to be kept in accordance with this Article may be held in electronic form.

ARTICLE 3.23

Exemptions from the Statement on Origin

1. Goods sent as low-value packages from private persons to private persons or forming part of

travellers' personal luggage shall be admitted as originating goods without requiring a statement on

origin, provided that those goods are not imported by way of trade and have been declared as

meeting the requirements of this Chapter, and that there is no doubt as to the veracity of that

declaration.

2. Imports, which are occasional and consist solely of products for the personal use of the

recipients or travellers or their families, shall not be considered as imports by way of trade if, from

the nature and quantity of the goods, it is evident that no commercial purpose is intended, provided

the importation does not form part of a series of importations that may reasonably be considered to

have been made separately for the purpose of avoiding the requirement for a statement on origin.

& /en 78

3. The total value of the goods referred to in paragraph 1 shall not exceed 500 euros or its

equivalent amount in the currency of the Party in the case of low value packages, or 1 200 euros or

its equivalent amount in the currency of the Party in the case of goods which are part of a travellers'

personal luggage.

4. Nothing in this Article shall be construed as preventing a Party from adopting appropriate

customs controls to ensure compliance with the provisions set out in paragraphs 1 to 3.

ARTICLE 3.24

Verification of Origin and Administrative Cooperation

1. The Parties shall provide each other the addresses and contact information of the customs

authorities or the competent governmental authority responsible for verifying the statements on

origin.

2. In order to ensure the proper application of this Chapter, the Parties shall assist each other,

through their customs authorities or the competent governmental authority, to verify whether goods

are originating as well as the authenticity of the statements on origin and the accuracy of the

information provided in those statements.

& /en 79

3. Verifications of the statements on origin shall be carried out at random or whenever the

customs authorities of the importing Party have reasonable doubts as to the authenticity of the

statements, the originating status of the goods concerned or the fulfilment of the other requirements

of this Chapter.

4. For the purposes of implementing the provisions of paragraph 3, the customs authorities of

the importing Party shall request in writing a verification of origin to the customs authority or the

competent governmental authority of the exporting Party, by providing:

(a) the identity of the customs authority issuing the request;

(b) the name of the exporter to be verified;

(c) the subject and scope of the verification; and

(d) a copy of the statement on origin and, if applicable, any other relevant documentation.

5. The customs authority or the competent governmental authority of the exporting Party shall

carry out the verification. For this purpose, they shall have the right to call for any evidence and to

carry out any inspection of the exporter's accounts or any other check that they consider

appropriate.

& /en 80

6. The customs authority or the competent governmental authority of the exporting Party shall

inform the customs authority requesting the verification of the results of this verification as soon as

possible. The results shall be presented in a written report that clearly indicates whether the goods

concerned can be considered as originating, the statement on origin is authentic and the other

requirements of this Chapter are fulfilled. That written report shall include:

(a) the results of the verification;

(b) the description of the goods subject to verification and the tariff classification relevant for the

application of the rules of origin;

(c) a description and explanation of the rationale concerning the originating status of the good;

and

(d) if available, supporting documentation.

7. If in cases of reasonable doubts there is no reply within 10 months after the date of the

verification request, or if the reply does not contain sufficient information to determine the

authenticity of the document in question or the origin of the good, the requesting customs authority

is entitled, except in exceptional circumstances, to refuse to grant preferential tariff treatment.

& /en 81

8. The importing Party shall notify the exporting Party within 60 days after the receipt of the

written report, if there are differences in relation to the verification procedures of this Article, or in

relation to the interpretation of the rules of origin, in determining whether a good qualifies as

originating, and those differences can not be resolved through consultations between the customs

authority requesting the verification and the customs authority or competent governmental authority

responsible for performing the verification.

9. At the request of either Party, the Parties shall hold and conclude consultations within 90 days

after the date of the notification referred to in paragraph 8 to resolve those differences. The period

for concluding consultations may be extended, on a case by case basis, by mutual written consent

between the Parties. The Parties shall seek to resolve those differences within the Sub-Committee

on Customs, Trade Facilitation and Rules of Origin established by

Article 33.4.1(d) (Sub-Committees and Other Bodies).

10. This Chapter does not prevent a customs authority of a Party from taking any other action that

it considers necessary, pending a resolution of the differences referred in paragraph 8 under this

Agreement.

& /en 82

ARTICLE 3.25

Confidentiality

1. Each Party shall maintain, in accordance with its law, the confidentiality of information

provided by the other Party pursuant to this Chapter and shall protect that information from

disclosure.

2. The customs authorities or the competent governmental authority of the importing Party may

only use the information obtained from the other Party for the purposes of this Chapter.

3. The customs authorities or the competent governmental authority of the exporting Party shall

not disclose confidential business information obtained from the exporter, unless otherwise

provided for in this Chapter.

4. The importing Party shall not use the information obtained by its customs authority pursuant

to this Chapter in any criminal proceedings carried out by a court or a judge, unless the exporting

Party is formally informed in writing by the importing Party about the information it intends to use

and the justification for the usage, and provided that no objection is raised by the exporting Party.

& /en 83

5. Nothing in this Agreement shall be construed as precluding a Party from using confidential

information for the purposes of administration or enforcement of customs law related to this

Chapter, or as otherwise required by law of the Party, including in administrative, quasi-judicial or

judicial proceedings.

ARTICLE 3.26

Administrative Measures and Sanctions

A Party shall impose administrative measures and sanctions on any person who made out a

document, or causes a document to be made out, which contains incorrect information for the

purposes of obtaining a preferential tariff treatment for goods.

SECTION C

Other Provisions

ARTICLE 3.27

Application of the Chapter to Ceuta and Melilla

1. For the purposes of this Chapter, in the case of the European Union, the term "Party" does not

include Ceuta and Melilla.

& /en 84

2. Originating goods of Mexico, when imported into Ceuta and Melilla, shall in all respects be

subject to the same customs treatment under this Agreement as that which is applied to goods

originating in the customs territory of the European Union under Protocol 2 of the Act of Accession

of the Kingdom of Spain and the Portuguese Republic to the European Union. Mexico shall grant to

imports of goods covered by the Agreement and originating in Ceuta and Melilla the same customs

treatment as that which is granted to goods imported from and originating in the European Union.

3. The rules of origin and origin procedures referred to in this Chapter shall apply mutatis

mutandis to goods exported from Mexico to Ceuta and Melilla and to goods exported from Ceuta

and Melilla to Mexico.

4. Ceuta and Melilla shall be considered as a single territory.

5. The exporter shall enter "Mexico" or "Ceuta and Melilla" in field 3 of the text of the statement

on origin, depending on the origin of the good.

6. The Spanish customs authorities shall be responsible for the application and implementation

of this Chapter in Ceuta and Melilla.

& /en 85

ARTICLE 3.28

The Principality of Andorra and the Republic of San Marino

The preferential tariff treatment of originating goods of Andorra and of San Marino and the

determination of the origin of those goods are set out in Annex 3-C.

ARTICLE 3.29

Explanatory Notes

Explanatory notes regarding the interpretation, application and administration of this Chapter are set

out in Annex 3-D.

ARTICLE 3.30

Transitional Provisions

1. For goods for which a claim for preferential tariff treatment and importation was made before

the entry into force of this Agreement, the rules and conditions set out in Annex III to Decision

No. 2/2000 of the EC-Mexico Joint Council of 23 March 2000 and its Appendices I to V shall be

applicable for a maximum period of three years after the entry into force of this Agreement.

& /en 86

2. A proof of origin issued in accordance with the provisions of Annex III to Decision

No. 2/2000 of the EC-Mexico Joint Council of 23 March 2000 and its Appendices I to V, for goods

for which a claim for preferential tariff treatment has not been made by the date of entry into force

of this Agreement, shall not be valid.

3. For goods which, at the entry into force of this Agreement, are either in transit from the

exporting Party to the importing Party or under customs control in the importing Party without

payment of import duties and taxes, a claim for preferential tariff treatment shall be made in

accordance with Article 3.16, provided those goods fulfil the requirements of this Chapter.

ARTICLE 3.31

Amendments to the Chapter

The Trade Council may modify by decision the provisions of the Chapter and Annexes 3-A to 3-D.

ARTICLE 3.32

The Sub-Committee on Customs, Trade Facilitation and Rules of Origin

For the purposes of the effective implementation and operation of this Chapter, the functions of the

Sub-Committee on Customs, Trade Facilitation and Rules of Origin are those listed in

Article 4.17 (Sub-Committee on Customs, Trade Facilitation and Rules of Origin).

& /en 87

CHAPTER 4

CUSTOMS AND TRADE FACILITATION

ARTICLE 4.1

General Objectives

1. The Parties recognise the importance of customs and trade facilitation in the evolving global

trading environment.

2. The Parties recognise that, for their import, export and transit requirements and procedures,

they should take into consideration customs and international trade instruments and standards

applicable in the area of customs and trade, such as the substantive elements of the Revised Kyoto

Convention on the Simplification and Harmonization of Customs Procedures done at Kyoto on

the 18 May 1973 and adopted by the World Customs Organization Council in June 1999, the

International Convention on the Harmonized Commodity Description and Coding System done at

Brussels on 14 June 1983, as well as the Framework of Standards to Secure and Facilitate Global

Trade of the World Customs Organization adopted in June 2005 (hereinafter referred to as "SAFE

Framework of Standards") and the Customs Data Model of the World Customs Organization.

& /en 88

3. The Parties recognise that their laws and regulations shall be non-discriminatory, and that

customs procedures shall be based upon the use of modern methods and effective controls to

achieve the protection and facilitation of legitimate trade.

4. The Parties also recognise that their customs procedures shall be no more administratively

burdensome or trade restrictive than necessary to achieve legitimate objectives and that they should

be applied in a manner that is predictable, consistent and transparent.

5. In order to ensure transparency, efficiency, integrity and accountability of operations, each

Party shall:

(a) simplify and review requirements and formalities wherever possible with a view to the rapid

release and clearance of goods;

(b) work towards the further simplification and standardisation of data and documentation

required by customs and other agencies, in order to reduce the time and costs thereof for

traders or operators, including small and medium-sized enterprises; and

(c) ensure that the highest standards of integrity be maintained, through the application of

measures reflecting the principles of the relevant international conventions and instruments in

the field of customs and trade facilitation.

& /en 89

6. The Parties agree to reinforce their cooperation with a view to ensuring that the relevant

legislation and procedures, as well as the administrative capacity of the relevant administrations,

fulfil the objectives of promoting trade facilitation while ensuring effective customs control.

ARTICLE 4.2

Transparency and Publication

1. Each Party shall provide, as appropriate, for regular consultations between border agencies

and traders or other stakeholders within its territory.

2. Each Party shall promptly publish, in a non-discriminatory and easily accessible manner,

including online and to the extent possible in the English language, its laws, regulations and general

administrative procedures and guidelines, related to customs and trade facilitation matters. Those

matters include:

(a) import, export and transit procedures, including port, airport and other entry-point procedures,

and required forms and documents;

(b) applied rates of duties and taxes of any kind imposed on or in connection with importation or

exportation;

(c) fees and charges imposed by or for governmental agencies on or in connection with

importation, exportation or transit;

& /en 90

(d) rules for the classification or valuation of goods for customs purposes;

(e) laws, regulations and administrative rulings of general application relating to rules of origin;

(f) import, export or transit restrictions or prohibitions;

(g) penalty provisions against breaches of import, export or transit formalities;

(h) appeal procedures;

(i) agreements or parts thereof with any country or countries relating to importation, exportation

or transit;

(j) procedures relating to the administration of tariff quotas;

(k) hours of operation and operating procedures for customs offices at ports and border crossing

points; and

(l) enquiry points for information enquiries.

3. Each Party shall provide, in accordance with its laws and regulations, opportunities and an

appropriate time period to traders and other interested parties to comment on the proposed

introduction or amendment of laws and regulations of general application related to customs and

trade facilitation matters.

& /en 91

4. Each Party shall ensure, in accordance with its laws and regulations, that new or amended

laws and regulations of general application related to customs and trade facilitation or any

information thereon are made publicly available, as early as possible before their entry into force, in

order to enable traders and other interested persons to become acquainted with them.

5. Each Party may provide that paragraphs 3 and 4 do not apply to changes to duty rates or tariff

rates, measures that have a relieving effect, measures the effectiveness of which would be

undermined as a result of compliance with paragraphs 3 and 4, measures applied in urgent

circumstances or minor changes to its domestic law and legal system.

6. Each Party shall establish or maintain one or more enquiry points to address enquiries of

traders and other interested persons concerning customs and other trade facilitation matters and

shall make information concerning the procedures for making such enquiries publicly available

online.

7. A Party shall not require the payment of a fee for answering enquiries or providing required

forms and documents.

8. The enquiry points shall provide an answer to enquiries and provide the forms and documents

within a reasonable time period set by each Party, which may vary depending on the nature or

complexity of the enquiry.

& /en 92

ARTICLE 4.3

Data and Documentation Requirements

1. With a view to simplifying and minimising the incidence and complexity of import, export

and transit formalities, data and documentation requirements, each Party shall ensure, as

appropriate, that those formalities, data and documentation requirements:

(a) are adopted and applied with a view to a rapid release of goods, provided the conditions for

the release are fulfilled;

(b) are adopted and applied in a manner that aims at reducing the time and cost of compliance for

traders and operators;

(c) are the least trade-restrictive alternative, if two or more alternatives were reasonably available

for fulfilling the policy objective or objectives in question; and

(d) are not maintained, including parts thereof, if no longer required.

2. Each Party shall apply common customs procedures and uniform customs data and

documentation requirements for the release of goods throughout its territory. Nothing in this

paragraph precludes a Party from differentiating its customs procedures and data and documentation

requirements based on elements such as risk management, the nature and type of goods, or means of

transport.

& /en 93

ARTICLE 4.4

Automation and Use of Information Technology

1. Each Party shall:

(a) use information technologies that expedite procedures for the release of goods in order to

facilitate trade between the Parties;

(b) make electronic systems accessible to customs users;

(c) allow a customs declaration to be submitted in electronic format; and

(d) use electronic or automated risk-management systems.

2. Each Party shall adopt or maintain procedures allowing the electronic payment of duties,

taxes, fees and charges collected by customs authorities incurred upon importation and exportation.

& /en 94

ARTICLE 4.5

Release of Goods

1. Each Party shall adopt or maintain procedures that:

(a) provide for the prompt release of goods within a period no longer than required to ensure

compliance with its customs law and other trade-related laws and regulations;

(b) provide for advance electronic submission and processing of customs data and documentation

and any other information prior to the arrival of the goods in order to enable the release of

goods from customs control upon arrival;

(c) allow goods to be released at the point of arrival without temporary transfer to warehouses or

other facilities; and

(d) allow for the release of goods prior to the final determination of customs duties, taxes, fees

and charges, if that determination is not done prior to or promptly upon arrival, provided that

all other regulatory requirements have been met; before releasing the goods, a Party may

require that an importer provides sufficient guarantee in the form of a surety, a deposit, or

other appropriate instrument, which shall not be higher than the amount required to secure

payment of customs duties, taxes, fees and charges due for the goods covered by the

guarantee and that shall be discharged when that guarantee is no longer required.

& /en 95

2. Each Party may adopt or maintain measures allowing traders or operators to benefit from

further simplification of customs procedures, in accordance with its laws and regulations.

ARTICLE 4.6

Risk Management

1. Each Party shall adopt or maintain a risk-management system for customs control that enables

its customs authorities to focus their inspection activities on high-risk consignments and expedite

the release of low-risk consignments.

2. Each Party shall design and apply risk management in a manner as to avoid arbitrary or

unjustifiable discrimination, or disguised restrictions to international trade.

3. Each Party shall base risk management on the assessment of risk through appropriate

selectivity criteria.

4. Each Party may also select, on a random basis, consignments for customs controls as part of

its risk management.

5. In order to facilitate trade, each Party shall periodically review and update, as appropriate, the

risk-management system referred to in paragraph 1.

& /en 96

ARTICLE 4.7

Advance Rulings

1. An advance ruling is a written decision provided by a Party through its customs authorities to

an applicant prior to the importation into its territory of a good covered by the application that sets

out the treatment that the Party shall provide to the good at the time of importation with regard to:

(a) the tariff classification of the good;

(b) the origin of the good17; and

(c) any other matters as the Parties may agree.

2. A Party shall issue the advance ruling in a reasonable, time-bound manner to the applicant

that has submitted an application, including in electronic format, provided it contains all necessary

information in accordance with the laws and regulations of that Party. A Party may request a sample

of the good for which the applicant is seeking an advance ruling.

3. The advance ruling shall be valid for at least three years after its issuance unless the law, facts

or circumstances supporting that ruling have changed.

17 According to the Agreement on Rules of Origin of the WTO or Chapter 3 (Rules of Origin

and Origin Procedures) of this Agreement.

& /en 97

4. A Party may decline to issue an advance ruling if the facts and circumstances forming the

basis of the advance ruling are the subject of an administrative or judicial review, or if the

application is not based on real and concrete facts, or does not relate to any intended use of the

advance ruling. A Party that declines to issue an advance ruling shall promptly notify the applicant

in writing, setting out the relevant facts and the basis for its decision.

5. Each Party shall publish, at least:

(a) the requirements for the application for an advance ruling, including the information to be

provided and the format;

(b) the time limit by which it will issue an advance ruling; and

(c) the period of time for which the advance ruling will be valid.

6. If a Party revokes, modifies or annuls an advance ruling, it shall notify the applicant in writing

setting out the relevant facts and the basis for its decision. A Party may only revoke, modify or

annul an advance ruling with retroactive effect if the ruling was based on incomplete, incorrect,

inaccurate, false or misleading information provided by the applicant.

7. An advance ruling issued by a Party shall be binding on that Party in respect of the applicant

and also on the applicant.

& /en 98

8. A Party shall provide, upon written request of an applicant, a review of the advance ruling or

of the decision to revoke, modify or annul it.

9. Subject to any confidentiality requirements in its laws and regulations, a Party shall

endeavour to make the substantive elements of its advance rulings publicly available, including

online.

ARTICLE 4.8

Authorised Economic Operators

1. Each Party shall establish or maintain for operators who meet specified criteria (authorised

economic operators, hereinafter referred to as "AEO") a trade facilitation partnership programme

(hereinafter referred to as "AEO programme") in accordance with the SAFE Framework of

Standards.

2. The specified criteria18 to qualify as AEO shall be published and relate to compliance, or the

risk of non-compliance, with the requirements specified in each Party's laws, regulations or

procedures.

18 A Party may use the criteria provided for in Article 7.7.2 of the WTO Agreement on Trade

Facilitation.

& /en 99

3. The specified criteria to qualify as an AEO shall not be designed or applied so as to afford or

create arbitrary or unjustifiable discrimination between operators where the same conditions prevail

and shall allow the participation of small and medium-sized enterprises.

4. The AEO programme shall include specific benefits for AEO, taking into account the

commitments of the Parties in accordance with Article 7.7.3 of the WTO Agreement on Trade

Facilitation, adopted on 27 November 2014.

5. The Parties shall cooperate in establishing, if relevant and appropriate, the mutual recognition

of their AEO programmes, provided that the programmes are compatible and based on equivalent

criteria and benefits.

ARTICLE 4.9

Review or Appeal

1. Each Party shall provide effective, prompt, non-discriminatory and easily accessible

procedures to guarantee the right of appeal against a decision on a customs matter.

& /en 100

2. Each Party shall ensure that a person to whom it issues a decision on a customs matter has

access within its territory to:

(a) an administrative review by or appeal to an administrative authority higher than or

independent from the official or office that issued the decision; or

(b) a judicial review or appeal of the decision.

3. Each Party shall provide that a person who has applied to the customs authorities for a

decision and has not obtained a decision on that application within the relevant time limits has the

right of appeal.

4. Each Party shall provide that the person referred to in paragraph 2 receives an administrative

decision with the reasons for that decision, so as to enable that person to have recourse to review or

appeal procedures if necessary.

ARTICLE 4.10

Penalties

1. Each Party shall provide for penalties for failure to comply with its laws, regulations or

procedural requirements related to customs or other legislation for the importation, exportation and

transit of goods.

& /en 101

2. Each Party shall ensure that its customs laws and regulations provide that any penalties

imposed for breaches of its customs laws, regulations or procedural requirements be proportionate

and non-discriminatory.

3. Each Party shall ensure that a penalty imposed by its customs authorities for a breach of its

customs laws, regulations or procedural requirements is imposed only on the person legally

responsible for the breach.

4. Each Party shall ensure that the penalty imposed depends on the facts and circumstances of

the case and is commensurate with the degree and severity of the breach.

5. Each Party shall avoid incentives or conflicts of interest in the assessment and collection of

penalties and duties.

6. Each Party is encouraged to consider voluntary disclosure prior to the discovery by the

customs authorities of a breach of its customs laws, regulations or procedural requirements, as a

potential mitigating factor when establishing a penalty.

7. Each Party shall ensure that if a penalty is imposed for a breach of its customs laws,

regulations or procedural requirements, an explanation in writing is provided to the person upon

whom the penalty is imposed specifying the nature of the breach and the applicable law, regulation

or procedure pursuant to which the amount or range of the penalty for the breach has been imposed.

& /en 102

8. Each Party shall provide in its laws, regulations or procedures a fixed period within which its

customs authorities may initiate proceedings to impose a penalty relating to a breach of its customs

laws, regulations or procedures.

ARTICLE 4.11

Customs Cooperation and Mutual Administrative Assistance

1. The Parties shall ensure that their respective authorities cooperate on customs matters in order

to ensure that the objectives set out in Article 4.1 are attained.

2. The Parties shall cooperate, among others, through:

(a) exchanging information concerning their customs laws and regulations and their

implementation, and customs procedures, particularly in the following areas:

(i) simplification and modernisation of customs procedures;

(ii) border enforcement measures applied by their customs authorities;

(iii) facilitation of transit movements and transhipment;

(iv) dialogue with the business community; and

(v) supply chain security and risk management;

& /en 103

(b) working together on the customs-related aspects of securing and facilitating the international

trade supply chain in accordance with the SAFE Framework of Standards, including with

respect to their AEO programmes and their mutual recognition referred to in Article 4.8;

(c) considering developing joint initiatives relating to import, export, other customs procedures

and trade facilitation including technical assistance;

(d) strengthening their cooperation in the field of customs in international organisations such as

the WTO and the World Customs Organization (hereinafter referred to as "WCO");

(e) establishing minimum standards, to the extent practicable, for risk-management techniques

and related requirements and programmes; if relevant and appropriate, the Parties shall also

consider mutual recognition of risk-management techniques, risk standards and security

controls;

(f) endeavouring to harmonise their data requirements for import, export and other customs

procedures by implementing common standards and data elements in accordance with the

WCO Data Model; and

(g) maintaining a dialogue between their respective policy experts to promote the utility,

efficiency and applicability of advance rulings.

& /en 104

3. The Parties shall provide each other with mutual administrative assistance in customs matters

in accordance with the provisions of the Annex on Mutual Administrative Assistance in Customs

Matters adopted by the Decision No 5/2004 of the EU-Mexico Joint Council of 15 December 2004,

which is hereby incorporated and made part of this Agreement. Any exchange of information

between the Parties in accordance with this Chapter shall be subject to the confidentiality of

information and personal data protection requirements provided for in Article 10 of that Annex,

mutatis mutandis, and to any confidentiality and privacy requirements provided for in the respective

laws and regulations of the Parties.

ARTICLE 4.12

Single Window

1. Each Party shall endeavour to develop or maintain single window systems to facilitate a

single electronic submission of all information required by customs and other legislation for the

import, export and transit of goods.

2. The Parties shall endeavour to work together towards the interoperability and streamlining of

their single window systems, including by sharing their respective experiences in developing and

deploying their single window systems.

& /en 105

ARTICLE 4.13

Transit and Transhipment

1. Each Party shall ensure the facilitation and effective control of transit movements and

transhipment operations through its territory.

2. Each Party shall endeavour to promote and implement regional transit arrangements with a

view to facilitating trade between the Parties.

3. Each Party shall ensure that all concerned authorities and agencies in its territory cooperate

and coordinate to facilitate traffic in transit.

4. Each Party shall allow goods intended for import to be moved under customs control from a

customs office of entry to another customs office in its territory from where the goods would be

released or cleared.

ARTICLE 4.14

Post-Clearance Audit

1. With a view to expediting the release of goods, each Party shall adopt or maintain

post-clearance audit to ensure compliance with its customs laws and regulations.

& /en 106

2. Each Party shall conduct post-clearance audits in a risk-based manner.

3. Each Party shall conduct post-clearance audits in a transparent manner. If an audit is

conducted and conclusive results have been achieved, the Party shall notify, without delay, the

person whose record is audited of the results, the reasons for the results and the rights and

obligations of the audited person.

4. The Parties acknowledge that the information obtained in a post-clearance audit may be used

in further administrative or judicial proceedings.

5. The Parties shall, to the extent practicable, use the result of a post-clearance audit in applying

risk management.

ARTICLE 4.15

Customs Brokers

1. A Party shall not require in its customs laws and regulations the mandatory use of customs

brokers.

2. Each Party shall publish its measures on the use of customs brokers.

3. Each Party shall apply transparent and objective rules if and when licensing customs brokers.

& /en 107

ARTICLE 4.16

Preshipment Inspections

A Party shall not require the mandatory use of pre-shipment inspections as defined in the WTO

Agreement on Preshipment Inspection, in relation to tariff classification and customs valuation19.

ARTICLE 4.17

Sub-Committee on Customs, Trade Facilitation and Rules of Origin

1. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin shall report to the

Trade Committee.

2. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin established pursuant

to Article 33.4.1(d) (Sub-Committees and Other Bodies) shall ensure the proper functioning of this

Chapter, Chapter 3 (Rules of Origin and Origin Procedures), the Annex on Mutual Administrative

Assistance in customs matters referred to in Article 4.11.3 and any additional customs-related

provisions agreed between the Parties, and examine all matters arising from their application.

19 For greater certainty, this Article does not preclude preshipment inspections for sanitary and

phytosanitary purposes.

& /en 108

3. The Sub-Committee shall:

(a) prepare appropriate recommendations, as necessary, to the Trade Committee on:

(i) the implementation and administration of Chapter 3 (Rules of Origin and Origin

Procedures); and

(ii) any amendments to Chapter 3 (Rules of Origin and Origin Procedures);

(b) adopt explanatory notes to facilitate the implementation of Chapter 3 (Rules of Origin and

Origin Procedures);

(c) monitor the implementation and administration of this Chapter;

(d) provide a forum to consult and discuss all matters concerning customs, including in particular

customs procedures, customs valuation, tariff regimes, customs nomenclature, customs

cooperation and mutual administrative assistance in customs matters;

(e) provide a forum to consult and discuss matters relating to rules of origin, origin procedures

and administrative cooperation;

& /en 109

(f) enhance cooperation on the development, application and enforcement of customs procedures,

mutual administrative assistance in customs matters, rules of origin, origin procedures and

administrative cooperation; and

(g) consider any other matter related to this Chapter or Chapter 3 (Rules of Origin and Origin

Procedures) as the Parties may agree.

4. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin may examine the

need for, and prepare for the Trade Council, decisions or recommendations on all matters arising

from the implementation of this Chapter. The Trade Council shall have the power to adopt decisions

on the implementation of this Chapter as appropriate, including in what concerns AEO programmes

and their mutual recognition, joint initiatives relating to customs procedures and trade facilitation,

and technical assistance.

5. The Parties may agree to hold ad hoc meetings for matters concerning customs cooperation,

rules of origin or mutual administrative assistance.

& /en 110

CHAPTER 5

TRADE REMEDIES

SECTION A

Anti-Dumping and Countervailing Measures

ARTICLE 5.1

General Provisions

1. The Parties affirm their rights and obligations under Article VI of GATT 1994, the

Anti-Dumping Agreement and the SCM Agreement.

2. For the purposes of the application of provisional and definitive measures, the origin of the

goods concerned shall be determined in accordance with the non-preferential rules of origin of each

Party.

& /en 111

ARTICLE 5.2

Transparency and Due Process

1. Each Party shall conduct its procedures and apply anti-dumping and countervailing measures

in a fair and transparent manner, in accordance with the relevant provisions of the Anti-Dumping

Agreement and the SCM Agreement.

2. Each Party shall inform all interested parties, at a preliminary stage of the proceedings, and in

any event before a final determination is made, of the essential facts under consideration, which

form the basis for the decision whether to apply final measures. This is without prejudice to

Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement.

3. Each Party shall grant each interested party in an anti-dumping or countervailing duty

investigation, full opportunity to defend its interests, provided it does not unduly delay the conduct

of the investigation.

4. The definition of interested parties provided for in Article 6.11 of the Anti-Dumping

Agreement and Article 12.9 of the SCM Agreement applies.

& /en 112

ARTICLE 5.3

Imposition of Anti-Dumping and Countervailing Duties

The decision whether the amount of the anti-dumping or countervailing duty to be imposed shall be

the full margin of dumping or amount of subsidy, or a lesser amount, is to be made by the

authorities of the importing Party in accordance with the law of that Party.

ARTICLE 5.4

Final Determination

A Party shall, when making a final determination, take into account the information duly provided

by all interested parties considered as such in accordance with its law.

ARTICLE 5.5

Non-Application of Dispute Settlement

A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement)

concerning the interpretation or application of the provisions of this Section.

& /en 113

SECTION B

Global Safeguard Measures

ARTICLE 5.6

General Provisions

Each Party retains its rights and obligations pursuant to Articles XIX of GATT 1994 and 5 of the

Agreement on Agriculture as well as under the Safeguards Agreement.

ARTICLE 5.7

Transparency

1. Notwithstanding Article 5.6, the Party initiating a global safeguard investigation or intending

to impose global safeguard measures shall immediately provide, at the request of the other Party

and provided the latter has a substantial interest, ad hoc written notification of all relevant

information leading to the initiation of the global safeguard investigation or the imposition of global

safeguard measures, including on the provisional findings, where relevant. This is without prejudice

to Article 3.2 of the Agreement on Safeguards.

& /en 114

2. A Party imposing global safeguard measures shall endeavour to impose them in a way that

least affects bilateral trade.

3. For the purposes of paragraph 2, if a Party considers that the legal requirements for the

imposition of definitive safeguard measures are met, and intends to impose such measures, it shall

notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory

solution has been reached within 30 days after the notification, the importing Party may adopt the

definitive safeguard measure appropriate to remedy the problem.

4. For the purposes of this Article, a Party is deemed to have a substantial interest if it is among

the five largest suppliers of the imported good during the most recent three-year period, measured in

terms of either absolute volume or value.

ARTICLE 5.8

Non-Application of Dispute Settlement

A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement)

concerning the interpretation or application of the provisions of this Section referring to rights and

obligations under the WTO Agreement.

& /en 115

SECTION C

Bilateral Safeguard Measures

SUB-SECTION C.1

General Provisions

ARTICLE 5.9

Definitions

For the purposes of Section C:

(a) "competent investigating authority" means:

(i) in the case of the European Union, the European Commission; and

(ii) in the case of Mexico, the "Unidad de Prácticas Comerciales Internacionales de la

Secretaría de Economía" (International Trade Practices Unit of the Ministry of the

Economy), or its successor;

& /en 116

(b) "domestic industry" means, with respect to an imported product, the producers as a whole of

the like or directly competitive products operating within the territory of a Party, or those

producers whose collective output of the like or directly competitive products constitutes a

major proportion of the total domestic production of those products;

(c) "like product" means a product which is identical, that is alike in all respects, to the product

under consideration, or in the absence of such product, another product which, although not

alike in all respects, has characteristics closely resembling those of the product under

consideration;

(d) "directly competitive product" means a product which may not be alike in all respects, but has

a high degree of substitutability with the product under consideration as it fulfils the same

functions20;

(e) "serious injury" means a significant overall impairment of the position of a domestic industry;

(f) "threat of serious injury" means serious injury that, based on facts and not merely on

allegation, conjecture or remote possibility, is clearly imminent; and

20 In that regard, the authorities may analyse aspects such as the physical characteristics of those

products, their technical specifications, final uses and channels of distribution. That list of

aspects is not exhaustive, nor can one or several of these factors necessarily give decisive

guidance.

& /en 117

(g) "transition period" means:

(i) a period of 10 years from the date of entry into force of this Agreement; or

(ii) the tariff elimination period for the goods set out in the tariff elimination schedule of a

Party in Annex 2-A (Tariff Elimination Schedule), provided the tariff elimination period

for the good concerned is 10 or more years, plus three years.

ARTICLE 5.10

Application of a Bilateral Safeguard Measure

1. Notwithstanding Section B, if as a result of the reduction or elimination of a customs duty

under this Agreement, an originating good of a Party is being imported into the territory of the other

Party in such increased quantities, in absolute terms or relative to domestic production, and under

such conditions as to cause or threaten to cause serious injury to the domestic industry that produces

like or directly competitive products, the importing Party may impose the measures provided for in

paragraph 2 under the conditions and in accordance with the procedures established in this Section.

& /en 118

2. If the conditions in paragraph 1 are met, the importing Party may only impose bilateral

safeguard measures which:

(a) suspend the further reduction of the rate of customs duty on the product concerned as

provided for under this Agreement; or

(b) increase the rate of customs duty on the product concerned to a level which does not exceed

the lesser of:

(i) the most-favoured-nation applied rate of customs duty on the product in effect at the

time the measure is imposed; or

(ii) the most-favoured-nation applied rate of customs duty on the product in effect on the

day immediately preceding the date of entry into force of this Agreement.

3. The Parties share the understanding that neither tariff rate quotas nor quantitative restrictions

would be a permissible form of bilateral safeguard measure.

& /en 119

ARTICLE 5.11

Conditions and Limitations

1. A Party shall not apply a bilateral safeguard measure:

(a) except to the extent, and for such time, as may be necessary to prevent or remedy the

situations described in Articles 5.10 or 5.15;

(b) for a period exceeding two years; or

(c) beyond the expiration of the transition period.

The period referred to in subparagraph (b) may be extended by another year if the competent

authorities of the importing Party determine, in conformity with the procedures specified in

Section C, that the measure continues to be necessary to prevent or remedy the situations described

in Articles 5.10 or 5.15 and to facilitate adjustment, provided that the total period of application of a

safeguard measure, including the period of initial application and any extension thereof, does not

exceed three years.

2. A Party shall only apply a bilateral safeguard measure to originating goods set out in

Annex 2-A (Tariff Elimination Schedule), that are subject to preferential treatment under this

Agreement.

& /en 120

3. In order to facilitate any adjustment in a situation where the expected duration of a bilateral

safeguard measure exceeds one year, the Party that applies the measure shall, during the period of

application, progressively liberalise the measure at regular intervals.

4. When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be

the rate that would have been in effect for the product in accordance with Article 2.4 (Elimination

or Reduction of Customs Duties).

ARTICLE 5.12

Provisional Measures

1. In critical circumstances where delay would cause damage that would be difficult to repair, a

Party may apply a bilateral safeguard measure on a provisional basis, without complying with the

requirements of Article 5.22.1, pursuant to a preliminary determination that there is clear evidence

that imports of an originating good of the other Party have increased as a result of the reduction or

elimination of a customs duty under this Agreement, and that such imports cause or threaten to

cause the situations described in Articles 5.10 or 5.15.

& /en 121

2. The duration of any provisional measure shall not exceed 200 days, during which time the

Party shall comply with the relevant procedural rules established in Sub-Section C.2. The Party

shall promptly refund any tariff increases if the subsequent investigation described in

Sub-Section C.2 does not result in the imposition of a definitive measure in compliance with the

requirements of Articles 5.10 or 5.15. The duration of any provisional measure shall be counted as

part of the period referred to in Article 5.11.1(b). The importing Party shall inform the other Party

upon imposing such provisional measures and it shall immediately refer the matter to the Trade

Committee for examination if the other Party so requests.

ARTICLE 5.13

Compensation and Suspension of Concessions

1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to

mutually agree on appropriate trade-liberalising compensation in the form of concessions having

substantially equivalent trade effects. The Party applying a bilateral safeguard measure shall

provide an opportunity for such consultations no later than 30 days after the application of the

bilateral safeguard measure.

& /en 122

2. If the consultations referred to in paragraph 1 do not result in an agreement on trade-

liberalising compensation within 30 days after the start of the consultations, the Party affected by

the bilateral safeguard measure may suspend the application of concessions which have trade

effects substantially equivalent to the bilateral safeguard measure of the other Party no later

than 90 days after the measure is applied.

3. The Party affected by the bilateral safeguard measure shall notify the other Party in writing at

least 30 days prior to the suspension of concessions in accordance with paragraph 2.

4. The obligation to provide compensation pursuant to paragraph 1 and the right to suspend

concessions pursuant to paragraph 2 expire on the date of termination of the bilateral safeguard

measure.

ARTICLE 5.14

Use of Safeguard Measures and Time Lapse in Between Measures

1. A Party shall not apply a safeguard measure referred to in this Section to the import of a

product that has previously been subject to such a measure, unless a period of time has elapsed that

is equal to half of that during which the safeguard measure was applied for the immediately

preceding period.

& /en 123

2. A Party shall not apply, with respect to the same product and during the same period:

(a) a bilateral safeguard measure or a provisional safeguard measure under this Agreement; and

(b) a safeguard measure pursuant to Article XIX of GATT 1994 and under the Safeguards

Agreement.

ARTICLE 5.15

Outermost Regions

1. If any originating good of Mexico is being imported directly into the territory of one or

several outermost regions of the European Union in such increased quantities and under such

conditions as to cause or threaten to cause serious deterioration in the economic situation of the

outermost region concerned, the European Union, after having examined alternative solutions, may

exceptionally impose safeguard measures limited to the territory of the outermost region concerned.

2. Without prejudice to paragraph 1, all the provisions of Section C applicable to bilateral

safeguard measures are also applicable to any safeguard measure adopted in relation to the

outermost regions of the European Union.

3. A bilateral safeguard measure limited to the outermost regions of the European Union shall

apply only to goods subject to preferential treatment under this Agreement.

& /en 124

4. For the purposes of paragraph 1, "serious deterioration" means major difficulties in a sector of

the economy producing like or directly competitive products. The determination of serious

deterioration shall be based on objective factors, including the following elements:

(a) the increase in the volume of imports in absolute terms or relative to domestic production and

to imports from other sources; and

(b) the effect of such imports on the situation of the relevant industry or the economic sector

concerned, including the levels of sales, production, financial situation and employment.

SUB-SECTION C.2

Procedural Rules Applicable to Bilateral Safeguard Measures

ARTICLE 5.16

Applicable Law

For the application of bilateral safeguard measures, the competent investigating authority shall

comply with the provisions of this Sub-Section and, in cases not covered by this Sub-Section, apply

the rules established under the law of the Party concerned, as long as those rules are in conformity

with the provisions of Section C.

& /en 125

ARTICLE 5.17

Initiation of a Safeguard Procedure

1. A competent investigating authority may initiate a safeguard procedure upon a written

application made by or on behalf of the domestic industry, or in exceptional circumstances, on its

own initiative. In the case of the European Union that application can be filed by one or more

Member States of the European Union on behalf of the domestic industry. The application shall be

deemed to have been made by or on behalf of the domestic industry if it is supported by those

domestic producers whose collective output constitutes more than 50 % of the total production of

the like or directly competitive products produced by that portion of the domestic industry

expressing either support for or opposition to the application. However, no investigation shall be

initiated when domestic producers expressly supporting the application account for less than 25 %

of total national production of the like or directly competitive products produced by the domestic

industry.

2. Once the investigation has been initiated, the application referred to in paragraph 1 shall

promptly be made available to whom it may concern, except for the confidential information

contained therein.

& /en 126

3. Upon initiation of a safeguard procedure, the competent investigating authority shall publish a

notice of initiation of the procedure in the official journal of the Party. The notice shall identify the

entity which filed the written application, if applicable, the imported good concerned, its heading,

subheading or the tariff item number under which it is classified under the Harmonized System, the

nature and timing of the determination to be made, the period within which interested parties may

make their views known in writing and submit information, the place at which the written

application and any other non-confidential documents filed in the course of the procedure may be

inspected and the name, address and telephone number of the office to be contacted for more

information. In case the competent investigating authority decides to hold a public hearing, the time

and place of that public hearing may be either included in the notice of initiation or notified at any

subsequent stage of the procedure, provided that such notice is given well in advance. In case no

public hearing is scheduled at the beginning of the investigation, the notice of initiation shall

include the period within which interested parties may apply to be heard orally by the competent

investigating authority.

4. With respect to a safeguard procedure initiated on the basis of a written application filed by an

entity asserting that it is representative of the domestic industry, the competent investigating

authority shall not publish the notice of initiation pursuant to paragraph 3 without first assessing

carefully that the application meets the requirements of its law and the requirements of paragraph 1,

and includes reasonable evidence that imports of an originating good of the other Party have

increased as the result of the reduction or elimination of a customs duty under this Agreement, and

that such imports cause or threaten to cause the alleged serious injury or the alleged serious

deterioration in the economic situation.

& /en 127

ARTICLE 5.18

Investigation

1. A Party may apply a safeguard measure only following an investigation by the competent

investigating authority of that Party pursuant to the procedures established in this Sub-Section. This

investigation shall include reasonable public notice to all interested parties, and public hearings or

other appropriate means in which importers, exporters and other interested parties can present

evidence and their views, including the opportunity to respond to the presentations of other parties.

2. Each Party shall ensure that its competent investigating authority completes any such

investigation within one year following its date of initiation.

ARTICLE 5.19

Determination of Serious Injury or Threat Thereof and Causal Link

1. In the investigation to determine whether increased imports cause or threaten to cause serious

injury to a domestic industry, the competent investigating authority shall evaluate all relevant

factors of an objective and quantifiable nature having a bearing on the situation of the domestic

industry, in particular the rate and amount of the increase in imports of the product concerned in

absolute terms and relative to domestic production, the share of the domestic market taken by the

increased imports, and changes in the level of sales, production, productivity, capacity utilisation,

profits and losses, and employment.

& /en 128

2. The determination that increased imports cause or threaten to cause the situations described in

Articles 5.10 or 5.15, shall not be made unless the investigation demonstrates, based on objective

evidence, the existence of a clear causal link between the increased imports of the product

concerned and the situations described in Articles 5.10 or 5.15. If factors other than the increased

imports are, at the same time, causing the situations described in Articles 5.10 or 5.15, such injury

or threat thereof, or serious deterioration in the economic situation or threat thereof, shall not be

attributed to the increased imports.

ARTICLE 5.20

Hearings

In the course of each safeguard procedure, the competent investigating authority shall:

(a) hold a public hearing, after providing reasonable notice, to allow all interested parties

considered as such under the law of the Party concerned, to appear in person or through

counsel, to present evidence and to be heard on the serious injury or threat thereof, or on the

serious deterioration in the economic situation or threat thereof, and the appropriate

remedy; or

& /en 129

(b) alternatively, in the case of the European Union, provide an opportunity to all interested

parties to be heard provided they have made a written application within the period set out in

the notice of initiation showing that they are likely to be affected by the outcome of the

investigation and that there are special reasons for them to be heard orally.

ARTICLE 5.21

Confidential Information

Any information which is by nature confidential or which is provided on a confidential basis shall,

upon good cause being shown, be treated as such by the competent investigating authority. Such

information shall not be disclosed without permission of the party submitting it. Parties providing

confidential information shall be requested to furnish non-confidential summaries thereof or, if

those parties indicate that such information cannot be summarised, the reasons why a summary

cannot be provided. The summaries shall be in sufficient detail to permit a reasonable

understanding of the substance of the submitted confidential information. However, if the

competent investigating authority finds that a request for confidentiality is not warranted and if the

party concerned is either unwilling to make the information public or to authorise its disclosure in

generalised or summary form, it may disregard such information unless it can be demonstrated to its

satisfaction from appropriate sources that the information is correct.

& /en 130

ARTICLE 5.22

Adoption, Notification, Consultation and Publication

1. If a Party considers that one of the situations set out in Articles 5.10 or 5.15 exists, it shall

immediately refer the matter to the Trade Committee for examination. The Trade Committee may

make any recommendation required to remedy the situations that have arisen. If no recommendation

has been made by the Trade Committee aimed at remedying the situations, or no other satisfactory

solution has been reached within 30 days of the matter being referred to the Trade Committee, the

importing Party may adopt the bilateral safeguard measure appropriate to remedy the situations in

accordance with Section C.

2. The competent investigating authority shall provide the exporting Party with all relevant

information, which shall include evidence of serious injury or threat thereof, or of a serious

deterioration, or threat thereof, in the economic situation caused by increased imports, a precise

description of the product involved and the proposed bilateral safeguard measure, the proposed date

of imposition and the expected duration of the proposed bilateral safeguard measure.

3. A Party shall promptly notify the other Party, in writing, when it:

(a) initiates a bilateral safeguard procedure under Section C;

(b) decides to apply a provisional bilateral safeguard measure;

& /en 131

(c) determines the existence of serious injury or threat thereof, or the serious deterioration in the

economic situation or threat thereof, caused by increased imports, pursuant to Article 5.19;

(d) decides to apply or extend a bilateral safeguard measure; and

(e) decides to modify a bilateral safeguard measure previously adopted.

4. If a Party makes a notification pursuant to subparagraph 3(a), such notification shall include:

(a) a copy of the public version of the application and its annexes or, in the case of investigations

initiated on the initiative of the competent investigating authority, of the relevant documents

showing that the requirements of Article 5.17 are met, as well as a questionnaire detailing the

points on which the interested parties must provide information; and

(b) a precise description of the imported good concerned.

5. If a Party makes a notification pursuant to subparagraphs 3(b) or (c), it shall include a copy of

the public version of its determination and, if applicable, of the document providing the technical

reasoning on which the determination is based.

& /en 132

6. If a Party makes a notification pursuant to subparagraph 3(d) concerning the application or

extension of a bilateral safeguard measure, it shall include in that notification:

(a) a copy of the public version of its determination and, if applicable, of the document providing

the technical reasoning on which the determination is based;

(b) evidence of serious injury or threat thereof, or of a serious deterioration in the economic

situation or threat thereof, caused by increased imports of an originating good of the other

Party, as a result of the reduction or elimination of a customs duty under this Agreement;

(c) a precise description of the originating good subject to the bilateral safeguard measure,

including its heading, subheading or the tariff line under which it is classified under the

Harmonized System;

(d) a precise description of the bilateral safeguard measure applied or extended;

(e) the initial date of application of the bilateral safeguard measure, its expected duration and, if

applicable, a timetable for progressive liberalisation of the measure; and

(f) in case of an extension of the bilateral safeguard measure, evidence that the domestic industry

concerned is adjusting.

& /en 133

7. At the request of the Party affected by the bilateral safeguard procedure under Section C, the

other Party shall hold consultations with the requesting Party to review a notification made pursuant

to subparagraphs 3(a) or (b).

8. The Party intending to apply or extend a bilateral safeguard measure shall notify the other

Party and give the possibility to hold prior consultations to discuss the eventual application or

extension. If no satisfactory solution has been reached within 30 days after the date of the

notification the former Party may apply or extend such measure.

9. The competent investigating authority shall also publish its findings and reasoned conclusions

reached on all relevant matters of fact and law in the official journal of the Party concerned,

including the description of the imported good and the situation which has given rise to the

imposition of measures in accordance with Articles 5.10 or 5.15, the causal link between such

situation and the increased imports, and the form, level and duration of the measures.

10. The competent investigating authorities shall treat any confidential information in full

compliance with Article 5.21.

& /en 134

CHAPTER 6

SANITARY AND PHYTOSANITARY MEASURES

ARTICLE 6.1

Definitions

1. For the purposes of this Chapter:

(a) "competent authorities" means the competent authorities of each Party referred to in

Annex 6-A;

(b) "emergency measure" means a sanitary or phytosanitary measure that is applied by the

importing Party to goods of the other Party to address an urgent problem of human, animal or

plant life or health protection that arises or threatens to arise in the importing Party; and

(c) "WTO SPS Committee" means the Committee on Sanitary and Phytosanitary Measures

established pursuant to Article 12 of the SPS Agreement.

& /en 135

2. The definitions in Annex A of the SPS Agreement, as well as those of the Codex

Alimentarius (Codex), the World Organisation for Animal Health (hereinafter referred to as

"WOAH") and the International Plant Protection Convention, signed in Rome on 6 December 1951

(hereinafter referred to as "IPPC") apply to this Chapter.

ARTICLE 6.2

Objectives

The objectives of this Chapter are to:

(a) protect human, animal or plant life or health in the territories of the Parties while facilitating

trade between them;

(b) reinforce and further the implementation of the SPS Agreement;

(c) strengthen communication, consultation and cooperation between the Parties, in particular

between their competent authorities;

(d) ensure that sanitary and phytosanitary measures implemented by the Parties do not create

unnecessary barriers to trade;

& /en 136

(e) improve consistency, certainty and transparency of the sanitary and phytosanitary measures of

each Party and their implementation; and

(f) encourage the development and adoption of international standards, guidelines and

recommendations by the relevant international organisations and enhance the implementation

thereof by the Parties.

ARTICLE 6.3

Scope

This Chapter applies to all sanitary and phytosanitary measures of a Party that may, directly or

indirectly, affect trade between the Parties.

ARTICLE 6.4

Relation to the SPS Agreement

The Parties affirm their rights and obligations with respect to each other under the SPS Agreement.

& /en 137

ARTICLE 6.5

Resources for Implementation

Each Party shall use the necessary resources to implement effectively this Chapter.

ARTICLE 6.6

Equivalence

1. The Parties acknowledge that the recognition of the equivalence of sanitary and phytosanitary

measures of the other Party is an important means to facilitate trade.

2. The importing Party shall recognise sanitary and phytosanitary measures of the exporting

Party as equivalent to its own measures if the exporting Party objectively demonstrates to the

importing Party that its measures achieve the appropriate level of sanitary and phytosanitary

protection of the importing Party.

3. The importing Party has the right to make the final determination as to whether a sanitary or

phytosanitary measure applied by the exporting Party achieves its appropriate level of sanitary and

phytosanitary protection.

& /en 138

4. A Party shall, when assessing or determining the equivalence of a measure of the other Party,

take into account among others and if relevant:

(a) decisions of the WTO SPS Committee;

(b) the work of the relevant international organisations;

(c) any knowledge and past experience in trading with the other Party; and

(d) information provided by the other Party.

5. Each Party shall base its assessment, determination and maintenance of equivalence on

standards, guidelines, and recommendations of the relevant international standardisation bodies or,

as appropriate, on a risk assessment.

6. The importing Party shall promptly initiate the assessment to determine the equivalence if it

receives a request for an equivalence assessment from the other Party that is supported by the

required information.

7. When the importing Party concludes the equivalence assessment, it shall promptly notify its

determination to the other Party.

& /en 139

8. When the importing Party has determined that it recognises the measure of the exporting

Party as equivalent, the importing Party shall promptly initiate the necessary legislative or

administrative measures to implement the recognition.

9. Without prejudice to Article 6.16, if a Party intends to adopt, modify or repeal a measure

which is subject to an equivalence determination affecting trade between the Parties, that Party

shall:

(a) notify the other Party of its intention at an appropriate early stage where any comments

submitted from the other Party can be taken into account;

(b) provide, on request of the other Party, information and the rationale concerning its planned

changes.

10. The importing Party shall maintain its recognition of equivalence for the time that the

measure, which is subject to the intended change, remains in effect.

11. The Parties shall discuss the intended modifications notified pursuant to subparagraph 9(a) on

the request of either Party. The importing Party shall review any information submitted pursuant to

subparagraph 9(b) without undue delay.

& /en 140

12. If a Party adopts, modifies or repeals a sanitary or phytosanitary measure that is subject to an

equivalence determination by the other Party, the importing Party shall maintain its recognition of

equivalence provided that the measures of the exporting Party concerning the product continue to

achieve the appropriate level of sanitary or phytosanitary protection of the importing Party. On

request of a Party, the Parties shall promptly discuss the determination made by the importing Party.

ARTICLE 6.7

Risk Assessment

1. The Parties recognise the importance of ensuring that their respective sanitary and

phytosanitary measures are based on scientific principles and conform to the relevant international

standards, guidelines and recommendations.

2. If a Party considers that a specific sanitary or phytosanitary measure adopted or maintained by

the other Party is constraining, or has the potential to constrain, its exports and that measure is not

based on a relevant international standard, guideline or recommendation, or a relevant standard,

guideline or recommendation does not exist, that Party may request information from the other

Party. The requested Party shall provide to the requesting Party an explanation of the reasons and

relevant information regarding that measure.

& /en 141

3. If the relevant scientific evidence is insufficient, a Party may provisionally adopt a sanitary or

phytosanitary measure on the basis of available pertinent information including from the relevant

international organisations. In such circumstances, that Party shall seek to obtain the additional

information necessary for a more objective risk assessment and review the sanitary or phytosanitary

measure accordingly within a reasonable period of time.

4. Recognising the rights and obligations of the Parties pursuant to the relevant provisions of the

SPS Agreement, nothing in this Chapter shall be construed as preventing a Party from:

(a) establishing the level of sanitary or phytosanitary protection it determines to be appropriate in

accordance with Article 5 of the SPS Agreement;

(b) establishing or maintaining an approval procedure that requires a risk assessment to be

conducted before that Party grants a product access to its market; or

(c) adopting or maintaining sanitary or phytosanitary precautionary measures in accordance with

paragraph 7 of Article 5 of the SPS Agreement.

5. Each Party shall ensure that its sanitary and phytosanitary measures do not arbitrarily or

unjustifiably discriminate between the Parties where identical or similar conditions prevail. A Party

shall not apply sanitary and phytosanitary measures in a manner that would constitute a disguised

restriction to trade between the Parties.

& /en 142

6. A Party conducting a risk assessment shall:

(a) take into account relevant guidance of the WTO SPS Committee and international standards,

guidelines and recommendations;

(b) consider risk management options that are no more trade restrictive than required to achieve

the level of sanitary or phytosanitary protection it has determined to be appropriate in

accordance with paragraph 3 of Article 5 of the SPS Agreement, taking into account technical

and economic feasibility, and

(c) take into account the objective of minimising negative effects on trade when determining the

appropriate level of sanitary or phytosanitary protection in accordance with paragraph 4 of

Article 5 of the SPS Agreement, and select a risk management option that is no more trade

restrictive than required to achieve the sanitary or phytosanitary objective, taking into account

technical and economic feasibility.

7. On request of the exporting Party, the importing Party shall inform the exporting Party of the

progress made with regard to a specific risk assessment concerning a market access request of the

exporting Party, and of any delay that may occur during the process.

& /en 143

8. Without prejudice to Article 6.16, a Party shall not stop the importation of a product of the

other Party solely for the reason that the Party is undertaking a review of its sanitary or

phytosanitary measures, if the importing Party permitted the importation of that product of the other

Party at the time the review was initiated.

ARTICLE 6.8

Adaptation to Regional Conditions, Including Pest- or Disease-Free Areas

and Areas of Low Pest or Disease Prevalence

General

1. The Parties recognise that the adaptation of sanitary and phytosanitary measures to regional

pest or disease conditions is an important means to protect animal and plant life or health, and to

facilitate trade.

2. The Parties shall recognise the concepts of pest- or disease- free areas and areas of low pest or

disease prevalence. The determination of such areas shall be based on factors such as geography,

ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary

controls.

& /en 144

3. The exporting Party claiming that areas within its territory are pest- or disease-free areas or

areas of low pest or disease prevalence shall provide the necessary evidence thereof in order to

objectively demonstrate to the importing Party that such areas are, and are likely to remain, pest- or

disease-free areas or areas of low pest or disease prevalence, respectively. For that purpose, the

exporting Party shall, on request of the importing Party, provide reasonable access for inspection,

testing and other relevant procedures.

4. When determining the areas referred to in paragraph 2 by regionalisation decisions, the

Parties shall take into account the relevant guidance of the WTO SPS Committee and base their

measures on international standards, guidelines and recommendations, or, in case those do not

achieve the appropriate level of sanitary or phytosanitary protection of the Party, on a risk

assessment appropriate to the circumstances.

5. For the determination of areas referred to in paragraph 2, the importing Party shall take into

account any relevant information of and prior experience with the authorities of the exporting Party.

6. The importing Party may determine that an expedited process can be used to evaluate a

request from the exporting Party for recognition of pest- or disease-free areas or areas of low pest or

disease prevalence.

7. If the exporting Party does not agree with the determination of the importing Party, the

importing Party shall provide a justification to the exporting Party.

& /en 145

8. On request of the importing Party, the exporting Party shall provide a full explanation and

supporting data for the determinations and decisions covered by this Article. During those

processes, the Parties shall endeavour to avoid unnecessary disruption to trade.

Animals, Animal Products and Animal By-Products

9. The Parties recognise the principle of zoning which they agree to apply in their trade. The

Parties also recognise the official animal health status as determined by the WOAH.

10. The importing Party shall normally base its own determination of the animal health status of

the exporting Party on the evidence provided by the exporting Party in accordance with the SPS

Agreement and the WOAH Terrestrial Animal Health Code and the WOAH Aquatic Animal Health

Code.

11. The importing Party shall assess any additional information received from the exporting Party

without undue delay and normally within 90 days after receipt. The importing Party may request an

on-site inspection to the exporting Party and shall carry out any inspection in accordance with the

principles set out in Article 6.11 and within 90 days following receipt of the request for inspection

by the exporting Party unless otherwise agreed between the Parties.

12. The Parties recognise the concept of compartmentalisation and shall cooperate on this matter.

& /en 146

Plants and Plant Products

13. The Parties recognise the concepts of pest free areas, pest free places of production and pest

free production sites, as well as areas of low pest prevalence as means to protect plant life or health,

and to facilitate trade as specified in relevant IPPC International Standards for Phytosanitary

Measures (hereinafter referred to as "ISPM"), which they agree to apply to goods traded between

them.

14. On request of the exporting Party, the importing Party shall, when adopting or maintaining

phytosanitary measures, take into account pest free areas, pest free places of production, pest free

production sites, as well as areas of low pest prevalence established by the exporting Party in

accordance with the relevant international standards, guidelines and recommendations.

15. The exporting Party shall identify pest free areas, pest free places of production, pest free

production sites or areas of low pest prevalence and provide that information to the other Party. On

request, the exporting Party shall provide a full explanation and supporting data in accordance with

the relevant ISPM or otherwise as appropriate.

16. Without prejudice to Article 6.16, the importing Party shall, in principle, base its own

determination of the plant health status of the exporting Party or parts thereof on the information

provided by the exporting Party in accordance with the SPS Agreement and the relevant ISPM.

& /en 147

17. The importing Party shall assess any additional information received from the exporting Party

without undue delay and normally within 90 days after receipt. The importing Party may request an

on-site inspection to the exporting Party and shall carry out any inspection in accordance with the

principles set out in Article 6.11 and within 6 months following receipt of the request for inspection

by the exporting Party unless otherwise agreed between the Parties. When agreeing on a different

period, the Parties shall take into account the biology of the pest and the crop concerned.

ARTICLE 6.9

Transparency

1. The Parties recognise the value of sharing information about their sanitary and phytosanitary

measures on an ongoing basis, and of providing the other Party with the opportunity to comment on

their proposed sanitary and phytosanitary measures.

2. In implementing this Article, each Party shall take into account relevant guidance of the WTO

SPS Committee as well as international standards, guidelines and recommendations.

& /en 148

3. Unless urgent problems of human, animal or plant life or health protection arise or threaten to

arise, or the measure is of a trade-facilitating nature, a Party shall notify a proposed sanitary or

phytosanitary measure which may affect trade between the Parties and normally allow at

least 60 days after the notification for the other Party to provide written comments. If feasible and

appropriate, that Party should allow more than 60 days for comments and shall consider any

reasonable request from the other Party to extend the time period for comments. On request, the

Party shall respond to the written comments of the other Party in an appropriate manner.

4. The Parties shall:

(a) pursue transparency as regards sanitary and phytosanitary measures applicable to trade;

(b) enhance mutual understanding of the sanitary or phytosanitary measures of each Party and

their application; and

(c) exchange information on matters related to the development and application of sanitary or

phytosanitary measures with a view to minimising their negative effects on trade between the

Parties.

& /en 149

5. Each Party shall, on request of the other Party and normally within 15 days after the receipt of

the request, provide information on:

(a) import requirements that apply for the import of specific products; and

(b) progress on the application for the approval of specific products.

6. The information referred to in subparagraph 4(c) and paragraph 5 is deemed to be provided if

it has been made available by notification to the WTO in accordance with the relevant rules and

procedures or if the information has been made available free of fees on a publicly accessible

official website of the Party.

7. On request, a Party shall provide to the other Party the relevant information that the Party

considered to develop the proposed measure, as appropriate and to the extent permitted by the

confidentiality and privacy requirements of the Party providing the information.

8. A Party may request the other Party to discuss, if appropriate and feasible, about any trade

concern in relation to a proposed sanitary or phytosanitary measure and about the availability of

alternative, significantly less trade-restrictive approaches for achieving the objective of that

measure.

9. Each Party shall publish, preferably by electronic means, notices of sanitary or phytosanitary

measures in an official journal or on a website.

& /en 150

10. Each Party shall ensure that the text or the notice of a sanitary or phytosanitary measure

specifies the date on which the measure takes effect and the legal basis for the measure.

11. The exporting Party shall notify the importing Party in a timely and appropriate manner:

(a) of a significant sanitary or phytosanitary risk related to the current trade;

(b) of urgent situations where a change in animal or plant health status in the territory of the

exporting Party may affect current trade;

(c) of significant changes in the pest or disease status, such as the presence and evolution of pests

or diseases, including the application of regionalisation decisions; and

(d) of significant changes in food safety, pest or disease management, control or eradication

policies or practices that may affect current trade.

12. If feasible and appropriate, a Party should provide a period of more than six months between

the date of publication of a sanitary or phytosanitary measure that may affect trade between the

Parties and the date on which the measure takes effect, unless the measure is intended to address an

urgent problem of human, animal or plant life or health protection or the measure is of a trade-

facilitating nature.

13. A Party shall provide to the other Party, on request, information on all sanitary or

phytosanitary measures related to the importation of a product into its territory.

& /en 151

ARTICLE 6.10

Trade Facilitation

Approval Procedures

1. The Parties recognise that each Party has the right to develop and apply approval procedures

to ensure the fulfillment of the appropriate level of sanitary and phytosanitary protection of the

importing Party while minimising negative effects on trade.

2. Each Party shall ensure that all sanitary and phytosanitary approval procedures affecting trade

between the Parties:

(a) are undertaken and completed without undue delay; and

(b) are not conducted in a manner which would constitute an arbitrary or unjustifiable

discrimination against the other Party.

3. Each Party shall endeavour to ensure that products exported to the other Party meet the

appropriate level of sanitary or phytosanitary protection of the importing Party. To that end, the

exporting Party shall establish and carry out appropriate control measures, including risk-based

on-site inspections where appropriate. The importing Party may require that the relevant competent

authority of the exporting Party objectively demonstrates, to the satisfaction of the importing Party,

that its import requirements are fulfilled.

& /en 152

4. If the importing Party requires a product to be approved prior to importation, that Party shall,

on request of the exporting Party, promptly make available information about sanitary and

phytosanitary import procedures. The importing Party shall in particular ensure that:

(a) the standard processing period of each procedure is published or that the anticipated

processing period is communicated on request to the exporting Party;

(b) the competent authority of the importing Party, when receiving an application, promptly

examines the completeness of the documentation and informs the exporting Party in a precise

and complete manner of all missing elements;

(c) the competent authority of the importing Party transmits as soon as possible the results of the

procedure in a precise and complete manner to the exporting Party so that corrective action, if

necessary, may be taken;

(d) the competent authority of the importing Party proceeds, even if the application is missing

elements, as far as practicable with the procedure if the exporting Party so requests; and

(e) the competent authority of the importing Party informs the exporting Party, on request, of the

stage of the procedure including an explanation of any delay.

& /en 153

5. If a Party requires for the approval process a risk assessment, that Party shall under normal

circumstances promptly, and normally within one year after the date of receipt of the required

information for the exportation of the product, make that risk assessment available.

6. Each Party shall endeavour to apply reasonable timelines for all steps of its approval

processes and shall promptly start those processes on receipt of an application from the other Party.

7. Each Party shall avoid unnecessary duplication and administrative burdens with respect to:

(a) any documentation, information or action that it requires of the applicant as part of its

approval processes; and

(b) any information the Party evaluates as part of the approval processes.

8. Each Party shall promptly make available any changes to its required approval processes or

related requirements. Except in duly justified circumstances related to its level of protection, each

Party shall provide a transition period between the publication of any changes to its approval

processes or related requirements and their entry into force to allow the other Party to become

familiar with and adapt to such changes. Each Party shall endeavour to accommodate and avoid

lengthening the approval process for applications submitted prior to the publication of the changes.

If the change of the approval processes reduces burdens, the entry into force shall not be

unnecessarily delayed.

& /en 154

9. On request, a Party shall provide, in a timely manner, to the other Party information on the

stage of the approval procedure.

Specific Plant Health related Conditions

10. In accordance with applicable standards agreed under the IPPC, each Party shall maintain

adequate information on its pest status, which may include surveillance, eradication and

containment programmes and their results, in order to support the categorisation of pests and to

justify phytosanitary import measures.

11. Each Party shall endeavour to establish and update a list of regulated pests for products for

which a phytosanitary concern exists. The list shall contain:

(a) the quarantine pests not present within any part of its territory;

(b) the quarantine pests present but not widely distributed and under official control; and

(c) the regulated non-quarantine pests.

12. Each Party shall limit its import requirements for plants or plant products for which a

phytosanitary concern exists to measures ensuring the absence of regulated pests. Such import

requirements shall be applicable to the entire territory of the exporting Party taking into account the

regional conditions.

& /en 155

13. Consignments of products for which phytosanitary measures exist shall be accepted on the

basis of adequate guarantees provided by the exporting Party without pre-clearance programs. The

importing Party may, based on a system approach, confer the related activities for the trade of

products to the competent authority of the exporting Party.

14. The Parties shall only adopt phytosanitary measures that are technically justified, consistent

with the pest risk involved and represent the least restrictive measures available.

15. For the purpose of implementing paragraphs 10 to 14, the Parties shall take into account the

relevant ISPM.

Specific Sanitary and Phytosanitary Import Requirements

16. If several sanitary or phytosanitary measures are available to achieve the appropriate level of

protection of the importing Party, the Parties shall, on request of the exporting Party, establish a

technical dialogue with a view to avoid unnecessary trade disruption and to select the most

practicable solution.

& /en 156

ARTICLE 6.11

Audits

1. In order to determine the ability of the exporting Party to provide the required assurances and

to comply with the sanitary and phytosanitary measures of the importing Party, the importing Party

shall have the right to audit, subject to the provisions of this Article, the competent authorities and

associated or designated inspection systems of the exporting Party.

2. The importing Party may determine that it is necessary to carry out an audit as one of the tools

to assess the official inspection and certification systems of the exporting Party. Such audit shall

follow a systems-based approach which relies on the examination of a sample of system procedures,

documents or records and, where required, on-site inspections of facilities within the scope of the

audit.

3. Audits shall focus primarily on evaluating the effectiveness of the official inspection and

certification systems as well as the capacity of the exporting Party to comply with the sanitary and

phytosanitary import requirements and related control measures, rather than on evaluating specific

establishments or facilities, in order to determine the ability of the exporting Party's competent

authorities to have and maintain control and deliver the required assurances to the importing

country.

& /en 157

4. In conducting an audit, the importing Party shall take into account relevant guidance of the

WTO SPS Committee and act in conformity with relevant international standards, guidelines, and

recommendations.

5. The importing Party shall determine the nature and frequency of audits taking into account the

inherent risks of the product, the track record of past import checks and other available information,

such as audits and inspections carried-out by the competent authority of the exporting Party.

6. Each Party shall endeavour to reduce the frequency and number of audits. If the importing

Party considers it necessary to carry out an audit as one of the tools to assess the official inspection

and certification systems of the exporting Party, as well as the capacity of the exporting Party to

comply with the sanitary and phytosanitary import requirements and related control measures, the

following shall apply:

(a) for the first export request for a specific product, the importing Party shall carry out an audit

on a representative sample of the other Party; and

(b) for any subsequent export request for the same product, with the aim to shorten the time of the

approval procedure, the importing Party shall carry out an audit to the exporting Party only in

duly justified circumstances. If the importing Party carries out an audit, it shall provide an

explanation to the exporting Party.

& /en 158

7. Prior to the audit, the competent authorities of the importing Party and of the exporting Party

shall discuss and lay down in an audit plan:

(a) the rationale for, and the objectives and scope of the audit;

(b) the criteria or requirements against which the exporting Party will be assessed; and

(c) the itinerary and procedures for conducting the audit.

Unless otherwise agreed by the Parties, the importing Party shall provide the exporting Party an

audit plan at least 30 days prior to the audit.

8. The importing Party shall provide information about the results of the audit in writing to the

exporting Party by means of an audit report that sets out findings, conclusions and

recommendations.

9. The importing Party shall provide the draft audit report to the exporting Party, normally

within 30 days of the conclusion of the audit.

10. The importing Party shall provide the exporting Party with the opportunity to comment on the

findings of the audit. The importing Party may take any such comments into account before

drawing conclusions and taking any action. The importing Party shall provide a final report in

writing to the exporting Party normally within two months after the date of receipt of those

comments.

& /en 159

11. The exporting Party shall inform the importing Party of any corrective actions taken on the

basis of the importing Party's findings and conclusions.

12. Each Party shall ensure that procedures are in place to prevent the disclosure of confidential

information obtained during an audit of the competent authorities of the exporting Party, including

procedures to remove any confidential information from a final audit report before that report is

made publicly available.

13. Any measures taken as a result of audits shall be proportionate to the risks identified and shall

not be more trade restrictive than required to achieve the appropriate level of sanitary or

phytosanitary protection of the importing Party. If so requested, consultations regarding the

situation shall be held in accordance with Article 6.19. The Parties shall consider any information

provided through such consultations.

14. Each Party shall bear its own costs associated with the audit.

ARTICLE 6.12

Import Checks

1. Each Party shall ensure that its import checks are risk-based, carried out without undue delay

and applied in a proportionate and non-discriminatory manner.

& /en 160

2. Each Party shall ensure that products exported to the other Party meet the sanitary and

phytosanitary requirements of the importing Party.

3. Each Party shall make available to the other Party, on request, information on its import

procedures including the frequency of import checks regarding sanitary and phytosanitary measures

and the factors it considers as determining the risks associated with importations.

4. If an import check reveals that a product does not comply with the relevant import

requirements, the importing Party shall:

(a) base its action on an assessment of the risk involved and ensure that the action is not more

trade-restrictive than necessary to achieve its appropriate level of sanitary or phytosanitary

protection;

(b) inform the importer or its representative of the reasons for the non-compliance, the legal basis

for the action and, as appropriate, on the place of disposal of that consignment; and

(c) provide to the importer or its representative the opportunity to provide additional information

for assisting that Party in taking a decision.

& /en 161

5. If a Party prohibits or restricts the importation of a good of the other Party on the basis of a

negative result of an import check, the importing Party, shall, in accordance with its law, if

requested by the competent authority of the exporting Party or the operator responsible for the

consignment, provide in writing through normal channels the reason for the prohibition or

restriction, the legal basis or authorisation for the action and, as appropriate, information on the

place of disposal of that consignment.21

6. If the rejected consignment is accompanied by a sanitary or phytosanitary certificate, the

importing Party shall inform the competent authority of the exporting Party and provide all

appropriate information, including the legal basis for the action, detailed laboratory results and

methods. The importing Party shall maintain physical and electronic documentation regarding the

identification, collection, sampling, transportation and storage of the test sample and the analytical

methods used on the test sample. The importing Party shall also inform the importer or its

representative on the disposal of that consignment. In the case of pest interceptions, the notification

shall indicate the pest at species level whenever feasible.

7. If the importing Party determines that there is a significant, sustained or recurring pattern of

non-conformity with a sanitary or phytosanitary measure, the importing Party shall notify the

exporting Party of the non-conformity.

21 For greater certainty, nothing in this Article prevents an importing Party from disposing of a

consignment which is found to have an infectious pathogen or pest that can, if urgent action is

not taken, spread and cause damage to human, animal or plant life or health in the territory of

that Party.

& /en 162

8. Notwithstanding paragraph 6, the importing Party shall provide to the exporting Party, on

request, available information on goods from the exporting Party that were found not to be in

conformity to a sanitary or phytosanitary measure of the importing Party.

9. Any fees imposed with respect to any procedure to check and ensure the fulfilment of sanitary

or phytosanitary measures shall not be higher than the actual cost of the service.

ARTICLE 6.13

Certification

1. If a Party requires a sanitary or phytosanitary certificate for the importation of a good such

certificate shall be based on the international standards of the Codex, the IPPC and the WOAH.

2. Each Party shall ensure that its certificates, including any attestations, are prepared in a

manner that avoids imposing unnecessary burdens for the trade between the Parties.

3. The importing Party shall promptly provide to the other Party, on request, information on the

certificates required for a specific product.

4. The Parties shall strengthen their cooperation in developing model certificates with a view to

reducing administrative burdens and facilitating access to their respective markets.

& /en 163

5. The Parties shall promote the implementation of electronic certification and other

technologies to facilitate trade between them.

6. Each Party shall accept the exchange of original certificates either by a paper-based system or

by a secure method of electronic data transmission that offers an equivalent certification guarantee.

The exporting Party may provide electronic official certification if the importing Party has

determined that equivalent security guarantees are provided, including the use of a digital signature

and the guarantee of the authenticity of the document.

ARTICLE 6.14

Application of SPS Measures

1. Without prejudice to Article 6.8, each Party shall apply its sanitary or phytosanitary measures

to the territory of the other Party.

2. In order to avoid an arbitrary or unjustifiable discrimination, the same import requirements

shall apply to the territory of the exporting Party where identical or similar sanitary or phytosanitary

conditions exist.

& /en 164

3. For the first export request for a specific product, the importing Party shall promptly start the

approval procedure for an application of the other Party or, as the case may be, of one or a group of

Member States of the European Union. The approval procedure shall follow the procedure set out in

Article 6.10 and, in case of an application of a group of Member States where identical or similar

sanitary or phytosanitary conditions exist, shall not take longer than for an application of one

Member State.

4. For a subsequent export request related to the same product, the importing Party shall approve

the application no later than six months after the reception of the request, except in duly justified

cases. Information requests shall be limited to what is necessary and shall take into account

information already available to the importing Party, such as information on the legislative

framework and previous audit reports.

ARTICLE 6.15

Elimination of Redundant Control Measures

1. The Parties recognise that the exporting Party is responsible for ensuring that establishments,

facilities and products eligible for exports meet the applicable sanitary requirements of the

importing Party.

& /en 165

2. If the importing Party maintains a list of approved establishments or facilities for the import

of a specific good, it shall, on request of the exporting Party accompanied by the appropriate

guarantees, approve an establishment or facility situated in the territory of the exporting Party

without prior inspection thereof, subject to the following conditions and procedures:

(a) the importing Party has authorised the import of the good on the basis of an evaluation of the

control system on animal health and food safety conditions applied by the competent

authorities of the exporting Party;

(b) the establishment or facility concerned has been approved by the competent authority of the

exporting Party;

(c) the competent authority of the exporting Party has the authority to suspend or withdraw the

approval of the establishment or facility concerned; and

(d) the exporting Party has provided the relevant information requested by the importing Party.

3. The importing Party shall include the establishments or facilities on the list of approved

establishments or facilities normally within 45 days after the date of receipt of the request of the

exporting Party. The list shall be made publicly available.

& /en 166

4. The importing Party shall have the right to audit the control system of the exporting Party

after the export approval. Those audits may include on-site inspection of a representative number of

establishments or facilities included in the list of approved establishments or facilities, or of those

requested for approval by the exporting Party. If the importing Party identifies as a result of the

audit serious recurrent cases of non-compliance, the importing Party may suspend the recognition of

the control system of the competent authority of the exporting Party.

5. In duly justified circumstances, the importing Party may refuse the approval of establishments

or facilities that are considered as non-compliant with its requirements. In such a case, the

importing Party shall notify the exporting Party of the refusal to approve establishments or facilities

and provide a justification for that refusal.

6. The importing Party may carry out audits in accordance with Article 6.11 as part of the

approval procedure. Such audits shall be limited to the structure, organisation and responsibilities of

the competent authority responsible for the approval of the establishment or facility and the sanitary

guarantees regarding the compliance with the requirements of the importing Party. Those audits

may include on-site inspection of a representative number of establishments or facilities listed as

approved establishments or facilities or for which a request for approval was made by the exporting

Party.

7. Based on the results of such audits, the importing Party may modify the list of establishments

or facilities.

8. This Article does not apply to measures relating to plants and plant products.

& /en 167

ARTICLE 6.16

Emergency Measures

1. The importing Party may, on serious grounds, provisionally adopt the emergency measures

necessary for the protection of human, animal or plant life or health.

2. A Party that adopts an emergency measure shall promptly notify that measure in writing to

the other Party. The Party that has adopted an emergency measure shall take into consideration any

information provided by the other Party.

3. After adopting an emergency measure, the Party shall review the rationale thereof normally

within six months, provided that the relevant information is available, and inform on request the

other Party of the results of the review. A Party shall not maintain the emergency measure unless

the urgent problem or the threat persists. If the Party maintains the emergency measure, that

measure should be periodically reviewed.

4. A Party that adopts an emergency measure shall, in order to avoid unnecessary disruptions to

trade, provide the most suitable and proportionate solution for consignments in transport between

the Parties, taking into account the identified risk.

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ARTICLE 6.17

Cooperation

1. The Parties shall explore, in accordance with this Chapter, options for further cooperation and

information exchange between the Parties on sanitary and phytosanitary matters of mutual interest.

Those options may include trade facilitation initiatives.

2. The Parties shall cooperate to facilitate the implementation of this Chapter and may jointly

identify initiatives on sanitary and phytosanitary matters with the aim of eliminating unnecessary

barriers to trade between the Parties.

3. The Parties may promote cooperation in all multilateral fora, in particular with the relevant

international standardisation bodies.

ARTICLE 6.18

Exchange of Information

Without prejudice to other provisions of this Chapter, a Party may request information from the

other Party on matters arising under this Chapter. The requested Party shall endeavour to provide, in

conformity with its own confidentiality and privacy requirements, available information to the

requesting Party within a reasonable period of time, and if possible, by electronic means.

& /en 169

ARTICLE 6.19

Consultations

1. Each Party may request consultations on specific trade concerns relating to sanitary and

phytosanitary measures.

2. The Parties shall hold those consultations within 30 days after the receipt of the request,

unless the Parties agree otherwise.

3. The Parties shall endeavour to provide all relevant information necessary to reach a mutually

agreed solution that avoids unnecessary disruption to trade.

ARTICLE 6.20

Contact Points

1. Each Party shall designate a contact point for the implementation of this Chapter and notify

the other Party of the contact details including the indication of the official in charge.

2. The Parties shall promptly notify each other of any change of those contact details.

& /en 170

ARTICLE 6.21

Sub-Committee on Sanitary and Phytosanitary Measures

1. The Sub-Committee on Sanitary and Phytosanitary Measures established pursuant to

Article 33.4.1(e)(Sub-Committees and Other Bodies) shall:

(a) provide a forum to improve the Parties' understanding of sanitary and phytosanitary matters

that relate to the implementation of this Chapter, including the regulatory processes related to

SPS measures;

(b) monitor the implementation of this Chapter and consider any matter relating to this Chapter,

including all matters which may arise in relation to its implementation;

(c) provide a forum for discussion of concerns from the application of sanitary or phytosanitary

measures with a view to reaching mutually acceptable solutions and promptly addressing any

matters that may create unnecessary obstacles to trade between the Parties;

(d) exchange information, expertise and experiences on sanitary and phytosanitary matters;

2. The Sub-Committee on Sanitary and Phytosanitary Measures may:

(a) identify areas for cooperation on sanitary and phytosanitary measures which may include

technical assistance;

& /en 171

(b) promote cooperation on sanitary and phytosanitary matters under discussion in multilateral

fora, including the WTO SPS Committee and international standardisation bodies; and

(c) establish working groups consisting of expert-level representatives of the Parties, to address

specific sanitary or phytosanitary matters, which may invite, with the modalities to be

decided, other experts to participate, including from non-governmental organisations.

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CHAPTER 7

COOPERATION ON ANIMAL WELFARE AND ANTI-MICROBIAL RESISTANCE

ARTICLE 7.1

Objectives

The objectives of this Chapter are to provide a framework for dialogue and cooperation with a view

to enhancing the protection and welfare of animals and reaching a common understanding

concerning animal welfare standards, and to strengthen the fight against the development of

anti-microbial resistance.

ARTICLE 7.2

Animal Welfare

1. The Parties recognise that animals are sentient beings.

& /en 173

2. The Parties recognise the value of the World Organisation for Animal Health (WOAH)

animal welfare standards, and shall endeavour to improve their implementation while respecting

their right to determine the level of their science-based measures based on the WOAH animal

welfare standards.

3. The Parties shall endeavour to cooperate in international fora with the aim of promoting

further development of good animal welfare practices and their implementation. The Parties

recognise the value of increased research collaboration in the area of animal welfare.

ARTICLE 7.3

Anti-Microbial Resistance

1. The Parties recognise that anti-microbial resistance is a serious threat to human and animal

health. Misuse of anti-microbials in animal production, including non-therapeutic use, can

contribute to anti-microbial resistance that may represent a risk to human and animal health. The

Parties recognise that the nature of the threat requires a transnational and "One Health"22 approach.

2. The Parties shall cooperate to reduce the use of anti-microbials in animal production and to

ban their use as growth promotors with the aim of combatting anti-microbial resistance in line with

the "One Health" approach.

22 "One Health" as defined by the World Health Organisation (WHO) is an approach combining

policies in multiple sectors to achieve better public health outcomes.

& /en 174

3. The Parties shall cooperate in and follow existing and future guidelines, standards,

recommendations and actions developed in relevant international organisations, initiatives and

national plans aiming to promote the prudent and responsible use of anti-microbials in animal

husbandry and veterinary practices.

4. The Parties shall promote cooperation in all multilateral fora, in particular in the international

standard setting bodies.

ARTICLE 7.4

Working Group on Animal Welfare and Anti-Microbial Resistance

1. The Parties shall endeavour to exchange information, expertise and experiences in the fields

of animal welfare and combatting anti-microbial resistance with the aim of implementing

Articles 7.2 and 7.3.

2. To that end, the Parties shall establish a working group on animal welfare and anti-microbial

resistance which shall share information with the Sub-Committee on Sanitary and Phytosanitary

Measures, as appropriate. The representatives of the Parties in the working group may jointly decide

to invite experts for specific activities.

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ARTICLE 7.5

Non-Application of Dispute Settlement

A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement)

concerning the interpretation or application of the provisions of this Chapter.

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CHAPTER 8

RECOGNITION OF THE PARTIES' RIGHT

TO REGULATE THE ENERGY SECTOR

ARTICLE 8.1

Recognition of the Parties' Right to Regulate the Energy Sector

1. The Parties confirm their full respect for their respective sovereignty, which includes the

ownership and management of all hydrocarbons in the subsoil of their respective territories by the

state or by the relevant public authorities, and their respective sovereign right to regulate with

respect to matters addressed in this Chapter in accordance with their respective law, in the full

exercise of their democratic processes.

2. In the case of Mexico, the European Union, without prejudice to its rights and remedies

available under this Agreement,23 recognizes that:

(a) Mexico reserves its sovereign right to reform its Constitution (Constitución Política de los

Estados Unidos Mexicanos) and its domestic legislation regarding the energy sector, including

hydrocarbons and electricity;

23 For greater certainty, these rights and remedies include those arising from Mexico's

obligations pursuant to the provisions in Chapter 10 (Investment) and the related annexes.

& /en 177

(b) Mexico has the direct, inalienable, and imprescriptible ownership of all hydrocarbons in the

subsoil of the national territory, including the continental shelf and the exclusive economic

zone located outside the territorial sea and adjacent thereto, in strata or deposits, regardless of

their physical conditions pursuant to Mexico's Constitution; and

(c) Mexico reserves its sovereign right to adopt or maintain measures regarding the energy sector,

including hydrocarbons and electricity.

& /en 178

CHAPTER 9

TECHNICAL BARRIERS TO TRADE

ARTICLE 9.1

Objective

The objective of this Chapter is to facilitate trade in goods between the Parties by preventing,

identifying and eliminating unnecessary technical barriers to trade, enhancing transparency and

promoting greater regulatory cooperation.

ARTICLE 9.2

Scope

1. This Chapter applies to the preparation, adoption and application of standards, technical

regulations and conformity assessment procedures, as defined in Annex 1 to the TBT Agreement,

that may affect trade in goods between the Parties.

& /en 179

2. Notwithstanding paragraph 1, this Chapter does not apply to:

(a) technical specifications prepared by procuring entities for their own production or

consumption requirements; or

(b) sanitary and phytosanitary measures covered by Chapter 6 (Sanitary and Phytosanitary

Measures).

3. All references in this Chapter to standards, technical regulations and conformity assessment

procedures include amendments thereto and additions to the rules or the product coverage thereof,

except amendments and additions of an insignificant nature.

ARTICLE 9.3

Relation with the TBT Agreement

Articles 2 to 9 and Annexes 1 and 3 to the TBT Agreement are hereby incorporated into and made

part of this Agreement, mutatis mutandis.

& /en 180

ARTICLE 9.4

International Standards

1. The Parties recognise the important role that international standards, guides and

recommendations can play in supporting greater regulatory alignment, good regulatory practice and

reducing unnecessary technical barriers to trade. To that end, the Parties shall use relevant

international standards as a basis for their technical regulations, except when the Party developing

the technical regulation can demonstrate that such international standards would be ineffective or

inappropriate for the fulfilment of the legitimate objectives pursued.

2. In addition to the obligations set out in Articles 2 and 5 and Annex 3 of the TBT Agreement,

each Party shall consider, among others, the Decisions and Recommendations adopted by the WTO

Committee on Technical Barriers to Trade since 1 January 1995.24

3. Standards developed by international organisations including those listed in Annex 9-A shall

be considered to be relevant international standards, provided that in their development those

organisations have complied with the principles and procedures set out in the Decision of the WTO

Committee on Technical Barriers to Trade on Principles for the Development of International

Standards, Guides and Recommendations.25

24 WTO Document G/TBT/1/Rev. 13, dated 8 March 2017, as may be revised. 25 Contained in WTO Document G/TBT/1/Rev. 13, dated 8 March 2017, as may be revised.

& /en 181

4. At the request of either Party the Trade Committee may by decision update the list in

Annex 9-A.

5. With a view to harmonising standards on as wide a basis as possible, each Party shall

encourage the standardisation bodies within its territory, as well as the regional standardisation

bodies of which the Party or the standardisation bodies within its territory are members, to:

(a) participate, within the limits of their resources, in the preparation of international standards by

relevant international standardisation bodies;

(b) use relevant international standards as a basis for the standards they develop, except where

such international standards would be ineffective or inappropriate, for instance because of an

insufficient level of protection or fundamental climatic or geographical factors or fundamental

technological problems;

(c) avoid duplication of, or overlap with, the work of international standardisation bodies;

(d) review national and regional standards not based on relevant international standards at regular

intervals, with a view to increasing their convergence with relevant international standards;

& /en 182

(e) cooperate with the relevant standardisation bodies of the other Party in international

standardisation activities to ensure that international standards, guides and recommendations

that are likely to become a basis for technical regulations and conformity assessment

procedures do not create unnecessary obstacles to international trade; that cooperation may be

undertaken in international standardisation bodies or at regional level;

(f) foster bilateral cooperation with the standardisation bodies within the territory of the other

Party, as well as the regional standardisation bodies of which the other Party or the

standardisation bodies within its territory are members;

(g) make publicly available through a website their work programs containing a list of the

standards they are currently preparing and of the standards they have adopted.

6. Article 9.6 of this Chapter and Articles 2 or 5 of the TBT Agreement apply to a draft technical

regulation or a draft conformity assessment procedure, which makes a standard mandatory through

incorporation or referencing.

& /en 183

ARTICLE 9.5

Conformity Assessment Procedures

1. The Parties recognise that different mechanisms exist to facilitate the acceptance of the results

of conformity assessment, including:

(a) voluntary agreements between the conformity assessment bodies within the territories of the

Parties;

(b) agreements on the mutual acceptance of the results of conformity assessment procedures with

regard to specific technical regulations, carried out by bodies located within the territory of

the other Party;

(c) use of accreditation procedures to qualify conformity assessment bodies;

(d) government designation or, if applicable, approval of conformity assessment bodies;

(e) recognition by a Party of the results of conformity assessment bodies within the territory of

the other Party; and

(f) acceptance of the supplier's declaration of conformity by the importing Party.

& /en 184

2. Recognising the differences in the conformity assessment procedures in their respective

territories:

(a) the European Union shall, as provided for in its laws and regulations, apply the regime of

supplier's declaration of conformity; and

(b) Mexico shall, as provided for in its laws and regulations, accept as an assurance that a product

conforms to the requirements of Mexico's technical regulations, including technical

regulations enacted after the entry into force of this Agreement, and without additional

requirements, certificates issued by conformity assessment bodies within the territory of the

European Union and that have been accredited by a Mexican accreditation entity and

approved by the competent authority.

In this regard, Mexico shall accord to conformity assessment bodies within the territory of the

European Union treatment no less favourable than that it accords to conformity assessment

bodies within its own territory.

Nothing in this subparagraph shall preclude Mexico from verifying the results of individual

conformity assessment procedures, as long as it does not require that a product is subject to

conformity assessment procedures in the territory of Mexico duplicating the conformity

assessment procedures already conducted in the territory of the European Union, except on a

random or infrequent basis for the purpose of surveillance, audit or in response to information

indicating non-conformity.

& /en 185

3. Notwithstanding paragraph 2, a Party may introduce requirements for mandatory third party

testing or certification for products if compelling reasons related to the protection of human health

and safety justify the introduction of such requirements or certification.

4. Nothing in this Article shall preclude a Party from requesting that a conformity assessment in

relation to specific products is performed by specified governmental bodies of that Party. In such

cases, the Party shall:

(a) limit the conformity assessment fees to the approximate cost of the services rendered and, on

request of an applicant for conformity assessment, explain how the fees imposed are limited

in amount to the approximate cost of the services rendered;

(b) make publicly available the conformity assessment fees; and

(c) on request of the other Party, and in addition to the obligations set out in Articles 5.2.3, 5.2.4

and 5.2.8 of the TBT Agreement, explain:

(i) how the information required is necessary to assess conformity and determine fees;

(ii) how the Party ensures that the confidentiality of the information required is respected in

a manner that ensures the protection of legitimate commercial interests; and

& /en 186

(iii) the procedure to review complaints concerning the operation of the conformity

assessment procedure.

5. Each Party shall publish online, preferably on a single website:

(a) any procedures, criteria and other conditions that it may use as a basis for determining

whether conformity assessment bodies are competent to receive accreditation, approval,

designation or other recognition, if applicable, including recognition granted pursuant to a

mutual recognition agreement; and

(b) a list of the bodies that it has approved, designated or otherwise recognised to perform such

conformity assessment and relevant information on the scope of the approval, designation or

other recognition of each body.

6. A Party may submit a substantiated request to the other Party to enter into negotiations to

conclude a mutual recognition agreement on the mutual acceptance of the results of conformity

assessment procedures for a particular sector. If the other Party refuses to enter into such

negotiations, it shall explain the reasons for its decision.

7. Article 9.7 applies, mutatis mutandis, to conformity assessment procedures.

& /en 187

8. If a Party requires a conformity assessment procedure, it shall:

(a) select conformity assessment procedures proportionate to the risks involved as determined on

the basis of a risk assessment; and

(b) on request, provide information to the other Party on the criteria used for the conformity

assessment procedures for specific products.

9. If a Party requires a third party conformity assessment procedure and it has not reserved this

task to a specified governmental body as referred to in paragraph 4, it shall:

(a) preferably use accreditation to qualify conformity assessment bodies;

(b) make best use of international standards for accreditation and conformity assessment, as well

as international agreements involving the Parties' accreditation bodies, for example, through

the mechanisms of the International Laboratory Accreditation Cooperation (ILAC) and the

International Accreditation Forum (IAF);

(c) join or, as applicable, encourage its conformity assessment bodies to join any functioning

international agreements or arrangements for harmonisation or facilitation of acceptance of

conformity assessment results;

& /en 188

(d) ensure that when more than one conformity assessment body has been designated for a

particular product or set of products, economic operators have a choice amongst them to carry

out the conformity assessment procedure;

(e) ensure that there are no conflicts of interest between accreditation bodies and conformity

assessment bodies; and

(f) allow conformity assessment bodies to rely on testing or inspections carried out by conformity

assessment bodies within the territory of the other Party in relation to the conformity

assessment. Nothing in this subparagraph shall be construed as prohibiting a Party from

requiring those conformity assessment bodies within the territory of the other Party to meet

the same requirements that its own conformity assessment body is required to meet.

ARTICLE 9.6

Transparency

1. In accordance with its respective rules and procedures and without prejudice to Chapter 28

(Good Regulatory Practices), when developing technical regulations and conformity assessment

procedures, which may have a significant effect on trade, each Party shall, except where urgent

problems of safety, health, environmental protection or national security arise or threaten to arise:

(a) allow persons of the other Party to participate in its public consultation process on terms no

less favourable than those accorded to its own persons; and

& /en 189

(b) make the results of the consultation process public on an official website.

2. Each Party shall endeavour to consider methods to provide additional transparency in the

development of technical regulations and conformity assessment procedures, including the use of

electronic tools and public outreach or public consultations.

3. If appropriate, each Party shall encourage non-governmental bodies including standardisation

bodies within its territory to comply with paragraphs 1 and 2.

4. Each Party shall ensure that any document laying down a technical regulation or conformity

assessment procedure contains sufficient detail to adequately inform interested persons and the

other Party about whether and how their trade interests might be affected.

5. Each Party shall publish online, preferably on a single website or official gazette, all

proposals for new or amended technical regulations and conformity assessment procedures of

central and sub-central levels of government, and their final versions, which a Party is required to

notify or publish in accordance with the TBT Agreement.26

6. Each Party shall ensure that its adopted technical regulations and conformity assessment

procedures are published on a website free of charge.

26 For greater certainty, a Party may comply with this obligation by ensuring that the proposed

measures and their final versions are published on, or otherwise accessible through, the

WTO's official website.

& /en 190

7. Each Party shall publish proposals for new technical regulations and conformity assessment

procedures that are in accordance with the technical content of relevant international standards,

guides or recommendations, if any, and that may have a significant effect on trade, except in the

cases provided for in Articles 2.10 and 5.7 of the TBT Agreement.

8. Each Party shall endeavour to publish proposals for new technical regulations and conformity

assessment procedures of sub-central or local governments, as the case may be, that are in

accordance with the technical content of relevant international standards, guides and

recommendations, if any, and that may have a significant effect on trade, in accordance with the

procedures set out in Articles 2.9 or 5.6 of the TBT Agreement.

9. For the purposes of determining whether a proposed technical regulation or conformity

assessment procedure may have a significant effect on trade and must thus be notified in accordance

with the relevant provisions of the TBT Agreement which are incorporated in this Agreement

pursuant to Article 9.3, a Party shall consider, among others, the relevant Decisions and

Recommendations adopted by the WTO Committee on Technical Barriers to Trade

since 1 January 1995, as referred to in Article 9.4.2.

10. Each Party shall, on request of the other Party, provide information regarding the objectives

of, legal basis and rationale for, a technical regulation or conformity assessment procedure that the

Party has adopted or is proposing to adopt.

& /en 191

11. Each Party shall allow a period of at least 60 days following its transmission to the WTO

Central Registry of Notifications of proposed technical regulations and conformity assessment

procedures for the other Party to provide written comments, except where urgent problems of

safety, health, environmental protection or national security arise or threaten to arise. A Party shall

consider any reasonable request from the other Party to extend the comment period. A Party that is

able to extend the comment period beyond 60 days, for example to 90 days, is encouraged to do so.

12. Each Party shall endeavour to provide sufficient time between the end of the comment period

and the adoption of the notified technical regulation or conformity assessment procedure, for its

consideration of, and preparation of responses to, the comments received.

13. If a Party receives written comments on its proposed technical regulation or conformity

assessment procedure from the other Party, it shall:

(a) on request of the other Party, discuss the written comments with the participation of its

competent regulatory authority at a time when those comments can be taken into account; and

(b) reply in writing to the comments no later than the date of publication of the technical

regulation or conformity assessment procedure.

14. Each Party shall publish on a website its responses to comments it receives, if possible no

later than the date of publication of the adopted technical regulation or conformity assessment

procedure.

& /en 192

15. Each Party shall notify the final text of a technical regulation or conformity assessment

procedure at the time the text is adopted or published, as an addendum to the original notification of

the proposed measure notified under Articles 2.9, 3.2, 5.6 or 7.2 of the TBT Agreement.

16. No later than the date of publication of a final technical regulation or conformity assessment

procedure that may have a significant effect on trade, each Party shall make publicly available

online:

(a) an explanation of the objectives and of how the final technical regulation or conformity

assessment procedure achieves them; and

(b) the results of the impact assessment provided for in Article 9.7, if carried out, in accordance

with its rules and procedures.

17. For the purposes of Articles 2.12 and 5.9 of the TBT Agreement, "reasonable interval" means

normally a period of not less than six months, except when this would be ineffective for the

fulfilment of the legitimate objectives pursued.

18. Each Party shall endeavour to provide an interval of more than six months between the

publication of final technical regulations and conformity assessment procedures and their entry into

force, except when this would be ineffective for the fulfilment of the legitimate objectives pursued.

& /en 193

ARTICLE 9.7

Technical Regulations

1. Each Party shall carry out, in accordance with its respective rules and procedures, a regulatory

impact assessment of planned technical regulations.

2. Each Party shall assess the available regulatory and non-regulatory alternatives to a proposed

technical regulation that may fulfil the Party's legitimate objectives, in accordance with Article 2.2

of the TBT Agreement.

3. If a Party has not used international standards as a basis for its technical regulations, a Party

shall, on request of the other Party, identify any substantial deviation from the relevant international

standards and explain the reasons why those standards have been judged inappropriate or

ineffective for the objective pursued, and provide the scientific or technical evidence on which this

assessment is based.

4. In addition to Article 2.3 of the TBT Agreement, each Party shall review technical regulations

with a view to increasing their convergence with relevant international standards. Each Party shall

take into account, among others, any new development in the relevant international standards and

whether the circumstances that have given rise to divergences from any relevant international

standard continue to exist.

& /en 194

ARTICLE 9.8

Regulatory Cooperation

1. The Parties recognise that a broad range of regulatory cooperation mechanisms exist that can

help to eliminate or avoid the creation of technical barriers to trade.

2. A Party may propose to the other Party sector specific regulatory cooperation activities in

areas covered by this Chapter. Those proposals shall be transmitted to the contact point designated

pursuant to Article 9.11 and shall consist of:

(a) information exchanges on regulatory approaches and practices;

(b) initiatives to further align technical regulations and conformity assessment procedures with

relevant international standards; or

(c) technical advice and assistance on mutually agreed terms and conditions to improve practices

related to the development, implementation and review of technical regulations, standards and

conformity assessment procedures and metrology.

The other Party shall give due consideration to the proposal and shall reply within a reasonable

period of time.

& /en 195

3. The Parties shall encourage cooperation between their respective organisations responsible for

standardisation, conformity assessment, accreditation and metrology, whether they are public or

private, on issues covered by this Chapter.

4. Nothing in this Article shall be construed as requiring a Party to:

(a) deviate from domestic procedures for preparing and adopting regulatory measures;

(b) take actions that would undermine or impede the timely adoption of regulatory measures to

achieve its public policy objectives; or

(c) achieve any particular regulatory outcome.

ARTICLE 9.9

Marking and Labelling

1. For the purposes of this Article and in accordance with paragraph 1 of Annex 1 to the TBT

Agreement, a technical regulation may include or deal exclusively with the requirements of marking

and labelling applied to a product, process or production method.

& /en 196

2. The Parties affirm that their technical regulations that include or deal exclusively with

marking or labelling comply with Article 2 of the TBT Agreement.

3. If a Party requires mandatory marking or labelling of products, that Party shall:

(a) endeavour to only require information which is relevant for consumers or users of the product

or for indicating the product's conformity with the mandatory technical requirements;

(b) not require any prior approval, registration or certification of the labels or markings of

products, or the payment of any fee, as a precondition for placing on its market products that

otherwise comply with its mandatory technical requirements, unless it is necessary in view of

the risk of the products to human, animal or plant life or health, the environment or national

security;

(c) if the Party requires the use of a unique identification number by economic operators, issue

that number to the economic operators of the other Party without undue delay and on a non-

discriminatory basis;

(d) provided it is not misleading, contradictory or confusing in relation to the information

required in the importing Party of the goods, permit the following:

(i) information in other languages in addition to the language required in the importing

Party of the goods;

& /en 197

(ii) internationally accepted nomenclatures, pictograms, symbols or graphics; and

(iii) additional information to that required in the importing Party of the goods;

(e) accept that labelling, including supplementary labelling and corrections to labelling, takes

place after importation but prior to offering the product for sale, as an alternative to labelling

at the place of origin, unless such labelling must be carried out at the place of origin for

reasons of public health or safety or due to a requirement related to a geographical indication

of the exporting Party; and

(f) endeavour to accept non-permanent or detachable labels, or the inclusion of relevant

information for marking or labelling in the accompanying documentation, rather than in labels

physically attached to the product, unless such labelling is required for reasons of public

health or safety.

ARTICLE 9.10

Information Exchange and Discussions

1. A Party may request the other Party to provide information on any matter covered by this

Chapter. The other Party shall provide that information within a reasonable period of time.

& /en 198

2. A Party may request the other Party to discuss any concern that arises under this Chapter,

including any draft or proposed technical regulation or conformity assessment procedure of the

other Party, if it considers that the technical regulation or conformity assessment procedure might

have a significant adverse effect on trade between the Parties. The request shall be in writing and

identify:

(a) the concern;

(b) the provisions of this Chapter to which the concern relates; and

(c) the reasons for the request, including a description of the requesting Party's concern.

3. For greater certainty, a Party may also request the other Party to discuss any concern that

arises under this Chapter with respect to technical regulations or conformity assessment procedures

of regional or local governments, as the case may be, on the level directly below that of the central

government, and that may have a significant effect on trade.

4. The Parties shall discuss the concern raised within 60 days after the date of the request in

person or by video or teleconference and shall endeavour to resolve the concern as expeditiously as

possible. If the requesting Party considers that the concern is urgent, it may request that any

discussions take place within a shorter timeframe. The responding Party shall give positive

consideration to that request. The Parties shall make every attempt to arrive at a mutually

satisfactory resolution of the matter.

& /en 199

5. Unless the Parties agree otherwise, the discussions and any information exchanged in the

course of the discussions shall be without prejudice to the rights and obligations of the Parties under

this Agreement, the WTO Agreement or any other agreement to which both Parties are party.

6. Requests for information or discussions shall be submitted through the respective contact

point designated pursuant to Article 9.11.

ARTICLE 9.11

Contact Points

1. Each Party shall designate a contact point to facilitate cooperation and coordination under this

Chapter and notify the other Party of its contact details. The Parties shall promptly notify each other

of any changes to those contact details.

2. The contact points shall work jointly to facilitate the implementation of this Chapter and

cooperation between the Parties on all TBT matters. The contact points shall in particular be

responsible for:

(a) organising information exchange and discussions referred to in Article 9.10.6;

& /en 200

(b) promptly addressing any issue that the other Party raises related to the development, adoption,

application or enforcement of standards, technical regulations or conformity assessment

procedures;

(c) on request of a Party, arranging discussions on any matter arising under this Chapter;

(d) exchanging information on developments in non-governmental, regional and multilateral fora

related to standards, technical regulations and conformity assessment procedures; and

(e) facilitating the identification of possible needs for technical assistance.

ARTICLE 9.12

Sub-Committee on Technical Barriers to Trade

The Committee on Technical Barriers to Trade established pursuant to

Article 33.4.1(g) (Sub-Committees and other Bodies) shall:

(a) monitor the implementation and administration of this Chapter;

(b) enhance cooperation in the development and improvement of standards, technical regulations

and conformity assessment procedures;

& /en 201

(c) establish priority areas of mutual interest for future work under this Chapter and consider

proposals for new initiatives;

(d) monitor and discuss developments under the TBT Agreement; and

(e) take any other steps that the Parties consider will assist them in implementing this Chapter

and the TBT Agreement.

& /en 202

CHAPTER 10

INVESTMENT LIBERALISATION

ARTICLE 10.1

Definitions

1. For the purposes of this Chapter:

(a) "covered enterprise" means an enterprise which is established in accordance with point (e) by

an investor of a Party in the territory of the other Party, in accordance with applicable law, and

which is in existence at the date of entry into force of this Agreement or is established

thereafter;

(b) "economic activity" means an activity of an industrial, commercial or professional character,

and an activity of craftsmen, including the supply of services, except an activity performed in

the exercise of governmental authority;

(c) "enterprise" means an enterprise as defined in Article 1.3 (Definitions of General

Application), or a branch or a representative office thereof27;

27 For Mexico, a representative office shall not be considered as an enterprise, unless it is

established as a branch.

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(d) "enterprise of the European Union" or "enterprise of Mexico" means an enterprise set up in

accordance with the law of the European Union or its Member States, or of Mexico and

engaged in substantive business operations28 in the territory of the European Union or of

Mexico, respectively;29

shipping companies established outside the European Union or Mexico and controlled by

nationals of a Member State of the European Union or of Mexico, respectively, shall also be

beneficiaries of the provisions of this Chapter, if their vessels are registered in accordance

with the law of a Member State of the European Union or of Mexico, as appropriate, and fly

the flag of that Member State of the European Union or of Mexico;

(e) "establishment" means the setting up, including the acquisition30, of an enterprise in the

European Union or in Mexico;

(f) "investor of a Party" means a Party or natural person or an enterprise of a Party, other than a

branch or representative office, that seeks to establish, is establishing or has established an

enterprise in accordance with point (e) within the territory of the other Party;

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

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

continuous link" with the economy of a Member State of the European Union enshrined in

Article 54 of the TFEU is equivalent to the concept of "substantive business operations". 29 For greater certainty, a branch or a representative office of an enterprise of a third country

shall not be considered to be an enterprise of the European Union or an enterprise of Mexico. 30 The term "acquisition" includes capital participation in an enterprise with a view to

establishing or maintaining lasting economic links.

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(g) "investor of a third country" means an investor that seeks to establish, is establishing or has

established an enterprise in accordance with point (e) within the territory of a Party, that is not

an investor of a Party;

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

disposal of an enterprise.

ARTICLE 10.2

Scope

1. This Chapter applies to measures adopted or maintained by:31

(a) the central, regional or local governments or authorities of that Party; and

(b) any person, including a state enterprise or any other non-governmental body in the exercise of

powers delegated by central, regional, or local governments or authorities.

31 For greater certainty, this Chapter covers measures by entities listed under subparagraphs (a)

and (b), which are adopted or maintained either directly or indirectly by instructing, directing

or controlling other entities with regard to those measures.

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2. This Chapter does not apply to measures of a Party insofar as they are covered by Chapter 18

(Financial Services).

ARTICLE 10.3

Right to Regulate

The Parties affirm the right to regulate within their territories to achieve legitimate policy

objectives, such as public health, social services, public education, safety, environment, public

morals, social or consumer protection, privacy and data protection, the promotion and protection of

cultural diversity, or competition.

ARTICLE 10.4

Relation to Other Chapters

If an inconsistency arises between this Chapter and Chapter 18 (Financial Services), the latter shall

prevail to the extent of the inconsistency.

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ARTICLE 10.5

Scope

1. This Chapter applies to measures adopted or maintained by a Party affecting the establishment

of an enterprise or the operation of such an enterprise by an investor of the other Party in its

territory.

2. This Chapter does not apply to:

(a) activities performed in the exercise of governmental authority within the territory of the

respective Party;

(b) government procurement of a good or service purchased for governmental purposes, and not

with a view to commercial resale or use in the production of a good or supply of a service for

commercial sale, irrespective of whether that procurement constitutes a covered procurement

within the meaning of Article 21.1 (Definitions);

(c) audio-visual services;

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(d) national maritime cabotage;32

(e) air services, or related services in support of air services33, other than the following:

(i) aircraft repair and maintenance services during which an aircraft is withdrawn from

service;

(ii) selling and marketing of air transport services;

(iii) computer reservation system services; and

(iv) ground handling services.

32 For the European Union, 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 a

Member State of the European Union and another port or point located in that same

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

United Nations Convention on the Law of the Sea, and traffic originating and terminating in

the same port or point located in a Member State of the European Union.

For Mexico, national maritime cabotage under this Chapter covers the navigation that any

vessel performs by sea, between ports or places located within the Mexican marine zones and

Mexican shores. 33 For greater certainty, "air services or related services in support of air services" also include

the following services: rental of aircraft with crew, airport operation services and services

provided by using an aircraft whose primary purpose is not the transportation of goods or

passengers, such as aerial fire-fighting, flight training, sightseeing, spraying, surveying,

mapping, photography, parachute jumping, glider towing, helicopter-lift for logging and

construction, and other airborne agricultural, industrial and inspection services.

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3. Articles 10.6 to 10.8 do not apply to subsidies34 or grants provided by a Party, including

government-supported loans, guarantees and insurance.

4. Articles 10.6 to 10.10 do not apply to new services, as set out in Annex VII (Understanding

on New Services Not Classified in the United Nations Provisional Central Product

Classification 1991).

5. This Chapter does not bind a Party in relation to any act or fact that took place or any situation

that ceased to exist before the date of entry into force of this Agreement.

34 For greater certainty, subsidies are covered under Chapter 24 (Subsidies).

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ARTICLE 10.6

Market Access

In the sectors or subsectors where market access commitments are undertaken, a Party shall not

adopt or maintain, with respect to market access through establishment or operation by investors of

the other Party or by covered enterprises, either on the basis of its entire territory or on the basis of a

territorial subdivision, a measure35 that:

(a) limits the number of enterprises that may carry out a specific economic activity, whether in

the form of numerical quotas, monopolies, exclusive rights or the requirement of an economic

needs test;

(b) limits the total value of transactions or assets in the form of numerical quotas or the

requirement of an economic needs test;

(c) limits the total number of operations or the total quantity of output expressed in terms of

designated numerical units in the form of quotas or the requirement of an economic needs

test;

35 Subparagraphs 2(a), (b) and (c) do not cover measures adopted or maintained in order to limit

the production of an agricultural or fishery product.

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(d) restricts or requires specific types of legal entity or joint venture through which an investor of

the other Party may carry out an economic activity; or

(e) limits the total number of natural persons that may be employed in a particular sector or that

an enterprise may employ and who are necessary for, and directly related to, the performance

of an economic activity in the form of numerical quotas or the requirement of an economic

needs test.

ARTICLE 10.7

National Treatment

1. Each Party shall accord to investors of the other Party and to their covered enterprises

treatment no less favourable than the treatment it accords, in like situations, to its own investors and

to their enterprises, respectively, with respect to their establishment in its territory.

2. Each Party shall accord to investors of the other Party and to their covered enterprises,

treatment no less favourable than the treatment it accords, in like situations, to its own investors and

to their enterprises, respectively, with respect to their operation in its territory.

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

a regional level of government of Mexico, treatment no less favourable than the most favourable

treatment accorded, in like situations, by that regional level of government to investors of Mexico,

and to their enterprises in the territory of that regional government.

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

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

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

to their enterprises in its territory.

ARTICLE 10.8

Most-Favoured-Nation Treatment

1. Each Party shall accord to investors of the other Party and to their covered enterprises

treatment no less favourable than the treatment it accords, in like situations, to investors and

enterprises, respectively, of any third country with respect to their establishment in its territory.

2. Each Party shall accord to investors of the other Party and to their covered enterprises

treatment no less favourable than the treatment it accords, in like situations, to investors and

enterprises, respectively, of any third country with respect to the operation of enterprises in its

territory.

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3. Paragraphs 1 and 2 shall not be construed as obliging a Party to extend to the investors of the

other Party the benefit of any treatment resulting from measures providing for recognition,

including of the standards or criteria for the authorisation, licencing or certification of a natural

person or enterprise to carry out an economic activity, or of prudential measures.

4. For greater certainty, the treatment referred to in this Article does not include treatment

accorded to investors of a third country and their enterprises by provisions concerning the

settlement of investment disputes provided for in other international agreements concluded between

a Party and a third country. The substantive provisions in other international agreements do not in

themselves constitute treatment as referred to in paragraphs 1 and 2, and thus cannot give rise to a

breach of this Article. Measures applied pursuant to such provisions may constitute treatment under

this Article.

ARTICLE 10.9

Performance Requirements

1. A Party shall not, in connection with the establishment or the operation of an enterprise of an

investor of a Party or of a third country in the territory of that Party, impose or enforce any

requirement or enforce any commitment or undertaking to:36

(a) export a given level or percentage of goods or services;

36 For greater certainty, a condition for the receipt or continued receipt of an advantage referred

to in paragraph 2 does not constitute a "commitment or undertaking" for the purposes of

paragraph 1.

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(b) achieve a given level or percentage of domestic content;

(c) purchase, use or accord a preference to goods produced or services provided in its territory, or

to purchase goods or services from natural persons or enterprises in its territory;

(d) relate in any way the volume or value of imports to the volume or value of exports or to the

amount of foreign exchange inflows associated with such enterprise;

(e) restrict sales of goods or services in its territory that such enterprise produces or supplies by

relating those sales in any way to the volume or value of its exports or foreign exchange

earnings;

(f) provide access to or transfer a particular technology, a production process or other proprietary

knowledge to a natural person or enterprise in its territory;

(g) supply exclusively from the territory of the Party to a specific regional or the world market,

goods or services that such enterprise produces;

(h) locate the headquarters of that enterprise for a specific regional or the world market in its

territory; or

(k) restrict the exportation or sale for export.

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2. A Party shall not condition the receipt or continued receipt of an advantage, in connection

with the establishment or the operation of an enterprise of an investor of a Party or of a third

country in its territory, on compliance with any requirement to:

(a) achieve a given level or percentage of domestic content;

(b) purchase, use or accord a preference to goods produced or services provided in its territory, or

to purchase goods from natural persons or enterprises in its territory;

(c) relate in any way the volume or value of imports to the volume or value of exports or to the

amount of foreign exchange inflows associated with such enterprise;

(d) restrict sales of goods or services in its territory that such enterprise produces or supplies by

relating those sales in any way to the volume or value of its exports or foreign exchange

earnings; or

(e) restrict the exportation or sale for export.

3. Nothing in paragraph 2 shall be construed as preventing a Party from conditioning the receipt

or continued receipt of an advantage, in connection with the establishment or the operation of an

enterprise of an investor of a Party or of a third country, on compliance with a requirement to locate

production, supply a service, train or employ workers, construct or expand particular facilities, or

carry out research and development, in its territory.

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4. Subparagraph 1(f) does not apply if:

(a) the requirement is imposed or the commitment or undertaking is enforced by a court,

administrative tribunal or competition authority to remedy a practice determined after a

judicial or administrative process to be a violation of the Party's competition law; or

(b) a Party authorises use of an intellectual property right in accordance with Articles 31

and 31bis of the TRIPS Agreement, or to measures requiring the disclosure of proprietary

information that fall within the scope of, and are consistent with, Article 39 of the TRIPS

Agreement.

5. Subparagraphs 1(a), (b) and (c) and 2(a) and (b), do not apply to qualification requirements

for goods or services with respect to participation in export promotion and foreign aid programmes.

6. Subparagraphs 2(a) and (b) do not apply to requirements imposed by an importing Party

relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.

7. For greater certainty, paragraphs 1 and 2 do not apply to any commitment, undertaking or

requirement other than those set out in those paragraphs.

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8. This Article does not preclude enforcement of any commitment, undertaking or requirement

between private parties other than a Party, where a Party did not impose or require the commitment,

undertaking or requirement.

9. This Article is without prejudice to commitments of a Party made under the WTO Agreement.

ARTICLE 10.10

Senior Management and Board of Directors

1. A Party shall not require that an enterprise that is a covered enterprise appoint natural persons

of any particular nationality to senior management positions.

2. A Party shall not require that the board of directors of an enterprise of that is a covered

enterprise be composed of nationals or residents in the territory of the Party, or a combination

thereof.

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ARTICLE 10.11

Formal Requirements

Notwithstanding Articles 10.7 and 10.8, a Party may require an investor of the other Party or its

covered enterprise to provide routine information concerning that enterprise solely for informational

or statistical purposes. The Party shall protect that information which is confidential from any

disclosure that would prejudice the competitive position of the investor or the covered enterprise.

Nothing in this Article shall be construed as preventing a Party from otherwise obtaining or

disclosing information in connection with the equitable and good faith application of its law.

ARTICLE 10.12

Non-Conforming Measures and Exceptions

1. Articles 10.7 to 10.10 do not apply to:

(a) an existing non-conforming measure that is maintained by a Party at the level of:

(i) the European Union, as set out in its List to Annex I (Reservations for Existing

Measures);

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(ii) a central government, as set out by that Party in its List to Annex I (Reservations for

Existing Measures);

(iii) a regional government, as set out by that Party in its List to Annex I (Reservations for

Existing Measures); or

(iv) a local government

(b) the continuation or prompt renewal of a non-conforming measure referred to in

subparagraph (a); or

(c) any amendment to a non-conforming measure referred to in subparagraph (a), to the extent

that the amendment does not decrease the conformity of the measure, as it existed

immediately before the amendment, with Articles 10.7 to 10.10.

2. Articles 10.7 to 10.10 do not apply to a measure that a Party adopts or maintains with respect

to sectors, subsectors or activities as set out in its List to Annex II (Reservations for Future

Measures).

3. A Party shall not, under a measure adopted after the date of entry into force of this Agreement

and covered by its List to Annex II (Reservations for Future Measures), require directly or

indirectly an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of a

covered enterprise existing at the time the measure becomes effective.

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4. Article 10.6 does not apply to a measure that a Party adopts or maintains with respect to

committed sectors or subsectors as set out in its Schedule to Annex III (Market Access

Commitments).

5. Articles 10.7 and 10.8 do not apply to any measure that constitutes an exception, exemption

or waiver from Articles 3 or 4 of the TRIPS Agreement, as provided in Articles 3 to 5 of that

Agreement.

6. Without prejudice to paragraphs 1 to 5, within five years after the date of entry into force of

this Agreement, Mexico may notify to the European Union a draft Trade Council decision to

modify Annexes I (Reservations for Existing Measures), II (Reservations for Future Measures)

and III (Specific Commitments and Limitations on Market Access):

(a) in Appendix I-B-2 (List of Mexico. Reservations Applicable at Sub-Central Level) to

Annex I (Reservations for Existing Measures) and Appendix III-B-2 (Schedule of Mexico.

Limitations Applicable at Sub-Central Level) to Annex III (Specific Commitments and

Limitations on Market Access) any existing non-conforming measures maintained at the

sub-federal level of government; and

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(b) in Appendix I-B-1 (List of Mexico. Reservations Applicable at Central Level) to

Annex I (Reservations for Existing Measures) and Appendix II-B (List of Mexico) to

Annex II (Reservations for Future Measures) its performance requirements.

The European Union shall review that draft within a period of three months and consult with

Mexico any related issues. After consultation, the Trade Council shall adopt the modifications to the

annexes referred to in this paragraph. The modified annexes shall apply as of the date of adoption of

the modifications.

ARTICLE 10.13

Denial of Benefits

A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise

of that Party and to investments of that investor if:

(a) an investor of a third country owns or controls the enterprise; and

(b) the denying Party adopts or maintains a measure with respect to that third country, or with

respect to natural persons or enterprises of that third country, that prohibits transactions with

the enterprise or that would be violated or circumvented if the benefits of this Chapter were

accorded to that investor or to its investments.

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ARTICLE 10.14

Sub-Committee on Services and Investment

The Sub-Committee on Services and Investment established pursuant to

Article 33.4.1(h) (Sub-Committees and Other Bodies) shall:

(a) provide a forum for the Parties to consult on issues related to this Chapter, including:

(i) difficulties which may arise in the implementation of this Chapter;

(ii) possible improvements of this Chapter, in particular in light of experience and

developments in other international fora and under other agreements of the Parties; and

(b) prepare decisions to be adopted or actions to be taken by the Trade Council pursuant to this

Chapter.

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CHAPTER 11

CROSS-BORDER TRADE IN SERVICES

ARTICLE 11.1

Definitions

1. For the purposes of this Chapter:

(a) "cross-border trade in services" or "cross-border supply of services" means the supply of a

service:

(i) from the territory of a Party into the territory of the other Party; or

(ii) in the territory of a Party to a service consumer of the other Party;

(b) "enterprise" means an enterprise as defined in Article 1.3 (Definitions of General

Application), or a branch or a representative office thereof;

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(c) "enterprise of the European Union" or "enterprise of Mexico" means an enterprise set up in

accordance with the law of the European Union or its Member States, or of Mexico and

engaged in substantive business operations37 in the territory of the European Union or of

Mexico, respectively;38

shipping companies established outside the European Union or Mexico and controlled by

nationals of a Member State of the European Union or of Mexico, respectively, shall also be

beneficiaries of the provisions of this Chapter if their vessels are registered in accordance with

the law of a Member State of the European Union or of Mexico, as appropriate, and fly the

flag of that Member State of the European Union or of Mexico;

(d) "service supplied in the exercise of governmental authority" means, for each Party, any

service that is supplied neither on a commercial basis nor in competition with one or more

service suppliers; and

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

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

continuous link" with the economy of a Member State of the European Union enshrined in

Article 54 of the TFEU is equivalent to the concept of "substantive business operations". 38 For greater certainty, a branch or a representative office of an enterprise of a third country

shall not be considered to be an enterprise of the European Union or an enterprise of Mexico.

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(e) "service supplier of a Party" means a natural person or an enterprise of a Party other than a

branch or a representative office that seeks to supply or supplies a service.

ARTICLE 11.2

Scope

1. This Chapter applies to measures of a Party affecting cross-border trade in services by service

suppliers of the other Party. Those measures include measures affecting:

(a) the production, distribution, marketing, sale or delivery of a service;

(b) the purchase or use of, or payment for, a service;

(c) the access to and use of, in connection with the supply of a service, services which are

required by a Party to be offered to the public generally, including distribution, transport or

telecommunications networks; and

(d) the provision of any form of financial security, including a bond, as a condition for the supply

of a service.

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2. This Chapter does not apply to:

(a) audio-visual services;

(b) national maritime cabotage;39

(c) measures of a Party insofar as they are covered by Chapter 18 (Financial Services);

(d) services supplied in the exercise of governmental authority;

39 For the European Union, 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 a

Member State of the European Union and another port or point located in that same

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

United Nations Convention on the Law of the Sea; and traffic originating and terminating in

the same port or point located in a Member State of the European Union.

For Mexico, national maritime cabotage under this Chapter covers the navigation that any

vessel performs by sea, between ports or places located within the Mexican marine zones and

Mexican shores.

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(e) government procurement of a good or service purchased for governmental purposes, and not

with a view to commercial resale, or use in the production of a good or supply service for

commercial sale, irrespective of whether that procurement constitutes a covered procurement

within the meaning of Article 21.1 (Definitions);

(f) subsidies40 or grants provided by a Party, including government-supported loans, guarantees

and insurance; and

(g) air services or related services in support of air services41, other than:

(i) aircraft repair and maintenance services during which an aircraft is withdrawn from

service;

(ii) selling and marketing of air transport services;

40 For greater certainty, subsidies are covered under Chapter 24 (Subsidies). 41 For greater certainty, air services or related services in support of air services also include:

rental of aircraft with crew, airport operation services and services provided by using an

aircraft whose primary purpose is not the transportation of goods or passengers, such as aerial

fire-fighting flight training, sightseeing, spraying, surveying, mapping, photography,

parachute jumping, glider towing, helicopter-lift for logging and construction, and other

airborne agricultural, industrial and inspection services.

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(iii) computer reservation system services; and

(iv) ground handling services.

3. Articles 11.4 to 11.7 do not apply to new services as set out in Annex VII (Understanding on

New Services Not Classified in the United Nations Provisional Central Product

Classification 1991).

ARTICLE 11.3

Right to Regulate

The Parties affirm the right to regulate within their territories to achieve legitimate policy

objectives, such as public health, social services, public education, safety, environment, public

morals, social or consumer protection, privacy and data protection, the promotion and protection of

cultural diversity, or competition.

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ARTICLE 11.4

Market Access

In the sectors or subsectors where market access commitments are undertaken, a Party shall not

adopt or maintain, either on the basis of its entire territory or on the basis of a territorial subdivision,

measures imposing limitations on:

(a) the number of service suppliers, whether in the form of numerical quotas, monopolies,

exclusive service suppliers or the requirement of an economic needs test;

(b) the total value of service transactions or assets in the form of numerical quotas or the

requirement of an economic needs test; or

(c) the total number of service operations or the total quantity of service output expressed in

terms of designated numerical units in the form of quotas or the requirement of an economic

needs test.

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ARTICLE 11.5

Local Presence

A Party shall not require a service supplier of the other Party to establish or maintain a

representative office or any form of enterprise, or to be resident, in its territory as a condition for the

cross-border supply of a service.

ARTICLE 11.6

National Treatment

1. Each Party shall accord to services and service suppliers of the other Party treatment no less

favourable than the treatment it accords, in like situations, to its own services and service suppliers.

2. The treatment to be accorded by Mexico pursuant to paragraph 1 is, with respect to a regional

level of government of Mexico, treatment no less favourable than the most favourable treatment

accorded, in like situations, by that regional level of government to its own services and service

suppliers.

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3. The treatment to be accorded by the European Union pursuant to paragraph 1 is, with respect

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

the most favourable treatment accorded, in like situations, by that government to its services and

service suppliers.

ARTICLE 11.7

Most-Favoured-Nation Treatment

1. Each Party shall accord to services and service suppliers of the other Party treatment no less

favourable than the treatment it accords, in like situations, to services and service suppliers of a

third country.

2. Paragraph 1 shall not be construed as obliging a Party to extend to services and service

suppliers of the other Party the benefit of any treatment resulting from measures providing for

recognition, including of the standards or criteria for the authorisation, licencing or certification of a

natural person or enterprise to carry out an economic activity, or of prudential measures.

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ARTICLE 11.8

Non-Conforming Measures and Exceptions

1. Articles 11.5 to 11.7 do not apply to:

(a) any existing non-conforming measure of a Party that is maintained by:

(i) the European Union, as set out in its List to Annex I (Reservations for Existing

Measures);

(ii) a national government, as set out by that Party in its List to Annex I (Reservations for

Existing Measures);

(iii) a regional government, as set out by that Party in its List to Annex I (Reservations for

Existing Measures); or

(iv) a local government;

(b) the continuation or prompt renewal of a non-conforming measure referred to in

subparagraph (a); or

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(c) any amendment to a non-conforming measure referred to in subparagraph (a), to the extent

that the amendment does not decrease the conformity of the measure, as it existed

immediately before the amendment, with Articles 11.5 to 11.7.

2. Articles 11.5 to 11.7 do not apply to a measure that a Party adopts or maintains with respect to

sectors, subsectors or activities, as set out in its List to Annex II (Reservations for Future

Measures).

3. Article 11.4 does not apply to any measure of a Party with respect to committed sectors or

subsectors as set out in its Annex III (Specific Commitments and Limitations on Market Access).

4. Within five years after the date of entry into force of this Agreement, Mexico may notify to

the European Union a draft Trade Council decision to modify Appendix I-B-2 (List of Mexico.

Reservations Applicable at Sub-Central Level) to Annex I (Reservations for Existing Measures) and

Appendix III-B-2 (Schedule of Mexico. Limitations Applicable at Sub-Central Level) to

Annex III (Specific Commitments and Limitations on Market Access) with any existing non-

conforming measures maintained at the sub-federal level of government.

The European Union shall review that draft within a period of three months and consult with

Mexico any related issues. After consultation, the Trade Council shall adopt the modifications to the

annexes referred to in this paragraph. The modified annexes shall apply as of the date of adoption of

the modifications.

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ARTICLE 11.9

Denial of Benefits

A Party may deny the benefits of this Chapter to a service supplier of the other Party that is an

enterprise of that Party and to services of that service supplier if:

(a) a person of a third country owns or controls the enterprise; and

(b) the denying Party adopts or maintains a measure with respect to that third country or to

enterprises or natural persons of that third country, that prohibits transactions with the

enterprise or that would be violated or circumvented if the benefits of this Chapter were

accorded to the enterprise.

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CHAPTER 12

TEMPORARY PRESENCE OF NATURAL PERSONS FOR BUSINESS PURPOSES

ARTICLE 12.1

Definitions

For the purposes of this Chapter:

(a) "business person" means, for Mexico, a national of the European Union who enters the

territory of Mexico, without the purpose of establishing temporary or permanent residence, to:

(i) commercially trade goods or provide services;

(ii) establish, develop or manage an enterprise;

(iii) conduct business contacts and negotiations for the sale of goods and services, or similar

activities;

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(iv) provide specialised services for installation, repair, maintenance, supervision or training

of workers, previously agreed or considered in a contract of technology transfer, patents

and trademarks, for the sale of commercial or industrial equipment or machinery, or any

other production process of an enterprise established in the territory of a Party, during

the term of the guarantee contract, sale or service;

(v) attend assemblies or sessions of the board of directors of a legally established enterprise

in Mexico; or

(vi) promote goods or services, advise clients, receive orders, negotiate contracts and

exhibit, participate or attend congresses, fairs, conventions or similar;

(b) "business visitors for purposes of establishment of an enterprise" means natural persons

working in a senior position who are responsible for setting up an enterprise, who do not offer

or provide services or engage in any economic activity other than required for the purpose of

the establishment of that enterprise and do not receive remuneration from a source located

within the host Party;

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(c) "contractual service suppliers" means natural persons employed by an enterprise of a Party

which itself is not an agency for placement and supply of services of personnel and is not

acting through such an agency, which is not established in the territory of the other Party and

which has concluded a bona fide contract to supply services with a final consumer in the other

Party, requiring the presence on a temporary basis of its employees in that Party, in order to

fulfil the contract to supply services;42

(d) "independent professionals" means, for the European Union, natural persons engaged in the

supply of a service and established as self-employed in the territory of a Party who are not

established in the territory of the other Party and who have concluded a bona fide contract,

other than through an agency for placement and supply services of personnel, to supply

services with a final consumer in the other Party, requiring their presence on a temporary

basis in that Party in order to fulfil the contract to supply services;43

42 The service contract referred to in subparagraph (c) shall comply with the requirements of the

laws and regulations of the Party where the contract is executed. 43 The service contract referred to in subparagraph (d) shall comply with the requirements of the

laws and regulations of the Party where the contract is executed.

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(e) "intra-corporate transferees" means natural persons who have been employed by an enterprise

of a Party or have been partners in an enterprise of a Party, who are temporarily transferred to

an enterprise of a Party, including a subsidiary, branch or parent company of that enterprise in

the territory of the other Party,44 and who are:

(i) "managers" or "executives", meaning persons working in a senior position within an

enterprise, who primarily direct the management of the enterprise45 in the other Party

and receive general supervision or direction principally from the board of directors or

from stockholders of the business or their equivalent, and who at least:

(A) direct the enterprise or a department or subdivision thereof;

(B) supervise and control the work of other supervisory, professional or managerial

employees; and

(C) have the personal authority to recruit and dismiss or to recommend recruitment,

dismissal or other personnel-related actions;

44 For greater certainty, managers or executives and specialists may be required to demonstrate

that they possess the professional qualifications and experience needed in the enterprise to

which they are transferred. 45 For greater certainty, while managers or executives do not directly perform tasks concerning

the actual supply of the services, they may, in the course of executing their duties to primarily

direct the management of the enterprise, perform tasks that may be necessary for the provision

of the services.

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(ii) "specialists", meaning persons working in an enterprise who possess specialised

knowledge essential to the enterprise's areas of activity, techniques or management,

assessed taking into account the knowledge specific to the enterprise and whether the

person has a high level of qualification; or

(iii) "trainee employees", meaning, for the European Union, persons who have been

employed by an enterprise which is not a representative office for at least one year,

possess a university degree and are temporarily transferred for career development

purposes or to obtain training in business techniques or methods;46

(f) "investors" means, for Mexico, natural persons of the European Union seeking to enter

Mexico for a temporary stay or that are already in Mexico and intending to:

(i) explore different establishment alternatives;

(ii) perform or supervise an establishment;

46 The recipient enterprise may be required to submit a training programme covering the

duration of the stay for prior approval, demonstrating that the purpose of the stay is for

training. For Czechia, Germany, Spain, France, Hungary Lithuania and Austria, training must

be linked to the university degree which has been obtained.

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(iii) represent a foreign enterprise or perform business transactions; or

(iv) develop, administer or provide advice or key technical services to the operation of an

enterprise to which the business person or the business person's enterprise has

committed, or is in the process of committing, a substantial amount of capital, in a

capacity that is supervisory, executive or involves essential skills; and

(g) "short-term business visitors" means natural persons who are seeking entry and temporary

stay into the territory of the other Party, who are not engaged in making direct sales to the

general public, who do not receive remuneration from a source located within the host Party

and who are:

(i) "business sellers", meaning short-term business visitors who are representatives of a

supplier of services or goods of a Party for the purposes of negotiating the sale of

services or goods, or entering into agreements to sell services or goods for that supplier,

are not engaged in the supply of a service in the framework of a contract concluded

between an enterprise that has no commercial presence in the territory of the other Party

and a consumer in that territory, and are not commission agents;

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(ii) "installers and maintainers", meaning, in respect of the entry and temporary stay in the

European Union, short-term business visitors possessing specialised knowledge

essential to a seller's or lessor's contractual obligations, performing services or training

personnel to perform services, pursuant to a warranty or other service contract

incidental to the sale or lease of commercial or industrial equipment or machinery,

including computer and related services, purchased or leased from an enterprise located

outside the territory of the European Union, throughout the duration of the warranty or

service contract and, in respect of the entry and temporary stay in Mexico, short-term

business visitors that provide specialised services, including after-sale or after-lease

services, previously agreed or as referred to in a contract of transfer of technology,

patent and trademark, for the sale of machinery and equipment, technical training of

personnel or any other production process for an established enterprise in Mexico; or

(iii) "other short-term business visitors", meaning, for Mexico, short-term visitors that attend

business administration meetings, conferences or trade fairs and perform management

or executive duties in an enterprise or its subsidiaries or affiliates that are established in

Mexico.

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ARTICLE 12.2

Objectives, Scope and General Provisions

1. This Chapter reflects the Parties' desire of facilitating the entry and temporary stay of natural

persons of a Party into the territory of the other Party for business purposes and the need to establish

transparent criteria for this purpose.

2. This Chapter applies to measures directly relating to the entry and temporary stay of natural

persons of a Party into the territory of the other Party for business purposes that are business visitors

for purposes of establishment of an enterprise, intra-corporate transferees, investors, business

sellers, contractual service suppliers and independent professionals.

3. This Chapter does not apply to measures affecting natural persons seeking access to the

employment market of a Party, nor to measures regarding citizenship or nationality, residence or

employment on a permanent basis.

4. Nothing in this Agreement shall prevent a Party from applying measures to regulate the entry

of natural persons into, or their temporary stay in, its territory, including those measures necessary

to protect the integrity of, and to ensure the orderly movement of natural persons across its borders,

provided that such measures are not applied in such a manner as to nullify or impair the benefits

accruing to the other Party under this Chapter. The sole fact of requiring a visa for natural persons

of a certain country and not for those of others shall not be regarded as nullifying or impairing

benefits under this Chapter.

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5. Each Party shall apply the measures covered by this Chapter expeditiously in order to avoid

delays or undue damages in trade in goods or services, or in establishment activities under this

Agreement.

6. The Parties shall endeavour to develop and adopt common criteria and common

interpretations for the implementation of this Chapter.

7. Each Party shall allow the entry and temporary stay for business purposes of natural persons

of the other Party who comply with the immigration laws and regulations of the former Party

applicable to the entry and temporary stay, in accordance with this Chapter, including the provisions

of Annexes I (Reservations for Existing Measures), II (Reservations for Future Measures), III,

(Specific Commitments and Limitations on Market Access), IV (Business Visitors for Purposes of

Establishment of an enterprise, Intra-Corporate Transferees, Investors and Short-Term Business

Visitors), V (Contractual Services Suppliers and Independent Professionals) and VI (Reservations

for Financial Services).

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8. A Party may, in accordance with its laws and regulations and on a non-discriminatory basis,

derogate from its commitments on entry and temporary stay set out in its Annexes IV (Business

Visitors for Purposes of Establishment of an Enterprise) and V (Contractual Services Suppliers and

Independent Professionals) in cases where the entry and temporary stay of a natural person of

another Party might adversely affect:

(a) the settlement of a collective labour dispute that is in progress at the place or intended place of

employment; or

(b) the employment of any person who is involved in that dispute.

ARTICLE 12.3

Obligations in Other Chapters

1. This Chapter does not impose any obligation on a Party regarding its immigration measures,

except as specifically provided herein.

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2. Without prejudice to any decision to allow entry and temporary stay to a natural person of the

other Party in accordance with this Chapter, including the length of stay permissible pursuant to any

such decision:

(a) the obligations of Articles 10.6 (Market Access), 10.7 (National Treatment),

10.9 (Performance Requirements) and 10.10 (Senior Management and Board of Directors),

subject to Articles 10.5 (Scope), 10.12 (Non-Conforming Measures and Exceptions),

18.2 (Scope) and 18.12 (Reservations and non-Conforming Measures), to the extent that the

measure affects the treatment of natural persons for business purposes present in the territory

of the other Party, are hereby incorporated into and made part of this Chapter and apply to

measures affecting treatment of natural persons for business purposes present in the territory

of the other Party under the categories of business visitors for purposes of establishment of an

enterprise, intra-corporate transferees and, for Mexico, investors, as defined in Article 12.1 of

this Chapter; and

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(b) the obligations of Articles 11.4 (Market Access), 11.5 (Local Presence) and 11.6 (National

Treatment), subject to Articles 11.2.2 (Scope), 11.8 (Non-Conforming Measures and

Exceptions), 18.2 (Scope) and 18.12 (Reservations and Non-Conforming Measures), to the

extent that the measure affects the treatment of natural persons for business purposes present

in the territory of the other Party, are hereby incorporated into and made part of this Chapter

and apply to the measures affecting treatment of natural persons for business purposes present

in the territory of the other Party under the categories of contractual service suppliers and, for

the European Union, independent professionals, for all sectors listed in Annex V (Contractual

Services Suppliers and Independent Professionals) and short-term business visitors, in

accordance with Annex IV (Business Visitors for Purposes of Establishment of an Enterprise,

Intra-Corporate Transferees, Investors and Short-Term Business Visitors).

3. For greater certainty, paragraph 2 applies to the measures affecting the treatment of natural

persons present in the territory of the other Party for business purposes and falling within the

relevant categories and who are supplying financial services, as defined in Article 18.1

(Definitions). Paragraph 2 does not apply to measures relating to the granting of temporary entry to

natural persons of a Party or of a third country.

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ARTICLE 12.4

Business Visitors for Purposes of Establishment of an Enterprise, Intra-corporate Transferees and

Investors

1. Subject to Article 10.5 (Scope), each Party shall allow the entry and temporary stay in its

territory of business visitors for purposes of establishment of an enterprise and intra-corporate

transferees of the other Party in accordance with Annex IV (Business Visitors for Purposes of

Establishment of an enterprise, Intra-Corporate Transferees, Investors and Short-Term Business

Visitors).

2. Subject to Article 10.5 (Scope), Mexico shall allow the entry and temporary stay in its

territory of investors in accordance with Annex IV (Business Visitors for Purposes of

Establishment of an Enterprise, Intra-Corporate Transferees, Investors and Short-Term Business

Visitors).

3. A Party shall not adopt or maintain limitations on the total number of natural persons that are

allowed entry and temporary stay in accordance with paragraphs 1 and 2, in a specific sector or

sub-sector, in the form of numerical quotas or the requirement of an economic needs test either on

the basis of a regional subdivision or on the basis of its entire territory.

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4. The permissible length of stay shall be:47

(a) for the European Union, up to three years for managers or executives and specialists, up to

one year for trainee employees, and up to 90 days within any six-month period for business

visitors for purposes of establishment of an enterprise; and

(b) for Mexico, one year which may be extended three times, for one year each time, for

intra-corporate transferees and investors, and up to 180 days for business visitors for purposes

of establishment of an enterprise.

5. The Parties shall grant family members of intra-corporate transferees treatment in accordance

with Annex 12-A.

47 The length of stay for business visitors for purposes of establishment of an enterprise is

without prejudice to the rights granted by a Party to nationals or citizens of the other Party

under bilateral visa waivers.

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ARTICLE 12.5

Short Term Business Visitors

Subject to Article 11.2 (Scope) and Annex IV (Business Visitors for Purposes of Establishment of

an Enterprise, Intra-Corporate Transferees, Investors and Short-Term Business Visitors), a Party

shall:

(a) allow the entry and temporary stay of short term business visitors;

(b) not adopt or maintain limitations on the total number of short term business visitors in a

specific sector in the form of numerical quotas either on the basis of a regional subdivision or

on the basis of its entire territory; and

(c) not adopt or maintain economic needs tests for short term business visitors.

ARTICLE 12.6

Contractual Service Suppliers

1. Each Party shall allow the entry and temporary stay in its territory of contractual service

suppliers of the other Party in accordance with Annex V (Contractual Services Suppliers and

Independent Professionals).

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2. Unless otherwise specified in Annex V (Contractual Services Suppliers and Independent

Professionals), a Party shall not adopt or maintain limitations on the total number of contractual

service suppliers of the other Party allowed entry and temporary stay, in the form of numerical

quotas or the requirement of an economic needs test.

ARTICLE 12.7

Independent Professionals

1. The European Union shall allow the entry and temporary stay in its territory of independent

professionals of Mexico in accordance with Annex V (Contractual Services Suppliers and

Independent Professionals).

2. Unless otherwise specified in Annex V (Contractual Services Suppliers and Independent

Professionals), the European Union shall not adopt or maintain limitations on the total number of

independent professionals of Mexico allowed entry and temporary stay, in the form of numerical

quotas or the requirement of an economic needs test.

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ARTICLE 12.8

Transparency

1. Each Party shall make publicly available information on the requirements and procedures for

entry and temporary stay, including relevant forms and documents, and explanatory materials that

will enable interested persons of the other Party to become acquainted with applicable requirements

and procedures.

2. The information referred to in paragraph 1 shall include, if applicable, information on the

following:

(a) categories of visa, permits or any similar type of authorisation regarding entry and temporary

stay;

(b) documentation required and conditions to be met;

(c) method of filing an application and options on where to file, such as consular offices or

online;

(d) application fees and indicative processing time;

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(e) maximum period of stay under each type of authorisation described in subparagraph (a);

(f) conditions for any available extensions or renewal;

(g) rules regarding accompanying dependents;

(h) available review or appeal procedures; and

(i) relevant laws of general application pertaining to the entry and temporary stay of natural

persons.

ARTICLE 12.9

Dispute Settlement

A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement)

regarding a refusal to grant entry and temporary stay under this Chapter unless the matter involves a

pattern of practice.

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CHAPTER 13

DOMESTIC REGULATION

ARTICLE 13.1

Scope

1. This Chapter applies to measures adopted or maintained by a Party relating to licensing and

qualification requirements and procedures, as well as technical standards48, affecting trade in

services or the pursuit of any other economic activity with respect to which a Party has undertaken a

commitment pursuant to Articles 10.6 (Market Access), 10.7 (National Treatment), 11.4 (Market

Access), 11.6 (National Treatment), subject to any terms, limitations, conditions or qualifications as

set out in its schedule pursuant to Articles 10.12 (Non-Conforming Measures and Exceptions)

and 11.8 (Non-Conforming Measures and Exceptions).

2. Notwithstanding paragraph 1, Article 13.6 applies to measures adopted or maintained by a

Party relating to licensing and qualification requirements and procedures, as well as technical

standards, affecting trade in services or the pursuit of any other economic activity.

48 For greater certainty, as far as measures relating to technical standards are concerned, this

Chapter only applies to such measures affecting trade in services.

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3. This Chapter does not apply to measures adopted or maintained by a Party covered under

Chapter 18 (Financial services).

ARTICLE 13.2

Development of Measures

A Party that adopts or maintains measures relating to licensing requirements and procedures,

qualification requirements and procedures, shall:

(a) ensure that those measures are based on objective and transparent criteria;49

(b) ensure that the competent authority reaches and administers its decisions in an independent

manner;

(c) ensure that the procedures do not in themselves unduly prevent the fulfilment of any

requirements;

49 For greater certainty, competent authorities may assess the weight to be given to those criteria

which may include competence, ability to supply a service or any other economic activity,

and potential health or environmental impacts of an authorisation decision.

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(d) ensure that the procedures are impartial and adequate for applicants to demonstrate whether

they meet the requirements, if any; and

(e) not require an applicant, to the extent practicable, to approach more than one competent

authority for each application for authorisation.50

ARTICLE 13.3

Administration of Measures

If authorisation is required for the supply of a service or the pursuit of any other economic activity,

the competent authorities of a Party shall:

(a) permit an applicant, to the extent practicable, to submit an application at any time;

(b) allow a reasonable period of time for the submission of an application if specific time periods

for applications exist;

(c) schedule examinations at reasonably frequent intervals, if examinations are required, and

provide a reasonable period of time for an applicant to request to take the examination;

50 For greater certainty, a Party may require multiple applications for authorisation if a service or

other economic activity is within the jurisdiction of multiple competent authorities.

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(d) endeavour to accept applications in electronic format, taking into account their competing

priorities and resource constraints;

(e) accept copies of documents authenticated in accordance with the Party's domestic law, in

place of original documents, unless they require original documents to protect the integrity of

the authorisation process;

(f) ensure that the authorisation fees51 charged by the competent authorities are reasonable and

transparent and do not in themselves restrict the supply of the relevant service or the pursuit

of any other economic activity;

(g) provide, to the extent practicable, an indicative timeframe for processing of an application;

(h) ascertain without undue delay, to the extent practicable, the completeness of an application for

processing under the law of the Party;

51 Authorisation fees include licensing fees and fees relating to qualification procedures; they do

not include fees for the use of natural resources, payments for auction, tendering or other

non-discriminatory means of awarding concessions, or mandated contributions to universal

service provision.

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(i) if an application is considered complete for processing under the law of the Party, ensure that

the processing of the application is finalised and that the applicant is informed of the decision

within a reasonable period of time after the submission of the application, to the extent

possible in writing;52

(j) provide at the request of the applicant and without undue delay information concerning the

status of the application;

(k) if an application is considered incomplete for processing under the law of the Party, within a

reasonable period of time and to the extent practicable:

(i) inform the applicant that the application is incomplete;

(ii) provide, at the request of the applicant, guidance on why the application is considered

incomplete;

52 The competent authorities can meet this requirement by informing an applicant in advance in

writing, including through a published measure, that lack of response after a specified period

of time from the date of submission of the application indicates either acceptance or rejection

of the application. For greater certainty, informing in writing may include information

provided in electronic form.

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(iii) provide the applicant with the opportunity53 to submit the additional information that is

required to complete the application; and

(iv) where none of the above is practicable, and the application is rejected due to

incompleteness, ensure that the applicant is informed within a reasonable period of

time;

(l) if an application is rejected, inform the applicant, to the extent possible, either on their own

initiative or on request of the applicant, of the reasons for rejection and, where applicable, the

procedures for resubmission of an application; and

(m) ensure that authorisation, once granted, enters into effect without undue delay subject to the

applicable terms and conditions.

53 For greater certainty, such opportunity does not require a competent authority to provide

extensions of deadlines.

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ARTICLE 13.4

Limited Numbers of Licences

1. If the number of licences available for a given activity is limited because of the scarcity of

available natural resources or technical capacity, a Party shall apply a selection procedure to

potential candidates which provides full guarantees of impartiality and transparency, including, in

particular, adequate publicity about the launch, conduct and completion of the procedure.

2. In establishing the rules for the selection procedure, a Party may take into account legitimate

policy objectives, including considerations of health, safety, consumer protection, competition, the

protection of the environment and the preservation of cultural heritage.

ARTICLE 13.5

Technical Standards

Each Party shall encourage its competent authorities, when adopting technical standards, to adopt

technical standards developed through open and transparent processes, and shall encourage any

body designated to develop technical standards to do so through open and transparent processes.

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ARTICLE 13.6

Transparency

A Party that requires authorisation for the supply of a service or the pursuit of any other economic

activity shall provide the information necessary for service suppliers or persons seeking to supply a

service and persons pursuing or seeking to pursue any other economic activity to comply with the

requirements and procedures for obtaining, maintaining, amending and renewing that authorisation.

That information shall include, where it exists:

(a) authorisation fees;

(b) contact information of relevant competent authorities;

(c) procedures for appeal or review of decisions concerning applications;

(d) procedures for monitoring or enforcing compliance with the terms and conditions of licenses;

(e) opportunities for public involvement, such as through hearings or comments;

(f) indicative timeframes for the processing of an application;

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(g) requirements and procedures; and

(h) applicable technical standards.

ARTICLE 13.7

Review

Following the entry into force of additional disciplines developed in accordance with paragraph 4 of

Article VI of GATS, the Parties shall review those disciplines. If the review concludes that those

disciplines would improve this Agreement, the Parties shall determine whether they should be

incorporated into this Agreement.

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CHAPTER 14

MUTUAL RECOGNITION OF PROFESSIONAL QUALIFICATIONS

ARTICLE 14.1

General Provisions

1. Nothing in this Chapter shall prevent a Party from requiring that natural persons possess the

necessary qualifications or professional experience specified in the territory where the service is

supplied, for the sector of activity concerned.

2. Each Party shall encourage the relevant professional bodies or authorities, as appropriate, in