United States - Morocco Free Trade Agreement

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CHAPTER TWELVE
FINANCIAL SERVICES

ARTICLE 12.1: SCOPE AND COVERAGE

1. This Chapter applies to measures adopted or maintained by a Party relating to:

(a) financial institutions of the other Party;

(b) investors of the other Party, and investments of such investors, in financial institutions in the Party’s territory; and

(c) cross-border trade in financial services.

(a) Articles 10.6 (Expropriation and Compensation), 10.7 (Transfers), 10.10 (Investment and Environment), 10.11 (Denial of Benefits), 10.13 (Special Formalities and Information Requirements), and 11.11 (Denial of Benefits) are hereby incorporated into and made a part of this Chapter.

(b) Section B of Chapter Ten (Investor-State Dispute Settlement) is hereby incorporated into and made a part of this Chapter solely for claims that a Party has breached Articles 10.6 (Expropriation and Compensation), 10.7 (Transfers), 10.11 (Denial of Benefits), or 10.13 (Special Formalities and Information Requirements), as incorporated into this Chapter.

(c) Article 11.10 (Transfers and Payments) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 12.5.

(a) activities or services forming part of a public retirement plan or statutory system of social security; or

(b) activities or services conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities,

ARTICLE 12.2: NATIONAL TREATMENT

1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords to its own investors, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.

2. Each Party shall accord to financial institutions of the other Party and to investments of investors of the other Party in financial institutions treatment no less favorable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.

3. For purposes of the national treatment obligations in Article 12.5.1, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favorable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service.

ARTICLE 12.3: MOST-FAVORED-NATION TREATMENT

1. Each Party shall accord to investors of the other Party, financial institutions of the other Party, investments of investors in financial institutions, and cross-border financial service suppliers of the other Party treatment no less favorable than that it accords to the investors, financial institutions, investments of investors in financial institutions, and cross-border financial service suppliers of a non-Party, in like circumstances.

2. A Party may recognize prudential measures of a non-Party in the application of measures covered by this Chapter. Such recognition may be:

(a) accorded unilaterally;

(b) achieved through harmonization or other means; or

(c) based upon an agreement or arrangement with the non-Party.

4. Where a Party accords recognition of prudential measures under paragraph 2(c) and the circumstances set out in paragraph 3 exist, the Party shall provide adequate opportunity to the other Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.

ARTICLE 12.4: MARKET ACCESS FOR FINANCIAL INSTITUTIONS

Neither Party may adopt or maintain, with respect to financial institutions of the other Party or investors of the other Party in such institutions, either on the basis of a regional subdivision or on the basis of its entire territory, measures that:

(a) impose limitations on

(i) the number of financial institutions whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;

(ii) the total value of financial service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;

(iii) the total number of financial service operations or on the total quantity of financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;¹ or

(iv) the total number of natural persons that may be employed in a particular financial service sector or that a financial institution may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas or the requirement of an economic needs test; or

(b) restrict or require specific types of legal entity or joint venture through which a financial institution may supply a service.

1. Each Party shall permit, under terms and conditions that accord national treatment, cross-border financial service suppliers of the other Party to supply the services specified in Annex 12-A.

2. Each Party shall permit persons located in its territory, and its nationals wherever located, to purchase financial services from cross-border financial service suppliers of the other Party located in the territory of the other Party. This obligation does not require a Party to permit such suppliers to do business or solicit in its territory. Each Party may define “doing business” and “solicitation” for purposes of this obligation, provided that those definitions are not inconsistent with paragraph 1.

3. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration of cross-border financial service suppliers of the other Party and of financial instruments.

ARTICLE 12.6: NEW FINANCIAL SERVICES²

1. Each Party shall permit a financial institution of the other Party, on request or notification to the relevant regulator, where required, to supply any new financial service that the Party would permit its own financial institutions, in like circumstances, to supply under its domestic law, provided that the introduction of the new financial service does not require the Party to adopt a new law or modify an existing law.

2. A Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorization for the supply of the service. Where a Party would permit the new financial service and authorization is required, the decision shall be made within a reasonable time and authorization may only be refused for prudential reasons.

ARTICLE 12.7: TREATMENT OF CERTAIN INFORMATION

Article 21.5 (Disclosure of Information) does not apply to this Chapter. Nothing in this Chapter shall be construed to require a Party to furnish or allow access to:

(a) information related to the financial affairs and accounts of individual customers of financial institutions or cross-border financial service suppliers; or

(b) any confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or prejudice legitimate commercial interests of particular enterprises.

1. Neither Party may require financial institutions of the other Party to engage individuals of any particular nationality as senior managerial or other essential personnel.

2. Neither Party may require that more than a minority of the board of directors of a financial institution of the other Party be composed of nationals of the Party, persons residing in the territory of the Party, or a combination thereof.

ARTICLE 12.9: NON-CONFORMING MEASURES

1. Articles 12.2 through 12.5 and 12.8 do not apply to:

(a) any existing non-conforming measure that is maintained by a Party at

(i) the central level of government, as set out by that Party in Section A of its Schedule to Annex III;

(ii) a regional level of government, as set out by that Party in Section A of its Schedule to Annex III; or

(iii) a local level of government;

(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or

(c) an amendment to any 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 12.2, 12.3, 12.4, or 12.8.

2. Articles 12.2 through 12.5 and 12.8 do not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors, or activities set out in Section B of its Schedule to Annex III.

3. Annex 12-B sets out certain specific commitments by each Party.

4. A non-conforming measure set out in a Party’s Schedule to Annex I or II as a measure to which Article 10.3 (National Treatment), 10.4 (Most-Favored-Nation Treatment), 11.2 (National Treatment), 11.3 (Most-Favored-Nation Treatment), or 11.4 (Market Access) does not apply shall be treated as a non-conforming measure to which Article 12.2, Article 12.3, or Article 12.4, as the case may be, does not apply, to the extent that the measure, sector, sub-sector, or activity set out in the Schedule of non-conforming measures is covered by this Chapter.

ARTICLE 12.10: EXCEPTIONS

1. Notwithstanding any other provision of this Chapter or Chapters Ten (Investment), Thirteen (Telecommunications), or Fourteen (Electronic Commerce), including specifically Article 13.16 (Telecommunications, Relationship to Other Chapters), and Article 11.1 (Scope and Coverage) with respect to the supply of financial services in the territory of a Party by a covered investment, neither Party shall be prevented from adopting or maintaining measures for prudential reasons,³ including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of this Agreement referred to in this paragraph, they shall not be used as a means of avoiding the Party’s commitments or obligations under such provisions.

2. Nothing in this Chapter or Chapters Ten (Investment), Thirteen (Telecommunications), or Fourteen (Electronic Commerce), including specifically Article 13.16 (Telecommunications, Relationship to Other Chapters), and Article 11.1 (Scope and Coverage) with respect to the supply of financial services in the territory of a Party by a covered investment applies to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph shall not affect a Party’s obligations under Article 10.8 (Performance Requirements) with respect to measures covered by Chapter Ten (Investment), or under Article 10.7 (Transfers) or Article 11.10 (Transfers and Payments).

3. Notwithstanding Articles 10.7 (Transfers) and 11.10 (Transfers and Payments), as incorporated into this Chapter, a Party may prevent or limit transfers by a financial institution or cross-border financial service supplier to, or for the benefit of, an affiliate of or person related to such institution or supplier, through the equitable, non-discriminatory, and good faith application of measures relating to maintenance of the safety, soundness, integrity, or financial responsibility of financial institutions or cross-border financial service suppliers. This paragraph does not prejudice any other provision of this Agreement that permits a Party to restrict transfers.

4. For greater certainty, nothing in this Chapter shall be construed to prevent the adoption or enforcement by a Party of measures necessary to secure compliance with laws or regulations that are not inconsistent with this Chapter, including those relating to the prevention of deceptive and fraudulent practices or to deal with the effects of a default on financial services contracts, subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment in financial institutions or cross-border trade in financial services, as covered by this Chapter.

ARTICLE 12.11: TRANSPARENCY

1. The Parties recognize that transparent regulations and policies governing the activities of financial institutions and cross-border financial service suppliers are important in facilitating access of foreign financial institutions and foreign cross-border financial service suppliers to, and their operations in, each other’s market. Each Party commits to promote regulatory transparency in financial services.

2. In lieu of Article 18.1.2 (Publication), each Party shall, to the extent practicable,

(a) publish in advance any regulations of general application relating to the subject matter of this Chapter that it proposes to adopt; and

(b) provide interested persons and the other Party a reasonable opportunity to comment on such proposed regulations.

4. To the extent practicable, each Party should allow reasonable time between publication of such final regulations and their effective date.

5. Each Party shall ensure that the rules of general application adopted or maintained by self-regulatory organizations of the Party are promptly published or otherwise made available in such a manner as to enable interested persons to become acquainted with them.

6. Each Party shall maintain or establish appropriate mechanisms for responding to inquiries from interested persons regarding measures of general application relating to the subject matter of this Chapter.

7. Each Party’s regulatory authorities shall make available to interested persons the requirements, including any documentation required, for completing applications relating to the supply of financial services.

8. On the request of an applicant, a Party’s regulatory authority shall inform the applicant of the status of its application. If the authority requires additional information from the applicant, it shall notify the applicant without undue delay.

9. A Party’s regulatory authority shall make an administrative decision on a completed application of an investor in a financial institution, a financial institution, or a cross-border financial service supplier of the other Party relating to the supply of a financial service within 120 days, and shall promptly notify the applicant of the decision. An application shall not be considered complete until all relevant hearings are held and all necessary information is received. Where it is not practicable for a decision to be made within 120 days, the regulatory authority shall notify the applicant without undue delay and shall endeavor to make the decision within a reasonable time thereafter.

ARTICLE 12.12: SELF-REGULATORY ORGANIZATIONS

Where a Party requires a financial institution or a cross-border financial service supplier of the other Party to be a member of, participate in, or have access to, a self-regulatory organization to provide a financial service in or into its territory, the Party shall ensure observance of the obligations of Articles 12.2 and 12.3 by such self-regulatory organization.

ARTICLE 12.13: PAYMENT AND CLEARING SYSTEMS

Under terms and conditions that accord national treatment, each Party shall grant financial institutions of the other Party access to payment and clearing systems operated by public entities, and to official funding and refinancing facilities available in the normal course of ordinary business. This paragraph is not intended to confer access to the Party’s lender of last resort facilities.

ARTICLE 12.14: DOMESTIC REGULATION

Each Party shall ensure that all measures of general application to which this Chapter applies are administered in a reasonable, objective, and impartial manner.

ARTICLE 12.15: EXPEDITED AVAILABILITY OF INSURANCE SERVICES

The Parties recognize the importance of maintaining and developing regulatory procedures to expedite the offering of insurance services by licensed suppliers.

ARTICLE 12.16: CONSULTATIONS

1. A Party may request consultations with the other Party regarding any matter arising under this Agreement that affects financial services. The other Party shall give sympathetic consideration to the request. The Parties shall report the results of their consultations to the Subcommittee on Financial Services.

2. Consultations under this Article shall include officials of the authorities specified in Annex 12-D.

3. Nothing in this Article shall be construed to require regulatory authorities participating in consultations under paragraph 1 to disclose information or take any action that would interfere with specific regulatory, supervisory, administrative, or enforcement matters.

4. Nothing in this Article shall be construed to require a Party to derogate from its relevant law regarding sharing of information among financial regulators or the requirements of an agreement or arrangement between financial authorities of the Parties.

ARTICLE 12.17: DISPUTE SETTLEMENT

1. Chapter Twenty (Dispute Settlement) applies as modified by this Article to the settlement of disputes arising under this Chapter.

2. When a Party claims that a dispute arises under this Chapter, Article 20.7 (Establishment of Panel) shall apply, except that, unless the Parties agree otherwise, the panel shall be composed entirely of individuals meeting the qualifications in paragraph 3.

3. Financial services panelists shall:

(a) have expertise or experience in financial services law or practice, which may include the regulation of financial institutions;

(b) be chosen strictly on the basis of objectivity, reliability, and sound judgment; and (c) meet the qualifications set out in Article 20.7.5(b) and

(c) (Establishment of Panel).

(a) only the financial services sector, the complaining Party may suspend benefits only in the financial services sector;

(b) the financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector that have an effect equivalent to the effect of the measure in the Party’s financial services sector; or

(c) only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector.

ARTICLE 12.18: INVESTOR-STATE DISPUTE SETTLEMENT IN FINANCIAL SERVICES

1. Where an investor of a Party submits a claim under Section B of Chapter Ten (Investor-State Dispute Settlement) against the other Party and the respondent invokes Article 12.10 (Exceptions), on request of the respondent, the tribunal shall refer the matter in writing to the Subcommittee on Financial Services for a decision. The tribunal may not proceed pending receipt of a decision or report under this Article.

2. In a referral pursuant to paragraph 1, the Subcommittee on Financial Services shall decide the issue of whether and to what extent Article 12.10 (Exceptions) is a valid defense to the claim of the investor. The Subcommittee shall transmit a copy of its decision to the tribunal and to the Joint Committee. The decision shall be binding on the tribunal.

3. Where the Subcommittee on Financial Services has not decided the issue within 60 days of the receipt of the referral under paragraph 1, the respondent or the Party of the claimant may refer the issue to a panel under Chapter Twenty (Dispute Settlement). The panel shall be constituted in accordance with Article 12.17. The panel shall transmit its final report to the Subcommittee and to the tribunal. The report shall be binding on the tribunal.

4. Where the issue has not been referred to a panel pursuant to paragraph 3 within 10 days of the expiration of the 60-day period referred to in paragraph 3, the tribunal may proceed to decide the matter.

5. For purposes of this Article, tribunal means a tribunal established pursuant to Section B of Chapter Ten (Investor-State Dispute Settlement).

ARTICLE 12.19: DEFINITIONS

For purposes of this Chapter:

cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of such services;

cross-border trade in financial services or cross-border supply of financial services means the supply of a financial service:

(a) from the territory of one Party into the territory of the other Party,

(b) in the territory of one Party by a person of that Party to a person of the other Party, or

(c) by a national of one Party in the territory of the other Party,

but does not include the supply of a financial service in the territory of a Party by an investment in that territory;

financial institution means any financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the law of the Party in whose territory it is located;

financial institution of the other Party means a financial institution, including a branch, located in the territory of a Party that is controlled by persons of the other Party;

financial service means any service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance), as well as services incidental or auxiliary to a service of a financial nature. Financial services include the following activities:

Insurance and insurance-related services

(a) Direct insurance (including co-insurance):

(i) life,

(ii) non-life;

(b) Reinsurance and retrocession;

(c) Insurance intermediation, such as brokerage and agency; and

(d) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment, and claim settlement services.

Banking and other financial services (excluding insurance)

(e) Acceptance of deposits and other repayable funds from the public;

(f) Lending of all types, including consumer credit, mortgage credit, factoring, and financing of commercial transactions;

(g) Financial leasing;

(h) All payment and money transmission services, including credit, charge and debit cards, travelers checks, and bankers drafts;

(i) Guarantees and commitments;

(j) Trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:

(i) money market instruments (including checks, bills, certificates of deposits);

(ii) foreign exchange;

(iii) derivative products including, but not limited to, futures and options;

(iv) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;

(v) transferable securities;

(vi) other negotiable instruments and financial assets, including bullion;

(k) Participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;

(l) Money broking;

(m) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository, and trust services;

(n) Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;

(o) Provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services;

(p) Advisory, intermediation, and other auxiliary financial services on all the activities listed in subparagraphs (e) through (o), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;

financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;

investment means “investment” as defined in Article 10.27 (Definitions), except that, with respect to “loans” and “debt instruments” referred to in that Article:

(a) a loan to or debt instrument issued by a financial institution is an investment only where it is treated as regulatory capital by the Party in whose territory the financial institution is located; and

(b) a loan granted by or debt instrument owned by a financial institution, other than a loan to or debt instrument of a financial institution referred to in subparagraph (a), is not an investment;

investor of a Party means a Party or state enterprise thereof, or a person of a Party, that concretely attempts to make, is making, or has made an investment in the territory of the other Party; provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality;

new financial service means a financial service not supplied in the Party’s territory that is supplied within the territory of the other Party, and includes any new form of delivery of a financial service or the sale of a financial product that is not sold in the Party’s territory;

person of a Party means “person of a Party” as defined in Article 1.3 (Definitions) and, for greater certainty, does not include a branch of an enterprise of a non-Party;

public entity means a central bank or monetary authority of a Party, or any financial institution owned or controlled by a Party; and

self-regulatory organization means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organization or association, that exercises its own or delegated regulatory or supervisory authority over financial service suppliers or financial institutions.

ANNEX 12-A
CROSS-BORDER TRADE

Insurance and insurance-related services

1. For the United States, Article 12.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (a) of the definition of cross-border supply of financial services in Article 12.19 with respect to:

(a) insurance of risks relating to:

(i) maritime shipping and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability arising therefrom; and

(ii) goods in international transit;

(b) reinsurance and retrocession, services auxiliary to insurance as referred to in subparagraph (d) of the definition of financial service, and insurance intermediation such as brokerage and agency as referred to in subparagraph (c) of the definition of financial service.

3. For Morocco, Article 12.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (a) of the definition of cross-border supply of financial services in Article 12.19:

(a) with respect to insurance of risks relating to:

(i) maritime shipping and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability arising therefrom;

(ii) goods in international transit; and

(iii) brokerage of insurance described in clauses (i) and (ii);

no later than two years after the date of entry into force of this Agreement; and

(b) with respect to reinsurance and retrocession and brokerage of reinsurance, upon entry into force of this Agreement.

Banking and other financial services (excluding insurance)

5. For the United States, Article 12.5.1 applies with respect to the provision and transfer of financial information and financial data processing and related software as referred to in subparagraph (o) of the definition of financial service and advisory and other auxiliary services, excluding intermediation, relating to banking and other financial services as referred to in subparagraph (p) of the definition of financial service.

6. For Morocco, Article 12.5.1 applies with respect to the provision and transfer of financial information and financial data processing and related software as referred to in subparagraph (o) of the definition of financial service and advisory and other auxiliary services, excluding intermediation and advice on acquisitions and on corporate restructuring and strategy, relating to banking and other financial services as referred to in subparagraph (p) of the definition of financial service.

ANNEX 12-B
SPECIFIC COMMITMENTS

United States – Expedited Availability of Insurance

Recognizing the principles of federalism under the U.S. Constitution, the history of state regulation of insurance in the United States, and the McCarran-Ferguson Act, the United States welcomes the efforts of the National Association of Insurance Commissioners (“NAIC”) relating to the availability of insurance services as expressed in the NAIC’s “Statement of Intent: The Future of Insurance Regulation,” including the initiatives on speed-to-market intentions and regulatory re-engineering (under Part II of the Statement of Intent).

Morocco – Expedited Availability of Insurance

Morocco reaffirms the transparency, rapidity, and efficiency of its procedures regarding introduction and distribution of products issued by insurance companies in its territory. In particular, Morocco deems any product to be approved unless it is disapproved within 30 days. Morocco imposes no limitations on the number or frequency of product introductions. As part of the work program of the Subcommittee on Financial Services, Morocco will be open to further discussions of the need for continuing review of products other than those sold to individuals (including life insurance), small- or medium-sized businesses, or compulsory insurance.

Morocco – Future Consultation and Implementing Actions Regarding Non-Insurance Financial Services

To follow up on discussions that took place during the negotiation of this Agreement with respect to non-insurance financial services, Morocco and the United States agree as follows:

1. Morocco shall begin consultations, in the context of the Subcommittee on Financial Services, and shall consider liberalizing changes with respect to the following two areas:

(a) Morocco’s current requirement that operations of banks incorporated abroad and functioning as branches in Morocco be limited by the amount of capital effectively allocated by those institutions to their operations in Morocco (dotation en capital). Morocco and the United States agree that any liberalizing change to this requirement would apply to new bank branches established after the change becomes effective and would not apply in the case of the conversion to a branch by a foreign bank operating through a subsidiary in Morocco, where that subsidiary is systemically important.⁴ Among possible approaches to liberalizing this requirement, the following two are noted:

(i) allowing a foreign branch bank to operate based on the capital of its parent company through a multiplying coefficient of the branch’s paid-in capital in Morocco, and

(ii) allowing a foreign branch bank to operate based on the capital of its parent company, up to an amount that would be limited to the average of total capital of the banks operating in Morocco, as calculated at the end of the prior year.

(b) Morocco’s current prohibition on the holding of non-Moroccan securities by Moroccan mutual funds. Morocco and the United States agree that any such change to this prohibition would be implemented at a pace to be determined. Among possible approaches to liberalizing this prohibition, the following two examples are noted:

(i) Morocco considers that a possible first step would be to permit five percent of the total amount of securities to be invested in non-Moroccan securities; and

(ii) the United States considers that a possible first step would be to permit 25 percent of the total amount of securities to be invested in non-Moroccan securities.

2. Morocco agrees that it will decide, by no later than three years from the date of entry into force of this Agreement, to take action to implement liberalizing changes with respect to one of the above two areas.

ANNEX 12-C
IMPLEMENTATION OF ARTICLE 12.11

The Parties recognize that Morocco’s implementation of the obligations of paragraphs 2, 3, and 4 of Article 12.11 may require changes to its process for issuing regulations. Morocco shall implement the obligations of paragraphs 2, 3, and 4 of Article 12.11 no later than two years after the date of entry into force of this Agreement. Morocco shall implement Article 12.11.2 within its constitutional framework.

ANNEX 12-D
AUTHORITIES RESPONSIBLE FOR FINANCIAL SERVICES

The authority of each Party responsible for financial services is:

(a) for Morocco, the Ministry of Finance; and

(b) for the United States, the Department of the Treasury for banking and other financial services and the Office of the United States Trade Representative, in coordination with the Department of Commerce and other agencies, for insurance services.

CHAPTER THIRTEEN
TELECOMMUNICATIONS

ARTICLE 13.1: SCOPE AND COVERAGE

1. This Chapter applies to:

(a) measures relating to access to and use of public telecommunications services;

(b) measures relating to obligations of suppliers of public telecommunications services, including major suppliers;

(c) other measures relating to public telecommunications networks or services; and

(d) measures relating to the provision of value-added services.

3. Nothing in this Chapter shall be construed to:

(a) require a Party, or require a Party to compel any enterprise, to establish, construct, acquire, lease, operate, or provide telecommunications networks or services not offered to the public generally;

(b) require a Party to compel any enterprise exclusively engaged in the broadcast or cable distribution of radio or television programming to make available its broadcast or cable facilities as a public telecommunications network; or

(c) prevent a Party from adopting or enforcing new or existing telecommunications laws or regulations that are not inconsistent with this Chapter.

ARTICLE 13.2: ACCESS TO AND USE OF PUBLIC TELECOMMUNICATIONS SERVICES

1. Each Party shall ensure that service suppliers of the other Party have access to and use of any public telecommunications service, including leased circuits, offered in its territory or across its borders, on reasonable and non-discriminatory terms and conditions, including as set out in paragraphs 2 through 6.

2. Each Party shall ensure that service suppliers of the other Party are permitted to¹: 

(a) purchase or lease and attach terminal or other equipment that interfaces with a public telecommunications network;

(b) provide services to individual or multiple end-users over leased circuits;

(c) connect owned² or leased circuits with public telecommunications networks and services in the territory, or across the borders, of that Party or with circuits leased or owned by another service supplier;

(d) perform switching, signaling, processing, and conversion functions; and

(e) use operating protocols of their choice in the supply of any service, other than as necessary to ensure the availability of telecommunications transport networks and services to the public generally.

4. Notwithstanding paragraph 3, a Party may take such measures as are necessary to:

(a) ensure the security and confidentiality of messages, or

(b) protect the privacy of non-public personal data of subscribers to public telecommunications services,

provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on trade in services.

5. Each Party shall ensure that no condition is imposed on access to and use of public telecommunications transport networks and services, other than as necessary to:

(a) safeguard the public service responsibilities of suppliers of public telecommunications transport networks and services, in particular their ability to make their networks or services available to the public generally;

(b) protect the technical integrity of public telecommunications transport networks or services; or

(c) ensure that service suppliers of the other Party do not supply services unless permitted pursuant to commitments in this Agreement.

6. Provided that they satisfy the criteria set out in paragraph 5, conditions for access to and use of public telecommunications transport networks and services may include:

(a) a requirement to use specified technical interfaces, including interface protocols, for interconnection with such networks and services;

(b) requirements, where necessary, for the inter-operability of such services;

(c) type approval of terminal or other equipment that interfaces with the network and technical requirements relating to the attachment of such equipment to such networks;

(d) restrictions on interconnection of private leased or owned circuits with such networks or services or with circuits leased or owned by another service supplier; or

(e) notification, registration, and licensing.

ARTICLE 13.3: OBLIGATIONS RELATING TO SUPPLIERS OF PUBLIC TELECOMMUNICATIONS SERVICES³

Interconnection

1.

(a) Each Party shall ensure that suppliers of public telecommunications services in its territory provide, directly or indirectly,⁴ interconnection with the suppliers of public telecommunications services of the other Party within the same territory.

(b) In carrying out subparagraph (a), each Party shall ensure that suppliers of public telecommunications services in its territory take reasonable steps to protect the confidentiality of commercially sensitive information of, or relating to, suppliers and end-users of public telecommunications services obtained as a result of interconnection arrangements and only use such information for the purpose of providing these services.

Resale

2. Each Party shall ensure that suppliers of public telecommunications services in its territory do not impose unreasonable or discriminatory conditions or limitations on the resale of these services.⁵

Number Portability

3. Each Party shall ensure that suppliers of public telecommunications services in its territory provide number portability to the extent technically feasible, and on reasonable terms and conditions.⁶

Dialing Parity

4. Each Party shall ensure that suppliers of public telecommunications services in its territory provide dialing parity to suppliers of public telecommunications services of the other Party.

ARTICLE 13.4: ADDITIONAL OBLIGATIONS RELATING TO MAJOR SUPPLIERS OF PUBLIC TELECOMMUNICATIONS SERVICES⁷

Treatment by Major Suppliers

1. Each Party shall ensure that major suppliers in its territory accord suppliers of public telecommunications services of the other Party treatment no less favorable than such major suppliers accord to their subsidiaries, their affiliates, or non-affiliated service suppliers regarding:

(a) the availability, provisioning, rates, or quality of like public telecommunications services; and

(b) the availability of technical interfaces necessary for interconnection.

2.

(a) Each Party shall maintain appropriate measures for the purpose of preventing suppliers that, alone or together, are a major supplier in its territory from engaging in or continuing anticompetitive practices.

(b) The anticompetitive practices referred to in subparagraph (a) include in particular:

(i) engaging in anticompetitive cross-subsidization;

(ii) using information obtained from competitors with anti-competitive results; and

(iii) not making available, on a timely basis, to suppliers of public telecommunications services, technical information about essential facilities and commercially relevant information that are necessary for them to provide services.

Unbundling of Network Elements

3. Each Party shall provide its telecommunications regulatory body the authority to require major suppliers in its territory to offer access to network elements on an unbundled basis on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent for the supply of public telecommunications services.⁸

Interconnection

4.

(a) General Terms and Conditions

Each Party shall ensure that major suppliers in its territory provide interconnection for the facilities and equipment of suppliers of public telecommunications services of the other Party:

(i) at any technically feasible point in the major supplier’s network;

(ii) under non-discriminatory terms, conditions (including technical standards and specifications), and rates;

(iii) of a quality no less favorable than that provided by such major suppliers for their own like services, for like services of non-affiliated service suppliers, or for their subsidiaries or other affiliates;

(iv) in a timely fashion, on terms, conditions (including technical standards and specifications), and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that suppliers need not pay for network components or facilities that they do not require for the service to be provided; and

(v) on request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.

(b) Options for Interconnecting with Major Suppliers

Each Party shall ensure that suppliers of public telecommunications services of the other Party may interconnect their facilities and equipment with those of major suppliers in its territory pursuant to at least one of the following options:

(i) a reference interconnection offer or another standard interconnection offer containing the rates, terms, and conditions that the major suppliers offer generally to suppliers of public telecommunications services; or

(ii) the terms and conditions of an existing interconnection agreement or through negotiation of a new interconnection agreement.

(c) Public Availability of Interconnection Offers

Each Party shall require major suppliers in its territory to make publicly available reference interconnection offers or other standard interconnection offers containing the rates, terms, and conditions that the major suppliers offer generally to suppliers of public telecommunications services.

(d) Public Availability of Procedures for Interconnection Negotiations

Each Party shall make publicly available the applicable procedures for interconnection negotiations with major suppliers in its territory.

(e) Public Availability of Interconnection Agreements Concluded with Major Suppliers

(i) Each Party shall require major suppliers in its territory to file all interconnection agreements to which they are party with its telecommunications regulatory body.⁹

(ii) Each Party shall make publicly available interconnection agreements in force between major suppliers in its territory and other suppliers of public telecommunications services in its territory.

Provisioning and Pricing of Leased Circuits Services

5.

(a) Each Party shall ensure that major suppliers in its territory provide enterprises of the other Party leased circuits services that are public telecommunications services on terms and conditions, and at rates, that are reasonable and non-discriminatory.

(b) In carrying out subparagraph (a), each Party shall provide its telecommunications regulatory body the authority to require major suppliers in its territory to offer leased circuits services that are public telecommunications services to enterprises of the other Party at capacity-based, cost-oriented prices.

Co-location

6.

(a) Subject to subparagraphs (b) and (c), each Party shall ensure that major suppliers in its territory provide to suppliers of public telecommunications services of the other Party physical co-location of equipment necessary for interconnection on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent.

(b) Where physical co-location is not practical for technical reasons or because of space limitations, each Party shall ensure that major suppliers in its territory

(i) provide an alternative solution or

(ii) facilitate virtual co-location,

on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent.

(c) Each Party may determine through its law or regulations which premises are subject to subparagraphs (a) and (b).

Access to Rights-of-Way

7. Each Party shall endeavor to ensure that major suppliers in its territory afford access to their poles, ducts, conduits, and rights-of-way to suppliers of public telecommunications services of the other Party on terms and conditions, and at rates, that are reasonable and non-discriminatory.

ARTICLE 13.5: SUBMARINE CABLE SYSTEMS AND SATELLITE SERVICES

1. Each Party shall ensure that any enterprise that it authorizes to operate a submarine cable system in its territory as a public telecommunications service accords reasonable and non-discriminatory treatment with respect to access to that system (including landing facilities) to suppliers of public telecommunications services of the other Party.

2. Each Party shall ensure that any enterprise that it authorizes to provide satellite services in its territory as a public telecommunications service accords reasonable and non-discriminatory treatment with respect to access to those services by suppliers of public telecommunications services of the other Party.

ARTICLE 13.6: CONDITIONS FOR THE SUPPLY OF VALUE-ADDED SERVICES

1. Neither Party may require an enterprise in its territory that it classifies as a supplier of value-added services and that supplies those services over facilities that it does not own to:

(a) supply those services to the public generally;

(b) cost-justify its rates for those services;

(c) file a tariff for those services;

(d) interconnect its networks with any particular customer for the supply of those services; or

(e) conform with any particular standard or technical regulation for interconnection other than for interconnection to a public telecommunications network.

2. Notwithstanding paragraph 1, a Party may take the actions described in paragraph 1 to remedy a practice of a supplier of value-added services that the Party has found in a particular case to be anticompetitive under its law or regulations, or to otherwise promote competition or safeguard the interests of consumers.

ARTICLE 13.7: INDEPENDENT REGULATORY BODIES AND PRIVATIZATION

1. Each Party shall ensure that its telecommunications regulatory body is separate from, and not accountable to, any supplier of public telecommunications services. To this end, each Party shall ensure that its telecommunications regulatory body does not hold a financial interest or maintain an operating role in any such supplier.

2. Each Party shall ensure that the decisions and procedures of its telecommunications regulatory body are impartial with respect to all interested persons. To this end, each Party shall ensure that any financial interest that it holds in a supplier of public telecommunications services does not influence the decisions and procedures of its telecommunications regulatory body.

3. Each Party shall maintain the absence of or eliminate as soon as feasible national government ownership in any supplier of public telecommunications services. Where a Party has an ownership interest in a supplier of public telecommunications services and intends to reduce or eliminate its interest, it shall notify the other Party of its intention as soon as possible.

ARTICLE 13.8: UNIVERSAL SERVICE

Each Party shall administer any universal service obligation that it maintains in a transparent, non-discriminatory, and competitively neutral manner and shall ensure that its universal service obligation is not more burdensome than necessary for the kind of universal service that it has defined.

ARTICLE 13.9: LICENSING PROCESS

1. When a Party requires a supplier of public telecommunications services to have a license, the Party shall make publicly available:

(a) all the licensing criteria and procedures it applies;

(b) the time it normally requires to reach a decision concerning an application for a license; and

(c) the terms and conditions of all licenses it has issued.

2. Each Party shall ensure that, on request, an applicant receives the reasons for its denial of a license.

ARTICLE 13.10: ALLOCATION AND USE OF SCARCE RESOURCES

1. Each Party shall administer its procedures for the allocation and use of scarce telecommunications resources, including frequencies, numbers, and rights-of-way, in an objective, timely, transparent, and non-discriminatory manner.

2. Each Party shall make publicly available the current state of allocated frequency bands but shall not be required to provide detailed identification of frequencies allocated for specific government uses.

3. Decisions on allocating and assigning spectrum and frequency management are not measures that are per se inconsistent with Article 11.4 (Market Access), which is applied to Chapter Ten (Investment) through Article 11.1.3 (Scope and Coverage). Accordingly, each Party retains the right to exercise its spectrum and frequency management policies, which may affect the number of suppliers of public telecommunications services, provided that this is done in a manner that is consistent with the provisions of this Agreement. The Parties also retain the right to allocate frequency bands taking into account existing and future needs and spectrum availability.

ARTICLE 13.11: ENFORCEMENT

Each Party shall provide its competent authority with the authority to enforce the Party’s measures relating to the obligations set out in Articles 13.2 through 13.5. Such authority shall include the ability to impose effective sanctions, which may include financial penalties, injunctive relief (on an interim or final basis), or the modification, suspension, and revocation of licenses.

ARTICLE 13.12: RESOLUTION OF TELECOMMUNICATIONS DISPUTES

Further to Articles 18.3 (Administrative Proceedings) and 18.4 (Review and Appeal), each Party shall ensure the following:

Recourse to Telecommunications Regulatory Bodies

(a)

(i) Enterprises of the other Party may seek review by a telecommunications regulatory body or other relevant body of the Party to resolve disputes regarding the Party’s measures relating to a matter set out in Articles 13.2 through 13.5.

(ii) Suppliers of public telecommunications services of the other Party that have requested interconnection with a major supplier in the Party’s territory may seek review, within a reasonable and publicly specified period after the supplier requests interconnection, by its telecommunications regulatory body¹⁰ to resolve disputes regarding the terms, conditions, and rates for interconnection with such major supplier.

(b) Any enterprise that is aggrieved or whose interests are adversely affected by a determination or decision of its telecommunications regulatory body may petition the body to reconsider that determination or decision. Neither Party may permit such a petition to constitute grounds for non-compliance with the determination or decision of the telecommunications regulatory body unless an appropriate authority stays the determination or decision.

Judicial Review

(c) Any enterprise that is aggrieved or whose interests are adversely affected by a determination or decision of its telecommunications regulatory body may obtain judicial review of the determination or decision by an impartial and independent judicial authority.

ARTICLE 13.13: TRANSPARENCY

Further to Article 18.1 (Publication), each Party shall ensure that:

(a) rulemakings, including the basis for such rules, of its telecommunications regulatory body and end-user tariffs filed with its telecommunications regulatory body are promptly published or otherwise made available to all interested persons;

(b) interested persons are provided with adequate advance public notice of and the opportunity to comment on any rulemaking that its telecommunications regulatory body proposes; and

(c) its measures relating to public telecommunications services are made publicly available, including measures relating to:

(i) tariffs and other terms and conditions of service;

(ii) procedures relating to judicial and other adjudicatory proceedings;

(iii) specifications of technical interfaces;

(iv) conditions for attaching terminal or other equipment to the public telecommunications network; and

(v) notification, permit, registration, or licensing requirements, if any.

ARTICLE 13.14: FLEXIBILITY IN THE CHOICE OF TECHNOLOGIES

Neither Party may prevent suppliers of public telecommunications services from choosing the technologies that they use to supply their services, including commercial mobile wireless services, except that a Party shall be free to establish and apply spectrum and frequency management policies and other measures necessary to satisfy legitimate public policy interests, such as a requirement to comply with technical specifications and national frequency tables.

ARTICLE 13.15: FORBEARANCE

The Parties recognize the importance of relying on market forces to provide wide choices in the supply of telecommunications services. To this end, each Party may forbear from applying a regulation to a service that the Party classifies as a public telecommunications service, if its telecommunications regulatory body determines that:

(a) enforcement of the regulation is not necessary to prevent unreasonable or discriminatory practices;

(b) enforcement of the regulation is not necessary for the protection of consumers; and

(c) forbearance is consistent with the public interest, including promoting and enhancing competition between suppliers of public telecommunications services.

ARTICLE 13.16: RELATIONSHIP TO OTHER CHAPTERS

In the event of any inconsistency between this Chapter and another Chapter, this Chapter shall prevail to the extent of the inconsistency.

ARTICLE 13.17: DEFINITIONS

For purposes of this Chapter:

co-location (physical) means physical access to space in order to install, maintain, or repair equipment at premises owned or controlled and used by a major supplier to supply public telecommunications services;

co-location (virtual) means the ability to lease and control equipment of a major supplier of public telecommunications services for the purpose of interconnecting with that supplier or accessing its unbundled network elements;

commercial mobile services means public telecommunications services supplied through mobile wireless means;

cost-oriented means based on cost, and may include a reasonable profit, and may involve different cost methodologies for different facilities or services;

dialing parity means the ability of an end-user to use an equal number of digits to access a like public telecommunications service, regardless of which public telecommunications service supplier the end-user chooses;

end-user means a final consumer of or final subscriber to a public telecommunications service;

enterprise means an enterprise as defined in Article 1.3 (Definitions), and a branch of an enterprise;

essential facilities means facilities of a public telecommunications network or service that:

(a) are exclusively or predominantly supplied by a single or limited number of suppliers, and

(b) cannot feasibly be economically or technically substituted in order to supply a service;

interconnection means linking with suppliers providing public telecommunications services in order to allow the users of one supplier to communicate with users of another supplier and to access services provided by another supplier;

leased circuits means facilities between designated terminating points of a public telecommunications network leased to a user by a supplier of public telecommunications services, excluding any switching functionality controlled by the user;

major supplier means a supplier of public telecommunications services that has the ability to materially affect the terms of participation (having regard to price and supply) in the relevant market for public telecommunications services as a result of:

(a) control over essential facilities or

(b) use of its position in the market;

network element means a facility or equipment used in supplying a public telecommunications service, including features, functions, and capabilities provided by means of that facility or equipment;

non-discriminatory means treatment no less favorable than that accorded to any other user of like public telecommunications services in like circumstances;

number portability means the ability of end-users of public telecommunications services to retain, at the same location, existing telephone numbers without impairment of quality, reliability, or convenience when switching between the same category of suppliers of public telecommunications services;

public telecommunications service means any telecommunications service that a Party requires, explicitly or in effect, to be offered to the public generally. Such services may include, inter alia, telephone and data transmission typically involving customer-supplied information between two or more points without any end-to-end change in the form or content of the customer’s information. Public telecommunications services in the territory of the United States do not include value-added services;

reference interconnection offer means an interconnection offer extended by a major supplier and filed with or approved by a telecommunications regulatory body¹¹ that is sufficiently detailed to enable a supplier of public telecommunications services that is willing to accept its rates, terms, and conditions to obtain interconnection without having to engage in negotiations with the major supplier;

supplier of public telecommunications services means any supplier of public telecommunications services;¹²

telecommunications means the transmission and reception of signals by any electromagnetic means, including by photonic means;

telecommunications regulatory body means a national body responsible for the regulation of telecommunications;

user means a service consumer or a service supplier; and

value-added services means services that add value to telecommunications services through enhanced functionality. With respect to the United States, these are services as defined in 47 U.S.C. § 153 (20). With respect to Morocco, these are services as defined in Dahir No. 24-96, Law for Posts and Telecommunications.¹³

ANNEX 13-A

For purposes of this Chapter, paragraphs 2 through 4 of Article 13.3 do not apply to the United States with respect to suppliers of commercial mobile services. In addition, a state regulatory authority of the United States may exempt a rural local exchange carrier, as defined in Section 251(f)(2) of the Communications Act of 1934, as amended, from the obligations contained in paragraphs 2 through 4 of Article 13.3.

ANNEX 13-B

1. Article 13.4 does not apply to the United States with respect to a rural telephone company, as defined in section 3(37) of the Communications Act of 1934, as amended, unless a state regulatory authority orders that the requirements described in that Article be applied to the company. In addition, a state regulatory authority may exempt a rural local exchange carrier, as defined in section 251(f)(2) of the Communications Act of 1934, as amended, from the obligations contained in Article 13.4.

2. For purposes of this Chapter, Article 13.4 does not apply to the United States with respect to suppliers of commercial mobile services.

CHAPTER FOURTEEN
ELECTRONIC COMMERCE

ARTICLE 14.1: GENERAL

The Parties recognize the economic growth and opportunity that electronic commerce provides, the importance of avoiding barriers to its use and development, and the applicability of the WTO Agreement to measures affecting electronic commerce.

ARTICLE 14.2: ELECTRONIC SUPPLY OF SERVICES

The Parties affirm that measures affecting the supply of a service using electronic means are subject to the obligations contained in the relevant provisions of Chapters Ten (Investment), Eleven (Cross-Border Trade in Services), and Twelve (Financial Services), subject to any exceptions or non-conforming measures set out in this Agreement that are applicable to such obligations.

ARTICLE 14.3: DIGITAL PRODUCTS

1. Neither Party may apply customs duties, fees, or other charges on or in connection with the importation or exportation of digital products by electronic transmission.¹

2. Each Party shall determine the customs value of an imported carrier medium bearing a digital product of the other Party based on the cost or value of the carrier medium alone, without regard to the cost or value of the digital product stored on the carrier medium.

3.

(a) Neither Party may accord less favorable treatment to digital products created, produced, published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms in the territory of the other Party than it accords to like digital products created, produced, published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms in the territory of a non-Party.

(b) Neither Party may accord less favorable treatment to digital products whose author, performer, producer, developer, or distributor is a person of the other Party than it accords to like digital products whose author, performer, producer, developer, or distributor is a person of a non-Party.

4. Neither Party may accord less favorable treatment to a digital product transmitted electronically than it accords to other like digital products transmitted electronically

(a) on the basis that

(i) the digital product receiving less favorable treatment is created, produced, published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms in the territory of the other Party, or

(ii) the author, performer, producer, developer, or distributor of such digital products is a person of the other Party;²

or

(b) so as otherwise to afford protection to the other like digital products that are created, produced, published, stored, transmitted, contracted for, commissioned, or first made available on commercial terms in its territory.

ARTICLE 14.4: DEFINITIONS

For purposes of this Chapter:

carrier medium means any physical object capable of storing a digital product by any method now known or later developed, and from which a digital product can be perceived, reproduced, or communicated, directly or indirectly, including an optical medium, a floppy disk, and a magnetic tape;

digital products means computer programs, text, video, images, sound recordings, and other products that are digitally encoded, regardless of whether they are fixed on a carrier medium or transmitted electronically;³

electronic means means employing computer processing;

electronic commerce means the production, distribution, marketing, sales, or delivery of products or services through electronic means; and

electronic transmission or transmitted electronically means the transfer of digital products using any electromagnetic or photonic means.

CHAPTER 15
INTELLECTUAL PROPERTY RIGHTS

ARTICLE 15.1: GENERAL PROVISIONS

1. Each Party shall, at a minimum, give effect to this Chapter.

International Agreements and Recommendations

2. Each Party shall ratify or accede to the following agreements:

(a) the Patent Cooperation Treaty (1970), as amended in 1979;

(b) the Convention Relating to the Distribution of Programme-Carrying Signals Transmitted by Satellite (1974);

(c) the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989);

(d) the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (1977), as amended in 1980;

(e) the International Convention for the Protection of New Varieties of Plants (1991) (UPOV Convention);

(f) the Trademark Law Treaty (1994);

(g) the WIPO Copyright Treaty (1996); and

(h) the WIPO Performances and Phonograms Treaty (1996).

3. Each Party shall make all reasonable efforts to ratify or accede to the following agreements:

(a) the Patent Law Treaty (2000); and

(b) the Hague Agreement Concerning the International Registration of Industrial Designs (1999).

More Extensive Protection and Enforcement

4. A Party may provide more extensive protection for, and enforcement of, intellectual property rights under its law than this Chapter requires, provided that the additional protection and enforcement is not inconsistent with this Chapter.

National Treatment

5. In respect of all categories of intellectual property covered in this Chapter, each Party shall accord to nationals¹ of the other Party treatment no less favorable than that it accords to its own nationals with regard to the protection² and enjoyment of such intellectual property rights and any benefits derived from such rights.

6. A Party may derogate from paragraph 5 in relation to its judicial and administrative procedures, including requiring a national of another Party to designate an address for service of process in its territory, or to appoint an agent in its territory, provided that such derogation:

(a) is necessary to secure compliance with laws and regulations that are not inconsistent with this Chapter; and

(b) is not applied in a manner that would constitute a disguised restriction on trade.

7. Paragraph 5 does not apply to procedures provided in multilateral agreements concluded under the auspices of the World Intellectual Property Organization (WIPO) in relation to the acquisition or maintenance of intellectual property rights.

Application of Agreement to Existing Subject Matter and Prior Acts

8. Except as it provides otherwise, including in Article 15.5.6, this Chapter gives rise to obligations in respect of all subject matter existing at the date of entry into force of this Agreement, that is protected on that date in the territory of the Party where protection is claimed, or that meets or comes subsequently to meet the criteria for protection under this Chapter.

9. Except as otherwise provided in this Chapter, including Article 15.5.6, a Party shall not be required to restore protection to subject matter that on the date of entry into force of this Agreement has fallen into the public domain in its territory.

10. This Chapter does not give rise to obligations in respect of acts that occurred before the date of entry into force of this Agreement.

Transparency

11. Further to Article 18.1 (Publication), and with the object of making the protection and enforcement of intellectual property rights as transparent as possible, each Party shall ensure that all laws, regulations, and procedures concerning the protection or enforcement of intellectual property rights shall be in writing and shall be published,³ or where publication is not practicable made publicly available, in a national language in such a manner as to enable governments and right holders to become acquainted with them. Nothing in this paragraph shall require a Party to disclose confidential information which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.

ARTICLE 15.2: TRADEMARKS

1. Neither Party may require, as a condition of registration, that signs be visually perceptible, nor may a Party deny registration of a trademark solely on the ground that the sign of which it is composed is a sound or a scent.

2. Each Party shall provide that trademarks shall include certification marks.

3. Each Party shall ensure that its measures mandating the use of the term customary in common language as the common name for a good or service (“common name”), including, inter alia, requirements concerning the relative size, placement, or style of use of the trademark in relation to the common name, do not impair the use or effectiveness of trademarks used in relation to such good or service.

4. Each Party shall provide that the owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs, including geographical indications, for goods or services that are related to those goods or services in respect of which the owner’s trademark is registered, where such use would result in a likelihood of confusion. In case of the use of an identical sign, including a geographical indication, for identical goods or services, a likelihood of confusion shall be presumed.

5. Each Party may provide limited exceptions to the rights conferred by a trademark, including a geographical indication, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interest of the owner of the trademark and of third parties.

6. Article 6bis of the Paris Convention for the Protection of Industrial Property (1967) shall apply, mutatis mutandis, to goods or services that are not identical or similar to those identified by a well-known trademark,⁴ whether registered or not, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the trademark and provided that the interests of the owner of the trademark are likely to be damaged by such use.

7. Each Party shall provide a system for the registration of trademarks, which shall include:

(a) providing to the applicant a communication in writing, which may be provided electronically, of the reasons for a refusal to register a trademark;

(b) an opportunity for the applicant to respond to communications from the trademark authorities, to contest an initial refusal, and to appeal judicially a final refusal to register;

(c) an opportunity for interested parties to oppose a trademark application or to seek cancellation of a trademark after it has been registered; and

(d) a requirement that decisions in opposition or cancellation proceedings be reasoned and in writing.

(a) an electronic means for applying for, processing, registering, and maintaining trademarks, and

(b) a publicly available electronic database, including an online database, of trademark applications and registrations.

9. Each Party shall provide that:

(a) each registration, or publication that concerns a trademark application or registration, that indicates goods or services shall indicate the goods or services by their names, grouped according to the classes of the classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (1979), as revised and amended (“Nice Classification”).

(b) goods or services may not be considered as being similar to each other solely on the ground that, in any registration or publication, they appear in the same class of the Nice Classification. Conversely, each Party shall provide that goods or services may not be considered as being dissimilar from each other solely on the ground that, in any registration or publication, they appear in different classes of the Nice Classification.

10. Each Party shall provide that initial registration and each renewal of registration of a trademark shall be for a term of no less than ten years.

11. Neither Party may require recordation of trademark licenses to establish the validity of the license, to assert any rights in a trademark, or for other purposes.

ARTICLE 15.3: GEOGRAPHICAL INDICATIONS

Procedures with Respect to Geographical Indications

1. If a Party provides the means to apply for protection or petition for recognition of geographical indications, it shall:

(a) accept those applications and petitions without requiring intercession by a Party on behalf of its nationals;

(b) process those applications or petitions, as relevant, with a minimum of formalities.

(c) ensure that its regulations governing filing of those applications or petitions, as relevant, are readily available to the public and set out clearly the procedures for these actions;

(d) make available contact information sufficient to allow the general public to obtain guidance concerning the procedures for filing applications or petitions and the processing of those applications or petitions in general; and to allow applicants, petitioners, or their representatives to ascertain the status of, and to obtain procedural guidance concerning, specific applications and petitions; and

(e) ensure that applications or petitions, as relevant, for geographical indications are published for opposition, and provide procedures for opposing geographical indications that are the subject of applications or petitions. Each Party shall also provide procedures to cancel a registration resulting from an application or a petition.

Relationship to Trademarks

2. Each Party shall provide that each of the following shall be a ground for refusing protection or recognition of a geographical indication:

(a) the geographical indication is likely to be confusingly similar to a trademark that is the subject of a good-faith pending application or registration; and

(b) the geographical indication is confusingly similar to a pre-existing trademark, the rights to which have been acquired in the territory of the Party through use in good faith.

Definition

3. For purposes of this Chapter, geographical indications means indications that identify a good as originating in the territory of a Party, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin.⁵ Any sign or combination of signs (such as words, including geographical and personal names, as well as letters, numerals, figurative elements, and colors, including single colors), in any form whatsoever, shall be eligible to be a geographical indication.

ARTICLE 15.4: DOMAIN NAMES ON THE INTERNET

1. In order to address the problem of trademark cyber-piracy, each Party shall require that the management of its country-code top-level domain (“ccTLD”) provide an appropriate procedure for the settlement of disputes, based on the principles established in the Uniform Domain-Name Dispute-Resolution Policy.

2. Each Party shall require that the management of its ccTLD provide online public access to a reliable and accurate database of contact information for domain-name registrants.

ARTICLE 15.5: COPYRIGHT AND RELATED RIGHTS

1. Each Party shall provide that authors, performers, and producers of phonograms⁶ have the right⁷ to authorize or prohibit all reproductions of their works, performances, and phonograms,⁸ in any manner or form, permanent or temporary (including temporary storage in electronic form).

2. Each Party shall provide to authors, performers, and producers of phonograms the right to authorize or prohibit the importation into that Party’s territory of copies of the work, performance, or phonogram that are made without authorization, or made outside that Party’s territory with the authorization of the author, performer, or producer of the phonogram.

3. Each Party shall provide to authors, performers, and producers of phonograms the right to authorize the making available to the public of the original and copies of their works, performances, and phonograms through sale or other transfer of ownership.

4. In order to ensure that no hierarchy is established between rights of authors, on the one hand, and rights of performers and producers of phonograms, on the other hand, each Party shall provide that in cases where authorization is needed from both the author of a work embodied in a phonogram and a performer or producer owning rights in the phonogram, the need for the authorization of the author does not cease to exist because the authorization of the performer or producer is also required. Likewise, each Party shall establish that in cases where authorization is needed from both the author of a work embodied in a phonogram and a performer or producer owning rights in the phonogram, the need for the authorization of the performer or producer does not cease to exist because the authorization of the author is also required.

5. Each Party shall provide that, where the term of protection of a work (including a photographic work), performance, or phonogram is to be calculated:

(a) on the basis of the life of a natural person, the term shall be not less than the life of the author and 70 years after the author’s death; and

(b) on a basis other than the life of a natural person, the term shall be

(i) not less than 70 years from the end of the calendar year of the first authorized publication of the work, performance, or phonogram, or

(ii) failing such authorized publication within 50 years from the creation of the work, performance, or phonogram, not less than 70 years from the end of the calendar year of the creation of the work, performance, or phonogram.

6. Each Party shall apply Article 18 of the Berne Convention for the Protection of Literary and Artistic Works (1971) (Berne Convention) and Article 14.6 of the TRIPS Agreement, mutatis mutandis, to the subject matter, rights, and obligations in this Article and Articles 15.6 and 15.7.

7. Each Party shall provide that for copyright and related rights, any person acquiring or holding any economic right in a work, performance, or phonogram:

(a) may freely and separately transfer that right by contract; and

(b) by virtue of a contract, including contracts of employment underlying the creation of works, performances, and phonograms, shall be able to exercise that right in that person’s own name and enjoy fully the benefits derived from that right.

(a) In order to provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that authors, performers, and producers of phonograms use in connection with the exercise of their rights and that restrict unauthorized acts in respect of their works, performances, and phonograms, each Party shall provide that any person who:

(i) circumvents without authority any effective technological measure that controls access to a protected work, performance, phonogram, or other subject matter; or

(ii) manufactures, imports, distributes, offers to the public, provides, or otherwise trafficks in devices, products, or components, or offers to the public or provides services, that:

(A) are promoted, advertised, or marketed for the purpose of circumvention of any effective technological measure,

(B) have only a limited commercially significant purpose or use other than to circumvent any effective technological measure, o

(C) are primarily designed, produced, or performed for the purpose of enabling or facilitating the circumvention of any effective technological measure, shall be liable and subject to the remedies set out in Article 15.11.14. Each Party shall provide for criminal procedures and penalties to be applied when any person, other than a nonprofit library, archive, educational institution, or public noncommercial broadcasting entity, is found to have engaged willfully and for purposes of commercial advantage or private financial gain in any of the foregoing activities.

(b) In implementing subparagraph (a), neither Party shall be obligated to require that the design of, or the design and selection of parts and components for, a consumer electronics, telecommunications, or computing product provide for a response to any particular technological measure, so long as the product does not otherwise violate any measures implementing subparagraph (a).

(c) Each Party shall provide that a violation of a measure implementing this paragraph is a separate civil or criminal offense, independent of any infringement that might occur under the Party’s law on copyright and related rights.

(d) Each Party shall confine exceptions and limitations to any measures implementing subparagraph (a) to the following activities, which shall be applied to relevant measures in accordance with subparagraph (e):

(i) noninfringing reverse engineering activities with regard to a lawfully obtained copy of a computer program, carried out in good faith with respect to particular elements of that computer program that have not been readily available to the person engaged in those activities, for the sole purpose of achieving interoperability of an independently created computer program with other programs;

(ii) noninfringing good faith activities, carried out by an appropriately qualified researcher who has lawfully obtained a copy, unfixed performance, or display of a work, performance, or phonogram and who has made a good faith effort to obtain authorization for such activities, to the extent necessary for the sole purpose of research consisting of identifying and analyzing flaws and vulnerabilities of technologies for scrambling and descrambling of information;

(iii) the inclusion of a component or part for the sole purpose of preventing the access of minors to inappropriate online content in a technology, product, service, or device that itself is not prohibited under the measures implementing subparagraph (a)(ii);

(iv) noninfringing good faith activities that are authorized by the owner of a computer, computer system, or computer network for the sole purpose of testing, investigating, or correcting the security of that computer, computer system, or computer network;

(v) noninfringing activities for the sole purpose of identifying and disabling a capability to carry out undisclosed collection or dissemination of personally identifying information reflecting the online activities of a natural person in a way that has no other effect on the ability of any person to gain access to any work;

(vi) lawfully authorized activities carried out by government employees, agents, or contractors for the purpose of law enforcement, intelligence, essential security, or similar governmental purposes; and

(vii) access by a nonprofit library, archive, or educational institution to a work not otherwise available to it, for the sole purpose of making acquisition decisions; and

(viii) noninfringing uses of a work, performance, or phonogram in a particular class of works, performances, or phonograms when an actual or likely adverse impact on those noninfringing uses is demonstrated in a legislative or administrative proceeding by substantial evidence; provided that any limitation or exception adopted in reliance upon this clause shall have effect for a period of not more than three years from the date of conclusion of such proceeding.

(e) The exceptions and limitations to any measures implementing subparagraph (a) for the activities set forth in subparagraph (d) may only be applied as follows, provided that they do not impair the adequacy of legal protection or the effectiveness of legal remedies against the circumvention of effective technological measures:

(i) Measures implementing subparagraph (a)(i) may be subject to exceptions and limitations with respect to each activity set forth in subparagraph (d).

(ii) Measures implementing subparagraph (a)(ii), as they apply to effective technological measures that control access to a work, performance, or phonogram, may be subject to exceptions and limitations with respect to activities set forth in subparagraph (d)(i), (ii), (iii), (iv), and (vi).

(iii) Measures implementing subparagraph (a)(ii), as they apply to effective technological measures that protect any copyright or any rights related to copyright, may be subject to exceptions and limitations with respect to activities set forth in subparagraph (d)(i) and (vi).

(f) For purposes of this paragraph, effective technological measure means any technology, device, or component that, in the normal course of its operation, controls access to a protected work, performance, phonogram, or other protected subject matter, or protects any copyright or any rights related to copyright.

9. In order to provide adequate and effective legal remedies to protect rights management information:

(a) each Party shall provide that any person who without authority, and knowing, or, with respect to civil remedies, having reasonable grounds to know, that it would induce, enable, facilitate, or conceal an infringement of any copyright or related right,

(i) knowingly removes or alters any rights management information;

(ii) distributes or imports for distribution rights management information knowing that the rights management information has been removed or altered without authority; or

(iii) distributes, imports for distribution, broadcasts, communicates, or makes available to the public copies of works, performances, or phonograms, knowing that rights management information has been removed or altered without authority,

shall be liable and subject to the remedies set out in Article 15.11.14. Each Party shall provide for criminal procedures and penalties to be applied when any person, other than a nonprofit library, archive, educational institution, or public noncommercial broadcasting entity, is found to have engaged willfully and for purposes of commercial advantage or private financial gain in any of the foregoing activities.

(b) Each Party shall confine exceptions and limitations to measures implementing subparagraph (a) to lawfully authorized activities carried out by government employees, agents, or contractors for the purpose of law enforcement, intelligence, essential security, or similar government purposes.

(c) For purposes of this paragraph, rights management information means:

(i) information that identifies a work, performance, or phonogram; the author of the work, the performer of the performance, or the producer of the phonogram; or the owner of any right in the work, performance, or phonogram;

(ii) information about the terms and conditions of the use of the work, performance, or phonogram; or

(iii) any numbers or codes that represent such information,

when any of these items is attached to a copy of the work, performance, or phonogram or appears in connection with the communication or making available of a work, performance, or phonogram to the public.

(d) For greater certainty, nothing in this paragraph obligates a Party to require the owner of any right in the work, performance, or phonogram to attach rights management information to copies of the work, performance, or phonogram, or to cause rights management information to appear in connection with a communication of the work, performance, or phonogram to the public.

10. Each Party shall issue appropriate laws, orders, regulations, or administrative or executive decrees mandating that its agencies use computer software only as authorized by the right holder. These measures shall actively regulate the acquisition and management of software for government use.

11.

(a) With respect to this Article and Articles 15.6, and 15.7, each Party shall confine limitations or exceptions to exclusive rights to certain special cases that do not conflict with a normal exploitation of the work, performance, or phonogram, and do not unreasonably prejudice the legitimate interests of the right holder.

(b) Notwithstanding subparagraph (a) and Article 15.7.3(b), neither Party may permit the retransmission of television signals (whether terrestrial, cable, or satellite) on the Internet without the authorization of the right holder or right holders of the content of the signal, if any, and of the signal.

ARTICLE 15.6: COPYRIGHT

Without prejudice to Articles 11(1)(ii), 11bis(1)(i) and (ii), 11ter(1)(ii), 14(1)(ii), and 14bis(1) of the Berne Convention, each Party shall provide to authors the exclusive right to authorize or prohibit the communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them.

ARTICLE 15.7: RELATED RIGHTS

1. Each Party shall accord the rights provided for in this Chapter with respect to performers and producers of phonograms to the performers and producers of phonograms who are nationals of the other Party and to performances or phonograms first published or fixed in the territory of the other Party. A performance or phonogram shall be considered first published in the territory of a Party in which it is published within 30 days of its original publication.⁹

2. Each Party shall provide to performers the right to authorize or prohibit:

(a) the broadcasting and communication to the public of their unfixed performances, except where the performance is already a broadcast performance, and

(b) the fixation of their unfixed performances.

3.

(a) Each Party shall provide to performers and producers of phonograms the right to authorize or prohibit the broadcasting or any communication to the public of their performances or phonograms, by wire or wireless means, including the making available to the public of those performances and phonograms in such a way that members of the public may access them from a place and at a time individually chosen by them.

(b) Notwithstanding subparagraph (a) and Article 15.5.11, the application of this right to traditional free over-the-air (i.e., noninteractive) broadcasting, and exceptions or limitations to this right for such activity, shall be a matter of each Party’s law.

(c) Each Party may adopt limitations to this right in respect of other noninteractive transmissions in accordance with Article 15.5.11, provided that the limitations do not prejudice the right of the performer or producer of phonograms to obtain equitable remuneration.

4. Neither Party may subject the enjoyment and exercise of the rights of performers and producers of phonograms provided for in this Chapter to any formality.

5. For purposes of this Article and Article 15.5, the following definitions apply with respect to performers and producers of phonograms:

(a) broadcasting means the transmission to the public by wireless means or satellite of sounds or sounds and images, or representations thereof, including wireless transmission of encrypted signals where the means for decrypting are provided to the public by the broadcasting organization or with its consent; “broadcasting” does not include transmissions over computer networks or any transmissions where the time and place of reception may be individually chosen by members of the public;

(b) communication to the public of a performance or a phonogram means the transmission to the public by any medium, other than by broadcasting, of sounds of a performance or the sounds or the representations of sounds fixed in a phonogram. For purposes of paragraph 3, “communication to the public” includes making the sounds or representations of sounds fixed in a phonogram audible to the public;

(c) fixation means the embodiment of sounds, or of the representations thereof, from which they can be perceived, reproduced, or communicated through a device;

(d) performers means actors, singers, musicians, dancers, and other persons who act, sing, deliver, declaim, play in, interpret, or otherwise perform literary or artistic works or expressions of folklore;

(e) phonogram means the fixation of the sounds of a performance or of other sounds, or of a representation of sounds, other than in the form of a fixation incorporated in a cinematographic or other audiovisual work;

(f) producer of a phonogram means the person who, or the legal entity which, takes the initiative and has the responsibility for the first fixation of the sounds of a performance or other sounds, or the representations of sounds; and

(g) publication of a performance or a phonogram means the offering of copies of the performance or the phonogram to the public, with the consent of the right holder, and provided that copies are offered to the public in reasonable quantity.

1. Each Party shall make it a criminal offense:

(a) to manufacture, assemble, modify, import, export, sell, lease, or otherwise distribute a tangible or intangible device or system, knowing or having reason to know that the device or system is primarily of assistance in decoding an encrypted program-carrying satellite signal without the authorization of the lawful distributor of such signal; and

(b) willfully to receive or further distribute a program-carrying signal that originated as an encrypted satellite signal knowing that it has been decoded without the authorization of the lawful distributor of the signal.

2. Each Party shall provide for civil remedies, including compensatory damages, for any person injured by any activity described in paragraph 1, including any person that holds an interest in the encrypted programming signal or its content.

ARTICLE 15.9: PATENTS

1. Each Party may only exclude from patentability inventions, the prevention within its territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal, or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by law.

2. Each Party shall make patents available for the following inventions:

(a) plants, and

(b) animals.

In addition, the Parties confirm that patents shall be available for any new uses or methods of using a known product, including new uses of a known product for the treatment of humans and animals.

3. Each Party may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.

4. Each Party shall provide that the exclusive right of the patent owner to prevent importation of a patented product, or a product that results from patented process, without the consent of the patent owner shall not be limited by the sale or distribution of that product outside its territory.¹⁰

5. Each Party shall provide that a patent may be revoked only on grounds that would have justified a refusal to grant the patent. A Party may also provide that fraud, misrepresentation, or inequitable conduct may be the basis for revoking a patent or holding a patent unenforceable. Where a Party provides proceedings that permit a third party to oppose the grant of a patent, a Party shall not make such proceedings available before the grant of the patent.

6. Consistent with paragraph 3, if a Party permits a third person to use the subject matter of a subsisting patent to generate information necessary to support an application for marketing approval of a pharmaceutical product, that Party shall provide that any product produced under such authority shall not be made, used, or sold in its territory other than for purposes related to generating information to meet requirements for approval to market the product, and if the Party permits exportation, the Party shall provide that the product shall only be exported outside its territory for purposes of meeting marketing approval requirements of that Party.

7. Each Party, at the request of the patent owner, shall adjust the term of a patent to compensate for unreasonable delays that occur in granting the patent. For purposes of this paragraph, an unreasonable delay shall at least include a delay in the issuance of the patent of more than four years from the date of filing of the application in the territory of the Party, or two years after a request for examination of the application, whichever is later. Periods attributable to actions of the patent applicant need not be included in the determination of such delays.

8. Each Party shall disregard information contained in public disclosures used to determine if an invention is novel or has an inventive step¹¹ if the public disclosure:

(a) was made or authorized by, or derived from, the patent applicant, and

(b) occurred within 12 months prior to the date of filing of the application in the territory of the Party.

9. Each Party shall provide patent applicants with at least one opportunity to make amendments, corrections, and observations in connection with their applications.

10. Each Party shall provide that a disclosure of a claimed invention shall be considered to be sufficiently clear and complete if it provides information that allows the invention to be made and used by a person skilled in the art, without undue experimentation, as of the filing date.

11. Each Party shall provide that a claimed invention:

(a) is sufficiently supported by its disclosure if the disclosure reasonably conveys to a person skilled in the art that the applicant was in possession of the claimed invention, as of the filing date, and

(b) is industrially applicable if it has a specific, substantial, and credible utility.

ARTICLE 15.10: MEASURES RELATED TO CERTAIN REGULATED PRODUCTS

1. If a Party requires, as a condition of approving the marketing of a new pharmaceutical or agricultural chemical product, the submission of:

(a) safety and efficacy data, or

(b) evidence of prior approval of the product in another territory that requires such information,

the Party shall not permit third persons not having the consent of the person providing the information to market a product on the basis of the approval granted to the person submitting that information for at least five years for pharmaceutical products and ten years for agricultural chemical products from the date of approval in the Party’s territory. For purposes of this paragraph, a new product is one that contains a new chemical entity that has not been previously approved in the Party’s territory.¹²

2. If a Party requires the submission of

(a) new clinical information that is essential to the approval of a pharmaceutical product (other than information related to bioequivalency), or

(b) evidence of prior approval of the product in another territory that requires such new information,

the Party shall not permit third persons not having the consent of the person providing the information to market a pharmaceutical product on the basis of such new information or the approval granted to the person submitting such information for at least three years from the date of approval in the Party. A Party may limit such protection to new clinical information the origination of which involves considerable effort.¹³

3. With respect to patents covering pharmaceutical products, each Party shall make available an extension of the patent term to compensate the patent owner for unreasonable curtailment of the effective patent term as a result of the marketing approval process.

4. With respect to any pharmaceutical product that is subject to a patent, and where a Party permits authorizations to be granted or applications to be made to market a pharmaceutical product based on information previously submitted concerning the safety and efficacy of a product, including evidence of prior marketing approval by persons other than the person that previously submitted such information, that Party:

(a) shall implement measures in its marketing approval process to prevent such other persons from marketing a product covered by a patent during the term of that patent, unless by consent or with the acquiescence of the patent owner,¹⁴ and

(b) if it allows applications¹⁵ to be made to market a product during the term of a patent covering that product, shall provide that the patent owner shall be notified of the identity of any such other person who requests marketing approval to enter the market during the term of a patent notified to or identified by the approving authority as covering that product.

General Obligations

1. Further to Article 18.1 (Publication), each Party shall provide that final judicial decisions and administrative rulings of general application pertaining to the enforcement of intellectual property rights shall be in writing and shall state any relevant findings of fact and the reasoning or the legal basis on which the decisions or rulings are based. Each Party shall provide that such decisions or rulings shall be published¹⁶ or, where publication is not practicable, otherwise made available to the public in a national language in such a manner as to enable governments and right holders to become acquainted with them.

2. Each Party shall publicize information on its efforts to provide effective enforcement of intellectual property rights in its civil, administrative, and criminal system, including any statistical information that the Party may collect for such purpose. Nothing in this paragraph shall require a Party to disclose confidential information that would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.

3. The Parties understand that a decision that a Party makes on the distribution of enforcement resources shall not excuse that Party from complying with this Chapter.

4. In civil, administrative, and criminal proceedings involving copyright or related rights, each Party shall provide for a presumption that, in the absence of proof to the contrary, the person whose name is indicated as the author, producer, performer, or publisher of the work, performance, or phonogram in the usual manner is the designated right holder in such work, performance, or phonogram. Each Party shall also provide for a presumption that, in the absence of proof to the contrary, the copyright or related right subsists in such subject matter.

Civil and Administrative Procedures and Remedies

5. Each Party shall make available to right holders¹⁷ civil judicial procedures concerning the enforcement of any intellectual property right.

6. Each Party shall provide that:

(a) in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer to pay the right holder:

(i) damages adequate to compensate for the injury the right holder has suffered as a result of the infringement and,

(ii) at least in the case of copyright or related rights infringement and trademark counterfeiting, the profits of the infringer that are attributable to the infringement and that are not taken into account in computing the amount of the damages referred to in clause (i); and

(b) in determining damages for infringement of intellectual property rights, its judicial authorities shall consider, inter alia, the value of the infringed-on good or service, measured by the suggested retail price or other legitimate measure of value submitted by the right holder.

7. In civil judicial proceedings, each Party shall, at least with respect to works, phonograms, and performances protected by copyright or related rights, and in cases of trademark counterfeiting, establish or maintain pre-established damages, which shall be available on the election of the right holder. Pre-established damages shall be in an amount sufficient to constitute a deterrent to future infringements and to compensate fully the right holder for the harm caused by the infringement. In civil judicial proceedings concerning patent infringement, each Party shall provide that its judicial authorities, except in exceptional circumstances, shall have the authority to increase damages to an amount that is up to three times the amount of the injury found or assessed.

8. Each Party shall provide that its judicial authorities, except in exceptional circumstances, shall have the authority to order, at the conclusion of civil judicial proceedings concerning copyright or related rights infringement and trademark counterfeiting, that the prevailing party shall be awarded payment of court costs or fees and reasonable attorney’s fees by the losing party. Further, each Party shall provide that its judicial authorities, at least in exceptional circumstances, shall have the authority to order, at the conclusion of civil judicial proceedings concerning patent infringement, that the prevailing party shall be awarded payment of reasonable attorney’s fees by the losing party.¹⁸

9. In civil judicial proceedings concerning copyright or related rights infringement and trademark counterfeiting, each Party shall provide that its judicial authorities shall have the authority to order the seizure of suspected infringing goods, any related materials and implements, and, at least for trademark counterfeiting, documentary evidence relevant to the infringement.

10. Each Party shall provide that:

(a) in civil judicial proceedings, at the right holder’s request, goods that have been found to be pirated or counterfeit shall be destroyed, except in exceptional circumstances;

(b) its judicial authorities shall have the authority to order that materials and implements that have been used in the manufacture or creation of the pirated or counterfeit goods be, without compensation of any sort, promptly destroyed or, in exceptional circumstances, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements; and

(c) in regard to counterfeit trademarked goods, the simple removal of the trademark unlawfully affixed shall not be sufficient to permit the release of goods into the channels of commerce.

11. Each Party shall provide that in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities shall have the authority to order the infringer to provide any information that the infringer possesses regarding any person involved in any aspect of the infringement and regarding the means of production or distribution channel of such goods, including the identification of third persons involved in the production and distribution of the infringing goods or services or in their channels of distribution, and to provide this information to the right holder.

12. Each Party shall provide that its judicial authorities have the authority to:

(a) fine or imprison, in appropriate cases, a party to a litigation who fails to abide by valid orders issued by such authorities; and

(b) impose sanctions on parties to a litigation, their counsel, experts, or other persons subject to the court’s jurisdiction, for violation of judicial orders regarding the protection of confidential information produced or exchanged in a proceeding.

13. To the extent that any civil remedy can be ordered as a result of administrative procedures on the merits of a case, each Party shall provide that such procedures conform to principles equivalent in substance to those set out in this Chapter.

14. In civil judicial proceedings concerning the acts described in Articles 15.5.8 and 15.5.9, each Party shall provide that its judicial authorities shall have the authority to order or award at least:

(a) provisional measures, including seizure of devices and products suspected of being involved in the prohibited activity;

(b) the opportunity for the right holder to elect between actual damages it suffered (plus any profits attributable to the prohibited activity not taken into account in computing those damages) or pre-established damages;

(c) payment to the prevailing right holder at the conclusion of civil judicial proceedings of court costs and fees, and reasonable attorney’s fees, by the party engaged in the prohibited conduct; and

(d) destruction of devices and products found to be involved in the prohibited activity.

Neither Party may make damages available against a nonprofit library, archive, educational institution, or public noncommercial broadcasting entity that sustains the burden of proving that it was not aware and had no reason to believe that its acts constituted a prohibited activity.

15. In civil judicial proceedings concerning the enforcement of intellectual property rights, each Party shall provide that its judicial authorities shall have the authority to order a party to desist from an infringement, in order, inter alia, to prevent, immediately after they clear customs, the entry into the channels of commerce in the jurisdiction of those authorities of imported goods that involve the infringement of an intellectual property right, or to prevent their exportation.

16. In the event that a Party’s judicial or other authorities appoint technical or other experts in civil proceedings concerning the enforcement of intellectual property rights and require that the parties to the litigation bear the costs of such experts, the Party should seek to ensure that such costs are closely related, inter alia, to the quantity and nature of work to be performed and do not unreasonably deter recourse to such proceedings.

Provisional Measures

17. Parties shall act on requests for relief inaudita altera parte expeditiously, and shall, except in exceptional circumstances, generally execute such requests within ten days.

18. Each Party shall provide that its judicial authorities have the authority to require the plaintiff to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the plaintiff’s right is being infringed or that such infringement is imminent, and to order the plaintiff to provide a reasonable security or equivalent assurance set at a level sufficient to protect the defendant and to prevent abuse, and so as not to unreasonably deter recourse to such procedures.

19. In proceedings concerning the grant of provisional measures in relation to enforcement of a patent, each Party shall provide for a rebuttable presumption that the patent is valid.

Special Requirements Related to Border Measures

20. Each Party shall provide that any right holder initiating procedures for its competent authorities to suspend release of suspected counterfeit or confusingly similar trademark goods, or pirated copyright goods¹⁹ into free circulation is required to provide adequate evidence to satisfy the competent authorities that, under the laws of the country of importation, there is prima facie an infringement of the right holder’s intellectual property right and to supply sufficient information that may reasonably be expected to be within the right holder’s knowledge to make the suspected goods reasonably recognizable by its competent authorities. The requirement to provide sufficient information shall not unreasonably deter recourse to these procedures. Each Party shall provide that the application to suspend the release of goods shall remain in force for a period of not less than one year from the date of application, or the period that the good is protected by copyright or the relevant trademark registration, whichever is shorter.

21. Each Party shall provide that its competent authorities shall have the authority to require a right holder initiating procedures to suspend the release of suspected counterfeit or confusingly similar trademark goods, or pirated copyright goods, to provide a reasonable security or equivalent assurance sufficient to protect the defendant and the competent authorities and to prevent abuse. Each Party shall provide that such security or equivalent assurance shall not unreasonably deter recourse to these procedures. Each Party may provide that such security may be in the form of a bond conditioned to hold the importer or owner of the imported merchandise harmless from any loss or damage resulting from any suspension of the release of goods in the event the competent authorities determine that the article is not an infringing good.

22. Where its competent authorities have made a determination that goods are counterfeit or pirated, a Party shall grant its competent authorities the authority to inform the right holder of the names and addresses of the consignor, the importer, and the consignee, and of the quantity of the goods in question.

23. Each Party shall provide that its competent authorities may initiate border measures ex officio, with respect to imported, exported, or in-transit merchandise suspected of infringing an intellectual property right, without the need for a formal complaint from a private party or right holder.

24. Each Party shall provide that goods that have been determined to be pirated or counterfeit by its competent authorities shall be destroyed, except in exceptional circumstances. In regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed shall not be sufficient to permit the release of the goods into the channels of commerce. In no event shall the competent authorities be authorized, except in exceptional circumstances, to permit the exportation of counterfeit or pirated goods or to permit such goods to be subject to other customs procedures.

25. Where an application fee or merchandise storage fee is assessed in connection with border measures to enforce an intellectual property right, each Party shall provide that such fee shall not be set at an amount that unreasonably deters recourse to these measures.

Criminal Procedures and Remedies

26.

(a) Each Party shall provide for criminal procedures and penalties to be applied at least in cases of willful trademark counterfeiting or copyright or related rights piracy on a commercial scale. Willful copyright or related rights piracy on a commercial scale includes

(i) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain, andഊ15-31

(ii) willful infringements for purposes of commercial advantage or private financial gain.

Each Party shall treat willful importation or exportation of counterfeit or pirated goods as unlawful activities subject to criminal penalties to the same extent as the trafficking or distribution of such goods in domestic commerce.

(b) Specifically, each Party shall provide:

(i) remedies that include sentences of imprisonment as well as monetary fines sufficient to provide a deterrent to future infringements, consistent with a policy of removing the infringer’s monetary incentive, and shall further establish policies or guidelines that encourage judicial authorities to impose those remedies at levels sufficient to provide a deterrent to future infringements;

(ii) that its judicial authorities shall have the authority to order the seizure of suspected counterfeit or pirated goods, any related materials and implements used in the commission of the offense, any assets traceable to the infringing activity, and any documentary evidence relevant to the offense. Each Party shall provide that items that are subject to seizure pursuant to any such judicial order need not be individually identified, so long as they fall within general categories specified in the order;

(iii) that its judicial authorities shall have the authority, among other measures, to order the forfeiture of any assets traceable to the infringing activity and shall, except in exceptional cases, order the forfeiture and destruction of all counterfeit or pirated goods, and, at least with respect to willful copyright or related rights piracy, order the forfeiture and destruction of materials and implements that have been used in the creation of infringing goods. Each Party shall further provide that such forfeiture and destruction shall occur without compensation of any kind to the defendant; and

(iv) that its authorities may initiate legal action ex officio with respect to the offenses described in this Chapter, without the need for a formal complaint by a private party or right holder.

27. Each Party shall also provide for criminal procedures and penalties to be applied in the following cases, even absent willful trademark counterfeiting or copyright piracy:

(a) knowing trafficking in counterfeit labels affixed or designed to be affixed to: a phonogram, a copy of a computer program, documentation or packaging for a computer program, or a copy of a motion picture or other audiovisual work; and

(b) knowing trafficking in counterfeit documentation or packaging for a computer program.

28. For the purpose of providing enforcement procedures that permit effective action against any act of copyright infringement covered by this Chapter, including expeditious remedies to prevent infringements and criminal and civil remedies, each Party shall provide, consistent with the framework set out in this Article:

(a) legal incentives for service providers to cooperate with copyright²⁰ owners in deterring the unauthorized storage and transmission of copyrighted materials; and

(b) limitations in its law regarding the scope of remedies available against service providers for copyright infringements that they do not control, initiate, or direct, and that take place through systems or networks controlled or operated by them or on their behalf, as set forth in this subparagraph.²¹

(i) These limitations shall preclude monetary relief, and provide reasonable restrictions on court-ordered relief to compel or restrain certain actions, for the following functions, and shall be confined to those functions:²²

(A) transmitting, routing, or providing connections for material without modification of its content, or the intermediate and transient storage of such material in the course thereof;

(B) caching carried out through an automatic process;

(C) storage at the direction of a user of material residing on a system or network controlled or operated by or for the service provider; and

(D) referring or linking users to an online location by using information location tools, including hyperlinks and directories.

(ii) These limitations shall apply only where the service provider does not initiate the chain of transmission of the material and does not select the material or its recipients (except to the extent that a function described in clause (i)(D) in itself entails some form of selection).

(iii) Qualification by a service provider for the limitations as to each function in clause (i)(A) through (D) shall be considered separately from qualification for the limitations as to each other function, in accordance with the conditions for qualification set forth in clauses (iv) through (vii).

(iv) With respect to functions referred to in clause (i)(B), the limitations shall be conditioned on the service provider:

(A) permitting access to cached material in significant part only to users of its system or network who have met conditions on user access to that material;

(B) complying with rules concerning the refreshing, reloading, or other updating of the cached material when specified by the person making the material available online in accordance with a generally accepted industry standard data communications protocol for the system or network through which that person makes the material available;

(C) not interfering with technology consistent with industry standards accepted in the Party’s territory used at the originating site to obtain information about the use of the material, and not modifying its content in transmission to subsequent users; and

(D) expeditiously removing or disabling access, on receipt of an effective notification of claimed infringement, to cached material that has been removed or access to which has been disabled at the originating site.

(v) With respect to functions referred to in clause (i)(C) and (D), the limitations shall be conditioned on the service provider:

(A) not receiving a financial benefit directly attributable to the infringing activity, in circumstances where it has the right and ability to control such activity;

(B) expeditiously removing or disabling access to the material residing on its system or network on obtaining actual knowledge of the infringement or becoming aware of facts or circumstances from which the infringement was apparent, such as through effective notifications of claimed infringement in accordance with clause (ix);and

(C) publicly designating a representative to receive such notifications.

(vi) Eligibility for the limitations in this subparagraph shall be conditioned on the service provider:

(A) adopting and reasonably implementing a policy that provides for termination in appropriate circumstances of the accounts of repeat infringers; and

(B) accommodating and not interfering with standard technical measures accepted in the Party’s territory that protect and identify copyrighted material, that are developed through an open, voluntary process by a broad consensus of copyright owners and service providers, that are available on reasonable and nondiscriminatory terms, and that do not impose substantial costs on service providers or substantial burdens on their systems or networks.

(vii) Eligibility for the limitations in this subparagraph may not be conditioned on the service provider monitoring its service, or affirmatively seeking facts indicating infringing activity, except to the extent consistent with such technical measures.

(viii) If the service provider qualifies for the limitations with respect to the function referred to in clause (i)(A), court-ordered relief to compel or restrain certain actions shall be limited to terminating specified accounts, or to taking reasonable steps to block access to a specific, non-domestic online location. If the service provider qualifies for the limitations with respect to any other function in clause (i), court-ordered relief to compel or restrain certain actions shall be limited to removing or disabling access to the infringing material, terminating specified accounts, and other remedies that a court may find necessary, provided that such other remedies are the least burdensome to the service provider among comparably effective forms of relief. Each Party shall provide that any such relief shall be issued with due regard for the relative burden to the service provider and harm to the copyright owner, the technical feasibility and effectiveness of the remedy and whether less burdensome, comparably effective enforcement methods are available. Except for orders ensuring the preservation of evidence, or other orders having no material adverse effect on the operation of the service provider’s communications network, each Party shall provide that such relief shall be available only where the service provider has received notice of the court order proceedings referred to in this subparagraph and an opportunity to appear before the judicial authority.

(ix) For purposes of the notice and take down process for the functions referred to in clauses (i)(C) and (D), each Party shall establish appropriate procedures for effective notifications of claimed infringement, and effective counter-notifications by those whose material is removed or disabled through mistake or misidentification. Each Party shall also provide for monetary remedies against any person who makes a knowing material misrepresentation in a notification or counter-notification that causes injury to any interested party as a result of a service provider relying on the misrepresentation.

(x) If the service provider removes or disables access to material in good faith based on claimed or apparent infringement,ഊeach Party shall provide that the service provider shall be exempted from liability for any resulting claims, provided that, in the case of material residing on its system or network, it takes reasonable steps promptly to notify the person making the material available on its system or network that it has done so and, if such person makes an effective counter-notification and is subject to jurisdiction in an infringement suit, to restore the material online unless the person giving the original effective notification seeks judicial relief within a reasonable time.

(xi) Each Party shall establish an administrative or judicial procedure enabling copyright owners who have given effective notification of claimed infringement to obtain expeditiously from a service provider information in its possession identifying the alleged infringer.

(xii) For purposes of the function referred to in clause (i)(A), service provider means a provider of transmission, routing, or connections for digital online communications without modification of their content between or among points specified by the user of material of the user’s choosing, and for purposes of the functions referred to in clause (i)(B) through (D), service provider means a provider or operator of facilities for online services or network access.

Each Party shall:

(a) implement the obligations set out in Article 15.4 within one year of the date of entry into force of this Agreement, and shall implement the obligations set out in Article 15.11.28 by January 1, 2006, and

(b) ratify or accede to the agreements listed in paragraph 2(d), (e), and (f) of Article 15.1 by January 1, 2006.

CHAPTER SIXTEEN 
LABOR 

ARTICLE 16.1: STATEMENT OF SHARED COMMITMENT 

1. The Parties reaffirm their obligations as members of the International Labor  Organization (“ILO”) and their commitments under the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up (1998) (“ILO Declaration”). Each Party  shall strive to ensure that such labor principles and the internationally recognized labor rights set forth in Article 16.7 are recognized and protected by its law. 

2. The Parties recognize the right of each Party to adopt or modify its labor laws and  standards. Each Party shall strive to ensure that it provides for labor standards consistent with the internationally recognized labor rights set forth in Article 16.7 and shall strive to  improve those standards in that light. 

ARTICLE 16.2: APPLICATION AND ENFORCEMENT OF LABOR LAWS 

1.

(a) Neither Party shall fail to effectively enforce its labor laws, through a  sustained or recurring course of action or inaction, in a manner affecting  trade between the Parties, after the date of entry into force of this Agreement. 

(b) The Parties recognize that each Party retains the right to exercise discretion  with respect to investigatory, prosecutorial, regulatory, and compliance  matters and to make decisions regarding the allocation of resources to  enforcement with respect to other labor matters determined to have higher  priorities. Accordingly, the Parties understand that a Party is in compliance  with subparagraph (a) where a course of action or inaction reflects a  reasonable exercise of such discretion, or results from a bona fide decision  regarding the allocation of resources. 

2. Each Party recognizes that it is inappropriate to encourage trade or investment by  weakening or reducing the protections afforded in domestic labor laws. Accordingly,  each Party shall strive to ensure that it does not waive or otherwise derogate from, or  offer to waive or otherwise derogate from, such laws in a manner that weakens or reduces adherence to the internationally recognized labor rights referred to in Article 16.7 as an  encouragement for trade with the other Party, or as an encouragement for the establishment, acquisition, expansion, or retention of an investment in its territory. 

ARTICLE 16.3: PROCEDURAL GUARANTEES AND PUBLIC AWARENESS 

1. Each Party shall provide for appropriate access by persons with a legally  recognized interest in a particular matter to impartial and independent administrative, quasi-judicial, or judicial tribunals for the enforcement of its labor laws. 

2. Each Party shall provide for fair, equitable, and transparent proceedings for the  enforcement of its labor laws. To this end, each Party shall provide that such proceedings comply with due process of law, are open to the public, except where the  administration of justice otherwise requires, and do not entail unwarranted delays.  

3. Each Party shall provide that final decisions on the merits of the case in such  proceedings are in writing and state the reasons on which the decisions are based; made available without undue delay to the parties to the proceedings and, consistent with its  law, to the public; based on information or evidence in respect of which the parties were offered the opportunity to be heard; and subject to review and, where warranted,  correction, in accordance with domestic law. 

4. Each Party shall provide that the parties to such proceedings may seek remedies  (such as orders, compliance agreements, fines, penalties, injunctions, or emergency workplace closures) to ensure the enforcement of their rights under its labor laws. 

5. Each Party shall promote public awareness of its labor laws, including by: 

(a) ensuring that information related to its labor laws and enforcement and  compliance procedures is publicly available; and 

(b) encouraging education of the public regarding its labor laws. 

ARTICLE 16.4: INSTITUTIONAL ARRANGEMENTS 

1. Each Party shall designate an office within its labor ministry that shall serve as a  contact point with the other Party and the public for purposes of implementing this Chapter. 

Each Party’s contact point shall provide for the submission, receipt, and consideration of  public communications on matters related to this Chapter and shall make such communications available to the other Party and, as appropriate, the public. Each Party  shall review such communications, as appropriate, in accordance with domestic procedures. 

2. Each Party may convene a national labor advisory committee, comprising  members of its public, including representatives of its labor and business organizations and other persons, to advise it on the implementation of this Chapter. 

3. Each formal decision of the Parties concerning the implementation of this Chapter  shall be made public, unless the Parties agree otherwise. 

4. The Parties, when they consider it appropriate, shall jointly prepare reports on  matters related to the implementation of this Chapter and shall make such reports public. 

ARTICLE 16.5: LABOR COOPERATION 

1. Recognizing that cooperation provides enhanced opportunities to promote respect  for core labor standards embodied in the ILO Declaration and compliance with ILO Convention No. 182 Concerning the Prohibition and Immediate Action for the  Elimination of the Worst Forms of Child Labour (1999) (“ILO Convention 182”), and to further advance other common commitments regarding labor matters, the Parties hereby  establish a Labor Cooperation Mechanism, as set out in Annex 16-A. 

2. The Parties may undertake cooperative activities under the Labor Cooperation  Mechanism relating to labor matters of common interest, such as: promoting fundamental rights and their effective application; eliminating the worst forms of child  labor; enhancing labor-management relations; improving working conditions; developing unemployment assistance programs and other social safety net programs; encouraging  human-resource development and life-long learning; and utilizing labor statistics. 

ARTICLE 16.6: LABOR CONSULTATIONS 

1. A Party may request consultations with the other Party regarding any matter  arising under this Chapter by delivering a written request to the contact point that the other Party has designated pursuant to Article 16.4.1. The Parties shall begin  consultations promptly after delivery of the request. 

2. The Parties shall make every attempt to arrive at a mutually satisfactory  resolution of the matter and may seek advice or assistance from any person or body they deem appropriate. 

3. If the consultations fail to resolve the matter, and if a subcommittee on labor  affairs has been established pursuant to Article 19.2 (Joint Committee), either Party may refer the matter to the subcommittee by delivering a written notification to the other  Party’s contact point. The subcommittee shall convene within 30 days after a Party delivers a notification, unless the Parties agree otherwise. If the Parties have not  established a subcommittee by the date a Party delivers a notification, they shall do so during the 30-day period described in this paragraph. The subcommittee shall endeavor  to resolve the matter expeditiously, including, where appropriate, by consulting  governmental or non-governmental experts and having recourse to such procedures as good offices, conciliation, or mediation. 

4. If a Party considers that the other Party has failed to carry out its obligations  under Article 16.2.1(a), the Party may request consultations pursuant to paragraph 1 or Article 20.5 (Consultations). 

(a) If a Party requests consultations pursuant to Article 20.5 at a time when  the Parties are engaged in consultations on the same matter pursuant to  paragraph 1 or the subcommittee is endeavoring to resolve the matter  pursuant to paragraph 3, the Parties shall discontinue their efforts to  resolve the matter under this Article. Once consultations have begun pursuant to Article 20.5, no consultations on the same matter may be  entered into pursuant to this Article. 

(b) If a Party requests consultations pursuant to Article 20.5 more than 60  days after the delivery of a request for consultations pursuant to paragraph  1, the Parties may agree at any time to refer the matter to the Joint  Committee pursuant to Article 20.6 (Referral to the Joint Committee). 

5. Neither Party may have recourse to dispute settlement under this Agreement for  any matter arising under any provision of this Chapter other than Article 16.2.1(a). 

ARTICLE 16.7: DEFINITIONS 

For purposes of this Chapter:

labor laws means a Party’s statutes or regulations, or provisions thereof, that are directly  related to the following internationally recognized labor rights: 

(a) the right of association; 

(b) the right to organize and bargain collectively; 

(c) a prohibition on the use of any form of forced or compulsory labor; 

(d) labor protections for children and young people, including a minimum age  for the employment of children and the prohibition and elimination of the  worst forms of child labor; and 

(e) acceptable conditions of work with respect to minimum wages, hours of  work, and occupational safety and health. 

For greater certainty, nothing in this Agreement shall be construed to impose obligations  on either Party with regard to establishing the level of minimum wages. 

statutes or regulations means: 

(a) for Morocco, dahirs, acts of the Moroccan Parliament, decrees, or  administrative regulations; and 

(b) for the United States, acts of Congress or regulations promulgated  pursuant to an act of Congress that are enforceable by action of the federal  government. 

ANNEX 16-A 
LABOR COOPERATION MECHANISM 

Establishment of a Labor Cooperation Mechanism 

1. Recognizing that bilateral cooperation provides enhanced opportunities for the  Parties to improve labor standards and to further advance common commitments with respect to labor matters, including the ILO Declaration and ILO Convention 182, the  Parties have established a Labor Cooperation Mechanism. 

Principal Functions and Organization 

2. Officials of the Parties’ labor ministries and other appropriate agencies and  ministries shall carry out the work of the Labor Cooperation Mechanism by developing and pursuing cooperative activities on labor matters, including by working jointly to: 

(a) establish priorities for cooperative activities on labor matters; 

(b) develop specific cooperative activities in accord with such priorities; 

(c) exchange information regarding labor law and practice in each Party; 

(d) exchange information on ways to improve labor law and practice,  including best labor practices; 

(e) advance understanding of, respect for, and effective implementation of the  principles reflected in the ILO Declaration; 

(f) promote full compliance with ILO Convention 182; 

(g) seek support from international organizations and agencies, in  advancement of common commitments with respect to labor matters; and 

(h) develop recommendations of actions to be taken by each Party for  consideration by the Joint Committee. 

3. The contact points designated under Article 16.4.1 shall support the work of the  Labor Cooperation Mechanism. 

Cooperative Activities 

4. The Parties may undertake cooperative activities through the Labor Cooperation  Mechanism on any labor matter they consider appropriate, including on: 

(a) fundamental rights and their effective application: legislation and  practice related to the core elements of the ILO Declaration (freedom of  association and the effective recognition of the right to collective  bargaining, elimination of all forms of forced or compulsory labor, the  effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation); 

(b) worst forms of child labor: legislation and practice related to  compliance with ILO Convention 182; 

(c) labor relations: forms of cooperation among workers, management, and  governments, including the resolution of disputes; 

(d) working conditions: hours of work, minimum wages, and overtime;  occupational safety and health; prevention of and compensation for work-related  injuries and illness; and employment conditions; 

(e) unemployment assistance programs and other social safety net  programs; 

(f) human resource development and life-long learning: workforce  development and employment training; worker adjustment programs;  programs, methodologies, and experiences regarding productivity  improvement; and use of technologies; and 

(g) labor statistics: development of methods for the Parties to generate  comparable labor market statistics in a timely manner. 

Implementation of Cooperative Activities 

5. The Parties may carry out cooperative activities undertaken by the Labor  Cooperation Mechanism through any form they consider appropriate, including by: 

(a) arranging study visits and other exchanges between government  delegations, professionals, and specialists; 

(b) exchanging information on standards, regulations, procedures, and best  practices, including through the exchange of pertinent publications and  monographs; 

(c) organizing joint conferences, seminars, workshops, meetings, training  sessions, and outreach and education programs; 

(d) developing collaborative projects or demonstrations; 

(e) undertaking joint research projects, studies, and reports, including by  engaging independent experts; 

(f) drawing on the expertise of academic and other institutions in their  territories in developing and implementing cooperative programs and by  encouraging cooperation between these institutions on technical labor  issues; and 

(g) engaging in technical exchanges and cooperation. 

6. In identifying areas for cooperation and carrying out cooperative activities, the  Parties shall consider views of their respective worker and employer representatives. 

CHAPTER SEVENTEEN 
ENVIRONMENT 

Objectives 

The objectives of this Chapter are to contribute to the Parties’ efforts to ensure that trade  and environmental policies are mutually supportive, to promote the optimal use of resources in accordance with the objective of sustainable development, and to strive to  strengthen the links between the Parties’ trade and environmental policies and practices, including through environmental cooperation activities aimed at capacity building. 

ARTICLE 17.1: LEVELS OF PROTECTION 

Recognizing the right of each Party to establish its own levels of domestic environmental  protection and its own environmental development priorities, and to adopt or modify accordingly its environmental laws and policies, each Party shall ensure that its own  environmental laws and policies provide for and encourage high levels of environmental protection and shall strive to continue to improve those laws and policies. 

ARTICLE 17.2: APPLICATION AND ENFORCEMENT OF ENVIRONMENTAL LAWS 

1.

(a) Neither Party shall fail to effectively enforce its environmental laws,  through a sustained or recurring course of action or inaction, in a manner  affecting trade between the Parties, after the date of entry into force of this  Agreement. 

(b) The Parties recognize that each Party retains the right to exercise discretion  with respect to investigatory, prosecutorial, regulatory, and compliance  matters and to make decisions regarding the allocation of resources to  enforcement with respect to other environmental matters determined to have  higher priorities. Accordingly, the Parties understand that a Party is in  compliance with subparagraph (a) where a course of action or inaction  reflects a reasonable exercise of such discretion, or results from a bona fide decision regarding the allocation of resources. 

2. Each Party recognizes that it is inappropriate to encourage trade or investment by  weakening or reducing the protections afforded in domestic environmental laws.  Accordingly, each Party shall strive to ensure that it does not waive or otherwise derogate  from, or offer to waive or otherwise derogate from, such laws in a manner that weakens or reduces the protections afforded in those laws as an encouragement for trade with the other  Party, or as an encouragement for the establishment, acquisition, expansion, or retention of an investment in its territory. 

3. Nothing in this Chapter shall be construed to empower a Party’s authorities to  undertake environmental law enforcement activities in the territory of the other Party. 

ARTICLE 17.3: ENVIRONMENTAL COOPERATION 

1. The Parties recognize the importance of strengthening capacity to protect the  environment and to promote sustainable development in concert with strengthening bilateral trade and investment relations. 

2. The Parties are committed to expanding their cooperative relationship, recognizing  that cooperation is important for furthering their shared environmental goals and objectives set out in this Chapter, including the development and improvement of environmental  protection. 

3. The Parties are committed to undertaking cooperative environmental activities, in  particular those involving their relevant government agencies, pursuant to a United States-Morocco Joint Statement on Environmental Cooperation (“Joint Statement”)  developed by the Parties, and in other fora. Activities undertaken pursuant to the Joint Statement shall be coordinated and reviewed by the Working Group on Environmental  Cooperation or any other such entity established thereunder for this purpose, in accordance with the Joint Statement. 

4. The Parties shall consider establishing additional cooperative mechanisms, as  appropriate, including an agreement on environmental cooperation, taking into account relevant regional cooperative initiatives. 

5. The Parties recognize the continuing importance of environmental cooperation in  other fora. 

6. Each Party shall, as appropriate, share information with the other Party and the  public regarding its experience in assessing and taking into account the positive and negative environmental effects of trade agreements and policies. In addition, each Party  may share its experience related to the implementation of this Chapter, including experience related to incentives and voluntary mechanisms set out in Article 17.5. 

7. The Parties recognize that strengthening their cooperative relationship on  environmental matters can encourage increased bilateral trade and investment in environmental goods and services. 

ARTICLE 17.4: PROCEDURAL MATTERS 

1. Each Party shall ensure that judicial, quasi-judicial, or administrative proceedings  are available under its law to sanction or remedy violations of its environmental laws. 

(a) Such proceedings shall be fair, equitable, and transparent and, to this end,  shall be open to the public, except where the administration of justice  otherwise requires, and shall comply with due process of law. 

(b) Each Party shall provide appropriate and effective sanctions or remedies for  a violation of its environmental laws that: 

(i) take into consideration the nature and gravity of the violation, any  economic benefit the violator has derived from the violation, the  economic condition of the violator, and other relevant factors; and

(ii) may include compliance agreements, penalties, fines, imprisonment,   injunctions, closure of facilities, and the cost of containing or cleaning up pollution. 

2. Each Party shall ensure that interested persons may request the Party’s competent  authorities to investigate alleged violations of its environmental laws, and that its competent authorities give such requests due consideration in accordance with its law. 

3. Each Party shall provide for appropriate access by persons with a legally  recognized interest under its law in a particular matter to proceedings referred to in paragraph 1. 

4. Each Party shall provide appropriate and effective access to remedies, in  accordance with its law, which may include the right: 

(a) to sue a person subject to the Party’s jurisdiction for damages under its  environmental laws; 

(b) to seek sanctions or remedies such as monetary penalties, emergency  closures, or orders to mitigate the consequences of violations of its  environmental laws; 

(c) to request the Party’s competent authorities to take appropriate action to  enforce its environmental laws in order to protect the environment or to  avoid environmental harm; or 

(d) to seek injunctions where a person suffers, or may suffer, loss, damage, or  injury as a result of conduct by another person subject to the Party’s  jurisdiction that is contrary to the Party’s environmental laws or that  constitutes tortious conduct that harms human health or the environment. 

ARTICLE 17.5: COMPLEMENTARY MECHANISMS TO ENHANCE ENVIRONMENTAL  PERFORMANCE 

1. The Parties recognize that incentives and other flexible and voluntary mechanisms  can contribute to the achievement and maintenance of high levels of environmental protection, complementing the procedures set out in Article 17.4. As appropriate and in  accordance with its law, each Party shall encourage the development of such mechanisms, which may include: 

(a) mechanisms that facilitate voluntary action to protect or enhance the  environment, such as: 

(i) partnerships involving businesses, local communities, non-governmental  organizations, government agencies, or scientific  organizations; 

(ii) voluntary guidelines for environmental performance; or 

(iii) sharing of information and expertise among government agencies,  interested parties, and the public concerning: methods for achieving  high levels of environmental protection, voluntary environmental auditing and reporting, ways to use resources more efficiently or  reduce environmental impacts, environmental monitoring, and collection of baseline data; or 

(b) incentives, including market-based incentives where appropriate, to  encourage conservation, restoration, enhancement, and protection of natural  resources and the environment, such as public recognition of facilities or  enterprises that are superior environmental performers, or programs for  exchanging or trading permits, credits, or other instruments to help achieve  environmental goals efficiently. 

2. As appropriate, and in accordance with its law, each Party shall encourage: 

(a) the development and improvement of performance goals and standards used  in measuring environmental performance; and 

(b) flexible means to achieve such goals and meet such standards, including  through mechanisms identified in paragraph 1. 

ARTICLE 17.6: OPPORTUNITIES FOR PUBLIC PARTICIPATION 

1. Recognizing that opportunities for public participation can facilitate the sharing of  best practices and the development of innovative approaches to issues of interest to the public, each Party shall ensure that procedures exist for dialogue with its public concerning  the implementation of this Chapter, including opportunities for its public to: 

(a) suggest matters to be discussed at the meetings of the Joint Committee or, if  a subcommittee on environmental affairs has been established pursuant to Article 19.2 (Joint Committee), meetings of the subcommittee; and 

(b) provide, on an ongoing basis, views, recommendations, or advice on  matters related to the implementation of this Chapter. Each Party shall  make these views, recommendations, or advice available to the other Party and the public. 

2. Each Party may convene, or consult an existing, national advisory committee,  comprising representatives of both its environmental and business organizations and other members of its public, to advise it on the implementation of this Chapter, as appropriate. 

3. Each Party shall make best efforts to respond favorably to requests for discussions  by persons of the Party regarding its implementation of this Chapter. 

4. Each Party shall take into account, as appropriate, public comments and  recommendations it receives regarding cooperative environmental activities undertaken pursuant to the Joint Statement. 

ARTICLE 17.7: ENVIRONMENTAL CONSULTATIONS 

1. A Party may request consultations with the other Party regarding any matter arising  under this Chapter by delivering a written request to the contact point designated by the other Party for this purpose. The Parties shall begin consultations promptly after delivery  of the request. 

2. The Parties shall make every attempt to arrive at a mutually satisfactory resolution  of the matter and may seek advice or assistance from any person or body they deem appropriate. 

3. If the consultations fail to resolve the matter, and if a subcommittee on  environmental affairs has been established pursuant to Article 19.2 (Joint Committee), either Party may refer the matter to the subcommittee by delivering a written notification to  the other Party’s contact point. The subcommittee shall convene within 30 days after a Party delivers a notification, unless the Parties agree otherwise. If the Joint Committee has  not established the subcommittee by the date a Party delivers a notification, it shall do so during the 30-day period described in this paragraph. The subcommittee shall endeavor to resolve the matter expeditiously, including, where appropriate, by consulting governmental  or non-governmental experts and by having recourse to such procedures as good offices, conciliation, or mediation. 

4. If a Party considers that the other Party has failed to carry out its obligations under  Article 17.2.1(a), the Party may request consultations under paragraph 1 or pursuant to Article 20.5 (Consultations). 

(a) If a Party requests consultations pursuant to Article 20.5 at a time when the  Parties are engaged in consultations on the same matter under paragraph 1 or the subcommittee is endeavoring to resolve the matter under paragraph 3,  the Parties shall discontinue their efforts to resolve the matter under this Article. Once consultations have begun under Article 20.5, no consultations  on the same matter may be entered into under this Article. 

(b) If a Party requests consultations pursuant to Article 20.5 more than 60 days  after delivery of a request for consultations under paragraph 1, the Parties may agree at any time to refer the matter to the Joint Committee pursuant to  Article 20.6 (Referral to the Joint Committee). 

5. Neither Party may have recourse to dispute settlement under this Agreement for  any matter arising under any provision of this Chapter other than Article 17.2.1(a). 

ARTICLE 17.8: RELATIONSHIP TO ENVIRONMENTAL AGREEMENTS 

1. The Parties recognize that multilateral environmental agreements to which they are both party play an important role, globally and domestically, in protecting the environment and that their respective implementation of these agreements is critical to achieving the  environmental objectives of these agreements. 

2. Accordingly, the Parties shall continue to seek means to enhance the mutual  supportiveness of multilateral environmental agreements to which they are both party and trade agreements to which they are both party. The Parties shall consult regularly with  respect to negotiations in the WTO regarding multilateral environmental agreements and on the extent to which the outcome of those negotiations may affect this Agreement. 

ARTICLE 17.9: DEFINITIONS 

For purposes of this Chapter: 

environmental law means any statute or regulation of a Party, or provision thereof, the  primary purpose of which is the protection of the environment, or the prevention of a danger to human, animal, or plant life or health, through: 

(a) the prevention, abatement, or control of the release, discharge, or emission  of pollutants or environmental contaminants; 

(b) the control of environmentally hazardous or toxic chemicals, substances,   materials, and wastes, and the dissemination of information related thereto; or 

(c) the protection or conservation of wild flora or fauna, including endangered  species, their habitat, and specially protected natural areas,

in areas with respect to which a Party exercises sovereignty, sovereign rights, or jurisdiction, but does not include any statute or regulation, or provision thereof, directly  related to worker safety or health; and 

statute or regulation means: 

(a) for Morocco, dahir, an act of the Moroccan Parliament, decree, or  administrative regulation; and 

(b) for the United States, an act of Congress or regulation promulgated pursuant  to an act of Congress that is enforceable by action of the federal  government. 

CHAPTER EIGHTEEN 
TRANSPARENCY 

ARTICLE 18.1: PUBLICATION 

1. Each Party shall ensure that its laws, regulations, procedures, and administrative  rulings of general application respecting any matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested  persons and the other Party to become acquainted with them. 

2. To the extent possible, and within its constitutional framework, each Party shall: 

(a) publish in advance any such measures that it proposes to adopt;¹ and 

(b) provide interested persons and the other Party a reasonable opportunity to  comment on such proposed measures. 

3. Paragraph 2(a) shall apply to Morocco beginning one year after the date of entry  into force of this Agreement. 

ARTICLE 18.2: NOTIFICATION AND PROVISION OF INFORMATION 

1. To the maximum extent possible, each Party shall notify the other Party of any  proposed or actual measure that the Party considers might materially affect the operation of this Agreement or otherwise substantially affect the other Party’s interests under this  Agreement. 

2. On request of the other Party, a Party shall promptly provide information and  respond to questions pertaining to any proposed or actual measure that the other Party considers might affect the operation of this Agreement or otherwise affect its interests  under this Agreement, regardless of whether the other Party has been previously notified of that measure. 

ARTICLE 18.3: ADMINISTRATIVE PROCEEDINGS 

With a view to administering in a consistent, impartial, and reasonable manner all  measures of general application affecting matters covered by this Agreement, each Party shall ensure, in its administrative proceedings applying measures referred to in Article  18.1.1 to particular persons, goods, or services of the other Party in specific cases, that: 

(a) wherever possible, persons of the other Party that are directly affected by a  proceeding are provided reasonable notice, in accordance with the Party’s procedures, when a proceeding is initiated, including a description of the  nature of the proceeding, a statement of the legal authority under which the proceeding is initiated, and a general description of any issues in  controversy; 

(b) such persons are afforded a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative  action, when time, the nature of the proceeding, and the public interest  permit; and 

(c) its procedures are in accordance with its law. 

ARTICLE 18.4: REVIEW AND APPEAL 

1. Each Party shall establish or maintain judicial, quasi-judicial, or administrative  tribunals or procedures for the purpose of the prompt review and, where warranted, correction of final administrative actions regarding matters covered by this Agreement.  Such tribunals shall be impartial and independent of the office or authority entrusted with  administrative enforcement and shall not have any substantial interest in the outcome of the matter. 

2. Each Party shall ensure that, in such tribunals or procedures, the parties to the  proceeding are provided with the right to: 

(a) a reasonable opportunity to support or defend their respective positions; and 

(b) a decision based on the evidence and submissions of record or, where  required by law, the record compiled by the administrative authority. 

3. Each Party shall ensure, subject to appeal or further review as provided in its law,  that such decisions shall be implemented by, and shall govern the practice of, the office or authority with respect to the administrative action at issue. 

ARTICLE 18.5: ANTI-CORRUPTION 

1. The Parties reaffirm their continuing resolve to eliminate bribery and corruption in  international trade and investment. 

2. Each Party shall adopt or maintain the necessary legislative or other measures to  establish that it is a criminal offense under its law, in matters affecting international trade or investment, for: 

(a) a public official of the Party or a person who performs public functions for  the Party intentionally to solicit or accept, directly or indirectly, any article of monetary value or other benefit, such as a favor, promise, or advantage,  for himself or for another person, in exchange for any act or omission in the performance of his public functions; 

(b) any person subject to the jurisdiction of the Party intentionally to offer or  grant, directly or indirectly, to a public official of the Party or a person who performs public functions for the Party any article of monetary value or  other benefit, such as a favor, promise, or advantage, for himself or for  another person, in exchange for any act or omission in the performance of  his public functions; 

(c) any person subject to the jurisdiction of the Party intentionally to offer,   promise, or give any undue pecuniary or other advantage, directly or  indirectly, to a foreign official, for that official or for another person, in  order that the official act or refrain from acting in relation to the  performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business; and 

(d) any person subject to the jurisdiction of the Party to aid or abet, or to  conspire in, the commission of any of the offenses described in  subparagraphs (a) through (c). 

3. Each Party shall make the commission of an offense described in paragraph 2 liable  to sanctions that take into account the gravity of the offense. 

4. Each Party shall strive to adopt or maintain appropriate measures to protect persons  who, in good faith, report acts of bribery described in paragraph 2.  

5. The Parties recognize the importance of regional and multilateral initiatives to  eliminate bribery and corruption in international trade and investment. The Parties shall work jointly to encourage and support appropriate initiatives in relevant international fora. 

ARTICLE 18.6: DEFINITIONS 

For purposes of this Chapter: 

act or refrain from acting in relation to the performance of official duties includes any  use of the official’s position, whether or not within the official’s authorized competence; 

administrative ruling of general application means an administrative ruling or  interpretation that applies to all persons and fact situations that fall generally within its ambit and that establishes a norm of conduct but does not include: 

(a) a determination or ruling made in an administrative or quasi-judicial  proceeding that applies to a particular person, good, or service of the other  Party in a specific case; or 

(b) a ruling that adjudicates with respect to a particular act or practice; 

foreign official means any person holding a legislative, administrative, or judicial office of  a foreign country, at any level of government, whether appointed or elected; any person exercising a public function for a foreign country at any level of government, including for  a public agency or public enterprise; and any official or agent of a public international organization; 

public function means any temporary or permanent, paid or honorary activity, performed  by a natural person in the name of a Party or in the service of a Party, such as procurement, at the central level of government; and 

public official means any official or employee of a Party at the central level of  government, whether appointed or elected. 

CHAPTER NINETEEN 
ADMINISTRATION OF THE AGREEMENT 

ARTICLE 19.1: CONTACT POINTS 

1. Each Party shall designate a contact point or points to facilitate communications  between the Parties on any matter covered by this Agreement. 

2. On request of the other Party, a Party’s contact point shall identify the office or  official responsible for the matter and assist, as necessary, in facilitating communications with the other Party. 

ARTICLE 19.2: JOINT COMMITTEE 

1. The Parties hereby establish a Joint Committee to supervise the implementation of  this Agreement and to review the trade relationship between the Parties. 

(a) The Joint Committee shall comprise officials of each Party and shall be  chaired by officials of (i) the Office of the United States Trade  Representative and (ii) the Ministry of Foreign Affairs and Cooperation of  the Kingdom of Morocco. 

(b) The Joint Committee may establish and delegate responsibilities to ad hoc  and standing subcommittees or working groups and seek the advice of  interested persons. 

(c) The Joint Committee shall determine the responsibilities and objectives of  such subcommittees or working groups and supervise their work. 

2. The Joint Committee shall: 

(a) review the general functioning of this Agreement; 

(b) review and consider specific matters related to the operation and  implementation of this Agreement in the light of its objectives; 

(c) facilitate the avoidance and settlement of disputes arising under this  Agreement, including through consultations pursuant to Chapter Twenty  (Dispute Settlement); 

(d) consider and adopt any amendment or other modification to this Agreement,  subject to completion of necessary approval procedures by each Party; 

(e) issue interpretations of this Agreement, including as provided in Articles  10.21 (Governing Law) and 10.22 (Interpretation of Annexes); 

(f) consider ways to further enhance trade relations between the Parties and to  promote the objectives of this Agreement, including through cooperation and assistance; and 

(g) take such other action as the Parties may agree. 

3. The Joint Committee shall establish its own rules of procedure. All decisions of  the Joint Committee shall be taken by consensus. 

4. Unless the Parties agree otherwise, the Joint Committee shall convene: 

(a) in regular session every year, with such sessions to be held alternately in the  territory of each Party; and 

(b) in special session within 30 days of the request of a Party, with such special  sessions to be held in the territory of the other Party or at such location as the Parties may agree. 

5. Recognizing the importance of openness and transparency, the Parties affirm their  respective practices of considering the views of members of the public in order to draw on a broad range of perspectives in the implementation of this Agreement. 

6. Each Party shall treat any confidential information exchanged in relation to a  meeting of the Joint Committee on the same basis as the Party providing the information. 

CHAPTER TWENTY 
DISPUTE SETTLEMENT 

ARTICLE 20.1: COOPERATION 

The Parties shall endeavor to agree on the interpretation and application of this Agreement,  and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation. 

ARTICLE 20.2: SCOPE OF APPLICATION 

Except as otherwise provided in this Agreement or as the Parties agree otherwise, this  Chapter shall apply with respect to the avoidance or settlement of all disputes between the Parties regarding the interpretation or application of this Agreement or wherever a Party  considers that: 

(a) a measure of the other Party is inconsistent with its obligations under this  Agreement; 

(b) the other Party has otherwise failed to carry out its obligations under this  Agreement; or 

(c) a benefit the Party could reasonably have expected to accrue to it under  Chapter Two (Market Access for Goods), Chapter Five (Rules of Origin),  Chapter Nine (Government Procurement), Chapter Eleven (Cross-Border  Trade in Services), or Chapter Fifteen (Intellectual Property Rights) is being nullified or impaired as a result of a measure that is not inconsistent with  this Agreement, except that neither Party may invoke this subparagraph with respect to a benefit under Chapter Eleven (Cross-Border Trade in  Services) or Chapter Fifteen (Intellectual Property Rights) if the measure is subject to an exception under Article 21.1 (General Exceptions). 

ARTICLE 20.3: ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS 

Each Party shall designate an office that shall be responsible for providing administrative  assistance to panels established under Article 20.7. Each Party shall be responsible for the operation and costs of its designated office and shall notify the other Party of its location. 

ARTICLE 20.4: CHOICE OF FORUM 

1. Where a dispute regarding any matter arises under this Agreement and under the  WTO Agreement, or any other agreement to which both Parties are party, the complaining Party may select the forum in which to settle the dispute. 

2. The complaining Party shall notify the other Party in writing of its intention to  bring a dispute to a particular forum before doing so. 

3. Once the complaining Party has selected a particular forum, the forum selected  shall be used to the exclusion of other possible fora. 

4. For the purposes of this paragraph, a Party shall be deemed to have selected a  forum when it has requested the establishment of, or referred a matter to, a dispute settlement panel. 

ARTICLE 20.5: CONSULTATIONS 

1. Either Party may request consultations with the other Party with respect to any  matter described in Article 20.2 by delivering written notification to the other Party. If a Party requests consultations, the other Party shall reply promptly to the request for  consultations and enter into consultations in good faith. 

2. In consultations under this Article, a Party may request the other Party to make  available personnel of its government agencies or other regulatory bodies who have expertise in the matter subject to consultations. 

3. Each Party shall: 

(a) provide sufficient information in the consultations to enable a full  examination of how the matter subject to consultations might affect the  operation of this Agreement; and 

(b) treat any confidential information exchanged in the course of consultations  on the same basis as the Party providing the information. 

4. Promptly after requesting or receiving a request for consultations pursuant to this  Article, each Party shall solicit and consider the views of interested nongovernmental entities on the matter in order to draw on a broad range of perspectives. 

ARTICLE 20.6: REFERRAL TO THE JOINT COMMITTEE 

If the consultations fail to resolve a matter within 60 days of the delivery of a Party’s  request for consultations under Article 20.5, or 20 days where the matter concerns perishable goods, either Party may refer the matter to the Joint Committee by delivering  written notification to the other Party. The Joint Committee shall endeavor to resolve the matter. 

ARTICLE 20.7: ESTABLISHMENT OF PANEL 

1. If the Joint Committee has not resolved a matter within 60 days after delivery of  the notification described in Article 20.6, within 30 days where the matter concerns perishable goods, or within such other period as the Parties may agree, the complaining  Party may refer the matter to a dispute settlement panel by delivering written notification to the other Party. 

2. Neither Party may refer a matter concerning any proposed measure to a dispute  settlement panel. 

3. Unless the Parties agree otherwise: 

(a) The panel shall have three members. 

(b) Each Party shall appoint one panelist, in consultation with the other Party,  within 30 days after the matter has been referred to a panel. If a Party fails to appoint a panelist within such period, a panelist shall be selected by lot  from the reserve list established under paragraph 4 to serve as the panelist appointed by that Party. 

(c) The Parties shall endeavor to agree on a third panelist who shall serve as  chair. 

(d) If the Parties are unable to agree on the chair within 30 days after the  second panelist has been appointed, the chair shall be selected by lot from  the reserve list established under paragraph 4.  

(e) The date of establishment of the panel shall be the date on which the chair  is appointed. 

4. By the date of entry into force of this Agreement, the Parties shall establish a reserve list of eight individuals who are willing and able to serve as panelists. Individuals on the reserve list shall be appointed by agreement of the Parties for a minimum term of  three years, and shall remain on the list until the Parties establish a new reserve list.  

5. Individuals appointed to a panel pursuant to paragraph 3 or to the reserve list  pursuant to paragraph 4 shall: 

(a) be chosen strictly on the basis of objectivity, reliability, and sound  judgment and have expertise or experience in law, international trade, or the  resolution of disputes arising under international trade agreements; 

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

(c) comply with a code of conduct to be established by the Parties. 

In addition, panelists other than those chosen by lot from the reserve list shall have, as  appropriate, expertise or experience relevant to the subject matter that is under dispute. 

6. The Joint Committee shall review the operation and effectiveness of this Article not  later than five years after the Agreement enters into force, or at such later time as the Parties may agree. 

ARTICLE 20.8: RULES OF PROCEDURE 

1. The Parties shall establish by the date of entry into force of this Agreement model  rules of procedure, which shall ensure: 

(a) a right to at least one hearing before the panel and that, subject to  subparagraph (f), such hearings shall be open to the public; 

(b) an opportunity for each Party to provide initial and rebuttal submissions; 

(c) that each Party’s written submissions, written versions of its oral statement,  and written responses to a request or questions from the panel shall be made available to the public within ten days after they are submitted, subject to  subparagraph (f); 

(d) that the panel shall consider requests from nongovernmental entities located  in the Parties’ territories to provide written views regarding the dispute that may assist the panel in evaluating the submissions and arguments of the  Parties; 

(e) a reasonable opportunity for each Party to submit comments on the initial  report presented pursuant to Article 20.9.1; and 

(f) the protection of confidential information. 

2. Unless the Parties agree otherwise, the panel shall follow the model rules of  procedure and may, after consulting the Parties, adopt additional rules of procedure not inconsistent with the model rules. 

3. On request of a Party, or on its own initiative, the panel may seek information and  technical advice from any person or body that it deems appropriate, provided that the Parties so agree and subject to such terms and conditions as the Parties may agree. 

ARTICLE 20.9: PANEL REPORT 

1. Unless the Parties agree otherwise, the panel shall, within 180 days after the chair  is appointed, present to the Parties an initial report containing findings of fact, and its determination as to whether: 

(a) the measure at issue is inconsistent with the obligations of this Agreement; 

(b) a Party has otherwise failed to carry out its obligations under this  Agreement; or 

(c) the measure at issue is causing nullification or impairment in the sense of  Article 20.2(c); 

as well as any other determination requested by the Parties with regard to the dispute. 

2. The panel shall base its report on the relevant provisions of the Agreement and the  submissions and arguments of the Parties. The panel may, at the request of the Parties,  make recommendations for the resolution of the dispute. 

3. After considering any written comments by the Parties on the initial report, the  panel may modify its report and make any further examination it considers appropriate.  

4. The panel shall present a final report to the Parties within 45 days of presentation  of the initial report, unless the Parties agree otherwise. The Parties shall make the final report public within 15 days thereafter, subject to the protection of confidential  information. 

ARTICLE 20.10: IMPLEMENTATION OF THE FINAL REPORT 

1. On receipt of the final report of a panel, the Parties shall agree on the resolution of  the dispute, which normally shall conform with the determinations and recommendations, if any, of the panel. 

2. If, in its final report, the panel determines that a Party has not conformed with its  obligations under this Agreement or that a Party’s measure is causing nullification or impairment in the sense of Article 20.2(c), the resolution, whenever possible, shall be to  eliminate the non-conformity or the nullification or impairment. 

ARTICLE 20.11: NON-IMPLEMENTATION 

1. If a panel has made a determination of the type described in Article 20.10.2, and  the Parties are unable to reach agreement on a resolution pursuant to Article 20.10.1 within 45 days of receiving the final report, or such other period as the Parties agree, the Party  complained against shall enter into negotiations with the other Party with a view to developing mutually acceptable compensation. 

2. If the Parties: 

(a) are unable to agree on compensation within 30 days after the period for  developing such compensation has begun, or 

(b) have agreed on compensation or on a resolution pursuant to Article 20.10.1  and the complaining Party considers that the other Party has failed to  observe the terms of the agreement, 

the complaining Party may at any time thereafter provide written notice to the other Party  that it intends to suspend the application to the other Party of benefits of equivalent effect.  The notice shall specify the level of benefits that the Party proposes to suspend. Subject  to paragraph 5, the complaining Party may begin suspending benefits 30 days after the later of the date on which it provides notice under this paragraph or the panel issues its  determination under paragraph 3, as the case may be. 

3. If the Party complained against considers that: 

(a) the level of benefits that the other Party has proposed to be suspended is  manifestly excessive; or 

(b) it has eliminated the non-conformity or the nullification or impairment that  the panel has found,

it may, within 30 days after the complaining Party provides notice under paragraph 2, request that the panel be reconvened to consider the matter. The Party complained against  shall deliver its request in writing to the other Party. The panel shall reconvene as soon as possible after delivery of the request and shall present its determination to the Parties  within 90 days after it reconvenes to review a request under subparagraph (a) or (b), or  within 120 days for a request under subparagraphs (a) and (b). If the panel determines that the level of benefits proposed to be suspended is manifestly excessive, it shall determine  the level of benefits it considers to be of equivalent effect. 

4. The complaining Party may suspend benefits up to the level the panel has  determined under paragraph 3 or, if the panel has not determined the level, the level the Party has proposed to suspend under paragraph 2, unless the panel has determined that the  Party complained against has eliminated the non-conformity or the nullification or impairment. 

5. The complaining Party may not suspend benefits if, within 30 days after it provides  written notice of intent to suspend benefits or, if the panel is reconvened under paragraph 3, within 20 days after the panel provides its determination, the Party complained against  provides written notice to the other Party that it will pay an annual monetary assessment. The Parties shall consult, beginning no later than ten days after the Party complained  against provides notice, with a view to reaching agreement on the amount of the assessment. If the Parties are unable to reach an agreement within 30 days after  consultations begin, the amount of the assessment shall be set at a level, in U.S. dollars, equal to 50 percent of the level of the benefits the panel has determined under paragraph 3  to be of equivalent effect or, if the panel has not determined the level, 50 percent of the level that the complaining Party has proposed to suspend under paragraph 2. 

6. Unless the Joint Committee decides otherwise, a monetary assessment shall be paid  to the complaining Party in U.S. currency, or in an equivalent amount of Moroccan currency, in equal, quarterly installments beginning 60 days after the Party complained  against gives notice that it intends to pay an assessment. Where the circumstances warrant, the Joint Committee may decide that an assessment shall be paid into a fund established by  the Joint Committee and expended at the direction of the Joint Committee for appropriate initiatives to facilitate trade between the Parties, including by further reducing unreasonable trade barriers or by assisting a Party in carrying out its obligations under the  Agreement. 

7. If the Party complained against fails to pay a monetary assessment, the complaining  Party may suspend the application to the Party complained against of benefits in accordance with paragraph 4. 

8. This Article shall not apply with respect to a matter described in Article 20.12.1. 

ARTICLE 20.12: NON-IMPLEMENTATION IN CERTAIN DISPUTES 

1. If, in its final report, a panel determines that a Party has not conformed with its  obligations under Article 16.2.1(a) (Application and Enforcement of Labor Laws) or Article 17.2.1(a) (Application and Enforcement of Environmental Laws), and the Parties: 

(a) are unable to reach agreement on a resolution pursuant to Article 20.10.1  within 45 days of receiving the final report; or 

(b) have agreed on a resolution pursuant to Article 20.10.1 and the complaining  Party considers that the other Party has failed to observe the terms of the agreement, 

the complaining Party may at any time thereafter request that the panel be reconvened to  impose an annual monetary assessment on the other Party. The complaining Party shall deliver its request in writing to the other Party. The panel shall reconvene as soon as  possible after delivery of the request. 

2. The panel shall determine the amount of the monetary assessment in U.S. dollars  within 90 days after it reconvenes under paragraph 1. In determining the amount of the assessment, the panel shall take into account: 

(a) the bilateral trade effects of the Party’s failure to effectively enforce the  relevant law; 

(b) the pervasiveness and duration of the Party’s failure to effectively enforce  the relevant law; 

(c) the reasons for the Party’s failure to effectively enforce the relevant law; 

(d) the level of enforcement that could reasonably be expected of the Party  given its resource constraints; 

(e) the efforts made by the Party to begin remedying the non-enforcement after  the final report of the panel; and 

(f) any other relevant factors. 

The amount of the assessment shall not exceed 15 million U.S. dollars annually, adjusted  for inflation as specified in Annex 20-A. 

3. On the date on which the panel determines the amount of the monetary assessment  under paragraph 2, or at any other time thereafter, the complaining Party may provide notice in writing to the Party complained against demanding payment of the monetary  assessment. The monetary assessment shall be payable in U.S. currency, or in an equivalent amount of Moroccan currency, in equal, quarterly installments beginning 60  days after the complaining Party provides such notice. 

4. Assessments shall be paid into a fund established by the Joint Committee and shall  be expended at the direction of the Joint Committee for appropriate labor or environmental initiatives, including efforts to improve or enhance labor or environmental law  enforcement, as the case may be, in the territory of the Party complained against, consistent with its law. In deciding how to expend monies paid into the fund, the Joint  Committee shall consider the views of interested persons in each Party’s territory. 

5. If the Party complained against fails to pay a monetary assessment, and if the Party  has created and funded an escrow account to ensure payment of any assessments against it, the other Party shall, before having recourse to any other measure, seek to obtain the funds  from the account. 

6. If the complaining Party cannot obtain the funds from the other Party’s escrow  account within 30 days of the date on which payment is due, or if the other Party has not created an escrow account, the complaining Party may take other appropriate steps to  collect the assessment or otherwise secure compliance. These steps may include suspending tariff benefits under the Agreement as necessary to collect the assessment,  while bearing in mind the Agreement’s objective of eliminating barriers to bilateral trade and while seeking to avoid unduly affecting parties or interests not party to the dispute. 

ARTICLE 20.13: COMPLIANCE REVIEW 

1. Without prejudice to the procedures set out in Article 20.11.3, if the Party  complained against considers that it has eliminated the non-conformity or the nullification or impairment that the panel has found, it may refer the matter to the panel by providing  written notice to the other Party. The panel shall issue its report on the matter within 90 days after the Party complained against provides notice. 

2. If the panel decides that the Party complained against has eliminated the non-conformity  or the nullification or impairment, the complaining Party shall promptly reinstate any benefits it has suspended under Article 20.11 or 20.12 and the Party  complained against shall no longer be required to pay any monetary assessment it has agreed to pay under Article 20.11.5 or that has been imposed on it under Article 20.12. 

ARTICLE 20.14: FIVE-YEAR REVIEW 

The Joint Committee shall review the operation and effectiveness of Articles 20.11 and  20.12 not later than five years after the Agreement enters into force, or within six months after benefits have been suspended or monetary assessments have been imposed in five  proceedings initiated under this Chapter, whichever occurs first. 

ARTICLE 20.15: PRIVATE RIGHTS 

Neither Party may provide for a right of action under its law against the other Party on the  ground that a measure of the other Party is inconsistent with this Agreement. 

ANNEX 20-A 
INFLATION ADJUSTMENT FORMULA FOR MONETARY ASSESSMENTS

1. An annual monetary assessment imposed before December 31, 2005, shall not  exceed 15 million U.S. dollars. 

2. Beginning January 1, 2006, the 15 million U.S. dollars annual cap shall be adjusted  for inflation in accordance with paragraphs 3 through 5. 

3. The period used for the accumulated inflation adjustment shall be calendar year  2004 through the most recent calendar year preceding the one in which the assessment is owed. 

4. The relevant inflation rate shall be the U.S. inflation rate as measured by the  Producer Price Index for Finished Goods published by the U.S. Bureau of Labor Statistics. 

5. The inflation adjustment shall be estimated according to the following formula: 

$15 million x (1+ π>_i) = A 

π>_i = accumulated U.S. inflation rate from calendar year 2004 through the  most recent calendar year preceding the one in which the assessment  is owed. 

A = cap for the assessment for the year in question. 

CHAPTER TWENTY-ONE
EXCEPTIONS

ARTICLE 21.1: GENERAL EXCEPTIONS 

1. For purposes of Chapters Two through Seven (National Treatment and Market  Access for Goods, Agriculture, Textiles and Apparel, Rules of Origin, Customs Administration, and Technical Barriers to Trade), Article XX of GATT 1994 and its  interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.

2. For purposes of Chapters Eleven, Thirteen, and Fourteen¹  (Cross-Border Trade in  Services, Telecommunications, and Electronic Commerce), Article XIV of GATS (including its footnotes) is incorporated into and made part of this Agreement. 

ARTICLE 21.2: ESSENTIAL SECURITY 

Nothing in this Agreement shall be construed: 

(a) to require a Party to furnish or allow access to any information the  disclosure of which it determines to be contrary to its essential security  interests; or  

(b) to preclude a Party from applying measures that it considers necessary for  the fulfillment of its obligations with respect to the maintenance or  restoration of international peace or security or the protection of its own  essential security interests. 

For greater certainty, measures that a Party considers necessary for the protection of its  own essential security interests may include, inter alia, measures relating to the production of or traffic in arms, ammunition, and implements of war and to such traffic and  transactions in other goods, materials, services, and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment. 

ARTICLE 21.3: TAXATION 

1. Except as set out in this Article, nothing in this Agreement shall apply to taxation  measures. 

2. Nothing in this Agreement shall affect the rights and obligations of either Party  under any existing or future tax convention. In the event of any inconsistency between this Agreement and any tax convention, the provisions of such convention shall prevail to the  extent of such inconsistency. In the case of the Convention Between the Government of the United States of America and the Kingdom of Morocco for the Avoidance of Double  Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, the  competent authorities of the Parties, as defined in that convention, are exclusively  responsible for determining whether any inconsistency exists between this Agreement and  that convention. 

3. Notwithstanding paragraph 2: 

(a) Article 2.2 (Market Access – National Treatment) and such other provisions  of this Agreement as are necessary to give effect to that Article shall apply to taxation measures to the same extent as does Article III of GATT 1994;  and 

(b) Article 2.10 (Market Access – Export Taxes) shall apply to taxation  measures. 

4. Subject to paragraph 2: 

(a) Article 11.2 (Cross-Border Trade in Services – National Treatment) and  Article 12.2 (Financial Services – National Treatment) shall apply to  taxation measures on income, capital gains, or on the taxable capital of  corporations that relate to the purchase or consumption of particular  services, except that nothing in this subparagraph shall prevent a Party from conditioning the receipt or continued receipt of an advantage relating to the  purchase or consumption of particular services on requirements to provide the service in its territory; and 

(b) Articles 10.3 (Investment – National Treatment) and 10.4 (Investment –  Most-Favored-Nation Treatment), Articles 11.2 (Cross-Border Trade in  Services – National Treatment) and 11.3 (Cross-Border Trade in Services –  Most-Favored-Nation Treatment), and Articles 12.2 (Financial Services–  National Treatment) and 12.3 (Financial Services – Most-Favored-Nation  Treatment) shall apply to all taxation measures other than those on income, capital gains, or on the taxable capital of corporations, taxes on estates,  inheritances, gifts, and generation-skipping transfers, 

except that nothing in those Articles shall apply: 

(c) any most-favored-nation obligation with respect to an advantage accorded  by a Party pursuant to a tax convention; 

(d) to a non-conforming provision of any existing taxation measure; 

(e) to the continuation or prompt renewal of a non-conforming provision of any  existing taxation measure; 

(f) to an amendment to a non-conforming provision of any existing taxation  measure to the extent that the amendment does not decrease its conformity,  at the time of the amendment, with any of those Articles; 

(g) to the adoption or enforcement of any taxation measure aimed at ensuring  the equitable or effective imposition or collection of taxes (as permitted by  Article XIV(d) of GATS); or 

(h) to a provision that conditions the receipt, or continued receipt, of an  advantage relating to the contributions to, or income of, pension trusts or  pension plans on a requirement that the Party maintain continuous  jurisdiction over the pension trust or pension plan. 

5. Subject to paragraph 2 and without prejudice to the rights and obligations of the  Parties under paragraph 3, paragraphs 2, 3, and 4 of Article 10.8 (Investment – Performance Requirements) shall apply to taxation measures.² 

6. Article 10.6 (Expropriation and Compensation) and Article 10.15 (Submission of a Claim to Arbitration) shall apply to a taxation measure alleged to be an expropriation or a  breach of an investment agreement or investment authorization. However, no investor may invoke Article 10.6 as the basis of a claim where it has been determined pursuant to this  paragraph that the measure is not an expropriation. An investor that seeks to invoke Article 10.6 with respect to a taxation measure must first refer to the competent authorities at the time that it gives notice of intent under Article 10.15.2 the issue of whether the  measure involves an expropriation. If the competent authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an  expropriation within a period of six months of such referral, the investor may submit its claim to arbitration under Article 10.15. 

7. For purposes of paragraph 6, competent authorities means (a) in the case of  Morocco, the minister in charge of finances or his delegate (Director General of Taxes);  and (b) in the case of the United States, the Assistant Secretary of the Treasury (Tax  Policy). 

ARTICLE 21.4: DISCLOSURE OF INFORMATION 

Nothing in this Agreement shall be construed to require a Party to furnish or allow access  to information the disclosure of which would impede law enforcement or would be contrary to the Party’s law protecting personal privacy or the financial affairs and accounts  of individual customers of financial institutions. 

ARTICLE 21.5: BALANCE OF PAYMENTS MEASURES ON TRADE IN GOODS 

Should a Party decide to impose measures for balance of payments purposes, it shall do so  only in accordance with that Party’s rights and obligations under GATT 1994, including the Declaration on Trade Measures Taken for Balance of Payments Purposes (1979  Declaration) and the Understanding on the Balance of Payments Provisions of the GATT 1994 (BOP Understanding). In adopting such measures, the Party shall immediately consult with the other Party and shall not impair the relative advantages accorded to the  goods of the other Party under this Agreement.³ 

CHAPTER TWENTY-TWO 
FINAL PROVISIONS 

ARTICLE 22.1: ANNEXES 

The Annexes to this Agreement constitute an integral part of this Agreement. 

ARTICLE 22.2: AMENDMENTS 

The Parties may agree, in writing, to amend this Agreement. An amendment shall enter  into force after the Parties complete any necessary approval procedures, on such date as the Parties may agree. 

ARTICLE 22.3: AMENDMENT OF THE WTO AGREEMENT 

If any provision of the WTO Agreement that the Parties have incorporated into this  Agreement is amended, the Parties shall consult with a view to amending the relevant provision of this Agreement, as appropriate, in accordance with Article 22.2. 

ARTICLE 22.4: DEVELOPMENT STRATEGIES 

At the request of either Party, the Parties shall consult to consider strategies and policies  for developing and promoting new economic activities in a Party’s territory that would  contribute to realizing the objectives of this Agreement. 

ARTICLE 22.5: ACCESSION 

1. Any country or group of countries may accede to this Agreement subject to such  terms and conditions as may be agreed between such country or countries and the Parties and following approval in accordance with the applicable legal procedures of each country. 

2. This Agreement shall not apply as between any Party and any acceding country or  group of countries if, at the time of the accession, either does not consent to such application. 

ARTICLE 22.6: ENTRY INTO FORCE AND TERMINATION 

1. This Agreement shall enter into force on the first day of the third month after the  date on which the Parties exchange written notifications certifying that they have completed their respective legal procedures or such other date as the Parties may agree. 

2. Either Party may terminate this Agreement on 180-days written notice to the other  Party. 

ARTICLE 22.7: AUTHENTIC TEXTS 

The English and Arabic texts of this Agreement are equally authentic, and the French text  shall be equally authentic upon an exchange of diplomatic notes confirming its conformity with the English and Arabic texts. 

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement. 

DONE at Washington, D.C., in duplicate, this fifteenth day of June, 2004.

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:

FOR THE GOVERNMENT OF THE   KINGDOM OF MOROCCO:

[ Index > Chapters > 1-11 > 12-21 ]

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Chapter 12

¹ This clause does not cover measures of a Party that limit inputs for the supply of financial services.

² The Parties understand that nothing in Article 12.6 prevents a financial institution of a Party from applying to the other Party to consider authorizing the supply of a financial service that is supplied in neither Party’s territory. Such application shall be subject to the law of the Party to which the application is made and, for greater certainty, shall not be subject to the obligations of Article 12.6.

³ It is understood that the term “prudential reasons” includes the maintenance of the safety, soundness, integrity, or financial responsibility of individual financial institutions or cross-border financial service suppliers.

⁴ For example, a bank with assets comprising one percent or less of the total assets of the Moroccan banking sector would not be considered systemically important.

Chapter 13

¹ For Morocco, subparagraphs (b) through (e) apply only to service suppliers in its territory classified as suppliers of public telecommunications services or suppliers of value-added services.

² In Morocco, only a licensed telecommunications supplier is permitted to own circuits.

3 This Article is subject to Annex 13-A.

⁴ For Morocco, indirect interconnection means through another supplier of public telecommunications services in the same territory.

⁵ For Morocco, resale is offered on a commercial basis, subject to commercially negotiated terms and conditions.

⁶ Paragraph 3 shall apply to Morocco when it implements pending regulations.

⁷ This Article is subject to Annex 13-B.

⁸ Paragraph 3 shall apply to Morocco when it implements pending regulations.

¹⁰ The United States may comply with this obligation by providing for review by a state regulatory authority.

¹¹ For purposes of applying this definition with respect to the United States, this body may be a state regulatory authority.

¹² For greater certainty, suppliers of public telecommunications services in the territory of Morocco are subject to the licensing regime of Dahir No. 24-96, Law for Posts and Telecommunications.

¹³ Suppliers of value-added services in the territory of Morocco are subject to Morocco’s declaration regime.

Chapter 14

¹ For greater certainty, paragraph 1 does not preclude a Party from imposing internal taxes or other internal charges on digital products, provided that these are imposed in a manner consistent with this Agreement.

² For greater certainty, recognizing the Parties’ objective to promote trade between them, the obligation to accord no less favorable treatment to the digital product applies only if one or more of the activities listed in paragraph 4(a)(i) occur in the territory of the other Party, or one or more persons listed in paragraph 4(a)(ii) is a person of the other Party.

³ For greater certainty, digital products do not include digitized representations of financial instruments.

Chapter 15

¹ For purposes of Articles 15.1.5, 15.1.6, 15.3.1, and 15.7.1, a “national of a Party” shall also mean, in respect of the relevant right, entities of that Party that would meet the criteria for eligibility for protection provided for in the agreements listed in Article 15.1.2 and the TRIPS Agreement.

² For purposes of this paragraph, “protection” includes matters affecting the availability, acquisition, scope, maintenance, and enforcement of intellectual property rights, as well as matters affecting the use of intellectual property rights specifically covered by this Chapter. Further, for purposes of this paragraph, “protection” also includes the prohibition on circumvention of effective technological measures set out in Article 15.5.8 and the rights and obligations concerning rights management information set out in Article 15.5.9.

³ For greater certainty, a Party may satisfy the requirement to publish a law, regulation, or procedure by making it available to the public on the Internet.

⁴ In determining whether a trademark is well known, the reputation of the trademark need not extend beyond the sector of the public that normally deals with the relevant goods or services.

⁵ For greater certainty, the term “originating”, as used in this Chapter, does not have the meaning ascribed to the term originating good in Article 1.3 (Definitions).

⁶ “Authors, performers, and producers of phonograms” includes any successors in interest.

⁷ With respect to copyrights and related rights in this Chapter, the “right to authorize or prohibit” and the “right to authorize” refer to exclusive rights.

⁸ With respect to copyrights and related rights in this Chapter, a “performance” means a performance fixed in a phonogram unless otherwise specified.

⁹ For purposes of this Article, “fixation” includes the finalization of the master tape or its equivalent.

¹⁰ A Party may limit application of this paragraph to cases where the patent owner has placed restrictions on importation by contract or other means.

¹¹ For purposes of this Article, “inventive step” shall be treated as synonymous with the term “non-obvious.”

¹² As of the date of signature of this Agreement, neither Party permits third persons not having the consent of the person providing such information to market a product on the basis of such information submitted in another territory or evidence of prior approval of the product in another territory. In addition, when a product is subject to a system of marketing approval pursuant to this paragraph and is also subject to a patent in the territory of a Party, that Party may not alter the term of protection that it provides in accordance with this paragraph in the event that the patent protection terminates before the end of the term of protection specified in Article 10.1.

¹³ As of the date of signature of this Agreement, neither Party permits third persons not having the consent of the person providing such new information to market a product on the basis of such information submitted in another territory or evidence of prior approval of the product in another territory. In addition, when a product is subject to a system of marketing approval pursuant to this paragraph and is also subject to a patent in the territory of a Party, that Party may not alter the term of protection that it provides in accordance with this paragraph in the event that the patent protection terminates before the end of the term of protection specified in Article 10.2.

¹⁴ Each Party may limit such measures to patents claiming the product and patents covering approved indications.

¹⁵ The Parties understand that as of the date of signature of this Agreement Morocco does not allow such applications to be made, except in cases that are consistent with Article 15.9.6, which is commonly referred to as the “Bolar provision.”

¹⁶ For greater certainty, a Party may satisfy the requirement for publication by making the decision or ruling available to the public on the Internet.

¹⁷ For purposes of this Article, “right holder” includes exclusive licensees as well as federations and associations having the legal standing and authority to assert such rights. “Exclusive licensee” includes the exclusive licensee of any one or more of the exclusive intellectual property rights encompassed in a given intellectual property.

¹⁸ Neither Party shall be required to apply this paragraph to actions for (a) infringement by a Party, or (b) infringement authorized by a Party.

¹⁹ For purposes of paragraphs 20 through 25:

(a) > counterfeit trademark goods> means any goods, including packaging, bearing without authorization a trademark that is identical to the trademark validly registered in respect of such goods, or that cannot be distinguished in its essential aspects from such a trademark, and that thereby infringes the rights of the owner of the trademark in question under the law of the country of importation; and

(b) > pirated copyright goods > means any goods that are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country of importation.

²⁰ For purposes of this paragraph, “copyright” includes related rights.

²¹ This subparagraph is without prejudice to the availability of defenses to copyright infringement that are of general applicability.

²² Either Party may request consultations with the other Party to consider how to address under this paragraph functions of a similar nature that a Party identifies after the date of entry into force of this Agreement.

CHAPTER EIGHTEEN

1 For greater certainty, a Party could satisfy this requirement through such mechanisms as publishing the  proposed measure in a journal of national circulation or making the proposed measure available to the public  on the Internet. 

CHAPTER TWENTY-ONE

1 This Article is without prejudice to whether digital products should be classified as goods or services. 

2 For greater certainty, nothing in paragraphs 2, 3, and 4 of Article 10.8 (Investment – Performance  Requirements) shall be construed to prevent a Party from conditioning the receipt or continued receipt of a tax advantage for income earned from the export of any goods or services, in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with a requirement that such income  be denominated in a foreign currency and received in its territory. 

3 For greater certainty, this Article applies to balance of payments measures imposed on trade in goods.