United States - Morocco Free Trade Agreement

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

The Government of the United States of America and the Government of the Kingdom of Morocco (the “Parties”):

Recognizing the longstanding friendship between them, and wishing to strengthen their partnership and promote mutually advantageous economic relations;

Recognizing Morocco’s commitment to reform to improve the lives of its people;

Desiring to raise living standards, promote economic growth and stability, create new employment opportunities, and improve the general welfare in their territories by liberalizing and expanding trade and investment between them;

Seeking to enhance the competitiveness of their enterprises in global markets;

Desiring to establish clear rules governing their trade and investment that reflect the interests of both Parties and thereby foster a predictable and mutually advantageous commercial environment;

Committed to foster bilateral cooperation while recognizing the differences in their level of development and the size of their economies;

Affirming their commitment to facilitate trade between them by eliminating barriers to bilateral trade;

Building on their rights and obligations under the WTO Agreement and other agreements
to which they are both parties;

Desiring to liberalize and expand bilateral agricultural trade and investment and thereby make their agricultural sectors more competitive, foster rural development, and increase prosperity in their territories;

Desiring to protect human, animal, and plant health conditions in the Parties’ territories, enhance the Parties’ implementation of the SPS Agreement, and provide a forum to address sanitary and phytosanitary matters between the Parties, thereby expanding trade opportunities;

Affirming their commitment to transparency and their desire to eliminate corruption in international trade and investment;

Seeking to foster creativity and innovation and to promote trade in goods and services that are the subject of intellectual property rights;

Desiring to strengthen the development and enforcement of labor and environmental laws and policies, promote basic workers’ rights and sustainable development, and implement this Agreement in a manner consistent with environmental protection and conservation;

Affirming their desire to establish a free trade area of the United States, Middle East, and North Africa and thereby contribute to regional integration and economic development;

Have agreed as follows:

CHAPTER ONE
INITIAL PROVISIONS AND DEFINITIONS

Section A: Initial Provisions

ARTICLE 1.1: ESTABLISHMENT OF A FREE TRADE AREA

Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area in accordance with the provisions of this Agreement.

ARTICLE 1.2: RELATION TO OTHER AGREEMENTS

1. Except as provided in paragraphs three through five, each Party affirms its existing rights and obligations with respect to each other under existing bilateral and multilateral agreements to which the Parties are party, including the WTO Agreement.

2. This Agreement shall not be construed to derogate from any legal obligation between the Parties that entitles goods or services, or suppliers of goods or services, to treatment more favorable than that accorded by this Agreement.

3. Articles VI and VII of the Treaty Between the United States of America and the Kingdom of Morocco Concerning the Encouragement and Reciprocal Protection of Investments, with Protocol, signed at Washington on July 22, 1985 (the “Treaty”) shall be suspended on the date of entry into force of this Agreement.

4. Notwithstanding paragraph 3, for a period of ten years beginning on the date of entry into force of this Agreement, Articles VI and VII of the Treaty shall not be suspended:

(a) in the case of investments covered by the Treaty as of the date of entry into force of this Agreement; or

(b) in the case of disputes that arose prior to the date of entry into force of this Agreement and that are otherwise eligible to be submitted for settlement under Article VI or VII.

Section B: General Definitions

ARTICLE 1.3: DEFINITIONS

For purposes of this Agreement, unless otherwise specified:

Agreement on Textiles and Clothing means the Agreement on Textiles and Clothing, contained in Annex 1A to the WTO Agreement;

central level of government means:

(a) for the United States, the federal level of government; and

(b) for Morocco, the national level of government;

customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with importation, but does not include any:

(a) charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994 in respect of like, directly competitive, or substitutable goods of the Party or in respect of goods from which the imported good has been manufactured or produced in whole or in part;

(b) antidumping or countervailing duty; and

(c) fee or other charge in connection with importation commensurate with the cost of services rendered;

days means calendar days;

enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately owned or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association;

enterprise of a Party means an enterprise constituted or organized under the law of a Party;

existing means in effect on the date of entry into force of this Agreement;

GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;

GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;

goods of a Party means domestic products as these are understood in GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party;

government procurement or procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale, or use in the production or supply of goods or services for commercial sale or resale;

Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;

measure includes any law, regulation, procedure, requirement, or practice;

national means:

(a) with respect to Morocco, “national of the Kingdom of Morocco” in accordance with Dahir No. 1-58-250 of 21 Safar 1378 (September 6, 1958) enacting the Code of Moroccan Nationality; and

(b) with respect to the United States, “national of the United States” as defined in Title III of the Immigration and Nationality Act;

person means a natural person or enterprise;

person of a Party means a national or an enterprise of a Party;

preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;

regional level of government means:

(a) for the United States, a state of the United States, the District of Columbia, or Puerto Rico; and

(b) for Morocco, “regional level of government” is not applicable;

SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement;

state enterprise means an enterprise owned, or controlled through ownership interests, by a Party;

TBT Agreement means the Agreement on Technical Barriers to Trade, contained in Annex 1A to the WTO Agreement;

territory means, with respect to the United States:

(a) the customs territory of the United States, which includes the 50 states, the District of Columbia, and Puerto Rico;

(b) the foreign trade zones located in the United States and Puerto Rico; and

(c) any areas beyond the territorial seas of the United States within which, in accordance with international law and its domestic law, the United States may exercise rights with respect to the seabed and subsoil and their natural resources;

TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement;

WTO means the World Trade Organization; and

WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.

CHAPTER TWO
NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

ARTICLE 2.1: SCOPE AND COVERAGE

Except as otherwise provided, this Chapter applies to trade in goods of a Party.

Section A: National Treatment

ARTICLE 2.2: NATIONAL TREATMENT

1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretive notes, and to this end Article III of GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.

2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment that regional level government accords to any like, directly competitive, or substitutable goods, as the case may be, of the Party of which it forms a part.

3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 2-A.

Section B: Tariff Elimination

ARTICLE 2.3: TARIFF ELIMINATION

1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any new customs duty, on an originating good.

2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods, in accordance with its schedule to Annex IV (Tariff Elimination).

3. On the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex IV. An agreement by the Parties to accelerate the elimination of a customs duty on a good shall supercede any duty rate or staging category determined pursuant to their Schedules to Annex IV for that good when approved by each Party in accordance with its applicable legal procedures.

4. For greater certainty, a Party may:

(a) raise a customs duty back to the level established in its Schedule to Annex IV following a unilateral reduction; or

(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.

Section C: Special Regimes

ARTICLE 2.4: WAIVER OF CUSTOMS DUTIES

1. Neither Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.

2. Neither Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties, except as provided in Annex 2-B.

ARTICLE 2.5: TEMPORARY ADMISSION OF GOODS

1. Each Party shall grant duty-free temporary admission for:

(a) professional equipment, including equipment for the press or television, software and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a business person who qualifies for temporary entry pursuant to the laws of the importing Party;

(b) goods intended for display or demonstration;

(c) commercial samples and advertising films and recordings; and

(d) goods imported for sports purposes, regardless of their origin.

3. Neither Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good:

(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of the business activity, trade, profession, or sport of that person;

(b) not be sold or leased while in its territory;

(c) be accompanied by a security in an amount no greater than the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;

(d) be capable of identification when exported;

(e) be exported on the departure of the person referenced in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish;

(f) be imported in no greater quantity than is reasonable for its intended use; and

(g) be otherwise admissible into the Party’s territory under its laws.

5. Each Party, through its customs authority, shall adopt procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, these procedures shall provide that when such goods accompany a national or resident of the other Party who is seeking temporary entry, the goods shall be released simultaneously with the entry of that national or resident.

6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.

7. Each Party, through its customs authority, shall relieve the importer or other person responsible for a good admitted under this Article from any liability for failure to export the good on destruction of the good in the presence of the Party’s customs authority or presentation of satisfactory proof to its customs authority, in accordance with its laws, that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.

8. Subject to Chapters Ten (Investment) and Eleven (Cross-Border Trade in Services):

(a) each Party shall allow a container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such container;

(b) neither Party may require any bond or impose any penalty or charge solely because of any difference between the port of entry and the port of departure of a container;

(c) neither Party may condition the release of any obligation, including any bond, that it imposes in respect of the entry of a container into its territory on its exit through any particular port of departure; and

(d) neither Party may require that the carrier bringing a container from the territory of the other Party into its territory be the same carrier that takes such container to the territory of the other Party.

1. Neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.

2. Neither Party may apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.

3. For purposes of this Article, repair or alteration means restoration, renovation, cleaning, resterilizing, or other operation or process that does not:

(a) destroy a good’s essential characteristics or creates a new or commercially different good; or

(b) transform an unfinished good into a finished good.

Each Party shall grant duty-free entry to commercial samples of negligible value and to printed advertising materials of negligible value, imported from the territory of the other Party, regardless of their origin, but may require that:

(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or

(b) such advertising materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.

Section D: Non-Tariff Measures

ARTICLE 2.8: IMPORT AND EXPORT RESTRICTIONS

1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes, and to this end Article XI of GATT 1994 and its interpretive notes are incorporated into and made a part of this Agreement, mutatis mutandis.¹

2. The Parties understand that GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:

(a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;

(b) measures conditioning the grant of an import license on the fulfillment of a performance requirement; or

(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the WTO Agreement on Subsidies and Countervailing Measures and Article 8.1 of the WTO Agreement on Implementation of Article VI of GATT 1994.

(a) limiting or prohibiting the importation of the good of the non-Party from the territory of the other Party; or

(b) requiring as a condition for exporting the good of the Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.

5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 2-A.

ARTICLE 2.9: ADMINISTRATIVE FEES AND FORMALITIES

1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretive notes, that all fees and charges of whatever character (other than import and export duties, charges equivalent to an internal tax or other internal charges applied consistently with Article III:2 of GATT 1994, and antidumping and countervailing duties applied pursuant to a Party’s law) imposed on, or in connection with, importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.

2. Neither Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.

3. Each Party shall make available on the Internet a current list of the fees and charges it imposes in connection with importation or exportation.

ARTICLE 2.10: EXPORT TAXES

Except as provided in Annex 2-C, neither Party may adopt or maintain any tax, duty, or other charge on the export of any good to the territory of other Party, unless the tax, duty, or charge is also adopted or maintained on the good when destined for domestic consumption.

Section E: Definitions

ARTICLE 2.11: DEFINITIONS

For purposes of this Chapter:

advertising films and recordings means recorded visual media or audio materials, consisting essentially of images and/or sound, showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that such materials are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public;

commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in Moroccan currency, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or use except as commercial samples;

consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers’ export declarations, or any other customs documentation required on, or in connection with, importation;

consumed means

(a) actually consumed; or

(b) further processed or manufactured so as to result in a substantial change in value, form, or use of the good or in the production of another good;

goods imported for sports purposes means sports requisites for use in sports contests, demonstrations, or training in the territory of the importing Party;

goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;

import license means a license issued by a Party pursuant to an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the Party;

performance requirement means a requirement that:

(a) a given level or percentage of goods or services be exported;

(b) domestic goods or services of the Party granting a waiver of customs duties or an import license be substituted for imported goods or services;

(c) a person benefiting from a waiver of customs duties or an import license purchase other goods or services in the territory of the Party granting the waiver of customs duties or the import license, or accord a preference to domestically produced goods;

(d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or

(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;

(f) an imported good be subsequently exported;

(g) an imported good be used as a material in the production of another good that is subsequently exported;

(h) an imported good be substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or

(i) an imported good be substituted by an identical or similar good that is subsequently exported; and

printed advertising materials of negligible value means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials, and posters, that are used to promote, publicize, or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge, having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in Moroccan currency.

ANNEX 2-A
NATIONAL TREATMENT AND IMPORT AND EXPORT RESTRICTIONS

Section A: Measures of the United States

Articles 2.2 and 2.8 shall not apply to:

(a) controls on the export of logs of all species;

(b)

(i) measures under existing provisions of the Merchant Marine Act of 1920, 46 App. U.S.C. § 883; the Passenger Vessel Act, 46 App. U.S.C. §§ 289, 292, and 316; and 46 U.S.C. § 12108, to the extent that such measures were mandatory legislation at the time the United States acceded to the General Agreement on Tariffs and Trade 1947 (“GATT 1947”) and have not been amended so as to decrease their conformity with Part II of GATT 1947;

(ii) the continuation or prompt renewal of a non-conforming provision of any statute referred to in clause (i); and

(iii) the amendment to a non-conforming provision of any statute referred to in clause (i) to the extent that the amendment does not decrease the conformity of the provision with Articles 2.2 and 2.8;

(c) actions authorized by the Dispute Settlement Body of the WTO; and

(d) actions authorized by the Agreement on Textiles and Clothing.

Section B: Measures of Morocco

Articles 2.2 and 2.8 shall not apply to actions authorized by the Dispute Settlement Body of the WTO.

ANNEX 2-B
WAIVER OF CUSTOMS DUTIES

Measures of Morocco

Article 2.4 shall not apply to the waiver of customs duties, pursuant to Morocco’s existing contracts, on imports of complete-knocked-down (CKD) parts (subheadings 8703.22.10; 8703.32.10; 8704.21.11.90; 8704.31.10.19; 8711.10.93.00; and 8712.00.10.00 of the Harmonized System), for the assembly of motor vehicles (subheadings 8703.22.83.00 and 8703.32.43.00 of the Harmonized System), light utility vehicles for cargo transport (subheadings 8704.21.99.51 and 8704.31.90.51 of the Harmonized System), bicycles (subheading 8712.00.90.90 of the Harmonized System), and motorcycles (subheading 8711.10.91.00 of the Harmonized System) until five years after the date of entry into force of this Agreement.

ANNEX 2-C
EXPORT TAXES

Measures of Morocco

Article 2.10 shall not apply to a tax on exports of processed or unprocessed phosphates, provided that the tax rate is no higher than 34 dirhams per ton of unprocessed phosphates, for five years beginning on the date of entry into force of this Agreement.

CHAPTER THREE
AGRICULTURE AND SANITARY AND PHYTOSANITARY MEASURES

Section A: Agriculture

ARTICLE 3.1: SCOPE AND COVERAGE

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

ARTICLE 3.2: ADMINISTRATION AND IMPLEMENTATION OF TARIFF-RATE QUOTAS

1. Each Party shall implement and administer the tariff-rate quotas for agricultural goods set out in Annex 1 to the General Notes to its Schedule to Annex IV (Tariff Elimination) (“TRQs”), in accordance with Article XIII of GATT 1994, including its interpretive notes, and the WTO Agreement on Import Licensing Procedures.

2. Each Party shall ensure that:

(a) its procedures for administering its TRQs are transparent, made available to the public, timely, nondiscriminatory, responsive to market conditions, and minimally burdensome to trade;

(b) any person of a Party that fulfills the Party’s legal and administrative requirements shall be eligible to apply and to be considered for an allocation under the Party’s TRQs;

(c) it does not allocate any portion of an in-quota quantity to producer groups or other non-governmental organizations, except as otherwise provided in Annex 3-C (Wheat Auction System);

(d) solely government authorities administer its TRQs and, to that end, that the government authorities do not delegate administration of its TRQs to producer groups or other non-governmental organizations; and

(e) it allocates in-quota quantities under its TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request.

3. Each Party shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them.

4. Neither Party may condition application for, or use of, an import license or an allocation under a TRQ on the re-export of an agricultural good.

5. Neither Party may count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled.

6. On request of either Party, the importing Party shall consult with the other Party regarding administration of the importing Party’s TRQs.

ARTICLE 3.3: AGRICULTURAL EXPORT SUBSIDIES

1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together toward an agreement in the WTO to eliminate those subsidies and prevent their reintroduction in any form.

2. Except as provided in paragraph 3, neither Party may introduce or maintain any export subsidy on any agricultural good destined for the territory of the other Party.

3. Where an exporting Party considers that a non-Party is exporting an agricultural good to the territory of the other Party with the benefit of export subsidies, the importing Party shall, on written request of the exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counter the effect of such subsidized imports. If the importing Party adopts the agreed-on measures, the exporting Party shall refrain from applying any export subsidy to exports of such good to the territory of the importing Party.

ARTICLE 3.4: EXPORT STATE TRADING ENTERPRISES

The Parties shall work together toward an agreement on export state trading enterprises in the WTO that:

(a) eliminates restrictions on the right to export;

(b) eliminates any special financing granted directly or indirectly to state trading enterprises that export for sale a significant share of their country’s total exports of an agricultural good; and

(c) ensures greater transparency regarding the operation and maintenance of export state trading enterprises.

ARTICLE 3.5: AGRICULTURAL SAFEGUARD MEASURES

1. Notwithstanding Article 2.3 (Tariff Elimination), a Party may apply a measure in the form of an additional duty on an originating agricultural good listed in that Party’s Schedule to Annex 3-A (Agricultural Safeguard Measures), provided that the conditions in paragraphs 2 through 5 are met. The sum of any such additional duty and any other customs duty on such good shall not exceed the lesser of:

(a) the prevailing most-favored-nation (“MFN”) applied rate of duty; or

(b) the MFN applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement.

2. The additional duty under paragraph 1 shall be set according to each Party’s Schedule to Annex 3-A.

3. Neither Party may apply or maintain an agricultural safeguard measure and at the same time apply or maintain, with respect to the same good:

(a) a safeguard measure under Chapter Eight (Safeguards); or

(b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement.

(a) on or after the date that the good is subject to duty-free treatment under the Party’s Schedule to Annex IV (Tariff Elimination), except as otherwise provided in Annex 3-A; or

(b) that increases the in-quota duty on a good that is subject to a TRQ.

5. A Party shall implement an agricultural safeguard measure in a transparent manner. Within 60 days after applying a measure, the Party applying the measure shall notify the Party whose good is subject to the measure, in writing, and shall provide it relevant data concerning the measure. On request, the Party applying the measure shall consult with the Party whose good is subject to the measure regarding the application of the measure.

6. The operation of this Article may be the subject of discussion and review in the Joint Committee or any subcommittee on agriculture established pursuant to Article 19.2 (Joint Committee).

ARTICLE 3.6: AGRICULTURAL TRADE FORUM

The Parties affirm their desire to provide a forum, through the Joint Committee established pursuant to Article 19.2 or a subcommittee established thereunder, for addressing agricultural trade matters under this Section.

ARTICLE 3.7: DEFINITIONS

For purposes of this Section:

agricultural goods means those goods referred to in Article 2 of the WTO Agreement on Agriculture; and

agricultural safeguard measure means a measure described in Article 3.5.1.

Section B: Sanitary and Phytosanitary Measures

ARTICLE 3.8: SCOPE AND COVERAGE

This Section applies to all sanitary and phytosanitary measures of a Party that may, directly or indirectly, affect trade between the Parties.

ARTICLE 3.9: GENERAL PROVISIONS

1. The Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement.

2. Neither Party may have recourse to dispute settlement under this Agreement for any matter arising under this Section.

3. The Parties affirm their desire to provide a forum, through the Joint Committee established pursuant to Article 19.2 or a subcommittee on sanitary and phytosanitary matters established thereunder, for addressing sanitary and phytosanitary matters affecting trade between the Parties. the Parties.

ARTICLE 3.10: DEFINITION

For purposes of this Section, sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1, of the SPS Agreement.

ANNEX 3-A
AGRICULTURAL SAFEGUARD MEASURES

Schedule of the United States

1. The United States may apply a price-based agricultural safeguard measure, pursuant to Article 3.5 (Agricultural Safeguard Measures), on an originating agricultural good listed in Table A if the good enters the customs territory of the United States at a unit import price below the trigger price set out in Table A for that good.

(a) The unit import price shall be determined on the basis of the F.O.B. import price of the good in U.S. dollars (“import price”).

(b) The trigger prices reflect historic unit import values for the products concerned. The Parties may mutually agree to periodically evaluate and update the trigger prices.

(a) if the difference between the import price of the good and the trigger price listed in Table A (“trigger price”) is less than or equal to 10 percent of the trigger price, no additional duty shall be applied;

(b) if the difference between the import price and the trigger price is greater than 10 percent but less than or equal to 40 percent of the trigger price, the additional duty shall equal 30 percent of the difference between the MFN rate for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in the U.S. Schedule to Annex IV (Tariff Elimination);

(c) if the difference between the import price and the trigger price is greater than 40 percent but less than or equal to 60 percent of the trigger price, the additional duty shall equal 50 percent of the difference between the MFN rate for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in the U.S. Schedule to Annex IV;

(d) if the difference between the import price and the trigger price is greater than 60 percent but less than or equal to 75 percent of the trigger price, the additional duty shall equal 70 percent of the difference between the MFN rate for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in the U.S. Schedule to Annex IV; and

(e) if the difference between the import price and the trigger price is greater than 75 percent of the trigger price, the additional duty shall equal 100 percent of the difference between the MFN rate for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in the U.S. Schedule to Annex IV.

TABLE A – U.S. Agricultural Safeguard List

Schedule of Morocco

1. Morocco may apply a quantity-based agricultural safeguard measure, pursuant to Article 3.5 (Agricultural Safeguard Measures), on an originating agricultural good listed in paragraphs 2 through 6 if, in any calendar year, the volume of imports of the good exceeds the volume of the good as set out in Tables B-1 through B-6.

2. Furposes of Article 3.5.2, Morocco shall set the additional duty for whole birds designated by Moroccan HS subheadings 0207.11.0000, 0207.12.0000, 0207.24.0000, and 0207.25.0000 according to the following schedule:

(a) for years one through seven, Morocco may apply an additional duty of less than or equal to 100 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV (Tariff Elimination);

(b) for years eight through 13, Morocco may apply an additional duty of less than or equal to 75 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV; and

(c) for years 14 through 18, Morocco may apply an additional duty of less than or equal to 50 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV.

3. For purposes of Article 3.5.2, Morocco shall set the additional duty for leg quarters and wings designated by Moroccan HS subheadings 0207.13.0029 and 0207.14.0029 according to the following schedule:

(a) for years one through ten, Morocco may apply an additional duty of less than or equal to 100 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV;

(b) for years 11 through 15, Morocco may apply an additional duty of less than or equal to 75 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV;

(c) for years 16 through 20, Morocco may apply an additional duty of less than or equal to 50 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV; and

(d) for years 21 through 24, Morocco may apply an additional duty of less than or equal to 30 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV.

(e) No later than year 24, the Parties will review the operation of this paragraph and the need for a quantity-based safeguard after year 24. Unless both Parties agree not to extend the safeguard, starting in year 25, Morocco may apply an additional duty of less than or equal to 25 percent of the MFN rate of duty for the good as determined under Article 3.5.1.

4. For purposes of Article 3.5.2, Morocco shall set the additional duty for chickpeas designated by Moroccan HS subheadings 0713.20.9010 and 0713.20.9090 and for lentils designated by Moroccan HS subheadings 0713.40.9010 and 0713.40.9090 according to the following schedule:

(a) for years one through six, Morocco may apply an additional duty of less than or equal to 100 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV;

(b) for years seven through 12, Morocco may apply an additional duty of less than or equal to 75 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV; and

(c) for years 13 through 17, Morocco may apply an additional duty of less than or equal to 50 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV.

5. For purposes of Article 3.5.2, Morocco shall set the additional duty for bitter almonds designated by Moroccan HS subheadings 0802.11.0011, 0802.11.0019, 0802.12.0011, and 0802.12.0019 according to the following schedule:

(a) for years one through five, Morocco may apply an additional duty of less than or equal to 100 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV;

(b) for years six through ten, Morocco may apply an additional duty of less than or equal to 75 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV; and

(c) for years 11 through 14, Morocco may apply an additional duty of less than or equal to 50 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV.

6. For purposes of Article 3.5.2, Morocco shall set the additional duty for dried prunes designated by Moroccan HS subheading 0813.20.0000 according to the following schedule:

(a) for years one through five, Morocco may apply an additional duty of less than or equal to 75 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV; and

(b) for years six through nine, Morocco may apply an additional duty of less than or equal to 50 percent of the difference between the MFN rate of duty for the good as determined under Article 3.5.1 and the applicable tariff rate specified for the good in Morocco’s Schedule to Annex IV.

7. Morocco may maintain an agricultural safeguard measure only until the end of the calendar year in which it applies the measure.

TABLE B-1:
Safeguard Volume Triggers for Whole Birds
(Moroccan HS Subheadings 0207.11.0000, 0207.12.0000,
0207.24.0000, and 0207.25.0000)

ANNEX 3-B
IMPORT LICENSING FOR HIGH-QUALITY BEEF

1. Morocco may establish an import licensing program for imports of high-quality beef from the United States to provide that the beef is sold to or imported by hotels or restaurants designated on lists agreed to by the Parties.

2. Morocco shall:

(a) implement and administer any such import licensing program and procedures in accordance with Article VIII of GATT 1994 and the WTO Agreement on Import Licensing Procedures;

(b) ensure that the import licensing program and procedures do not impede the orderly fill of the in-quota quantity for high-quality beef; and

(c) limit the amount of any fees charged in connection with an import license to the cost of services rendered in processing the license application under the import licensing program and procedures.

3. The Parties shall review and update the lists of eligible hotels and restaurants at least once a year, or on request of either Party. The Parties shall develop an agreed set of non-discriminatory criteria and procedures for modifying the lists.

4. The Parties shall review the operation of the import licensing program at least once a year, or on request of either Party.

5. On request of either Party, the Parties shall consult on any issues related to the operation of the import licensing program. Consultations shall commence within 30 days of receipt of a request for consultations with a view to resolving the issue.

6. For purposes of this Annex:

high-quality beef means those goods defined in paragraph 5(c) of Annex 1 to the General Notes to Morocco’s Schedule to Annex IV (Tariff Elimination); and

hotels and restaurants means four- and five-star hotels and officially graded restaurants.

ANNEX 3-C
WHEAT AUCTION SYSTEM

1. Morocco may implement and administer an auction system for the in-quota quantities of the TRQs on U.S. durum and non-durum wheat provided for in paragraphs 9 and 10, subject to the conditions set out in paragraphs 9(c) and 10(d), of Annex 1 to the General Notes to Morocco’s Schedule to Annex IV (Tariff Elimination).

2. Morocco’s auction policies and procedures shall be:

(a) transparent, nondiscriminatory, and made available to the public; and

(b) developed and implemented in a manner that minimizes the cost of participation in the auction.

3. Morocco shall ensure that solely government authorities administer its auctions and, to that end, may not delegate administration of its auctions to producer groups or other non-governmental organizations.

4. Morocco’s auctions shall be held on a regular basis and conducted in a timely fashion to facilitate trade.

5. Morocco shall award licenses under the auction system:

(a) in commercially viable shipping quantities;

(b) to persons who have a history in trading and have posted a performance bond in an amount agreed by the Parties; and

(c) in a manner that encourages competition and that precludes manipulation or control of the auction system by producer groups or other nongovernmental organizations.

6. Morocco shall not condition application for, or use of, an auction license on the reexportation of the auctioned good.

7. Morocco shall require:

(a) any license holder that fails to fill its full license amount by the date on which two-thirds of the period covered by the auction has expired to immediately transfer the unfilled portion of the license to another licensee; and

(b) that the original license holder shall be responsible for ensuring that at least 90 percent of the license amount originally awarded is filled.

8. Morocco shall provide that any license holder that is unable to fill at least 90 percent of its license amount during the period covered by an auction shall remit all or part of its performance bond, as agreed by the Parties, and shall not be permitted to participate in auctions for the following two years. After this period, the license holder may re-apply to participate in the auction system, unless the Parties agree otherwise.

9. For purposes of paragraphs 7 and 8, Morocco shall deem the date on which a license holder has filled a license as the date of the bill of lading for the relevant shipment.

10. The Parties shall agree on auction policies and procedures, and any changes or amendments thereto. Morocco shall disseminate the policies and procedures applicable to each auction through widely available publications, including on the websites of their relevant authorities, no later than 45 days before the auction.

11. Within 15 days of receipt of a request by either Party, the Parties shall consult on any issues related to application and operation of this Annex with a view to resolving them.

CHAPTER FOUR
TEXTILES AND APPAREL

ARTICLE 4.1: TARIFF ELIMINATION

1. Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating textile and apparel goods in accordance with its Schedule to Annex IV (Tariff Elimination).

2. Duties on originating textile and apparel goods provided for in the items in staging category A in a Party’s Schedule shall be eliminated entirely and such goods shall be duty-free on the date this Agreement enters into force.

3. Duties on originating textile and apparel goods provided for in the items in staging category D in a Party’s Schedule shall be reduced to 50 percent of that Party’s base rate of duty on January 1 of year one. Beginning January 1 of year two, duties shall be removed in five equal annual stages, and such goods shall be duty-free, effective January 1 of year six.

4. Duties on originating textile and apparel goods provided for in the items in staging category F in a Party’s Schedule shall be removed in nine equal annual stages beginning January 1 of year one, and such goods shall be duty-free, effective January 1 of year nine.

5. Duties on originating textile and apparel goods provided for in the items in staging category H in a Party’s Schedule shall be removed in ten stages. On January 1 of year one, duties shall be reduced by three percent of that Party’s base rate, and by an additional three percent of the base rate on January 1 of each year thereafter through year four. Beginning January 1 of year five, duties shall be removed in six equal annual stages, and such goods shall be duty-free, effective January 1 of year ten.

6. The United States shall eliminate customs duties on any originating textile or apparel goods that, after the date of entry into force of this Agreement, are designated as articles eligible for duty-free treatment under the U.S. Generalized System of Preferences, effective from the date of such designation.

7. On the date of entry into force of this Agreement, each Party shall provide that the originating apparel goods specified in Annex 4-B shall be duty-free, up to the annual quantities identified therein. Duties on originating apparel goods specified in Annex 4-B above those quantities shall be reduced as provided for in paragraph 3.

8. An importing Party, through its competent authorities, shall require an importer claiming duty-free treatment for an originating apparel good listed in Annex 4-B to present to the competent authorities at the time of entry a declaration that it is entitled to duty-free treatment in accordance with paragraph 7 and Annex 4-B. The importing Party shall not be required to provide duty-free treatment if an importer does not provide such a declaration. An exporting Party may require the exporter to prepare a declaration of eligibility for duty-free treatment in order to administer the annual quantities listed in Annex 4-B.

9. On the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties, and to consider increasing the annual quantities listed in Annex 4-B. An agreement by the Parties to accelerate the elimination of a customs duty or to adjust the annual quantities listed in Annex 4-B shall supersede any duty rate, staging category, or annual quantity determined pursuant to this Agreement when approved by each Party in accordance with its applicable legal procedures.

ARTICLE 4.2: SPECIAL TEXTILE AND APPAREL SAFEGUARD ACTIONS

1. If, as a result of the reduction or elimination of a duty under this Agreement, a textile or apparel good benefiting from preferential tariff treatment under this Agreement is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the Party may, to the extent and for such time as may be necessary to prevent or remedy such damage and to facilitate adjustment, increase the rate of duty on the good to a level not to exceed the lesser of:

(a) the most-favored-nation (“MFN”) applied rate of duty in effect at the time the action is taken; and

(b) the MFN applied rate of duty in effect on the date of entry into force of this Agreement

2. In determining serious damage, or actual threat thereof, the importing Party:

(a) shall examine the effect of increased imports of the good from the exporting Party on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilization of capacity, inventories, market share, exports, wages, employment, domestic prices, profits, and investment, none of which shall necessarily be decisive; and

(b) shall not consider changes in technology or consumer preference as factors supporting a determination of serious damage or actual threat thereof.

4. The importing Party shall deliver to the exporting Party, without delay, written notice of its intent to take a safeguard action and, on the request of the exporting Party, shall enter into consultations with that Party regarding the matter.

5. An importing Party:

(a) shall not maintain a safeguard action for a period exceeding three years, except that the Party may extend the period by up to two years if the Party’s competent authorities determine, in conformity with the procedures set out in paragraphs 3 and 4, that the action continues to be necessary to prevent or remedy serious damage and to facilitate adjustment by the domestic industry, and that there is evidence that the industry is adjusting;

(b) shall not take or maintain a safeguard action against a good beyond ten years after the Party must eliminate customs duties on that good pursuant to this Agreement;

(c) shall not take a safeguard action more than once against the same good of the other Party; and

(d) shall, on termination of the safeguard action, apply to the good that was subject to the safeguard action the rate of duty that would have been in effect but for the action.

6. The importing Party shall provide to the exporting Party mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard action. Such concessions shall be limited to textile and apparel goods, unless the Parties agree otherwise. If the Parties are unable to agree on compensation, the exporting Party may suspend tariff concessions under this Agreement having trade effects substantially equivalent to the trade effects of the safeguard action. Such tariff action may be taken against any goods of the exporting Party. The exporting Party shall apply the tariff action only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party’s obligation to provide trade compensation and the exporting Party’s right to take tariff action shall terminate when the safeguard action terminates.

7. Nothing in this Agreement shall be construed to limit a Party’s right to restrain imports of textile and apparel goods in a manner consistent with the Agreement on Textiles and Clothing or the Safeguards Agreement. However, a Party may not take or maintain a safeguard action under this Article against a textile or apparel good that is subject, or becomes subject, to a safeguard measure that a Party takes pursuant to either such agreement.

ARTICLE 4.3: RULES OF ORIGIN AND RELATED MATTERS

Application of Chapter Five

1. Except as provided in this Chapter, including its Annexes, Chapter Five (Rules of Origin) applies to textile and apparel goods.

2. For greater certainty, the rules of origin set forth in this Agreement shall not apply in determining the country of origin of a textile or apparel good for non-preferential purposes.

Consultations

3. On the request of either Party, the Parties shall consult to consider whether the rules of origin applicable to a particular textile or apparel good should be revised to address issues of availability of supply of fibers, yarns, or fabrics in the territories of the Parties.

4. In the consultations referred to in paragraph 3, each Party shall consider all data presented by the other Party that demonstrate substantial production in its territory of a particular fiber, yarn, or fabric. The Parties shall consider that there is substantial production if a Party demonstrates that its domestic producers are capable of supplying commercial quantities of the fiber, yarn, or fabric in a timely manner.

5. On request of an exporting Party, the Parties shall consult to consider revising the rules of origin applicable to originating textile and apparel goods described in HS 6207, 6208, and 6212, with a view to furthering the objectives of the Agreement, if:

(a) at any time beginning one year after the date of entry into force of this Agreement, the requesting Party’s annual exports of such goods to the other Party are not significantly higher than its annual exports of such goods before the date of entry into force of this Agreement, or

(b) at any time after this Agreement enters into force, either Party enters into an agreement that establishes a rule of origin for such goods that differs from the rule of origin provided for under this Agreement.

De Minimis

7. A textile or apparel good that is not an originating good because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in Annex 4-A, shall nonetheless be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than seven percent of the total weight of that component.¹ Notwithstanding the preceding sentence, a good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of a Party.

Treatment of Sets

8. Notwithstanding the specific rules of origin set out in Annex 4-A, textile or apparel goods classified under General Rule of Interpretation 3 of the Harmonized System as goods put up in sets for retail sale shall not be regarded as originating goods unless each of the goods in the set is an originating good or the total value of the non-originating goods in the set does not exceed 10 percent of the value of the set determined for purposes of assessing customs duties.

Preferential Tariff Treatment for Non-Originating Fabric and Apparel Goods (Tariff Preference Levels)

9. Subject to paragraph 11, each Party shall accord preferential tariff treatment to fabric goods provided for in Chapters 51, 52, 54, 55, 58, and 60 of the Harmonized System that are wholly formed in the territory of a Party, regardless of the origin of the fiber or yarn used to produce the goods, and that meet the applicable conditions for preferential tariff treatment under this Agreement other than the condition that they be originating goods.

10. Subject to paragraph 11, each Party shall accord preferential tariff treatment to apparel goods provided for in Chapters 61 and 62 of the Harmonized System that are cut or knit to shape, or both, and sewn or otherwise assembled in the territory of a Party, regardless of the origin of the fabric or yarn used to produce the goods, and that meet the applicable conditions for preferential tariff treatment under this Agreement other than the condition that they be originating goods.

11. A Party shall accord preferential tariff treatment to the goods described in paragraphs 9 and 10 up to the combined annual quantities specified in the following schedule:

12. An importing Party, through its competent authorities, may require that an importer claiming preferential tariff treatment for a fabric or apparel good under paragraph 9 or 10 present to the competent authorities at the time of entry a declaration of eligibility for preferential tariff treatment under that paragraph. The declaration shall be prepared by the importer and shall consist of information demonstrating that the good satisfies the requirements for preferential tariff treatment under paragraph 9 or 10. An exporting Party may require the exporter to prepare a declaration of eligibility for preferential tariff treatment under paragraph 9 or 10 in order to monitor the use of tariff preference levels.

13. To determine the quantity in square meters equivalent that is charged against the annual quantity set out in paragraph 11, the importing Party shall apply the conversion factors listed in, or utilize a methodology based on, the Correlation: U.S. Textile and Apparel Category System with the Harmonized Tariff Schedule of the United States of America, 2003 (“The Textile Correlation”), U.S. Department of Commerce, Office of Textiles and Apparel, or successor publication.

14. Paragraphs 9 through 13 shall cease to apply beginning on the first day of the eleventh twelve-month period following the date of entry into force of this Agreement.

Treatment of Certain Cotton Goods

15. Each Party shall accord preferential tariff treatment to a textile or apparel good listed in Annex 4-A that is not an originating good solely because cotton fibers used in the production of the good do not undergo an applicable change in tariff classification as se out in Annex 4-A if the cotton fibers, classified in HS heading 5201.00, used in the good originate in one or more of the least-developed beneficiary sub-Saharan African countries designated in Article 6 of the Bulletin Officiel, No. 4861 bis – 6 chaoual 1421 (1.1.2001), Exoneration du droit d’importation en faveur des produits originaires et en provenance de certains pays d’Afrique, as of the date of entry into force of this Agreement, and provided the cotton fibers are carded or combed in the territory of a Party or of a designated least-developed country. The total quantity of goods that may be accorded preferential tariff treatment based on this paragraph shall be limited to 1,067,257 kilograms annually. On request of either Party, the Parties shall consult on whether to adjust this quantity, or on any other matter related to this paragraph.

ARTICLE 4.4: CUSTOMS AND ADMINISTRATIVE COOPERATION

1. The Parties shall cooperate for purposes of:

(a) enforcing or assisting in the enforcement of their measures affecting trade in textile and apparel goods;

(b) verifying the accuracy of claims of origin;

(c) enforcing or assisting in the enforcement of measures implementing international agreements affecting trade in textile and apparel goods; and

(d) preventing circumvention of international agreements affecting trade in textile and apparel goods.

3. Where the importing Party has a reasonable suspicion that an exporter or producer of the exporting Party is engaging in unlawful activity relating to trade in textile or apparel goods, the exporting Party shall conduct, on the request of the importing Party, a verification for purposes of enabling the importing Party to determine that the exporter or producer is complying with applicable customs measures regarding trade in textile and apparel goods, including measures that the exporting Party adopts and maintains pursuant to this Agreement and measures of either Party implementing other international agreements affecting trade in textile or apparel goods, or to determine that a claim of origin regarding textile or apparel goods exported or produced by that enterprise is accurate. For purposes of this paragraph, a reasonable suspicion of unlawful activity means a suspicion based on relevant factual information of the type set forth in Article 6.5.5 (Cooperation) or information that indicates:

(a) circumvention by the exporter or producer of applicable customs measures regarding trade in textile and apparel goods, including measures adopted to implement this Agreement; or

(b) conduct that facilitates the violation of measures relating to any other international agreement regarding trade in textile or apparel goods.

5. Each Party shall provide to the other Party, consistent with the Party’s law, production, trade, and transit documents and other information necessary for the exporting Party to conduct a verification under paragraph 2 or 3. Each Party shall treat any documents or information exchanged in the course of such a verification in accordance with Article 6.6 (Confidentiality).

6. While a verification is being conducted, the importing Party may, consistent with its law, take appropriate action, which may include suspending the application of preferential tariff treatment to:

(a) the textile or apparel good for which a claim of origin has been made, in the case of a verification under paragraph 2; or

(b) any textile or apparel good exported or produced by the person subject to a verification under paragraph 3, where the reasonable suspicion of unlawful activity relates to that good.

7. The Party conducting a verification under paragraph 2 or 3 shall provide the other Party with a written report on the results of the verification, which shall include all documents and facts supporting any conclusion that the Party reaches.

8.

(a) If the importing Party is unable to make the determination described in paragraph 2 within 12 months after its request for a verification, or makes a negative determination, it may, consistent with its law, take appropriate action, including denying preferential tariff treatment to the textile or apparel good subject to the verification, and to similar goods exported or produced by the person that exported or produced the good.

(b) If the importing Party is unable to make a determination described in paragraph 3 within 12 months after its request for a verification, or makes a negative determination, it may, consistent with its law, take appropriate action, including denying preferential tariff treatment to any textile or apparel good exported or produced by the person subject to the verification.

(a) The importing Party may deny preferential tariff treatment or entry under paragraph 8 only after notifying the other Party of its intention to do so.

(b) If the importing Party takes action under paragraph 8 because it is unable to make a determination described in paragraph 2 or 3, it may continue to take appropriate action under paragraph 8 until it receives information sufficient to enable it to make the determination.

ARTICLE 4.5: DEFINITIONS

For purposes of this Chapter:

base rate of duty means: a) with respect to the United States, the HTSUS Column 1 General rates of duty in effect January 10, 2003; and b) with respect to Morocco, the HTSMOROCCO MFN rates of duty in effect January 1, 2003;

claim of origin means a claim that a textile or apparel good is an originating good;

exporting Party means the Party from whose territory a textile or apparel good is exported;

importing Party means the Party into whose territory a textile or apparel good is imported; and

textile or apparel good means a good listed in the Annex to the Agreement on Textiles and Clothing.

 ANNEX 4-A

RULES OF ORIGIN FOR TEXTILE OR APPAREL GOODS FOR
CHAPTERS 42, 50 THROUGH 63, 70, AND 94

1. For goods covered in this Annex, a good is an originating good if:

(i) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in this Annex as a result of production occurring entirely in the territory of one or both of the Parties, or the good otherwise satisfies the applicable requirements of this Chapter where a change in tariff classification for each non-originating material is not required,

(ii) and the good satisfies any other applicable requirements of this Chapter and Chapter Five (Rules of Origin).

(a) the specific rule, or specific set of rules, that applies to a particular heading or subheading is set out immediately adjacent to the heading or subheading;

(b) a rule applicable to a subheading shall take precedence over a rule applicable to the heading which is parent to that subheading;

(c) a requirement of a change in tariff classification applies only to non-originating materials

(d) a good is considered to be “wholly” of a material if the good is made entirely of the material; and

(e) the following definitions apply:

chapter means a chapter of the Harmonized System;

heading means the first four digits in the tariff classification number under the Harmonized System;

section means a section of the Harmonized System; and

subheading means the first six digits in the tariff classification number under the Harmonized System.

ANNEX 4-B
TARIFF-RATE QUOTAS ON APPAREL GOODS

General Notes:
(1) This Annex lists apparel goods defined by HS codes at the six-digit level.

(2) Effective on January 1 of year six, each Party shall eliminate its customs duties on originating apparel
goods listed in this Annex without any limitation on the annual quantity of such imports.

Note: For the purposes of determining the quantity of square meters equivalent that is charged against the annual quantities, the conversion factors listed in the Correlation: U.S. Textile and Apparel Category system with the Harmonized Tariff Schedule of the United States of America (“The Textile Correlation”), 2003, U.S. Department of Commerce, Office of Textiles and Apparel, or successor publication, apply.

CHAPTER FIVE
RULES OF ORIGIN

ARTICLE 5.1: ORIGINATING GOODS

Except as otherwise provided in this Chapter or Chapter Four (Textiles and Apparel), each Party shall provide that a good is an originating good where it is imported directly from the territory of one Party into the territory of the other Party, and

(a) it is a good wholly the growth, product, or manufacture of one or both of the Parties;

(b) for goods other than those covered by the rules in Annex 4-A or Annex 5-A , the good is a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties; and the sum of (i) the value of materials produced in the territory of one or both of the Parties, plus (ii) the direct costs of processing operations performed in the territory of one or both of the Parties is not less than 35 percent of the appraised value of the good at the time it is imported into the territory of a Party; or

(c) for goods covered by the rules in Annex 4-A or Annex 5-A, the good has satisfied the requirements specified in that Annex.

ARTICLE 5.2: NEW OR DIFFERENT ARTICLE OF COMMERCE

For purposes of this Chapter, new or different article of commerce means a good that has been substantially transformed from a good or material that is not wholly the growth, product, or manufacture of one or both of the Parties and that has a new name, character, or use distinct from the good or material from which it was transformed.

ARTICLE 5.3: NON-QUALIFYING OPERATIONS

Each Party shall provide that, for purposes of Article 5.1, no good shall be considered a new or different article of commerce by virtue of having merely undergone (a) simple combining or packaging operations or (b) mere dilution with water or with another substance that does not materially alter the characteristics of the good.

ARTICLE 5.4: CUMULATION

1. Each Party shall provide that direct costs of processing operations performed in one or both of the Parties as well as the value of materials produced in the territory of one or both of the Parties may be counted without limitation toward satisfying the 35 percent value-content requirement specified in Article 5.1(b).

2. Each Party shall provide that an originating good or a material produced in the territory of one or both of the Parties, incorporated into a good in the territory of the other Party, shall be considered to originate in the other Party.

3. Each Party shall provide that a good grown, produced, or manufactured in the territory of one or both of the Parties by one or more producers shall be an originating good, provided that it satisfies the requirements of Article 5.1 and all other applicable requirements in this Chapter and Chapter Four (Textiles and Apparel).

ARTICLE 5.5: VALUE OF MATERIALS

1. For purposes of this Chapter, each Party shall provide that the value of a material produced in the territory of one or both of the Parties includes:

(a) the price actually paid or payable by the producer of the good for the material;

(b) when not included in the price actually paid or payable by the producer of the good for the material, the freight, insurance, packing, and all other costs incurred in transporting the material to the producer’s plant;

(c) the cost of waste or spoilage, less the value of recoverable scrap; and

(d) taxes or customs duties imposed on the material by one or both of the Parties, provided the taxes or customs duties are not remitted on exportation.

2. Each Party shall provide that where the relationship between the producer of the good and the seller of the material influenced the price actually paid or payable for the material, or where paragraph 1 is otherwise not applicable, the value of the material produced in the territory of one or both of the Parties includes:

(a) all expenses incurred in the growth, production, or manufacture of the material, including general expenses;

(b) a reasonable amount for profit; and

(c) freight, insurance, packing, and all other costs incurred in transporting the material to the producer’s plant.

1. For purposes of this Chapter, direct costs of processing operations means those costs either directly incurred in, or that can be reasonably allocated to, the growth, production, or manufacture of the good. Such costs include the following, to the extent that they are includable in the appraised value of goods imported into the territory of a Party:

(a) all actual labor costs involved in the growth, production, or manufacture of the specific good, including fringe benefits, on-the-job training, and the costs of engineering, supervisory, quality control, and similar personnel;

(b) tools, dies, molds, and other indirect materials, and depreciation on machinery and equipment that are allocable to the specific good;

(c) research, development, design, engineering, and blueprint costs, to the extent that they are allocable to the specific good;

(d) costs of inspecting and testing the specific good; and

(e) costs of packaging the specific good for export to the territory of the other Party.

(a) profit; and

(b) general expenses of doing business that are either not allocable to the good or are not related to the growth, production, or manufacture of the good, such as administrative salaries, casualty and liability insurance, advertising, and salesmen’s salaries, commissions, or expenses.

Each Party shall provide that packaging and packing materials and containers for retail sale and for shipment shall be disregarded in determining whether the good qualifies as an originating good, except to the extent that the value of such packaging and packing materials and containers may be counted toward satisfying the 35 percent value-content requirement specified in Article 5.1(b), where applicable.

ARTICLE 5.8: INDIRECT MATERIALS

Each Party shall provide that indirect materials shall be disregarded in determining whether the good qualifies as an originating good, except that the cost of such indirect materials may be counted toward satisfying the 35 percent value-content requirement where applicable.

ARTICLE 5.9: TRANSIT AND TRANSSHIPMENT

For purposes of this Chapter, each Party shall provide that a good shall not be considered to be imported directly from the territory of the other Party if the good undergoes subsequent production, manufacturing, or any other operation outside the territories of the Parties, other than unloading, reloading, or any other operation necessary to preserve it in good condition or to transport the good to the territory of the other Party.

ARTICLE 5.10: IMPORTER REQUIREMENTS

Each Party shall provide that whenever an importer makes a claim for preferential tariff treatment for a good, the importer:

(a) shall be deemed to have certified that the good qualifies for preferential tariff treatment; and

(b) shall submit to the customs authority of the importing Party, on request, a signed declaration setting forth all pertinent information concerning the growth, production, or manufacture of the good. Each Party may require that the declaration contain at least the following details:

(i) a description of the good, quantity, numbers, and invoice numbers and bills of lading;

(ii) a description of the operations performed in the growth, production, or manufacture of the good in the territory of one or both of the Parties and, where applicable, identification of the direct costs of processing operations;

(iii) a description of any materials used in the growth, production, or manufacture of the good that are wholly the growth, product, or manufacture of one or both of the Parties, and a statement as to the value of such materials;

(iv) a description of the operations performed on, and a statement as to the origin and value of, any materials used in the good that are claimed to have been sufficiently processed in the territory of one or both of the Parties so as to be materials produced in the territory of one or both of the Parties, or are claimed to have undergone an applicable change in tariff classification specified in Annex 4-A or Annex 5-A; and

(v) a description of the origin and value of any foreign materials used in the good that are not claimed to have been substantially transformed in the territory of one or both of the Parties, or are not claimed to have undergone an applicable change in tariff classification specified in Annex 4-A or Annex 5-A.

ARTICLE 5.11: OBLIGATIONS RELATING TO IMPORTATION

1. Each Party shall grant any claim for preferential tariff treatment, unless the Party possesses information indicating that the importer’s claim fails to comply with any requirement under this Chapter or Chapter Four (Textiles and Apparel).

2. To determine whether a good imported into its territory qualifies for preferential tariff treatment, the importing Party may, through its customs authority, verify the origin.

3. Where a Party denies a claim for preferential tariff treatment, it shall issue a written determination containing findings of fact and the legal basis for its determination. The Party shall issue the determination within a period established under its law.

4. Nothing in this Article shall prevent a Party from taking action under Article 4.4 (Customs and Administrative Cooperation).

ARTICLE 5.12: CONSULTATIONS AND MODIFICATIONS

1. The Parties shall consult and cooperate to ensure that this Chapter is applied in an effective and uniform manner, in accordance with the objectives of this Agreement.

2. The Parties may establish ad hoc working groups, or a subcommittee of the Joint Committee established pursuant to Article 19.2 (Joint Committee), to consider any matter related to this Chapter (including Annex 5-A). On request of a Party, the Parties may direct a working group or subcommittee to review operation of this Chapter (including Annex 5-A) and develop recommendations for amending them in the light of pertinent developments, including changes in technology and production processes, and other relevant factors.

ARTICLE 5.13: REGIONAL CUMULATION

At a time to be determined by the Parties, and in the light of their desire to promote regional integration, the Parties shall enter into discussions with a view to deciding the extent to which materials that are products of countries in the region may be counted for purposes of satisfying the origin requirement under this Agreement as a step toward achieving regional integration.

ARTICLE 5.14: DEFINITIONS

For purposes of this Chapter:

foreign material means a material other than a material produced in the territory of one or more of the Parties;

good means any merchandise, product, article, or material;

goods wholly the growth, product, or manufacture of one or both of the Parties means goods consisting entirely of one or more of the following:

(a) mineral goods extracted in the territory of one or both of the Parties;

(b) vegetable goods, as such goods are defined in the Harmonized System, harvested in the territory of one or both of the Parties;

(c) live animals born and raised in the territory of one or both of the Parties;

(d) goods obtained from live animals raised in the territory of one or both of the Parties;

(e) goods obtained from hunting, trapping, or fishing in the territory of one or both of the Parties;

(f) goods (fish, shellfish, and other marine life) taken from the sea by vessels registered or recorded with a Party and flying its flag;

(g) goods produced on board factory ships from the goods referred to in subparagraph (f) provided such factory ships are registered or recorded with that Party and fly its flag;

(h) goods taken by a Party or a person of a Party from the seabed or beneath the seabed outside territorial waters, provided that a Party has rights to exploit such seabed;

(i) goods taken from outer space, provided they are obtained by a Party or a person of a Party and not processed in the territory of a non-Party;

(j) waste and scrap derived from:

(i) production or manufacture in the territory of one or both of the Parties, or

(ii) used goods collected in the territory of one or both of the Parties, provided such goods are fit only for the recovery of raw materials;

(k) recovered goods derived in the territory of a Party from used goods and utilized in the Party’s territory in the production of remanufactured goods; and

(l) goods produced in the territory of one or both of the Parties exclusively from goods referred to in subparagraphs (a) through (j), or from their derivatives, at any stage of production;

indirect material means a good used in the growth, production, manufacture, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the growth, production, or manufacture of a good, including:

(a) fuel and energy;

(b) tools, dies, and molds;

(c) spare parts and materials used in the maintenance of equipment and buildings;

(d) lubricants, greases, compounding materials, and other materials used in the growth, production, or manufacture of a good or used to operate equipment and buildings; (e) gloves, glasses, footwear, clothing, safety equipment, and supplies;

(f) equipment, devices, and supplies used for testing or inspecting the good;

(g) catalysts and solvents; and

(h) any other goods that are not incorporated into the good but whose use in the growth, production, or manufacture of the good can reasonably be demonstrated to be a part of that growth, production, or manufacture;

material means a good, including a part or ingredient, that is used in the growth, production, or manufacture of another good that is a new or different article of commerce that has been grown, produced, or manufactured in one or both of the Parties;

material produced in the territory of one or both of the Parties means a good that is either wholly the growth, product, or manufacture of one or both of the Parties, or a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties;

recovered goods means materials in the form of individual parts that are the result of: (1) the complete disassembly of used goods into individual parts; and (2) the cleaning, inspecting, testing, or other processing of those parts as necessary for improvement to sound working condition;

remanufactured goods means industrial goods assembled in the territory of a Party that: (1) are entirely or partially comprised of recovered goods; (2) have similar life expectancies and meet similar performance standards as new goods; and (3) enjoy similar factory warranties as new goods;

simple combining or packaging operations means operations such as adding batteries to electronic devices, fitting together a small number of components by bolting, gluing, or soldering, or packing or repacking components together; and

substantially transformed means, with respect to a good or material, changed as the result of a manufacturing or processing operation where: (1) the good or material has multiple uses and is converted into a good or material with limited uses; (2) the physical properties of the good or material are changed to a significant extent; or (3) the operation undergone by the good or material is complex in terms of the number of processes and materials involved, as well as the time and level of skill required to perform these processes; and the good or material loses its separate identity in the resulting, new good or material.

ANNEX 5-A
CERTAIN PRODUCT-SPECIFIC RULES OF ORIGIN

Section A: Interpretative Notes

1. For goods covered in this Annex, a good is an originating good if:

(a) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in this Annex as a result of production occurring entirely in the territory of one or both of the Parties, or the good otherwise satisfies the applicable requirements of this Annex where a change in tariff classification for each non-originating material is not specified; and

(b) the good satisfies any other applicable requirements of this Chapter.

(a) the specific rule, or specific set of rules, that applies to a particular heading or subheading is set out immediately adjacent to the heading or subheading;

(b) a rule applicable to a subheading shall take precedence over a rule applicable to the heading which is parent to that subheading;

(c) a requirement of a change in tariff classification applies only to non-originating materials; and

(d) the following definitions apply:

chapter means a chapter of the Harmonized System;

heading means the first four digits in the tariff classification number under the Harmonized System; and

subheading means the first six digits in the tariff classification number under the Harmonized System.

Section B: Specific Rules

ANNEX NOTE: A good containing over 10 percent by weight of cow’s milk solids classified under chapter 4 or heading 1901, 2105, 2106, or 2202 must be made from originating cow's milk. Use of non-originating sheep’s or goat’s milk in a good classified under Chapter 4 or heading 1901, 2105, 2106, or 2202 shall not render the good non-originating.

Section I

Vegetable Products (Chapter 6-14)

NOTE: An agricultural or horticultural good grown in the territory of a Party shall be treated as an originating good even if grown from a non-originating seed, bulb, rootstock, cutting, slip, graft, shoot, bud or other live part of a plant.

CHAPTER SIX
CUSTOMS ADMINISTRATION

ARTICLE 6.1: PUBLICATION

1. Each Party shall publish its customs laws, regulations, and administrative procedures on the Internet.

2. Each Party shall designate one or more inquiry points to address inquiries from interested persons concerning customs matters and shall make available on the Internet information concerning procedures for making such inquiries.

3. In accordance with Article 18.1.2 (Publication), to the extent possible, each Party shall publish in advance any regulations of general application governing customs matters that it proposes to adopt and shall provide interested persons the opportunity to comment on such proposed regulations prior to their adoption.

ARTICLE 6.2: RELEASE OF GOODS

Each Party shall:

(a) adopt or maintain procedures providing for the release of goods within a period no greater than that required to ensure compliance with its customs laws and regulations and, to the extent possible, within 48 hours of arrival, provided that necessary data submission requirements are fulfilled;

(b) adopt or maintain procedures allowing, to the extent possible, goods to be released at the point of arrival, without interim transfer to warehouses or other locations;

(c) adopt or maintain procedures allowing the release of goods prior to, and without prejudice to, the final determination by its customs authority of the applicable customs duties, taxes, and fees and, as part of such procedures, may require an importer to provide a sufficient guarantee in the form of a surety or other appropriate instrument to ensure payment of any customs duties, taxes, and fees that may ultimately be assessed; and

(d) otherwise endeavor to adopt or maintain simplified procedures for the release of goods.

Each Party’s customs authority shall:

(a) endeavor to use information technology that expedites procedures for the importation of goods; and

(b) in deciding on the information technology to be used for this purpose, take into account international standards.

Each Party shall endeavor to adopt or maintain risk management systems that enable its customs authority to concentrate inspection activities on high-risk goods and that simplify the clearance and movement of low-risk goods.

ARTICLE 6.5: COOPERATION

1. Each Party shall endeavor to provide the other Party with advance notice of any significant modification of administrative policy regarding the implementation of its customs laws that is likely to substantially affect the operation of this Agreement.

2. The Parties shall cooperate in achieving compliance with their laws and regulations pertaining to:

(a) the implementation and operation of the provisions of this Agreement relating to the importation of goods, including Chapter Five (Rules of Origin) and this Chapter;

(b) the implementation and operation of the Customs Valuation Agreement;

(c) restrictions or prohibitions on imports or exports; or

(d) such other matters relating to the importation or exportation of goods as the Parties may agree.

4. The other Party shall respond by providing any information that it has collected that is material to the request.

5. For purposes of paragraph 3, a reasonable suspicion of unlawful activity means a suspicion based on relevant factual information obtained from public or private sources, including:

(a) historical evidence that a specific importer, exporter, producer, or other enterprise involved in the movement of goods from the territory of one Party to the territory of the other Party has not complied with a Party’s laws or regulations governing importation;

(b) historical evidence that some or all of the enterprises involved in the movement from the territory of one Party to the territory of the other Party of goods within a specific product sector have not complied with a Party’s laws or regulations governing importation; or

(c) other information that the Parties agree is sufficient in the context of a particular request.

7. The United States shall endeavor to provide Morocco with technical advice and assistance for the purpose of improving risk assessment techniques, simplifying and expediting customs procedures, advancing technical skills, and enhancing the use of technologies that can lead to improved compliance with laws and regulations governing importation.

8. Building on the procedures established in this Article, the Parties shall use best efforts to explore additional means of cooperation to enhance each Party’s ability to enforce its laws and regulations governing importation, including by:

(a) endeavoring to conclude a mutual assistance agreement between their respective customs authorities within six months after the date of entry into force of this Agreement; and

(b) considering whether to establish additional channels of communication to facilitate the secure and rapid exchange of information and to improve coordination on customs issues.

1. Where a Party providing information to the other Party in accordance with this Chapter designates the information as confidential, the other Party shall maintain the confidentiality of the information. The Party providing the information may require written assurances from the other Party that the information will be held in confidence, will be used only for the purposes specified in the other Party’s request for information, and will not be disclosed without the Party’s specific permission. The Parties may agree that the information may be used or disclosed for law enforcement purposes or in the context of judicial proceedings.

2. A Party may decline to provide confidential information requested by the other Party where the other Party has failed to act in conformity with assurances provided under paragraph 1.

3. Each Party shall adopt or maintain procedures that protect confidential information, including information the disclosure of which could prejudice the competitive position of the person providing the information, submitted in connection with the administration of its customs laws and regulations from unauthorized disclosure.

ARTICLE 6.7: EXPRESS SHIPMENTS

Each Party shall adopt or maintain separate, expedited customs procedures for express shipments, including procedures:

(a) that, to the extent possible, allow the information necessary for the release of express shipments to be submitted electronically;

(b) in which the information necessary for the release of an express shipment may be submitted, and processed by the Party’s customs authority, before the shipment arrives;

(c) allowing a shipper to submit a single manifest covering all goods contained in an express shipment;

(d) that, to the extent possible, minimize the documentation required for the release of express shipments; and

(e) that, under normal circumstances, allow for an express shipment that has arrived at a point of entry to be released no later than six hours after the submission of the information necessary for release.

Each Party shall ensure that with respect to a determination of the Party on customs matters, the importer in its territory has access to:

(a) administrative review independent of the official or office that issued the determination; and

(b) judicial review of the determination in accordance with its law.

Each Party shall adopt or maintain measures that provide for the imposition of civil, administrative, and, where appropriate, criminal sanctions for violations of its customs laws and regulations, including its laws and regulations governing tariff classification, customs valuation, country of origin, and entitlement to preferential tariff treatment.

ARTICLE 6.10: ADVANCE RULINGS

1. Each Party, through its customs authority, shall issue advance rulings prior to the importation of a good into its territory at the written request of an importer in its territory, or an exporter or producer in the territory of the other Party, on the basis of the facts and circumstances provided by the requester, concerning:

(a) tariff classification;

(b) the application of customs valuation criteria, including the criteria in the Customs Valuation Agreement;

(c) duty drawback;

(d) whether a good qualifies as an originating good); and

(e) whether a good qualifies for duty-free treatment in accordance with Article 2.6 (Goods Re-entered After Repair or Alteration).

3. Each Party shall provide that an advance ruling shall be in force from its date of issuance, or such other date specified by the ruling, for at least three years, provided that the facts and circumstances on which the ruling is based remain unchanged.

4. The issuing Party may modify or revoke an advance ruling when facts or circumstances warrant, such as where the information on which the ruling is based is false or inaccurate.

5. Where an importer claims that the treatment accorded to an imported good should be governed by an advance ruling, the customs authority may evaluate whether the facts and circumstances of the importation are consistent with the facts and circumstances on which the advance ruling was based.

6. Each Party shall make its advance rulings publicly available, subject to confidentiality requirements in its law.

7. If a requester provides false information or omits relevant circumstances or facts in its request for an advance ruling, or does not act in accordance with the ruling’s terms and conditions, the importing Party may apply appropriate measures, including civil, criminal, and administrative penalties, or other sanctions.

8. For purposes of this Article, advance ruling means a written response by a Party to a request made in accordance with this Article, setting forth the official position of the Party on the interpretation of its relevant laws and regulations pertaining to a matter referenced in paragraph 1(a) through (e), as applied to a specific, prospective customs transaction.

9. This Article shall apply to Morocco beginning two years after the date of entry into force of this Agreement.

ARTICLE 6.11: TECHNICAL COOPERATION AND IMPLEMENTATION

1. Within 120 days after the date of entry into force of this Agreement, the Parties shall consult and establish a work program on procedures that Morocco may adopt to implement Article 6.10 and shall consult on technical assistance that the United States may provide to assist Morocco in that endeavor.

2. Not later than 18 months after the date of entry into force of this Agreement, the Parties shall consult on Morocco’s progress in implementing Article 6.10 and on whether to undertake further cooperative activities.

CHAPTER SEVEN
TECHNICAL BARRIERS TO TRADE

ARTICLE 7.1: SCOPE AND COVERAGE

1. This Chapter applies to all standards, technical regulations, and conformity assessment procedures of the central level of government that may, directly or indirectly, affect trade in goods between the Parties.

2. Notwithstanding paragraph 1, this Chapter does not apply to:

(a) technical specifications prepared by governmental bodies for production or consumption requirements of such bodies; or

(b) sanitary and phytosanitary measures as defined in Annex A of the SPS Agreement.

ARTICLE 7.2: AFFIRMATION OF THE WTO AGREEMENT ON TECHNICAL BARRIERS TO TRADE

Further to Article 1.2 (Relation to Other Agreements), the Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement.

ARTICLE 7.3: INTERNATIONAL STANDARDS

In determining whether an international standard, guide, or recommendation within the meaning of Articles 2 and 5 and Annex 3 of the TBT Agreement exists, each Party shall apply the principles set out in Decisions and Recommendations adopted by the Committee since 1 January 1995, G/TBT/1/Rev.8, 23 May 2002, Section IX (Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement), issued by the WTO Committee on Technical Barriers to Trade.

ARTICLE 7.4: TRADE FACILITATION

The Parties shall intensify their joint work in the field of standards, technical regulations, and conformity assessment procedures with a view to facilitating access to each other’s markets. In particular, the Parties shall seek to identify trade facilitating bilateral initiatives regarding standards, technical regulations, and conformity assessment procedures that are appropriate for particular issues or sectors. Such initiatives may include cooperation on regulatory issues, such as alignment with international standards and use of accreditation to qualify conformity assessment bodies.

ARTICLE 7.5: CONFORMITY ASSESSMENT PROCEDURES

1. The Parties recognize that a broad range of mechanisms exists to facilitate the acceptance in a Party’s territory of the results of conformity assessment procedures conducted in the other Party’s territory. For example:

(a) the importing Party may recognize the results of conformity assessment procedures conducted in the territory of the other Party;

(b) conformity assessment bodies located in each Party’s territory may enter into voluntary arrangements to accept the results of the other’s assessment procedures;

(c) a Party may adopt accreditation procedures for qualifying conformity assessment bodies located in the territory of the other Party;

(d) a Party may designate conformity assessment bodies located in the territory of the other Party; and

(e) the importing Party may rely on a supplier’s declaration of conformity.

The Parties shall intensify their exchange of information on these and similar mechanisms.

2. Where a Party does not accept the results of a conformity assessment procedure conducted in the territory of the other Party, it shall, on request of the other Party, explain the reasons for its decision.

3. Each Party shall accredit, approve, license, or otherwise recognize conformity assessment bodies in the territory of the other Party on terms no less favorable than those it accords to conformity assessment bodies in its territory. Where a Party accredits, approves, licenses, or otherwise recognizes a body assessing conformity with a specific technical regulation or standard in its territory and refuses to accredit, approve, license, or otherwise recognize a body assessing conformity with that technical regulation or standard in the territory of the other Party, it shall, on request of the other Party, explain the reasons for its decision.

4. Where a Party declines a request from the other Party to engage in negotiations or concludes an agreement on facilitating recognition in its territory of the results of conformity assessment procedures conducted by bodies in the other Party’s territory, it shall, on request of the other Party, explain the reasons for its decision.

ARTICLE 7.6: TRANSPARENCY

1. Each Party shall allow its own persons and persons of the other Party to participate in the development of standards, technical regulations, and conformity assessment procedures.¹ Each Party shall permit persons of the other Party to participate in the development of such measures on terms no less favorable than those accorded to its own persons.

2. Each Party shall recommend that non-governmental standardizing bodies in its territory observe paragraph 1.

3. In order to enhance the meaningful opportunity for persons to provide comments on proposed technical regulations and conformity assessment procedures, a Party publishing a notice in accordance with Article 2.9 or 5.6 of the TBT Agreement shall:

(a) include in the notice a statement describing the objective of the proposed technical regulation or conformity assessment procedure and the rationale for the approach the Party is proposing;

(b) transmit the proposal electronically to the other Party through the inquiry point the Party has established in accordance with Article 10 of the TBT Agreement at the same time as it notifies WTO Members of the proposal in accordance with the TBT Agreement; and

(c) publish, preferably by electronic means, or otherwise make available to the public its responses to significant comments it receives from the public or the other Party on the proposed technical regulation or conformity assessment procedure no later than the date it publishes the final technical regulation or conformity assessment procedure.

Each Party should allow at least 60 days after it transmits a proposal under subparagraph 3(b) for the public and the other Party to provide comments in writing on the proposal.

4. Where a Party makes a notification under Article 2.10 or 5.7 of the TBT Agreement, it shall at the same time transmit the notification electronically to the other Party through the inquiry point referenced in subparagraph 3(b).

5. On request, each Party shall provide the other Party information regarding the objective of, and rationale for, a standard, technical regulation, or conformity assessment procedure that the Party has adopted or is proposing to adopt.

6. Each Party shall implement this Article as soon as is practicable and in no event later than five years after the date of entry into force of this Agreement.

ARTICLE 7.7: COORDINATORS

1. The Chapter Seven Coordinators designated in Annex 7-A shall work jointly to facilitate implementation of this Chapter and cooperation between the Parties on matters pertaining to this Chapter. The Coordinators shall:

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

(b) promptly address any issue that a Party raises related to the development, adoption, application, or enforcement of standards, technical regulations, or conformity assessment procedures;

(c) enhance cooperation in the development and improvement of standards, technical regulations, and conformity assessment procedures;

(d) where appropriate, facilitate sectoral cooperation between governmental and non-governmental conformity assessment bodies in the Parties’ territories;

(e) facilitate consideration of any sector-specific proposal a Party makes for further cooperation under this Chapter;

(f) exchange information on developments in non-governmental, regional, and multilateral fora related to standards, technical regulations, and conformity assessment procedures;

(g) on request of a Party, consult on any matter arising under this Chapter;

(h) review this Chapter in light of any developments under the TBT Agreement and develop recommendations for amendments to this Chapter in light of those developments; and

(i) take any other steps the Parties consider will assist them in implementing this Chapter and the TBT Agreement and in facilitating trade between them.

In carrying out its functions, each Party’s Chapter Seven Coordinator shall coordinate with interested parties in its territory.

2. The Chapter Seven Coordinators shall communicate with each other by any method they agree is appropriate and shall meet as they agree is necessary.

ARTICLE 7.8: INFORMATION EXCHANGE

Where a Party requests the other Party to provide information pursuant to this Chapter, the requested Party shall provide it within reasonable period of time and, if possible, by electronic means.

ARTICLE 7.9: DEFINITIONS

For purposes of this Chapter, technical regulation, standard, conformity assessment procedures, non-governmental body, and central government body have the meanings assigned to those terms in Annex 1 of the TBT Agreement.

ANNEX 7-A
CHAPTER SEVEN COORDINATORS

The Chapter Seven Coordinators shall be:

(a) in the case of Morocco, the Ministry of Industry, or its successor; and

(b) in the case of the United States, the Office of the United States Trade Representative, or its successor.

CHAPTER EIGHT
SAFEGUARDS

ARTICLE 8.1: APPLICATION OF A SAFEGUARD MEASURE

If, as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of the other Party is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions that the imports of such originating good from the other Party constitute a substantial cause of serious injury, or threat thereof, to a domestic industry producing a like or directly competitive good, the Party may:

(a) suspend the further reduction of any rate of customs duty on the good provided for under this Agreement;

(b) increase the rate of customs duty on the good to a level not to exceed the lesser of

(i) the most-favored-nation (MFN) applied rate of duty on the good in effect at the time the action is taken, and

(ii) the MFN applied rate of duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement; or

(c) in the case of a customs duty applied to a good on a seasonal basis, increase the rate of duty to a level not to exceed the lesser of

(i) the MFN applied rate of duty on the good in effect for the immediately preceding corresponding season, and

(ii) the MFN applied rate of duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.

1. A Party shall notify the other Party in writing on initiation of an investigation described in paragraph 2 and shall consult with the other Party as far in advance of applying a safeguard measure as practicable, with a view to reviewing the information arising from the investigation and exchanging views on the measure.

2. A Party shall apply a safeguard measure only following an investigation by the Party’s competent authorities in accordance with Articles 3 and 4.2(c) of the Safeguards Agreement, and to this end, Articles 3 and 4.2(c) of the Safeguards Agreement are incorporated into and made a part of this Agreement, mutatis mutandis.

3. In the investigation described in paragraph 2, the Party shall comply with the requirements of Article 4.2(a) of the Safeguards Agreement, and to this end, Article 4.2(a) is incorporated into and made a part of this Agreement, mutatis mutandis.

4. Neither Party may apply a safeguard measure against a good:

(a) except to the extent and for such time as may be necessary to prevent or remedy serious injury and to facilitate adjustment;

(b) for a period exceeding three years, except in the case provided for under Article 8.3; or

(c) beyond five years after the Party applying the measure must eliminate customs duties on that good pursuant to its Schedule to Annex IV (Tariff Elimination), except with the consent of the other Party.

5. Neither Party may apply a safeguard measure more than once against the same good.

6. Where the expected duration of the safeguard measure is over one year, the importing Party shall progressively liberalize it at regular intervals.

7. On the termination of the safeguard measure, the rate of customs duty shall be the rate that, according to the Party’s Schedule to Annex IV (Tariff Elimination), would have been in effect but for the measure.

ARTICLE 8.3: EXTENSION

If the competent authorities of a Party determine, in conformity with the procedures set out in Article 8.2, that a safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, the Party may extend the application of the safeguard measure for up to an additional two years.

ARTICLE 8.4: PROVISIONAL MEASURES

In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports constitute a substantial cause of serious injury, or threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of Articles 8.2.2 and 8.2.3. The Party shall promptly refund any tariff increases if the investigation described in Article 8.2.2 does not result in a finding that the requirements of Article 8.1 are met. The duration of any provisional measure shall be counted as part of the period described in Article 8.2.4(b).

ARTICLE 8.5: COMPENSATION

A Party applying a safeguard measure shall endeavor to provide to the other Party mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the measure. If the Parties are unable to agree on compensation within 30 days from the date the Party announces a decision to apply the measure, the other Party may take tariff action having trade effects substantially equivalent to the safeguard measure. The Party shall apply the action only for the minimum period necessary to achieve the substantially equivalent effects and, in any event, only while the safeguard measure is being applied.

ARTICLE 8.6: GLOBAL SAFEGUARD ACTIONS

Each Party retains its rights and obligations under Article XIX of GATT 1994 and the Safeguards Agreement. This Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken under Article XIX of GATT 1994 and the Safeguards Agreement.

ARTICLE 8.7: DEFINITIONS

For purposes of this Chapter:

competent authorities means (a) for Morocco, the Ministry of Foreign Trade, and (b) for the United States, the United States International Trade Commission;

domestic industry means, with respect to an imported good, the producers as a whole of the like or directly competitive good operating in the territory of a Party, or those whose collective output of the like or directly competitive good constitutes a major proportion of the total domestic production of that good;

safeguard measure means a measure described in Article 8.1;

serious injury means a significant overall impairment in the position of a domestic industry;

substantial cause means a cause that is important and not less than any other cause; and

threat of serious injury means serious injury that, on the basis of facts and not merely on allegation, conjecture, or remote possibility, is clearly imminent.

CHAPTER NINE
GOVERNMENT PROCUREMENT

ARTICLE 9.1: SCOPE AND COVERAGE

Application of Chapter

1. This Chapter applies to any measure, including any act or guideline of a Party, regarding covered procurement.

2. For purposes of this Chapter, covered procurement means a procurement of goods, services, or both:

(a) by any contractual means, including purchase, rental, or lease, with or without an option to buy; build-operate-transfer contracts; and public works concession contracts;

(b) where the value is estimated, in accordance with paragraph 4, to equal or exceed the relevant threshold specified in the Annexes;

(c) that is conducted by a procuring entity; and

(d) that is not excluded from coverage by this Agreement.

(a) non-contractual agreements or any form of assistance that a Party or a state enterprise provides, including grants, loans, equity infusions, fiscal incentives, subsidies, guarantees, cooperative agreements, and government provision of goods and services to persons or to state, regional, or local governments;

(b) purchases funded entirely or partially by international grants, loans, or other international assistance, where the provision of such assistance is subject to conditions inconsistent with this Chapter; and

(c) acquisition of fiscal agency or depository services, liquidation and management services for regulated financial institutions, and sale and distribution services for government debt.

4. Each Party shall ensure that its procuring entities comply with this Chapter in conducting covered procurements.

Valuation

5. In estimating the value of a procurement for the purpose of ascertaining whether it is a covered procurement, a procuring entity:

(a) may not prepare, design, or otherwise structure or divide a procurement, in any stage of the procurement, in order to avoid the application of this Chapter; and

(b) shall take into account all forms of remuneration, including any premiums, fees, commissions, interest, other revenue streams that may be provided for under the contract, and, where the procurement provides for the possibility of option clauses, the total maximum value of the procurement, inclusive of optional purchases.

National Treatment and Non-Discrimination

1. With respect to any measure covered by this Chapter, each Party, including its procuring entities, shall accord to the goods and services of the other Party, and to the suppliers of the other Party of such goods and services, treatment no less favorable than the most favorable treatment the Party accords to its own goods, services, and suppliers.

2. With respect to any measure covered by this Chapter, a Party may not:

(a) treat a locally established supplier less favorably than another locally established supplier on the basis of degree of foreign affiliation or ownership; nor

(b) discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of the other Party.

Rules of Origin

3. For purposes of procurement covered by this Chapter, neither Party may apply rules of origin to goods imported from the other Party that are different from the rules of origin the Party applies in the normal course of trade to imports of the same goods from the other Party.

Offsets

4. A procuring entity may not seek, take account of, or impose offsets in any stage of a covered procurement.

Measures Not Specific to Procurement

5. Paragraphs 1 and 2 do not apply to measures respecting customs duties or other charges of any kind imposed on or in connection with importation, the method of levying such duties or charges, other import regulations, including restrictions and formalities, or measures affecting trade in services other than measures governing covered procurement.

ARTICLE 9.3: PUBLICATION OF PROCUREMENT MEASURES

Each Party shall promptly publish laws, regulations, judicial decisions, administrative rulings, procedures, and other measures of general application specifically governing procurement, and any changes to such measures, in officially designated electronic or paper media that are widely disseminated and readily accessible to the public.

ARTICLE 9.4: PUBLICATION OF NOTICE OF INTENDED PROCUREMENT AND NOTICE OF PLANNED PROCUREMENT

Notice of Intended Procurement

1. For each covered procurement, a procuring entity shall publish in advance a notice inviting interested suppliers to submit tenders (“notice of intended procurement”) in an electronic or paper medium that is widely available and remains readily accessible to the public for the entire period established for tendering for that procurement.

2. Each notice of intended procurement shall include a description of the intended procurement, any conditions for participation, the name of the procuring entity, the address where all documents relating to the procurement may be obtained, the deadline for submission of tenders, and the time for delivery of the goods or services being procured.

Notice of Planned Procurement

3. Each Party shall encourage its procuring entities to publish as early as possible in each fiscal year a notice regarding each entity’s planned procurements. The notice should include the subject matter of any planned procurement and the estimated date of the publication of the notice of intended procurement.

ARTICLE 9.5: TIME LIMITS FOR TENDERING PROCESS

1. A procuring entity shall prescribe time limits for tendering that allow suppliers sufficient time to prepare and submit responsive tenders, taking into account the nature and complexity of the procurement. Except as provided in paragraph 3, a procuring entity shall provide no less than 40 days from the date of publication of a notice of intended procurement to the deadline for submission of tenders.

2. Notwithstanding paragraph 1, a procuring entity may establish a period of less than 40 days, provided that the period is sufficiently long to enable suppliers to prepare and submit responsive tenders and is in no case less than ten days:

(a) where the entity has published a separate notice, including a notice of planned procurement under Article 9.4.3, at least 40 days and not more than 12 months in advance, and such notice contains a description of the procurement, the time limits for the submission of tenders or, where appropriate, applications for participation in a procurement, and the address from which documents relating to the procurement may be obtained;

(b) where the entity procures commercial goods or services, except that the procuring entity may not rely on this provision if it requires suppliers to satisfy conditions for participation; or

(c) in duly substantiated cases of extreme urgency brought about by events unforeseeable by the procuring entity, such that a 40-day deadline would result in serious adverse consequences to the entity or the relevant Party.

ARTICLE 9.6: INFORMATION ON INTENDED PROCUREMENT

Tender Documentation

1. A procuring entity shall provide to an interested supplier tender documentation that includes all information necessary to permit suppliers to prepare and submit responsive tenders. Unless already provided in the notice of intended procurement, such documentation shall include a complete description of:

(a) the procurement, including the nature, scope, and, where quantifiable, the quantity of the goods or services to be procured and any requirements to be fulfilled, including any technical specifications, conformity certification, plans, drawings, or instructional materials;

(b) any conditions for participation, information, or documents that suppliers are required to submit;

(c) all criteria, including all cost factors, to be considered in awarding the contract, and the relative importance of each criterion;

(d) the date, time, and place for the opening of tenders; and

(e) any other terms or conditions, including terms of payment, relating to the procurement.

2. A procuring entity shall promptly:

(a) provide, on request, the tender documentation to any supplier participating in the procurement; and

(b) reply to any reasonable request for relevant information by a supplier participating in the procurement, provided that such information does not give that supplier an advantage over its competitors in the procurement.

Modifications

3. If, during the course of a procurement, a procuring entity modifies the criteria or technical requirements set out in the notice of intended procurement or tender documentation provided to participating suppliers, or amends or reissues a notice or tender documentation, the procuring entity shall transmit in writing any such modification or amended or reissued notice or tender documentation:

(a) to all suppliers that are participating at the time the information is amended, if known, and, in all other cases, in the same manner as the original information;

(b) in sufficient time to allow such suppliers to modify and submit amended tenders, as appropriate; and

(c) in cases where a notice is reissued, in accordance with the time limits set out in Article 9.5.

1. A procuring entity may not prepare, adopt, or apply any technical specification or prescribe any conformity assessment procedure with the purpose or the effect of creating unnecessary obstacles to trade between the Parties.

2. In prescribing any technical specification for the good or service being procured, a procuring entity shall:

(a) specify the technical specification, wherever appropriate, in terms of performance or functional requirements, rather than design or descriptive characteristics; and

(b) base the technical specification on international standards, where such exist and are applicable to the procuring entity, except where the use of an international standard would fail to meet the procuring entity’s program requirements or would impose more burdens than the use of a government-unique standard.

4. A procuring entity may not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in preparing or adopting any technical specification for a specific procurement from a person that may have a commercial interest in that procurement.

5. For greater certainty, this Article is not intended to preclude a procuring entity from preparing, adopting, or applying technical specifications to promote the conservation of natural resources or to protect the environment.

ARTICLE 9.8: CONDITIONS FOR PARTICIPATION

1. Where a procuring entity requires suppliers to satisfy conditions for participation, the entity shall, subject to the other provisions of this Chapter:

(a) limit any conditions for participation in a covered procurement to those that are essential to ensure that the supplier has the legal, technical, and financial abilities to fulfill the requirements and technical specifications of the procurement;

(b) evaluate a supplier’s financial and technical abilities on the basis of its global business activities, including both its activities in the territory of the Party of the supplier, as well as its activities, if any, in the territory of the Party of the procuring entity, and may not impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by a procuring entity of that Party or that the supplier has prior work experience in the territory of that Party;

(c) base its determination of whether a supplier has satisfied the conditions for participation solely on the conditions that it has specified in advance in notices or tender documentation; and

(d) allow all suppliers that satisfy the conditions for participation to participate in the procurement.

2. Nothing in this Article shall preclude a procuring entity from excluding a supplier from a procurement on grounds such as bankruptcy or false declarations.

3. Where a procuring entity requires suppliers to satisfy conditions for participation, the entity shall publish a notice inviting suppliers to apply for participation. The entity shall publish the notice sufficiently in advance to provide interested suppliers adequate time to prepare and submit responsive applications and for the entity to evaluate and make its determination based on such applications.

4. A procuring entity may establish a publicly available multi-use list of suppliers that satisfy its conditions for participation. Where a procuring entity requires suppliers to qualify for such a list in order to participate in a covered procurement, the entity shall promptly process any application for inclusion on the list. The entity shall allow a supplier whose application for inclusion on such a list is pending to participate in a procurement, provided that the entity determines that the supplier satisfies the conditions for participation and that there is sufficient time for the procuring entity to complete its evaluation of the supplier within the time period established for tendering.

5. A procuring entity shall promptly communicate to any supplier that has applied for participation its decision on whether that supplier has satisfied the conditions for participation. Where a procuring entity rejects an application for participation or ceases to recognize a supplier as having satisfied the conditions for participation, the entity shall promptly inform the supplier and, on request of the supplier, promptly provide a written explanation of the reasons for its decision.

ARTICLE 9.9: LIMITED TENDERING

1. Subject to paragraph 2, a procuring entity shall award contracts by means of open tendering procedures, in the course of which any interested supplier may submit a tender.

2. Provided that the tendering procedure is not used to avoid competition, to protect domestic suppliers, or in a manner that discriminates against suppliers of the other Party, a procuring entity may contact a supplier of its choice and may choose not to apply Articles 9.4 through 9.8 and Article 9.10 in relation to a covered procurement in any of the following circumstances:

(a) where, in response to a prior notice of intended procurement or invitation to tender,

(i) no tenders were submitted;

(ii) no tenders were submitted that conform to the essential requirements in the tender documentation; or

(iii) no suppliers satisfied the conditions for participation;

and the entity does not substantially modify the essential requirements of the procurement or the conditions for participation;

(b) where the goods or services can be supplied only by a particular supplier and no reasonable alternative or substitute goods or services exist because:

(i) the requirement is for works of art;

(ii) the procuring entity is obligated to protect patents, copyrights, or other exclusive rights, or proprietary information; or

(iii) there is an absence of competition for technical reasons;

(c) for additional deliveries of goods or services by the original supplier that are intended either as replacement parts, extensions, or continuing services for existing equipment, software, services, or installations, where a change of supplier would compel the procuring entity to procure goods or services that do not meet requirements of interchangeability with existing equipment, software, services, or installations;

(d) for goods purchased on a commodity market;

(e) where a procuring entity procures a prototype or a first good or service that is developed at its request in the course of, and for, a particular contract for research, experiment, study, or original development. When such contracts have been fulfilled, subsequent procurements of goods or services shall be subject to Articles 9.4 through 9.8 and 9.10; or

(f) insofar as is strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time by means of an open tendering procedure and the use of an open tendering procedure would result in serious injury to the entity, the entity’s program responsibilities, or the Party.

ARTICLE 9.10: AWARDING OF CONTRACTS

1. A procuring entity shall require that, in order to be considered for award, a tender must be submitted in writing and must, at the time it is submitted:

(a) conform to the essential requirements of the tender documentation and evaluation criteria specified in the notices and tender documentation; and

(b) be submitted by a supplier that has satisfied any conditions for participation.

2. Unless a procuring entity determines that it is not in the public interest to award a contract, the entity shall award the contract to a supplier that the entity has determined to be fully capable of undertaking the contract and whose tender is determined to be the most advantageous in terms of the requirements and evaluation criteria set out in the notices and tender documentation.

3. No procuring entity may cancel a procurement, or terminate or modify a contract it has awarded, in order to avoid the obligations of this Chapter.

Information Provided to Suppliers

4. Subject to Article 9.14, a procuring entity shall promptly inform suppliers that have submitted tenders of its contract award decision. A procuring entity, on request of a supplier whose tender was not selected for award, shall provide the supplier the reasons for not selecting its tender and the relative advantages of the tender selected.

Publication of Award Information

5. Promptly after awarding a contract in a covered procurement, a procuring entity shall publish a notice that includes at least the following information about the award:

(a) the name of the entity;

(b) a description of the goods or services procured;

(c) the name of the supplier awarded the contract;

(d) the value of the contract award; and

(e) where the entity did not use an open tendering procedure, an indication of the circumstances justifying the procedure used.

Maintenance of Records

6. A procuring entity shall maintain records and reports relating to tendering procedures and contract awards in covered procurements, including the reports required by Article 9.9.3, according to the practices of each Party, for at least three years after the date a contract is awarded.

ARTICLE 9.11: ENSURING INTEGRITY IN PROCUREMENT PRACTICES

Further to Article 18.5 (Anti-Corruption), each Party shall adopt or maintain procedures to declare ineligible for participation in the Party’s procurements, either indefinitely or for a specified time, suppliers that the Party has determined to have engaged in fraudulent or illegal action in relation to procurement. On request of the other Party, a Party shall identify the suppliers determined to be ineligible under these procedures, and, where appropriate, exchange information regarding those suppliers or the fraudulent or illegal action.

ARTICLE 9.12: DOMESTIC REVIEW OF SUPPLIER CHALLENGES

1. Each Party shall permit a supplier to challenge a Party’s compliance with its measures implementing this Chapter without prejudice to that supplier’s participation in ongoing or future procurement activities. Each Party shall ensure that its review procedures are made publicly available in writing, and are timely, transparent, effective, and consistent with the principle of due process.

2. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of the procuring entity that is the subject of the challenge to receive and review challenges that suppliers submit in connection with any covered procurement. Where a body other than such an authority initially reviews a challenge, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the procuring entity that is the subject of the challenge.

3. Each Party shall authorize the authority that it establishes or designates under paragraph 2 to take prompt interim measures, pending the resolution of a challenge, to ensure that the Party complies with its measures implementing this Chapter and to preserve the supplier’s opportunity to participate in the procurement, including by suspending the contract award or the performance of a contract that has already been awarded. However, in deciding whether to apply an interim measure, each Party may take into account any overriding adverse consequences to the public interest if an interim measure were taken. If a Party decides not to apply an interim measure, it shall provide a written explanation of the grounds for its decision.

4. Each Party shall ensure that the authority that it establishes or designates under paragraph 2 conducts its review in accordance with the following:

(a) a supplier shall be allowed sufficient time to prepare and submit a written challenge, which in no case shall be less than ten days from the time when the basis of the challenge became known or reasonably should have become known to the supplier;

(b) the procuring entity shall be required to respond in writing to the supplier’s challenge and provide all relevant documents to the authority;

(c) the supplier that initiates the challenge shall be provided an opportunity to reply to the procuring entity’s response before the authority makes a decision on the challenge; and

(d) the authority shall promptly provide decisions relating to a supplier’s challenge in writing, with an explanation of the grounds for each decision.

ARTICLE 9.13: MODIFICATIONS AND RECTIFICATIONS TO COVERAGE

1. Either Party may modify its coverage under this Chapter provided that it:

(a) notifies the other Party in writing and that Party does not object in writing within 30 days after the notification; and

(b) within 30 days after notifying the other Party, offers acceptable compensatory adjustments to the other Party to maintain a level of coverage comparable to that existing before the modification, except as provided in paragraph 3.

3. A Party need not offer compensatory adjustments where the Parties agree that the proposed modification covers a procuring entity over which the Party has effectively eliminated its control or influence. Where the Parties do not agree that government control or influence has been effectively eliminated, the objecting Party may request further information or consultations with a view to clarifying the nature of any government control or influence and reaching agreement on the procuring entity’s continued coverage under this Chapter.

4. The Joint Committee shall modify the relevant Annex to reflect any agreed modification, technical rectification, or minor amendment.

ARTICLE 9.14: NON-DISCLOSURE OF INFORMATION

1. A Party, including its procuring entities and review authority referred to in Article 9.12, shall not disclose confidential information that a person provides in the course of a procurement or challenge without the authorization of the person that provided the information. A procuring entity shall treat tenders in confidence.

2. Nothing in this Chapter shall be construed to require a Party, including its procuring entities, to provide confidential information the disclosure of which would:

(a) impede law enforcement;

(b) prejudice fair competition between suppliers;

(c) prejudice the legitimate commercial interests of particular suppliers or persons, including the protection of intellectual property; or

(d) otherwise be contrary to the public interest.

1. Provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining measures:

(a) necessary to protect public morals, order, or safety;

(b) necessary to protect human, animal, or plant life or health;

(c) necessary to protect intellectual property; or

(d) relating to goods or services of handicapped persons, of philanthropic institutions, or of prison labor.

ARTICLE 9.16: DEFINITIONS

For purposes of this Chapter:

build-operate-transfer contract and public works concession contract mean any contractual arrangement, the primary purpose of which is to provide for the construction or rehabilitation of physical infrastructure, plant, buildings, facilities, or other government-owned works, and under which, as consideration for a supplier’s execution of a contractual arrangement, a procuring entity grants to the supplier, for a specified period, temporary ownership or a right to control and operate, and demand payment for the use of, such works for the duration of the contract;

commercial goods and services means goods and services of a type that are sold or offered for sale to, and customarily purchased by, non-governmental buyers for non-governmental purposes; it includes goods and services with modifications customary in the commercial marketplace, as well as minor modifications not customarily available in the commercial marketplace;

conditions for participation means any financial or other guaranty that a supplier must provide, and any registration, qualification, or other requirements or conditions that a supplier must fulfill, to participate in a procurement;

in writing or written means any worded or numbered expression that can be read, reproduced, and later communicated, and includes electronically transmitted and stored information;

offsets means any conditions or undertakings that require use of domestic content, domestic suppliers, the licensing of technology, technology transfer, investment, counter-trade, or similar actions to encourage local development or to improve a Party’s balance-of- payments accounts;

procuring entity means an entity listed in Annex 9-A-1, 9-A-2, or 9-A-3;

services includes construction services, unless otherwise specified;

supplier means a person that provides or could provide goods or services to a procuring entity; and

technical specification means a tendering requirement that:

(a) sets out the characteristics of:

(i) goods to be procured, including quality, performance, safety, and dimensions, or the processes and methods for their production; or

(ii) services to be procured, or the processes or methods for their provision, including any applicable administrative provisions; or

(b) addresses terminology, symbols, packaging, marking, or labelling requirements, as they apply to a good or service.

CHAPTER TEN
INVESTMENT

Section A: Investment

ARTICLE 10.1: SCOPE AND COVERAGE

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

(a) investors of the other Party;

(b) covered investments; and

(c) with respect to Articles 10.8 and 10.10, all investments in the territory of the Party.

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

2. A requirement by a Party that a service supplier of the other Party post a bond or other form of financial security as a condition of the cross-border supply of a service does not of itself make this Chapter applicable to measures adopted or maintained by the Party relating to such cross-border supply of the service. This Chapter applies to measures adopted or maintained by the Party relating to the posted bond or financial security, to the extent that such bond or financial security is a covered investment.

3. This Chapter does not apply to measures adopted or maintained by a Party to the
extent
that they are covered by Chapter Twelve (Financial Services).

ARTICLE 10.3: NATIONAL TREATMENT

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

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

3. The treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level of government to investors, and to investments of investors, of the Party of which it forms a part.

ARTICLE 10.4: MOST-FAVORED-NATION TREATMENT

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

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

ARTICLE 10.5: MINIMUM STANDARD OF TREATMENT ¹

1. Each Party shall accord to covered investments treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.

2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide:

(a) “fair and equitable treatment” includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; and

(b) “full protection and security” requires each Party to provide the level of police protection required under customary international law.

3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.

4. Notwithstanding Article 10.12.5(b), each Party shall accord to investors of the other Party, and to covered investments, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife.

5. Notwithstanding paragraph 4, if an investor of a Party, in the situations referred to in paragraph 4, suffers a loss in the territory of the other Party resulting from:

(a) requisitioning of its covered investment or part thereof by the latter’s forces or authorities; or

(b) destruction of its covered investment or part thereof by the latter’s forces or authorities, which was not required by the necessity of the situation,

6. Paragraph 4 does not apply to existing measures relating to subsidies or grants that would be inconsistent with Article 10.3 but for Article 10.12.5(b).

ARTICLE 10.6: EXPROPRIATION AND COMPENSATION ²

1. Neither Party may expropriate or nationalize a covered investment either directly or indirectly through measures equivalent to expropriation or nationalization (“expropriation”), except:

(a) for a public purpose;

(b) in a non-discriminatory manner;

(c) on payment of prompt, adequate, and effective compensation; and

(d) in accordance with due process of law and Article 10.5.1 through 10.5.3.

(a) be paid without delay;

(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (“the date of expropriation”);

(c) not reflect any change in value occurring because the intended expropriation had become known earlier; and

(d) be fully realizable and freely transferable.

3. If the fair market value is denominated in a freely usable currency, the compensation referred to in paragraph 1(c) shall be no less than the fair market value on the date of expropriation, plus interest at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.

4. If the fair market value is denominated in a currency that is not freely usable, the compensation referred to in paragraph 1(c) – converted into the currency of payment at the market rate of exchange prevailing on the date of payment – shall be no less than:

(a) the fair market value on the date of expropriation, converted into a freely usable currency at the market rate of exchange³ prevailing on that date, plus

(b) interest, at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.

ARTICLE 10.7: TRANSFERS

1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers include:

(a) contributions to capital;

(b) profits, dividends, capital gains, and proceeds from the sale of all or any part of the covered investment or from the partial or complete liquidation of the covered investment;

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

(d) payments made under a contract, including a loan agreement;

(e) payments made pursuant to Article 10.5.4 and 10.5.5 and Article 10.6; and

(f) payments arising out of a dispute.

2. Each Party shall permit transfers relating to a covered investment to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.

3. Each Party shall permit returns in kind relating to a covered investment to be made as authorized or specified in a written agreement between the Party and a covered investment or an investor of the other Party.

4. Notwithstanding paragraphs 1 through 3, a Party may prevent a transfer through the equitable, non-discriminatory, and good faith application of its laws relating to:

(a) bankruptcy, insolvency, or the protection of the rights of creditors;

(b) issuing, trading, or dealing in securities, futures, options, or derivatives;

(c) criminal or penal offenses;

(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; or

(e) ensuring compliance with orders or judgments in judicial or administrative proceedings.

1. Neither Party may, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party or of a non-Party in its territory, impose or enforce any requirement or enforce any commitment or undertaking:⁵

(a) to export a given level or percentage of goods or services;

(b) to achieve a given level or percentage of domestic content;

(c) to purchase, use, or accord a preference to goods produced in its territory, or to purchase goods from persons in its territory;

(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment;

(e) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;

(f) to transfer a particular technology, a production process, or other proprietary knowledge to a person in its territory; or

(g) to supply exclusively from the territory of the Party the goods that such investment produces or the services that it supplies to a specific regional market or to the world market.

(a) to achieve a given level or percentage of domestic content;

(b) to purchase, use, or accord a preference to goods produced in its territory, or to purchase goods from persons in its territory;

(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or

(d) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.

3.

(a) Nothing in paragraph 2 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.

(b) Paragraph 1(f) does not apply:

(i) when a Party authorizes use of an intellectual property right in accordance with Article 31 of the TRIPS Agreement, or to measures requiring the disclosure of proprietary information that fall within the scope of, and are consistent with, Article 39 of the TRIPS Agreement;⁶ or

(ii) when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal, or competition authority to remedy a practice determined after judicial or administrative process to be anticompetitive under the Party’s competition laws.⁷

(c) Provided that such measures are not applied in an arbitrary or unjustifiable manner, and provided that such measures do not constitute a disguised restriction on international trade or investment, paragraphs 1(b), (c), and (f), and 2(a) and (b), shall not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:

(i) necessary to secure compliance with laws and regulations that are not inconsistent with this Agreement;

(ii) necessary to protect human, animal, or plant life or health; or

(iii) related to the conservation of living or non-living exhaustible natural resources.

(d) Paragraphs 1(a), (b), and (c), and 2(a) and (b), do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs.

(e) Paragraphs 1(b), (c), (f), and (g), and 2(a) and (b), do not apply to procurement.

(f) Paragraphs 2(a) and (b) do not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.

5. This Article does not preclude enforcement of any commitment, undertaking, or requirement between private parties, where a Party did not impose or require the commitment, undertaking, or requirement.

ARTICLE 10.9: SENIOR MANAGEMENT AND BOARDS OF DIRECTORS

1. Neither Party may require that an enterprise of that Party that is a covered investment appoint to senior management positions natural persons of any particular nationality.

2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment, be of a particular nationality, or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.

ARTICLE 10.10: INVESTMENT AND ENVIRONMENT

Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.

ARTICLE 10.11: DENIAL OF BENEFITS

1. A Party may deny the benefits of this Chapter to an investor of the other Party that is an enterprise of such other Party and to investments of that investor if persons of a non-Party own or control the enterprise and the denying Party:

(a) does not maintain diplomatic relations with the non-Party; or

(b) adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments.

ARTICLE 10.12: NON-CONFORMING MEASURES

1. Articles 10.3, 10.4, 10.8, and 10.9 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 its Schedule to Annex I,

(ii) a regional level of government, as set out by that Party in its Schedule to Annex I, 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 Article 10.3, 10.4, 10.8, or 10.9.

2. Articles 10.3, 10.4, 10.8, and 10.9 do not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors, or activities, as set out in its Schedule to Annex II.

3. Neither Party may, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule to Annex II, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.

4. Articles 10.3 and 10.4 do not apply to any measure that is an exception to, or derogation from, the obligations under Article 15.1.5 (General Provisions) as specifically provided in that Article.

5. Articles 10.3, 10.4, and 10.9 do not apply to:

(a) procurement; or

(b) subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance.

1. Nothing in Article 10.3 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with covered investments, such as a requirement that investors be residents of the Party or that covered investments be legally constituted under the laws or regulations of the Party, provided that such formalities do not materially impair the protections afforded by a Party to investors of the other Party and covered investments pursuant to this Chapter.

2. Notwithstanding Articles 10.3 and 10.4, a Party may require an investor of the other Party, or a covered investment, to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect any confidential business information from any disclosure that would prejudice the competitive position of the investor or the covered investment. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.

Section B: Investor-State Dispute Settlement

ARTICLE 10.14: CONSULTATION AND NEGOTIATION

In the event of an investment dispute, the claimant and the respondent should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures.

ARTICLE 10.15: SUBMISSION OF A CLAIM TO ARBITRATION

1. In the event that a disputing party considers that an investment dispute cannot be settled by consultation and negotiation:

(a) the claimant, on its own behalf, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,

(B) an investment authorization, or

(C) an investment agreement;

and

(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

(b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim

(i) that the respondent has breached

(A) an obligation under Section A,

(B) an investment authorization, or

(C) an investment agreement;

and

(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

(a) the name and address of the claimant and, where a claim is submitted on behalf of an enterprise, the name, address, and place of incorporation of the enterprise;

(b) for each claim, the provision of this Agreement, investment authorization, or investment agreement alleged to have been breached and any other relevant provisions;

(c) the legal and factual basis for each claim; and

(d) the relief sought and the approximate amount of damages claimed.

(a) under the ICSID Convention and the ICSID Rules of Procedures for Arbitration Proceedings, provided that both the respondent and the non-disputing Party are parties to the ICSID Convention;

(b) under the ICSID Additional Facility Rules, provided that either the respondent or the non-disputing Party is a party to the ICSID Convention;

(c) under the UNCITRAL Arbitration Rules; or

(d) if the claimant and respondent agree, to any other arbitration institution or under any other arbitration rules.

(a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General;

(b) referred to in Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General;

(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, are received by the respondent; or

(d) referred to under any other arbitral institution or arbitral rules selected under paragraph 3(d) is received by the respondent.

5. The arbitration rules applicable under paragraph 3, and in effect on the date the claim or claims were submitted to arbitration under this Section, shall govern the arbitration except to the extent modified by this Agreement.

6. The claimant shall provide with the notice of arbitration:

(a) the name of the arbitrator that the claimant appoints; or

(b) the claimant’s written consent for the Secretary-General to appoint that arbitrator.

1. Each Party consents to the submission of a claim to arbitration under this Section in accordance with this Agreement.

2. The consent under paragraph 1 and the submission of a claim to arbitration under this Section shall satisfy the requirements of:

(a) Chapter II of the ICSID Convention (Jurisdiction of the Centre) and the ICSID Additional Facility Rules for written consent of the parties to the dispute; and

(b) Article II of the New York Convention for an “agreement in writing.”

ARTICLE 10.17: CONDITIONS AND LIMITATIONS ON CONSENT OF EACH PARTY

1. No claim may be submitted to arbitration under this Section if more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under Article 10.15.1 and knowledge that the claimant (for claims brought under Article 10.15.1(a)) or the enterprise (for claims brought under Article 10.15.1(b)) has incurred loss or damage.

2. No claim may be submitted to arbitration under this Section unless:

(a) the claimant consents in writing to arbitration in accordance with the procedures set out in this Agreement; and

(b) the notice of arbitration is accompanied,

(i) for claims submitted to arbitration under Article 10.15.1(a), by the claimant’s written waiver, and

(ii) for claims submitted to arbitration under Article 10.15.1(b), by the claimant’s and the enterprise’s written waivers

of any right to initiate or continue before any administrative tribunal or court under the law of either Party, or other dispute settlement procedures, any proceeding with respect to any measure alleged to constitute a breach referred to in Article 10.15.

ARTICLE 10.18: SELECTION OF ARBITRATORS

1. Unless the disputing parties agree otherwise, the tribunal shall comprise three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.

2. The Secretary-General shall serve as appointing authority for an arbitration under this Section.

3. If a tribunal has not been constituted within 75 days from the date that a claim is submitted to arbitration under this Section, the Secretary-General, on the request of a disputing party, shall appoint, in his or her discretion, the arbitrator or arbitrators not yet appointed.

 4. For purposes of Article 39 of the ICSID Convention and Article 7 of Schedule C to the ICSID Additional Facility Rules, and without prejudice to an objection to an arbitrator on a ground other than nationality:

(a) the respondent agrees to the appointment of each individual member of a tribunal established under the ICSID Convention or the ICSID Additional Facility Rules;

(b) a claimant referred to in Article 10.15.1(a) may submit a claim to arbitration under this Section, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant agrees in writing to the appointment of each individual member of the tribunal; and

(c) a claimant referred to in Article 10.15.1(b) may submit a claim to arbitration under this Section, or continue a claim, under the ICSID Convention or the ICSID Additional Facility Rules, only on condition that the claimant and the enterprise agree in writing to the appointment of each individual member of the tribunal.

1. The disputing parties may agree on the legal place of any arbitration under the arbitral rules applicable under Article 10.15.3. If the disputing parties fail to reach agreement, the tribunal shall determine the place in accordance with the applicable arbitral rules, provided that the place shall be in the territory of a State that is a party to the New York Convention.

2. The non-disputing Party may make oral and written submissions to the tribunal regarding the interpretation of this Agreement.

3. The tribunal shall have the authority to accept and consider amicus curiae submissions from a person or entity that is not a disputing party.

4. Without prejudice to a tribunal’s authority to address other objections as a preliminary question, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant may be made under Article 10.25.

(a) Such objection shall be submitted to the tribunal as soon as possible after the tribunal is constituted, and in no event later than the date the tribunal fixes for the respondent to submit its counter-memorial (or, in the case of an amendment to the notice of arbitration, the date the tribunal fixes for the respondent to submit its response to the amendment).

(b) On receipt of an objection under this paragraph, the tribunal shall suspend any proceedings on the merits, establish a schedule for considering the objection consistent with any schedule it has established for considering any other preliminary question, and issue a decision or award on the objection, stating the grounds therefor.

(c) In deciding an objection under this paragraph, the tribunal shall assume to be true claimant’s factual allegations in support of any claim in the notice of arbitration (or any amendment thereof) and, in disputes brought under the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules. The tribunal may also consider any relevant facts not in dispute.

(d) The respondent does not waive any objection as to competence or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph or make use of the expedited procedure set out in paragraph 5.

6. When it decides a respondent’s objection under paragraph 4 or 5, the tribunal may, if warranted, award to the prevailing disputing party reasonable costs and attorney’s fees incurred in submitting or opposing the objection. In determining whether such an award is warranted, the tribunal shall consider whether either the claimant’s claim or the respondent’s objection was frivolous, and shall provide the disputing parties a reasonable opportunity to comment.

7. A respondent may not assert as a defense, counterclaim, right of set-off, or for any other reason that the claimant has received or will receive indemnification or other compensation for all or part of the alleged damages pursuant to an insurance or guarantee contract.

8. The tribunal may order an interim measure of protection to preserve the rights of a disputing party, or to ensure that the tribunal’s jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party or to protect the tribunal’s jurisdiction. The tribunal may not order attachment or enjoin the application of a measure alleged to constitute a breach referred to in Article 10.15. For purposes of this paragraph, an order includes a recommendation.

9.

(a) In any arbitration conducted under this Section, at the request of a disputing party, a tribunal shall, before issuing a decision or award on liability, transmit its proposed decision or award to the disputing parties and to the non-disputing Party. Within 60 days after the tribunal transmits its proposed decision or award, the disputing parties may submit written comments to the tribunal concerning any aspect of its proposed decision or award. The tribunal shall consider any such comments and issue its decision or award not later than 45 days after the expiration of the 60-day comment period.

(b) Subparagraph (a) shall not apply in any arbitration conducted pursuant to this Section for which an appeal has been made available pursuant to paragraph 10 or Annex 10-D.

10. If a separate regional or multilateral agreement concerning investment enters into force between the Parties that establishes an appellate body for purposes of reviewing awards rendered by tribunals constituted pursuant to international trade or investment arrangements to hear investment disputes, the Parties shall strive to reach an agreement that would have such appellate body review awards rendered under Article 10.25 in arbitrations commenced after the regional or multilateral agreement enters into force between the Parties.

ARTICLE 10.20: TRANSPARENCY OF ARBITRAL PROCEEDINGS

1. Subject to paragraphs 2 and 4, the respondent shall, after receiving the following documents, promptly transmit them to the non-disputing Party and make them available to the public:

(a) the notice of intent;

(b) the notice of arbitration;

(c) pleadings, memorials, and briefs submitted to the tribunal by a disputing party and any written submissions submitted pursuant to Article 10.19.2 and 10.19.3 and Article 10.24;

(d) minutes or transcripts of hearings of the tribunal, where available; and

(e) orders, awards, and decisions of the tribunal.

3. Nothing in this Section requires a respondent to disclose protected information or to furnish or allow access to information that it may withhold in accordance with Article 21.2 (Essential Security) or Article 21.5 (Disclosure of Information).

4. Any protected information that is submitted to the tribunal shall be protected from disclosure in accordance with the following procedures:

(a) Subject to subparagraph (d), neither the disputing parties nor the tribunal shall disclose to the non-disputing Party or to the public any protected information where the disputing party that provided the information clearly designates it in accordance with subparagraph (b);

(b) Any disputing party claiming that certain information constitutes protected information shall clearly designate the information at the time it is submitted to the tribunal;

(c) A disputing party shall, at the time it submits a document containing information claimed to be protected information, submit a redacted version of the document that does not contain the information. Only the redacted version shall be provided to the non-disputing Party and made public in accordance with paragraph 1; and

(d) The tribunal shall decide any objection regarding the designation of information claimed to be protected information. If the tribunal determines that such information was not properly designated, the disputing party that submitted the information may (i) withdraw all or part of its submission containing such information, or (ii) agree to resubmit complete and redacted documents with corrected designations in accordance with the tribunal’s determination and subparagraph (c). In either case, the other disputing party shall, whenever necessary, resubmit complete and redacted documents which either remove the information withdrawn under (i) by the disputing party that first submitted the information or redesignate the information consistent with the designation under (ii) of the disputing party that first submitted the information.

ARTICLE 10.21: GOVERNING LAW

1. Subject to paragraph 3, when a claim is submitted under Article 10.15.1(a)(i)(A) or Article 10.15.1(b)(i)(A), the tribunal shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.

2. Subject to paragraph 3 and the other terms of this Section, when a claim is submitted under Article 10.15.1(a)(i)(B) or (C), or Article 10.15.1(b)(i)(B) or (C), the tribunal shall apply:

(a) the rules of law specified in the pertinent investment authorization or investment agreement, or as the disputing parties may agree otherwise; or

(b) if the rules of law have not been specified or agreed otherwise:

(i) the law of the respondent, including its rules on the conflict of laws;⁸ and

(ii) such rules of international law as may be applicable.

3. A decision of the Joint Committee declaring its interpretation of a provision of this Agreement under Article 19.2 (Joint Committee) shall be binding on a tribunal, and any decision or award issued by a tribunal must be consistent with that decision.

ARTICLE 10.22: INTERPRETATION OF ANNEXES

1. Where a respondent asserts as a defense that the measure alleged to be a breach is within the scope of an entry set out in Annex I or Annex II, the tribunal shall, on request of the respondent, request the interpretation of the Joint Committee on the issue. The Joint Committee shall submit in writing any decision declaring its interpretation under Article 19.2 (Joint Committee) to the tribunal within 60 days of delivery of the request.

2. A decision issued by the Joint Committee under paragraph 1 shall be binding on the tribunal, and any decision or award issued by the tribunal must be consistent with that decision. If the Joint Committee fails to issue such a decision within 60 days, the tribunal shall decide the issue.

Article 10.23: EXPERT REPORTS

Without prejudice to the appointment of other kinds of experts where authorized by the applicable arbitration rules, a tribunal, at the request of a disputing party or, unless the disputing parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on any factual issue concerning environmental, health, safety, or other scientific matters raised by a disputing party in a proceeding, subject to such terms and conditions as the disputing parties may agree.

ARTICLE 10.24: CONSOLIDATION

1. Where two or more claims have been submitted separately to arbitration under Article 10.15.1 and the claims have a question of law or fact in common and arise out of the same events or circumstances, any disputing party may seek a consolidation order in accordance with the agreement of all the disputing parties sought to be covered by the order or the terms of paragraphs 2 through 10.

2. A disputing party that seeks a consolidation order under this Article shall deliver, in writing, a request to the Secretary-General and to all the disputing parties sought to be covered by the order and shall specify in the request:

(a) the names and addresses of all the disputing parties sought to be covered by the order;

(b) the nature of the order sought; and

(c) the grounds on which the order is sought.

4. Unless all the disputing parties sought to be covered by the order agree otherwise, a tribunal established under this Article shall comprise three arbitrators:

(a) one arbitrator appointed by agreement of the claimants;

(b) one arbitrator appointed by the respondent; and

(c) the presiding arbitrator appointed by the Secretary-General, provided, however, that the presiding arbitrator shall not be a national of either Party.

6. Where a tribunal established under this Article is satisfied that two or more claims that have been submitted to arbitration under Article 10.15.1 have a question of law or fact in common, and arise out of the same events or circumstances, the tribunal may, in the interest of fair and efficient resolution of the claims, and after hearing the disputing parties, by order:

(a) assume jurisdiction over, and hear and determine together, all or part of the claims;

(b) assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others; or

(c) instruct a tribunal previously established under Article 10.18 to assume jurisdiction over, and hear and determine together, all or part of the claims, provided that

(i) that tribunal, at the request of any claimant not previously a disputing party before that tribunal, shall be reconstituted with its original members, except that the arbitrator for the claimants shall be appointed pursuant to paragraphs 4(a) and 5; and

(ii) that tribunal shall decide whether any prior hearing shall be repeated.

(a) the name and address of the claimant;

(b) the nature of the order sought; and

(c) the grounds on which the order is sought.

8. A tribunal established under this Article shall conduct its proceedings in accordance with the UNCITRAL Arbitration Rules, except as modified by this Section.

9. A tribunal established under Article 10.18 shall not have jurisdiction to decide a claim, or a part of a claim, over which a tribunal established or instructed under this Article has assumed jurisdiction.

10. On application of a disputing party, a tribunal established under this Article, pending its decision under paragraph 6, may order that the proceedings of a tribunal established under Article 10.18 be stayed, unless the latter tribunal has already adjourned its proceedings.

ARTICLE 10.25: AWARDS

1. Where a tribunal makes a final award against a respondent, the tribunal may award, separately or in combination, only:

(a) monetary damages and interest, as appropriate; and

(b) restitution of property, in which case the award shall provide that the respondent may pay monetary damages and interest, as appropriate, in lieu of restitution.

A tribunal may also award costs and attorney’s fees in accordance with this Section and the applicable arbitration rules.

2. Subject to paragraph 1, where a claim is submitted to arbitration under Article 10.15.1(b):

(a) an award of restitution of property shall provide that restitution be made to the enterprise;

(b) an award of monetary damages and interest, as appropriate, shall provide that the sum be paid to the enterprise; and

(c) the award shall provide that it is made without prejudice to any right that any person may have in the relief under applicable domestic law.

4. An award made by a tribunal shall have no binding force except between the disputing parties and in respect of the particular case.

5. Subject to paragraph 6 and the applicable review procedure for an interim award, a disputing party shall abide by and comply with an award without delay.

6. A disputing party may not seek enforcement of a final award until:

(a) in the case of a final award made under the ICSID Convention

(i) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award; or

(ii) revision or annulment proceedings have been completed; and

(b) in the case of a final award under the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules, or the rules selected pursuant to Article 10.15.3(d)

(i) 90 days have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside, or annul the award; or

(ii) a court has dismissed or allowed an application to revise, set aside, or annul the award and there is no further appeal.

8. If the respondent fails to abide by or comply with a final award, on delivery of a request by the non-disputing Party, a panel shall be established under Article 20.7 (Establishment of Panel). The requesting Party may seek in such proceedings:

(a) a determination that the failure to abide by or comply with the final award is inconsistent with the obligations of this Agreement; and

(b) in accordance with Article 20.9.2 (Panel Report), a recommendation that the respondent abide by or comply with the final award.

9. A disputing party may seek enforcement of an arbitration award under the ICSID Convention or the New York Convention regardless of whether proceedings have been taken under paragraph 8.

10. A claim that is submitted to arbitration under this Section shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention.

ARTICLE 10.26: SERVICE OF DOCUMENTS

Delivery of notice and other documents on a Party shall be made to the place named for that Party in Annex 10-C.

Section C: Definitions

ARTICLE 10.27: DEFINITIONS

For purposes of this Chapter:

Centre means the International Centre for Settlement of Investment Disputes (“ICSID”) established by the ICSID Convention;

claimant means an investor of a Party that is a party to an investment dispute with the other Party;

disputing parties means the claimant and the respondent;

disputing party means either the claimant or the respondent;

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

enterprise of a Party means an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there;

freely usable currency means “freely usable currency” as determined by the International Monetary Fund under its Articles of Agreement;

ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;

ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, March 18, 1965;

investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:

(a) an enterprise;

(b) shares, stock, and other forms of equity participation in an enterprise;

(c) bonds, debentures, other debt instruments, and loans;⁹

(d) futures, options, and other derivatives;

(e) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts;

(f) intellectual property rights;

(g) licenses, authorizations, permits, and similar rights conferred pursuant to domestic law;^{10 11} and

(h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens, and pledges;

investment agreement means a written agreement¹² that takes effect on or after the date of entry into force of this Agreement between a national authority¹³ of a Party and a covered investment or an investor of the other Party that grants the covered investment or investor rights:

(a) with respect to natural resources or other assets that a national authority controls; and

(b) upon which the covered investment or the investor relies in establishing or acquiring a covered investment other than the written agreement itself;

investment authorization ¹⁴ means an authorization that the foreign investment authority of a Party grants to a covered investment or an investor of the other Party;

investor of a non-Party means, with respect to a Party, an investor that concretely attempts to make, is making, or has made an investment in the territory of that Party, that is not an investor of either Party;

investor of a Party means a Party or state enterprise thereof, or a national or an enterprise 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 York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;

non-disputing Party means the Party that is not a party to an investment dispute;

protected information means confidential business information or information that is privileged or otherwise protected from disclosure under a Party’s law;

respondent means the Party that is a party to an investment dispute;

Secretary-General means the Secretary-General of ICSID; and

UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law.

ANNEX 10-A
CUSTOMARY INTERNATIONAL LAW

The Parties confirm their shared understanding that “customary international law” generally and as specifically referenced in Article 10.5 and Annex 10-B results from a general and consistent practice of States that they follow from a sense of legal obligation. With regard to Article 10.5, the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interests of aliens.

ANNEX 10-B
EXPROPRIATION

The Parties confirm their shared understanding that:

1. Article 10.6.1 is intended to reflect customary international law concerning the obligation of States with respect to expropriation.

2. An action or a series of actions by a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right or property interest in an investment.

3. Article 10.6.1 addresses two situations. The first is direct expropriation, where an investment is nationalized or otherwise directly expropriated through formal transfer of title or outright seizure.

4. The second situation addressed by Article 10.6.1 is indirect expropriation, where an action or series of actions by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.

(a) The determination of whether an action or series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by- case, fact-based inquiry that considers, among other factors:

(i) the economic impact of the government action, although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;

(ii) the extent to which the government action interferes with distinct, reasonable investment-backed expectations; and

(iii) the character of the government action.

(b) Except in rare circumstances, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.

ANNEX 10-C
SERVICE OF DOCUMENTS ON A PARTY UNDER SECTION B

Morocco

Notices and other documents in disputes under Section B shall be served on Morocco by delivery to:

Directorate for Legal Affairs and Treaties
Ministry of Foreign Affairs and Cooperation
Rabat
Kingdom of Morocco

United States

Notices and other documents in disputes under Section B shall be served on the United States by delivery to:

Executive Director (L/EX)
Office of the Legal Adviser
Department of State
Washington, D.C. 20520
United States of America

ANNEX 10-D
POSSIBILITY OF A BILATERAL APPELLATE MECHANISM

Within three years after the date of entry into force of this Agreement, the Parties shall consider whether to establish a bilateral appellate body or similar mechanism to review awards rendered under Article 10.25 in arbitrations commenced after they establish the appellate body or similar mechanism.

ANNEX 10-E
SUBMISSION OF A CLAIM TO ARBITRATION

Morocco

If an investor of the United States, or an enterprise of Morocco that is a juridical person that the investor owns or controls directly or indirectly, initiates proceedings before a court of Morocco alleging a breach by Morocco of an obligation under Section A, an investment authorization, or an investment agreement, the investor may not submit that alleged breach to arbitration under Section B either:

(a) on its own behalf under Article 10.15.1(a), or

(b) on behalf of the enterprise under Article 10.15.1(b),

CHAPTER ELEVEN
CROSS-BORDER TRADE IN SERVICES

ARTICLE 11.1: SCOPE AND COVERAGE

1. This Chapter applies to measures adopted or maintained by a Party affecting cross-border
trade in services by service suppliers of the other Party. Such measures include
measures affecting:

(a) the production, distribution, marketing, sale, and delivery of a service;

(b) the purchase or use of, or payment for, a service;

(c) the access to and use of distribution, transport, or telecommunications networks and services in connection with the supply of a service;

(d) the presence in its territory of a service supplier of the other Party; and

(e) the provision of a bond or other form of financial security as a condition for the supply of a service.

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

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

4. This Chapter does not apply to:

(a) financial services as defined in Article 12.19 (Definitions), except as provided in paragraph 3;

(b) air services, including domestic and international air transportation services, whether scheduled or non-scheduled, and related services in support of air services, other than:

(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service; and

(ii) specialty air services;

(c) government procurement; or

(d) subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance.

6. This Chapter does not apply to services supplied in the exercise of governmental authority within the territory of each respective Party.

ARTICLE 11.2: NATIONAL TREATMENT

1. Each Party shall accord to service suppliers of the other Party treatment no less favorable than that it accords, in like circumstances, to its own service suppliers.

2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level of government to service suppliers of the Party of which it forms a part.

ARTICLE 11.3: MOST-FAVORED-NATION TREATMENT

Each Party shall accord to service suppliers of the other Party treatment no less favorable than that it accords, in like circumstances, to service suppliers of a non-Party.

ARTICLE 11.4: MARKET ACCESS

1. Neither Party may adopt or maintain, 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 service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;

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

(iii) the total number of service operations or on the total quantity of services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;² or

(iv) the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific 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 service supplier may supply a service.

Neither Party may require a service supplier of the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.

ARTICLE 11.6: NON-CONFORMING MEASURES

1. Articles 11.2, 11.3, 11.4, and 11.5 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 its Schedule to Annex I;

(ii) a regional level of government, as set out by that Party in its Schedule to Annex I; 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 11.2, 11.3, 11.4, or 11.5.

2. Articles 11.2, 11.3, 11.4, and 11.5 do not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities set out in its Schedule to Annex II.

3. Annex 11-A sets out specific commitments by the Parties.

ARTICLE 11.7: DOMESTIC REGULATION

1. Where a Party requires authorization for the supply of a service, the Party’s competent authorities shall, within a reasonable period after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of the Party shall provide, without undue delay, information concerning the status of the application. This obligation shall not apply to authorization requirements that are within the scope of Article 11.6.2.

2. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards, and licensing requirements do not constitute unnecessary barriers to trade in services, each Party shall endeavor to ensure, as appropriate for individual sectors, that such measures are:

(a) based on objective and transparent criteria, such as competence and the ability to supply the service;

(b) not more burdensome than necessary to ensure the quality of the service; and

(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.

3. If the results of the negotiations related to Article VI:4 of GATS (or the results of any similar negotiations undertaken in other multilateral fora in which both Parties participate) enter into effect, this Article shall be amended, as appropriate, after consultations between the Parties, to bring those results into effect under this Agreement. The Parties agree to coordinate on such negotiations, as appropriate.

ARTICLE 11.8: TRANSPARENCY IN DEVELOPMENT AND APPLICATION OF REGULATIONS

Further to Chapter Eighteen (Transparency):

1. Each Party shall establish or maintain appropriate mechanisms for responding to inquiries from interested persons regarding its regulations relating to the subject matter of this Chapter.^{3 4}

2. If a Party does not provide advance notice of and opportunity for comment on proposed regulations relating to the subject matter of this Chapter pursuant to Article 18.1.2 (Publication), it shall, to the extent possible, address in writing the reasons therefore.

3. At the time it adopts final regulations relating to the subject matter of this Chapter, a Party shall, to the extent possible, including on request, address in writing substantive comments received from interested persons with respect to the proposed regulations.

4. To the extent possible, each Party shall allow reasonable time between publication of final regulations relating to the subject matter of this Chapter and their effective date.

ARTICLE 11.9: MUTUAL RECOGNITION

1. For the purposes of the fulfillment, in whole or in part, of its standards or criteria for the authorization, licensing, or certification of services suppliers, and subject to the requirements of paragraph 4, a Party may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular country, including the other Party and non-Parties. Such recognition, which may be achieved through harmonization or otherwise, may be based on an agreement or arrangement with the country concerned or may be accorded autonomously.

2. Where a Party recognizes, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted in the territory of a non-Party, nothing in Article 11.3 shall be construed to require the Party to accord such recognition to the education or experience obtained, requirements met, or licenses or certifications granted in the territory of the other Party.

3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for the other Party, if the other Party is interested, to negotiate its accession to such an agreement or arrangement or to negotiate a comparable one with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for the other Party to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Party’s territory should be recognized.

4. Neither Party may accord recognition in a manner that would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization, licensing, or certification of services suppliers, or a disguised restriction on trade in services.

5. Annex 11-B applies to measures adopted or maintained by a Party relating to the licensing or certification of professional service suppliers as set out in that Annex.

ARTICLE 11.10: TRANSFERS AND PAYMENTS

1. Each Party shall permit all transfers and payments relating to the cross-border supply of services to be made freely and without delay into and out of its territory.

2. Each Party shall permit such transfers and payments relating to the cross-border supply of services to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.

3. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer or payment through the equitable, non-discriminatory, and good faith application of its laws relating to:

(a) bankruptcy, insolvency, or the protection of the rights of creditors;

(b) issuing, trading, or dealing in securities, futures, options, or derivatives;

(c) financial reporting or record keeping of transfers, when necessary to assist law enforcement or financial regulatory authorities;

(d) criminal or penal offenses; or

(e) ensuring compliance with orders or judgments in judicial or administrative proceedings.

ARTICLE 11.11: DENIAL OF BENEFITS

1. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service is being supplied by an enterprise owned or controlled by persons of a non-Party, and the denying Party:

(a) does not maintain diplomatic relations with the non-Party, or

(b) adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise.

2. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service is being supplied by an enterprise that has no substantial business activities in the territory of the other Party and the enterprise is owned or controlled by persons of a non-Party or of the denying Party.

ARTICLE 11.12: IMPLEMENTATION

The Parties shall meet annually, and as otherwise agreed, on any issues of mutual interest arising from the implementation of this Chapter.

ARTICLE 11.13: DEFINITIONS

For purposes of this Chapter:

cross-border trade in services or cross-border supply of services means the supply of a 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 a Party in the territory of the other Party;

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

enterprise of a Party means an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there;

professional services means services, the supply of which requires specialized post-secondary education, or equivalent training or experience, and for which the right to practice is granted or restricted by a Party, but does not include services supplied by trades-persons or vessel and aircraft crew members;

service supplied in the exercise of governmental authority means any service that is supplied neither on a commercial basis, nor in competition with one or more service suppliers;

service supplier of a Party means a person of that Party that seeks to supply or supplies a service;⁵ and

specialty air services means any non-transportation air services, such as aerial fire-fighting, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial, and inspection services.

ANNEX 11-A
EXPRESS DELIVERY SERVICES

 1. The Parties affirm that measures affecting express delivery services are subject to the provisions of this Agreement.

2. For purposes of this Agreement, express delivery services means the collection, transport, and delivery of documents, printed matter, parcels, goods, or other items on an expedited basis, while tracking and maintaining control of these items throughout the supply of the service. Express delivery services do not include (1) air transport services, (2) services supplied in the exercise of governmental authority, or (3) maritime transport services.

3. The Parties express their desire to maintain at least the level of market openness for express delivery services they provide on the date of signature of this Agreement.

4. Morocco shall not adopt any new restriction on the supply of express delivery services after the date of signature of this Agreement.

5. International express delivery services, and domestic express delivery services for letters and other materials in excess of one kilogram, are not within the scope of Morocco’s postal monopoly. Morocco confirms that it does not intend to direct revenues from its postal monopoly to benefit these services.

ANNEX 11-B
PROFESSIONAL SERVICES

DEVELOPMENT OF PROFESSIONAL STANDARDS
1. The Parties shall encourage the relevant bodies in their respective territories to develop mutually acceptable standards and criteria for licensing and certification of professional service suppliers and to provide recommendations on mutual recognition to the Joint Committee.

2. The standards and criteria referred to in paragraph 1 may be developed with regard to the following matters:

(a) education – accreditation of schools or academic programs;

(b) examinations – qualifying examinations for licensing;

(c) experience – length and nature of experience required for licensing;

(d) conduct and ethics – standards of professional conduct and the nature of disciplinary action for non-conformity with those standards;

(e) professional development and re-certification – continuing education and ongoing requirements to maintain professional certification;

(f) scope of practice – extent of, or limitations on, permissible activities;

(g) local knowledge – requirements for knowledge of such matters as local laws, regulations, language, geography, or climate; and

(h) consumer protection – including alternatives to residency requirements, such as bonding, professional liability insurance, and client restitution funds, to provide for the protection of consumers.

3. On receipt of a recommendation referred to in paragraph 1, the Joint Committee shall review the recommendation within a reasonable period to determine whether it is consistent with this Agreement. Based on the Joint Committee’s review, each Party shall encourage its respective competent authorities, where appropriate, to implement the recommendation within a mutually agreed time.

Temporary Licensing

4. Where the Parties agree, each Party shall encourage the relevant bodies in its territory to develop procedures for the temporary licensing of professional service suppliers of the other Party.

Review

5. At least once every three years, or annually at either Party’s request, the Joint Committee shall review the implementation of this Annex.

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

Chapter 1

¹ For greater certainty, paragraph 1 applies to prohibitions or restrictions on the importation of remanufactured products.

Chapter 4

 ¹ For greater certainty, when the good is a yarn, fabric, or group of fibers, the “component of the good that determines the tariff classification of the good” is all of the fibers in the yarn, fabric, or group of fibers.

Chapter 7

¹ A Party may satisfy this obligation through public consultations.

Chapter 10

¹ Article 10.5 shall be interpreted in accordance with Annex 10-A.

² Article 10.6 shall be interpreted in accordance with Annexes 10-A and 10-B.

³ For purposes of this paragraph and Article 10.7.2, Morocco’s foreign exchange system in effect on the date of signature of this Agreement yields an exchange rate comparable to a “market rate of exchange.”

⁴ For greater certainty, the reference to the TRIPS Agreement in paragraph 5 includes any waiver in force between the Parties of any provision of that agreement granted by WTO Members in accordance with the WTO Agreement.

⁵ For greater certainty, a condition for the receipt or continued receipt of an advantage referred to in paragraph 2 does not constitute a “commitment or undertaking” for the purposes of paragraph 1.

⁶ For greater certainty, the references to the TRIPS Agreement in paragraph 3(b)(i) include any waiver in force between the Parties of any provision of that agreement granted by WTO Members in accordance with the WTO Agreement.

⁷ The Parties recognize that a patent does not necessarily confer market power.

⁸ The law of the respondent means the law that a domestic court or tribunal of proper jurisdiction would apply in the same case.

⁹ Some forms of debt, such as bonds, debentures, and long-term notes, are more likely to have the characteristics of an investment, while other forms of debt, such as claims to payment that are immediately due and result from the sale of goods or services, are less likely to have such characteristics.

¹⁰ Whether a particular type of license, authorization, permit, or similar instrument (including a concession, to the extent that it has the nature of such an instrument) has the characteristics of an investment depends on such factors as the nature and extent of the rights that the holder has under the law of the Party. Among the licenses, authorizations, permits, and similar instruments that do not have the characteristics of an investment are those that do not create any rights protected under domestic law. For greater certainty, the foregoing is without prejudice to whether any asset associated with the license, authorization, permit, or similar instrument has the characteristics of an investment.

¹¹ The term “investment” does not include an order or judgment entered in a judicial or administrative action.

¹² “Written agreement” refers to an agreement in writing, executed by both parties, that creates an exchange of rights and obligations, binding on both parties under the law applicable under Article 10.21.2. For greater certainty, (a) a unilateral act of an administrative or judicial authority, such as a permit, license, or authorization issued by a Party solely in its regulatory capacity or a decree, order, or judgment; and (b) an administrative or judicial consent decree or order, shall not be considered a written agreement.

¹³ For purposes of this definition, “national authority” means an authority at the central level of government.

¹⁴ For greater certainty, actions taken by a Party to enforce laws of general application, such as competition laws, are not encompassed within this definition.

Chapter 11

¹ The Parties understand that nothing in this Chapter, including this paragraph, shall be subject to investor-state dispute settlement pursuant to Section B of Chapter Ten (Investment).

² This paragraph does not cover measures of a Party that limit inputs for the supply of services.

³ For greater certainty, such regulations include regulations establishing or applying to licensing authorization or criteria.

⁴ Morocco’s implementation of its obligation to establish appropriate mechanisms for small administrative agencies may need to take into account resource and budget constraints.

⁵ The Parties understand that for the purposes of Articles 11.2 and 11.3, “service suppliers” has the same meaning as “services and service suppliers” as used in Articles II and XVII of GATS.