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 AGREEMENT ON COMPREHENSIVE ECONOMIC PARTNERSHIPAMONG MEMBER STATES OF THE ASSOCIATION

OF SOUTHEAST ASIAN NATIONS AND JAPAN

Table  of Contents

Preamble

Chapter 1 General Provisions

Article 1    General Definitions 

Article 2    Principles 

Article 3    Objectives 

Article 4    Transparency 

Article 5    Confidentiality 

Article 6    Taxation 

Article 7   General Exceptions 

Article 8   Security Exceptions 

Article 9   Non-governmental Bodies 

Article 10   Relation to Other Agreements 

Article 11     Joint Committee 

Article 12       Communications

Chapter 2       Trade in Goods

Article 13   Definitions  

Article 14    Classification of Goods

Article 15     National Treatment on Internal Taxation and Regulation 

Article 16  Elimination or Reduction of Customs Duties 

Article 17  Customs Valuation 

Article 18  Non-tariff Measures 

Article 19  Modification of Concessions 

Article 20  Safeguard Measures

Article 21 Measures to Safeguard the Balance of Payments 

Article 22        Customs Procedures

Chapter 3        Rules of Origin

Article 23    Definitions

Article 24    Originating Goods

Article 25        Goods Wholly Obtained or Produced Goods Not Wholly Obtained or Produced

Article 26

Article 27   Calculation of Regional Value Content

Article 28   De Minimis

Article 29  Accumulation

Article 30  Non-qualifying   Operations

Article 31  Direct Consignment

Article 32 Packing Materials and Containers

Article 33     Accessories,  Spare  Parts, Tools and Instructional  or  Other  Information

Materials

Article 34            Indirect Materials

Article 35            Identical and Interchangeable  Materials

Article 36            Operational Certification Procedures

Article 37   Sub-Committee on Rules of Origin

Chapter 4   Sanitary and Phytosanitary Measures

Article 38           Scope

Article 39          Reaffirmation of Rights and Obligations

Article 40   Sub-Committee  on Sanitary and  Phytosanitary Measures 

Article 41          Enquiry Points

Article 42          Non-application of Chapter 9

Chapter 5    Standards, Techri,;al feguiatio,,s 3nd Conformity A55essmerit f-'rocedui e:S

Article 43            Objectives

Article 44           Scope

Article 45           Reaffirmation  of  Rights  and Obligations

Article 46                Cooperation

Article  47                Enquiry Points

Article 48   Sub-Committee on Standards, Technical Regulations and Conformity Assessment

Procedures

Article 49               Non-application of Chapter 9

Chapter 6         Trade in Services Article 50              Trade in Services

Chapter 7  Investment

Article 51              Investment

Chapter 8        Economic  Coperation Article 52        Basic Principles

A:iisle 53        Fields of Economic Cooperation

Article 54        Sub-Committee on Economic Cooperation

Article 55            Work Programmes for Economic Cooperation 

Article 56        Resources for Economic Cooperation

Article 57                        Implementation of Economic Cooperation Activities 

Article 58       Non-application of Chapter 9

Chapter 9          Settlement of Disputes          

Article 59       Definitions

Article 60      Scope  of Application

Article 61      Contact Points

Article 52       Consul\ations

Article 63           Good Offices, Conc1i1ation and Mediation

Article 64      Establishment  of Arbitral  Tribunals

Article 65      Composition  of Arbitral Trib,.mals

Article 66      Third Parties

Article 67      Functions  of Arbitral Tribunals

Article 68     Proceedings  of Arbitral  Tribunals

Article 69     Draft Award  and Award

Article 70         Suspension  and Termination of Proceedings 

Article 71    Implementation  of Award

Article 72         Compensation and the Suspension of Concessions 

Article 73    Expenses

Chapter  10       Final Provision

Article 74        Table  of Contents,  Headings and Subheadings 

Article 75   Review

Article 76   Annexes and Notes

Article 77  Amendments

Article 78  Depositary

Article 79  Entry into Force

Article 80  Withdrawal  and Termination

Annex 1         Schedules for the Elimination or Reduction of Customs Duties 

Annex 2     Product  Specific Rules

Annex 3     Information  Technology  Products

Annex 4    Operational   Certification  Procedures

Annex 5  Working Programs for Economic Cooperation 

Preamble

The Governments of Brunet Darussa!am,  t:1e  l<ingdcm  of  Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist  Republic of Viet Nam, Member States of the Association of Southeast Asian Nations (hereinafter referred to as " ASEAN"),  and Japan;

RECALLING the Joint Declaration  signed  in  Phnom  Penh,  Cambodia on 5 November 2002 and  the  Framework  for  Comprehensive  Economic Partnership between the Association of Southeast Asian Nations and Japan signed in Bali, Indonesia on 8 October    2003;

DESIRING to deepen the relationship between  ASEAN  and  Japan, which is built on mutual confidence and trust in wide-ranging fields covering not only political and economic areas, but also social and  cultural areas;

INSPIRED by the  continuous  development  of  ASEAN  through economic activities among ASEAN Member States and Japan, and the significant progress in the relationship  between  ASEAN  and  Japan which has spanned thirty years of economic ties that have been  expanding over a wide range of  areas;

CONFIDENT that a comprehensive economic partnership between ASEAN and Japan (hereinafter referred to as "AJCEP") will strengthen their economic ties, create a larger . qnd more efficient market  with greater opportunities and larger economies of scale, and enhance their attractiveness  to capital and talent, for  mutual benefit;

RECOGNIS!NG thc1t multi-layered and multi-faceted bilateral and regional efforts towards strengthening economic relations among ASEAN Member States and Japan will facilitate the realisation of such comprehensive economic partnership;

SHARING the view that such comprehensive economic partnership  should benefit from,  and  be  complementary  to,  the  economic integration  and  integrity of ASEAN;

RECOGNISING further the various stages of economic development among the ASEAN  Member States;

CONFIDENT that this Agreement, covering areas such  as  trade  in  goods and services, and investment, would serve as  an  important building block towards  economic  integration in East Asia;

RECALLING Art:cie XXIV of the Gener;::Jl ,t\greernsnt O'l Tariffs  and Traae 1994 and Article V of the General  Agreement  on  Trade  in Services in Annex 1A and Annex 1B, respectively, to the Marrakesh Agreement Establishing the World Trade Organization, done  at Marrakesh,     15    April    1994    (hereinafter    referred    to    as    "WTO Agreement"):

RECOGNISING the role of regional trade agreements as a catalyst in accelerating  regional  and  global  liberalisation  in  the  framework  of the multilateral trading  system;

REAFFIRMING the rights and obligations of each Party under the WTO Agreement   and   multilateral,   regional   and   bilateral   agreements and arrangements; and

DETERMINDED      to      establish      a      legal      framework      for      such comprehensive  economic  partnership among the  Parties,

HAVE AGREED  as follows:

Chapter 1

General Provisions

Article 1 General Definitions

For the purposes of this Agreement,  the  term:

(a)                        "ASEAN Member States" means Brunei Darussalam, the rG,1gdor , of Cambodia, the Republic of  Indonesia,  the  Lao People's Democratic Republic,  M8\3ySia, the  L.J nicn of Myanmar, the Republic of the Philippines,  the  Republic of  Singapore,  the  Kingdom  of Thailand  and  the Socialist

Republic of Viet  Nam collectively;

(b)                        "customs authority" means the competent authority that is responsible for the administration and enforcement of customs  laws and regulations;

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

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

(e)                        "GATT 1994" means the General  Agreement  on  Tariffs and Trade 1994 in Annex 1A to the WTO Agreement. For the purposes of this Agreement, references to articles in GATT    1994    include    its    Notes    and  Supplementary

Provisions:

(f)                             · Harmonized System" o "HS" mearis the Harmonized Commodity Desr:r:pfon and Coding Sy stem set out in the Annex to the !nter;iat1ona\ Conventior on the H2rmor1i2.ed Commodity Description and Coding System, and acioptsd and implemented  by the Parties in their  respective laws;

(g)                          "newer ASEAN Member States" means the Kingdom of Cambodia, the Lao People's Democratic Republic. the Union  of   Myanmar   and  the   Socialist   Republic  of Viet

Nam;

(h)                          "Parties" means those ASEi\N Member States  for  which this   Agreement    has   entered    into   force    and   Japan collectively; and

(i)                             "Party" means either of one (1) of ASEAN Member States for which this Agreement  has entered into force or  Japan.

Article 2

Principles

The Parties reaffirm the importance of  realising  the  AJCEP  through  both this Agreement and other bilateral or regional agreements or arrangements,  and are guided by the following  principles:

(a)            the AJCEP shall involve all ASEAN Member States and Japan and includes a broad range of sectors focusing on liberalisation, facilitation ?rJd economic  cooperation;

(b)            the integrity, solidarity and integration of ASEAN shall be maintained in the realisation of the  AJCEP;

(c)            spec1ai and differential treatment is accorded to ASEAN Member States, especially the newer ASEAN Member States, in recognition of their different levels of economic development;    additional   flexibility    is   accorded   to  the newer ASEAN  Member States;

(d)            recognition shall be given to the provisions of the  ministerial declarations of the  World  Trade  Organization on measures in favour  of least-developed  countries;

(e)            flexibility should also be given to address the sensitive sectors in each ASEAN  Member State and Japan;  and

 (f) technical assistance and capacity building ar e important elements of economic coorerat1on provided under this Agreement.

Article 3

Objectives

The objectives  of this Agreement  are to:

(a)            progressively liberalise and facilitate trade in goods and servlces among the  Parties;

(b)            improve investment opportunities  and  ensure  protection  for investments and investment activities in  the  Parties;  and

(c)           establish a framework for the enhancement of economic cooperation among the Parties with a view to supporting ASEAN economic integration, bridging the  development gap among ASEAN Member States, and enhancing trade and investment among the  Parties.

Article 4 Transparency

1. Each Party shall, in accordance with its laws and  regulations, make publicly available its laws, regulations, administrative procedures and administrative rulings and judicial  decisions  of  general  application as well as international agreements to which the Party is a party, that pertain to  or affect the  implementation  and operation  of this Agreement.

1. Each Party shall make publicly available the names and addresses of the competent authorities responsible for laws, regulations, administrative procedures and administrative rulings, referred to in paragraph 1.

1. Each Party shall, upon the request by another Party, respond to specific questions from, and provide information to, the latter, in the English language, with respect to matters referred to in paragraph 1.

Article 5

Confidentiality

1. Nothing in this Agreement shall require a Party to provide confidential information, the disclosure of which would impede law enforcement of the Party, or  otherwise  be  contrary  to  the  public interest, or which would prejudice  legitimate  commercial  interests  of  any particular enterprise,  public or  private.

Nothing in this Agreement shall be construed to  require  a  Party  to provide information relatinq to the affairs  and  accounts  of customers of financi al institutions

Each Party shall, in accordance with its laws and regulations, maintain the confidentiality of information provided as confidential by another  Party pursuant to this  Agreement.

Article 6 Taxation

1. Unless otherwise provided  for  in this Agreement,  the  provisions of this Agreement  shall not apply  to any taxation  measures.
   1. Nothing in this Agreement shall  affect the  rights  and  obligations of any Party under any tax convention. In  the  event  of  any  inconsistency between this Agreement and any such convention, that convention  shall prevail to the  extent of the  inconsistency.

1. Articles 4 and 5 shall apply to taxation measures,  to the  extent  that  the  provisions  of  this  Agreement  are  applicable  to  such  taxation  measures.

Article 7 General Exceptions

For the purposes of Chapters 2 through 5  Artir,it:;: XX af GJ\TT      994 is incorporated into and forms part of this Agreement, mutatis mutandis.

Article 8 Security Exceptions

Nothing in this Agreement shall be construed:

(a)                       to require any Party to furnish any information,  the disclosure of which it considers contrary to its essential security  interests; or

(b)                        to prevent any Party from taking any action which it considers necessary for the protection of its essential security  interests:

(i)                 relating to fissionable materials or  the  materials from which they  are derived;

(ii)                   relating to the traffic iri arms, arnmu:1it1on and i;-n1,1ernents of war and to such traffic ether  goods and materials as  sarred on directly or indirectly  for  the  pmf)ose  ot  supplying  a  military establishment;

(iii)                    taken so as to protect critical public infrastructure, including communications, power and water infrastructures, from deliberate  attempts  i:1tended  to disable  or degrade  such infrastructure;

(iv)                  taken in time of domestic emergency, or war  or other  emergency  in international  relations; or

(c)                        to prevent any Party from taking  any  action  in pursuance of its obligations under the United Nations Charter for the maintenance of  international  peace and security.

Article 9

Non-governmental Bodies

In fulfilling its obligations and commitments under this Agreement, each Party shall endeavour to ensure their observance by non-governmental bodies in the exercise of powers delegated by central, regional or local governments  or authorities within the  Party.

Article 10

Relation to Other Agreements

1. Each Party reaffirms its rights and obligations vis-a-vis another Party  under  the  WTO  Agreement   and/or  other  agreements  to   which these  Parties  are parties.

1. Nothing in this Agreement shall be construed to  derogate  from any obligation of a Party vis-a-vis another Party under agreements to which these Parties are parties, if such an obligation entitles the latter Party   to   treatment    more   favourable than that accorded by this Agreement.

1. In the event of any inconsistency  between  this  Agreement  and the WTO Agreement,  tl1e  WTO Agreement  shall  prevail to the  extent  of the inconsistency.

1. In the ever.t of any  inconsistency  between  this Agreeement  2nd any agreement other than the WTO .u..greP-r,ent to which  more than  one ('i )  Party  are  µmtes these Parties  shall  immediately  consult with each other with  a view  to finding  a  mutually  satisfactory  solution. taking into1 consideration  general principles of international  law.

1. A Party which is not a party  to the WTO Agreement  shall  abide by the provisions of the said Agreement in  accordance  with  its accession commitments  to the World Trade  Organization.

Article 11

Joint Committee

1. A Joint Committee shall be established  under this  Agreement.

1. The functions  of the Joint Committee shall be  to:

(a)           review       the       implementation       and       operation  · of       this Agreement;

(b)            submit a report to the Parties on the implementation and operation of this Agreement;

(c)           consider and recommend to the Parties any  amendments to this Agreement;

(d)            supervise and coordinate the work of all Sub-Committees established under this Agreement; 

(e)            adopt:

(i)        the Implementing Regulations referred  to  in  Rule 11 of Annex 4; and

(ii)       any necessary decisions;  and

(f)    carry   out   other   functions   as   may   be   agreed by  the Parties.

1. The  Joint Committee:

(a)            shall be composed of representatives of ASEAN Member States and Japan; and

(b)            may   establish   Sub-Committees   and _\ delegate   its responsibilities   thereto.

1. The Joint Committee shall meet at such venues  and times  as  may be agreed by the  Parties.

Article 12 Communications

Each Party shall designate a contact point to facilitate communications among the Parties on, except as otherwise provided  for  in Article  61,  any matter relating to  this  Agreement.  All  official  communications  in this  regard shall be done in the  English language.

Chapter 2 Trade  in Goods

Article 13 Definitions

For the purposes of this Chapter, the  term:

(a)           "customs  duties"  means any customs  or import duty  and  a charge of any kind imposed in connection with the importation of a good, but does  not include  any:

(i)       charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article Ill of GATT 1994, in respect of the like domestic goods or in respect of goods from  which the imported goods have been manufactured or produced in whole or in  part;

(ii)      anti-dumping or countervailing duty applied consistently with· the provisions of Article VI of  GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Tr::ide 1994, and the Agreement on Subsidies and Countervailina Mea L!res ir, .Anne 1A to the WTO Agreement;

(iii)       fee or any charge commensurate with the cost of services rendered;

(b)          "customs laws" means such laws and regulations administered and enforced by the customs authority of  each Party concerning the importation, exportation, and transit of goods, as they relate  to  customs  duties,  charges. and other taxes, or to  prohibitions,  restrictions, and other similar  controls  with  respect to the  movement  of controlled items across the boundary of the customs territory  of each Party; ·

 (c)           "customs vaiue of oods" merrns the value of goods for the purposes of !evyir.g ::ici valorem c1 Jstorns duties on irr1ported  goods;

(d)          "domestic industry" means the producers  as  a  whole  of the like or directly competitive  goods operating  in a  Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of  the  total domestic  production  of those goods;

(e)           "originating goods" means goods  that  qualify  as  originating in accordance  with  the  provisions  of  Chapter 3;

(f)           "serious injury" means a significant overall  impairment  in the  position of a domestic  industry; and

(g)           "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.

Article 14  Classification  of Goods

The classification of goods in trade between the Parties shall be in conformity with the Harmonized System.

Article 15

National Treatment on Internal Taxation and  Regulation

Each Party shall accord national treatment to the goods of the other Parties in accordance with Article Ill of GATT 1994, which to this end is incorporated into and forms part of this Agreement, mutatis mutandis.

Article 16

Elimination or Reduction of Customs Duties

1. Except as otherwise provided for in this Agreement, each Party shall, in accordance with its  Schedule  in Annex  1, eliminate  or  reduce its customs duties on originating goods of the other Parties. Such elimination or reduction shall be applied to originating goods of  all the other  Parties on a non-discriminatory  basis.

1. The Parties shall endeavour to take further steps towards liberalisation of trade in goods through unilateral, bilateral or regional efforts consistent with GATT  1994.

1. The Parties  reaffirm  that,  as  is  prcvided  for  in Article  7,  nothing  in tnis Chapter shall be construed to  prevent a  Party wh1,: h 1s a party tc  the Base: Convei tion en tne Contr ol of TransboundoiV Mover,1ents of Hazardous Wastes and their D1spo al or other rel8vant international agreements from adopting or enforcing any measure  in  relation  to hazardous wastes or hazardous substances based on its laws and regulations,   in  accordance  with  such  international   agreements.

Article 17  Customs Valuation

For the purposes of determining the customs value of goods traded between the Parties, the provisions of Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement (hereinafter  referred to as "the Agreement on Customs Valuation")  shall  apply,  mutatis mutandis.

Note: In the case of the Kingdom of Cambodia, the Agreement on Customs Valuation, as implemented in accordance with the provisions of the Protocol on the Accession of the Kingdom of Cambodia to the World Trade  Organization,  shall  apply, mutatis mutandis.

Article 18

Non-tariff Measures

1. Eash Party shall not institute Of maintain any non-tariff measures including quantitative restrictions on the·importation of any good of the other Parties or on the exportation or sale for export of any  good  destined for another Party, except the same  measures  as  those rermitted  under  the WTO Agreement.

1. Each Party shall ensure transparency of its non-tariff measures permitted under paragraph 1, including quantitative restrictions.  Each Party which is a member of the World Trade  Organization  shall  ensure full compliance with the obligations under the WTO Agreement  with a  view to minimising possible distortions to trade to the maximum extent possible.

Article 19

Modification of  Concessions

1. The Parties shall not nullify or impair any of the  concessions  under this Agreement,  except in cases  provided for  in this Agreement.

Any Party may negotiate 'Nii:h ony !ntersted Party to modify or w;thdr2vJ ;ts concess:e,n 1 r:Jde under u-·,is Agre2rnent. !r. such riegC;tiatioris. which may ind•Jde compensatory adJustment witr1 respect to other goods, the PartiP.s concerned shall maintain a general level of reciprocal and mutually  advantageous  concessions  not less favourable to trade than that provided for in this Agreement prior to such negotiations. In reflecting the results of such negotiations to this Agreement, Article 77 shall  apply.

Article 20

Safeguard Measures

1. A Party which is a member of the World Trade Organization may apply a safeguard measure to  an originating  good of the  other  Parties in accordance with Article XIX of GATT 1994 and the Agreement on Safeguards in Annex 1A to the WTO Agreement (hereinafter referred to as "the Agreement on Safeguards"), or Article 5 of the Agreement on Agriculture in Anne x 1A to the WTO Agreement (hereinafter  referred to as "Agreement on Agriculture").  Any  action  taken  pursuant  to Article XIX of GATT 1994 and the Agreement  on  Safeguards,  or Article  5  of the Agreement on Agriculture shall not be subject to Chapter 9 of this Agreement.

1. Each Party shall be free to apply a safeguard measure provided  for under this Article (hereinafter referred to as "an AJCEP safeguard measure"), to the minimum extent necessary to prevent or remedy the serious injury to a domestic industry of that Party and to facilitate adjustment, if as an effect of the  obligations  incurred  by  that  Party under this Agreement, including tariff concessions, or if as a result of unforeseen developments and of the effects of  the  obligations  incurred by that Party under this Agreement, an originating good of the other Parties is being imported  in  such  increased  quantities,  in  absolute terms or relative to dcrncs:c pcuuuction, ant.i under sue;-. 1...·!-idit1or,s as to cause or threaten to cause serious injury to the domestic industry of  the importing Party that produces like or directly  competitive  goods  in  the importing Party.

1. An AJC::EP safogumd measure shnll not bP, applied against an or;gir 1ating good of ;::i Party v,rhich is ar. ASF..u..N Mern'.:le1 St2. te, as !ong as 1t:::. sr.are cf imports of the: go.Ju concerned in the importin] Psrty  does not exceed three (3) per cent of the total imports from the other Parties, provided that those Parties with less than three (3) per  cent import share collectively account for not more than nine (9) per cent of total imports of the good concerned from the other    Parties.

1. A Party shall not apply an AJCEP safeguard measure to an originating good imported up to the limit of quota  quantities  granted  under tariff rate quotas applied in accordance with  its  Schedule  in  Annex 1.

1. A Party applying an AJCEP safeguard  measure  may:

(a)            suspend the further reduction of any customs duty on the originating good of the other Parties  provided  for  under this Chapter; or

(b)            increase the customs duty on the originating good of the other  Parties to a level not to exceed the lesser  of:

(i)        the applied most-favoured-nation rate (hereinafter referred to as "applied MFN rate") on the good in effect on the day when the AJCEP safeguard measure is applied; and

(ii)       the applied MFN rate on the oood in effect on the day immediately preceding the date of entry into force of this Agreement pursuant to paragraph 1 of Article 79.

1. (a) A  Party  may  apply  an  AJCEP  safeguard  measure  cnly after an investigation has been carried out by the  competent authorities of that Party in accordance with the same procedures as those provided for in Article 3 and paragraph 2 of Article 4 of the Agreement  on  Safeguards.

(b) The investigation referred to in subparagraph (a) shall be completed within one (1) year following  its  date  of initiation.

1. The following conditions and  limitations  shall  apply  with  regard to an AJCEP  safeguard measure:

(a)            A Party shall immediately give a written' notice  to  the  other  Parties upon:

(:)            initiating            an            ir.'Jestigation                        referred            to            lil suboaragrnph 6(a) relating            o  serious  :njury.  or 1hreat of serious injury, ar id the reasons for it;

(ii)                  making a finding of serious injury or  threat  of  serious  injury caused  by increased  imports; and

(iii)                    taking a decisio11 to apply or extend an AJCEP safeguard measure.

{b) The Party giving the written notice  referred  to  in  subparagraph (a) shali provide the other Parties with all pertinent information,  which  shall include:

(i)    in the written notice referred to in  subparagraph  (a)(i), the reason for the initiation of  the  investigation, a  precise  description  of  an  originating good subject to the investigation and its heading or subheading of the Harmonized  System, on which the Schedules in Annex 1 are based, the period subject to the investigation and the date of initiation of the investigation;   and

(ii)    in the written notice referred to in subparagraphs (a)(ii) and (iii), the evidence of serious  injury  or threat of serious injury caused by the increased imports of the originating good,  a  precise description of the· originating good subject to the proposed safeguard measure and its heading or subheading of the Harmonized System,  on  which the Schedules in Annex 1 are based, a precise description of the AJCEP safeguard measure, the proposed date of its introduction and its expected duration.

(c)     A Party proposing to apply  or  extend  an  AJCEP  safeguard  measure  shall  provide  adequate   opportunity for prior consultations with those Parties which would be affected by the AJCEP safeguard measure with a view to reviewing the information arising from the investigation referred to in subparagraph (a), exchanging views on the AJCEP safeguard measure and  reaching  an  agreement  on compensation  set out in paragraph  8.

(d)     No  AJCEP  safeguard  measure  shall   be   maintained  except to the extent and for such time 3'.3 n1a y  be  necessary to prevent or rerneay  serious  inJu,y  and  to facilitate adjustment, provided that such  time  shall  not exceed a period of three (3) years. An AJCEP safeguard measure  may  be  extended,  provided  that  the   conditions set out in this Article are met. The total  duration  of  the  AJCEP safeguard  measure,  including  any  extensions thereof, shall  not  exceed  four  (4)  years.  In  order  to facilitate adjustment in a situation where  the  expected duration of an AJCEP safeguard measure is over one  ( 1) year,  the  Party  maintaining  the  AJCEP   safeguard  measure  shall  progressively  liberalise   the   AJCEP safeguard  measure  at  regular  intervals  during  the   period of  application.

(e)     No AJCEP safeguard measure shall be applied  again  to the import of a particular originating good which has been subject to such an AJCEP safeguard measure,  for  a  period of time equal to the duration of the previous safeguard  measure or one (1) year, whichever  is longer.

(f)       Upon the termination  of an AJCEP safeguard  measure on a good, the rate of the customs duty for that good shall be the rate that, in accordance with  the  Schedule  of  the  Party applying the AJCEP safeguard measure set out in Annex 1, would have been in effect had the AJCEP safeguard  measure not been applied.

1. (a)  A  Party  proposing  to  apply  or  extend  an  AJCEP  safeguard measure shall provide to the other Parties mutually agreed adequate  means  of trade  compensation in the fcrm of substanti::illv  equivalent  level  of  concessions or other obligations to  that  existing  under  this Agreement between the Party applying the AJCEP safeguard measure and the  exporting  Parties  which  would  be affected by such a measure.

(b)           In seeking compensation  provided  for  in  subparagraph (a), the Parties shall hold consultations in the Joint Committee. Any proceedings arising from such consultations shall be completed within thirty (30)  days  from the date on which the AJCEP  safeguard  measure was applied.

(c)           If no agreement O!l  the  compensation  is  reached  within the time fr2r11e specified ifl subparagraph (b). the Parties other thar the one appipng the ..L\JCEP  safeguard measure sha!i be free to  Suspend  concessions  of  customs duties under this Agreement. which  is  substantially  equivalent  to  the  AJCEP  safeguard measure, on originating goods of the Party applying the AJCEP safeguard measure.  The  Parties  may  suspend th8 concessions  oniy  for  the  minimum  period  necessary to achieve the substantially equivalent effects and only  while the AJCEP safeguard measure is maintained. The right of  suspension  provided  for  in  this  subparagraph shall not be exercised for the first two (2) years that an AJCEP safeguard measure is in effect, provided that the AJCEP safeguard measure  has been applied  as a result  of an absolute increase in imports and that  such  an  AJCEP safeguard measure conforms to the provisions of this Article.

1. (a)    A Party  applying  a safeguard  measure  in connection with an importation of an originating good of another Party in accordance with Article XIX of GATT 1994 and the Agreement on Safeguards, or Article 5 of  the Agreement  on Agriculture. shall not apply the AJCEP safeguard measure to that  importation.

(b)  The  period  of  application  of  the  AJCEP  safeguard  measure referred to in subparagraph 7(d) shall not be interrupted by the PartY:s. non-application of the AJCEP safeguard  measure  in accordance  with subparagraph (a).

1. (a) Within ten (10) years after the entry into force of this  Agreement pursuant to paragraph 1 of Article 79,  the Parties shall review this Article wih a view to determinir,g whether there is a need to maintain the AJCEP safeguard mechanism.

(b) If the Parties  do  not  agree  to  remove  the  AJCEP  safeguard mechanism during the review pursuant to subparagraph (a), the Parties shall thereafter conduct reviews to determine the necessity of  the  AJCEP safeguard mechanism. in conjunction with the general review pursuant to Article  75.

1. In critical c:rcurnstances. where delay  would  cause damage '.".'hich it would b2 difficu1t to rcP3ir 3 Par1y may app!y a provisional  A.ICEP  safeguard  measure,  which shall take the fai-m of the measure set  out  in  subparagraph 5( a) or S(b), pursuant to a preliminary determination tha t there is clear evidence that increased imports of an originating good have caused or are threatening  to cause serious injury to a domestic  industry.

(b)           A Party shall give a written notice  to  the  other  Parties  prior to applying a provisional AJCEP safeguard measure. Consultations by the Parties in  the  Joint  Committee  on  the application of the provisional AJCEP  safeguard measure shall be initiated  immediately  after  the  provisional AJCEP safeguard  measure is  applied.

(c)           The duration of a provisional AJCEP safeguard measure shall not exceed two hundred (200) days. During that  period, the pertinent requirements of paragraph 6 shall be met. The duration of the provisional AJCEP safeguard measure shall be counted as a part of  the  period referred to in subparagraph  7(d).

(d)           Paragraph 3 and subparagraph 7(f) shall apply, mutatis mutandis,  to the  provisional AJCEP  safeguard measure.

(e)           The customs duty imposed as a result of the provisional AJCEP safeguard measure shall be refunded if the subsequent investigation·referred to in subparagraph 6(a) does not determine that increased imports of  the  originating good have caused or threatened to cause serious injury to a dornestic  industry.

1. All official communications  and  documentations  exchanged among the Parties relating to an AJCEP safeguard measure shall be in writing  and shall  be in the  English language.

Article 21

Measures  to  Safeguard  the Balance of Payments

Nothing in this Chapter shall be construed to  prevent  a  Part'/  frorn  taking any measure for balance-of-payments purposes. A Party taking such measure shall do  so  in  accordance  with  the  conditions established under Article XII of GATT 1994 and  the  Understanding  on the Balance-of-Payments Provisions of the  General  Agreement  on Tariffs and Trade  1994 in Annex  1A to the WTO Agreement.

Article 22 Customs Procedures

1. Each Party shall endeavour to apply its customs procedures in a predictable,  consistent  and transparent manner.

1. Recognising the importance of improving transparency  in  the  area of customs procedures, each Party, subject to its laws and regulations, and available resources, shall endeavour to provide information relating to specific matters raised by  interested  persons  of the Parties pertaining  to  its customs  laws.  Each Party shall endeavour to supply not only such information but also other pertinent information which  it considers  the interested persons should  be made aware  of.

1. For prompt customs clearance of goods traded among  the Parties, each Party, recognising the significant role of  customs  authorities and the importance of customs procedures  in  promoting  trade facilitation,  shall endeavour to:

(a)            simplify its customs  procedures; and

(b)  i:armonise its  :.istoms procedures,  to the extent possible,   with relevant international standards and 2co!11m2nded practices such as those made under the auspices of the Customs  Co-operation Council.

Chapter 3  Rules  of Origin

Article 23 Definitions

For the purposes of this Chapter, the  term:

(a)            "exporter" means a natural  or juridical  person  located  in an exporting Party who exports a good from the exporting Party;

(b)           "foctor/ ships of the Pa:ty" or "vessels of the Party" respective!y me,=ws f2ctury shi;::>s or vr::sse:s:

(i)                   which are registered i i1 the Party;

(ii)                 which sail under the flag of the   Party;

(iii)                    which are owned to an extent  of  at  least fifty  (50) per cent by nationals of one or more of the Parties,   or by a juridical person with its head  office  in  a Party, of which  the  representatives,  chairman  of the board of directors, and the majority of the members of such board are nationals of one  or  more of the Parties, and of which at least fifty  (50) per cent of the · equity interest is owned  by  nationals or juridical  persons of one or  more of   the  Parties; and

(iv)                  of which at least seventy-five (75) per cent of  the total of the master, officers and crew  are nationals  of one or more of the  Parties;

(c)           "generally accepted accounting principles" means the recognised consensus or substantial  authoritative  support in a Party, with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These standards may encompass broad guidelines of general    application    as· ·well    as    detailed   standards,

practices  and procedures;

(d)           "good" means any merchandise, product, article  or  material;

(e)           "identical  and  interchangeable  materials"   means materials being of the same kind and commercial quality, possessing the same technical  and  physical characteristics, and which once they are incorporated into the good cannot be distinguished from one another for  origin purposes  by virtue  of any markings;

(f)        "importer" means a natural or juridical person who imports  a good into the importing  Party;

(g)            "mc1terials" means anJ rr.atter or subst3nce used or cor,scmed in the prcdustion of a gocci physica!iy ipco:-pxaled  into  a  gocd.  er  used  in  the   production   of

another good;

(h)            "originating good" or "originating  material"  means  a good or  material that qualifies  as  originating  ill accordance with

the provisions of this  Chapter;

(i)             "packing materials and containers for transportation and shipment" means the goods used  to  protect  a  good  during its transportation  and  shipment,  different  from those containers  or materials used for its retail  sale;

U)  "preferential  tariff  treatment"  means  the  rate  of  customs  duties applicable to an originating good  of  the  exporting Party  in accordance  with  paragraph  1 of Article  16;   and

(k)             "production" means  methods  of  obtaining  a  good including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing,  fishing,  trapping,      hunting,      manufacturing,      processing      or  assembling.

Article 24

Originating Goods

For the purposes of this Agreement, a good shall qualify as an  originating  good of a Party if it: ·

(a)            is wholly obtained or produced entirely in the Party as provided for  in Article 25;

(b)            satisfies the requirements of Article 26 when using non­ originating  materials; or

(c)            is   produced  entirely in the Party exclusively from originating  materials of one or more of the  Parties, and meets all other  applicable  requirements  of this Chapter.

Article 25

Goods Wholly Obtained or Produced

For the purposes of paragraph (a) of Article 24, the following shall be considered  as wholly  obtained or produced entirely  in a Party:

(a)                        p\am and plant products grown and hnrvesteci, picked or gc:ithe:-ed 1n  rhe Party,

Note: For the purposes  of  this  paragraph,  the  term  "plant" refers to all plant life, including fruit,  flowers,  vegetables,  trees,  seaweed,  fungi   and live plants.

(b)                        live animals  born and raised in the  Party;

Note: For the purposes  of  paragraphs  (b) and  (c), the term " animals" covers all animal life, including mammals,   birds,   fish,   crustaceans,   molluscs, reptiles, bacteria and viruses.

(c)                       goods obtained from  live animals  in the Party;

(d)                        goods obtained from hunting, trapping, fishing,  gathering  or capturing conducted  in the Party;

(e)                       minerals and other naturally occurring substances, not included in paragraphs (a) through (d), extracted or taken from  soil,  waters,  seabed  or  beneath  the  seabed  of the Party;

(f)                             goods taken from the waters, seabed or beneath  the seabed outside the territorial waters of the Party, provided that the Party has the rights to  exploit  such  waters, seabed and beneath the ·seabed in accordance with  its laws and regulations  and international  law;

Note: Nothing in this Agreement shall affect the rights and ob!igatioo1s :::,f the Pai l!eS under international law, including those under the United Nations Convention on the  Law of the Sea.

(g)                       goods of sea-fishing and other marine products taken by vessels  of the  Party from outside the territorial  sea of  any Party;

(h)                        goods processed and/or made on board factory  ships  of the    Party    exclusively    from    products    referred   to  in paragraph (g);

(i)                            articles coliected in the  Party  which  can  no  longer perform their original purpose or be restored or repaired, and are fit only for disposal, for the  recovery  of  parts or raw materials, or for recycling   purposes;

scr ap and wa::;te derived from manufacturing  or processing oµeations. inciL:d1ng r.iinir.g, agr ,r:u:ture, construction, refining, incineration 3nd sewage tr82tment operations, or from consumption, in the  P3rty, and fit only for disposal or for the recovery of raw materials;   and

(k)          goods  obtained or  produced in the  Party exclusively from goods referred to in paragraphs (a) through  U).

Article 26

Goods Not Wholly Obtained or Produced

1. For the purposes of paragraph (b) of Article 24, a good shall qualify as an originating good of a Party   if:

(a)            the good has a regional value  content  (hereinafter  referred to as "RVC"), calculated using the formula set out  in Article 27, of not less than forty (40) per cent, and the final process of production has been performed in the  Party; or

Note:

(b)           all non-originating materials used in the production of the good have undergone in the Party a change in tariff classification (hereinafter referred to as "CTC") at the 4- digit level (i.e. a change in tariff heading) of Harmonized System.

For the purposes of this subparagraph, "Harmonized System" is that on which·the product specific rules set out  in Annex  2 are based.

Each Party shall permit the c,:porier 0f the good to decide whether to use subp,n'lg,aph (a) or (b) w:ien determining whether the good  qualifies as an originating good of the  Party.

1. Notwithstanding paragraph 1, a good subject to product specific rules shall qualify as an originating good if it satisfies the applicable product specific rules set out in Annex 2. Where a product specific rule provides a choice of rules from a RVC-based rule of  origin,  a  CTC­ based rule of origin,  a specific  manufacturing  or  processing  operation, or a combination of any  of these, each  Party shall  permit the  exporter  of the good to decide which rule to  use  in  determining  whether  the good qualifies as an originating good of the   Party.

1. For the purposes of subparaqraph 1(a) and the relevant product spec\ fic rL.:l2s set 01t in /1,nnex 2 wh:cr1 specify a csr t;:i:n R'/C.  it  is re1uired th3t tr,e RVC of 3 good, c2lculc1ted using the forrnula sd out in Art:cle  2'7 , is not iess than the  percentage  specified  by tne  rule fer the good.

1. For the purposes of subparagraph 1(b) and the relevant product specific rules set out in Annex 2, the rules requiring that the materials used have undergone  CTC,  or  a  specific  manufacturing  or processing operation,  shall apply  only to non-originating materiais

1. For the purposes of this Chapter, Annex  3 shall  apply.

Article 27

Calculation of Regional Value Content

1. For the purposes of calculating the RVC of a good, the following formula  shall be used:

FOB - VNM

RVC = --------------- X  100  %

FOB

1. For the purposes of this  Article:

(a)            "FOB" is, except as provided for in paragraph 3, the free­ on-board value of a good, inclusive  of  the  cost  of tran:;port  from  the  producer  to  the  port  or  site  of   final

shipment abroad; ·

{b)  "RVC"  is the  RVC of a good, expressed  as a percentage;  and

(c)   "VNM"  is the  value  of  non-originating  maLc:nals  used  in the production of a  good.

1. FOB referred to in subparagraph 2(a) shall be the value:

(a)            adjusted to the first ascertainable price paid  for  a  good from the buyer to the producer of the good, if there is free-on-board  value  of  the  good,  but  it  is  unknown  and

cannot be ascertained;  or

(b)            determined in accordance with Articles 1 through 8 of the Agreement  on Customs  Valuation,  if there  is no   free-on- board value of a good.

1. ror the purpcsas of paragraph 1. the value cf non-originating  mc1teric:ils  used 1n the production of a good in a   Party:

(a)           shall be ,jetermined in accordance with the Aqreernent on Customs Valuation and shall include  freight,  insurance, and where appropriate, packing and all  other  costs incurred in transporting  the  material  to  the  importation port in the Party where the producer of  the  good  is located; or

(b)            if such value is unknown and cannot be ascertained, shall be the first ascertainable price paid for the material in the Party, but may exclude all the  costs  incurred in the  Party in transporting the material from the warehouse of the supplier of the material to the place where the producer is located such as freight, insurance and packing as well as any other known and ascertainable cost incurred in the Party.

1. For the purposes of paragraph 1, the VNM of a good shall not include the value of non-originating materials used in the production of originating materials of the Party  which  are  used  in the  production  of the good.

1. For the purposes of subparagraph 3(b) or 4(a), in applying the Agreement on Customs Valuation to determine the value of a good or non-originating material, the Agreement on Customs  Valuation  shall apply, mutatis mutandis , to domestic transactions or to the cases where there  is no domestic  transaction  of the·good or non-originating  material.

Article 28

De Minimis

1. A good that does not satisfy the requirements of  subparagraph  1(b) of Article 26 or an applicable CTC-based rule of origin set out in Annex  2 shall be considered as an originating  good of a Party   if:

(a)            in the case of a good  classified  under  Chapters  16,  19, 20, 22, 23, 28 through 49, and 64 through 97 of the Harmonized System, the total value of non-originating materials used in the production of the good that have not undergone the required CTC does  not  exceed  ten  (10)  per cent of the  FOB;

 (b)            in the case of c1  particular  good  classified  under  Chapters 18 c:nd 2. 1 of the H2r rno:1:2.ed System. the totc1:  va\ue  of ncin- orig;nating materials used ir 1 the produc.;tion of  the good that have not undergone the requ,red CTC does not exceed ten (10) per cent  or  seven  (7)  per  cent  of  the  FOB,  as  specified  in Annex  2; or

(c)           in the case of a good classified  under  Chapters  50  through 63 of the Harmonized System, the weight of all non-originating materials used in the production  of  the good that have not undergone the required CTC does not exceed ten (10) per cent of the total weight of the   good, provided that it meets all other applicable criteria set out in this Chapter  for qualifying as an originating  good.

Note:                      For the  purposes of this  paragraph,  subparagraph 2(a) of Article 27 shall apply.

1. The value of non-originating materials referred to in paragraph 1 shall, however, be included in the value of non-originating materials for any applicable  RVC-based rule of origin for the  good.

Article 29 Accumulation

Originating materials of a Party used in the production of a good in another Party shall be considered as originating materials of that Party where the working or processing of the good has taken    place.

Article 30

Non-qualifying Operations

A good shall not be considered to satisfy the requirements of CTC or specific  manufacturing  or processing operation  merely  by reason of:

(a)           operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing, keeping in brine) and other similar operations;

(b)            changes of packaging and breaking up and assembly of packages;

(c)           disassembly;

·-

(d)            placing   in   bottles,          cases,          boxes          and          other          simple packaging operations; 

(e)            ccl!ection of p::1rts and components classified a5 a good OL!,suc1rit   to   R  le   2( a  of   thE-   General   Rules  for the interpretation of the Harmoriiz.ed System:

(f)             mere making-up of sets of articles;  or

(g)            any combination of operations referred  to  in subparagraphs  (a) through (f).

Article 31

Direct Consignment

1. Preferential tariff treatment shall be accorded to an originating good satisfying the requirements of this Chapter  and  which  is  consigned directly from the exporting  Party to the importing   Party.

1. The following shall be considered as consigned directly from the exporting  Party to the importing  Party:

(a)           a good transported directly from the exporting Party to the importing Party; or

(b)           a good transported through one or more  Parties,  other than the exporting Party and the importing Party,  or  through a non-Party, provided that the good does not undergo operations other than  transit  or  temporary storage in warehouses, unloading, reloading,  and  any other operation to preserve it in good   condition.

Article 32

Packing Materials and Containers

1. Packing materials and containers for transportation and shipment of a good shall not be taken into account in determining the origin of any good.

1. Packing materials and containers in which a  good  is  packaged for retail sale, when classified together with the good, shall not be taken into account in determining whether all of the non-originating materials used in the production of the good have met the applicable CTC-based rule of origin for the  good.

1. If a good is subject to a RVC-based  rule  of  origin.  the value  of the packing materials and containers in which the good is packaged for retail sale shall be taken into account as originating or non-originating materiais, as the case may be, in calculating the    RVC of the good.

Artlcle 33

Accessories, Spare Parts, Too!s and

Instructional or  Other  Information Materials

1. If a good is subject to the requirements of CTC or specific manufacturing or processing operation, the origin of accessories, spare parts, tools and instructional or other information  materials  presented with the good shall not  be  taken  :nto  account  in determining  whether the good qualifies  as an originating  good, provided  that:

(a)                       the accessories, spare parts, tools  and  instructional  or other information materials are not invoiced  separately  from the good; and

(b)                       the quantities and value of the accessories, spare parts, tools and instructional or other information materials are customary  for the good.

1. If a good is subject to a RVC-based rule  of  origin,  the  value  of the accessories, spare  parts,  tools  and  instructional  or  other information materials shall be taken into account as the value of the originating or non-originating materials, as the case may  be,  in  calculating the  RVC of the originating  goods.

Article 34

Indirect Materials

1. Indirect materials shall be treated as originating materials regardless of where  they  are produced. ·

1. For the purposes of this Article, the term  "indirect  materials" mea'1S goods used in the production, testing, or  inspection  of  a good  but not pi:ysically incorporated into the good, or goods used in the maintenance of buildings or the operation of equipment associated with  the production of  a good, including:

(a)                      fuel and energy;

(b)                      tools, dies and  moulds;

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

(d)                       lubricants, greases, compounding materials and other materials used in  production  or  used  to  operate equipment  and buildings;

(e)                       gloves, glasses, footwear, clothing, safety equipment and supplies;

(f) eo,uipment. devices and supplies used for  testing  or insper.ting the good,

(g)                        catalysts and solvents;  and

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

production.

Article 35

Identical and Interchangeable Materials

The determination of whether identical  and  interchangeable  materials are originating materials shall be made by  the  use  of  generally  accepted accounting principles of stock control applicable, or those of inventory  management  practised,  in the exporting Party.

Article 36

Operational Certification Procedures

The  operational  certification  procedures,  as  set  out  in Annex   4,  shall   l

apply  with  respect  to  procedures   regarding  certificate  of    origin  and   ,

related matters.

Article 37             i

Sub-Committee on Rules of Origin        ·1

1. For  the  purposes  of  the  effecti'1e  implementation and  operation :j

of  this   Chapter,   a   Sub-Committee   on   Rules  of Origin  (hereinafter 1

referred  to  in this Article  as  "the  Sub-Committee")  shall be established '

pursuant to Article  11.

1. The functions  of the Sub-Committee  shall be to:

(a)           review and make appropriate recommendations, as needed, to the Joint Committee  on:

(i)                  the implementation  and operation  of this Chapter;

(ii)                   any            amendments            to   Annexes            2   and   3,            and Attachment  to  Annex  4,   proposed  by  any   Party;

and

(iii)                    the  Implementing  Regulations  referred  to  in   Rule

11 of Annex 4;

(b)           consider any other matter as the  Parties  may  agree related to this Chapter;

(c)            report the findings of the Sub-Committee to the Joint Committee:  ar d

(d)            carry out other functions 8S mc1y be  delegatsd  by  the Joint Committee  pursuant to Article 11.

1. The Sub-Committee shall be composed of representatives of the Governments of the Parties, and may invite representatives of relevant Entities other than the Governments of the Parties with necessar-y expertise relevant to the issues to be discussed, upon agreement  of all the Parties.

1. The Sub-Committee shall meet at such venues  and  times  as  may be agreed  by the Parties.

Chapter 4

Sanitary and Phytosanitary Measures

Article 38

Scope

This Chapter shall apply to all sanitary and phytosanitary (hereinafter referred to as "SPS") measures of the Parties as defined  in Annex A of the Agreement on the Application of Sanitary and  Phytosanitary Measures in Annex 1A to the WTO Agreement  (hereinafter  referred  to as "SPS Agreement") that may, directly or indirectly,  affect  trade between the  Parties.

Article 39

Reaffirmation of Rights and  Obligations

The   Parties   reaffirm   the   rights   and   obligations    relating   to    SPS measures under the SPS Agreement among those Parties that are  parties to the  said Agreement.

Article 40

Sub-Committee on Sanitary and Phytosanitary Measures

1. For the purposes of the effective  implementation  and  operation  of this Chapter, a Sub-Committee on Sanitary and Phytosanitary Measures (hereinafter referred to in this  Article  as  "the  Sub­  committee")  shall  be established  pursuant to Article 11.

1. The functions  of the Sub-Committee  shall be  to:

(a)           exchangs information on such rn3tters as occurrences of SPS ;n::ic:ents ip the Parties and non-Parties, ar.d change  or introdu::t1on of SPS-relatcd regulakms aria  stc1ndards of the Parties, which may,  directly  or  indirectly,  affect trade between Japan and more than one (1) ASEAN Member State which are the  Parties;

(b)            facilitate cooperation in the area of SPS  measures, including capacity building, technical assistance and exchange of experts, subject to the availability of appropriated funds and the  applicable  laws  and regulations  of each Party;

(c)            undertake science-based consultations to identify and address specific issues that  may  arise  from  the application of SPS measures and are  shared  by  Japan and more than one (1) ASEAN Member  State which  are the Parties;

(d)           review the implementation and operation of this Chapter; and

(e)           report, where appropriate, its findings to the Joint Committee.

1. The Parties shall coordinate their undertakings with the activities conducted in the bilateral, regional and multilateral context, with the objective of avoiding unnecessary· ·duplication  and  maximising  efficiency  of efforts of the Parties in this  field.

1. The  Sub-Committee  shall  meet  at  such  venues  and  times  as may be agreed by the  Parties.

1. The  Sub-Committee  shall be:

(a)            composed of government officials of the Parties with responsibility  for  SPS measures; and

(b)            co-chaired by an official of the Government  of Japan and  an official of one of the Governments of the  ASEAN Member States which  are the Parties.

Article 41

Enquiry Points

Each Party shall designate an enquiry point to answer all reasonable enquiries from another Party regarding SPS measures and,  if  appropriate,  provide the  latter with  relevant information.

Aitlcle 42

Non-application  of  Chapter 9

The dispute settlement procedures provided for in Chapter 9 shall not apply to this Chapter.

CHAPTER 5

Standards, Technical Regulations and Conformity Assessment Procedures

Article 43

Objectives

The objectives of this Chapter are to promote trade  among the Parties  by:

(a)                       ensuring that standards, technical regulations and conformity assessment procedures do not create unnecessary obstacles to  trade;

(b)                       promoting mutual understanding of  the  standards, technical     regulations     and     conformity      assessment

procedures in each Party;

(c)                        strengthening information exchange and  cooperation among the Parties in relation to the preparation, adoption and  application  of  standards,  technical   regulations   and

conformity  assessment procedures;

(d)                        strengthen cooperation among the Parties in the work of  iritR!T 2.tior,al bodie3 rc:i::1ted  to  st::i.,,daruisation c1nd

conformity  assessments; and

(e)                                                                                                              providing a framework to realise these objectives. Article  44

Scope

1. This Chapter shall apply to standards, technical regulations and conformity assessment procedures as defined in the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement (hereinafter  referred to as "TBT Agreement").
   1. This Chapter shall not apply to purchasing  ·specifications  prepared by governmental bodies for production or consumption requirements of governmental bodies and sanitary and phytosanitary measures as defined in Annex A of the SPS  Agreement

 Notr;ing in this Cr a;->ter shall lir.iit the (igt1t of 2  Party to   prepare,

Adopt and apply stadards and technical regulations, to the extent necessary, to fulfil a legitimate  objective.  Such  legitimate  obJectives are, inter alia, national security requirements;  the  prevention  of  deceptive practices; protection of human health  or  safety,  animal  or plant life or health, or the environment.  In  pursuance  of  this.  each  Party retains all authority to interpret its laws, regulations and administrative  provisions

Article 45

Reaffirmation of Rights and  Obligations

The Parties reaffirm the rights and obligations relating to standards, technical regulations and conformity assessment procedures under the TBT Agreement among those Parties that are parties to the said Agreement

Article 46 Cooperation

1. For the purposes of  ensuring  that  standards,  technical regulations and conformity assessment procedures do not create unnecessary obstacles to  trade  in  goods  among  the  Parties,  the Parties shall, where possible, cooperate in the field  of  standards, technical  regulations  and conformity  assessment  procedures.

1. The forms of cooperation  pursuant to  paragraph  1 may include  the following:

(a)          conducting joint studies and holding seminars, in order to enhance mutual understanding of standards, technical regulations and  conformity  assessment  procedures  in each Party;

(b)           exchanging information  on  standards,  technical regulations  and  conformity  assessment procedures;

{c)  developing  and  implementing   joint   programmes   for building and/or upgrading capacity in the Parties for advancement of activities within the scope of the TBT Agreement;

(d)           encouraging the bodies responsible for standards, technical regulations and conformity assessment procedures in each Party to cooperate on matters of mutual interest;

(e)            contrib!Jting, where appropriate, jolritiy to the activ:ties related to standa.rds. tecr:nica! regulotions and co:1formity assessrnent procedures in internat\ ona1  ana  region3i  fora;

and

(f)             jointly identifying work in the field of standards, technical regulations  and  conformity  assessment  procedures, where   appropriate,   to   avoid   unnecessary   obstacle  to

trade  among the Parties.

1. The implementation of this Article shall be  subject  to  the availability          of          appropriated          funds          and          the          applicable          laws          and

regulations of each  Party.

Article 47 Enquiry Points

1. Each Party shall designate an enquiry point which shall have the responsibility  to coordinate the implementation  of this  Chapter.
   1. Each Party shall provide the other Parties with the name of its designated enquiry point and the contact details of  relevant officials  in that  organisation  including  information  on  telephone,  facsimile  and  e-

mail and other  relevant details.

1. Each Party shall notify the other Parties promptly  of  any change  of   its  enquiry   point  or   any   amendments   to  the   information  of  the  relevant officials.

Article 48

Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures

1. For the purposes of  the  effective  implementation  and  operation of this Chapter, a Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures (hereinafter referred to in this Article  as "the  Sub-Committee")  shall  be established  pursuant to Article

11.

1. The functions  of the  Sub-Committee  shall be to:

(a)            coordinate  cooperation  pursuant to Article 46;

(b)            identify mutually agreed priority sectors for enhanced cooperation,  including  giving  favourable  consideration  to any proposal made by a  Party;

(c)           estat)lish vv c,rk prorgrams in mutually agreed  priority areas to facilitate the acceptance of  conformity assessment     results     and     equivalence     of    technical regulations;

(d)           monitor the progress of work   programmes;

(e)           review the implementation  and operation of this  Chapter;

(f)             facilitate  technical consultations;

(g)            report,          where          appropriate,          its   findings          to   the          Joint Committee: and

(h)            carry out other functions as may be  delegated  by  the  Joint Committee  pursuant to Article 11.

1. The Sub-Committee shall meet at such venues  and  times  as  may be agreed by the  Parties.
   1. The Parties shall coordinate their undertakings with the activities conducted in the bilateral, regional and multilateral context, with the objective of avoiding  unnecessary  duplication  and  maximising  efficiency of efforts of the Parties in this  field.

1. The Sub-Committee  shall be:

(a)            composed of representatives of the Governments of the Parties; and

(b)            co-chaired by an official of the Government of  Japan and an 0fficial of one of the Governments of the ASE/\N Member States, which   .re the Part\es.

Article 49

Non-application of Chapter 9

The dispute settlement procedures provided for in Chapter 9 shall not apply to this Chapter.

Chapter 6 Trade in Services

Article 50 Trade in Services

1. Each Party shall endeavour to. in accordance with its laws, regulations and policies, take further steps towards the expansion  of trade in services  among or between the Parties consistent with   GATS.

1. The Parties sha!I. with the participation of a!I A SE.t,N MerT,ber Stat1:;s ar:d jnpan, continue to discuss c:1nd negotiate  pro·.iisions  for trade 1 n services w1t,1 a 'Jiew to exploring measures towards further liberalisation and facilitation of trade  in  services  among  ASEAN  Member States and Japan and to enhance cooperation in order to improve the efficiency and competitiveness of services and service suppliers of the ASEAN Member States and Japan. For this purpose, a Sub-Committee on Trade in Services, which shall be composed of representatives of the Governments of all ASEAN Member States and Japan shall be established in accordance with Article 11 within one ( 1) year from the date of entry into force of this Agreement pursuant to paragraph  1 of Article 79.

1. The results of the negotiations referred to in paragraph 2, if any, shall be incorporated into this Chapter in accordance  with Article   77.

Chapter 7 Investment

Article 51

Investment

1. Each Party shall endeavour to, in accordance with its laws, regulations and policies, create and  maintain  favourable  and transparent conditions in the Party for investments of investors of the other Parties.

1. The Parties shall, with the parti€ipation of all ASEAN Member States and Japan, continue to discuss and negotiate provisions for investment, with  a view to improving the efficiency  and competitiveness of the investment environment of ASEAN Member States and Japan through progressive i;t,eraiisation,  promotion,  facilitation  and protection of investment. For this purpose,  a  Sub-Committee  on  Investment,  which shall be composed of the representatives of the Governments  of  all ASEAN Member States and Japan, shall be  established  in accordance with Article 11 within one  (1)  year  from  the  date  of  entry into force  of this Agreement  pursuant to paragraph 1 of Article  79.

1. The results of the negotiations referred to in paragraph 2, if any, shall be incorporated into this Chapter in accordance with Article 77.

Chapter 8 Econorr.ic  Cooperation

Article 52 Basic Principles

1. The Parties shall, subject to the availability  of  resources  as well  as their respective applicable  laws  and  regulations,  promote  cooperation under this Agreement for their mutual benefits in order to liberalise and facilitate trade and investment among the Parties and to promote the well-being of the peoples  of  the  Parties,  taking  into  account  the  different  levels of  economic  development  among ASEAN

Member States.

1. The Parties  shall  promote  regional  and  sub-regional development  through  economic  cooperation  activities   including capacity building, technical assistance,  and  other  such  activities  as may be mutually  agreed upon among the  Parties.

Article 53

Fields of Economic Cooperation

The Parties, on the basis of mutual benefit, shall explore and undertake economic  cooperation  activities  in the following fields:

(a)                       Trade-Related  Procedures;

(b)                        Business Environment;

(c)                       Intellectual  Property;

(d)                        Energy;

(e)                       Information  and  Communications Technology;

(f) Human  Resource Development;

(g)          Small  and Medium Enterprises;

(h)          Tourism and Hospitality;

(i)            Transportation  and Logistics;

U)            Agriculture,  Fisheries  and Forestry;

(k)                         Environment;

(I)                            Competition  Policy; and

 (m)          Other fields 33 may be mutuaily agreed upon among the Partiss.

Article 54

Sub-Committee on Economic Cooperation

1. For the purposes of the effective implementation and operation of this Chapter, a  Sub-Committee  on  Economic  Cooperation  (hereinafter referred to in this Article as '·the Sub-Committee'') shall be established in accordance with Article  11 on the  date of  entry  into force of this Agreement  pursuant to paragraph  1 of Article 79.

1. The functions  of the  Sub-Committee  shall be to:

(a)             modify  and  formulate  relevant  Work  Programmes setting out areas and forms of each field of economic  ooperation;

(b)            make recommendations on existing and new economic cooperation activities under this Chapter in accordance  with the priorities of the  Parties; 

(c)            review and monitor the implementation and operation  of this Chapter  and the application  and fulfilment  of its  basic principles; and

(d)            report the findings and thE? outcome of its discussions to the Joint Committee.

1. The  Sub-Committee  shall be:

(a)            composed of representatives of the Governments of all ASEAN  Member States and Japan;  and

(b)            co-chaired by an official of one of the Governments of ASEAN  Member  States  and an official of the Government of Japan.

Article 55

Work Programmes for Economic  Cooperation

1. Work Programmes setting out areas and forms of each field of cooperation activities shall b set forth in Annex 5.
   1. Any modification of existing Work Programmes or formulation of new Work Programmes shall  be made  in accordance  with  paragraph 2 of   Article    54   and   through   amending   Annex    5   pursuant   to    the procedures  set out in Article 77.

Article 56

Resources  for  Economic Cooperation

Taking into account tr,e different leveis of economic development and capacity among the Parties, resources for economic cooperation under this Chapter shall be provided in such a manner as may be mutually agreed  upon among the Parties.

Article 57

Implementation  of Economic Cooperation Activities

1. Economic cooperation activities shall involve at least two (2) ASEAN  Member States and Japan

1. Notwithstanding paragraph 1, economic cooperation  activities  may also involve one (1) ASEAr-.J Member State and Japan,  provided that those activities are regional in nature and  of  benefit  to  other  ASEAN Member States. Such activities  shall  aim  at  narrowing  the  gaps of economic development among ASEAN Member States or at promoting the well-being of the people of ASEAN Member  States  towards further  integration of ASEAN.

1. The Parties shall undertake economic cooperation activities at mutually  agreed time.

Article 58

Non-application of Chapter 9

The dispute settlement procedures provided for in Chapter 9 shall not apply to this  Chapter.

Chapter 9 Settlement  of Dispute

Article 59 Definitions

For the purposes of this Chapter, the  term:

(a)           "complaining party" means any Party or  Parties  that request consultations  under paragraph  1 of Article 62;

(b)          "party to a dispute" means any Party which is a  complaining  party or a party complained  against;

(c)          "party complained against" means any Party or Parties to which the request for consultations is made under paragraph 1 of Article 62;  and

(d)          "third party" means a Party, other thar, the cart:es to a dispute, that notifies its interest in writing i:i accordance with Article 65.

Article 60 Scope of Application

1. Unless otherwise provided for in this Agreement,  this  Chapter shall apply with respect to the settlement of all disputes between the Parties concerning  the interpretation or application  of this  Agreement.

1. This Chapter may apply to measures affecting a Party's observance of this Agreement  taken  by  regional  or  local governments or authorities within the Party. When  the  arbitral tribunal  has awarded that a provision of this Agreement has  not  been  observed  in  accordance with Article 67, the responsible Party shall take such reasonable measures as may be available to it  to  ensure  its  observance. Paragraphs 3 and 4 of Article  71  shall  apply  in  cases where it has not been possible for the  Party  to  secure  such  observance.

1. Nothing in this Chapter shall prejudice any rights of the Parties to have recourse to dispute settlement procedures available under any other international agreement to which all of the parties to a dispute are parties.

1. Notwithstanding paragraph 3, once dispute  settlement proceedings have been initiated undec this Chapter or under and other international agreement to which all of the parties to  a  dispute  are  parties with respect to a particular dispute, the forum selected by the complaining party shall be used to the exclusion of  any  other  fora  for that particular dispute. However, this ;;hall not app\' if substantially separate and distinct rights or obligations under different international agreements  are  in dispute.

1. For the purposes of paragraphs 3 and 4, the complaining party shall be deemed to have selected a forum when it has requested the establishment of, or referred a dispute to. an arbitral tribunal or a dispute settlement panel, in accordance with this Chapter or any other international agreement to which the parties to a dispute are parties.

Article 61

Contact Points

1. For the purposes of this Chapter, a Porty  may  designate  a contact point responsible for  communications  on all matters  referred to  in this Chapter The submission of any  request,  notice  or  other  document under this Chapter  to  the  contact  point so  designated  shall be deemed to have been made to that   Party.

1. Where a Party chooses not  to  designate  a  c:ontact  point pursuant to paragraph 1, the submission of any request, notice or other document under this Chapter shall be made to the contact  point which  the  Party designates  in accordance  with Article 12.

1. Any Party receiving any request, notice or other document under this  Chapter  shall acknowledge  receipt in writing.

Article 62

Consultations

1. A Party or Parties may make a  request  in  writing  for  consultations to other Party or Parties concerning any matter on the interpretation or application of this Agreement where the  complaining party considers that any benefit accruing to it under this Agreement is being nullified or impaired as a result of the failure of the  party  complained against to carry out its obligations under this Agreement,  or  as a result of the application by the party complained against  of  measures which are in conflict  with  its  obligations  under  this Agreement.

1. Any request for consultations shall be submitted in writing, CC!;tainir,;; ti ,e icientiftcation of the specific measures at issue and indi<.;ation of the factual and legal basis (including the provisions of this Agreement alleged to have been breached and any other relevant provisions) of the complaint. The complaining party shall  at the  same  time  notify the rest of the Parties  therecf.

1. Upon receipt of the request referred to in paragraph 1, the party complained against shall promptly  acknowledge  receipt of such request  to the complaining  party and the rest of the  Parties at the same   time.

If a request for  consuitat1ons  is  made,  the  party  complained against shail 1 eplv to the requ2st within ten ( '1 C) days 2fter t11e d3te of receipt of the reqest 2nd sa'l enter into cor.su!ta ioi1S in good  faith within a period of  not more than  thirty  (30) days  after  the  date  of  receipt of  the  request,  with  a view  to  reaching  a mutually  satisfactory  solution.

1. The parties to a dispute shall make every effort to reach  a  mutually satisfactory resolution of any matter  through  consultations  under this Article. To this end, the parties to the dispute shall  provide each other with sufficient information to enable a full examination of the dispute.

1. Consultations shall be confidential between the parties to the dispute and are without prejudice to the rights of any  Party  in  any  further proceedings under this Chapter or in other proceedings. The parties to the dispute shall inform the rest of the  Parties of the outcome   of the consultations.

1. In cases of urgency, including those which concern perishable goods, the parties to the dispute shall enter into consultations within a period of no more than ten (10) days after the date of receipt of the request by the  party complained against.

1. In cases of urgency, including those which concern perishable goods, the parties to the dispute shall make every  effort to  accelerate  the consultations to the greatest extent   possible.

Article 63

Good Offices, Conciliation and Mediation

1. Good offices, conciliation and mediation are procedures that are undertaken voluntarily  if the parties to the  dispute so  agree.

1. Good offices, conciliation or mediation may be requested at any time by any party to a dispute. They may begin at any  time  by  agreement of the parties to the dispute and be terminated at any time  upon the request of any party to the   dispute.

1. If the parties to the dispute agree, good offices, conciliation or mediation may continue while the proceedings of the arbitral tribunal provided for  in this Chapter  are in progress.

1. Proceedings  invol'1ing  good  offices,  conci\iatior.  or  mediation,  und. in particular, pc - itions taken oy  the  parties  to  the  sispute  dunn  tr-,ese proceedings, shall  be  kept  confidential  and  without  prejudice  to the rights of  any  Party  in  any  proceedings  under  this  Chapter  or  in other   proceedings.

Article 64 Establishment of Arbitral  Tribunals

1. The complaining party may request in writing, to the party complained  against,  the establishment of an Rrbitral  tribunal:

{a)   if the  party  complained  against  does  not  respond  within ten ( 10) days, or does not enter into such consultations within thirty (30) days after the date of receipt of  the  request for  such consultations; or

(b) if the parties to the  dispute  fail  to  resolve  the  dispute  through such consultations within sixty (60) days after the date of receipt of the request for such consultations,  or within twenty (20) days after such date  in  cases  of  urgency  including those which concern perishable   goods.

1. A copy of the request referred to in paragraph 1 shall also be communicated  to the  rest of the Parties.

1. Where more than one (1) complaining party request the establishment of an arbitral tribunal related to the same matter, a single arbitral tribunal may, whenever feasible, be established by the parties to the dispute to examine the matter, taking into account the rights of each party to the dispute.

1. Where a single arbitral tribunal is established  purs1_ 1  r.t  to  paragraph 3,  the  arbitral  tribunal  shall  organise  its  examination  and present its findings  to  all  the  parties  to  the  dispute  in  such  a  manner  that the rights which the parties to the dispute would have enjoyed had separate arbitral tribunals examined the same  matter  are  in  no  way impaired. If any of the parties to the  dispute  so  requests,  the  arbitral  tribunal  may  make  separate  awards  on  the  dispute  concerned  as  long as the timeframe for making the  awards  so  permits.  The  written submissions by a party to  the  dispute  shall  be  made  available  to  the  other parties  to  the  dispute,  and  each  party  to  the  dispute  shall  have  the right to be present when any other party  to  the  dispute  presents  its views  to  the  arbitral  tribunal.

1. Where moie than 0ne (1) arbitrc1I tribu:131 are estabii tled ta  examine the dispute reiotE'd t.a the sarne matter , to the g,e a tes t F.: xte:1t possibie,  tr, e  same   persc"s  shall   be  appointed   by   the enties  to  the disputes to serve on each of the separate arbitrnl   tcibunals.

1. Any request for the establishment of an arbitral tribunal shall indicate whether consultations under Article 62 have been held. identify the factual basis for the complaint including the specific measures  at issue and provide the legal basis of the complaint including  the  provisions of this Agreement alleged to have been breached and  any other  relevant provisions.

Article  65 Composition  of Arbitral Tribunals

1.        An arbitral tribunal shall consist of three (3)  arbitrators.

1. The complaining party and the party complained against shall, within thirty (30) days after the date of receipt of the request for the establishment of an arbitral tribunal,  each  appoint  one  (1)  arbitrator  who may be a national of any party to the dispute and propose  up to  three (3) candidates to serve as the third  arbitrator  who  shall  be the chair of the arbitral tribunal.  The third arbitrator  shall  not be a  national  of any party to the dispute, nor have his or  her usual place of residence  in any party to the dispute, nor be employed by  any  party  to  the  dispute,  nor have dealt with the dispute in any  capacity.

1. The complairing party and the party complained against shall  agree on and appoint the third arbitrator within forty-five (45) days after  the date of receipt of the request for the establishment of an arbitral tribunal, taking into account the candidates proposed pursuant to paragraph 2. If either the complaining party or the p?rty  complained against has not appointed an arbitrator  pursuant to paragraph  2,  or  if  the parties to the dispute fail to agree on and appoint the third arbitrator pursuant to this paragraph, the Director-General of the World Trade Organization shall immediately be requested to make the necessary appointments. In the event that  the  Director-General  is  a  national  of any party to the dispute, the Deputy Director-General  or the officer  next  in seniority who is not a national of any party to the dispute shall be requested to make the necessary appointments. Appointments made pursuant to this paragraph other than that of the third arbitrator shall be deemed to have been made by the complaining party or the party complained  against which  has failed to make such an   appointment.

1. The date ot est::1blishment of an arbitral tribunal shall t,e the date on wh:ch tr,e third arb:trator  is appointed pursuant to pa,og r3ph   3.

1. If an arbitrator appointed under this Article resigns or becomes unable to act, a succeeding arbitrator shall be appointed in the same manner as prescribed for the appointment of the original arbitrator and  the succeeding arbitrator shall have all the powers and duties of the original  arbitrator.   The work  of the  arbitral tribunal  shall  be suspended until the succeeding  arbitrator  is appointed.

1. Any person appointed as an arbitrator shall have expertise or experience in law, international trade, other matters covered by this Agreement or the resolution  of  disputes  arising  under  international trade agreements. An arbitrator shall be chosen strictly on the basis of objectivity, reliability, sound judgment and independence  and  shall conduct himself or herself  on the same  basis throughout  the course  of the arbitral  tribunal  proceedings.  If a party to the  dispute  believes that an arbitrator is not adhering to the basis stated above, the parties to the dispute shall consult and if they agree, the  arbitrator  shall be removed and a new arbitrator  shall be appointed in accordance with this   Article.

Article 66

Third Parties

1. Any Party having a substantial interest in a dispute before an arbitral tribunal and having notified its interest in writing to the parties to the dispute and the rest of the Parties shall  have  an  opportunity  to make written submissions to the arbitral  tribunal.  These  submissions shall also  be given to the  parties to the dispute  and may be reflected   in the award of the arbitral  tribunal.

1. A third party shall receive the submissions of the parties to the dispute to the first m2et:ng of the 3,bitral  tr ibunai.
   1. If a third party considers that a measure that is  already  the  subject of any arbitral tribunal proceedings nullifies or impairs benefits accruing to it under this  Agreement,  such  third  party  may  have recourse to normal dispute settlement  procedures  under this  Chapter. 

Article  67 Functions of Arhltr3i Tribunals

1. The arbitral tribunal  established  pursuant to Article  64: 

(a)           should make an objective  assessment  of  the  matter before it, including an examination of the facts of the case and the applicability of and  conformity  with  the  Agreement;

(b)          should consult with the parties to the  dispute  as appropriate and provide them with adequate opportunities for the development  of a mutually satisfactory   resolution;

(c)           shall make its award in accordance with  this Agreement and applicable  rules of international  law;

(d)           shall set out, in its award, its findings of law and fact, together with the  reasons therefor;

(e)          may, apart from giving its findings, include in its award suggested implementation options for the parties to the dispute  to consider  in conjunction with Article  71; and

(f)           cannot, in its award, add to or diminish the rights and obligations  of any  Party provided in this Agreement.

1. The arbitral tribunal may seek, from the Parties, such relevant information as it considers  necessary  ·and  appropriate.  The  Parties shall respond promptly and fully  to  any  request  by the  arbitral tribunal for  such information.

1. The arbitral tribunal may seek information from any relevant source and may consult experts to obtain their opi, 1ion on certain aspects of the matter. With respect to factual issues concerning a scientific or other technical matter raised by any party to the dispute, the arbitral tribunal may request advisory reports in writing from  experts. The arbitral tribunal may, at the request of any party to the dispute or on its own initiative, select, in consultation with the parties to the dispute, no fewer than two (2) scientific or technical experts who shall assist the arbitral tribunal throughout its proceedings, but who shall not have the right to vote in respect of any decision to be made by the arbitral tribunal, including its award. Any information and technical advice so obtained shall be made available to the parties to the  dispute.

Article 68

Proceedings  of  Arbitral Tribunals

1. The rules and procedures as set out in this Article shall apply  to  the proceedings  of an arbitral  tribunal.
   1. The parties to the dispute,  in  consultation  with  the  arbitral tribunal, may agree to adopt additional rules and procedures not inconsistent with the  provisions  of this Article.

Terms of Reference for Arbitral  Tribunals

1. An  arbitral  tribunal  shall have the following  terms  of reference:

"To examine, in the light of (the relevant provisions in  this Agreement to be cited by the parties to the dispute), the matter referred to in the request for the establishment of an arbitral  tribunal pursuant to Article 64, and to issue awards including findings,  determinations  and  suggested  implementation   options,

if any, as provided for in Article  67."

Written Submissions  and  Other Documents

1. Each party to the dispute shall deliver to the other parties to the dispute  a copy  of  its written  submissions to the arbitral tribunal.
   1. In respect of any request, notice or other documents  related   to the arbitral tribunal proceedings that js not covered  by  paragraph  4,  each  party to the dispute  may  deliver  a copy  of  the  documents  to the other parties to the dispute by facsimile, e-mail or other means of electronic  transmission.

1. Any party to the dispute may at any time correct minor errors of  a clerical nature in any request, notice, written submission or other documents related to the arbitral tribunal proceedings by delivering a new document clearly indicating the changes.

Tirmetable

1. After consulting the parties to the dispute, the  arbitrai  tribunal shall as soon as practicable and whenever possible within  seven  (7) days after the establishment of the arbitral tribunal, fix the timetable for  the arbitral tribunal process. The timetable fixed for the arbitral tribunal shall include precise deadlines for written submissions by the parties to the dispute. Modifications to such timetable may be made by the agreement of the parties to the dispute in consultation with the arbitral tribunal.

Operation of Arbitral  Tribunals

1. An arbitral tribunal shall meet in closed session.  The  parties to  the dispute shall be present at the meetings only when invited by the arbitral tribunal to appear  before it.

1. All third parties which have notified their interest in the dispute shall be invited in writing to present their views during a session of the  first meeting of the arbitral tribunal proceedings set aside for  that purpose. All such third  parties may be present during  the  entirety  of  this session.

1. The deliberations of the arbitral tribunal and the documents submitted to it shall be kept  confidential.

1. Notwithstanding paragraph 10, any party to the  dispute  may  make public statements of its positions and its views regarding the  dispute, but shall treat as confidential, information and  written submissions made by the other parties to the dispute to the arbitral tribunal which the other parties to the dispute have designated as confidential. Where a party to  the  dispute  submits  a  confidential  version of its written s•_1brr.:ss1 c..,r 1::; t.::, ti:8 a,b: ral tribunal, it si iaii also, upon request of another party to the dispute, provide a non-confidential summary of the information or written submissions which may be disclosed publicly.

12.   The venue  for  the  arbitral tribunal  proceedings  shall be decided by mutual agreement between the complaining party and the party complained against. If there is no agreement, the venue shall alternate among the capitals of the parties to the dispute with the first meeting of  the arbitral tribunal proceedings to be held in one (1) of the  capitals  of  the party complained against. 

1. The partis to  the  dispute  shall  be  given  the  ooport,mity  to  atter.d any of the pi·2s2nt3tions, stat.emer,ts o, rebuttal in the proceedings. Any information provided and 'Nritt2n subrn:s::ions made to the arbitral tribunal by a party to the dispute. including any comments on the descriptive part of the draft award and responses to questions put by the arbitral tribunal, shall be made available to the other parties to the dispute.

Article 69

Draft Award  and Award

1. The award of the arbitral tribunal shall be drafted without the presence of the parties to the dispute and in the light of the information provided and the statements made in the proceedings. Opinions expressed in the award of the arbitral tribunal by its individual arbitrator shall be anonymous.

1. The arbitral tribunal shall, within ninety  (90) days  after  the date  of its establishment, issue to the parties to the dispute its draft award including both the descriptive part and its findings and  conclusions  for the purposes of enabling the parties to the dispute to review precise aspects of the draft  award.

1. When the arbitral tribunal considers that it cannot issue its draft award within the ninety (90) day period referred to  in paragraph  2,  it shall inform the parties to the dispute in writing of the reasons for the  delay together with the estimate of the period within  which  it will  issue  its draft award.

1. The parties to the dispute may submit comments in writing to the arbitral tribunal on the draft award within fifteen  (15) days after the date  of issuance of the draft  award.

1. Where written comments by the parties to the  dispute  as  provided for in paragraph 4 are received,  the  arbitral  tribunal,  on  its own initiative or at the request of a party to the dispute,  may reconsider  its award and make any further examination that  it  considers  appropriate.

1. The arbitral tribunal shall issue its award to the parties to the dispute within thirty  (30) days after the issuance of the draft   award.

1. The arbitral tribunal shall make its decisions, including its award,  by consensus, failing which  it may make its decisions  by majority  vote.

1. The award of the arbitrai  tribun2!  ::.hali be fin2i  ar,d binding  on the parties to m 2 dispute.

1. The award of the arbitral tribunal shall  be  circulated  to  tile  Parties within ten (10) days after its issuance to the parties to  the  dispute.

Article 70

Suspension and Termination  of Proceedings

1. Where the parties to the dispute agree, the arbitral tribunal may suspend its work at any time for a period not exceeding twelve  (12) months from the date of the joint notification of such agreement to the chair of the arbitral tribunal by the parties to the  dispute.  Upon  the request of any party to the dispute,  the  arbitral  tribunal  proceedings  shall be resumed after such suspension. If the work of  the  arbitral  tribunal has been suspended for more than twelve (12) months, the authority of the arbitral tribunal shall lapse unless the parties to the  dispute  agree otherwise.

1. The parties to the dispute may agree to  terminate  the  proceedings of an arbitral tribunal  at  any  time  before the  issuance  of the award by jointly  so notifying the chair of the arbitral   tribunal.

1. Before the arbitral tribunal issues its draft award, it may, at any stage of the proceedings, propose to the parties to the dispute that the dispute be settled  amicably.

Article 71 ·

Implementation of Award

1. The party complained against shall promptly comply with  the  award of the  arbitral tribunal  issued pursuant to Article  69.

2. The party complained against shall, within twenty (20) days after the date of issuance of the award, notify the complaining party of the period of time in which to implement the award. If the complaining party considers the period of time notified to be unacceptable, it may refer the matter to an arbitral tribunal which then determines the reasonable implementation period. The arbitral tribunal shall inform the parties to the dispute of its determination within thirty (30) days after  the date of the referral of the matter to it.

If the party complained aga!nst consider s it impracticable to comply With the awa,d with1r. the imp!enentatiofl p2riod as deLerm:r.ed pursu:mt to paragraph 2, the  pany  complained  asainst  sha!I, r.c  laer than the expiry of that  implementaticn  perioci,  enter  into consultations with the complaining party, with a view to  developing  mutually  satisfactory compensation. If no satisfactory compensation has been agreed within twenty (20) days after the date of expiry of that implementation period, the complaining party may request an arbitrul tribunal to determine the appropriate level of any suspension of the application  to  the  party  complained  against  of  concessions   or   other obligations  under this Agreement.

1. If the complaining party considers that the party  complained against has failed to comply with the award within the implementation period as determined pursuant to paragraph  2,  the  complaining  party may refer the matter to an arbitral tribunal to confirm the failure and to determine the appropriate level of any suspension  of the  application to the  party complained  against  of concessions  or  other  obligations under this Agreement.

1. The arbitral  tribunal  established  under  this  Article  shall, wherever possible, have as its arbitrators, the arbitrators of the original arbitral tribunal. If this is not possible, then  the  arbitrators  of  such  arbitral  tribunal  shall  be appointed  pursuant  to  paragraphs  2  and  3 of

Article 65

1. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under paragraphs 3 and 4 shall issue  its award within  sixty  (60) days  after  the  date when the  matter  is referred to it.

7. The  award of the arbitral tribunal  established  under this Article shall be bindir.; un an the parties to the dispute.

Article 72

Compensation  and the  Suspension  of Concessions

1. Compensation and the suspension of concessions or other obligations under this Agreement are temporary measures  available  in the event that the award is not implemented within  a reasonable  period  of time. However, neither compensation nor the suspension of concessions or other obligations  under  this Agreement  is  preferred  to full implementation of the award to bring a measure into conformity with this Agreement.   Compensation,  if granted,  shall  be consistent  with this Agreement.
2. The apr,Lrnti,:in of concessions or other obligations under this Aqr2emen shall not be suspended before t!K: ccxn!T,en..::ement and d1.1ring the course of the µmceedirigs under paragraphs 3 and 4  of Article 71.

1. The suspension of the application of concessions or other obligations under paragraphs 3 and 4 of Article 71 may only be lmplemented after the complaining party notifies the party complained against and the rest of the Parties that the complaining party intends to suspend the application to the party complained  against of concessions  or other obligations under this  Agreement.  The  party  complained against and the rest of the Parties shall be informed of the commencement of the suspension and which concessions or other obligations  under this Agreement  would  be suspended.

1. In considering what concessions or other obligations under this Agreement to be suspended under paragraphs 3 and 4  of Article  71, such  suspension shall:

(a)                       be temporary, and be discontinued  when  the  parties  to the dispute reach a mutually satisfactory resolution or  where  compliance  with the award is effected;

(b)                        be restricted to the same level of  nullification  or  impairment that is attributable to the failure to comply with the award;  and

(c)                       be restricted to the same sector or sectors as those  in which the arbitral tribunal· has found the nullification or impairment, unless it is not practicable or effective to suspend  the  application  of  concessions  or  obligations in such sector or sectors, in which case, the  complaining  party   may  suspend   concessions   or   benefits   ::1 othr

sectors  under this Agreement.

1. If the party complained against considers that the suspension of concessions or other obligations under this Agreement by  the  complaining party is inconsistent with the provisions of paragraph 4, the matter shall be referred tc an arbitral tribunal. For the purposes of the arbitral tribunal established under this Article, paragraph 5 of Article 71 shall  apply,  mutatis mutandis.

1. Unless the parties to the dispute agree to a different period, the arbitral tribunal established under  this  Article  shall  issue  its  award within sixty (60) days after the date when the matter  is referred  to  it. Such award shall be binding on all the  parties to the   dispute.

Article 73

Expense

1. The complaining party and the party complained against shall respectively bear the costs of the arbitrators which they appointed, and their  own expenses  and legal costs.
   1. Unless the parties to the dispute otherwise  agree,  the  costs  of the chair of the arbitral tribunal and other expenses associated with the conduct  of  the  proceedings  of  the  arbitral  tribunal  shall  be  borne in equal parts by the parties to a   dispute.

1. The arbitral tribunal shall keep a record  and  render  a  final account of all general expenses incurred in connection with the proceedings,  including  those  paid  to  their  assistants,  designated  note

takers  or other  individuals that it retains.

Chapter 10  Final Provisions

Article 74

Table of Contents, Headings and Subheadings

The table of contents, headings and subheadings are inserted for convenience  of  reference  only  and shall  not affect the  interpretation  of this Agreement.

Article 75 Review

The Parties shall undertake a general review of the implementation and operation of this Agreement in the fifth calendar year following  the calendar year in which this Agreement enters intc fort..;e pursuant to paragraph  1  of  Article  79,  and  every  five  (5)  years  thereafter, unless

otherwise  agreed  by the Parties.

Article 76 Annexes and Notes

The Annexes including attachment and Notes to this Agreement  shall form  an integral part of this  Agreement.

Article 77 Amendments

1. This Agreement may be amended by agreement among the Parties.

2    The  Government  of each Party shall notify the  Governments  of  tnh ether Parties in writir:c; that its legal procedures neceessary for entry into force of the amendment have been completed Such ,:rn1eild mc:nt shall enter into force or the first day o7 the second montr-, following the date by which such  notifications  have been made by the  Governments  of Japan and at least one (1) ASEAN Member  State,  which  is a  Party,  in relation to those Parties whose Governments have made such notifications  by that date.

3. Where an ASEAN Member State, which is a Party, makes the notification referred to :n paragraph 2 after the date by which the notifications have been made by the Governments  of  J2pan  and  at  least one (1) ASEAN Member State, which is a Party, as referred to in paragraph 2, the amendment referred to in paragraph 1 shall enter into force in relation to that ASEAN Member State on the first day of the second  month following the date on which  it makes the   notification.

4. Notwithstanding paragraphs 2 and 3, the number of ASEAN Member States referred to in paragraph 2 which is necessary for entry  into force of the amendment may  be increased  by  agreement  among the Parties.

1. Notwithstanding  paragraph  2, amendments  relating only to:

(a)           Annex 1 (provided that the amendments are made in accordance with the amendment of the Harmonized  System, and include no change on tariff  rates  applied  to the originating goods of the other  Parties  in  accordance with Annex 1); · ·

(b)           Annex 2;

(CJ   Attachment  to Annex  4;  or

(d)   Annex 5,

may be made by diplomatic notes exchanged among the Governments of the Parties. Such amendments shall enter into force in relation to all the Parties on the date specified in such diplomatic notes.

Article 78 Depositary

For the ASEAN Member States, this Agreement including its amendments shall be deposited with the Secretary-General of ASEAN, who shall promptly furnish a certified copy thereof, to each ASEAN Member State

 Article 79

Entry into Force

1. The Government of each signatory State shall notify t.he Governments of other signatory States in  writing  that  its  legal procedures necessary for entry into force of this Agreement have been completed. This Agreement shall enter into force on the first day of the second month following the date by which such notifications have been made by the Governments of Japan and at least  one  (1)  ASEAN  Member  State,  in  relation  to  those  signatory  States  that  have   made such notifications  by that date.

1. In relation to an ASEAN Member State making the notification referred to in paragraph 1 after the date by which the notifications have been made by the Governments of Japan and at least one (1) ASEAN Member State as referred to in paragraph 1, this Agreement  shall  enter into force on the first day of the second month following  the  date  on  which that ASEAN Member State makes the notification. That ASEAN Member State shall be  bound  by the  existing  terms  and  conditions  of this Agreement, including any amendments that may have entered  into force pursuant to Article 77 by the time of such notification. For the purposes of Annex 1, the staging of tariff elimination or reduction of that ASEAN  Member State shall also commence  from the date of entry    into force  of this Agreement  pursuant to  paragraph 1.

Article 80

Withdrawal and Termination

1. Any Party may withdraw from this Agreement by giving one (1) year's advance notice in writing to the other Parties.

2.  This government shall terminate  either when all ASEAN Member States which  are  Parties withdraw  in accordance with  pai a9i'apr1   i or when Japan does so.

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

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