Common use of Measures to Safeguard the Balance of Payments Clause in Contracts

Measures to Safeguard the Balance of Payments. 1. Where a Party is in serious balance of payments and external financial difficulties or under threat thereof, it may: (a) in the case of trade in goods, in accordance with GATT 1994 and the WTO Understanding on Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994, adopt restrictive import measures; (b) in the case of services, in accordance with GATS, adopt or maintain restrictions on trade in services on which it has undertaken specific commitments, including on payments or transfers for transactions related to such commitments; (c) in the case of investments, adopt or maintain restrictions with regard to the transfer of funds related to investment, including those on capital account. 2. Restrictions adopted or maintained under subparagraph 1(b) or 1(c) shall: (a) be consistent with the Articles of Agreement of the International Monetary Fund; (b) avoid unnecessary damage to the commercial, economic and financial interests of the other Party; (c) not exceed those necessary to deal with the circumstances described in paragraph 1; (d) be temporary and be phased out progressively as the situation specified in paragraph 1 improves; and (e) be applied on an equitable, non- discriminatory and good faith basis and such that the other Party is treated no less favourably than any non-Party. 3. In determining the incidence of such restrictions, the Parties may give priority to economic sectors which are more essential to their economic development. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular sector. 4. Any restrictions adopted or maintained by a Party under paragraph 1, or any changes therein, shall be notified to the other Party within 30 days from the date such measures are taken. 5. The Party adopting or maintaining any restrictions under paragraph 1 shall commence consultations with the other Party within 45 days from the date of notification in order to review the measures adopted or maintained by it.

Measures to Safeguard the Balance of Payments. 1. Where a Party is in serious balance of payments and external financial difficulties or under threat thereof, it may: (a) in the case of trade in goods, in accordance with GATT 1994 and the WTO Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 19941994 in Annex 1A to the WTO Agreement, adopt restrictive import measures; (b) in the case of trade in services, in accordance with GATS, adopt or maintain restrictions on trade in services on which it has undertaken specific commitments, including on payments or transfers for transactions related to such commitments; (c) in the case of investments, adopt or maintain restrictions with regard to the transfer of funds on payments or transfers related to investment, including those on capital account. 2. covered investments as defined in Article 2(a) (Definitions) of Chapter 11 (Investment) Restrictions adopted or maintained under subparagraph Paragraph 1(b) or 1(c(c) shall: (a) be consistent with the IMF Articles of Agreement of the International Monetary FundAgreement; (b) avoid unnecessary damage to the commercial, economic and financial interests of the any other Party; (c) not exceed those necessary to deal with the circumstances described in paragraph Paragraph 1; (d) be temporary and be phased out progressively as the situation specified in paragraph Paragraph 1 improves; and (e) be applied on an equitable, non- a non-discriminatory and good faith basis and such that the other no Party is treated no less favourably than any other Party or non-Party. 3. In With respect to trade in services and investment, it is recognised that particular pressures on the balance of payments of a Party in the process of economic development or economic transition may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserves adequate for the implementation of its programme of economic development or economic transition; in determining the incidence of such restrictions, the Parties a Party may give priority to economic sectors which are more essential to their economic developmentor development programmes. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular sector. 4. Any restrictions adopted or maintained by a Party under paragraph Paragraph 1, or any changes therein, shall be notified promptly to the other Party within 30 days from the date such measures are takenParties. 5. The A Party adopting or maintaining any restrictions under paragraph Paragraph 1 shall: in the case of investment, respond to any other Party that requests consultations in relation to the restrictions adopted by it, if such consultations are not otherwise taking place outside this Agreement; in the case of trade in services, if consultations in relation to the restrictions adopted by it are not taking place at the WTO, a Party, if requested, shall promptly commence consultations with the other Party within 45 days from the date of notification in order to review the measures adopted or maintained by itany interested Party.