COUNCIL DECISION

of 10 November 2009

on the conclusion of an Agreement in the form of a Protocol between the European Community and its Member States and the Republic of Lebanon establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part

(2010/771/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 in conjunction with the first sentence of the first subparagraph of Article 300(2) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1) On 24 February 2006, the Council authorised the Commission to open negotiations with its partners from the Mediterranean region in order to establish a dispute settlement mechanism related to trade provisions.

(2) Negotiations have been conducted by the Commission in consultation with the Committee established by Article 133 of the Treaty and within the framework of the negotiating directives issued by the Council.

(3) The Commission has finalised negotiations for the conclusion of an Agreement in the form of a Protocol establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part(1).

(4) This Agreement should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreement in the form of a Protocol between the European Community and the Republic of Lebanon establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part, is hereby approved on behalf of the Community.

The text of the Agreement is attached to this Decision.

Article 2

The President of the Council is hereby authorised to designate the person(s) empowered to sign the Agreement in the form of a Protocol in order to bind the Community.

Done at Brussels, 10 November 2009.

For the Council

The President

A. BORG

(1)

OJ L 143, 30.5.2006, p. 2

Joint Declaration

by the European Union and the Republic of Lebanon

on the occasion of the signature of the Agreement in the form of a Protocol establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part

As a consequence of the entry into force of the Treaty of Lisbon on 1 December 2009, the European Union has replaced and succeeded the European Community and from that date the European Union exercises all rights and assumes all obligations of the European Community.

Therefore, references to ‘the European Community’ in the text of the aforementioned Agreement, signed today, are, where appropriate, to be read as ‘the European Union’.

Déclaration conjointe

de I’Union européenne et de la République libanaise

à l’occasion de la signature de l’accord sous forme de protocole instituant un mécanisme de règlement des différends relatifs aux dispositions commerciales de l’accord euroméditerranéen instituant une association entre la Communauté européenne et ses États membres, d’une part, et la République libanaise, d’autre part

À la suite de l’entrée en vigueur du traité de Lisbonne, le 1

décembre 2009, I’Union européenne s’est substituée et a succédé à la Communauté européenne et, à compter de cette date, exerce tous les droits et assume toutes les obligations de la Communauté européenne.

Par conséquent les références à «la Communauté européenne» dans le texte de l’accord signé ce jour s’entendent, le cas échéant, comme faites à «l’Union européenne».

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Done at Brussels on 11 November 2010

Fait à Bruxelles, le 11 novembre 2010

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For the European Union

Pour 1’Union européenne

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For the Republic of Lebanon

Pour la République libanaise

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14.12.2010

Official Journal of the European Union

L 328/21

PROTOCOL

between the European Community and the Republic of Lebanon establishing a dispute settlement mechanism applicable to disputes under the trade provisions of the Euro-Mediterranean Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Lebanon, of the other part

THE EUROPEAN COMMUNITY,

hereinafter referred to as ‘the Community’,

of the one part, and

THE REPUBLIC OF LEBANON,

hereinafter referred to as ‘Lebanon’,

of the other part,

HAVE DECIDED AS FOLLOWS:

CHAPTER I

OBJECTIVE AND SCOPE

Article 1

Objective

The objective of this Protocol is to avoid and settle any trade dispute between the Parties with a view to arriving at, where possible, a mutually agreed solution.

Article 2

Application of the Protocol

The provisions of this Protocol apply with respect to any dispute concerning the interpretation and application of the provisions of Title II (with the exception of Articles 23, 24 and 25) of the Euro-Mediterranean Agreement establishing an Association between the European Community and its Members States, of the one part, and the Republic of Lebanon, of the other part (hereinafter referred to as the ‘Association Agreement’), except as otherwise expressly provided(1). Article 82 of the Association Agreement applies to disputes relating to the application and interpretation of other provisions of the Association Agreement.

CHAPTER II

CONSULTATIONS AND MEDIATION

Article 3

Consultations

1. The Parties shall endeavour to resolve any difference regarding the interpretation and application of the provisions referred to in Article 2 by entering in good faith into consultations under the auspices of the Association Council with the aim of reaching a prompt, equitable, and mutually agreed solution.

2. A Party shall seek consultations by means of a written request to the other Party, copied to the subcommittee on industry, trade and services, identifying any measure at issue and the provisions of the Association Agreement that it considers applicable.

3. Consultations shall be held within 30 days of the date of receipt of the request and shall take place, unless the Parties agree otherwise, on the territory of the Party complained against. The consultations shall be deemed concluded within 60 days of the date of receipt of the request, unless both Parties agree to continue consultations. Consultations, in particular all information disclosed and positions taken by the Parties during these proceedings, shall be confidential, and without prejudice to the rights of either Party in any further proceedings.

4. Consultations on matters of urgency, including those regarding perishable or seasonal goods, shall be held within 15 days of the date of receipt of the request, and shall be deemed concluded within 30 days of the date of receipt of the request.

5. If the Party to which the request for consultations is made does not respond to the request within 10 working days of the date of its receipt, or if consultations are not held within the timeframes laid down in paragraph 3 or paragraph 4 respectively, or if consultations have been concluded and no agreement has been reached on a mutually agreed solution, the complaining Party may request the establishment of an arbitration panel in accordance with Article 5.

Article 4

Mediation

1. If consultations fail to produce a mutually agreed solution, the Parties may, by mutual agreement, seek recourse to a mediator. Any request for mediation must be made in writing to the subcommittee on industry, trade and services and state any measure which has been the subject of consultations as well as the mutually agreed terms of reference for the mediation. Each Party undertakes to accord sympathetic consideration to requests for mediation.

2. Unless the Parties agree on a mediator within five working days of the date of receipt of the request for mediation, the chairpersons of the subcommittee on industry, trade and services, or the chairpersons’ delegate, shall draw by lot a mediator from the names on the lists referred to in Article 19 who is not a national of either Party. The selection shall be made within 10 working days of the date of receipt of the request for mediation. The mediator shall convene a meeting with the Parties no later than 30 days after having been selected. The mediator shall receive the submissions of each Party no later than 15 days before the meeting and may request additional information from the Parties or from experts or technical advisors as she or he deems necessary. Any information obtained in this manner must be disclosed to each of the Parties and submitted for their comments. The mediator shall deliver an opinion no later than 45 days after having been selected.

3. The mediator’s opinion may include recommendations on how to resolve the dispute consistent with the provisions referred to in Article 2. The mediator’s opinion is non-binding.

4. The Parties may agree to amend the time limits referred to in paragraph 2. The mediator may also decide to amend these time limits upon request of any of the Parties or on his own initiative, given the particular difficulties experienced by the Party concerned or the complexities of the case.

5. The proceedings involving mediation, in particular the mediator’s opinion and all information disclosed and positions taken by the Parties during these proceedings, shall be confidential, and without prejudice to the rights of either Party in any further proceeding.

6. If the Parties agree, a procedure for mediation may continue while the arbitration procedure proceeds.

7. Replacement of a mediator shall take place only for the reasons and according to the procedures detailed in Rules 17 to 20 of the Rules of Procedure.

CHAPTER III

DISPUTE SETTLEMENT PROCEDURES

SECTION I

Arbitration procedure

Article 5

Initiation of the arbitration procedure

1. Where the Parties fail to resolve the dispute by recourse to consultations as provided for in Article 3, or by recourse to mediation as provided for in Article 4, the complaining Party may request the establishment of an arbitration panel.

2. The request for the establishment of an arbitration panel shall be made in writing to the Party complained against and the subcommittee on industry, trade and services. The complaining Party shall identify in its request the specific measure at issue, and it shall explain how such measure constitutes a breach of the provisions referred to in Article 2. The establishment of an arbitration panel shall be requested no later than 18 months from the date of receipt of the request for consultations, without prejudice to the rights of the complaining Party to request new consultations on the same matter in the future.

Article 6

Establishment of the arbitration panel

1. An arbitration panel shall be composed of three arbitrators.

2. Within 10 working days of the date of receipt by the Party complained against of the request for the establishment of an arbitration panel, the Parties shall consult in order to reach an agreement on the composition of the arbitration panel.

3. In the event that the Parties are unable to agree on its composition within the time frame laid down in paragraph 2, either party may request the chairpersons of the subcommittee on industry, trade and services, or the chairpersons’ delegate, to draw by lot all three members of the arbitration panel from the list established under Article 19; one name shall be drawn among the individuals proposed by the complaining Party, one shall be drawn among the individuals proposed by the Party complained against and one shall be drawn among the individuals selected by the Parties to act as chairperson. Where the Parties agree on one or two of the members of the arbitration panel, the remaining members shall be selected by the same procedure.

4. The chairpersons of the subcommittee on industry, trade and services, or the chairpersons’ delegate, shall select the arbitrators within five working days of the request referred to in paragraph 3.

5. The date of establishment of the arbitration panel shall be the date on which the three arbitrators are selected.

6. Replacement of arbitrators shall take place only for the reasons and according to the procedures detailed in Rules 17 to 20 of the Rules of Procedure.

Article 7

Interim panel report

The arbitration panel shall issue an interim report to the Parties setting out the findings of fact, the applicability of relevant provisions and the basic rationale behind any findings and recommendations that it makes, no later than 120 days from the date of establishment of the arbitration panel. Either Party may submit a written request for the arbitration panel to review precise aspects of the interim report within 15 days of its notification. The findings of the final arbitration panel ruling shall include a discussion of the arguments made at the interim review stage.

Article 8

Arbitration panel ruling

1. The arbitration panel shall notify its ruling to the Parties and to the subcommittee on industry, trade and services within 150 days from the date of establishment of the arbitration panel. Where the chairperson of the arbitration panel considers that this deadline cannot be met, he or she shall notify the Parties and the subcommittee on industry, trade and services in writing, stating the reasons for the delay and the date on which the arbitration panel plans to conclude its work. Under no circumstances should the ruling be notified later than 180 days from the date of establishment of the arbitration panel.

2. In cases of urgency, including those involving perishable or seasonal goods, the arbitration panel shall make every effort to notify its ruling within 75 days from the date of its establishment. Under no circumstances should the ruling be notified later than 90 days from the date of its establishment. The arbitration panel shall give a preliminary ruling within 10 days of its establishment on whether it deems the case to be urgent.

3. The arbitration panel shall, at the request of both Parties, suspend its work at any time for a period agreed by the Parties not exceeding 12 months and shall resume its work at the end of this agreed period at the request of the complaining Party. If the complaining Party does not request the resumption of the arbitration panel’s work before the expiry of the agreed suspension period, the procedure shall be terminated. The suspension and termination of the arbitration panel’s work are without prejudice to the rights of either Party in another proceeding on the same matter.

SECTION II

Compliance

Article 9

Compliance with the arbitration panel ruling

Each Party shall take any measure necessary to comply with the arbitration panel ruling, and the Parties shall endeavour to agree on the period of time to comply with the ruling.

Article 10

The reasonable period of time for compliance

1. No later than 30 days after the receipt of the notification of the arbitration panel ruling by the Parties, the Party complained against shall notify the complaining Party and the subcommittee on industry, trade and services of the time it will require for compliance (reasonable period of time), if immediate compliance is not possible.

2. In the event of disagreement between the Parties on the reasonable period of time with which to comply with the arbitration panel ruling, the complaining Party shall, within 20 days of the receipt of the notification made under paragraph 1 by the Party complained against, request in writing the arbitration panel to determine the length of the reasonable period of time. Such request shall be notified simultaneously to the other Party and to the subcommittee on industry, trade and services. The arbitration panel shall notify its ruling to the Parties and to the subcommittee on industry, trade and services within 30 days from the date of submission of the request.

3. The reasonable period of time may be extended by mutual agreement of the Parties.

Article 11

Review of any measure taken to comply with the arbitration panel ruling

1. The Party complained against shall notify the other Party and the subcommittee on industry, trade and services before the end of the reasonable period of time of any measure that it has taken to comply with the arbitration panel ruling.

2. In the event of disagreement between the Parties concerning the existence of any measure notified under paragraph 1 or its consistency with the provisions referred to in Article 2, the complaining Party may request in writing the arbitration panel to rule on the matter. Such request shall identify the specific measure at issue and shall explain how such measure is inconsistent with the provisions referred to in Article 2. The arbitration panel shall notify its ruling within 90 days of the date of submission of the request. In cases of urgency, including those involving perishable or seasonal goods, the arbitration panel shall notify its ruling within 45 days of the date of submission of the request.

Article 12

Temporary remedies in case of non-compliance

1. If the Party complained against fails to notify any measure taken to comply with the arbitration panel ruling before the expiry of the reasonable period of time, or if the arbitration panel rules that the measure notified under Article 11(1) is inconsistent with that Party’s obligations under the provisions referred to in Article 2, the Party complained against shall, if so requested by the complaining Party, present an offer for temporary compensation.

2. If no agreement on compensation is reached within 30 days of the end of the reasonable period of time or of notification of the arbitration panel ruling under Article 11 that the measure taken to comply is inconsistent with the provisions referred to in Article 2, the complaining Party shall be entitled, upon notification to the other Party and to the subcommittee on industry, trade and services, to suspend obligations arising from any provision referred to in Article 2 at a level equivalent to the nullification or impairment caused by the violation. The complaining Party may implement the suspension 10 working days after the date of receipt of the notification by the Party complained against, unless the Party complained against has requested arbitration under paragraph 3.

3. If the Party complained against considers that the level of suspension is not equivalent to the nullification or impairment caused by the violation, it may request in writing the arbitration panel to rule on the matter. Such request shall be notified to the other Party and to the subcommittee on industry, trade and services before the expiry of the 10-working-day period referred to in paragraph 2. The arbitration panel, having sought, if appropriate, the opinion of experts, shall notify its ruling on the level of the suspension of obligations to the Parties and to the subcommittee on industry, trade and services within 30 days of the date of submission of the request. Obligations shall not be suspended until the arbitration panel has delivered its ruling, and any suspension shall be consistent with the arbitration panel ruling.

4. The suspension of obligations shall be temporary and shall be applied only until any measure found to be inconsistent with the provisions referred to in Article 2 has been withdrawn or amended so as to bring it into conformity with those provisions, as established under Article 13, or until the Parties have settled the dispute.

Article 13

Review of any measure taken to comply after the suspension of obligations

1. The Party complained against shall notify the other Party and the subcommittee on industry, trade and services of any measure it has taken to comply with the ruling of the arbitration panel and of its request for an end to the suspension of obligations applied by the complaining Party.

2. If the Parties do not reach an agreement on the compatibility of the notified measure with the provisions referred to in Article 2 within 30 days of the date of receipt of the notification, the complaining Party shall request in writing the arbitration panel to rule on the matter. Such request shall be notified simultaneously to the other Party and to the subcommittee on industry, trade and services. The arbitration panel ruling shall be notified to the Parties and to the subcommittee on industry, trade and services within 45 days of the date of submission of the request. If the arbitration panel rules that any measure taken to comply is in conformity with the provisions referred to in Article 2, the suspension of obligations shall be terminated.

SECTION III

Common provisions

Article 14

Mutually agreed solution

The Parties may reach a mutually agreed solution to a dispute under this Protocol at any time. They shall notify the subcommittee on industry, trade and services and the arbitration panel of any such solution. Upon notification of the mutually agreed solution, the arbitration panel shall terminate its work and the procedure shall be terminated.

Article 15

Rules of procedure

1. Dispute settlement procedures under Chapter III shall be governed by the Rules of Procedure annexed to this Protocol.

2. Any meeting of the arbitration panel shall be open to the public in accordance with the Rules of Procedure, unless the Parties agree otherwise.

Article 16

Information and technical advice

1. Upon its own initiative or at the request of a Party, the arbitration panel may obtain information from any source, including the Parties, which it deems appropriate for the arbitration panel proceeding. In particular, the arbitration panel has the right to seek the relevant opinion of experts as it deems appropriate. The panel shall consult the Parties before choosing such experts. The panel shall not be bound by the Parties’ opinion on the experts. Any information obtained in this manner must be disclosed to each of the Parties and submitted for their comments.

2. Interested natural or legal persons established in the Parties are authorised to submit

amicus curiae

briefs to the arbitration panel in accordance with the Rules of Procedure. Such briefs shall be limited to the factual aspects of the dispute and shall not address points of law.

Article 17

Rules of interpretation

Any arbitration panel shall interpret the provisions referred to in Article 2 in accordance with customary rules of interpretation of public international law, including those set out in the Vienna Convention on the Law of Treaties. The rulings of the arbitration panel cannot add to or diminish the rights and obligations provided in the provisions referred to in Article 2.

Article 18

Arbitration panel rulings

1. The arbitration panel shall make every effort to make its rulings by consensus. Where, nevertheless, a ruling cannot be made by consensus, the matter at issue shall be decided by majority vote.

2. Any ruling of the arbitration panel shall be binding on the Parties and shall not create any rights or obligations to physical or legal persons. The ruling shall set out the findings of fact, the applicability of the relevant provisions of the Association Agreement and the basic rationale behind any findings and conclusions that it makes. The subcommittee on industry, trade and services shall make the arbitration panel ruling publicly available in its entirety unless it decides not to do so in order to ensure the confidentiality of confidential business information.

CHAPTER IV

GENERAL PROVISIONS

Article 19

Lists of arbitrators

1. The subcommittee on industry, trade and services shall, no later than 6 months after the entry into force of this Protocol, establish a list of at least 15 individuals who are willing and able to serve as arbitrators. Each of the Parties shall propose at least five individuals to serve as arbitrators. The two Parties shall also select at least five individuals who are not nationals of either Party to act as chairperson. The subcommittee on industry, trade and services will ensure that the list is always maintained at this level.

2. The arbitrators must have specialised knowledge or experience of law and international trade. They shall be independent, serve in their individual capacities and not take instructions from any organisation or government, or be affiliated with the government of any of the Parties, and shall comply with the Code of Conduct annexed to this Protocol.

3. The subcommittee on industry, trade and services may establish additional lists of at least 15 individuals having a sectoral expertise in specific matters covered by the Association Agreement, or with experience in mediation. When recourse is made to the selection procedure of Article 6(2), the chairpersons of the subcommittee on industry, trade and services may use such sectoral list upon agreement of both Parties.

Article 20

Relation with WTO obligations

1. Recourse to the dispute settlement provisions of this Protocol shall be without prejudice to any action in the WTO framework, including dispute settlement action.

2. However, where a Party has, with regard to a particular measure, instituted a dispute settlement proceeding, either under this Protocol or under the WTO Agreement, it may not institute a dispute settlement proceeding regarding the same measure in the other forum until the first proceeding has ended. In addition, a Party shall not seek redress for the breach of an obligation which is identical under the Association Agreement and under the WTO Agreement in the two forums. In such case, once a dispute settlement proceeding has been initiated, the Party shall not bring a claim seeking redress for the breach of the identical obligation under the other agreement to the other forum, unless the forum selected fails, for procedural or jurisdictional reasons, to make findings on that claim.

3. For purposes of paragraph 2:

— dispute settlement proceedings under the WTO Agreement are deemed to be initiated by a Party’s request for the establishment of a panel under Article 6 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO (DSU) and are deemed to be ended when the Dispute Settlement Body adopts the panel’s report, and the Appellate Body’s report as the case may be, under Articles 16 and 17(14) of the DSU,

— dispute settlement proceedings under this Protocol are deemed to be initiated by a Party’s request for the establishment of an arbitration panel under Article 5(1) and are deemed to be ended when the arbitration panel notifies its ruling to the Parties and to the subcommittee on industry, trade and services under Article 8.

4. Nothing in this Protocol shall preclude a Party from implementing the suspension of obligations authorised by the Dispute Settlement Body of the WTO. The WTO Agreement shall not be invoked to preclude a Party from suspending its obligations under this Protocol.

Article 21

Time limits

1. All time limits laid down in this Protocol, including the limits for the arbitration panels to notify their rulings, shall be counted in calendar days from the day following the act or fact to which they refer, unless otherwise specified.

2. Any time limit referred to in this Protocol may be modified by mutual agreement of the Parties. The Parties undertake to accord sympathetic consideration to requests for extensions of any time limit by reason of difficulties faced by any Party in complying with the procedures of this Protocol. Upon request of a Party, the arbitration panel may modify the time limits applicable in the proceedings, taking into account the different level of development of the Parties.

Article 22

Review and modification of the Protocol

1. The Association Council may review the implementation of this Protocol and its Annexes, with a view to deciding on their continuation, modification or termination.

2. The Association Council may decide to modify this Protocol and its annexes. Any such modification may be subject to the fulfilment of the internal legal requirements of each Party.

Article 23

Entry into force

This Protocol shall be approved by the Parties in accordance with their own procedures. It shall enter into force on the first day of the second month following the date on which the Parties notify each other that the procedures referred to in this Article have been completed.

Done at Brussels, 11 November 2010, in duplicate, in the Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish, Swedish and Arabic languages, each of these texts being equally authentic.

За Европейския съюз

Por la Unión Europea

Za Evropskou unii

For Den Europæiske Union

Für die Europäische Union

Euroopa Liidu nimel

Για την Ευρωπαϊκή Ένωση

For the European Union

Pour l'Union européenne

Per l'Unione europea

Eiropas Savienības vārdā

Europos Sajungos vardu

Az Európai Unió részéről

Għall-Unjoni Ewropea

Voor de Europese Unie

W imieniu Unii Europejskiej

Pela União Europeia

Pentru Uniunea Europeană

Za Európsku úniu

Za Evropsko unijo

Euroopan unionin puolesta

För Europeiska unionen

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За Релублика Ливан

Por la República Libanesa

Za Libanonskou republiku

For Den Libanesiske Republik

Für die Libanesische Republik

Liibanoni Vabariigi nimel

Για τη Δημοκρατία του Λιβάνου

For the Republic of Lebanon

Pour la République libanaise

Per la Repubblica libanese

Libānas Republikas vārdā

Libano Respublikos vardu

A Libanoni Köztársaság részéről

Għar-repubblika tal-Libanu

Voor de Republiek Libanon

W imieniu Republiki Libańskiej

Pela República do Líbano

Pentru Republica Libaneză

Za Libanonskú republiku

Za Republiko Libanon

Libanonin tasavallan puolesta

För Republiken Libanon

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(1) The provisions of this Protocol are without prejudice to Article 33 of the Protocol concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation.

ANNEXES

ANNEX I

RULES OF PROCEDURE FOR ARBITRATION

ANNEX II

CODE OF CONDUCT FOR MEMBERS OF ARBITRATION PANELS AND MEDIATORS

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