TITLE XII: EXCEPTIONS
Article EXC.1: General exceptions
1. Nothing in Chapter one [National Treatment and market access for goods] and Chapter five of Title I of Heading One of Part two [Customs and trade facilitation], Title VIII of Heading One of Part two [Energy and raw materials], Chapter four of Title XI of Heading One of Part two [State-owned enterprises], Title III of Heading One of Part two [Digital trade] and Chapter two of Title II of Heading One of Part two [Investment liberalisation] shall be construed as preventing a Party from adopting or maintaining measures compatible with Article XX of GATT 1994. To that end, Article XX of GATT 1994, including its Notes and Supplementary Provisions, is incorporated into and made part of this Agreement, mutatis mutandis.
2. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on investment liberalization or trade in services, nothing in Title VIII of Heading One of Part two [Energy and raw materials], Chapter four of Title XI of Heading One of Part two [State-owned enterprises], Title III of Heading One of Part two [Digital trade], Title II of Heading One of Part two [Services and Investment] and Title IV of Heading One of Part two [Capital movements, payments, transfers and temporary safeguard measures] shall be construed to prevent the adoption or enforcement by either Party of measures:
(a) necessary to protect public security or public morals or to maintain public order67;
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contracts;
67 The public security and public order exceptions may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.
(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; and
3. For greater certainty, the Parties understand that, to the extent that such measures are otherwise inconsistent with the provisions of the aforementioned Chapters, Sections or Titles:
(a) the measures referred to in point (b) of Article XX of GATT 1994 and in point (b) of paragraph 2 of this Article include environmental measures, which are necessary to protect human, animal or plant life and health;
(b) point (g) of Article XX of GATT 1994 applies to measures relating to the conservation of living and non-living exhaustible natural resources; and
(c) measures taken to implement multilateral environmental agreements can fall under points (b) or (g) of Article XX of GATT 1994 or under point (b) of paragraph 2 of this Article.
4. Before a Party takes any measures provided for in points (i) and (j) of Article XX of GATT 1994, that Party shall provide the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. If no agreement is reached within 30 days of providing the information, the Party may apply the relevant measures. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith precautionary measures necessary to deal with the situation. That Party shall inform the other Party immediately thereof.
Article EXC.2: Taxation
1. Nothing in Titles I to VII, Chapter four [Energy and raw materials] of Title VIII, Titles IX to XII of Heading One of Part Two or Heading Six [Other provisions] of Part Two shall affect the rights and obligations of either the Union or its Member States and the United Kingdom, under any tax convention. In the event of any inconsistency between this Agreement and any such tax convention, the tax convention shall prevail to the extent of the inconsistency. With regard to a tax convention between the Union or its Member States and the United Kingdom, the relevant competent authorities under this Agreement and that tax convention shall jointly determine whether an inconsistency exists between this Agreement and the tax convention68.
2. Article SERVIN.2.4 of Chapter two of Title II of Heading One of Part two [Investment Liberalisation] and Article SERVIN.3.4 of Chapter three of Title II of Heading One of Part two [Cross- border trade in services] shall not apply to an advantage accorded pursuant to a tax convention.
3. Subject to the requirement that tax measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade and investment, nothing in Titles I to VII, Chapter four [Energy and raw materials] of Title VIII, Titles IX to XII of Heading One of Part Two or Heading Six
68 For greater certainty, such determination shall be without prejudice to Title I of Part Six [Dispute Settlement].
[Other provisions] of Part Two shall be construed to prevent the adoption, maintenance or enforcement by a Party of any measure that:
(a) aims at ensuring the equitable or effective69 imposition or collection of direct taxes; or
(b) distinguishes between taxpayers, who are not in the same situation, in particular with regard to their place of residence or with regard to the place where their capital is invested.
4. For the purposes of this Article:
(a) “residence” means residence for tax purposes;
(b) “tax convention” means a convention for the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation; and
(c) “direct taxes” comprise all taxes on income or capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, taxes on wages or salaries paid by enterprises and taxes on capital appreciation.
Article EXC.3: WTO Waivers
If an obligation in Titles I to XII of Heading One of Part Two or Heading Six [Other provisions] of Part Two of this Agreement is substantially equivalent to an obligation contained in the WTO Agreement, any measure taken in conformity with a waiver adopted pursuant to Article IX of the WTO Agreement is deemed to be in conformity with the substantially equivalent provision in this Agreement.
69 Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include measures taken by a Party under its taxation system which:
(i) apply to non-resident service suppliers in recognition of the fact that the tax obligation of non- residents is determined with respect to taxable items sourced or located in the Party’s territory; or
(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the Party’s territory; or
(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or
(iv) apply to consumers of services supplied in or from the territory of the other Party or of a third country in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Party’s territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or
(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Party’s tax base.
Article EXC.4: Security exceptions
Nothing in Titles I to XII of Heading One of Part Two or Heading Six [Other provisions] of Part Two of this Agreement shall be construed:
(a) to require a Party to furnish or allow access to any information the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent a Party from taking an action which it considers necessary for the protection of its essential security interests:
(i) connected to the production of or traffic in arms, ammunition and implements of war and to such production, traffic and transactions in other goods and materials, services and technology, and to economic activities, carried out directly or indirectly for the purpose of supplying a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from which they are derived; or
(iii) in time of war or other emergency in international relations; or
(c) to prevent a Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article EXC.5: Confidential information
1. Nothing in Titles I to X, Title XI, with the exception of Article LPFS.2.26 [Taxation standards] of Title XI and Title XII of Heading One of Part Two or Heading Six [Other provisions] of Part Two of this Agreement shall be construed as requiring a Party to make available confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of particular enterprises, public or private, except where an arbitration tribunal requires such confidential information in dispute settlement proceedings under Title I [Dispute settlement] of Part Six, or where a panel of experts requires such confidential information in proceedings under Article LPFS.9.2¨[Panel of experts] or Article LPFS.9.3¨[Panel of experts for non-regression areas]. In such cases, the arbitration tribunal, or, as the case may be, the panel of experts shall ensure that confidentiality is fully protected in accordance with ANNEX INST-X [Rules of Procedure].
2. When a Party submits information to the Partnership Council or to Committees that is considered as confidential under its laws and regulations, the other Party shall treat that information as confidential, unless the submitting Party agrees otherwise.