CHAPTER 28

GOOD REGULATORY PRACTICES

Article 28.1:  Definitions

For the purposes of this Chapter:

regulation  means  a measure  of general  application  adopted,  issued,  or maintained  by  a regulatory authority with which compliance is mandatory, except as set forth in Annex 28-A;

regulatory authority means an administrative authority or agency at the Party’s central level of government that develops, proposes or adopts a regulation, and does not include legislatures or courts; and

regulatory  cooperation  means an effort between Parties to prevent, reduce, or  eliminate unnecessary  regulatory  differences  between  jurisdictions  to  facilitate  trade  and  promote economic growth, while maintaining or enhancing standards of public health and safety and environmental protection.

Article 28.2:  Subject Matter and General Provisions

  1. The Parties recognize that implementation of government-wide practices to promote regulatory  quality  through  greater  transparency,  objective  analysis,  accountability,  and predictability  can  facilitate  international  trade,  investment,  and  economic  growth,  while contributing to each Party’s ability to achieve its public policy objectives (including health, safety, and environmental  goals) at the level of protection  it considers  appropriate.   The application of good regulatory practices can support the development of compatible regulatory approaches among the Parties, and reduce or eliminate unnecessarily burdensome, duplicative, or divergent  regulatory  requirements.    Good regulatory  practices  are also fundamental  to effective regulatory cooperation.
  1. Accordingly, this Chapter sets forth specific obligations with respect to good regulatory practices, including practices relating to the planning, design, issuance, implementation, and review of the Parties’ respective regulations.
  1. Nothing in this Chapter prevents a Party from:

(a)       pursuing   its   public   policy   objectives   (including   health,   safety,    and environmental goals) at the level it considers to be appropriate;

(b)       determining  the appropriate  method of implementing  its obligations  in  this

Chapter within the framework of its own legal system and institutions; or

(c)       adopting good regulatory practices that supplement those that are set out in this

Chapter.

Article 28.3:  Central Regulatory Coordinating Body

Recognizing   that   institutional   arrangements   are  particular   to  each   system   of governance,  the  Parties  note  the  important  role  of  their  respective  central  regulatory coordinating bodies in promoting good regulatory practices among their regulatory authorities; performing  key  advisory,  coordination  and  review  functions  to  improve  the  quality  of regulations; and developing improvements to their regulatory system.  The Parties intend to maintain  their  respective  central  regulatory  coordinating  bodies,  within  their  respective mandates and consistent with their law.

Article 28.4:  Internal Consultation, Coordination, and Review

  1. The Parties recognize that internal processes or mechanisms providing for consultation, coordination, and review among domestic authorities in the development of regulations can increase regulatory compatibility among the Parties and facilitate trade.   Accordingly, each Party shall adopt or maintain those processes or mechanisms to  pursue, among others, the following objectives:

(a)       promoting government-wide adherence to good regulatory practices, including those set forth in this Chapter;

(b)       identifying  and  developing  improvements  to  government-wide  regulatory processes;

(c)       identifying potential overlap and duplication between proposed and  existing regulations,  and preventing  the creation of inconsistent  requirements  across authorities;

(d)        supporting  compliance  with  international  trade  and  investment  obligations, including, as appropriate, the consideration of international standards, guides, and recommendations;

(e)       promoting  consideration  of regulatory  impacts,  including  burdens  on  small enterprises1  of information collection and implementation and

(f)        encouraging  regulatory  approaches  that  avoid  unnecessary  restrictions  on competition in the marketplace.

  1. Each Party shall make publicly available a description of the processes or mechanisms referred to in paragraph 1.

1   For greater certainty and for purposes of this Chapter, for Mexico “small enterprises” also include medium enterprises.

Article 28.5:  Information Quality

  1. Each Party recognizes the need for regulations to be based upon information that is reliable and of high quality. To that end, each Party should adopt or maintain publicly available guidance or mechanisms that encourage its regulatory authorities when developing a regulation to:

(a)       seek the best, reasonably obtainable information, including scientific, technical, economic, or other information relevant to the regulation it is developing;

(b)       rely on information that is appropriate for the context in which it is used; and

(c)       identify  sources  of  information  in  a  transparent  manner,  as  well  as  any significant assumptions and limitations.

  1. If a regulatory authority systematically collects information from members of the public through identical questions in a survey for use in developing a regulation, each Party shall provide that the authority should:

(a)       use sound statistical  methodologies  before drawing generalized  conclusions concerning  the  impact  of  the  regulation  in  the  population  affected  by  the regulation; and

(b)        avoid unnecessary duplication and otherwise minimize unnecessary burdens on those being surveyed.

Article 28.6:  Early Planning

Each Party shall publish annually a list of regulations that it reasonably expects within the following 12 months to adopt or propose to adopt.  Each regulation identified in the list should be accompanied by:

(a)       a concise description of the planned regulation;

(b)        a point  of contact  for a knowledgeable  person  in the  regulatory  authority responsible for the regulation; and

(c)       an indication,  if known, of sectors to be affected and whether there is  any expected significant effect on international trade or investment.

Entries in the list should also include, to the extent available, time tables for subsequent actions, including those providing opportunities for public comment under Article 28.9.

Article 28.7:  Dedicated Website

  1. Each Party shall maintain a single, freely accessible internet website that, to the extent practicable, contains all information that it is required to publish pursuant to Article 28.9.
  1. A Party may comply with paragraph 1 by making publicly available information on, and providing for the submission of comments through, more than one website, provided the information can be accessed, and submissions can be made, from a single web portal that links to other websites.

Article 28.8:  Use of Plain Language

Each Party should provide that proposed and final regulations are written using plain language  to  ensure  that  those  regulations  are  clear,  concise,  and  easy  for  the  public  to understand,  recognizing  that  some  regulations  address  technical  issues  and  that  relevant expertise may be required to understand and apply them.

Article 28.9:  Transparent Development of Regulations

  1. During the period described in paragraph 2, when a regulatory authority is developing a regulation, the Party shall, under normal circumstances,2  publish:

(a)       the text of that regulation along with its regulatory impact assessment, if any; (b)    an explanation of the regulation, including its objectives, how the regulation

achieves  those  objectives,  the  rationale  for  the  material  features  of  the

regulation, and any major alternatives being considered;

(c)       an explanation of what data, other information, and analyses it relied upon to support the regulation; and

(d)        the  name  and  contact  information  of  an  individual  official  who  may  be contacted to address questions regarding the regulation.

At the same time, the Party shall also make publicly available data, other information, and scientific and technical analyses it relied upon in support of the regulation, including any risk assessment.

2   For paragraphs 1 and 4, “normal circumstances” do not include, for example, situations where publication in accordance with those paragraphs would render the regulation ineffective in addressing the particular harm to the public interest which the regulation aims to address; where urgent problems (e.g., of safety, health, or environmental protection) arise or threaten to arise for a Party; or where the regulation has no substantive impact upon members of the public, including persons of another Party.

  1. With respect to the items required to be published under paragraph 1, each Party shall publish them before the regulatory authority finalizes its work on the regulation3 and at a time that will enable the regulatory authority to take into account the comments received and, as appropriate, make revisions to the text.  The Parties are encouraged to publish government- generated items identified in this Article in a format that can be read and digitally processed through word searches and data mining by a computer or other technology.
  1. After the items identified in paragraph 1 have been published, the Party shall ensure that any person, regardless of domicile, has an opportunity, on terms no less favorable than those afforded to a person of the Party, to submit written comments on the items identified in paragraph 1 for consideration by the relevant regulatory authority of the Party.  Each Party shall allow interested persons to submit any comments and other inputs electronically and may also allow written submissions by mail to a published address or through another technology.
  1. If a Party expects a draft regulation to have a significant impact on trade, the Party should normally provide a time period to submit written comments and other input on the items published in accordance with paragraph 1 that is:

(a)       not less than 60 calendar days from the date the items identified in paragraph 1 are published; or

(b)        a longer time period as is appropriate due to the nature and complexity of the regulation,  in  order  to  provide  interested  persons  adequate  opportunity  to understand  how  the  regulation  may  affect  their  interests  and  to  develop informative responses.

With respect to other draft regulations, a Party shall endeavor, under normal circumstances, to provide a time period to submit written comments and other input on the information published in accordance  with paragraph  1 that is not less than four weeks  from the date the items identified in paragraph 1 are published.

  1. With respect  to regulations  referred  to in paragraph  4, each  Party  shall  consider reasonable requests to extend the comment period.
  1. Each Party shall endeavor to promptly make publicly available any written comments it receives, except to the extent necessary  to protect confidential  information  or withhold personal identifying information or inappropriate content.  If it is impracticable to post all such comments on the website provided for in Article 28.7 the regulatory authority of a Party shall endeavor to make those comments available via its own website.
  1. Before finalizing  its work on a regulation,  a regulatory  authority  of a Party  shall evaluate any information provided in written comments received during the comment period.

3   For Canada a regulatory authority “finalizes its work” on a regulation when a final regulation is published in Canada Gazette, Part II. For Mexico a regulatory authority “finalizes its work” on a regulation when the final Act of General Application is issued and published in the Official Gazette.   For the United States, a regulatory authority “finalizes its work” on a regulation when a final rule is signed and published in the Federal Register.

  1. When a regulatory authority of a Party finalizes its work on a regulation, the Party shall promptly publish the text of the regulation, any final impact assessment, and other items as set out in Article 28.12.

Article 28.10:  Expert Advisory Groups

  1. The Parties recognize that their respective regulatory authorities may seek expert advice and recommendations with respect to the preparation or implementation of regulations from groups or bodies that include non-governmental persons.  The Parties further recognize that obtaining such advice and recommendations should be a complement to, rather than a substitute for, the procedures seeking public comment pursuant to Article 28.9.4.
  1. For purposes of this Article, an expert group or body means a group or body: (a)  established by a Party;

(b)        whose membership includes persons who are not employees or contractors of the Party; and

(c)       whose function includes providing advice or recommendations, including of a scientific or technical nature, to a regulatory authority of the Party with respect to the preparation or implementation of regulations.

This Article does not apply to a group or body that is established to enhance intergovernmental coordination, or to provide advice related to international affairs, including national security.4

  1. Each Party shall encourage its regulatory authorities to ensure that the membership of any expert group or body includes a range and diversity of views and interests, as appropriate to the particular context.
  1. Recognizing the importance of keeping the public informed with respect to the purpose, membership, and activities of expert groups and bodies, and that such groups or bodies can provide an important additional perspective or expertise affecting government operations, each Party shall encourage its regulatory authorities to provide public notice of:

(a)       the name of any expert group or body it creates or uses, and the names of the members of the group or body and their affiliations;

(b)       the mandate and functions of the expert group or body; (c)       information about upcoming meetings; and

(d)       a summary of the outcome of these meetings.

4   For greater clarity, this Article does not apply to Mexico’s National Standardization Advisory Committees (Comité Consultivo Nacional de Normalización), established under article 62 of the Federal Law on Metrology and Standardization.

Each  Party  shall  endeavor,  as  appropriate,  to  make  publicly  available  any  supporting documentation, and recognizes the importance of providing a means for interested persons to provide inputs to the expert groups.

Article 28.11:  Regulatory Impact Assessment

  1. The Parties recognize that regulatory impact assessment is a tool to assist regulatory authorities in assessing the need for and potential impacts of regulations they are preparing. Each Party  should  encourage  the  use  of  regulatory  impact  assessments  in  appropriate circumstances when developing proposed regulations that have anticipated costs or impacts exceeding certain thresholds established by the Party.
  1. Each Party shall maintain procedures that promote the consideration of the following when conducting a regulatory impact assessment:

(a)       the need for a proposed regulation, including a description of the nature and significance of the problem it is intended to address;

(b)        feasible and appropriate regulatory and non-regulatory alternatives that would address the need identified in subparagraph (a), including the alternative of not regulating;

(c)       benefits and costs of the selected and other feasible alternatives, including the relevant impacts (such as economic, social, environmental, public health, and safety effects) as well as risks and distributional effects over time, recognizing that some costs and benefits are difficult to quantify and monetize; and

(d)       the grounds for concluding that the selected alternative is preferable.

  1. Each Party should consider whether a proposed regulation may have significant adverse economic effects on a substantial number of small enterprises.  If so, the Party should consider potential steps to minimize such adverse economic impact, while continuing to allow the Party to fulfill its objectives.

Article 28.12:  Final Publication

  1. When a regulatory authority of a Party finalizes its work on a regulation, the Party shall promptly publish, in a final regulatory impact assessment or other document:

(a)       the date by which compliance is required;

(b)        an  explanation  of  how  the  regulation  achieves  the  Party’s  objectives,  the rationale for the essential features of the regulation (to the extent different than the explanation provided in Article 28.9), and the nature of and reasons for any

significant  revisions  made since making the regulation  available  for  public comment;

(c)       the regulatory  authority’s  views on any substantive  issues raised in  timely submitted comments;

(d)        major alternatives, if any, that the regulatory authority considered in developing the regulation and reasons supporting the alternative that it selected; and

(e)        the relationship between the regulation and the key evidence, data, and other information the regulatory authority considered in finalizing its  work  on the regulation.

  1. Each Party shall ensure that all regulations in effect are online and publicly available.

Article 28.13:  Retrospective Review

  1. Each Party shall adopt or maintain procedures or mechanisms to conduct retrospective reviews of its regulations in order to determine whether modification or repeal is appropriate. Retrospective reviews may be initiated, for example, pursuant to a Party’s law, on a regulatory authority’s own initiative, or in response to a suggestion submitted pursuant to Article 28.14.
  1. When conducting retrospective reviews, each Party should consider, as appropriate:

(a)       the effectiveness of the regulation in meeting its initial stated objectives, such as the actual social or economic impacts;

(b)        any circumstances that have changed since the development of the regulation, including availability of new information;

(c)       new opportunities to eliminate unnecessary regulatory burdens;

(d)        ways to address unnecessary regulatory differences that may adversely affect trade  among  the  Parties,  including  through  the  activities  listed  in  Article

28.17.3; and

(e)       any relevant views expressed by members of the public.

  1. Each Party shall include among the procedures or mechanisms adopted pursuant to paragraph 1 provisions addressing impacts on small enterprises.
  1. Each Party is encouraged to publish, to the extent available, any official plans  and results of retrospective reviews.

Article 28.14:  Suggestions for Improvement

Each Party shall provide the opportunity for any interested person to submit to any regulatory authority of the Party written suggestions for the issuance, modification, or repeal of a regulation.  The basis for such suggestions may include, for example, that, in the view of the interested person, the regulation has become ineffective at protecting health, welfare, or safety, has become more burdensome than necessary to achieve its objective (including with respect to its impact on trade), fails to take into account  changed circumstances  (such as fundamental  changes in technology,  or relevant  scientific and technical developments),  or relies on incorrect or outdated information.

Article 28.15:  Information About Regulatory Processes

  1. Each Party  shall  publish  online  a  description  of  the  processes  and  mechanisms employed  by  its  regulatory  authorities  to  prepare,  evaluate,  or  review  regulations.    The description  shall  identify  the  applicable  guidelines,  rules,  or  procedures,  including  those regarding opportunities for the public to provide input.
  1. Each Party shall also publish online:

(a)       a  description  of  the  functions  and  organization  of  each  of  its  regulatory authorities, including the appropriate offices through which persons can obtain information, make submissions or requests, or obtain decisions;

(b)        any procedural requirements or forms promulgated or utilized by any of  its regulatory authorities;

(c)       the  legal  authority  for  regulatory  authorities’  verification,  inspection,  and compliance activities;

(d)        information concerning the judicial or administrative procedures available to challenge regulations; and

(e)       any fees charged by a regulatory authority to a person of a Party for services rendered in connection with the implementation of a regulation, including for licensing, inspections, audits, and other administrative actions required under the Party’s law to import, export, sell, market, or use a good.

Article 28.16:  Annual Report

Each Party shall prepare and make publicly available, on an annual basis, a  report setting forth:

(a)       to the extent feasible, an estimate regarding the annual costs and benefits of economically significant regulations, as established by the Party, issued in that period by its regulatory authorities, on an aggregate or individual basis; and

(b)       any changes, or any proposals to make changes, to its regulatory system.

Article 28.17:  Encouragement of Regulatory Compatibility and Cooperation

  1. The Parties recognize the important contribution of dialogues between their respective regulatory authorities in promoting regulatory compatibility and regulatory cooperation where appropriate, and in order to facilitate trade and investment and to achieve regulatory objectives. Accordingly, each Party should encourage its regulatory  authorities to engage in mutually beneficial regulatory cooperation activities with relevant counterparts of one or more of the other Parties in appropriate circumstances to achieve these objectives.
  1. The Parties recognize the valuable work of cooperation fora, and intend to continue to work together to further regulatory compatibility on a mutually beneficial basis in such fora or under this Agreement. The Parties also recognize that effective regulatory cooperation requires the participation of regulatory authorities that possess the authority and technical expertise to develop, adopt, and implement regulations.  Each Party should encourage input from members of the public to identify promising avenues for cooperation activities.
  1. The Parties recognize that a broad range of mechanisms including those set forth in the WTO Agreement, exists to help minimize unnecessary regulatory differences and facilitate trade  or investment,  while  contributing  to each  Party’s  ability  to  meet  its  public  policy objectives.  These activities may include, as appropriate to the particular circumstances:

(a)       early stage formal or informal exchange of technical or scientific information or data, including coordinating research agendas, to reduce duplicative research;

(b)        exploring possible common approaches to the evaluation and mitigation of risks or  hazards,  including  those  potentially   posed  by  the  use  of   emerging technologies;

(c)       wherever  appropriate,  regulating  by  specifying  performance  requirements rather than design characteristics, to promote innovation and facilitate trade;

(d)       seeking to collaborate in relevant international fora;

(e)       exchanging information, such as of technical or practical nature, on regulations that  each  Party  is  developing  to  maximize  the  opportunity  for  common approaches;

(f)        co-funding of research in support of regulations and implementation tools of joint interest;

(g)        facilitating  the  greater  use  of  relevant  international  standards,  guides,  and recommendations as the basis for regulations, testing, and approval procedures;

(h)        when developing or implementing regulations, considering relevant scientific or technical guidance documents developed through international collaborative initiatives;

(i)         considering  common  approaches  to  the  display  of  product  or  consumer information;

(j)        considering the development of compatible platforms or formats for industry submission of product information for regulatory review;

(k)        coordinating  in  the  implementation  of  regulations  and  sharing  compliance information,   including,   as   appropriate   by   entering   into   confidentiality agreements; and

(l)        periodically exchanging information, as appropriate, concerning any planned or ongoing  post-implementation  review  or  evaluation  of  regulations  in  effect affecting trade or investment.

Article 28.18:  Committee on Good Regulatory Practices

  1. The  Parties  hereby  establish  a  Committee  on  Good  Regulatory  Practices  (the Committee)   composed   of   government   representatives    from   each   Party,    including representatives  from their central regulatory  coordinating  bodies as well as  from relevant regulatory agencies.
  1. Through   the  Committee,   the   Parties   shall   enhance   their   communication   and collaboration  in  matters  relating  to  this  Chapter,  including  encouragement  of  regulatory compatibility and regulatory cooperation, with a view to facilitating trade between the Parties. The Committee’s functions include:

(a)       monitoring the implementation and operation of this Chapter, including through updates on each Party’s regulatory practices and processes;

(b)        exchanging information on effective methods for implementing this Chapter, including with respect to approaches to regulatory cooperation,  and relevant work in international fora;

(c)       consulting on matters and positions for upcoming meetings in international fora that  are  related  to  the  work  of  this  Chapter,  including  opportunities  for workshops, seminars and other relevant activities to support strengthening of good  regulatory  practices  and  to  support  improvements  in  approaches  to regulatory cooperation.

(d)        considering   suggestions   from   stakeholders   regarding   opportunities    to strengthen the application of good regulatory practices;

(e)       considering  developments  in  good  regulatory  practices  and  approaches  to regulatory cooperation with a view to identifying future work for the Committee or making recommendations as appropriate to the Commission for improving the operation and implementation of this Chapter; and

(f)        taking any other steps that the Parties consider will assist them in implementing this Chapter.

Each Party shall provide opportunities  for persons  of that Party to provide  views on  the implementation of this Chapter.

  1. In carrying out its work, the Committee shall take into account the activities of other committees, working groups and other subsidiary bodies established under this Agreement in order to avoid duplication of activities.
  1. Unless the Parties decide otherwise, the Committee shall meet at least once a year.  The Parties shall endeavor to schedule Committee meetings to permit participation of government representatives  engaged  in the  work  of other  relevant  chapters  in this  Agreement.    The Committee may also invite interested persons to contribute to its work.
  1. The Committee shall provide an annual report on its activities.

Article 28.19:  Contact Points

Each Party shall designate and notify a contact point for matters arising under  this Chapter, in accordance with Article 30.5 (Agreement Coordinator and Contact Points).  A Party shall promptly notify the other Parties of any material changes to its contact point.

Article 28.20:  Application of Dispute Settlement

  1. Recognizing that a mutually acceptable solution can often be found outside recourse to dispute settlement,  a Party shall exercise its judgement  as to whether  recourse to dispute settlement under Chapter 31 (Dispute Settlement) would be fruitful.
  1. Chapter 31 (Dispute Settlement) shall apply with respect to a responding Party as of one year after the date of entry into force of this Agreement for that Party.
  1. No  Party  shall  have  recourse  for  dispute  settlement  under  Chapter  31  (Dispute Settlement) for a matter arising under this Chapter except to address a sustained and recurring course of action or inaction that is inconsistent with a provision of this Chapter.

ANNEX 28-A

ADDITIONAL PROVISIONS CONCERNING THE SCOPE OF “REGULATIONS” AND “REGULATORY AUTHORITIES”

  1. The following measures are not regulations for the purposes of this Chapter:

(a)       for all Parties:  General statements of policy or guidance that do not prescribe legally enforceable requirements;

(b)        for Canada:  a measure concerning (i) a military, foreign affairs, or national security function of the Government of Canada, (ii) public sector management, personnel, pensions, public property, loans, grants, benefits, or contracts, (iii) departmental  organization,  procedure,  or  practice,  (iv)  taxation,  financial services or anti-money laundering measures, or (v) federal/provincial/territorial relations and agreements and relations with Aboriginal Peoples, (vi) a measure that does not constitute a regulation under the Statutory Instruments Act;

(c)      for Mexico:  a measure concerning (i) taxation, specifically those related with contributions  and their accessories,  (ii) public servants  responsibilities,  (iii) agrarian  and labor  justice,  (iv) financial  services  or  anti-money  laundering measures, (v) public prosecutor’s office executing its constitutional functions, and (vi) navy and defense; and

(d)        for the United States:  a measure concerning (i) a military or foreign affairs function  of  the  United  States,  (ii)  agency  management,  personnel,  public property,  loans,  grants,  benefits,  or  contracts,  (iii)   agency  organization, procedure,  or practice,  or (iv)  financial  services  or  anti-money  laundering measures.

  1. The following entities are not a regulatory authorities for the purposes of this Chapter: (a)  for Canada:  the Governor in Council; and

(b)       for the United States:  the President.

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