UNOFFICIAL TEXT · CENTRE FOR INTERNATIONAL LAW · www.cil.nus.edu.sg
2003 DECLARATION OF ASEAN CONCORD II
Adopted by the Heads of State/Government at the 9th ASEAN Summit
in Bali, Indonesia on 7 Oct 2003
[
https://www.aseansec.org/15159.htm ]

A. ASEAN SECURITY C OMMUNITY (ASC) …………………………………………………… 3
B. ASEAN ECONOMIC COMMUNITY (AEC) …………………………………………………. 4
C. ASEAN SOCIO -CULTURAL COMMUNITY ( ASCC) ……………………………………. 5
ANNEX TO THE 2003 DE CLARATION OF ASEAN CONCORD II:
RECOMMENDATIONS OF T HE HIGH-LEVEL TASK FORCE ON ASEAN
ECONOMIC INTEGRATION …………………………………………………………………………. 7

The Sultan of Brunei Darussalam, the Prime Minister of the Kingdom of Cambodia,
the President of the Republic of Indonesia, the Prime Minister of the Lao People’s
Democratic Republic, the Prime Minister of Malaysia, the Prime Minister of the Union
of Myanmar, the President of the Republic of the Philippines, the Prime Minister of
the Republic of Singapore, the Prime Minister of the Kingdom of Thailand and the
Prime Minister of the Socialist Republic of Viet Nam;
RECALLING the Declarat ion of ASEAN Concord adopted in this historic place of
Bali, Indonesia in 1976, the Leaders of the Association of Southeast Asian Nations
(ASEAN) expressed satisfaction with the overall progress made in the region;
NOTING in particular the expansion of ASE AN to ten countries in Southeast Asia, the
deepening of regional economic integration and the impending accession to the
Treaty of Amity and Cooperation (TAC) by States outside Southeast Asia;
CONSCIOUS of the need to further consolidate and enhance the ac hievements of
ASEAN as a dynamic, resilient, and cohesive regional association for the well being
of its member states and people as well as the need to further strengthen the
Association’s guidelines in achieving a more coherent and clearer path for
cooperation between and among them;
REAFFIRMING their commitment to the principles enshrined in the ASEAN
Declaration (Bangkok, 1967), the Declaration on Zone of Peace, Freedom, and
Neutrality (Kuala Lumpur, 1971), the Treaty of Amity and Cooperation in Southeast
Asia (Bali, 1976), the Declaration of ASEAN Concord (Bali, 1976), and the Treaty on
the Southeast Asia Nuclear Weapons Free Zone (Bangkok, 1995);
COGNIZANT that the future of ASEAN cooperation is guided by the ASEAN Vision
2020, the Hanoi Plan of Acti on (1999-2004), and its succeeding Plans of Action, the
Initiative for ASEAN Integration (IAI), and the Roadmap for the Integration of ASEAN
(RIA);
CONFIRMING further that ASEAN Member Countries share primary responsibility for
strengthening the economic and social stability in the region and ensuring their
peaceful and progressive national development, and that they are determined to
ensure their stability and security from external interference in any form or manner in
order to preserve their national interest in accordance with the ideals and aspirations
of their peoples;

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REAFFIRMING the fundamental importance of adhering to the principle of non-
interference and consensus in ASEAN cooperation;
REITERATING that the Treaty of Amity and Cooperation in Sout heast Asia (TAC) is
an effective code of conduct for relations among governments and peoples;
RECOGNIZING that sustainable economic development requires a secure political
environment based on a strong foundation of mutual interests generated by
economic cooperation and political solidarity;
COGNIZANT of the interdependence of the ASEAN economies and the need for
ASEAN member countries to adopt “Prosper Thy Neighbour” policies in order to
ensure the long -term vibrancy and prosperity of the ASEAN region;
R EITERATING the importance of rules -based multilateral trading system that is
equitable and that contributes towards the pursuit of development;
REAFFIRMING that ASEAN is a concert of Southeast Asian nations, bonded
together in partnership in dynamic devel opment and in a community of caring
societies, committed to upholding cultural diversity and social harmony;
DO HEREBY DECLARE THAT :
1. An ASEAN Community shall be established comprising three pillars, namely
political and security cooperation, economic co operation, and socio-cultural
cooperation that are closely intertwined and mutually reinforcing for the purpose of
ensuring durable peace, stability and shared prosperity in the region;
2. ASEAN shall continue its efforts to ensure closer and mutually bene ficial
integration among its member states and among their peoples, and to promote
regional peace and stability, security, development and prosperity with a view to
realizing an ASEAN Community that is open, dynamic and resilient;
3. ASEAN shall respond t o the new dynamics within the respective ASEAN Member
Countries and shall urgently and effectively address the challenge of translating
ASEAN cultural diversities and different economic levels into equitable development
opportunity and prosperity, in an environment of solidarity, regional resilience and
harmony;
4. ASEAN shall nurture common values, such as habit of consultation to discuss
political issues and the willingness to share information on matters of common
concern, such as environmental degradati on, maritime security cooperation, the
enhancement of defense cooperation among ASEAN countries, develop a set of
socio -political values and principles, and resolve to settle long -standing disputes
through peaceful means;
5. The Treaty of Amity and Cooper ation in Southeast Asia (TAC) is the key code of
conduct governing relations between states and a diplomatic instrument for the
promotion of peace and stability in the region;
6. The ASEAN Regional Forum (ARF) shall remain the primary forum in enhancing
political and security cooperation in the Asia Pacific region, as well as the pivot in
building peace and stability in the region. ASEAN shall enhance its role in further
advancing the stages of cooperation within the ARF to ensure the security of the Asia
P acific region;
7. ASEAN is commi tted to deepening and broadening its internal economic
integration and linkages with the world economy to realize an ASEAN Economic
Community through a bold, pragmatic and unified strategy;
8. ASEAN shall further build on t he momentum already gained in the ASEAN+3
process so as to further draw synergies through broader and deeper cooperation in
various areas;

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9. ASEAN shall build upon opportunities for mutually beneficial regional integration
arising from its existing initia tives and those with partners, through enhanced trade
and investment links as well as through IAI process and the RIA;
10. ASEAN shall continue to foster a community of caring societies and promote a
common regional identity;
DO HEREBY ADOPT :
The framework to achieve a dynamic, cohesive, resilient and integrated ASEAN
Community:
A. ASEAN SECURITY COMMUNITY (ASC)
1. The ASEAN Security Community is envisaged to bring ASEAN’s political and
security cooperation to a higher plane to ensure that countries in the region live at
peace with one another and with the world at large in a just, democratic and
harmonious environment. The ASEAN Security Community members shall rely
exclusively on peaceful processes in the settlement of intra -regional differences and
regar d their security as fundamentally linked to one another and bound by
geographic location, common vision and objectives.
2. The ASEAN Security Community, recognizing the sovereign right of the member
countries to pursue their individual foreign policies and defense arrangements and
taking into account the strong interconnections among political, economic and social
realities, subscribes to the principle of comprehensive security as having broad
political, economic, social and cultural aspects in consonance with the ASEAN Vision
2020 rather than to a defense pact, military alliance or a joint foreign policy.
3. ASEAN shall continue to promote regional solidarity and cooperation. Member
Countries shall exercise their rights to lead their national existence fr ee from outside
interference in their internal affairs.
4. The ASEAN Security Community shall abide by the UN Charter and other
principles of international law and uphold ASEAN’s principles of non- interference,
consensus -based decision- making, national and regional resilience, respect for
national sovereignty, the renunciation of the threat or the use of force, and peaceful
settlement of differences and disputes.
5. Maritime issues and concerns are transboundary in nature, and therefore shall be
addressed regionally in holistic, integrated and comprehensive manner. Maritime
cooperation between and among ASEAN member countries shall contribute to the
evolution of the ASEAN Security Community.
6. Existing ASEAN political instruments such as the Declaration on ZOPFAN, the
TAC, and the SEANWFZ Treaty shall continue to play a pivotal role in the area of
confidence building measures, preventive diplomacy and the approaches to conflict
resolution.
7. The High Council of the TAC shall be the important component i n the ASEAN
Security Community since it reflects ASEAN’s commitment to resolve all differences,
disputes and conflicts peacefully.
8. The ASEAN Security Community shall contribute to further promoting peace and
security in the wider Asia Pacific region and reflect ASEAN’s determination to move
forward at a pace comfortable to all. In this regard, the ARF shall remain the main
forum for regional security dialogue, with ASEAN as the primary driving force.
9. The ASEAN Security Community is open and outward l ooking in respect of
actively engaging ASEAN’s friends and Dialogue Partners to promote peace and

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stability in the region, and shall build on the ARF to facilitate consultation and
cooperation between ASEAN and its friends and Partners on regional security
matters.
10. The ASEAN Security Community shall fully utilize the existing institutions and
mechanisms within ASEAN with a view to strengthening national and regional
capacities to counter terrorism, drug trafficking, trafficking in persons and other
tra nsnational crimes; and shall work to ensure that the Southeast Asian Region
remains free of all weapons of mass destruction. It shall enable ASEAN to
demonstrate a greater capacity and responsibility of being the primary driving force of
the ARF.
11. The ASEAN Security Community shall explore enhanced cooperation with the
United Nations as well as other international and regional bodies for the maintenance
of international peace and security.
12. ASEAN shall explore innovative ways to increase its security and establish
modalities for the ASEAN Security Community, which include, inter alia, the following
elements: norms -setting, conflict prevention, approaches to conflict resolution, and
post -conflict peace building.
B. ASEAN ECONOMIC COMMUNITY (AEC)
1. Th e ASEAN Economic Community is the realisation of the end- goal of economic
integration as outlined in the ASEAN Vision 2020, to create a stable, prosperous and
highly competitive ASEAN economic region in which there is a free flow of goods,
services, invest ment and a freer flow of capital, equitable economic development and
reduced poverty and socio- economic disparities in year 2020.
2. The ASEAN Economic Community is based on a convergence of interests among
ASEAN members to deepen and broaden economic int egration efforts through
existing and new initiatives with clear timelines.
3. The ASEAN Economic Community shall establish ASEAN as a single market and
production base, turning the diversity that characterises the region into opportunities
for business co mplementation making the ASEAN a more dynamic and stronger
segment of the global supply chain. ASEAN’s strategy shall consist of the integration
of ASEAN and enhancing ASEAN’s economic competitiveness. In moving towards
the ASEAN Economic Community, ASEAN shall, inter alia, institute new mechanisms
and measures to strengthen the implementation of its existing economic initiatives
including the ASEAN Free Trade Area (AFTA), ASEAN Framework Agreement on
Services (AFAS) and ASEAN Investment Area (AIA); acceler ate regional integration
in the priority sectors; facilitate movement of business persons, skilled labour and
talents; and strengthen the institutional mechanisms of ASEAN, including the
improvement of the existing ASEAN Dispute Settlement Mechanism to ens ure
expeditious and legally binding resolution of any economic disputes. As a first step
towards the realization of the ASEAN Economic Community, ASEAN shall implement
the recommendations of the High Level Task Force on ASEAN Economic Integration
as annexed .
4. The ASEAN Economic Community shall ensure that deepening and broadening
integration of ASEAN shall be accompanied by technical and development
cooperation in order to address the development divide and accelerate the economic
integration of Cambodia, Lao PDR, Myanmar and Viet Nam through IAI and RIA so
that the benefits of ASEAN integration are shared and enable all ASEAN Member
Countries to move forward in a unified manner.

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5. The realization of a fully integrated economic community requires implementation
of both liberalization and cooperation measures. There is a need to enhance
cooperation and integration activities in other areas. These will involve, among
others, human resources development and capacity building; recognition of
educational qualif ications; closer consultation on macroeconomic and financial
policies; trade financing measures; enhanced infrastructure and communications
connectivity; development of electronic transactions through e -ASEAN; integrating
industries across the region to pr omote regional sourcing; and enhancing private
sector involvement.
C. ASEAN SOCIO -CULTURAL COMMUNITY ( ASCC)
1. The ASEAN Socio-cultural Community, in consonance with the goal set by ASEAN
Vision 2020, envisages a Southeast Asia bonded together in partners hip as a
community of caring societies.
2. In line with the programme of action set by the 1976 Declaration of ASEAN
Concord, the Community shall foster cooperation in social development aimed at
raising the standard of living of disadvantaged groups and t he rural population, and
shall seek the active involvement of all sectors of society, in particular women, youth,
and local communities.
3. ASEAN shall ensure that its work force shall be prepared for, and benefit from,
economic integration by investing m ore resources for basic and higher education,
training, science and technology development, job creation, and social protection.
The development and enhancement of human resources is a key strategy for
employment generation, alleviating poverty and socio- economic disparities, and
ensuring economic growth with equity. ASEAN shall continue existing efforts to
promote regional mobility and mutual recognition of professional credentials, talents,
and skills development.
4. ASEAN shall further intensify cooperat ion in the area of public health, including in
the prevention and control of infectious diseases, such as HIV/AIDS and SARS, and
support joint regional actions to increase access to affordable medicines. The
security of the Community is enhanced when pover ty and diseases are held in check,
and the peoples of ASEAN are assured of adequate health care.
5. The Community shall nurture talent and promote interaction among ASEAN
scholars, writers, artists and media practitioners to help preserve and promote
ASEAN’s diverse cultural heritage while fostering regional identity as well as
cultivating people’s awareness of ASEAN.
6. The Community shall intensify cooperation in addressing problems associated with
population growth, unemployment, environmental degradat ion and transboundary
pollution as well as disaster management in the region to enable individual members
to fully realize their development potentials and to enhance the mutual ASEAN spirit.
We hereby pledge to our peoples our resolve and commitment to bring the ASEAN
Community into reality and, for this purpose, task the concerned Ministers to
implement this Declaration.

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DONE in Bali, Indonesia, on the Seventh Day of October in the Year Two Thousand
and Three.
For Brunei Darussalam: HAJl HASSANAL BOLKIA H, Sultan of Brunei
Darussalam
For the Kingdom of Cambodia: SAMDECH HUN SEN, Prime Minister
For the Republic of Indonesia: MEGAWATI SOEKARNOPUTRI , President
For the Lao People’s Democratic Republic: BOUNNHANG VORACHITH,
Prime Minister
For Malaysia: DR MAHATHIR BIN MOHAMAD, Prime Minister
For the Union of Myanmar: GENERAL KHIN NYUNT , Prime Minister
For the Republic of the Philippines: GLORIA M ACAPAG AL -ARROYO ,
President
For the Republic of Singapore: GOH CHOK TONG , Prime Minister
For the Kingdom of Thailand: THAKSIN SHINAWATRA, Prime Minister
For the Socialist Republic of Viet Nam: PHAN VAN KHAI , Prime Minister

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ANNEX TO THE 2003 DECLARATION OF ASEAN CONCORD II:
RECOMMENDATIONS OF THE HIGH -LEVEL TASK FORCE ON
ASEAN ECONOMIC INTEG RATION
INTRODUCTION
1. The realization of a fully integrated economic community requires
implementation of both liberalization and cooperation measures. The Task Force
while focusing its recommendations relating to liberalization and facilitation
measures in the area of trade in good, services and investment, acknowledges on
the need to enhance cooperation and integration activities in other areas. These will
involve among others, human resource development and capacity building;
recognition of educational qualifi cations; closer consultations on macroeconomic and
financial policies; trade financing measures; enhanced infrastructure and
communications connectivity; development of electronic transactions through e –
ASEAN; integrating industries across the region to pr omote regional sourcing; and
enhancing private sector involvement.
ASEAN ECONOMIC COMMUNITY
2. As a step towards the realization of ASEAN Economic Community for trade in
goods, services and investment, the HLTF took into account the experience of other
Regional Trading Arrangements ( RTAs), ASEAN’s own experience, the development
perspective in ASEAN and also the views contained in the following documents:
(i)
ASEAN Vision 2020, the Hanoi Plan of Action (HPA), and RIA;
(ii)
ASEAN Competitiveness Study;
(iii)
ASEAN Economic Community: Concept Paper by ISEAS; and
(iv)
ASEAN ISIS: Towards an ASEAN Economic Community.

3. The HLTF is of the view that the elements of the AEC in the area of goods,
services and inv estment have been elaborated in ASEAN Vision 2020, HPA and RIA,
and recommends that the AEC should be:
(i)
The end-goal of economic integration as outlined in the ASEAN Vision 2020;
(ii)
Characterized as a single market and product ion base, with free flow of
goods, services, investment and skilled labour, and freer flow of capital by 2020; and
(iii)
Approached on a progressive basis with clear timelines by strengthening
existing initiatives and building new initiatives to enhance economic integration.

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RECOMMENDATIONS
4. Recognizing that not all ASEAN member countries can meet the recommended
deadlines, the HLTF recommends that flexibility be allowed in its implementation to
enable those member countries that ar e ready to proceed first.
I. CURRENT ECONOMIC COOPERATION INITIATIVES
5. The HLTF recommends that cooperation under the current economic initiatives
be further strengthened in the following areas:
A.
Trade in Goods
(i)
By end-2004, finalize the improvement to the CEPT Scheme Rules of Origin
(ROO) by:
•
Making it more transparent, predictable and standardized and taking into
account the best practices of other RTAs including the WTO ROO; and
• Adopting substantial transformation as alternative criteria for conferring origin
status.
(ii) Ensure transparency on Non- Tariff Measures (NTMs) and eliminate those
that are barriers to trade:
• Establish ASEAN Database of NTMs by mid -2004;
• Set clear criteria to identify measures that are classifi ed as barriers to trade
by mid -2005;
• Set a clear and definitive work programme for the removal of the barriers by
2005; and
• Adopt the WTO agreements on Technical Barriers to Trade; Sanitary
and Phyto -Sanitary and Import Licensing Procedures and develop
imp lementation guidelines appropriate for ASEAN by end- 2004.
Customs
(i)
Ensure full implementation of the Green Lane system for CEPT products at
entry points of all Member Countries by 2004;
(ii)
Adopt WTO agreement on Customs Valuation and develop implementation
guidelines appropriate for ASEAN by end- 2004;
(iii)
Adopt service commitment (client charter) by ASEAN customs authorities; and
(iv)
Adopt the Single Window approach including the electronic processing of
trade documents at national and regional level.
Standards
(i)
Accelerate the completion and implementation of the Mutual Recognition
Arrangements ( MRAs) for the five identified priority sectors (electrical and electronic
equipment, cosme tics, pharmaceuticals, telecommunications equipment and
prepared foodstuff) within 2004/2005; and other sectors with significant potential for
trade;

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(ii) Set specific targets for the harmonization of standards and technical
regulations to trade focusing on sectors with significant trade value and those with
potential for trade in the future; and
(iii)
Develop ASEAN technical regulations, where possible, for national
applications.
B.
Trade in Services
(i)
Set clear tar gets and schedules of services liberalization for each sector and
each round towards achieving free flow of trade in services; and AEM to provide
specific mandate in every round of services negotiations. The end date to achieve
free flow of trade in servic es earlier than 2020;
(ii)
Accelerate services liberalization in specific sectors earlier than end- date by
countries which are ready, through the application of the ASEAN -X formula;
(iii)
Complete MRAs for qualifications in major profes sional services by 2008 to
facilitate free movement of professional/skilled labor/talents in ASEAN;
(iv)
Promote the use of ASEAN professional services through the establishment
of a “Professional Exchange” by 2008;
(v)
Recognise the A EM as the coordinator for services liberalization across all
sectors; and
(vi)
Each country to be represented by senior officials who are authorized to
negotiate on behalf of the government.
C.
Investment
(i)
Speed up the opening of sectors currently in the sensitive list to TEL, using
the ASEAN -X formula, beginning 2004;
(ii)
Encourage and promote companies to relocate within ASEAN and where
appropriate, special incentives should be given;
(iii)
Institute a mec hanism to monitor the specific activities and timelines
undertaken by each country vis -à -vis their submitted planned actions/activities on
annual basis;
(iv)
Establish a network of ASEAN free trade zones ( FTZs) so that companies
could structure their manufacturing processes across different ASEAN countries to
take advantage of their comparative strengths; and in the process increase intra –
ASEAN trade and investment. Special marketing efforts should be undertaken for
ASEAN -based companies; and
(v)
Undertake more effective joint ASEAN facilitation and promotion measures
and develop new sources of inward FDI, particularly from potential countries such
as China, India and ROK.
D. Intellectual Property Rights ( IPRs)
6. ASEAN IPR c ooperation beyond trademarks and patents by including
cooperation in copyrights information exchange and enforcement by 2004.

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E. Capital Mobility
7. T o facilitate trade and investment flows, expedite the implementation of the
Roadmap for Integr ation of ASEAN in Finance.
II. NEW INITIATIVES AND MEASURES
Priority Integration Sectors
8. The Special Informal AEM agreed to accelerate 11 priority sectors for
integration to be coordinated by the following countries.
(i)
Indonesia: Wood- Based Products and Automotives;
(ii)
Malaysia: Rubber -Based Products; Textiles and Apparels;
(iii)
Myanmar: Agro -Based Products and Fisheries;
(iv)
Philippines: Electronics;
(v)
Singapore: e -ASEAN and Healthcare; and
(vi)
Thailand: Air Travel and Tourism

9. The approach recommended for the integration of these priority
sectors be premised on:
(i)
Combine the economic strengths of ASEAN Member Countries for regional
advantage;
(ii)
Facilitate and promote intra- ASEAN investments;
(iii)
Improve the condition to attract and retain manufacturing and other economic
activities within the region;
(iv)
Promote out -sourcing programme within ASEAN; and
(v)
Promote the development of “ Made in ASEAN” products and services.

10. Roadmap should be developed for each of the priority sectors and be
implemented with the active involvement of the private sector, beginning 2004.

11. Possible measures proposed for the goods sector:
(i)
Zero internal tariffs;
(ii) Immediate removal of barriers to trade;
(ii)
Faster customs clearance and simplified customs procedures; and
(iii)
Accelerated development of MRAs and harmonization of products standards
and technical regulations.

12. Integration of services sectors be implemented through:

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(i) Accelerated liberalization of these priority sectors by 2010;
(ii)
Accelerated development of MRAs ; and
(iii)
Promote joint ventures and cooperation, including in third country markets.

13. Facilitate mobility of business people and tourists through:
(i)
Visa exemption for intra- ASEAN travel by ASEAN nationals by 2005
(ii)
Harmonizing the procedures for issuing visas to international travelers in
ASEAN by 2004; and
(iii)
Developing ASEAN agreement to facilitate movement of business persons
and skilled labour and talents by 2005.
III. INSTITUTIONAL STRENGTHENING
14. To streamline the decision- making process and ensure effective
implementation of all ASEAN economic initiatives, the following measures are
recommended:
(i)
Re-affirm the AEM as the coordinator of all ASE AN economic integration and
cooperation issues;
(ii)
Issues of policy in nature to be resolved by AEM/AFTA Council/AIA Council;
(iii)
Technical/operational issues to be resolved by SEOM and the various
committees/working groups;
(iv)
Decision -making process by economic bodies to be made by consensus, and
where there is no consensus, ASEAN to consider other options with the objective of
expediting the decision- making process.
(v)
By end- 2004, establish an effective sy stem to ensure proper implementation
of all economic agreements and expeditious resolution of any disputes. The new
system should provide for advisory, consultative, and adjudicatory mechanisms as
follows :
• Establish a legal unit within the ASEAN Secretariat; (Advisory – the legal unit
will provide legal advice on trade disputes)
• Establish the ASEAN Consultation to Solve Trade and Investment Issues
(ACT); (Consultative – the ACT is the ASEAN equivalent of the EU SOLVIT
mechanism to provide quick resolution to operational problems)
• Establish the ASEAN Compliance Body (ACB); and (Adjudication – modeled
after the WTO Textile Monitoring Body and make use of peer pressure)
• Enhanced ASEAN DSM to make it more practical. (Adjudication – amend the
ASEAN DSM to ensure expeditious and legally binding decision in resolving
trade disputes)
The proposed concept, elements and flow chart of the new system appear
as
ANNEX 1

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(vi) Enhance the capability of the ASEAN Secret ariat to conduct research and
analytical studies related to trade, investment and finance.
IV. OUTREACH
15. To promote better appreciation and understanding of ASEAN economic issues
among business/investor community and public sector agencies, the HLTF
recommends the following:
(i)
Conduct out -reach programmes annually at both national and regional
level; and
(ii)
Consult regularly with private sector representatives at national and
regional level to address issues of concern/interest relating to the implementation of
ASEAN economic initiatives.
V. DEVELOPMENT AND TECHNICAL COOPERATION
16. The recommendations to address the development divide and accelerate
economic integration of CLMV:
(i)
Expand the coverage of the AISP products; and
(ii)
Implement IAI projects through mobilization of resources from within
ASEAN.
CONCLUSION
17. The HLTF recommends that a review be made after one year of its
implementati on and the Secretary General of ASEAN to submit an annual progress
report of its implementation to the AEM.

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ANNEX 1
MECHANISM OF THE DISPUTE SETTLEMENT SYSTEM
Advisory Mechanism
ASEAN Consultation to Solve Trade and Investment Issues (ACT)
(i)
The ACT is adapted from the EU SOLVIT mechanism. It is a network of
government agencies (one from each country) to allow the private sector to cut
through red tape and achieve speedy resolution of operational problems
encountered, thus helping to cr eate a pro-business environment in ASEAN.
(ii)
Private individuals and businesses faced with operational problems related to
countries’ ASEAN commitments, either at home or in other ASEAN countries, can
highlight these problems to the ACT in their country (Host ACT). For problems
encountered within the home country, the Host ACT will direct the problem to the
appropriate government agencies, and ensure that a proposed solution is sent to the
individuals/businesses within 30 calendar days.
(iii)
For problems encountered in other ASEAN countries, the Host ACT will
forward the problem to the other countries’ ACT (Lead ACT). The Lead ACT will be
responsible for directing the problem to the appropriate government agencies in its
country, and ensuring that a proposed solution is sent to the individuals/businesses
via the Host ACT within 30 calendar days. Tominimise delays, communication
between Host and Lead ACTs should be via electronic means, for instance an online
database accessible to all member countries.
(iv)
If the proposed solution does not resolve the problem highlighted, the private
individuals/businesses can request that their government raise this issue to the other
dispute settlement mechanisms described below.

ASEAN Legal Unit
(i)
The ASEAN Legal Unit will be staffed by qualified lawyers specialising in
trade laws employed by the ASEAN Secretariat. The unit will offer legal
interpretation/ advice on potential trade dispute issues upon request from
count ries. The advice is purely advisory and non- binding in nature.
(ii)
The ASEAN Legal Unit would play a useful role in screening out issues that
are operational/technical in nature which could be resolved through bilateral
consultations, rather than being surfaced to the ASEAN Compliance Monitoring Body
or the Enhanced ASEAN Dispute Settlement Mechanism. The ASEAN Legal Unit
will also be responsible for providing legal advice and secretariat support to the
ASEAN Compliance Monitoring Body and enhanced ASEAN Dispute Settlement
Mechanism.

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Consultative Mechanism
ASEAN Compliance Monitoring Body (ACMB)
(i)
The ACMB is modelled after the Textile Monitoring Body of the WTO, and
makes use of peer adjudication, which is less legalistic and offers a speedier
channel, to help countries resolve their disputes.
(ii)
In cases of non- compliance by one or more ASEAN Member
Country/Countries in any ASEAN economic integration agreement, ACMB members
from countries not involved in the di spute will upon request, review and issue findings
on the case within a stipulated timeframe. The case findings of the ACB are not
legally -binding. However, any opinion pointing to non- compliance should lead to the
offending ASEAN Member Country/Countries to seriously consider measures to
rectify the non -compliance. Moreover the ACMB’s findings would be tabled as
inputs to the DSM should the case be raised to the DSM.
(iii)
Subject to agreement by both Parties, Member Countries who do not wish t o
avail of the ACMB after going through the ACT can go directly to the ASEAN DSM
panel.
(iv)
AEM had earlier directed SEOM to work out a Terms of Reference for this
monitoring body.

Conciliation and mediation processes
(i)
Upon mut ual voluntary agreement, member countries can at any time,
engage in conciliation and mediation procedures to resolve their dispute before it is
surfaced for adjudication at the enhanced ASEAN Dispute Settlement Mechanism.
(ii)
Proceedings under these conciliation and mediation procedures, including
respective positions taken by parties to the dispute during the proceedings, shall be
confidential.
(iii)
The ASEAN Secretary General may, acting in an ex officio capacity, offer
good office s, conciliation and mediation procedures.

Enforcement Mechanism
Enhanced ASEAN Dispute Settlement Mechanism (DSM)
(i)
To ensure that binding decisions can be made based solely on legal
considerations, changes should be made to the procedures of the existing ASEAN
DSM to depoliticise the entire process.

(ii)
The enhanced ASEAN DSM would be modeled after the WTO DSM,
which have already established a proven track record in resolving trade disputes. It
would include the following key features: ( i) having panels of three independent
professionals from countries not involved in the disputes (including non- ASEAN
countries) to rule on the disputes and administer the appellate process. To ensure
de- politicisation of the processes, ASEA N should replace the AEM with an

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appellate body comprising of well -qualified, independent and experienced
professionals as the appeal body for the panels’ decisions, and adopt the existing
WTO DSM panel selection procedures, including the listing of qualif ied individuals
who can serve as panelists and members of the appellate body (maintained by the
WTO Secretariat); (ii) strict and detailed procedures and timeline governing each
stage of the dispute settlement process (adopted from the WTO DSM procedure) t o
ensure speedy progress towards a fair outcome, and (iii) effective mechanisms,
including the possibility of imposing sanctions on non- compliant countries, to ensure
full implementation of the DSM rulings.

(See below for flowchart)

UNOFFICIAL TEXT · CENTRE FOR INTERNATIONAL LAW · www.cil.nus.edu.sg
FLO WCHART OF MECHANISMS AND PROCESSES OF THE ASEAN DISPUTE SETTLEMENT SYSTEM

Note :
* While resolution of disputes should generally advance from the advisory stage to the consultative stage, and finally the adjudicative stage as
shown in the flowchart, this is not mandatory. Countries may choose to make use of the appropriate mechanisms as they wish .
^ Countries do not need to go through the four methods sequentially. After surfacing the issue at either the ASEAN Legal Unit or ACT, they can
either go to the ACB or proceed directly to the enhanced ASEAN DSM .
– Upon mutual agreement, involved countries should engage in consultations or avail themselves of the good offices of the ASEAN Secretary
General to engage in concurrent conciliation and mediation processes at any stage .