Mr Yoon Sang-jick

Minister of Trade, Industry and Energy

Seoul, Republic of Korea

Dear Minister Yoon

I have the honour to acknowledge receipt of your letter of this date, which reads as follows:

In connection with the signing on this date of the Korea-Australia Free Trade Agreement (the "Agreement"), I have the honour to confirm the following understandings reached between the delegations of the Republic of Korea and Australia during the course of negotiations regarding Chapter 11 (Investment) of the Agreement:

The Parties shall enter into consultations within 12 months of the date of entry into force of the Agreement on the future application of the United Nations Commission on International Trade Law (UNCITRAL) Rules on Transparency in Treaty-based Investor-State Arbitration (UN Doc A/CN.9/783) ('the UNCITRAL Transparency Rules') to arbitrations initiated pursuant to Section B of Chapter 11 (Investment).

Unless the Parties otherwise agree, the UNCITRAL Transparency Rules shall not apply to arbitrations initiated pursuant to Section B of Chapter 11 (Investment).

I have the honour to propose that this letter and your letter in reply confirming that your Government shares these understandings shall constitute an integral part of the Agreement.

I have the further honour to confirm that my Government shares these understandings and that your letter and this letter in reply shall constitute a integral part of the Agreement.

Yours sincerely

Andrew Robb

Telephone (02) 6277 7420

Facsimile (02) 6273 4128

Parliament House, Canberra ACT 2600