Yes, we've had the dispute resolution mechanism in previous agreements, for North America and for Chile. The Costa Rica one did not have financial penalties. This agreement is sort of a third generation agreement. It is much, much stronger than what you had under the North American agreement or the Costa Rica agreement. The dispute resolution mechanism is an important part of this. Essentially, we've tried to strike a balance between having an efficient deterrent for non-compliance and having a problem-solving approach.
You have different approaches in the world right now. For example, Americans will tell other countries that if they don't comply they'll get trade sanctions. Actually, when we looked at the agreement, we thought that it was better to have financial penalties than to have trade sanctions. When countries have to face trade sanctions in the WTO, or they don't comply, they have a choice of either paying a penalty or having trade sanctions. Very often they'll choose the trade sanctions, because the country applying the trade sanctions actually hurts itself a little bit.
In this case, if 70% of our imports from Peru come from Canadian companies and are reprocessed, it would actually hurt us, so we would prefer to have a penalty instead. We have a strong legal mechanism to ensure that the penalty would be paid into a fund controlled by both governments. It would also ensure that the money would be used to solve the problem.
It's important to understand when the penalty would take effect. It would come at the end of a dispute resolution process, where the government probably would have had to expend maybe half a million dollars just for the cost of the dispute review panel. The government would probably be in no mood to compromise after having gone through all of this, and generally the government has been seen as aggressively pursuing these complaints.
Once the money is put into the fund, then you have to have an agreement. You have to have an action plan. You have to have an agreement to resolve the issue. If we believe the other country is not acting in good faith and does not really want to resolve the issue, we'll just refuse to have an agreement. Until we have an agreement, that country has to keep paying this amount of money into the fund year after year. We find that this approach is superior to asking, as other countries do sometimes, that the money be paid to the treasury. That's the process that we've set up.