ANNEX 14-E. MEXICO-UNITED STATES INVESTMENT DISPUTES RELATED TO COVERED GOVERNMENT CONTRACTS
1. Annex 14-D (Mexico-United States Investment Disputes) applies as modified by this Annex to the settlement of a qualifying investment dispute under this Chapter in the circumstances set out in paragraph 2. (29)
2. In the event that a disputing party considers that a qualifying investment dispute cannot be settled by consultation and negotiation:
(a) the claimant, on its own behalf, may submit to arbitration under Annex 14-D (Mexico-United States Investment Disputes) a claim:
(i) that the respondent has breached any obligation under this Chapter, (30) provided that:
(A) the claimant is:
(1) a party to a covered government contract, or
(2) engaged in activities in the same covered sector in the territory of the respondent as an enterprise of the respondent that the claimant owns or controls directly or indirectly and that is a party to a covered government contract, and
(B) the respondent is a party to another international trade or investment agreement that permits investors to initiate dispute settlement procedures to resolve an investment dispute with a government, and
(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach;
(b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under Annex 14-D (Mexico-United States Investment Disputes) a claim:
(i) that the respondent has breached any obligation under this Chapter, provided that:
(A) the enterprise is:
(1) a party to a covered government contract,
(2) engaged in activities in the same covered sector in the territory of the respondent as the claimant and the claimant is a party to a covered government contract, or
(3) engaged in activities in the same covered sector in the territory of the respondent as another enterprise of the respondent that the claimant owns or controls directly or indirectly and that is a party to a covered government contract, and
(B) the respondent is a party to another international trade or investment agreement that permits investors to initiate dispute settlement procedures to resolve an investment dispute with a government, and
(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach. (31)
3. For the purposes of paragraph 2, if a covered government contract is terminated in a manner inconsistent with an obligation under this Chapter, the claimant or enterprise that was previously a party to the contract shall be deemed to remain a party for the duration of the contract, as if it had not been terminated.
4. No claim shall be submitted to arbitration under paragraph 2 if:
(a) less than six months have elapsed from the events giving rise to the claim; and
(b) more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under paragraph 2 and knowledge that the claimant (for claims brought under paragraph 2(a)) or the enterprise (for claims brought under paragraph 2(b)) has incurred loss or damage. (32)
5. For greater certainty, the Annex Parties may agree to modify or eliminate this Annex.
6. For the purposes of this Annex:
(a) "covered government contract" means a written agreement between a national authority of an Annex Party and a covered investment or investor of the other Annex Party, on which the covered investment or investor relies in establishing or acquiring a covered investment other than the written agreement itself, that grants rights to the covered investment or investor in a covered sector;
(b) "covered sector" means:
(i) activities with respect to oil and natural gas that a national authority of an Annex Party controls, such as exploration, extraction, refining, transportation, distribution, or sale,
(ii) the supply of power generation services to the public on behalf of an Annex Party,
(iii) the supply of telecommunications services to the public on behalf of an Annex Party,
(iv) the supply of transportation services to the public on behalf of an Annex Party, or
(v) the ownership or management of roads, railways, bridges, or canals that are not for the exclusive or predominant use and benefit of the government of an Annex Party;
(c) "national authority" means an authority at the central level of government; (33) and
(d) "written agreement" means an agreement in writing, negotiated, and executed by two or more parties, whether in a single instrument or in multiple instruments. (34)
Chapter 15. CROSS-BORDER TRADE IN SERVICES
Article 15.1. Definitions
For the purposes of this Chapter:
cross-border trade in services or cross-border supply of services means the supply of a service: (a) from the territory of a Party into the territory of another Party; (b) in the territory of a Party by a person of that Party to a person of another Party; or (c) by a national of a Party in the territory of another Party,
but does not include the supply of a service in the territory of a Party by a covered investment;
enterprise means an enterprise as defined in Article 1.5 (General Definitions), or a branch of an enterprise;
professional service means a service, the supply of which requires specialized post-secondary education, or equivalent training or experience, and for which the right to practice is granted or restricted by a Party, but does not include a service provided by a tradesperson, or a vessel or aircraft crew member;
service supplied in the exercise of governmental authority means, for a Party, a service that is supplied neither on a commercial basis nor in competition with one or more service suppliers;
service supplier of another Party means a person of a Party that seeks to supply or supplies a service; and
specialty air service means a specialized commercial operation using an aircraft whose primary purpose is not the transportation of goods or passengers, such as aerial fire-fighting, flight training, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial, and inspection services.
Article 15.2. Scope
1. This Chapter applies to measures adopted or maintained by a Party relating to cross-border trade in services by a service supplier of another Party, including a measure relating to:
(a) the production, distribution, marketing, sale or delivery of a service; (1)
(b) the purchase or use of, or payment for, a service; (2)
(c) the access to or use of distribution, transport, or telecommunications networks or services in connection with the supply of a service;
(d) the presence in the Party's territory of a service supplier of another Party; or
(e) the provision of a bond or other form of financial security as a condition for the supply of a service.
2. In addition to paragraph 1:
(a) Article 15.5 (Market Access) and Article 15.8 (Development and Administration of Measures) apply to measures adopted or maintained by a Party relating to the supply of a service in its territory by a covered investment; and
(b) Annex 15-A (Delivery Services) applies to measures adopted or maintained by a Party relating to the supply of delivery services, including by a covered investment.
3. This Chapter does not apply to:
(a) a financial service as defined in Article 17.1 (Definitions), except that paragraph 2(a) applies if the financial service is supplied by a covered investment that is not a covered investment in a financial institution as defined in Article 17.1 (Definitions) in the Party's territory;
(b) government procurement;
(c) a service supplied in the exercise of governmental authority; or
(d) a subsidy or grant provided by a Party or a state enterprise, including government-supported loans, guarantees, or insurance.
4. This Chapter does not apply to air services, including domestic and international air transportation services, whether scheduled or non-scheduled, or to related services in support of air services, other than the following:
(a) aircraft repair or maintenance services during which an aircraft is withdrawn from service, excluding so-called line maintenance; and
(b) specialty air services.
5. This Chapter does not impose an obligation on a Party with respect to a national of another Party who seeks access to its employment market or who is employed on a permanent basis in its territory, and does not confer any right on that national with respect to that access or employment.
6. Annex 15-B (Committee on Transportation Services) and Annex 15-D (Programming Services) include additional provisions related to this Chapter.
Article 15.3. National Treatment
1. Each Party shall accord to services or service suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to its own services and service suppliers.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to services and service suppliers of the Party of which it forms a part.
3. For greater certainty, whether treatment referred to in paragraph 1 is accorded in "like circumstances" depends on the totality of the circumstances, including whether the relevant treatment distinguishes between services or service suppliers on the basis of legitimate public welfare objectives.
Article 15.4. Most-Favored-Nation Treatment
1. Each Party shall accord to services or service suppliers of another Party treatment no less favorable than that it accords, in like circumstances, to services and service suppliers of another Party or a non-Party.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to services and service suppliers of another Party or a non-Party.
3. For greater certainty, whether treatment referred to in paragraph 1 is accorded in "like circumstances" depends on the totality of the circumstances, including whether the relevant treatment distinguishes between services or services suppliers on the basis of legitimate public welfare objectives.
Article 15.5. Market Access
1. No Party shall adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, a measure that:
(a) imposes a limitation on:
(i) the number of service suppliers, whether in the form of a numerical quota, monopoly, exclusive service suppliers, or the requirement of an economic needs test,
(ii) the total value of service transactions or assets in the form of a numerical quota or the requirement of an economic needs test,
(iii) the total number of service operations or the total quantity of service output expressed in terms of a designated numerical unit in the form of a quota or the requirement of an economic needs test, (3) or
(iv) the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of a numerical quota or the requirement of an economic needs test; or
(b) restricts or requires a specific type of legal entity or joint venture through which a service supplier may supply a service.
Article 15.6. Local Presence
No Party shall require a service supplier of another Party to establish or maintain a representative office or an enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.
Article 15.7. Non-Conforming Measures
1. Article 15.3 (National Treatment), Article 15.4 (Most-Favored-Nation Treatment), Article 15.5 (Market Access), and Article 15.6 (Local Presence) do not apply to:
(a) an existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I,
(ii) a regional level of government, as set out by that Party in its Schedule to Annex I, or
(iii) a local level of government;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or
(c) an amendment to a non-conforming measure referred to in subparagraph (a), to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Article 15.3 (National Treatment), Article 15.4 (Most-Favored-Nation Treatment), Article 15.5 (Market Access), or Article 15.6 (Local Presence).
2. Article 15.3 (National Treatment), Article 15.4 (Most-Favored-Nation Treatment), Article 15.5 (Market Access), and Article 15.6 (Local Presence) do not apply to a measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities, as set out by that Party in its Schedule to Annex II.
3. If a Party considers that a non-conforming measure applied by a regional level of government of another Party, as referred to in sub-paragraph 1(a)(ii), creates a material impediment to the cross-border supply of services in relation to the former Party, it may request consultations with regard to that measure. These Parties shall enter into consultations with a view to exchanging information on the operation of the measure and to considering whether further steps are necessary and appropriate.
4. For greater certainty, a Party may request consultations with another Party regarding non-conforming measures applied by the central level of government, as referred to in subparagraph 1(a)(i).
Article 15.8. Development and Administration of Measures
1. Each Party shall ensure that a measure of general application affecting trade in services is administered in a reasonable, objective, and impartial manner.
2. If a Party adopts or maintains a measure relating to licensing requirements and procedures, or qualification requirements and procedures, affecting trade in services, the Party shall, with respect to that measure:
(a) ensure that the requirement or procedure is based on criteria that are objective and transparent. For greater certainty, these criteria may include competence or ability to supply a service, or potential health or environmental impacts of an authorization, and competent authorities may assess the weight given to such criteria;
(b) ensure that the competent authority reaches and administers a decision in an independent manner;
(c) ensure that the procedure does not in itself prevent fulfilment of a requirement; and
(d) to the extent practicable, avoid requiring an applicant to approach more than one competent authority for each application for authorization. (4)
3. If a Party requires an authorization for the supply of a service, it shall ensure that each of its competent authorities:
(a) to the extent practicable, permits an applicant to submit an application at any time;
(b) if a specific time period for applications exists, allows a reasonable period for the submission of an application;
(c) if an examination is required, schedules the examination at reasonably frequent intervals and provides a reasonable period of time to enable an applicant to request to take the examination;
(d) endeavors to accept an application electronically;
(e) to the extent practicable, provides an indicative timeframe for processing an application;
(f) to the extent practicable, ascertains without undue delay the completeness of an application for processing under the Party's law;
(g) accepts copies of documents that are authenticated in accordance with the Party's law, in place of original documents, unless the competent authority requires original documents to protect the integrity of the authorization process;
(h) at the request of the applicant, provides without undue delay information concerning the status of the application;
(i) if an application is considered complete under the Partyâs law, within a reasonable period of time after the submission of the application, ensures that the processing of the application is completed, and that the applicant is informed of the decision concerning the application, to the extent possible in writing; (5)
(j) if an application is considered incomplete for processing under the Party's law, within a reasonable period of time, to the extent practicable:
(i) informs the applicant that the application is incomplete,
(ii) if the applicant requests, provides guidance on why the application is considered incomplete,
(iii) provides the applicant with an opportunity (6) to provide the additional information that is required for the application to be considered complete, and
if none of the above is practicable, and the application is rejected due to incompleteness, ensures that the applicant is informed of the rejection within a reasonable period of time;
(k) if an application is rejected, to the extent possible, either upon its own initiative or upon the request of the applicant, informs the applicant of the reasons for rejection and, if applicable, the timeframe for an appeal or review of the decision to reject the application and the procedures for resubmission of an application; and
(l) ensures that authorization, once granted, enters into effect without undue delay, subject to the applicable terms and conditions.
4. Each Party shall ensure that any authorization fee charged by any of its competent authorities is reasonable, transparent, and does not, in itself, restrict the supply of the relevant service. For the purposes of this paragraph, an authorization fee does not include a fee for the use of natural resources, payments for auction, tendering, or other non-discriminatory means of awarding concessions, or mandated contributions to the provision of universal service.
5. Each Party shall encourage its competent authorities, when adopting a technical standard, to adopt technical standards developed through an open and transparent process, and shall encourage a body designated to develop a technical standard to use an open and transparent process. 6. If a Party requires authorization for the supply of a service, the Party shall provide to a service supplier or person seeking to supply a service the information necessary to comply with requirements or procedures for obtaining, maintaining, amending, and renewing that authorization. That information must include:
(a) any fee;
(b) the contact information of a relevant competent authority;
(c) any procedure for appeal or review of a decision concerning an application;
(d) any procedure for monitoring or enforcing compliance with the terms and conditions of licenses;
(e) any opportunities for public involvement, such as through hearings or comments;
(f) any indicative timeframe for processing of an application;
(g) any requirement or procedure; and
(h) any technical standard.
7. Paragraphs 1 through 6 do not apply to the aspects of a measure set out in an entry to a Party's Schedule to Annex I, or to a measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities as set out by that Party in its Schedule to Annex II.
Article 15.9. Recognition
1. For the purposes of the fulfilment, in whole or in part, of a Party's standards or criteria for the authorization, licensing, or certification of a service supplier, and subject to the requirements of paragraph 4, a Party may recognize any education or experience obtained, requirements met, or licenses or certifications granted, in the territory of another Party or a non-Party. That recognition, which may be achieved through harmonization or otherwise, may be based on an agreement or arrangement with the Party or non-Party concerned, or may be accorded autonomously.
2. If a Party recognizes, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted, in the territory of another Party or a non-Party, Article 15.4 (Most-Favored-Nation Treatment) does not require the Party to accord recognition to the education or experience obtained, requirements met, or licenses or certifications granted, in the territory of another Party.
3. If a Party is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, the Party shall afford adequate opportunity to another Party, on request, to negotiate its accession to that agreement or arrangement, or to negotiate a comparable agreement or arrangement. Ifa Party accords recognition of the type referred to in paragraph 1 autonomously, the Party shall afford adequate opportunity to another Party to demonstrate that education or experience obtained, requirements met, or licenses or certifications granted, in that other Party's territory should be recognized.
4. A Party shall not accord recognition in a manner that would constitute a means of discrimination between Parties or between a Party and a non-Party in the application of its standards or criteria for the authorization, licensing, or certification of a service supplier, or a disguised restriction on trade in services.
5. The Parties shall endeavor to facilitate trade in professional services as set out in Annex 15-C (Professional Services).
Article 15.10. Small and Medium-Sized Enterprises
1. With a view to enhancing commercial opportunities in services for SMEs, and further to Chapter 25 (Small and Medium-Sized Enterprises), each Party shall endeavor to support the development of SME trade in services and SME-enabling business models, such as direct selling services,(7) including through measures that facilitate SME access to resources or protect individuals from fraudulent practices.
2. Further to Chapter 28 (Good Regulatory Practices), each Party shall endeavor to adopt or maintain appropriate mechanisms that consider the effects of regulatory actions on SME service suppliers and that enable small businesses to participate in regulatory policy development.
3. Further to Article 15.8 (Development and Administration of Measures), each Party shall endeavor to ensure that authorization procedures for a service sector do not impose disproportionate burdens on SMEs.