4. Notwithstanding Article 31.19 (Non-Implementation - Suspension of Benefits), when a panel's determination is that a Party's measure is inconsistent with this Agreement and the measure affects:
(a) only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector; or
(b) the financial services sector and another sector, the complaining Party may not suspend benefits in the financial services sector that have an effect that exceeds the effect of the measure in the complaining Party's financial services sector.
ANNEX 17-A. CROSS-BORDER TRADE
Canada (11)
Insurance and Insurance-Related Services
1, Articles 17.3.3 (National Treatment) and 17.5.1 (Market Access) apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of "cross- border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) insurance of risks relating to:
(I) maritime transport and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability deriving therefrom, and
(ii) goods in international transit;
(b) Reinsurance and retrocession;
(c) services auxiliary to insurance as described in subparagraph (d) of the definition of "financial service" in Article 17.1 (Definitions); and
(d) insurance intermediation such as brokerage and agency, as referred to in subparagraph (c) of the definition of "financial service" in Article 17.1 (Definitions) of insurance of risks related to services listed in subparagraphs (a) and (b) of this paragraph.
Banking and Other Financial Services (excluding insurance)
2. Articles 17.3.3 (National Treatment) and 17.5.1 (Market Access) apply to the cross-border supply of or trade in financial services, as defined in subparagraphs (a) of the definition of "cross-border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) the provision and transfer of financial information and financial data processing as described in subparagraph (O) of the definition of "financial service" in Article 17.1 (Definitions);
(b) advisory and other auxiliary financial services, and credit reference and analysis, excluding intermediation, relating to banking and other financial services as described in subparagraph (p) of the definition of "financial service" in Article 17.1 (Definitions); and
(c) electronic payment services for payment card transactions falling within subparagraph (h) of the definition of "financial service" in Article 17.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:
(i) the processing of financial transactions, such as verification of financial balances, authorization of transactions, notification of banks (or credit card issuers) of individual transactions and provision of daily summaries and instructions regarding the net financial position of relevant institutions for authorized transactions, and
(ii) those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions,
but not including the transfer of funds to and from transactors' accounts. (12)
(d) the following services if they are provided to a collective investment scheme located in Canada:
(i) investment advice, and
(ii) portfolio management services, excluding:
(A) trustee services, and
(B) custodial services and execution services that are not related to managing a collective investment scheme.
3. For the purposes of paragraph 3, in Canada:
(a) payment card means a "payment card" as defined under the Payment Card Networks Act as of January 1, 2015. For greater certainty, physical and electronic forms of credit and debit cards are included in the definition. For greater certainty, credit cards include pre-paid cards.
(b) a collective investment scheme means, an "investment fund" as defined under the relevant Securities Act.
Mexico
Insurance and insurance-related services
1. Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of "cross-border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) insurance of risks relating to:
(i) maritime shipping and commercial aviation, space launching and freight (including satellites), with such insurance to cover all or any of the following: the goods being transported; and the vehicle transporting the goods, when such vehicles have foreign registration or are property of persons domiciled abroad, and
(ii) goods in international transit;
(b) any other insurance of risks, if the person seeking to purchase the insurance demonstrates that none of the insurance companies authorized to operate in Mexico is able or deems convenient to enter into such insurance proposed to it;
(c) reinsurance and retrocession; and
(d) insurance intermediation, as referred to in subparagraph (c) of the definition of "financial service" in Article 17.1 (Definitions), and services auxiliary to insurance, as referred to in subparagraph (d) of the definition of "financial service" in Article 17.1 (Definitions), only in respect of insurance referred to in the section of Mexico in this Annex.
Banking and other financial services (excluding insurance)
2. Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of "cross-border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) provision and transfer of financial information, and financial data processing and related software, as referred to in subparagraph (o) of the definition of "financial service" in Article 17.1 (Definitions);
(b) advisory and other auxiliary services, (14) excluding intermediation, and creditreference and analysis, relating to banking and other financial services, as referred to in subparagraph (p) of the definition of "financial service" in Article 17.1 (Definitions);
(c) the following services if they are provided to a collective investment scheme in Mexico:
(i) investment advice, and
(ii) portfolio management services, excluding:
(A) trustee services, and
(B) custodial services and execution services that are not related to managing a collective investment scheme; and
(d) electronic payment services for payment card transactions falling within subparagraph (h) of the definition of "financial service" in Article 17.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:
(i) receiving and sending messages for: authorization requests, authorization responses (approvals or declines), stand-in authorizations, adjustments, refunds, returns, retrievals, charge backs and related administrative messages,
(ii) calculation of fees and balances derived from transactions of acquirers and issuers, and receiving and sending messages related to this process to acquirers and issuers, and their agents and representatives,
(iii) the provision of periodic reconciliation, summaries and instructions regarding the net financial position of acquirers and issuers, and their agents and representatives for approved transactions,
(iv) value-added services related to the main processing activities referred to in subparagraphs (i), (ii), and (iii), such as fraud prevention and mitigation activities, and administration of loyalty programs, and
(v) those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions, as referenced in subparagraphs (i)-(iv),
but not including the transfer of funds to and from transactors' accounts.
For Mexico, a payment card means a credit card, debit card, and reloadable card in physical form or electronic format, as defined under Mexican law.
3. For the purposes of paragraph 2(b) and 2(c), in Mexico a collective investment scheme means the "Managing Companies of Investment Funds (Sociedades Operadoras de Fondos de Inversión)" established under the Investment Funds Law (Ley de Fondos de Inversión). A financial institution organized in the territory of another Party will only be authorized to provide portfolio management services to a collective investment scheme located in Mexico if it provides the same services in the territory of the Party where it is established.
United States
Insurance and insurance-related services
1, Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of "cross-border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) insurance of risks relating to:
(i) maritime shipping and commercial aviation and space launching and freight (including satellites), with that insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability arising therefrom, and
(ii) goods in international transit; and
(b) reinsurance and retrocession; services auxiliary to insurance, as referred to in subparagraph (d) of the definition of "financial service" in Article 17.1 (Definitions); and insurance intermediation, such as brokerage and agency, as referred to in subparagraph (c) of the definition of "financial service" in Article 17.1 (Definitions).
Banking and other financial services (excluding insurance)
2. Article 17.3.3 (National Treatment) and 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of "cross- border supply of financial services" in Article 17.1 (Definitions), with respect to:
(a) provision and transfer of financial information, and financial data processing and related software, as referred to in subparagraph (o) of the definition of "financial service" in Article 17.1 (Definitions);
(b) advisory and other auxiliary services, excluding intermediation, relating to banking and other financial services, as referred to in subparagraph (p) of the definition of "financial service" in Article 17.1 (Definitions);
(c) investment advice to a collective investment scheme located in the Party's territory;
(d) portfolio management services, excluding
(i) trustee services, and
(ii) custodial services and execution services that are not related to managing a collective investment scheme; and
(e) electronic payment services for payment card transactions falling within subparagraph (h) of the definition of "financial service" in Article 17.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:
(i) the processing of financial transactions such as verification of financial balances, authorization of transactions, notification of banks (or credit card issuers) of individual transactions and provision of daily summaries and instructions regarding the net financial position of relevant institutions for authorized transactions, and
(ii) those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions,
but not including the transfer of funds to and from transactors' accounts.
For the United States, a payment card means a credit card, charge card, debit card, check card, automated teller machine (ATM) card, prepaid card, and other physical or electronic products or services for performing similar functions as these cards, and the unique account number associated with that card, product, or service. (16)
3. For the purposes of subparagraphs 2(c) and 2(d), for the United States, a collective investment scheme means an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940. (17)
ANNEX 17-B. AUTHORITIES RESPONSIBLE FOR FINANCIAL SERVICES
The authorities for each Party responsible for financial services are:
(a) for Canada, the Department of Finance of Canada;
(b) for Mexico, the Ministry of Finance and Public Credit (Secretaria de Hacienda y Crédito Puúlico); and
(c) for the United States, the Department of the Treasury for the purposes of Annex 17-C (Mexico-United States Investment Disputes in Financial Services) and for all matters involving banking, securities, and financial services other than insurance, and the Department of the Treasury, in cooperation with the Office of the U.S. Trade Representative, for insurance matters.
ANNEX 17-C. MEXICO-UNITED STATES INVESTMENT DISPUTES IN FINANCIAL SERVICES
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.
2. In the event that a disputing party considers that a qualifying investment dispute under this Chapter cannot be settled by consultation and negotiation:
(a) the claimant, on its own behalf, may submit to arbitration under Annex 14-D a claim:
(i) that the respondent has breached:
(A) Article 17.3.1 (National Treatment), Article 17.3.2 (National Treatment), Article 17.4.1(a) (Most-Favored-Nation Treatment), Article 17.4.1(b) (Most-Favored-Nation Treatment), or Article 17.4.1(c) (Most-Favored-Nation Treatment) (18) except with respect to the establishment or acquisition of an investment; or
(B) Article 14.8 (Expropriation and Compensation) as incorporated into this Chapter under Article 17.2.2(a) (Scope), except with respect to indirect expropriation; and
(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and
(b) the claimant, on behalf of a financial institution 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 a claim:
(i) that the respondent has breached:
(A) Article 17.3.1 (National Treatment), Article 17.3.2 (National Treatment), Article 17.4.1(a) (Most-Favored-Nation Treatment), Article 17.4.1(b) (Most-Favored-Nation Treatment), or Article 17.4.1(c) (Most-Favored-Nation Treatment), except with respect to the establishment or acquisition of an investment; or
(B) Article 14.8 (Expropriation and Compensation) as incorporated into this Chapter under Article 17.2.2(a), except with respect to indirect expropriation; and
(ii) that the financial institution has incurred loss or damage by reason of, or arising out of, that breach.
3. If an investor of an Annex Party submits a claim to arbitration under Annex 14-D (Mexico- United States Investment Disputes) as modified by this Annex:
(a) the presiding arbitrator and the other arbitrators shall be selected so that the presiding arbitrator has expertise or experience in financial services law or practice such as the regulation of financial institutions, and, to the extent practicable, the other arbitrators have expertise or experience in financial services law or practice such as the regulation of financial institutions; and
(b) the respondent shall endeavor to consult with its domestic financial regulatory authorities on the claim.
4. No claim shall be submitted to arbitration under Annex 14-D (Mexico-United States Investment Disputes) as modified by this Annex unless the conditions in Article 14.D.5.1 (Conditions and Limitations on Consent) of Annex 14-D (Mexico-United States Investment Disputes) are satisfied, except the relevant time period in subparagraph (b) is 18 months.
5. If an investor of an Annex Party submits a claim to arbitration under Annex 14-D (Mexico- United States Investment Disputes) as modified by this Annex, and the respondent invokes Article 17.11 (Exceptions) as a defense, the following provisions of this Article apply:
(a) The respondent shall, no later than the date the tribunal fixes for the respondent to submit its counter-memorial, or in the case of an amendment to the notice of arbitration, the date the tribunal fixes for the respondent to submit its response to the amendment, submit in writing to the authorities responsible for financial services of the Annex Party of the claimant, as set out in Annex 17-B (Authorities Responsible for Financial Services), a request for a joint determination by the authorities of the respondent and the Annex Party of the claimant on the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim.
(i) The respondent shall set out in the request the text of a proposed joint determination that specifies the claims to which it considers Article 17.11 (Exceptions) a valid defense.
(ii) The respondent shall promptly provide the tribunal, if constituted, a copy of the request.
(iii) The authorities of the Annex Party of the claimant shall notify the authorities of the respondent in writing that the request has been received.
(iv) The arbitration may proceed with respect to the claim only as provided in subparagraph (g). (19)
(b) The authorities referred to in subparagraph (a) shall attempt in good faith to make a joint determination as described in that subparagraph within 120 days after the date of the written request for that determination. The authorities may, in extraordinary circumstances, agree to extend the date for a joint determination for up to 60 additional days.
(c) The authorities of the Annex Party of the claimant shall notify the authorities of the respondent within 120 days after the date of the written request for a joint determination under subparagraph (a), or within the period agreed under subparagraph (b), whichever is longer, whether the authorities of the Annex Party of the claimant agree to the proposed joint determination submitted under subparagraph (a)(i), propose an alternative joint determination, or will not, for any reason, agree to a joint determination.
(d) If the authorities of the Annex Party of the claimant make no notification under subparagraph (c), they shall be presumed to take a position that is consistent with that of the authorities of the respondent, and a joint determination shall deemed to be made regarding the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim as set out in the proposed joint determination submitted under subparagraph (a)(i).
(e) Any joint determination made or deemed to be made shall be transmitted promptly to the disputing parties, the Committee and, if constituted, to the tribunal. The joint determination shall be binding on the tribunal and any decision or award issued by the tribunal must be consistent with that determination.
(f) If the authorities referred to in subparagraph (a), within 120 days after the date of the written request for a joint determination under subparagraph (a) or within the date agreed under subparagraph (b), whichever is longer, have not made a determination as described in subparagraph (a), the tribunal shall decide the issue left unresolved by the authorities.
(i) The tribunal shall draw no inference regarding the application of Article 17.11 (Exceptions) from the fact that the competent authorities have not made a determination as described in subparagraph (a).
(ii) The Annex Party of the claimant may make oral and written submissions to the tribunal regarding the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim. Unless it makes such a submission, the Annex Party of the claimant shall be presumed, for purposes of the arbitration, to take a position on Article 17.11 (Exceptions) not inconsistent with that of the respondent.
(g) The arbitration referred to in subparagraph (a) may proceed with respect to the claim:
(i) 10 days after the date a joint determination under subparagraph (a) has been received by the disputing parties and, if constituted, the tribunal; or
(ii) 10 days after the expiration of the 120-day period following the request for a joint determination under subparagraph (a) or the expiration of the period agreed under subparagraph (b), whichever is longer.
(h) On the request of the respondent made within 30 days after the expiration of the 120- day period following the request for a joint determination under subparagraph (a), or within 30 days after the expiration of the period agreed under subparagraph (b), whichever is longer, or, if the tribunal has not been constituted as of the expiration of the 120-day or the period agreed under subparagraph (b), within 30 days after the tribunal is constituted, the tribunal shall address and decide the issue or issues left unresolved by the authorities as referred to in subparagraph (c) prior to deciding the merits of the claim for which Article 17.11 (Exceptions) has been invoked by the respondent as a defense. Failure of the respondent to make that request is without prejudice to the right of the respondent to invoke Article 17.11 (Exceptions) as a defense at any appropriate phase of the arbitration.
6. If a respondent asserts that the measure alleged to be a breach is within the scope of a non-conforming measure set out in the responding Party's Schedule to Annex II, Article 10 of Annex 14-D (Mexico-United States Investment Disputes) shall apply to any request of the respondent for an interpretation of the Commission on the issue.
ANNEX 17-D. LOCATION OF COMPUTING FACILITIES
Article 17.18 (Location of Computing Facilities) does not apply to existing measures of Canada for one year after the entry into force of this Agreement.
Chapter 18. TELECOMMUNICATIONS
Article 18.1. Definitions
For the purposes of this Chapter:
cost-oriented means based on cost, and may include a reasonable profit, and may involve different cost methodologies for different facilities or services;
dialing parity means the ability of an end-user to use an equal number of digits to access a particular public telecommunications service, regardless of which public telecommunications services supplier the end-user chooses;
end-user means a final consumer of or subscriber to a public telecommunications service, including a service supplier other than a supplier of public telecommunications services;
enterprise means an enterprise as defined in Article 1.5 (General Definitions) and a branch of an enterprise;
essential facilities means facilities of a public telecommunications network or service that:
(a) are exclusively or predominantly provided by a single or limited number of suppliers; and
(b) cannot feasibly be economically, or technically substituted in order to supply a service;
interconnection means linking suppliers providing public telecommunications services in order to allow a user of one supplier to communicate with a user of another supplier and to access services provided by another supplier;
leased circuit means a telecommunications facility between two or more designated points that is set aside for the dedicated use of, or availability to, a user and supplied by a supplier of a fixed telecommunications service;
license means any authorization that a Party may require of a person, in accordance with its laws and regulations, in order for that person to offer a telecommunications service, including concessions, permits or registrations;
major supplier means a supplier of public telecommunications services that has the ability to materially affect the terms of participation (having regard to price and supply) in the relevant market for public telecommunications services as a result of:
(a) control over essential facilities; or
(b) use of its position in the market (1)
mobile service means a public telecommunications service supplied through mobile wireless means;
network element means a facility or equipment used in supplying a fixed public telecommunications service, including features, functions and capabilities provided by means of that facility or equipment;
non-discriminatory means according treatment no less favorable than that accorded to another user of like public telecommunications services in like circumstances, including with respect to timeliness;
number portability means the ability of an end-user of public telecommunications services to retain the same telephone numbers when switching between suppliers of public telecommunications services;
physical co-location means physical access to and control over space in order to install, maintain or repair equipment, at premises owned or controlled and used by a major supplier to provide public telecommunications services;
public telecommunications network means telecommunications infrastructure used to provide public telecommunications services between defined network termination points;