1. A Party shall ensure that each of its state-owned enterprises, enterprises granted special rights or privileges and designated monopolies, when engaging in commercial activities:
(a) acts in accordance with commercial considerations in its purchase or sale of a good or service, except to fulfil any terms of its public service mandate that are not inconsistent with subparagraph (b) or (c) of this paragraph;
(b) in its purchase of a good or service:
(i) accords to a good or service supplied by an enterprise of the other Party treatment no less favourable than it accords to a like good or a like service supplied by enterprises of the Party concerned; and
(ii) accords to a good or service supplied by an enterprise that is a covered enterprise, as defined in subparagraph (d) of Article 10.2(1), in the territory of that Party treatment no less favourable than it accords to a like good or a like service supplied by enterprises in the relevant market in the territory of that Party that are investments of investors of that Party; and
(c) in its sale of a good or service:
(i) accords to an enterprise of the other Party treatment no less favourable than it accords to enterprises of the Party concerned; and
(ii) accords to an enterprise that is a covered enterprise, as defined in subparagraph (d) of Article 10.2(1), in the territory of that Party treatment no less favourable than it accords to enterprises in the relevant market in the territory of that Party that are investments of investors of that Party.
2. Paragraph 1 does not preclude state-owned enterprises, enterprises granted special rights or privileges or designated monopolies from:
(a) purchasing or supplying goods or services on different terms or conditions, including terms or conditions relating to price, provided that such different terms or conditions are established in accordance with commercial considerations; or
(b) refusing to purchase or supply goods or services, provided that such refusal is undertaken in accordance with commercial considerations.
Article 22.5. Regulatory Framework
1. The Parties shall make best use of international standards, as applicable, including the OECD Guidelines on Corporate Governance of State-Owned Enterprises, as appropriate.
2. Each Party shall ensure that any regulatory body or any other body exercising a regulatory function that it establishes or maintains:
(a) is independent from, and not accountable to, any of the enterprises that it regulates, in order to ensure the effectiveness of the regulatory function; and
(b) acts, in like circumstances, impartially (1) in respect of all enterprises that it regulates, including state-owned enterprises, enterprises granted special rights or privileges and designated monopolies (2).
3. Each Party shall apply its laws and regulations to state-owned enterprises, enterprises granted special rights or privileges and designated monopolies in a consistent and non-discriminatory manner.
Article 22.6. Transparency
1. A Party ("the requesting Party") which has reason to believe that its interests under this Chapter are being adversely affected by the commercial activities of a state-owned enterprise, an enterprise granted special rights or privileges or a designated monopoly of the other Party may request that other Party ("the requested Party") to supply in writing information on that entity's commercial activities relating to the implementation of this Chapter.
2. The requesting Party shall include, in a request pursuant to paragraph 1, an explanation as to how that Party believes that the activities of the entity may be affecting the interests of that Party under this Chapter and shall specify which information listed in paragraph 3 it requests.
3. The requested Party shall provide the following information, in accordance with paragraphs 1 and 2:
(a) the ownership and the voting structures of the entity, indicating the percentage of shares that the Party, its state-owned enterprises, enterprises granted special rights or privileges or designated monopolies cumulatively own, and the percentage of voting rights that they cumulatively hold, in the entity;
(b) a description of any special shares or special voting or other rights that the Party, its state- owned enterprises, enterprises granted special rights or privileges or designated monopolies hold, if such rights are different from those attached to the general common shares of the entity;
(c) the organisational structure of the entity and the composition of its board of directors or of an equivalent body;
(d) a description of which government departments or public bodies regulate or monitor the entity, a description of the reporting requirements imposed on it by those government departments or public bodies, and the rights and practices of those government departments or any public bodies in respect of the appointment, dismissal or remuneration of senior executives and members of its board of directors or any other equivalent management body;
(e) the annual revenue of the entity and total assets over the most recent three-year period for which information is available;
(f) any exemptions, immunities and related measures from which the entity benefits under the laws and regulations of the requested Party; and
(g) any additional information regarding the entity that is publicly available, including annual financial reports and third party audits.
4. Paragraphs 1, 2 and 3 do not require any Party to disclose confidential information the disclosure of which would be inconsistent with its laws and regulations, impede law enforcement, or otherwise be contrary to the public interest, or would prejudice the legitimate commercial interests of particular enterprises.
5. If the requested information is not available to the requested Party, that Party shall provide the requesting Party with the reasons therefor, in writing.
Article 22.7. Party-specific Annex
1. Article 22.4 does not apply in respect of the non-conforming activities of state-owned enterprises or designated monopolies that a Party lists in its schedule in Annex 22 in accordance with the terms of the schedule of the Party.
2. On request of either Party, the Trade Council may adopt a decision to amend Annex 22 pursuant to subparagraph (a) of Article 33.1(6) and shall in any event consider amendments to Annex 22 within five years of the date of entry into force of this Agreement.
Chapter 23. COMPETITION POLICY
Article 23.1. Principles
The Parties recognise the importance of free and undistorted competition in trade and investment. The Parties acknowledge that anti-competitive practices have the potential to distort the proper functioning of markets and undermine the benefits of trade liberalisation.
Article 23.2. Regulatory Framework
1. Each Party shall maintain or adopt competition law which applies to all sectors of the economy (1) and addresses the following practices in an effective manner:
(a) agreements between enterprises, decisions by associations of enterprises and concerted practices which have as their object or effect the prevention, restriction or distortion of competition;
(b) abuses by one or more enterprises of a dominant position; and
(c) mergers between enterprises which significantly impede effective competition, in particular as a result of the creation or strengthening of a dominant position.
2. Each Party shall ensure that all enterprises, private or public, are subject to the competition law referred to in paragraph 1.
3. The application of the competition law of each Party should not obstruct the performance, in law or in fact, of any particular task of public interest assigned to the enterprises concerned. Exemptions from the competition law of a Party should be limited to tasks of public interest, limited to what is strictly necessary to achieve the desired public policy objective, and transparent.
Article 23.3. Implementation
1. Each Party shall maintain a functionally independent authority responsible for, and appropriately equipped with the powers and resources necessary for the full application and the effective enforcement of, the competition law referred to in Article 23.2.
2. Each Party shall apply its competition law in a transparent and non-discriminatory manner, respecting the principles of procedural fairness and right of defence of the enterprises concerned, irrespective of their nationality or ownership.
Article 23.4. Cooperation
1. The Parties acknowledge that it is in their common interest to promote cooperation on matters related to their competition policy and the enforcement thereof.
2. To facilitate cooperation, the competition authorities of the Parties may exchange information, subject to the confidentiality rules provided for in their respective laws and regulations.
3. The competition authorities of the Parties shall endeavour to coordinate, to the extent possible and if appropriate, their enforcement activities in the same or related conduct or cases.
Article 23.5. Consultations
1. To foster mutual understanding between the Parties, or to address specific matters on the interpretation or application of this Chapter, the Parties shall, on request of either Party, promptly enter into consultations on any matter concerning the interpretation or application of this Chapter (1). The Party requesting consultations shall indicate, if relevant, how the matter affects trade or investment between the Parties.
2. To facilitate the consultations referred to in paragraph 1, each Party shall endeavour to provide relevant non-confidential information to the other Party.
Article 23.6. Non-application of Dispute Settlement
Chapter 31 does not apply to this Chapter.
Chapter 24. SUBSIDIES
Article 24.1. Principles
The Parties recognise that subsidies may be granted if they are necessary to achieve public policy objectives. The Parties acknowledge, however, that certain subsidies have the potential to distort the proper functioning of markets and undermine the benefits of trade liberalisation and competition. Therefore, in principle, a Party shall not grant subsidies if they negatively affect, or are likely to negatively affect, trade or competition between the Parties.
Article 24.2. Definition and Scope
1. For the purposes of this Chapter, a "subsidy" means a measure which fulfils the conditions set out in Article 1.1 of the SCM Agreement, irrespective of whether it is granted to an enterprise supplying goods or to an enterprise supplying services (1).
2. This Chapter applies to subsidies which are specific in accordance with Article 2 of the SCM Agreement.
3. This Chapter applies to subsidies to any enterprise, including private and public enterprises.
4. Each Party shall ensure that subsidies to enterprises entrusted with the operation of services of general economic interest are subject to the rules set out in this Chapter, in so far as the application of those rules does not obstruct the performance, in law or in fact, of the particular tasks that are assigned to those enterprises. Assigned tasks shall be transparent, and any limitation to or deviation from the application of the rules set out in this Chapter shall not go beyond what is necessary to perform the assigned tasks.
5. Article 24.5 does not apply to subsidies related to trade in goods covered by Annex 1 to the Agreement on Agriculture.
6. Articles 24.5 and 24.6 do not apply to the audio-visual sector.
7. Articles 24.5 and 24.6 do not apply to subsidies granted to assist indigenous people and their communities in their economic development (1). Such subsidies shall be targeted, proportionate and transparent.
8. Articles 24.5 and 24.6 do not apply to subsidies granted to remedy the damage caused by natural disasters or other exceptional occurrences.
9. Article 24.5 does not apply to subsidies that are granted on a temporary basis to respond to an economic emergency (1). Such subsidies shall be proportionate and targeted to remedy that economic emergency.
10. The Trade Council may adopt a decision amending the definition of "subsidy" in paragraph 1 of this Article in so far as it relates to enterprises supplying services, with a view to incorporating the outcome of future discussions in the WTO or related plurilateral fora on that matter, pursuant to subparagraph (a) of Article 33.1(6).
Article 24.3. Relation to the WTO Agreement
This Chapter applies without prejudice to the rights and obligations of a Party under Article XV of GATS, Article XVI of GATT 1994, the SCM Agreement and the Agreement on Agriculture.
Article 24.4. Transparency
1. With respect to a subsidy granted or maintained within its territory, each Party shall make available the following information:
(a) the legal basis and purpose of the subsidy;
(b) the form of the subsidy;
(c) the amount of the subsidy or the amount budgeted for the subsidy; and
(d) if possible, the name of the recipient of the subsidy.
2. A Party shall meet the requirements set out in paragraph 1 of this Article by means of:
(a) notification pursuant to Article 25 of the SCM Agreement, provided that the notification contains all the information referred to in paragraph 1 of this Article and is provided at least every two years;
(b) notification pursuant to Article 18 of the Agreement on Agriculture; or
(c) publication by the Party or on its behalf on a publicly accessible website, by 31 December of the calendar year following the year in which the subsidy was granted or maintained.
Article 24.5. Consultations
1. If a Party considers that a subsidy granted by the other Party has or could have a negative effect on its trade interests or on competition, that Party (the "requesting Party") may express its concern in writing to the other Party (the "responding Party") and request consultations on the matter. Such a request shall include an explanation of how the subsidy has or could have a negative effect on the trade interests of the requesting Party or on competition.
2. For the purposes of paragraph 1, the requesting Party may request from the responding Party the following information about the subsidy:
(a) the legal basis and policy objective or purpose of the subsidy;
(b) the form of the subsidy;
(c) the dates and duration of the subsidy and any other time limits attached to it;
(d) the eligibility requirements of the subsidy;
(e) the total amount or the annual amount budgeted for the subsidy;
(f) if possible, the name of the recipient of the subsidy; and
(g) any other information permitting an assessment of the negative effect of the subsidy.
3. The responding Party shall provide the information requested pursuant to paragraph 2 in writing no later than 60 days after the date of receipt of the request.
4. If the responding Party does not provide, in whole or in part, the information requested pursuant to paragraphs 2 and 3, the responding Party shall explain the reasons therefor in writing.
5. If, after having received the requested information and following the consultations, the requesting Party considers that the subsidy concerned has or may have a significant negative effect on its trade interests or competition, the responding Party shall use its best endeavours to eliminate or minimise that effect.
Article 24.6. Subsidies Subject to Conditions
1. When granting the following subsidies, each Party shall apply the following conditions:
(a) in respect of subsidies whereby a government, directly or indirectly, is responsible for guaranteeing debts or liabilities of certain enterprises, that the coverage of the debts or liabilities is not unlimited with regard to the amount of those debts or liabilities or that the duration of the government's responsibility is not unlimited; and
(b) in respect of subsidies to insolvent or ailing enterprises such as loans and guarantees, cash grants, capital injections, provision of assets below market prices and tax exemptions with a duration of more than one year, that a credible restructuring plan has been prepared which is based on realistic assumptions with a view to ensuring the return of the insolvent or ailing enterprises, within a reasonable time, to long-term viability and that the enterprise, with the exception of small and medium-sized enterprises, itself contributes to the costs of restructuring.
2. Subparagraph (b) of paragraph 1 does not apply to subsidies granted to enterprises as a temporary liquidity support in the form of loan guarantees or loans limited to the amount needed merely to keep an ailing company in business for the time necessary to adopt a restructuring or liquidation plan.
3. This Article applies only to subsidies that negatively affect trade and competition of the other Party or are likely to do so.
4. This Article does not apply to subsidies:
(a) which are granted to ensure the orderly market exit of a company; or
(b) the cumulative amounts or budgets of which are less than 170 000 SDR per enterprise over a period of three consecutive years.
Article 24.7. Use of Subsidies
Each Party shall ensure that enterprises use subsidies only for the explicitly defined policy objective for which those subsidies were granted (1).
Article 24.8. Non-application of Dispute Settlement
Chapter 31 does not apply to Article 24.5(5).
Article 24.9. Confidentiality
1. When exchanging information under this Chapter, the Parties shall take into account the limitations imposed by their respective law concerning professional and business secrecy and shall ensure the protection of business secrets and other confidential information.
2. If a Party communicates information under this Chapter, the receiving Party shall maintain the confidentiality of that information.
Chapter 25. INTELLECTUAL PROPERTY
Section A. GENERAL PROVISIONS
Article 25.1. Objectives
1. The objectives of this Chapter are to:
(a) facilitate the production and commercialisation of innovative and creative goods and services between the Parties, contributing to a more sustainable and inclusive economy for the Parties;
(b) facilitate and govern trade between the Parties, as well as reduce distortions and impediments to such trade; and
(c) achieve an adequate and effective level of protection and enforcement of intellectual property rights.
2. The objectives set out in Article 7 of the TRIPS Agreement apply to this Chapter, mutatis mutandis.
Article 25.2. Scope
1. Each Party shall comply with its commitments under the international treaties in the field of intellectual property to which it is a party, including the TRIPS Agreement.
2. This Chapter shall complement and further specify the rights and obligations of each Party under the TRIPS Agreement and other international treaties in the field of intellectual property.
3. Nothing in this Chapter prevents a Party from applying provisions of its law introducing higher standards for the protection and enforcement of intellectual property rights, provided that those provisions are compatible with this Chapter. Each Party shall be free to determine the appropriate method of implementing this Chapter within its own legal system and practice.
Article 25.3. Principles
1. The principles set out in Article 8 of the TRIPS Agreement apply to this Chapter, mutatis mutandis.
2. Taking into consideration the underlying public policy objectives of domestic systems, the Parties recognise the need to do the following through their respective intellectual property systems, while respecting the principles of transparency, taking into account the interests of relevant stakeholders, including right holders, users and the general public:
(a) promote innovation and creativity; and
(b) facilitate the diffusion of information, knowledge, technology, culture and the arts.
Article 25.4. Definitions
For the purposes of this Chapter and Annexes 25-A, 25-B and 25-C:
(a) "Berne Convention" means the Berne Convention for the Protection of Literary and Artistic Works, done at Berne on 9 September 1886, and as amended on 28 September 1979;
(b) "intellectual property" means all categories of intellectual property rights that are covered by Sub-Sections 1 to 7 of Section B of this Chapter or Sections 1 to 7 of Part II of the TRIPS Agreement; the protection of intellectual property includes protection against unfair competition pursuant to Article 10bis of the Paris Convention;
(c) "Paris Convention" means the Paris Convention for the Protection of Industrial Property, of 20 March 1883, as last revised at Stockholm on 14 July 1967 and as amended on 28 September 1979;
(d) "Rome Convention" means the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, done at Rome on 26 October 1961; and
(e) "WIPO" means the World Intellectual Property Organization.
Article 25.5. National Treatment
1. In respect of all categories of intellectual property rights covered by this Chapter, each Party shall accord to nationals of the other Party treatment no less favourable than it accords to its own nationals with regard to the protection (1) of intellectual property rights, subject to the exceptions already provided in, respectively, the Paris Convention, the Berne Convention, the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits, done at Washington on 26 May 1989 and the WIPO Performances and Phonograms Treaty ("WPPT"), done at Geneva on 20 December 1996. In respect of performers, producers of phonograms and broadcasting organisations, that obligation only applies in respect of the rights provided for under this Chapter.
2. A Party may avail itself of the exceptions permitted under paragraph 1 in relation to its judicial and administrative procedures, including requiring a national of the other Party to designate an address for service of process in its territory, or to appoint an agent in its territory, provided that such exception is:
(a) necessary to secure compliance with the laws or regulations of the Party concerned that are not inconsistent with this Chapter; and
(b) not applied in a manner that would constitute a disguised restriction on trade.
3. Paragraph 1 does not apply to procedures provided in multilateral agreements concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.