(i) the determination of whether an act or series of acts of a Party, in a specific factual situation, has an effect equivalent to a direct expropriation without the formal transfer of title or right of ownership (i) the determination of whether or not an act or series of acts of a Party, in a specific factual situation, constitutes an indirect expropriation. indirect expropriation, requires a factual, case-by-case inquiry that case-by-case factual inquiry that considers among other factors:
(1) the economic impact of the governmental act, although (2) the fact that an act or series of acts of a Party has an adverse effect on the value of a Party's adverse effect on the economic value of an investment, by itself, does not investment, standing alone, does not establish that an indirect expropriation has indirect expropriation has occurred;
(2) the extent to which the government action interferes with unambiguous and reasonable expectations. with unambiguous and reasonable expectations in the investment; and investment; and
(3) the character of the government action;
(ii) except in exceptional circumstances, acts of indirect expropriation do not constitute indirect expropriations. indirect expropriations do not constitute non-discriminatory regulatory non-discriminatory regulatory acts of a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, security and such as public health, safety and the environment.
Annex 11.31. Delivery of Documents
For purposes of Article 11.31, the place for delivery of notices and other documents under Section C shall be:
(a) for the case of Costa Rica, the Dirección General de Comercio Exterior, Ministerio de Comercio Exterior, Avenidas 1 y 3, Calle 40, San José, Costa Rica;
(b) in the case of El Salvador, the Dirección de Administración de Tratados Comerciales, Ministerio de Economía, Alameda Juan Pablo II y Calle Guadalupe, Plan Maestro, Edificio "C-2", San Salvador, El Salvador;
(c) in the case of Guatemala, the Dirección de Administración del Comercio Exterior, Ministerio de Economía, 8ª Avenida 10-43 zona 1, Guatemala, Guatemala;
(d) for Honduras, the Dirección General de Integración Económica y Política Comercial, Secretaría de Estado en los Despachos de Industria y Comercio, Boulevard José Cecilio del Valle, Edificio San José, Tegucigalpa, Honduras;
(e) for Mexico: Dirección General de Consultoría Jurídica de Negociaciones, Secretaría de Economía, Alfonso Reyes número 30 Hipódromo Condesa, Cuauhtémoc, México, D.F.; and
(f) in the case of Nicaragua, the Dirección General de Comercio Exterior, Ministerio de Fomento Industria y Comercio, Km. 6, Carretera a Masaya, Managua, Nicaragua,
or its successors.
2. For the modification of the information contained in paragraph 1, the written notification of the modifying Party to the other Party(ies) at the place designated by such other Party(ies) shall be sufficient.
Chapter XII. Cross-Border Trade In Services
Article 12.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
Cross-border trade in services: the supply of a service:
(a) from the territory of one Party to the territory of the other Party;
(b) in the territory of a Party, by a person of that Party, to a person of the other Party; or
(c) by a national of a Party in the territory of the other Party;
but does not include the supply of a service in the territory of a Party by an investor of the other Party, as defined in Article 11.1 (Definitions) or an investment by an investor of the other Party;
company: a company, as defined in Article 2.1 (Definitions of General Application), and the branch of a company;
enterprise of a Party: an enterprise incorporated or organized under the domestic law of that Party and domiciled in the territory of that Party; and a branch located in the territory of a Party and carrying on substantive business activities therein;
measures adopted or maintained by a Party: measures adopted or maintained by:
(a) central, regional or local governments or authorities; and
(b) non-governmental institutions or agencies in the exercise of powers delegated to them, in accordance with national legislation, by the governments or authorities indicated in the preceding paragraph;
national: a natural person who is a national of a Party in accordance with Article 2.1 (Definitions of General Application), or a permanent resident of a Party;
person: a national or a company;
service supplier of a Party: a person of a Party who intends to supply or does supply a service; (1)
services: includes any service, except services provided in the exercise of governmental authority;
service supplied in the exercise of governmental authority: any service that is supplied neither on a commercial basis nor in competition with one or more service suppliers;
specialized air services: any air service other than transportation, such as aerial mapping, aerial surveying, aerial photography, forest fire control, fire suppression, aerial advertising, glider towing, parachuting services, construction air services, log air transport, scenic flights, training flights, aerial inspection and surveillance and aerial spraying, and other air services related to agriculture, industry and inspection;
professional services: services, the supply of which requires specialized higher education or equivalent training or experience and the exercise of which is authorized or restricted by a Party, but does not include services supplied by persons engaged in a trade or to crew members of merchant ships and aircraft; and transfers: international remittances and payments.
Article 12.2. Scope of Application
1. This Chapter applies to measures that a Party adopts or maintains on cross-border trade in services by service suppliers of the other Party, including those relating to:
(a) the production, distribution, marketing, sale and provision of a service;
(b) the purchase or use of, or payment for, a service;
(c) access to and use of distribution systems, transport or telecommunication networks and services related to the supply of a service;
(d) the presence in its territory of a service supplier of the other Party; and
(e) the provision of a bond or other form of financial guarantee as a condition for the provision of a service.
2. This Chapter does not apply to:
(a) air services, including domestic and international air transport, both scheduled and non-scheduled, as well as ancillary activities in support of air services, except:
(i) aircraft repair and maintenance services during the period in which an aircraft is removed from service;
(ii) specialized air services; and
(iii) computerized reservation systems;
(b) financial services;
(c) subsidies or grants provided by a Party or a state enterprise, including government-supported loans, guarantees and insurance;
(d) services provided in the exercise of governmental authority such as, but not limited to, the enforcement of laws relating to social rehabilitation services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care; and
(e) public procurement.
3. This Chapter does not impose any obligation on a Party with respect to a national of the other Party who seeks to enter its labor market or who has permanent employment in its territory, or to confer any rights on that national, with respect to such access or employment, nor shall it apply to measures relating to citizenship or residence on a permanent basis.
4. Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry or temporary stay of persons of the other Party in its territory, including those measures necessary to protect the integrity of its borders and to ensure the orderly movement of persons across its borders. (2)
5. Articles 12.6 and 12.9 shall apply to measures of a Party affecting the supply of a service in its territory by an investment as defined in Article 11.1 (Definitions). (3)
6. For the purposes of this Agreement, the extraction of natural resources, the generation of electricity, the refining of crude oil and its derivatives, hunting and fishing shall not be considered services.
Article 12.3. Most-Favored-Nation Treatment
1. Each Party shall accord to services and service suppliers of the other Party treatment no less favorable than that it accords, in like circumstances, to services and service suppliers of any non-Party.
2. Nothing in this Chapter shall be construed to prevent a Party from conferring advantages on adjacent States for the purpose of facilitating trade, limited to contiguous border areas, in services that are produced or consumed locally.
Article 12.4. National Treatment
1. Each Party shall accord to services and service suppliers of the other Party treatment no less favorable than that it accords, in like circumstances, to its own services and service suppliers.
2. A Party may comply with paragraph 1 by granting to services and service suppliers of the other Party formally identical treatment or formally different treatment to that it accords to its like services and service suppliers.
3. Formally identical treatment or formally different treatment shall be considered less favorable if it modifies the conditions of competition in favor of services or service suppliers of the Party, as compared to like services or service suppliers of the other Party.
4. Nothing in this Article shall be construed to require either Party to compensate for any inherent competitive disadvantages resulting from the foreign character of the relevant services or service suppliers.
5. Treatment accorded by a Party under paragraph 1 means, with respect to a regional level government, treatment no less favourable than the most favourable treatment accorded by that regional level government to like services and service suppliers of the Party to which they belong.
Article 12.5. Local Presence
No Party shall require a service supplier of the other Party to establish or maintain a representative office or other business or to reside in its territory as a condition for the cross-border supply of a service.
Article 12.6. Market Access
No Party shall adopt or maintain, on the basis of a regional subdivision or its entire territory, measures that:
(a) impose limitations on:
(i) the number of service providers, either in the form of numerical quotas, monopolies or exclusive service providers, or by requiring an economic needs test;
(ii) the total value of assets or service transactions in the form of numerical quotas or by requiring an economic needs test;
(iii) the total number of service operations or the total amount of service output, expressed in designated numerical units, in the form of quotas or through the requirement of an economic needs test; (4)
(iv) the total number of persons who may be employed in a given service sector or who may be employed by a service provider and who are necessary for and directly related to the provision of a specific service, in the form of numerical quotas or by requiring an economic needs test; or
(b) restrict or prescribe the specific types of legal entity or joint venture through which a service provider may supply a service.
Article 12.7. Reservations and Exceptions
1. Articles 12.3, 12.4, 12.5 and 12.6 do not apply to:
(a) any existing non-conforming measure maintained by a Party in:
(i) central level government, as established by that Party in its Schedule to Annex I;
(ii) a regional level government, as established by that Party in its Schedule to Annex I; or
(iii) government at the local level;
(b) the continuation or prompt renewal of any nonconforming measure referred to in subsection (a); or
(c) the modification of any nonconforming measure referred to in subparagraph (a), provided that such modification does not diminish the conformity of the measure, as in effect immediately before the modification, with Articles 12.3, 12.4, 12.5, and 12.6.
2. Articles 12.3, 12.4, 12.5 and 12.6 do not apply to any measures that a Party adopts or maintains, in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex Il.
3. Parties are not required to list governance measures at the local level.
Article 12.8. Transparency In the Development and Application of the Regulations
In addition to the provisions of Chapter XVIII (Transparency):
(a) the Parties shall establish or maintain appropriate mechanisms to respond to inquiries from interested persons concerning their regulations relating to matters covered by this Chapter;
(b) at the time of adopting final regulations relating to the subject matter of this Chapter, a Party shall, to the extent practicable, afford the other Party and interested persons of the other Party reasonable opportunity to comment on the proposed regulations. In addition, that Party shall, to the extent practicable, including upon request, respond in writing to substantive comments received; and
(c) to the extent possible, the Parties shall allow a reasonable period of time between the publication of final regulations and the date on which they enter into force.
Article 12.9. National Regulations
1. Where a Party requires authorization for the supply of a service, the competent authorities of that Party shall, within a reasonable time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision regarding the application. At the request of such applicant, the competent authorities of the Party shall, without undue delay, provide information concerning the status of the application. This obligation shall not apply to authorization requirements that fall within the scope of Article 12.7.2.
2. In order to ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, each Party shall endeavor to ensure, as appropriate to each specific sector, that any such measures it adopts or maintains:
(a) based on objective and transparent criteria, such as competence and capacity to provide the service;
(b) are not more burdensome than necessary to ensure quality of service; and
(c) in the case of licensing procedures, do not in themselves constitute a restriction on the provision of the service.
3. If the results of negotiations related to Article VI:4 of the GATS (or the result of any similar negotiations conducted in another multilateral forum in which the Parties participate) enter into force for each Party, this Article shall be modified, as appropriate, after consultations between the Parties, so that those results are in force in accordance with this Agreement. The Parties shall use their best efforts to coordinate among themselves in such negotiations.
Article 12.10. Mutual Recognition
1. For the purposes of complying, in whole or in part, with its standards or criteria for the authorization or certification of service suppliers or the licensing of service suppliers, and subject to the requirements of paragraph 4, a Party may recognize education or experience obtained, requirements met, or licenses or certificates granted in a particular State, including the other Party or a non-Party. Such recognition, which may be effected through harmonization or otherwise, may be based on an agreement with the State in question or may be granted autonomously.
2. Where a Party recognizes, autonomously or by means of an agreement or arrangement, education or experience obtained, qualifications completed or licenses or certificates granted in the territory of the other Party or of a non-Party, nothing in Article 12.3 shall be construed to require the Party to grant such recognition to education or experience obtained, qualifications completed or licenses or certificates granted in the territory of the other Party.
3. A Party that is a party to an existing or future agreement or arrangement of the type referred to in paragraph 1 shall provide adequate opportunities for the other Party, if that other Party is interested, to negotiate its accession to that agreement or arrangement or to negotiate with it a comparable one. Where a Party grants recognition autonomously, it shall provide adequate opportunities for the other Party to demonstrate that education, experience, licenses or certificates obtained or requirements fulfilled in the territory of that other Party should be subject to recognition.
4. No Party shall grant recognition in a manner that would constitute a means of discrimination between States in the application of its standards or criteria for the authorization or certification of service suppliers or the granting of licenses to them, or a disguised restriction on trade in services.
5. Each Party shall, within one year of the date of entry into force of this Agreement, consider eliminating any nationality or permanent residence requirement indicated in its Schedule to Annex | that it maintains for the recognition of qualifications of professional service suppliers of the other Party. Where a Party is unable to eliminate such requirements with respect to a particular sector, the other Party may, in the same sector and for as long as the non-complying Party maintains its requirement, maintain, as a sole remedy, an equivalent requirement.
6. Annex 12.10 establishes procedures for the recognition of education, experience, standards and requirements governing professional service providers.
Article 12.11. Transfers and Payments
1. Each Party shall allow all transfers and payments related to the cross-border supply of services to be made freely and without delay to and from its territory.
2. Each Party shall allow such transfers and payments related to the cross- border supply of services to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent the making of a transfer or payment, through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or protection of creditors' rights;
(b) issuance, trading or operations of securities, futures, options or derivatives;
(c) financial reporting or record keeping of transfers when necessary to cooperate with law enforcement or financial regulatory authorities;
(d) criminal offenses;
(e) guaranteeing compliance with orders or rulings in judicial or administrative proceedings; or
(f) social security, public pensions or mandatory savings programs.
Article 12.12. Denial of Benefits
Subject to prior notification and consultations, a Party may deny the benefits of this Chapter to:
(a) a service supplier of the other Party, if the service supplier is an enterprise owned or controlled by persons of a non-Party and such enterprise does not maintain substantive business operations in the territory of the other Party; or
(b) a service supplier of the other Party, if the service supplier is an enterprise owned or controlled by persons of the denying Party and such enterprise does not maintain substantive business operations in the territory of the other Party.
Article 12.13. Technical Cooperation
The Parties shall establish, no later than one year after the entry into force of this Agreement, a system to provide service suppliers with information concerning their markets in relation to:
(a) commercial and technical aspects of service provision;
(b) the possibility of obtaining service technology; and
(c) all those aspects that the Administrative Commission may agree upon regarding services.
Chapter XIII. Telecommunications Services (1)
Article 13.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
regulatory authority: the body or bodies, in the telecommunications services sector, entrusted with any of the regulatory tasks assigned in accordance with the national legislation of each Party;
essential telecommunications facilities: the facilities of a network or of a publicly available telecommunications service that:
(a) are supplied exclusively or predominantly by a single supplier or by a limited number of suppliers; and
(b) whose substitution for the provision of a service is not economically or technically feasible;
interconnection: the connection between public telecommunications networks of suppliers providing publicly available telecommunications services, for the purpose of enabling users of one supplier to communicate with users of another supplier and to access publicly available telecommunications services provided by another supplier;
major supplier (2) in the telecommunications sector: a supplier of publicly available telecommunications services that has the ability to materially affect the terms of participation (with respect to price and supply/supply) in a relevant market for publicly available telecommunications services as a result of control of essential facilities or use of its market position;
public telecommunications network: the telecommunications network over which publicly available telecommunications services are commercially operated. The network does not include users' telecommunications terminal equipment or private telecommunications networks beyond the terminal connection point;
telecommunications services: all services consisting of the transmission and reception of signals through telecommunications networks, not including the economic activity consisting of the supply of content requiring telecommunications networks or services for its transport; and
publicly available telecommunications services: any telecommunications service that a Party authorizes to be offered to the general public, in accordance with its domestic law.
Article 13.2. Scope
1. This Chapter establishes the regulatory principles applicable to publicly available telecommunications services committed pursuant to Chapters XI (Investment) and XII (Cross-Border Trade in Services).
2. Except to ensure that persons operating broadcasting stations (3) and cablecasting have continuous access to and use of telecommunications services directed to the public in accordance with domestic law, this Chapter does not apply to any measure that a Party adopts or maintains relating to the broadcasting or cablecasting of radio or television programming.
3. In the event of any inconsistency between this Chapter and another Chapter, this Chapter shall prevail to the extent of the inconsistency.
Article 13.3. Regulatory Authority
1. The regulatory authority will be legally distinct and functionally independent from any telecommunications service provider.
2. Each Party shall endeavor to ensure that its regulatory authority has adequate resources to carry out its functions.
3. The decisions and procedures applied by a regulatory authority shall be impartial with respect to all market participants.
4. A supplier authorized to supply publicly available telecommunications services affected by a decision of a regulatory authority of a Party shall have the right, in accordance with the respective national legislation, to appeal such decision to that regulatory authority or to another competent body independent of the suppliers authorized to supply publicly available telecommunications services involved. Where the competent body is not of a judicial nature, it shall provide written reasons and justification for the decisions appealed against. Such decisions shall also be subject to review by an impartial and independent judicial authority.