(a) the form of the non-commercial assistance provided under the policy or program, for example, grant or loan;
(b) the names of the government agencies, state-owned enterprises, or state enterprises providing the non-commercial assistance and the names of the state-owned enterprises that have received or are eligible to receive the non-commercial assistance;
(c) the legal basis and policy objective of the policy or program providing for the non-commercial assistance;
(d) with respect to goods, the amount per unit of the non-commercial assistance or, in cases where this is not possible, the total amount or the annual amount budgeted for the non-commercial assistance, indicating, if possible, the average amount per unit in the previous year;
(e) with respect to services, the total amount or the annual amount budgeted for the non-commercial assistance, indicating, if possible, the total amount in the previous year;
(f) with respect to policies or programs providing for non-commercial assistance in the form of loans or loan guarantees, the amount of the loan or amount of the loan guaranteed, interest rates, and fees charged;
(g) with respect to policies or programs providing for non-commercial assistance in the form of the provision of goods or services, the prices charged, if any;
(h) with respect to policies or programs providing for non-commercial assistance in the form of equity capital, the amount invested, the number and a description of the shares received, and any assessments that were conducted with respect to the underlying investment decision;
(i) duration of the policy or program or any other time limits attached to it; and
(j) available statistical data on trade or investment between the Parties.
6. If a Party considers that it has not adopted or does not maintain any policies or programmes referred to in paragraph 4, it shall so inform the requesting Party in writing.
7. If the Party responding to a request has not addressed a relevant point in paragraph 5, that Party shall provide an explanation for this omission in the written response.
8. The Parties recognize that the provision of information under paragraphs 5 and 7 does not prejudge the legal status of the assistance that was the subject of the request under paragraph 4 or the effects of that assistance under this Agreement.
9. If a Party provides written information pursuant to a request under this Article and informs the requesting Party that it considers the information to be confidential, the requesting Party shall not disclose the information without the prior consent of the Party providing the information.
Article 10.8. Technical Cooperation
1. The Parties shall, if appropriate and subject to available resources, engage in mutually decided technical cooperation activities, including:
(a) exchanging information regarding Parties’ experiences in improving the corporate governance and operation of their state-owned enterprises;
(b) sharing best practices on policy approaches to ensure a level playing field between state-owned and privately owned enterprises, including policies related to competitive neutrality; and
(c) organizing international seminars, workshops or any other appropriate forum for sharing technical information and expertise related to the governance and operations of state-owned enterprises.
2. The Parties may promote direct cooperation between state-owned enterprises to develop and implement sector-specific projects and initiatives. The cooperation activities among state-owned enterprises may include, among others, collaboration for joint ventures, research and development activities, and other cooperative efforts tailored to particular industry needs, with the potential to bring about significant benefits. For this purpose, the state-owned enterprises may exchange contact points through the contact points of this Chapter.
Article 10.9. Contact Points
Each Party shall designate a contact point on State-Owned Enterprises and Designated Monopolies and notify the other Party to facilitate communications between the Parties on any matter covered by this Chapter.
Article 10.10. Party-Specific Annexes
1. Article 10.3, Article 10.5 and Article 10.6 do not apply with respect to the non-conforming activities of state-owned enterprises or designated monopolies that a Party lists in its Schedule to Annex IV in accordance with the terms of the Party’s Schedule.
2. Article 10.3, Article 10.4, Article 10.5, Article 10.6 and Article 10.7 do not apply with respect to a Party’s state-owned enterprises or designated monopolies as set out in Annex 10-C.
Article 10.11. Exceptions
1. Article 10.3, Article 10.5, and Article 10.6 do not:
(a) prevent the adoption or enforcement by a Party of measures to respond temporarily to a national or global economic emergency; or
(b) apply to a state-owned enterprise with respect to which a Party has adopted or enforced measures on a temporary basis in response to a national or global economic emergency, for the duration of that emergency.
2. Article 10.3.1 does not apply with respect to the supply of financial services by a state-owned enterprise pursuant to a government mandate if that supply of financial services:
(a) supports exports or imports, provided that these services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market;
(b) supports private investment outside the territory of the Party, provided that these services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market; or
(c) is offered on terms consistent with the Arrangement, provided that it falls within the scope of the Arrangement.
3. The supply of financial services by a state-owned enterprise pursuant to a government mandate, including through an enterprise that is a covered investment, is deemed not to give rise to adverse effects under Article 10.5.1(b), Article 10.5.2(b) Article 10.5.1(c) or Article 10.5.2(c) where the Party in which the financial services are supplied requires a local presence in order to supply those services, if that supply of financial services:
(a) supports exports and imports, provided that these services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market;
(b) supports private investment outside the territory of the Party, provided that these services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial market; or
(c) is offered on terms consistent with the Arrangement, provided that it falls within the scope of the Arrangement.
4. In circumstances in which no comparable financial services are offered in the commercial market referred to in paragraphs 2 and 3:
(a) for the purposes of paragraphs 2(a)(i), 2(b)(i), 3(a)(i) and 3(b)(i), the supply of the financial services is deemed not to be intended to displace commercial financing; and
(b) for the purposes of paragraphs 2(a)(ii), 2(b)(ii), 3(a)(ii) and 3(b)(ii), the state-owned enterprise may rely on available information to establish a benchmark on the terms on which these services would be offered in the commercial market.
5. Article 10.3, Article 10.5, Article 10.6 and Article 10.7 do not apply to any service supplied in the exercise of governmental authority. For the purposes of this paragraph, “a service supplied in the exercise of governmental authority” has the same meaning as in GATS, including the meaning in the Financial Services Annex of GATS if applicable.
6. Article 10.5 and Article 10.6 do not apply with respect to an enterprise located outside the territory of a Party over which a state-owned enterprise of that Party has assumed temporary ownership as a consequence of foreclosure or a similar action in connection with defaulted debt, or payment of an insurance claim by the state-owned enterprise, associated with the supply of the financial services referred to in paragraphs 2 and 3, provided that any support the Party, a state enterprise or state-owned enterprise of the Party, provides to the enterprise during the period of temporary ownership is provided in order to recoup the state-owned enterprise’s investment in accordance with a restructuring or liquidation plan that will result in the ultimate divestiture from the enterprise.
7. Article 10.3, Article 10.5, Article 10.6, and Article 10.7 do not apply with respect to a state-owned enterprise or designated monopoly if in any one of the three previous consecutive fiscal years, the annual revenue derived from the commercial activities of the state-owned enterprise or designated monopoly was less than a threshold amount which must be calculated in accordance with Annex 10-A.
8. Article 10.3.1(b), Article 10.3.1(c), Article 10.3.2(b), and Article 10.3.2(c) do not apply to the extent that a Party’s state-owned enterprise or designated monopoly makes purchases and sales of goods or services pursuant to:
(a) any existing non-conforming measure that the Party maintains, continues, renews, or amends in accordance with Article 15.18.1 (Investment – Non-conforming Measures), Article 16.7.1 (Cross-Border Trade in Services – Non-conforming Measures), or Article 18.10.1 (Financial Services – Non-conforming Measures), as set out in its Schedule to Annex I or in Section A of its Schedule to Annex III; or
(b) any non-conforming measure that the Party adopts or maintains with respect to sectors, subsectors, or activities in accordance with Article 15.18.2 (Investment – Non-conforming Measures), Article 16.7.2 (Cross-Border Trade in Services – Non-conforming Measures), or Article 18.10.2 (Financial Services – Non-conforming Measures), as set out in its Schedule to Annex II or in Section B of its Schedule to Annex III.
9. If a Party invokes the exception referred to in paragraph 7 during consultations under Article 27.5 (Dispute Settlement – Consultations), the Parties should exchange and discuss available evidence concerning the annual revenue of the state-owned enterprise or the designated monopoly derived from the commercial activities during the three previous consecutive fiscal years in an effort to resolve during the consultations period any disagreement regarding the application of the exception.
Article 10.12. Process for Developing Information
Annex 10-B applies in any dispute under Chapter 27 (Dispute Settlement) regarding a Party’s conformity with Article 10.3, Article 10.5, or Article 10.6.
Chapter 11. GOVERNMENT PROCUREMENT
Article 11.1: Definitions
For purposes of this Chapter:
build-operate-transfer contract and public works concession contract means a contractual arrangement the primary purpose of which is to provide for the construction or rehabilitation of physical infrastructure, plants, buildings, facilities or other government-owned works and under which, as consideration for a supplier’s execution of a contractual arrangement, a procuring entity grants to the supplier, for a specified period of time, temporary ownership or a right to control and operate, and demand payment for the use of those works for the duration of the contract;
commercial goods or services means goods or services of a type generally sold or offered for sale in the commercial marketplace to, and customarily purchased by, non-governmental buyers for non-governmental purposes;
Committee means the Committee on Government Procurement established by Article 11.23.1;
construction service means a service that has as its objective the realization by whatever means of civil or building works, based on Division 51 of the United Nations Provisional Central Product Classification (“CPC”);
electronic auction means an iterative process that involves the use of electronic means for the presentation by suppliers of either new prices, or new values for quantifiable non-price elements of the tender related to the evaluation criteria, or both, resulting in a ranking or re-ranking of tenders;
in writing or written means any worded or numbered expression that can be read, reproduced and later communicated. It may include electronically transmitted and stored information;
limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice;
measure means any law, regulation, procedure, administrative guidance or practice or any action of a procuring entity relating to a covered procurement;
multi-use list means a list of suppliers that a procuring entity has determined satisfy the conditions for participation in that list, and that the procuring entity intends to use more than once;
notice of intended procurement means a notice published by a procuring entity inviting interested suppliers to submit a request for participation, a tender, or both;
offset means any condition or undertaking that encourages local development or improves a Party’s balance-of-payments accounts, such as the use of domestic content, the licensing of technology, investment, counter-trade or similar action or requirement;
open tendering means a procurement method whereby all interested suppliers may submit a tender;
procuring entity means an entity covered under a Party’s Schedule to Annex 11-A;
qualified supplier means a supplier that a procuring entity recognizes as having satisfied the conditions for participation;
SDR means Special Drawing Rights;
selective tendering means a procurement method whereby only qualified suppliers are invited by the procuring entity to submit a tender;
services includes construction services, unless otherwise specified;
standard means a document approved by a recognized body that provides for common and repeated use, rules, guidelines or characteristics for goods or services, or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labelling requirements as they apply to a good, service, process or production method;
supplier means a person or group of persons that provides or could provide goods or services; and
technical specification means a tendering requirement that:
(a) lays down the characteristics of goods or services to be procured, including quality, performance, safety and dimensions, or the processes and methods for their production or provision; or
(b) addresses terminology, symbols, packaging, marking or labelling requirements, as they apply to a good or service.
Article 11.2: Scope and Coverage
1. This Chapter applies to any measure regarding covered procurement, whether or not it is conducted exclusively or partially by electronic means.
2. For the purposes of this Chapter, covered procurement means procurement for governmental purposes:
(a) of goods, services or any combination thereof:
(i) as specified in each Party’s Schedule to Annex 11-A ; and
(ii) not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;
(b) by any contractual means, including purchase, lease or rental, with or without an option to buy, build-operate-transfer contracts and public works concessions contracts;
(c) for which the value, as estimated in accordance with paragraphs 6 through 8, equals or exceeds the relevant threshold specified in a Party’s Schedule to Annex 11-A, at the time of publication of a notice in accordance with Article 11.6;
(d) by a procuring entity; and
(e) that is not otherwise excluded from coverage in paragraph 3 or a Party’s Schedule to Annex 11-A.
3. This Chapter does not apply to:
(a) the acquisition or rental of land, existing buildings or other immovable property or the rights thereon;
(b) non-contractual agreements or any form of assistance that a Party provides, including cooperative agreements, grants, loans, subsidies, equity infusions, guarantees and fiscal incentives;
(c) the procurement or acquisition of fiscal agency or depository services, liquidation and management services for regulated financial institutions or services related to the sale, redemption and distribution of public debt, including loans and government bonds, notes and other securities;
(d) public employment contracts; or
(e) procurement conducted:
(i) for the specific purpose of providing international assistance, including development aid;
(ii) under the particular procedure or condition of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project; or
(iii) under the particular procedure or condition of an international organization, or funded by international grants, loans or other assistance if the applicable procedure or condition would be inconsistent with this Chapter.
4. Each Party shall specify the following information in its Schedule to Annex 11-A:
(a) in Section A, the central government entities whose procurement is covered by this Chapter;
(b) in Section B, all other entities whose procurement is covered by this Chapter;
(c) in Section C, the goods covered by this Chapter;
(d) in Section D, the services, other than construction services, covered by this Chapter;
(e) in Section E, the construction services covered by this Chapter;
(f) in Section F, any General Notes;
(g) in Section G, the applicable Threshold Adjustment Formula; and
(h) in Section H, the publication information required under Article 11.5.
5. If a procuring entity, in the context of covered procurement, requires persons not covered under a Party’s Schedule to Annex 11-A to procure in accordance with particular requirements, Article 11.4.1 and Article 11.4.2 shall apply to those requirements.
6. A procuring entity shall not prepare or design a procurement, or otherwise structure or divide a procurement into separate procurements in any stage of the procurement, or use a particular method to estimate the value of a procurement, in order to avoid the obligations of this Chapter.
7. This Chapter does not prevent a Party, including its procuring entities, from developing new procurement policies, procedures or contractual means, provided that they are not inconsistent with this Chapter.
8. In estimating the value of a procurement for the purposes of ascertaining whether it is a covered procurement, a procuring entity shall include the estimated maximum total value of the procurement over its entire duration, taking into account:
(a) all forms of remuneration, including any premium, fee, commission, interest or other revenue stream that may be provided for under the contract;
(b) the value of any option clause; and
(c) any contract awarded at the same time or over a given period to one or more suppliers under the same procurement.
9. If the total estimated maximum value of a procurement over its entire duration is not known, the procurement is deemed a covered procurement, unless otherwise excluded under this Chapter.
Article 11.3: Security and General Exceptions
1. This Chapter does not prevent a Party from taking any action or not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
2. Subject to the requirement that the measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between the Parties where the same conditions prevail or a disguised restriction on international trade, this Chapter does not prevent a Party from imposing or enforcing a measure:
(a) necessary to protect public morals, order or safety;
(b) necessary to protect human, animal, or plant life or health;
(c) necessary to protect intellectual property; or
(d) relating to a good or service of a person with a disability, of a philanthropic institution or of prison labour.
3. The Parties understand that paragraph 2(b) includes environmental measures necessary to protect human, animal or plant life or health.
Article 11.4: General Principles
1. With respect to any measure regarding covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and to the suppliers of the other Party offering the goods or services, treatment no less favourable than the treatment the Party, including its procuring entities, accords to its domestic goods, services and suppliers. For greater certainty, the obligations set out in this Chapter, including this paragraph, are subject to the exclusions and restrictions in this Chapter and Annex 11-A.
2. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:
(a) treat a locally established supplier less favourably than another locally established supplier on the basis of the degree of foreign affiliation or ownership; or
(b) discriminate against a locally established supplier on the basis that the good or service offered by that supplier for a particular procurement are a good or service of the other Party.
3. If conducting covered procurement by electronic means, a procuring entity shall:
(a) ensure that the procurement is conducted using information technology systems and software, including those related to authentication and encryption of information, that are generally available and interoperable with other generally available information technology systems and software; and
(b) maintain mechanisms that ensure the integrity of requests for participation and tenders, including establishment of the time of receipt and the prevention of inappropriate access.
4. A procuring entity shall conduct covered procurement in a transparent and impartial manner that:
(a) is consistent with this Chapter;
(b) avoids conflicts of interest; and
(c) prevents corrupt practices.
5. For the purposes of covered procurement, a Party shall not apply rules of origin to goods or services imported from or supplied from the other Party that are different from the rules of origin the Party applies at the same time in the normal course of trade to imports or supplies of the same goods or services from the other Party.
6. With regard to covered procurement, a Party, including its procuring entities, shall not seek, take account of, impose or enforce any offset.
7. Paragraphs 1 and 2 do not apply to: customs duties or charges of any kind imposed on, or in connection with, importation; the method of levying those duties or charges; other import regulations or formalities; or measures affecting trade in services other than measures governing covered procurement.
Article 11.5: Publication of Procurement Information
1. Each Party shall promptly publish any measure of general application relating to covered procurement, and any change or addition to this information.
2. Each Party shall list in Section H of its Schedule to Annex 11-A the paper or electronic means through which the Party publishes the information described in paragraph 1 and the notices required by Article 11.6, Article 11.8.7 and Article 11.15.2.
3. Each Party shall, on request, respond to an inquiry relating to the information referred to in paragraph 1.
4. Each Party shall promptly notify the other Party of any modification to the Party’s information listed in Section H of its Schedule to Annex 11-A.
Article 11.6: Notices
1. For each covered procurement, a procuring entity shall publish a notice of intended procurement in the appropriate electronic medium listed in Section H of a Party’s Schedule to Annex 11-A, except in the circumstances described in Article 11.12. The notices shall be accessible by electronic means free of charge through a single point of access and shall remain readily accessible to the public, at least until expiration of the time period indicated in the notice.
2. Except as otherwise provided in this Chapter, each notice of intended procurement shall include:
(a) the name and address of the procuring entity and other information necessary to contact the procuring entity and obtain all relevant documents relating to the procurement, and their cost and terms of payment, if any;