(d) ensure that the processing of an application, including reaching a final decision, is completed within a reasonable timeframe from the submission of a complete application;
(e) at the request of an applicant, provide, without undue delay, information concerning the status of their application;
(f) if an examination is required, schedule that examination at reasonably frequent intervals, and provide a reasonable period of time to enable an applicant to request to take an examination;
(g) if possible, accept an application, including an examination, through electronic means under similar conditions of authenticity as a paper submission at all stages of the authorization process; and
(h) accept an authenticated copy in place of an original document, unless the original document is required to protect the integrity of the authorization process.
5. Each Party shall ensure that an authorization is granted as soon as the competent authority determines that the conditions for the authorization have been met, and once granted, that the authorization enters into effect without undue delay, in accordance with the terms and conditions specified therein.
6. If an application for an authorization is considered incomplete, the competent authority shall, within a reasonable period of time, inform the applicant, and at the request of the applicant, identify the additional information required to complete the application, and provide the applicant an opportunity to correct deficiencies.
7. If the competent authority rejects an application for an authorization, it shall inform the applicant in writing, including by electronic means, and without undue delay. On request of the applicant, the competent authority shall also inform the applicant of the reasons the application was rejected and, to the extent practicable, of the timeframe for an appeal or review against the decision. An applicant should be permitted, within reasonable time limits, to resubmit an application.
4 For greater certainty, a Party may require multiple applications for authorization if a service is within the jurisdiction of multiple competent authorities.
5 In the case of professional services, each Party shall ensure that there are domestic procedures in place to assess the competency of those professionals.
Article 17.6: Fees
1. Each Party shall ensure that the authorization fees charged by a competent authority are reasonable, transparent and do not restrict the supply of the relevant service. Having regard to the cost and administrative burden, each Party is encouraged to accept payment of authorization fees by electronic means.
2. Authorization fees do not include fees for the use of natural resources, royalties, payments for auction, tendering or other non-discriminatory means of awarding concessions or mandated contributions to provide a universal service.
Article 17.7: Review of administrative decisions6
Each Party shall maintain or institute judicial, arbitral, or administrative tribunals or procedures that provide, at the request of a service supplier of a Party, as defined in Article 16.1 (Cross-Border Trade in Services – Definitions), or an investor of a Party, as defined in Article 15.1 (Investment – Definitions), a prompt review of, and if justified, appropriate remedies for, an administrative decision relating to the supply of a service. If the review procedures are not independent of the competent authority entrusted with the administrative decision concerned, each Party shall ensure that the review procedures are applied in a way that provides for an objective and impartial review.
Article 17.8: Transparency
If a Party requires an authorization, that Party shall promptly publish,7 or otherwise make publicly available in writing, the information necessary to comply with the requirements and procedures for obtaining, maintaining, amending and renewing that authorization. This information shall include, but is not limited to, if it exists:
(a) authorization fees;
(b) contact information of relevant competent authorities;
(c) procedures for appeal or review of decisions concerning applications;
(d) procedures for monitoring or enforcing compliance with the terms and conditions of authorizations;
(e) opportunities for public involvement, such as through hearings or comments;
(f) indicative timeframes for processing of an application; and
(g) the requirements and procedures.
6 This Article does not require a Party to institute procedures where this would be inconsistent with its constitution and laws.
7 For the purposes of this Article, “publish” means to include in an official publication, such as an official journal, or on an official website.
Chapter 18. FINANCIAL SERVICES
Article 18.1: Definitions
For the purposes of this Chapter:
cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of that service;
cross-border trade in financial services or cross-border supply of financial services means the supply of a financial service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a 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 financial service in the territory of a Party by an investment in that territory;
financial institution means a financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the law of the Party in whose territory it is located;
financial institution of the other Party means a financial institution, including a branch, located in the territory of a Party that is controlled by a person of the other Party;
financial service means a service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance), as well as services incidental or auxiliary to a service of a financial nature. Financial services include the following activities:
Insurance and insurance-related services
(a) direct insurance (including co-insurance):
(i) life; and
(ii) non-life;
(b) reinsurance and retrocession;
(c) insurance intermediation, such as brokerage and agency; and
(d) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;
Banking and other financial services (excluding insurance)
(a) acceptance of deposits and other repayable funds from the public;
(b) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;
(c) financial leasing;
(d) all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;
(e) guarantees and commitments;
(f) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(i) money market instruments (including cheques, bills, certificates of deposits);
(ii) foreign exchange;
(iii) derivative products, including futures and options;
(iv) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(v) transferable securities; and
(vi) other negotiable instruments and financial assets, including bullion;
(g) participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to those issues;
(h) money broking;
(i) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
(j) settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(k) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and
(l) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (a) through (k), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;
investment means “investment” as defined in Article 15.1 (Investment – Definitions), except that, with respect to “loans” and “debt instruments” referred to in that Article:
(a) a loan to or debt instrument issued by a financial institution is an investment only if it is treated as regulatory capital by the Party in whose territory the financial institution is located; and
(b) a loan granted by or debt instrument owned by a financial institution, other than a loan to or debt instrument issued by a financial institution referred to in subparagraph (a), is not an investment,
for greater certainty, a loan granted by or debt instrument owned by a cross-border financial service supplier, other than a loan to or debt instrument issued by a financial institution, is an investment for the purposes of Chapter 15 (Investment), if the loan or debt instrument meets the criteria for investments set out in Article 15.1 (Investment – Definitions);
investor of a Party means a Party, or a person of a Party, that seeks to make1, is making or has made an investment in the territory of the other Party. For the purposes of this
definition, a “person of a Party” that is an enterprise of a Party means:
(a) an enterprise that is constituted or organized under the law of that Party and that has substantial business activities in the territory of that Party. A determination of whether an enterprise has substantial business activities in the territory of a Party requires a case-by-case, fact-based inquiry; or
(b) an enterprise that is constituted or organized under the law of that Party, and is directly or indirectly owned or controlled by a national of that Party or by an enterprise mentioned under subparagraph (a);
national means a “national” as defined in Article 1.8 (Initial Provisions and General Definitions – Country-Specific Definitions), except that:
(a) a natural person who is a dual citizen of Canada and Ecuador shall be deemed to be exclusively a national of the Party of their dominant and effective nationality; and
(b) a natural person who is a citizen of one Party and a permanent resident of the other Party shall be deemed to be exclusively a national of the Party of their citizenship;
new financial service means a financial service not supplied in the Party’s territory that is supplied within the territory of the other Party, and includes any new form of delivery of a financial service or the sale of a financial product that is not sold in the Party’s territory;
person of a Party means a national of a Party or an enterprise of a Party and, for greater certainty, does not include a branch of an enterprise of a non-party;
1 For greater certainty, the Parties understand that for the purposes of the definition of an “investor of a Party”, an investor “seeks to make” an investment when that investor has taken concrete action or actions to make an investment, such as channelling resources or capital in order to set up a business, or applying for a permit or license.
public entity means a central bank or monetary authority of a Party, or a financial institution that is owned or controlled by a Party; and
self-regulatory organization means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organization or association, that exercises regulatory or supervisory authority over financial service suppliers or financial institutions by statute or delegation from central or regional government.
Article 18.2: Scope
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors of the other Party, and investments of those investors, in financial institutions in the Party’s territory; and
(c) cross-border trade in financial services.
2. Chapter 15 (Investment) and Chapter 16 (Cross-Border Trade in Services) apply to measures described in paragraph 1 only to the extent that those Chapters or Articles of those Chapters are incorporated into this Chapter.
(a) Article 15.4 (Investment – Right to Regulate), Article 15.5 (Investment – Non-Derogation), Article 15.8 (Investment – Treatment in Case of Armed Conflict, Civil Strife or Natural Disaster), Article 15.9 (Investment – Minimum Standard of Treatment), Article 15.10 (Investment – Expropriation), Article 15.11 (Investment – Transfer of Funds),
Article 15.15 (Investment – Responsible Business Conduct), Article 15.16 (Investment – Denial of Benefits), Article 15.17 (Investment – Special Formalities and Information Requirements), Article 15.19 (Investment – Exclusions) and Article 16.9 (Cross-Border Trade in Services – Denial of Benefits) are hereby incorporated into and made a part of this Chapter.
(b) Section D and Section E of Chapter 15 (Investment) are hereby incorporated into and made a part of this Chapter2 solely for claims that a Party has breached Article 15.8 (Investment – Treatment in Case of Armed Conflict, Civil Strife or Natural Disaster), Article 15.10 (Investment – Expropriation), Article 15.11 (Investment – Transfer of Funds), Article 15.16 (Investment – Denial of Benefits) or Article 15.17 (Investment – Special Formalities and Information Requirements) incorporated into this Chapter under subparagraph (a).
(c) Article 16.10 (Cross-border Trade in Services – Payments and Transfers) is incorporated into and made a part of this Chapter to the extent that
cross-border trade in financial services is subject to obligations pursuant to Article 18.6.
2 For greater certainty, Section D of Chapter 15 (Investment) does not apply to cross-border trade in financial services.
3. This Chapter does not apply to measures adopted or maintained by a Party relating to:
(a) activities or services forming part of a public retirement plan or statutory system of social security; or
(b) activities or services conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities,
except that this Chapter applies to the extent that a Party allows any of the activities or services referred to in subparagraph (a) or (b) to be conducted by its financial institutions in competition with a public entity or a financial institution.
4. This Chapter does not apply to government procurement of financial services.
5. This Chapter does not apply to subsidies or grants with respect to the cross-border supply of financial services, including government-supported loans, guarantees and insurance.
Article 18.3: National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords to its own investors, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.
2. Each Party shall accord to financial institutions of the other Party, and to investments of investors of the other Party in financial institutions, treatment no less favourable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. For the purposes of the national treatment obligations in Article 18.6, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favourable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service.
4. The treatment accorded by a Party under paragraphs 1, 2 and 3 means, with respect to a government other than at the central level of government, treatment accorded, in like circumstances, by that government to financial institutions of the Party, investors of the Party, and investments of those investors, in financial institutions, of the Party of which it forms a part.
5. For greater certainty, whether treatment is accorded in “like circumstances” under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, financial services or financial service suppliers on the basis of legitimate public policy objectives.
6. Paragraphs 1, 2 and 3 prohibit discrimination based on nationality. A difference in treatment accorded to an investor of the other Party, or their investments, in a financial institution, or a financial institution of the other Party and a Party’s own investors, or their investments, in a financial institution, or financial institutions does not, in and of itself, establish discrimination based on nationality.
Article 18.4: Most-Favoured-Nation Treatment
1. Each Party shall accord to:
(a) investors of the other Party, treatment no less favourable than that it accords to investors of a non-party, in like circumstances;
(b) financial institutions of the other Party, treatment no less favourable than that it accords to financial institutions of a non-party, in like circumstances;
(c) investments of investors of the other Party in financial institutions, treatment no less favourable than that it accords to investments of investors of a non-party in financial institutions, in like circumstances; and
(d) cross-border financial service suppliers of the other Party and the financial services they supply, treatment no less favourable than that it accords to cross-border financial service suppliers of a non-party and the financial services they supply, in like circumstances.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment accorded, in like circumstances, by that government to: financial institutions of a non-party; investors of a non-party, and investments of those investors, in financial institutions; or financial services or cross-border financial service suppliers of a non-party.
3. The treatment referred to in paragraphs 1 and 2 does not include procedures for the resolution of investment disputes between investors and states provided for in other international investment treaties and other trade agreements.
4. Substantive obligations in other international investment treaties and other trade agreements do not in themselves constitute treatment, and cannot give rise to a breach of this Article, absent measures adopted or maintained by a Party pursuant to those obligations.
5. For greater certainty, whether treatment is accorded in like circumstances under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, financial services or financial service suppliers on the basis of legitimate public policy objectives.
6. Paragraph 1 prohibits discrimination based on nationality. A difference in treatment accorded to an investor of the other Party, or their investments, in a financial institution, or a financial institution of the other Party and a non-party’s investors, or their investments, in a financial institution, or financial institutions does not, in and of itself, establish discrimination based on nationality.
Article 18.5: Market Access for Financial Institutions
A Party shall not adopt or maintain with respect to financial institutions of the other Party or investors of the other Party seeking to establish those institutions, either on the basis of a regional subdivision or on the basis of its entire territory, measures that:
(a) impose limitations on:
(i) the number of financial institutions, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
(ii) the total value of financial service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of financial service operations or the total quantity of financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;3or
(iv) the total number of natural persons that may be employed in a particular financial service sector or that a financial institution may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas or the requirement of an economic needs test; or
(b) restrict or require specific types of legal entity or joint venture through which a financial institution may supply a service.
Article 18.6: Cross-Border Trade
1. Each Party shall permit, under terms and conditions that accord national treatment, cross-border financial service suppliers of the other Party to supply the financial services specified in Annex 18-A.
3 Subparagraph (a)(iii) does not cover measures of a Party which limit inputs for the supply of financial services.
2. Article 18.5 applies to the treatment of cross-border financial service suppliers supplying the financial services specified in Annex 18-A. The measures that a Party shall not adopt or maintain with respect to financial institutions of the other Party or investors of the other Party under Article 18.5 means measures relating to cross-border financial service suppliers of the other Party supplying the financial services specified in Annex 18-A.
3. Each Party shall permit persons located in its territory, and its nationals wherever located, to purchase financial services from cross-border financial service suppliers of the other Party located in the territory of the other Party. This obligation does not require a Party to permit those suppliers to do business or solicit in its territory. Each Party may
define “doing business” and “solicitation” for the purposes of this obligation provided that those definitions are not inconsistent with paragraph 1.
4. A Party shall not require a cross-border financial service supplier of the other Party to establish or maintain a representative office or an enterprise, or to be resident, in its territory as a condition for the cross-border supply of a financial service, with respect to the financial services as specified by the Party in Annex 18-A.
5. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration or authorization of cross-border financial service suppliers of the other Party and of financial instruments.
Article 18.7: New Financial Services4
Each Party shall permit a financial institution of the other Party to supply a new financial service that the Party would permit its own financial institutions, in like circumstances, to supply without adopting a law or modifying an existing law.5 Notwithstanding Article 18.5(b), a Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorization for the supply of the service. If a Party requires a financial institution to obtain authorization to supply a new financial service, the Party shall decide within a reasonable period of time whether to issue the authorization and may refuse the authorization only for prudential reasons.
Article 18.8: Treatment of Certain Information
This Chapter does not require a Party to furnish or allow access:
(a) to information related to the financial affairs and accounts of individual customers of financial institutions or cross-border financial service suppliers; or
4 The Parties understand that this Article does not prevent a financial institution of a Party from applying to the other Party to request that it authorize the supply of a financial service that is not supplied in either Party’s territory. That application shall be subject to the law of the Party to which the application is made and, for greater certainty, shall not be subject to this Article.
5 For greater certainty, a Party may issue a new regulation or other subordinate measure in permitting the supply of the new financial service.
(b) to any information, the disclosure of which would be contrary to its law, or would impede law enforcement, or otherwise be contrary to the public interest, or prejudice legitimate commercial interests of a person.
Article 18.9: Senior Management and Boards of Directors
1. A Party shall not require financial institutions of the other Party to engage natural persons of any particular nationality as senior managerial or other essential personnel.
2. A Party shall not require that more than a simple majority of the board of directors of a financial institution of the other Party be composed of nationals of the Party, persons residing in the territory of the Party, or a combination thereof.
3. A Party may encourage financial institutions operating within its territory, or subject to its jurisdiction, to nominate women to senior management positions or to boards of directors.
Article 18.10: Non-Conforming Measures
1. Articles 18.3 through 18.6 and Article 18.9 do not apply to:
(a) any existing non-conforming measure that is maintained by a Party:
(i) at the central level of government, as set out by that Party in Section A of its Schedule to Annex III;
(ii) at the regional level of government, as set out by that Party in Section A of its Schedule to Annex III; or