(ii) purchasing specifications prepared by a governmental body for its production or consumption requirements.
4. For the purposes of paragraphs 1 and 2 of this Article, "central government body", "local government body", "non-governmental body", "standards" and "conformity assessment procedures" have the meanings assigned to those terms in Annex 1 of the WTO Agreement on Technical Barriers to Trade. Consistent with Annex 1, the two latter terms do not include standards or conformity assessment procedures for the supply of a service.
Article 8. Transparency of Subsidies
1. For the purposes of this Article, a subsidy shall be deemed to exist if the conditions set out in Article 1.1 of the WTO Agreement on Subsidies and Countervailing Measures (3)(ASCM) are fulfilled irrespective of whether it is granted to an enterprise operating in services or non-services sectors.
2. This Article applies to subsidies only if the subsidies are specific in accordance with Article 2 of the ASCM and to the extent they are related to economic activities (4).
3. This Article does not apply to:
(a) subsidies, the cumulative amounts or budgets of which are less than 450 000 Special Drawing Rights per beneficiary for a period of three consecutive years;
(b) subsidies granted to compensate the losses caused by natural disasters;
(c) subsidies related to fish and fish products and subsidies covered by Annex 1 of the WTO Agreement on Agriculture; and
(d) subsidies provided for audio-visual services and for the services set out in Entries 1.21 to 1.26 of China's schedule in Annex I.
4. The application of the rules in this Article must not obstruct the performance, in law or in fact, of a public service mandate, assigned to the enterprises in question in a transparent manner.
5. Each Party shall ensure transparency as regards subsidies to the following service sectors listed in [Annex X]. To this end, each Party shall promptly, and no later than on 31 December of the calendar year subsequent to the one in which the subsidy was granted, publish on a publicly accessible website (5) the objective, legal basis, form, amount or amount budgeted for, and recipient of any subsidy subject to this paragraph. The Parties shall begin to fulfil this obligation no later than two years after the entry into force of this Agreement.
6. If a Party considers that a subsidy (6) granted by the other Party has or could have a negative effect on its investment interests under this Agreement, the former Party may express its concern in written form to the other Party, indicating how the subsidy has or could have such negative effect, and request consultations on the matter. The Parties shall enter into consultations with a view to resolving the matter.
During the consultations, the requesting Party may seek additional information about the subsidy, such as the policy objective and/or purpose, the amount and any other information permitting an assessment of the negative effects of the subsidy in question on its investment interests under this Agreement. In order to facilitate the consultations, the requested Party shall provide information on the subsidy in question within no more than 90 days from the date of receipt of the request.
7. If the requesting Party, after the consultations have been held, considers that the subsidy concerned has or could have a significant negative effect on the requesting Party's investment interests under this Agreement, the requested Party shall use its best endeavours to find a solution with the requesting Party. Any solution must be considered feasible and acceptable by both Parties.
8. Nothing in this Article shall affect the rights and obligations of each Party under WTO Agreements, in particular, Article XV GATS, Article VI of GATT 1994, the ASCM Agreement and the WTO Agreement on Agriculture.
9. This Article is without prejudice to the Parties' positions and the possible outcome of future discussions in the WTO on subsidies. Depending on the progress and the possible outcome of those discussions at the WTO level, the Parties may adopt a decision by the relevant committee under this Agreement to update this article, including the definition of subsidy.
10. Paragraph 7 shall not be subject to Section X (State to State Dispute Settlement).
Subsection 3. FINANCIAL SERVICES
Article 1. Scope and Definitions
1. This Sub-section applies to measures adopted or maintained by a Party affecting the establishment of an enterprise or the operation of a covered enterprise by an investor of the other Party in its territory in order to supply financial services, without prejudice to a Party's right to restrict the supply of a specific financial service pursuant to its commitments undertaken in Annex (1) (for the EU) and Annex I (for China) [reservations for existing measures], Annex (II) [reservations for future measures], and Annex (XX) (Schedule of Specific Market Access Commitments on Services).
2. For the purposes of paragraph (x) (definition of services/activities supplied in the exercise of governmental authority) of this Agreement, "services supplied in the exercise of governmental authority" means activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies.
3. For the purposes of this Sub-section and of Section II Liberalisation of Investment of this Agreement:
(a) "financial service" means any service of a financial nature offered by a financial service supplier of a Party. Financial services comprise the following activities:
A. Insurance and insurance-related services
1. direct insurance (including co-insurance):
(a) life;
(b) non-life;
2. reinsurance and retrocession;
3. insurance inter-mediation, such as brokerage and agency; and
4. services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.
B. Banking and other financial services (excluding insurance):
1. acceptance of deposits and other repayable funds from the public;
2. lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;
3. financial leasing;
4. all payment and money transmission services, including credit, charge and debit cards, travellers cheques, bankers drafts and any other new means of payment; guarantees and commitments; trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(a) money market instruments (including cheques, bills, certificates of deposits);
(b) foreign exchange;
(c) derivative products including, but not limited to, futures and options;
(d) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(e) transferable securities;
(f) other negotiable instruments and financial assets, including bullion;
7. participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
8. money broking;
9. asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
10. settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
11. provision and transfer of financial information, and financial data processing and related software;
12. advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (1) through (11), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy.
(b) "financial service supplier" means any natural or juridical person of a Party that seeks to provide or provides financial services. The term âfinancial service supplierâ does not include a public entity.
(c) "public entity" means:
1. a government, a central bank or a monetary authority, of a Party, or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or
2. a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions.
(d) "new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, that is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party.
(e) self-regulatory organisation means a non-governmental body, including a securities or futures exchange or market, clearing agency, or other organisation or association, that exercises regulatory or supervisory authority over financial service suppliers by delegation from a Party.
Article 2. Prudential Carve-out
1. Notwithstanding any other provision of this Agreement, a Party shall not be prevented from adopting or maintaining measures for prudential reasons (7), including for the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system.
2. Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the Party's commitments or obligations under the Agreement.
3. Nothing in this Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual consumers or any confidential or proprietary information in the possession of public entities.
Article 3. Effective and Transparent Regulation
1. Each Party shall make available to interested investors and covered enterprises its requirements for completing applications relating to the supply of financial services through commercial presence. On the request of an applicant in writing, the competent authority shall inform the applicant of the status of its application within a reasonable timeframe. If the competent authority requires additional information from the applicant, it shall notify the applicant without undue delay.
2. Each Party shall make its best endeavours to ensure that internationally agreed standards for regulation and supervision and for the fight against tax evasion and avoidance in the financial services sector are implemented and applied in its territory. Such internationally agreed standards are, inter alia, those adopted by the G20, the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), in particular its "Core Principle for Effective Banking Supervision", the International Association of Insurance Supervisors (IAIS), in particular its "Insurance Core Principles", the International Organisation of Securities Commission (IOSCO), in particular its "Objectives and Principles of Securities Regulation", the Financial Action Task Force (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Article 4. New Financial Services
1. Each Party shall permit a financial service supplier of the other Party established in its territory to supply any new financial service that it would permit its own financial service suppliers to supply in accordance with its law in like situations, provided that the introduction of the new financial service does not require the adoption of a new law or amendment of an existing law.
2. Notwithstanding (Market Access), a Party may determine the institutional and legal form through which the service may be supplied and require authorisation for the supply of the service. Where such authorisation is required, a decision shall be made within a reasonable time and the authorisation may only be refused for prudential reasons.
3. Prior to permitting the supply of a new financial service, a Party may impose a non- discriminatory requirement to conduct a pilot project, during which the new financial service may be supplied by a limited number of suppliers on a trial basis for a limited period of time and in a certain area or region, in order to assess potential prudential risks. At the end of the trial pilot project period, the financial service supplier should be permitted to provide the new financial service throughout the territory of the Party, unless the Party decides that new legislative action is required or the provision of such services is not permitted for prudential reasons.
Article 5. Specific Exceptions
1. Nothing in this Agreement shall be construed to prevent a Party, including its public entities, from conducting or providing in its territory activities or services forming part of a public retirement plan or statutory system of social security, except when those activities may be carried out, as provided by the Party's national regulation, by financial service suppliers in competition with public entities or private institutions.
2. Nothing in this Agreement shall be construed to prevent a Party, including its public entities, from conducting or providing in its territory activities or services for the account or with the guarantee or using the financial resources of the Party, or its public entities except when those activities may be carried out, as provided by the Party's national regulation, by financial service suppliers in competition with public entities or private institutions.
Article 6. Self-regulatory Organisations
When a Party requires membership or participation in, or access to, any self-regulatory body, in order for financial service suppliers of the other Party established in its territory to supply financial services on an equal basis with financial service suppliers of the Party, or when the Party provides directly or indirectly such entities, privileges or advantages in supplying financial services, the Party shall ensure observance of the obligations of Articles X (National Treatment and Most Favoured Nation Treatment).
Article 7. Clearing and Payment Systems
Under terms and conditions that accord national treatment, each Party shall grant to financial service suppliers of the other Party established in its territory access to payment and clearing systems operated by public entities, and to official funding and refinancing facilities available in the normal course of ordinary business. This article is not intended to confer access to the Party's lender of last resort facilities.
Annex. to Section III Subsection II. Article 8 Transparency of Subsidies
BUSINESS SERVICES
Professional Services (for the medical and dental services only those privately funded) Computer and Related Services
Research and Development Services except for research and development services in social science and humanities
Real Estate Services
Rental/Leasing Services without Operators
Other Business Services except for printing and publishing services
COMMUNICATION SERVICES
Courier services [*][* For greater certainty, this includes express delivery services other than for correspondence, including if provided by the national postal administration] Telecommunication services
CONSTRUCTION AND RELATED ENGINEERING SERVICES
General construction work for buildings
General construction work for civil engineering
Installation and assembly work
Building completion and finishing work
DISTRIBUTION SERVICES
Commission agents' services Wholesale trade services Retailing services Franchising
ENVIRONMENTAL SERVICES
Sewage services
Refuse disposal services Sanitation and similar services
FINANCIAL SERVICES [*] [* as defined in Article X (Scope and definitions) [Sub-section 3: Financial services]
All insurance and insurance-related services Banking and other financial services
HEALTH RELATED SERVICES (privately funded) Hospital services Other Human Health Services
TOURISM AND TRAVEL RELATED SERVICES Hotels and restaurants (incl. catering)
Travel agencies and tour operators' services
Tourist guides services
TRANSPORT SERVICES
Maritime Transport Services
Air Transport Services except for passenger and freight transportation services directly related to the exercise of traffic rights
Space Transport
Rail Transport Services except for passenger public transportation by rail and metro, passenger rail transport for remote areas and passenger rail transport for specific categories of passengers (students, people with disabilities, servicemen, etc.).
Road Transport Services except for urban and suburban passenger public transportation by bus Pipeline Transport
Services auxiliary to all modes of transport
Section IV. Investment and Sustainable Development
Subsection I. Context and Objectives
Article 1. Overarching Principles
1. The Parties recall the relevant international documents with regard to sustainable development in particular the Agenda 21 on Environment and Development of 1992, the Johannesburg Plan of Implementation on Sustainable Development of 2002, the Ministerial Declaration of the UN Economic and Social Council on Full Employment and Decent Work of 2006, the International Labour Organisation (ILO) Declaration on Social Justice for a Fair Globalisation of 2008 and the Outcome Document of the UN Conference on Sustainable Development of 2012 entitled "The Future We Want", the UN 2030 Agenda for Sustainable Development and its Sustainable Development Goals, and the 2019 ILO Centenary Declaration for the Future of Work and reaffirm their commitment to promote the development of investment in such a way as to contribute to the objective of sustainable development, for the welfare of present and future generations, and to ensure that this objective is integrated and reflected in their investment relationship.
2. The Parties are committed to pursue sustainable development, and recognize that economic development, social development and environmental protection are interdependent and mutually reinforcing dimensions of sustainable development.
Article 2. Corporate Social Responsibility
1. The Parties recognise the important contribution of Corporate Social Responsibility or Responsible Business Conduct to strengthening investment's positive role in sustainable growth, and in this way contributing to the objectives of this Agreement.
2. Each Party agrees to promote responsible business practices, including by encouraging the voluntary uptake of relevant practices by businesses, taking into account relevant internationally recognised guidelines and principles, such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, and the OECD Guidelines for Multinational Enterprises.
3. The Parties commit to exchanging information and, as appropriate, cooperating on promoting responsible business practices.
Article 3.
1. Each Party, in accordance with its domestic laws and [Transparency provisions], shall ensure that measures of general application, including implementing measures, on matters related to this [Section] are proposed and adopted in a transparent manner providing reasonable opportunities for the public, including non-state stakeholders, to submit their views.
2. The Parties shall hold regular discussions and exchanges of views on the elements of this [Section] in the Investment Committee. In this regard, the Parties shall seek views of their non-state stakeholders, in a balanced representation of interests across all three dimensions of sustainable development. Each Party shall receive written communication on matters related to this [Section] and refer the relevant ones for due consideration by the Investment Committee.
3. The Parties may facilitate the meetings of non-state stakeholders on matters related to this [Section] in accordance with domestic law.
Article 4. Review of Sustainability Impacts
The Parties recognise the importance of reviewing, monitoring and assessing the impact of the implementation of this Agreement on sustainable development through their respective processes and institutions.
Subsection 2. Investment and Environment
Article 1. Right to Regulate
The Parties recognise the right of each Party to determine its sustainable development policies and priorities, to establish its own levels of domestic labour and environmental protection, and to adopt or modify its relevant laws and policies accordingly, consistently with its multilateral commitments in the fields of labour and environment.
Article 2. Levels of Protection
1. Each Party shall strive to ensure that its laws and policies provide for and encourage high levels of environmental protection and shall strive to continue to improve those laws and policies and their underlying levels of protection.
2. The Parties recognise that it is inappropriate to encourage investment by weakening or reducing the levels of protection afforded in their domestic environmental laws.
3. A Party shall not waive or derogate from, or offer to waive or derogate from, its environmental laws as an encouragement for the establishment, acquisition or retention of an investment or an investor in its territory.
4. A Party shall not, through a sustained or recurring course of action or inaction, fail to effectively enforce its environmental laws, as an encouragement for investment.
5. The Parties recognize that with respect to the enforcement of environmental laws, a Party is in compliance with paragraph 4 if a course of action or inaction results from a good faith decision regarding the allocation of resources in accordance with its priorities for enforcement of its environmental laws.
6. A Party shall not apply domestic environmental laws in a manner that would constitute a disguised restriction of investment or an unjustified discrimination between investors and investments of the Parties.
Article 3. Dialogue and Cooperation on Investment-related Environmental Issues
The Parties recognise the value of the United Nations Environment Assembly (UNEA) of the United Nations Environment Program (UNEP) and multilateral environmental agreements in tackling global and regional environmental challenges, and stress the need to enhance the mutual supportiveness between investment and environmental policies. In this context, the Parties agree to dialogue and cooperate as appropriate on investment-related environmental issues of mutual interest arising under this Section in a manner complementary to their efforts under existing bilateral and multilateral mechanisms.
Article 4. Multilateral Environmental Agreements
Each Party is committed to effectively implement the multilateral environmental agreements to which it is a party. The Parties shall regularly exchange information on their respective situation and developments as regards ratifications and implementation of Multilateral Environmental Agreements or amendments to such agreements in a manner complementary to the exchanges under the multilateral mechanisms.
Article 5. Investment Favouring Green Growth
In accordance with their commitment to enhance the contribution of investment to the goal of sustainable development, including its environmental aspects, the Parties: a. shall facilitate and encourage investment in environmental goods and services, b. agree to co-operate by exchanging experiences and good practices related to environmental impact assessments in respect of investments which are likely to have significant impact on the environment.
Article 6. Investment and Climate Change
Recognising the importance of pursuing the ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) and the purpose and goals of the Paris Agreement adopted by the Conference of the Parties to the UNFCCC at its 21st session (the Paris Agreement) in order to combat climate change and its impacts and committed to enhance the contribution of investment to climate change mitigation and adaptation, each Party shall:
a. effectively implement the UNFCCC and the Paris Agreement adopted thereunder, including its commitments with regard to its Nationally Determined Contributions;
b. promote and facilitate investment of relevance for climate change mitigation and adaptation; including investment concerning climate friendly goods and services, such as renewable energy, low-carbon technologies and energy efficient products and services, and by adopting policy frameworks conducive to deployment of climate-friendly technologies;
c. cooperate with the other Party on investment-related aspects of climate change policies and measures bilaterally and in international fora, as appropriate.
Subsection 3. Investment and Labour
Article 1. Right to Regulate
The Parties recognise the right of each Party to determine its sustainable development policies and priorities, to establish its own levels of domestic labour and environmental protection, and to adopt or modify its relevant laws and policies accordingly, consistently with its multilateral commitments in the fields of labour! and environment.
Article 2. Levels of Protection
1. Each Party shall strive to ensure that its laws and policies provide for and encourage high levels of labour protection and shall strive to continue to improve those laws and policies and their underlying levels of protection.