1. Except as provided in this Article, claims made by a disputing investor against a Party in relation to the obligations provided for in this Chapter shall be resolved in accordance with Section B of Chapter 3 (Dispute Settlement Investor - State).
2. When the Party against which the claim is made invokes any of the exceptions referred to in Article 6.09, the following procedure shall be followed:
a) The court shall refer the matter to the Financial Services Committee for its decision. The court may not proceed until it has received a decision of said Committee under the terms of this Article or sixty (60) days have passed since the date of receipt of the matter by said Committee;
b) Upon receipt, the Financial Services Committee shall decide upon and to what extent the exception to Article 6.09 invoked is a valid defense against the investor's claim and shall transmit a copy of its decision to the court and to the Board. That decision will be binding on the court.
6.22. Disputes between the Parties
1. The mechanism for the settlement of commercial disputes between the Parties shall be applied, in the terms modified by this Article, to disputes arising between the Parties related to the interpretation and application of this Chapter.
2. The Financial Services Committee shall by consensus consist of a list of up to twenty-five (25) persons, including three (3) persons from each Party and ten (10) persons who are not nationals of either Party, who have the Aptitudes and dispositions necessary to act as arbitrators in disputes related to this Chapter.
3. Members of the list of financial services shall:
a) have specialized knowledge or experience in financial law or the practice of financial services, which may include regulation of financial institutions;
b) be chosen strictly on the basis of objectivity, reliability and good judgment;
c) be independent of and not affiliated with or receive instructions from any Party; and
d) comply with the Code of Conduct of the trade dispute resolution mechanism in force between the Parties.
4. Notwithstanding the provisions of the commercial dispute settlement mechanism in force between the Parties, when a court finds that a measure is inconsistent with this Treaty and the measure subject to controversy affects:
a) only to the financial services sector, the complaining Party may suspend benefits only in the financial services sector. If the complaining Party considers that it is not feasible or effective to suspend benefits only in the financial services sector, it may suspend benefits in other sectors;
b) the financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector having an effect equivalent to the effect of the measure in the financial services sector of the Party; or
c) only to a sector other than financial services, the complaining Party shall not be able to suspend benefits in the financial services sector.
Annex 6.18. Financial Services Committee
The authority of each Party responsible for financial services is:
a) in the case of Costa Rica, the National Council for the Supervision of the Financial System (CONASSIF) and the Ministry of Foreign Trade for banking and other financial services and insurance;
b) in the case of El Salvador, the Ministry of Economy, in consultation with the corresponding competent authority (Superintendency of the Financial System, Superintendency of Securities, Superintendence of Pensions and the Central Reserve Bank);
c) in the case of Guatemala, the Superintendency of Banks, for banking and other financial services, the Ministry of Economy for insurance and securities and any other institutions approved by those authorities to participate in the Financial Services Committee;
d) in the case of Honduras, the Central Bank of Honduras, the National Commission of Banks and Insurance and the Secretary of State in the Offices of Industry and Commerce; Y
e) in the case of Nicaragua, the Ministry of Development, Industry and Commerce, the Superintendency of Banks and other Financial Institutions, the Superintendency of Pensions and the Ministry of Finance and Public Credit, for banking and other financial services and insurance;
Or their successors.
Annex 6.19.2. Specific Commitments
Section A. Costa Rica
Portfolio management
1. Costa Rica shall allow a financial institution (other than a fiduciary company) incorporated outside its territory to provide investment advice and portfolio management services, excluding (a) custody services, (b) fiduciary services, And (c) execution services that are not related to the administration of a collective investment fund, to a collective investment fund located in its territory. This commitment is subject to Article 6.02 and Article 6.06.3
2. Notwithstanding paragraph 1, Costa Rica may require that the ultimate responsibility for the management of a collective investment fund be assumed by an "investment fund management company" established in accordance with the Securities Market Regulatory Law, No 7732 dated December 17, 1997 for the case of investment funds or a "pension operator" set up under the Worker Protection Act No. 7983 of February 18, 2000 for the case of pension funds And supplementary pension funds.
3. For the purposes of paragraphs 1 and 2, a collective investment fund means an investment fund constituted in accordance with the Securities Market Regulatory Law, No. 7732 of December 17, 1997, or a pension fund or Supplementary pension fund constituted in accordance with the Worker Protection Act, No. 7983 of February 18, 2000.
Availability of expedited insurance services
4. Costa Rica should endeavor to consider policies or procedures such as: not to require approval of insurance other than insurance sold to natural persons, or compulsory insurance; To allow the introduction of products other than those that are disapproved within a reasonable period of time; And not to impose limitations on the number or frequency of product introductions.
Section B. El Salvador
Portfolio management
1. El Salvador shall allow a financial institution (other than a trust company), established outside its territory, to provide investment advisory and portfolio management services, excluding (a) custody services, (b) services Fiduciaries and (c) execution services that are not related to the administration of a collective investment fund, to a collective investment fund located in the territory of El Salvador. This commitment is subject to Article 6.02 and Article 6.06.3.
2. The Parties recognize that El Salvador does not currently have legislation regulating the scheme for collective investment funds. Notwithstanding the provisions of paragraph 1, and no later than four years after the date of entry into force of this Agreement, El Salvador shall implement paragraph 1 by adopting a Special Law regulating collective investment funds, Which will provide a definition of collective investment funds as specified in paragraph 3.
3. For the purposes of paragraphs 1 and 2, collective investment fund shall have the meaning established under the Special Law that El Salvador will adopt as established in paragraph 2.
Availability of expedited insurance services
4. It is understood that El Salvador requires prior approval of products prior to the introduction of a new insurance product. El Salvador will provide that once a company applying for approval for said product registers the information with the Salvadoran supervising agency; The regulator shall issue an approval or disapproval in accordance with Salvadoran legislation for the sale of the new product within sixty (60) days. It is understood that El Salvador will not maintain limitations in the number or frequency in the introduction of new products.
Section C. Guatemala
Portfolio management
1. Guatemala will allow financial institutions (other than a trust company), organized outside its territory, to provide investment advisory and portfolio management services, excluding (a) custody services, (b) trust services and C) execution services not related to the administration of collective investment schemes, to a collective investment scheme located in its territory. This commitment is subject to Article 6.02 and Article 6.06.3.
2. The Parties recognize that Guatemala currently does not allow insurance companies to manage collective investment schemes. When Guatemala allows insurance companies to administer collective investment schemes, Guatemala will comply with the requirements of paragraph 1.
3. For the purposes of paragraphs 1 and 2, collective investment scheme means an investment made in accordance with Articles 74, 75, 76, 77 and 79 of the Securities and Commodities Market Law, Decree No. 34-96 Of the Congress of the Republic.
Availability of expedited insurance services
4. It is understood that Guatemala requires prior approval before the introduction of a new insurance product. Guatemala will permit that once the company interested in such approval present the information with the supervisory authority, that authority will issue approval or denial in accordance with the laws of Guatemala for the sale of the new product within sixty (60) days. It is understood that Guatemala does not maintain any limitations on the number or frequency of product introduction.
Section D. Honduras
Portfolio management
1. Honduras shall allow a financial institution (other than a trust company) organized outside its territory, to provide investment advice and portfolio management, excluding (a) custody services, (b) trust services and (c)) Execution services not related to the administration of collective investment schemes, to a collective investment scheme located in its territory. This commitment is subject to Article 6.02 and Article 6.06.3.
2. Notwithstanding paragraph 1, Honduras may require that a collective investment scheme located in its territory bears the maximum responsibility for the management of the collective investment scheme or the funds it administers.
3. For the purposes of paragraphs 1 and 2, collective investment scheme shall have the meaning that is established in any future law, regulation or guidelines that define "collective investment scheme".
Availability of expedited insurance services
4. It is understood that Honduras, prior to the introduction of a new insurance product, requires prior approval. Honduras will provide that, once the company interested in the approval of said product registers the information in the National Commission of Banks and Insurance, the Commission may grant or not the approval for the sale of a new product, in accordance with its legislation Of a term of thirty (30) days. It is understood that Honduras does not maintain any limitation on the number or frequency of product introductions.
Section E. Nicaragua
Portfolio management
1. Nicaragua shall allow a financial institution (other than a trust company), incorporated or organized outside its territory, to provide investment advisory and portfolio management services to administrators of a collective investment fund or pension fund located in Its territory, excluding (a) custody services, (b) fiduciary services and (c) enforcement services not related to the administration of a collective investment fund or a pension fund. This commitment is subject to Article 6.02 and Article 6.06.3.
2. Notwithstanding the provisions of paragraph 1, Nicaragua may require full liability for the management of collective investment funds and pension funds to be reserved respectively to the administrators of said funds established in its territory.
3. The Parties recognize that Nicaragua does not currently have legislation establishing collective investment funds and that its legislation related to pension funds is not being fully implemented. Notwithstanding the provisions of paragraph 1, at the time when Nicaragua adopts legislation, regulations or administrative guidelines
By establishing collective investment funds, Nicaragua will comply with paragraph 1 with respect to collective investment funds and provide a definition of collective investment funds to be added to paragraph 5. Notwithstanding paragraph 1, at the time Nicaragua implements Its legislation related to pension funds, must comply with paragraph 1 regarding pension funds.
4. The Parties recognize that Nicaragua currently does not allow insurance companies to manage collective investment funds. Notwithstanding paragraph 1, at the time Nicaragua permits insurance companies to manage collective investment funds, it shall comply with paragraph 1 with respect to the management of collective investment funds by insurance companies.
5. For the purposes of paragraphs 1 to 3, the pension fund has the meaning established in the Law on the Savings System for Pensions, Law No. 340 (published in La Gaceta, Official Gazette, No. 72 of April 11 2000) and its regulations.
Availability of expedited insurance services
6. Nicaragua should seek to maintain existing opportunities, or may wish to consider policies or procedures such as: not requiring the approval of products for insurance other than those sold to natural persons or compulsory insurance; Permit the introduction of products, unless such products are rejected within a reasonable time; And not impose limitations on the number of products that can be introduced or the frequency with which they are introduced.
Insurance Branches
7. Notwithstanding Nicaragua's non-conforming measures in Annex III, Section B, referring to market access in insurance, excluding any part of such non-conforming measures referring to financial conglomerates and social services, Nicaragua, no later than four (4) years After the entry into force of this Agreement, will allow insurance providers of the Parties to establish themselves in their territory through branches. Nicaragua may choose how to regulate branches, including its characteristics, structure, relationship with its parent company, capital requirements, technical reserves and obligations related to risk capital and its investments.
Annex 6.19.3. Additional Information Relating to Financial Services Measures
Each Party listed below has provided the following descriptive and explanatory information regarding certain aspects of financial services measures for transparency purposes only.
Section A. Costa Rica
Pension fund managers may invest up to twenty-five (25) percent of the fund's assets in securities issued by foreign financial institutions. This limit may be increased up to fifty (50) per cent if the actual return on investments in the supplementary pension scheme is equal to or less than international income.
Section B. El Salvador
With respect to Banking:
a) Controlling companies of banks and other foreign financial institutions are subject to consolidated supervision in accordance with relevant international practices. The Superintendency of the Financial System, following the opinion of the Central Reserve Bank, will issue the instructions to determine the institutions that will be eligible.
b) Banks and other foreign financial institutions must meet the requirements of regulation and prudential supervision in their countries of origin in accordance with relevant international practices.
c) To be authorized to establish a branch of a bank in El Salvador, a foreign bank must meet the following requirements:
(i) Establishment: To obtain authorization to establish a branch, a foreign bank must:
a) verify that the parent company is legally established in accordance with the laws of the country in which it was constituted and that such country subjects the bank to prudential regulation and supervision according to international uses in this matter and that is classified as first Line, by an internationally recognized risk classifier;
b) to verify that, in accordance with the laws of the country where it is constituted and its own statutes, it may agree on the establishment of branches, agencies and offices that meet the requirements of the Banking Law and that the parent company as the government authority responsible for Supervision of the institution in their country of origin have duly authorized the operation of the institution in El Salvador;
c) undertake to permanently maintain in El Salvador at least one representative with sufficient and sufficient powers to perform all acts and contracts to be held and to take effect in El Salvador. The power must be granted in a clear and precise way to bind the institution represented, responding unlimitedly in and outside the country for the acts that are signed and contracts signed in El Salvador and fulfilling both the requirements required by Salvadoran law and The law of the country where the foreign institution is constituted;
d) undertake to establish and maintain in El Salvador the amount of capital and capital reserves which, in accordance with the provisions of the Banking Law, corresponds to the Salvadoran banks;
e) to prove that it has been operating for at least five years and that the results of its operations have been satisfactory, according to reports from the supervisory entity of the country where the foreign bank is incorporated and internationally recognized risk classifiers; and,
f) to submit expressly to the laws, courts and authorities of El Salvador, in relation to the acts that it concludes and contracts that it subscribes in El Salvador or that they will have effects in the same.
(ii) In such cases, the Superintendency of the Financial System must sign a memorandum of cooperation with the supervisor of the country where the investor entity is established.
(iii) Foreign banks authorized to operate in El Salvador will be subject to the inspection and supervision of the Superintendency of the Financial System, will enjoy the same rights and privileges, will be subject to the same laws and will be governed by the same rules applicable to domestic banks.
Section C. Honduras
1. Banks and savings and loan associations may not provide loans to natural persons or legal entities domiciled abroad unless the Central Bank of Honduras authorizes credits.
2. A branch of a foreign bank is not required to have its own board of directors or administrative council, but must have at least two representatives domiciled in Honduras. Such representatives are responsible for the overall management and administration of the business and have the legal authority to act in Honduras and to execute and respond to the operations of the branch.
3. The founding members of financial institutions organized under the laws of Honduras must be natural persons.
4. The operation, function, services and issuance of any new financial product with a direct and immediate relationship to banking activities or loans shall be approved by the National Banking and Insurance Commission.
5. Shares in a foreign investment fund may be traded on the territory of Honduras only if there is a reciprocity agreement at the government level or at the level of the relevant supervisory authorities of the country of origin of the investment fund and in the country in Which shares are traded.
6. Corporations that classify risk and choose to organize under Honduran law must be incorporated as an anonymous corporation and must have in Honduras a permanent legal representative with sufficient and sufficient power to undertake any legal act for the provision of risk classification services in Honduras.
Section D. Nicaragua
1. Nicaragua reserves the right to deny an operating license to a financial institution or group (except an insurance financial institution or group) when another Party has denied or canceled an operating license to that same financial institution or group.
2. To maintain a branch in Nicaragua, a bank established and organized abroad must:
a) be legally authorized and by their statutes, to operate in their country of origin and to establish branches in other countries;
b) prior to the establishment of said branch, present certification issued by the supervisory authority of the country where the bank is established and organized, stating the agreement of that authority with which the Bank, under its supervision, establishes a branch in Nicaragua; and
c) assign to the branch, the capital that meets the minimum requirements.
Said branch must have its address in Nicaragua.
3. To maintain a branch in Nicaragua, a non-bank financial institution, organized and incorporated under the laws of a foreign country, must:
a) be legally authorized and by its statutes, to operate in the country where it is organized and established and to establish branches abroad;
b) prior to the establishment of said branch, must submit a certificate issued by the supervisory authority of the country where that institution is constituted and organized, which establishes the agreement of the authority with which that institution establishes a branch in Nicaragua.
c) assign to that branch, the capital that meets the minimum requirements; and
d) in the case of FONCITUR, the capital and all its funds must be invested in Nicaragua in the projects registered with the Nicaraguan Institute of Tourism (INTUR).
Said branch must have its address in Nicaragua.
4. For the purposes of this paragraph and paragraph 3,
a) non-bank financial institutions means an institution that operates as a source of funds from the public in the form of deposits; as a listed institution or institution; as general store of a financial deposit; as a leasing or leasing entity; and as FONCITUR; and
B) FONCITUR means a Capital Investment Fund for Tourism.
5. A representative office of a foreign bank may place funds in the country in the form of credits and investments, and act as information centers for its clients, however, it is prohibited to raise funds from the public in Nicaragua.
6. Pension fund administrators may place up to thirty (30) percent of the fund's assets abroad. However, the Superintendency of Pensions retains the power to vary the limits on investments made by pension fund managers at national and foreign levels.
Chapter 7. Temporary Entry of Business Persons
7.01. Definitions
1. For the purposes of this Chapter, the following definitions shall apply:
Business activities: those legitimate commercial activities created and operated for the purpose of gaining profits in the market. It does not include the possibility of obtaining employment, nor salary or remuneration coming from labor source in the territory of a Party;
Labor certification: the procedure carried out by the competent administrative authority to determine whether a national of one Party, who intends to enter temporarily in the territory of another Party, displaces national labor in the same labor branch or significantly impairs the working conditions of the same;
Temporary entry: the entry of a business person from one Party into the territory of another Party, without the intention of establishing permanent or permanent residence;
National: a "national", as defined in Article 2.01 (Definitions of general application), but does not include permanent or permanent residents;
Business person: a national participating in the trade in goods or provision of services, or in investment activities; and
Recurrent practice: a practice executed by the migratory authorities of a Party in a repetitive manner during a representative period prior to and immediately following the execution of the same.
2. For the purposes of Annex 7.04, the following definitions shall apply:
Executive functions: those functions assigned within an organization, under which the business person essentially has the following responsibilities:
a) directing the administration of the organization or a relevant component or function thereof;
b) establish the policies and objectives of the organization, component or function; or
c) receive supervision or general management only from senior executives, the board of directors or the board of directors of the organization or the shareholders of the same;
Managerial functions: those functions assigned within an organization, under which the business person essentially has the following responsibilities:
a) direct the organization or an essential function within it;
b) supervise and control the work of other professional employees, supervisors or administrators;
c) have the authority to contract and dismiss, or recommend such actions, as well as others regarding the management of the personnel being directly supervised by that person and to perform functions at the higher level within the organizational hierarchy or with respect to the function to its position; or
d) to execute actions at their discretion regarding the daily operation of the function over which that person has the authority; and
Functions involving special knowledge of the goods, services, research, equipment, techniques, administration of the organization or its interests and its application in international markets, or an advanced level of knowledge or experience in The processes and procedures of the organization.
7.02. General Principles
This Chapter reflects the preferential trade relationship between the Parties, the advisability of facilitating temporary entry in accordance with the principle of reciprocity and the establishment of transparent criteria and procedures for this purpose. It also reflects the need to ensure the security of borders and to protect the national workforce and permanent employment in their respective territories.
7.03. General Obligations
1. Each Party shall apply measures relating to the provisions of this Chapter in accordance with Article 7.02 and in particular shall apply them expeditiously in order to avoid undue delays or prejudice in trade in goods and services or in investment activities Included in this Treaty.
2. The Parties shall endeavor to develop and adopt common criteria, definitions and interpretations for the implementation of this Chapter.
7.04. Temporary Entry Authorization
1. In accordance with the provisions of this Chapter, including those contained in Annexes 7.04 and 7.04 (1), each Party shall authorize the temporary entry of business persons who comply with other applicable measures relating to public health and safety, and Those related to national security.
2. A Party may deny the issuance of an immigration document authorizing employment to a business person when its temporary entry adversely affects:
a) the solution of any labor dispute in progress in the place where it is used or will be used; or
b) the employment of any person involved in that conflict.
3. When a Party denies the issuance of an immigration document authorizing employment, in accordance with paragraph 2, that Party:
a) inform in writing the reasons for the refusal to the business person concerned; Y
b) at the request of the Party to whose national the entry is refused, the reasons for the refusal shall be notified without delay and in writing.
4. Each Party shall limit the amount of the fees for the processing of applications for temporary entry at the approximate cost of the services rendered, unless the Parties have agreed in the past to eliminate those entitlements.
5. The authorization of temporary entry under this Chapter does not replace the requirements required for the exercise of a profession or activity in accordance with the specific regulations in force in the territory of the Party authorizing temporary entry.
7.05. Provision of Information
1. In addition to the provisions of Article 10.02 (Information Center), each Party shall:
a) to provide to another Party the informational material that allows him to know the measures that adopts relative to this Chapter; and
b) no later than six (6) months after the date of entry into force of this Agreement, prepare, publish and make available to interested parties, on their own territory and on the territory of another Party, a consolidated document containing material That explains the requirements for temporary entry under this Chapter, so that the business persons of another Party may know them.
2. Each Party shall collect, maintain and make available to another Party information relating to the granting of authorizations for temporary entry, in accordance with this Chapter, to business persons of another Party to whom migratory documentation has been issued. This collection will include information for each authorized category.
7.06. Dispute Settlement
1. A Party may not initiate a dispute settlement procedure under the dispute settlement mechanism in force between the Parties in respect of a refusal to authorize temporary entry under this Chapter or in respect of any particular case falling within Article 7.03, unless: