(k) “monopoly supplier of a service” means any person, public or private, which in the relevant market of the territory of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;
(l) “service consumer” means any person that receives or uses a service;
(m) “person” means either a natural person or a juridical person;
(n) “natural person of another Party” means a national of that other Party according to its legislation.
(o) “juridical person” means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(p) “juridical person of another Party” means a juridical person which is either:
(i) constituted or otherwise organised under the law of that other Party, and is engaged in substantive business operations in the territory of a Party; or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(aa) natural persons of that other Party; or
(bb) juridical persons of that other Party identified under subparagraph (p)(i);
(q) a juridical person is:
(i) “owned” by persons of a Party if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party;
(ii) “controlled” by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;
(iii) “affiliated” with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;
(r) “direct taxes” comprises all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
Article 3.3. Most-Favoured-Nation Treatment
1. Without prejudice to measures taken in accordance with Article VII of the GATS, and except as provided for in its List of MFN Exemptions contained in Annex IX (List of MFN Exemptions), each Party shall accord immediately and unconditionally, to services and service suppliers of another Party treatment no less favourable than the treatment it accords to like services and service suppliers of any non-patty.
2. Treatment granted under other existing or future agreements concluded by a Party and notified under Article V or Article V bis of the GATS shall not be subject to paragraph 1.
3. Notwithstanding paragraph 2, if a Party enters into an agreement of the type referred in the paragraph 2 it shall, upon request from another Party, afford adequate opportunity to that Party to negotiate the benefits granted therein.
4. The provisions of this Chapter shall not be so construed as to prevent a Party from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous frontier zones of services that are both locally produced and consumed.
Article 3.4. Market Access
1. With respect to market access through the modes of supply identified in subparagraph (a) of Article 3.2 (Definitions), each Party shall accord services and service suppliers of another Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments. (5)
2. In sectors where market-access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (6)
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 3.5. National Treatment
1. In the sectors inscribed in its Schedule of Specific Commitments, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of another Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers. (7)
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of another Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like services or service suppliers of another Party.
Article 3.6. Additional Commitments
Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 3.4 (Market Access) or 3.5 (National Treatment), including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule of Specific Commitments.
Article 3.7. Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier of another Party, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
3. Where authorisation is required by a Party for the supply of a service, the competent authorities of that Party shall, within a reasonable period of time after the submission of an application is considered complete under that Partyâs domestic laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of that Party shall provide, without undue delay, information concerning the status of the application.
4. Each Party shall ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures, in all services sectors, are based on objective and transparent criteria, such as competence and the ability to supply the service.
5. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures do not constitute unnecessary barriers to trade in services, the Joint Committee shall take a decision aiming at incorporating into this Agreement any disciplines developed in the WTO in accordance with paragraph 4 of Article VI of the GATS. The Parties may also, jointly or bilaterally, decide to develop further disciplines.
6. (a) In sectors in which a Party has undertaken specific commitments, pending the entry into force of a decision incorporating WTO disciplines for these sectors pursuant to paragraph 5, and, if agreed between Parties, disciplines developed jointly or bilaterally under this Agreement pursuant to paragraph 5, the Party shall not apply qualification requirements and procedures, technical standards and licensing requirements and procedures that nullify or impair such specific commitments in a manner which is
(i) more burdensome than necessary to ensure the quality of the service; or
(ii) in the case of licensing procedures, not in itself a restriction on the supply of the service.
(b) In determining whether a Party is in conformity with the obligation under subparagraph (a), account shall be taken of international standards of relevant international organisations (8) applied by that Party.
7. Each Party shall provide for adequate procedures to verify the competence of professionals of another Party.
Article 3.8. Recognition
1. For the purposes of the fulfilment of its relevant standards or criteria for the authorisation, licensing or certification of service suppliers, each Party shall give due consideration to any requests by another Party to recognise the education or experience obtained, requirements met, or licences or certifications granted in the requesting Party. Such recognition may be based upon an agreement or arrangement with the requesting Party, or otherwise be accorded autonomously.
2. Where a Party recognises, by agreement or arrangement, the education or experience obtained, requirements met, or licences or certifications granted, in the territory of a non-party, that Party shall afford another Party adequate opportunity to negotiate its accession to such an agreement or arrangement, whether existing or future, or to negotiate a comparable agreement or arrangement with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for another Party to demonstrate that the education or experience obtained, requirements met, or licences or certifications granted, in the territory of that other Party should also be recognised.
3. Any such agreement or arrangement or autonomous recognition shall be in conformity with the relevant provisions of the WTO Agreement, in particular paragraph 3 of Article VII of the GATS.
Article 3.9. Movement of Natural Persons
1. This Article applies to measures affecting natural persons who are service suppliers of a Party, and natural persons of a Party who are employed by a service supplier of a Party, with respect to the supply of a service.
2. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, nor shall it apply to measures regarding nationality, residence or employment on a permanent basis.
3. Natural persons covered by a specific commitment shall be allowed to supply the service in accordance with the terms of that commitment.
4. This Chapter shall not prevent a Party from applying measures to regulate the entry of natural persons of another Party into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Party under the terms of a specific commitment. (9)
Article 3.10. Transparency
1. Each Party shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application which pertain to or affect the operation of this Chapter. International agreements pertaining to or affecting trade in services to which a Party is a signatory shall also be published.
2. Where publication as referred to in paragraph 1 is not practicable, such information shall be made otherwise publicly available.
3. Nothing in this Chapter shall require any Party to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.
Article 3.11. Monopolies and Exclusive Service Suppliers
1. Each Party shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Partyâs obligations under Article 3.3 (Most-Favoured-Nation Treatment) and its specific commitments.
2. Where a Party's monopoly supplier competes, either directly or through an affiliated company, in the supply of a service outside the scope of its monopoly rights and which is subject to that Partyâs specific commitments, the Party shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such commitments.
3. The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Party, formally or in effect:
(a) authorises or establishes a small number of service suppliers; and
(b) substantially prevents competition among those suppliers in its territory.
Article 3.12. Business Practices
1. Parties recognise that certain business practices of service suppliers, other than those falling under Article 3.11 (Monopolies and Exclusive Service Suppliers), may restrain competition and thereby restrict trade in services.
2. Each Party shall, at the request of another Party, enter into consultations with a view to eliminating practices referred to in paragraph 1. The Party addressed shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Party addressed shall also provide other information available to the requesting Party, subject to its domestic laws and regulations, and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting Party.
Article 3.13. Payments and Transfers
1. Except under the circumstances envisaged in Article 3.14 (Restrictions to Safeguard the Balance of Payments), a Party shall not apply restrictions on international transfers and payments for current transactions with another Party.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of Agreement of the International Monetary Fund (IMF), including the use of exchange actions which are in conformity with the Articles of Agreement of the IMF, provided that a Party shall not impose restrictions on capital transactions inconsistently with its specific commitments regarding such transactions, except under Article 3.14 (Restrictions to Safeguard the Balance of Payments) or at the request of the IMF.
Article 3.14. Restrictions to Safeguard the Balance of Payments
1. The Parties shall endeavour to avoid imposition of restrictions to safeguard the balance of payments.
2. Any restrictions to safeguard the balance of payments adopted or maintained by a Party under and in conformity with Article XII of the GATS shall apply under this Chapter.
3. A Party adopting or maintaining such restrictions shall promptly notify the Joint Committee.
Article 3.15. Subsidies
1. A Party which considers that it is adversely affected by a subsidy of another Party may request ad hoc consultations with that Party on such matters. The requested Party shall enter into such consultations. (10)
2. The Parties shall review any disciplines agreed under Article XV of the GATS with a view to incorporating them into this Chapter.
Article 3.16. General Exceptions
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in this Chapter shall be construed to prevent the adoption or enforcement by a Party of measures:
(a) necessary to protect public morals or to maintain public order; (11)
(b) necessary to protect human, animal or plant life or health;
(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Chapter including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts;
(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;
(iii) safety;
(d) inconsistent with Article 3.5 (National Treatment), provided that the difference in treatment is aimed at ensuring the equitable or effective (12) imposition or collection of direct taxes in respect of services or service suppliers of other Parties;
(e) inconsistent with Article 3.3 (Most-Favoured-Nation Treatment), provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Party is bound.
Article 3.17. Security Exceptions
Nothing In this Chapter shall be construed:
(a) to require a Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent a Party from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;
(ii) relating to fissionable and fusionable materials or the materials from which they are derived;
(iii) taken in time of war or other emergency in international relations; or
(c) to prevent a Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 3.18. Schedules of Specific Commitments
1. Each Party shall set out in a Schedule the Specific Commitments it undertakes under Articles 3.4 (Market Access), 3.5 (National Treatment) and 3.6 (Additional Commitments). With respect to sectors where such commitments are undertaken, each Schedule shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments referred to in Article 3.6 (Additional Commitments); and
(d) where appropriate, the time-frame for implementation of such commitments; and the date of entry into force of such commitments.
2. Measures inconsistent with both Articles 3.4 (Market Access) and 3.5 (National Treatment) shall be subject to paragraph 2 of Article XX of the GATS.
3. The Parties' Schedules of Specific Commitments are set out in Annex XII (Schedules of Specific Commitments).
Article 3.19. Modification of Schedules
The Parties shall, upon written request by a Party, hold consultations to consider any modification or withdrawal of a specific commitment in the requesting Party's Schedule of Specific Commitments. The consultations shall be held within three months from the request. In the consultations, the Parties shall aim to ensure that a general level of mutually advantageous commitments no less favourable to trade than that provided for in the Schedule of Specific Commitments prior to such consultations is maintained. Modifications of Schedules of Specific Commitments are subject to the procedures set out in Articles 8.1 Joint Committee) and 10.1 (Amendments).
Article 3.20. Review
With the objective of further liberalising trade in services between them, in particular eliminating substantially all remaining discrimination within a period of ten years, the Parties shall review at least every three years, or more frequently if so agreed, their Schedules of Specific Commitments and their Lists of MFN Exemptions, taking into account in particular any autonomous liberalisation and on-going work under the auspices of the WTO. The first such review shall take place no later than five years after the entry into force of this Agreement.
Article 3.21. Annexes
The following Annexes are an integral part of this Chapter:
(a) Annex IX (Lists of MFN Exemptions);
(b) Annex X (Recognition of Qualifications of Service Suppliers);
(c) Annex XI (Movement of Natural Persons);
(d) Annex XII (Schedules of Specific Commitments);
(e) Annex XIII (Electronic Commerce);
(f) Annex XIV (Telecommunications Services);
(g) Annex XV (Co-Productions).
(h) Annex XVI (Financial Services);
(i) Annex XVII (Health Services);
(j) Annex XVIII (Tourism and Travel Services); and
(k) Annex XIX (International Road Transport and Logistics Services).
Chapter 4. PROTECTION OF INTELLECTUAL PROPERTY
Article 4. Protection of Intellectual Property
1. The Parties shall grant and ensure adequate, effective and non-discriminatory protection of intellectual property rights, and provide for measures for the enforcement of such rights against infringement thereof, including counterfeiting and piracy, in accordance with the provisions of this Chapter, Annex XX (Protection of Intellectual Property), and the international agreements referred to in that Annex.
2. The Parties shall accord to each other's nationals treatment no less favourable than that they accord to their own nationals. Exemptions from this obligation must be in accordance with the substantive provisions of Article 3 and 5 of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement).
3. The Parties shall grant to each other's nationals treatment no less favourable than that they accord to nationals of a non-party. Exemptions from this obligation must be in accordance with the substantive provision of the TRIPS Agreement, in particular Articles 4 and 5.
4. Upon request of a Party, the Joint Committee shall review the provisions of this Chapter and Annex XX (Protection of Intellectual Property) with a view to further improve levels of protection and to avoid or remedy trade distortions caused by actual levels of protection of intellectual property rights.
5. The Joint Committee shall keep the implementation of intellectual property rights under review. At the request of a Party, consultations shall take place in the Joint Committee on any matter concerning intellectual property rights.
Chapter 5. GOVERNMENT PROCUREMENT
Article 5. Government Procurement
1. The Parties shall enhance their mutual understanding of each other's government procurement laws, regulations and agreements with a view to progressively liberalising their respective procurement markets on the basis of non-discrimination and reciprocity.
2. Each Party shall publish its laws and make publicly available its regulations and administrative rulings of general application, as well as the international agreements to which it is a party that may affect its procurement markets. Each Party shall respond to specific questions and provide, upon request, information to another Party on such matters.
3. The Parties shall review this Article in the Joint Committee within three years after the entry into force of this Agreement, in light of further developments in international economic relations, inter alia in the framework of the WTO and free trade relations with non-parties, and examine the possibility of developing and deepening their cooperation under this Agreement. After the first review they shall conduct regular reviews at the meetings of the Joint Committee.
Chapter 6. COMPETITION
Article 6.1. Rules of Competition Concerning Undertakings
1. The following practices of undertakings are incompatible with the proper functioning of this Agreement in so far as they may affect trade between the Parties:
a) agreements and concerted practices between undertakings, decisions by associations of undertakings which have as their object or effect the prevention, restriction or distortion of competition;
b) abuse by one or more undertakings of a dominant position in the territory of a Party as a whole or in a substantial part thereof; or
c) concentrations between undertakings, which are considered anti- competitive, according to the competition laws and regulations applicable in the Parties.
2. Paragraph 1 shall also apply to the activities of public undertakings, and undertakings to which the Parties grant special or exclusive rights, in so far as the application of these provisions does not obstruct the performance, in law or in fact, of their particular public tasks.
3. Each Party undertakes to apply its respective competition laws with a view to removing anti-competitive practices as outlined in paragraph 1.