(b) Article 9.4 (Market Access);
(c) Article 9.5 (National Treatment) or 10.3 (National Treatment);
(d) Article 9.6 (Local Presence);
(e) Article 10.6 (Senior Management and Boards of Directors); or
(f) Article 10.7 (Performance Requirements).
2. Each tab of this Annex sets forth the following elements:
(a) Sector: refers to the sector in general for which the tab has been made;
(b) Sub-sector: refers to the specific sector for which the fiche has been made;
(c) Obligations Affected: specifies the obligation(s) referred to in paragraph 1 that, by virtue of Articles 9.7 (1) (a) (Non-Conforming Measures) and 10.8 (1) (a) (Non-Conforming Measures), do not apply to the listed measure(s);
(d) Level of Government: indicates the level of government that maintains the measure(s) on which a reservation is taken;
(e) Measures: identifies the laws, regulations or other measures, as qualified, where indicated, by the Description element in respect of which the record has been made. A measure cited in the Measures element:
(i) means the measure as modified, continued or renewed, as of the date of entry into force of this Agreement; and
(ii) includes any measure subordinated to, adopted or maintained under the authority of, and consistent with, such measure; and
(iii) includes any measure adopted or maintained under the authority of, and consistent with, such measure.
(f) Description provides a general description of the Measures.
3. In interpreting a tab, all elements of the tab shall be considered. A tab shall be interpreted in light of the relevant provisions of the chapters against which the tab is taken. The Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements, considered as a whole, is so substantial and significant that it would be unreasonable to conclude that the Measures element should prevail. In this case, the other elements shall prevail to the extent of the discrepancy.
4. Pursuant to Articles 9.7(1)(a) (Non-Conforming Measures) and 10.8(1)(a) (Non-Conforming Measures), the Articles of this Agreement specified in the Affected Obligations element of a tab do not apply to the law, regulation or other measure identified in the Measures element of that tab.
5. Where a Party maintains a measure that requires a service supplier to be a national, permanent resident or resident in its territory as a condition for the supply of a service in its territory, a tab in the Annex made for that measure in relation to Articles 9. 3 (Most-Favored-Nation Treatment), 9.5 (National Treatment) or 9.6 (Local Presence) shall operate as an Annex tab in relation to Articles 10.3 (National Treatment), 10.4 (Most-Favored-Nation Treatment) or 10.7 (Performance Requirements) with respect to such measure.
6. For purposes of this Agreement, the Parties understand that:
(a) extractive fishing activity shall not be considered a service and therefore need not be listed in Annexes I and II with respect to the obligations of Chapter 9 (Cross-Border Trade in Services); and
(b) where a Party completely prohibits the cross-border supply of or investment in a service by a foreign person, such prohibition shall not be considered a non-conformity with respect to Article 9.4 (Access to Markets in Services).
9.4 (Market Access) and therefore need not be listed in Annexes I and II as such.
Annex I . SCHEDULE OF MEXICO. HORIZONTAL NOTES
For the purposes of this Schedule, the following definitions shall apply:
foreigner exclusion clause: the express provision contained in the bylaws of a company, which establishes that foreigners will not be allowed, directly or indirectly, to be partners or shareholders of the company;
international cargo: goods that have their origin or destination outside the territory of a Party;
concession: an authorization granted by the Mexican State to a person to exploit natural resources or provide a service, for which Mexican nationals and Mexican companies will be preferred over foreigners.
Annex I . SCHEDULE OF MEXICO
1. Sector: All Sectors
Subsector:
Obligations Concerned: Article 10.3 (National Treatment)
Level of Government: Federal
Measures: Political Constitution of the United Mexican States, Article 27
Foreign Investment Law, Title II, Chapters I and II Regulation of the Foreign Investment Law and of the National Registry of Foreign Investment, Title II, Chapters I and II
Description: Investment
Foreign nationals or foreign companies may not acquire direct dominion over lands and waters within a 100 kilometers strip along the borders and 50 kilometers along the beaches (hereinafter referred to as the Restricted Zone).
Mexican companies without a foreign exclusion clause may acquire direct ownership of real estate used for non-residential activities located in the Restricted Zone. The notice of such acquisition must be filed with the Ministry of Foreign Affairs (hereinafter referred to as SRE), within 60 business days following the date on which the acquisition is made.
Mexican companies without a foreign exclusion clause may not acquire direct ownership of real estate for residential purposes located in the Restricted Zone.
In accordance with the procedure described below, Mexican companies without foreigners exclusion clause may acquire rights for the use and exploitation of real estate located in the Restricted Zone, which are intended for residential purposes. Such procedure will also apply when foreign nationals or foreign companies intend to acquire rights for the use and enjoyment of real estate located in the Restricted Zone, regardless of the use for which the real estate is intended.
Permission from the SRE is required for credit institutions to acquire, as trustees, rights over real estate located in the Restricted Zone, when the purpose of the trust is to allow the use and exploitation of such real estate, without granting real rights over them, and the beneficiaries are Mexican companies without a foreigner exclusion clause, or the foreigners or foreign companies referred to above.
The use and exploitation of the real estate located in the Restricted Zone will be understood as the rights to the use or enjoyment thereof, including, as the case may be, the obtaining of fruits, products and, in general, any yield resulting from the operation and lucrative exploitation through third parties or credit institutions in their capacity as trustees.
The duration of the trusts referred to in this reserve will be for a maximum period of 50 years, which may be extended at the request of the interested party.
The SRE may verify at any time compliance with the conditions under which the permits referred to in this reservation are granted, as well as the presentation and veracity of the aforementioned notifications.
The SRE will decide on the permits, considering the economic and social benefit that the realization of these operations implies for the Nation.
Foreign nationals or foreign companies that intend to acquire real estate outside the Restricted Zone, must previously present before the SRE a written document in which they agree to consider themselves Mexican nationals for such purposes and renounce to invoke the protection of their governments with respect to such property.
2. Sector: All Sectors
Subsector:
Obligations Concerned: Article 9.4 (Market Access) Article 10.3 (National Treatment)
Level of Government: Federal
Measures: Foreign Investment Law, Title VI, Chapter III
Description: Cross-Border Trade in Services and Investment
The National Foreign Investment Commission (hereinafter referred to as CNIE), in evaluating applications submitted for its consideration (acquisitions or establishment of investments in the restricted activities in accordance with the provisions of this Schedule), shall consider the following criteria:
(a) the impact on employment and worker training;
(b) the technological contribution;
(c) compliance with the environmental provisions contained in the ecological ordinances governing the matter; and
(d) in general, the contribution to increase the competitiveness of Mexico's productive plant.
When deciding on the merits of an application, the CNIE may only impose requirements that do not distort international trade.
3. Sector: All Sectors
Subsector:
Obligations Concerned: Article 10.3 (National Treatment)
Level of Government: Federal
Measures: Foreign Investment Law, Title I, Chapter III As qualified by the Description element
Description: Investment
A favorable resolution of the National Commission on Foreign Investment (hereinafter referred to as CNIE) is required for investors of the other Party or their investments to participate, directly or indirectly, in a proportion greater than 49% of the capital stock of Mexican companies within an unrestricted sector, only when the total value of the assets of the Mexican companies, at the time of submitting the acquisition request, exceeds the applicable threshold.
The applicable threshold for the review of an acquisition of a Mexican company will be the amount so determined by the CNIE. In any event, the threshold will not be less than US$150 million.
Each year, the threshold will be adjusted according to the nominal growth rate of Mexico's Gross Domestic Product, as published by the National Institute of Statistics and Geography (INEGI).
4. Sector: All Sectors
Subsector:
Obligations Affected: Article 10.3 (National Treatment) Article 10.6 (Senior Executives and Boards of Directors)
Level of Government: Federal
Measures: Political Constitution of the United Mexican States, Article 25
General Law of Cooperative Societies, Title I and Title II, Chapter II.
Federal Labor Law, Title I
Foreign Investment Law, Title I, Chapter III
Description: Investment
No more than 10% of the members of a Mexican cooperative production company may be foreign nationals.
Investors of the other Party or their investments may only acquire, directly or indirectly, up to 10% of the participation in a Mexican production cooperative society.
Foreign nationals may not hold management or general management positions in the cooperative societies.
A cooperative production company is an enterprise whose members unite their personal labor, whether physical or intellectual, for the purpose of producing goods and services.
intellectual, for the purpose of producing goods or services.
5. Sector: All Sectors
Subsector:
Obligations Concerned: Article 10.3 (National Treatment)
Level of Government:
Federal
Measures: Federal Law for the Promotion of Microindustry and Handicraft Activity, Chapters I, II, III and IV
Description: Investment
Only Mexican nationals may apply for a certificate to qualify as a microindustrial enterprise.
Mexican microindustrial companies may not have foreign nationals as partners.
The Federal Law for the Promotion of Microindustry and Artisan Activity defines a microindustrial company as one that has up to 15 workers, that is engaged in the transformation of goods and whose annual sales do not exceed the amounts determined periodically by the Ministry of Economy.
6. Sector: Agriculture, Livestock, Forestry and Lumber Activities
Subsector: Agriculture, Livestock or Forestry
Obligations Concerned: Article 10.3 (National Treatment)
Level of Government: Federal
Actions: Political Constitution of the United Mexican States, Article 27
Agrarian Law, Title VI
Foreign Investment Law, Title I, Chapter III
Description: Investment
Only Mexican nationals or Mexican companies may own land intended for agricultural, livestock or forestry purposes. Such companies must issue a special series of shares ("T" shares), which will represent the value of the land at the time of acquisition. Investors of the other Party or their investments may only acquire, directly or indirectly, up to 49% participation in the "T" shares.
7. Sector: Retail Trade
Subsector: Trade in Non-Food Products in Specialized Establishments
Obligations Concerned: Article 10.3 (National Treatment)
Level of Government: Federal
Measures: Ley de Inversión Extranjera, Título I, Capítulo III (Foreign Investment Law, Title I, Chapter III)
Description: Investment
Investors of the other Party or their investments may only acquire, directly or indirectly, up to 49% of the participation in an enterprise established or to be established in the territory of Mexico that is engaged in the sale of explosives, firearms, cartridges, ammunition and fireworks, not including the acquisition and use of explosives for industrial and extractive activities, and the elaboration of explosive mixtures for such activities.
8. Sector: Communications
Subsector: Entertainment Services (Open Sound and Television Broadcasting)
Obligations Concerned: Articles 9.5 (National Treatment) and 10.3 (National Treatment) Article 9.6 (Local Presence) Article 10.4 (Most-Favored-Nation Treatment)
Level of Government: Federal
Measures: Political Constitution of the United Mexican States, Articles 28 and 32
Ley de Vías Generales de Comunicación, Book I, Chapter III.
Federal Telecommunications Law, Chapter III, Section I Federal Radio and Television Law, Title III, Chapter I Regulations of the Federal Radio and Television Law, in Matters of Concessions, Permits and Content of Radio and Television Transmissions
Foreign Investment Law, Title I, Chapter II
Description: Cross Border Trade in Services and Investment
A concession granted by the telecommunications regulatory body is required to provide open radio and television broadcasting services.
Only Mexican nationals and Mexican companies with a foreigner exclusion clause may provide services or make investments in the activities mentioned in the preceding paragraph.
9. Sector: Communications
Subsector: Entertainment Services (Open sound and television broadcasting, and public telecommunications networks for the provision of restricted television and audio services).
Obligations Concerned: Article 9.5 (National Treatment) Article 10.7 (Performance Requirements)
Level of Government: Federal
Measures: Federal Law of Radio and Television, Title IV, Chapter III Regulations of the Federal Law of Radio and Television, in Matters of Concessions, Permits and Content of Radio and Television Broadcasts.
Regulation of the Restricted Audio and Television Service.
Description: Cross-Border Trade in Services and Investment
In order to protect copyrights, the licensee of an open commercial radio and television broadcasting station or of a Public Telecommunications Network requires prior authorization from the Ministry of the Interior (SEGOB) to import in any form radio or television programs for the purpose of rebroadcasting or distributing them in the territory of Mexico.
The authorization will be granted provided that the application is accompanied by documentation evidencing the copyright(s) for the retransmission or distribution of such programs.
10. Sector: Communications
Subsector: Entertainment Services (limited to open sound and television broadcasting, and public telecommunications networks for the provision of restricted television services).
Obligations Concerned: Article 9.5 (National Treatment) Article 10.7 (Performance Requirements)
Level of Government: Federal
Measures: Federal Radio and Television Law, Title IV, Chapters III and V.
Regulations of the Federal Law of Radio and Television, in Matters of Concessions, Permits and Content of Radio and Television Broadcasts.
Regulation of the Restricted Audio and Television Service.
Description: Cross Border Trade in Services and Investment
The use of the Spanish language or subtitles in Spanish is required in advertisements that are transmitted through open radio and television, or that are distributed in the Public Telecommunications Networks, within the territory of Mexico.
Advertising included in programs transmitted directly from outside the territory of Mexico may not be distributed when the programs are rebroadcast in the territory of Mexico.
The use of the Spanish language is required for the transmission of open and restricted television and radio programs, except when the Ministry of the Interior (Secretaría de Gobernación, SEGOB) authorizes the use of another language.
The majority of the time of the daily broadcast programming that uses personal acting must be covered by Mexican nationals.
In Mexico, radio or television announcers and entertainers who are not Mexican nationals must obtain an authorization from SEGOB to perform in Mexico such activities.
11. Sector: Communications