(a) the production, distribution, marketing, sale, and delivery of a service;
(b) the purchase or use of, or payment for, a service;
(c) the access to and use of distribution, transport, or telecommunications networks and services in connection with the supply of a service;
(d) the presence in its territory of a service supplier of the other Party; and
(e) the provision of a bond or other form of financial security as a condition for the provision of a service.
2. For the purposes of this Chapter, measures adopted or maintained by a Party means measures adopted or maintained by:
(a) a national , sub-national, or local government and authority; or
(b) a non-governmental body of a Party in the exercise of powers delegated by a national, sub-national, or local government and authority of the Party.
3. Notwithstanding paragraph 1, Articles 9.4 and 9.7 apply to measures adopted or maintained by a Party affecting the supply of a service in its territory by a covered investment 1 as defined in Article 8.45 (Definitions).
4. This Chapter does not apply to:
(a) financial services as defined in Article 10.20 (Definitions);
(b) air services, including domestic and international air transportation services, whether scheduled or non-scheduled, and related services in support of air services, other than:
(i) aircraft repair and maintenance services;
(ii) the selling and marketing of air transport services; or
(iii) computer reservation system (CRS) services;
(c) procurement by a Party or a state enterprise; or
(d) subsidies or grants provided by a Party or a state enterprise, including government-supported loans, guarantees, or insurance.
5. This Chapter is not to be construed to impose an obligation on a Party with respect to a national of the other Party seeking access to its employment market, or a national of the other Party employed on a permanent basis in its territory, and does not confer that national a right with respect to that access or employment.
6. This Chapter does not apply to services supplied in the exercise of governmental authority in a Party's territory.
Article 9.2. National Treatment
1. Each Party shall accord to service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to its own service suppliers.
2. The treatment accorded by a Party under paragraph 1 means, with respect to a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to service suppliers of the Party of which it forms a part.
Article 9.3. Most-favoured-nation Treatment
Each Party shall accord to service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to service suppliers of a non-party.
Article 9.4. Market Access
A Party shall not adopt or maintain, either on the basis of its entire territory or on the basis of a sub-national government, a measure that:
(a) imposes limitations on:
(i) the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;
(ii) the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of service operations or 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 (2) ; or
(iv) 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 provision of a specific service in the form of numerical quotas or the requirement of an economic needs test; or
(b) restricts or requires specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 9.5. Local Presence
A Party shall not require a service supplier of the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.
Article 9.6. Non-conforming Measures
1. Articles 9.2 through 9.5 do not apply to:
(a) an existing non-conforming measure that is maintained by:
(i) the national government of a Party, as set out in its Schedule to Annex I;
(ii) a sub-national government of a Party as set out by that Party in its Schedule to Annex I (3) ; or
(iii) a local government of a Party (4) ;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or
(c) an amendment to a non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 9.2 through 9.5.
2. Articles 9.2 through 9.5 do not apply to a measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities, as set out in its Schedule to Annex II. 3. Annex 9-A sets out specific commitments with regard to consultation regarding a non-conforming measure adopted or maintained by a sub-national government.
Article 9.7. Domestic Regulation
1. If a Party requires authorisation for the supply of a service covered by this Chapter, the Party, through its competent authorities, shall, within a reasonable period of time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the Party, through its competent authorities, shall provide, without undue delay, information concerning the status of the application.
2. The Parties note their mutual obligations related to domestic regulation in Article VI:4 of the GATS and affirm their commitment respecting the development of any necessary disciplines pursuant to Article VI:4 of the GATS. To the extent that any such disciplines are adopted by the WTO Members, the Parties shall, as appropriate, review them jointly with a view to determining whether this Article needs to be supplemented.
Article 9.8. Recognition
1. For the purposes of fulfilment, in whole or in part, of its standards or criteria for the authorisation, licensing, or certification of service suppliers, and subject to the requirements of paragraph 5, a Party may recognise the education or experience obtained, requirements met, or licenses or certifications granted in a particular country. Such recognition, which may be achieved through harmonisation or otherwise, may be based on an agreement or arrangement with the country concerned or may be accorded autonomously.
2. If a Party recognises, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted in the territory of a non-party, Article 9.3 is not to be construed to require the Party to accord such recognition to the education or experience obtained, requirements met, or licenses or certifications granted in the territory of the other Party.
3. On request of the other Party, a Party shall promptly provide information, including appropriate descriptions, concerning a recognition agreement or arrangement that the Party or relevant bodies in its territory have concluded.
4. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for the other Party, if the other Party is interested, to negotiate accession to such an agreement or arrangement or to negotiate a comparable one with that other Party. If a Party accords recognition autonomously, it shall afford adequate opportunity for the other Party to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Party's territory should be recognised.
5. A Party shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorisation, licensing, or certification of service suppliers, or a disguised restriction on trade in services.
6. The Parties shall endeavour to ensure that the relevant bodies in their respective territories:
(a) exchange information and enter into negotiations with the relevant bodies of the other Party to develop an agreement or arrangement referred to in paragraph 1;
(b) meet within 12 months of the date of entry into force of this Agreement, to develop an agreement or arrangement referred to in paragraph 1, for sectors set out in Annex 9-B;
(c) be guided by Annex 9-C for the negotiations of such agreement or arrangement; and
(d) provide notification following the conclusion of an agreement or arrangement to the Commission.
7. On receipt of a notification referred to in paragraph 6(d), the Commission shall review the agreement or arrangement within a reasonable period of time to determine whether it is consistent with this Agreement. Based on the Commission's review, each Party shall ensure that its respective competent authorities, if appropriate, implement the agreement or arrangement within a mutually agreed period of time.
Article 9.9. Temporary Licensing
1. If the Parties agree, each Party shall encourage the relevant bodies in its territory to develop procedures for the temporary licensing of professional service suppliers of the other Party.
2. Notwithstanding Article 9.8, each Party shall endeavour to ensure that the relevant bodies in their respective territories:
(a) exchange information and enter into negotiations with the relevant bodies of the other Party to develop procedures for the temporary licensing of professional service suppliers of the other Party;
(b) meet within 12 months of the date of entry into force of this Agreement, to develop procedures referred to in subparagraph (a) for the sectors set out in Annex 9-B;
(c) be guided by Annex 9-C for the negotiations concerning procedures referred to in subparagraph (a); and
(d) provide notification to the Commission regarding the implementation of any such procedures by the relevant bodies in the Parties' respective territories.
3. On receipt of a notification referred to in paragraph 2(d), the Commission shall review the procedures within a reasonable period of time to determine whether they are consistent with this Agreement. Based on the Commission's review, each Party shall ensure that its respective competent authorities, if appropriate, implement the procedures within a mutually agreed period of time.
4. If a relevant body in the territory of a Party implements procedures for the temporary licensing of professional service suppliers of a non-party, the Party shall notify the existence of such procedures promptly to the other Party and shall, within a reasonable period of time, provide information on the terms and conditions that were agreed upon for the implementation of the procedures.
Article 9.10. Denial of Benefits
1. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service supplier is an enterprise owned or controlled by persons of a non-party, and the denying Party adopts or maintains measures with respect to the non-party or a person of the non-party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise.
2. A Party may deny the benefits of this Chapter to a service supplier of the other Party if the service supplier is an enterprise owned or controlled by persons of a non-party or of the denying Party that has no substantial business activities in the territory of the other Party.
Article 9.11. Payments and Transfers
1. Each Party shall permit all payments and transfers relating to the cross-border supply of services to be made freely and without delay into and out of its territory.
2. Each Party shall permit such payments and transfers relating to the cross-border supply of services to be made in a freely usable currency at the market rate of exchange prevailing at the time of payment or transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a payment or transfer through the equitable, non-discriminatory, and good faith application of its law relating to:
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading, or dealing in securities, futures, options, or derivatives;
(c) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(d) criminal or penal offences; or
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings.
Article 9.12. Definitions
For the purposes of this Chapter:
aircraft repair and maintenance services means such activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and does not include so-called line maintenance;
computer reservation system (CRS) services means services supplied by computerised systems that contain information about air carriers' schedules, availability, fares, and fare rules, through which reservations can be made or tickets may be issued;
cross-border trade in services or cross-border supply of services means the supply of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party by a person of that Party to a person of the other Party; or
(c) by a national of a Party in the territory of the other Party, but does not include the supply of a service in the territory of a Party by a covered investment, as defined in Article 8.45 (Definitions);
enterprise means an "enterprise" as defined in Article 1.8 (Definitions of General Application) and a branch of an enterprise;
enterprise of a Party means an enterprise constituted or organised under the domestic law of a Party, and a branch of that enterprise located in the territory of a Party and carrying out business activities there;
professional services means services, the supply of which requires specialised post-secondary education, or equivalent training or experience or examination, and for which the right to practice is granted or restricted by a Party, but does not include services supplied by tradespersons or crew members of a vessel or aircraft;
selling and marketing of air transport services means opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising, and distribution, but does not include the pricing of air transport services nor the applicable conditions;
service supplied in the exercise of governmental authority means a service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers; and
service supplier of a Party means a person of that Party that seeks to supply or supplies a service (5).
Chapter Ten. Financial Services
Article 101. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors of the other Party, or investments of those investors, in financial institutions in the Party's territory; and
(c) cross-border trade in financial services.
2. Chapters Eight (Investment) and Nine (Cross-Border Trade in Services) apply to measures described in paragraph 1 only to the extent that those Chapters or Articles of those Chapters are incorporated into this Chapter.
(a) Articles 8.10 (Investment and Environment), 8.11 (Expropriation and Compensation), 8.12 (Transfers), 8.14 (Denial of Benefits), 8.15 (Special Formalities and Information Requirements) and 9.10 (Denial of Benefits) are incorporated into and made a part of this Chapter.
(b) Section B of Chapter Eight (Investor-State Dispute Settlement) is incorporated into and made a part of this Chapter solely for claims that a Party has breached Articles 8.11 (Expropriation and Compensation), 8.12 (Transfers), and 8.14 (Denial of Benefits) as incorporated into this Chapter.
(c) Article 9.11 (Payments and Transfers) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 10.5.
3. This Chapter is not to be construed to prevent a Party, including its public entities, from exclusively conducting or providing in its territory:
(a) activities or services forming part of a public retirement plan or statutory system of social security; or
(b) activities or services for the account, with the guarantee or using the financial resources of the Party, including its public entities.
4. This Chapter does not apply to domestic laws, regulations, or requirements governing the procurement by government entities of financial services purchased for governmental purposes and not with a view to commercial resale or use in the supply of services for commercial sale.
Article 10.2. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords to its own investors in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.
2. Each Party shall accord to financial institutions of the other Party and to investments of investors of the other Party in financial institutions treatment no less favourable than that it accords to its own financial institutions and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. For the purposes of the national treatment obligations in Article 10.5.1, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favourable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service.
4. The treatment that a Party is required to accord under paragraphs 1, 2 and 3 means, with respect to measures adopted or maintained by a sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to investors in financial institutions, financial institutions, investments of investors in financial institutions, and financial service suppliers of the Party of which it forms a part.
Article 10.3. Most-favoured-nation Treatment
Each Party shall accord to investors of the other Party, financial institutions of the other Party, investments of investors of the other Party in financial institutions, and cross-border financial service suppliers of the other Party treatment no less favourable than that it accords to investors, financial institutions, investments of investors in financial institutions, and cross-border financial service suppliers of a non-party, in like circumstances.
Article 10.4. Market Access for Financial Institutions
A Party shall not adopt or maintain, with respect to financial institutions of the other Party, or investors of the other Party seeking to establish such institutions, either on the basis of its entire territory or on the basis of a sub-national government, a measure that: (a) imposes limitations on:
(i) the number of financial institutions in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;
(ii) the total value of financial service transactions or assets in the form of numerical quotas, or the requirement of an economic needs test;
(iii) the total number of financial service operations or the total quantity of financial services output expressed in terms of designated numerical units in the form of quotas, or the requirement of an economic needs test (1) ; or
(iv) the total number of natural persons that may be employed in a particular financial service sector or that a financial institution may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas, or the requirement of an economic needs test; or
(b) restricts or requires specific types of legal entity or joint venture through which a financial institution may supply a service.
Article 10.5. Cross-border Trade (2)
1. Each Party shall permit, under terms and conditions that accord national treatment, cross-border financial service suppliers of the other Party to supply the services specified in Annex 10-A.
2. Each Party shall permit persons located in its territory, and its nationals, wherever they are located, to purchase financial services from cross-border financial service suppliers of the other Party located in the territory of the other Party. This obligation does not require a Party to permit such suppliers to do business or solicit in its territory. Subject to paragraph 1, each Party may define "doing business" and "solicitation" for the purposes of this obligation.
3. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration of cross-border financial service suppliers of the other Party and of financial instruments.
Article 10.6. New Financial Services (3)
A Party shall permit a financial institution of the other Party to supply a new financial service that the Party would permit its own financial institutions, in like circumstances, to supply without additional legislative action by the Party. Notwithstanding Article 10.4(b), a Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorisation for the supply of the service. If a Party requires a financial institution to obtain authorisation to supply a new financial service, the Party shall decide within a reasonable time whether to issue the authorisation and the authorisation may only be refused for prudential reasons.
Article 10.7. Treatment of Certain Information
This Chapter does not require a Party to furnish or allow access to:
(a) information related to the financial affairs and accounts of individual customers of financial institutions or cross-border financial service suppliers; or
(b) confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or prejudice legitimate commercial interests of particular enterprises.
Article 10.8. Senior Management and Boards of Directors (4)
1. A Party shall not require financial institutions of the other Party to engage natural persons of a particular nationality as senior managerial or other essential personnel.
2. A Party shall not require that more than a simple majority of the board of directors of a financial institution of the other Party be composed of nationals of the Party, or natural persons residing in the territory of the Party.
Article 10.9. Non-conforming Measures
1. Articles 10.2 through 10.5 and Article 10.8 do not apply to:
(a) an existing non-conforming measure that is maintained by:
(i) the national government of a Party, as set out in Section A of its Schedule to Annex III;
(ii) a sub-national government of a Party as set out by that Party in Section A of its Schedule to Annex III (5) ; or
(iii) a local government of a Party (6) ;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or