b) shall not be more burdensome than necessary to ensure quality of service; and
c) in the case of licensing procedures, shall not in themselves constitute a restriction on the supply of the service.
3. If the results of the negotiations related to paragraph 4 of Article VI of the GATS (or the results of any similar negotiations undertaken in other multilateral fora in which both Parties participate) enter into force for each Party, this Article shall be amended, as appropriate, after consultations between the Parties, so that those results become an integral part of this Agreement.
Article 10.10. Transparency
Each Party shall establish or maintain appropriate mechanisms to respond to inquiries from interested persons concerning its regulations relating to matters covered by this Chapter, in accordance with its laws and regulations on transparency. (6)
Article 10.11. Mutual Recognition
1. For purposes of complying, in whole or in part, with its standards or criteria for the authorization, licensing or certification of service suppliers, and subject to the requirements of paragraph 3, a Party may recognize education or experience obtained, requirements met, or licenses or certifications granted in a Party or non- Party. Such recognition, which may be achieved through harmonization or otherwise, may be based on an agreement or arrangement with the Party or non-Party, or may be granted autonomously.
2. Where a Party recognizes, autonomously or by agreement or arrangement, education or experience obtained, qualifications completed, or licenses or certifications granted in the territory of a non-Party, Article 10.5 shall not be construed to require the Party to grant such recognition to education or experience obtained, qualifications completed, or licenses or certifications granted in the territory of the other Party.
3. No Party shall grant recognition in a manner that, in the application of its rules or criteria for the authorization, licensing or certification of service suppliers, constitutes a disguised restriction on trade in services.
4. The Annex to Article 10.11 applies to measures adopted or maintained by a Party relating to the licensing or certification of professional service suppliers, as set out in the provisions of that Annex.
Article 10.12. Transfers and Payments
1. Each Party shall allow all transfers and payments related to the cross-border supply of services to be made freely and without delay to and from its territory.
2. Each Party shall allow all transfers and payments related to the cross-border supply of services to be made in freely circulating currency at the market rate of exchange prevailing on the date of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay the completion of the transfer or payment by the equitable, non-discriminatory and good faith application of its laws with respect to:
a) bankruptcy, insolvency or protection of creditors' rights;
b) issuance, marketing or sale of securities, futures, options or derivatives;
c) financial reports or records of transfers, when necessary to assist law enforcement or financial regulatory authorities;
d) criminal offenses; or
e) guarantee of compliance with judicial or administrative orders or rulings.
Article 10.13. Denial of Benefits
Upon notice and subject to Article 15.4 (Consultations), a Party may deny the benefits of this Chapter to:
a) aservice supplier of the other Party, where the Party determines that the service is being supplied by an enterprise owned or controlled by persons of a non-Party and:
i) the Party denying benefits does not maintain diplomatic relations with the non-Party; or
ii) the Party denying benefits adopts or maintains measures with respect to the non-Party that prohibit transactions with that enterprise that would be violated or circumvented if the benefits of this Chapter were accorded to that enterprise; or
b) a service supplier of the other Party, where the Party determines that the service is being supplied by an enterprise owned or controlled by persons of a non-Party, and that does not engage in substantial business activities in the territory of that other Party.
Article 10.14. Implementation and Consultation
The Parties shall consult annually, unless otherwise agreed, to review the implementation of this Chapter and to consider other matters of trade in services of mutual interest. Among other matters, the Parties shall consult with a view to determining the feasibility of removing any continued citizenship or permanent residence requirements for the licensing or certification of service suppliers of each Party. Such consultations shall also include consideration of the development of procedures that could contribute to increasing the transparency of the measures described in paragraphs 1(c) and 3 of Article 10.8.
Annex to Article 10.11. Professional Services
Scope of application
1. This Annex applies to measures adopted or maintained by the Parties in relation to the granting of licenses or certificates to professional service suppliers, as set out in the provisions befow.
Target
2. The purpose of this Annex is to establish the rules to be observed by the Parties to harmonize between them, the measures that will regulate the mutual recognition of licenses or certificates for the rendering of professional services, through the granting of authorization for professional practice.
Processing of applications for the granting of licenses and certificates
3. Each Party shall ensure that its competent authorities, within a reasonable time after the submission of an application for licenses or certificates by a national of the other Party:
a) if the application is complete, decide on the application and notify the applicant of the decision; or
b) if it is incomplete, notify the applicant, without undue delay, of the status of the application and of any additional information required under their national law.
Development of professional standards
4. The Parties shall encourage the relevant agencies in their respective territories to develop mutually acceptable standards and criteria for the licensing and certification of professional service providers, as well as to submit recommendations to the Commission on their mutual recognition.
5. The standards and criteria referred to in paragraph 4 may be developed in relation to the following aspects:
a) education: accreditation of educational institutions or academic programs;
b) examinations: qualifying examinations for licensing, including alternative methods of evaluation, such as oral examinations and interviews;
c) experience: duration and nature of experience required to obtain a license;
d) conduct and ethics: standards of professional conduct and the nature of disciplinary measures in the event that professional service providers contravene them;
e) professional development and certification renewal: continuing education and the corresponding requirements to maintain professional certification;
f) scope of action: extent and limits of authorized activities;
g) local knowledge: requirements on knowledge of aspects such as local laws and regulations, language, geography or climate; and
h) consumer protection: alternative requirements to residency, such as bonding, professional liability insurance and client reimbursement funds to ensure consumer protection.
6. Upon receipt of a recommendation referred to in paragraph 4, the Commission shall review it within a reasonable period of time to decide whether it is consistent with the provisions of this Agreement. Based on the review conducted by the Commission, each Party shall encourage its respective competent authorities to implement that recommendation in appropriate cases within a mutually agreed period of time.
Granting of temporary licenses
7. Where agreed by the Parties, each Party shall encourage the relevant agencies in their respective territories to develop procedures for the issuance of temporary licenses to professional service providers of the other Party.
Review
8. The Commission shall periodically review, at least once every 3 years, the application of the provisions of this Annex.
Professional Services Working Group
9. The Parties establish a Working Group on Professional Services, including representatives of each Party, to facilitate the activities listed in paragraphs 4 through 7 of this Annex.
10. Issues for the working group to consider with respect to general professional services and, as appropriate, for individual professional services include:
a) develop workable procedures on standards for licensing and certification of professional service providers;
b) provide for the granting in its territory of temporary licenses for service suppliers of the other Party; and
c) other matters of mutual interest related to the provision o f professional services.
11. To facilitate the efforts of the working group, each Party shall consult with the relevant agencies in its territory to identify the professional services to which the working group shall give priority. The first meeting of this group shall focus on discussing the outcome of such consultations and shall be held no later than one year after the entry into force of this Agreement.
12. The working group shall report to the Commission on its progress and future activities within 18 months of the entry into force of this Agreement.
Chapter XI. INVESTMENT
Section A. General Provisions
Article 11.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
ICSID: the International Centre for Settlement of Investment Disputes;
ICSID Convention: the Convention on the Settlement of Investment Disputes between States and Nationals of other States, concluded in Washington, D.C., on March 18, 1965;
New York Convention: the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded in New York, June 10, 1958;
enterprise: an enterprise as defined in Article 2.1 (General Definitions), and branches of that enterprise;
investment: the assets owned or controlled by investors of a Party, acquired in accordance with the laws and regulations of the other Party in its territory, listed below:
a) a company;
b) shares of a company;
c) debt instruments of a company:
i) when the company is a subsidiary of the investor; or
ii) when the original maturity date of the debt instrument is at least 3 years,
but does not include an obligation of a Party or a State enterprise, regardless of the original maturity date;
d) a loan to a company:
i) when the company is a subsidiary of the investor; or
ii) when the original maturity date of the loan is at least 3 years,
but does not include a loan to a Party or a State enterprise, regardless of the original maturity date;
e) an interest in a company, which allows the owner to participate in the company's revenues or profits;
f) an interest in an enterprise that entitles the owner to share in the equity of that enterprise in a liquidation, provided that it does not arise from an obligation or loan excluded under subsection (c) or (d);
g) real estate or other property, tangible or intangible, acquired or used for the purpose of economic benefit or for other business purposes; and
h) the participation resulting from capital or other resources in the territory of a Party intended for the development of an economic activity in such territory, inter alia, in accordance with:
i) contracts involving the presence of an investor's property in the territory of the other Party, including concessions, construction and turnkey contracts; or
ii) contracts where the remuneration depends substantially on the production, revenues or profits of a company;
but investment does not mean:
i) pecuniary claims arising exclusively from:
i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of the other Party; or
ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by the provisions of subsection (d); or
j) any other pecuniary claim, which does not involve the interest rates set forth in subsections (a) through (h);
investor of a Party: a Party or a State enterprise, or a national or enterprise of such Party, that intends to make (1), makes or has made an investment;
disputing party: the disputing investor or the disputing Party;
Disputing Party: the Party against which a claim is made under the terms of Section C of this Chapter;
disputing parties: the disputing investor and the disputing Party;
UNCITRAL Arbitration Rules: the Arbitration Rules of the United Nations Commission on International Trade Law, adopted by the United Nations General Assembly on December 15, 1976; and
ICSID Additional Facility Rules: the Additional Facility Rules for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes.
Article 11.2. Scope of Application
1. This Chapter applies to measures adopted or maintained by a Party relating to:
a) investors of the other Party;
b) investments of investors of the other Party made in its territory; and c) all investments in its territory, with respect to Articles 11.7 and 11.17.
2. This Chapter does not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapier XII (Financial Services).
3. The obligations of a Party under this Chapter shall apply to a state enterprise or other person when any of them is acting in the exercise of regulatory, administrative or other governmental authority delegated to it by that Party.
Section B. Investment Protection
Article 11.3. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
2. Each Party shall accord to investments of investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
3. Treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or region, treatment no less favorable than the most favorable treatment accorded by that state or region, in like circumstances, to investors and investments of the Party of which it forms an integral part.
Article 11.4. Most-favored-nation Treatment (2)
1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investors of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
2. Each Party shall accord to investments of investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investments of investors of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
Article 11.5. Standard of Treatment
Each Party shall accord to investors and investments of investors of the other Party the best of the treatment required by Articles 11.3 and 11.4.
Article 11.6. Minimum Standard of Treatment Under Customary International Law
1. Each Party shall accord to investments of investors of the other Party treatment consistent with the minimum standard of treatment under customary international law, including fair and equitable treatment and full protection and security.
2. For greater certainty, the concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to that required by the minimum standard of treatment of aliens under customary international law, or going beyond it. A finding that another provision of this Chapter or of a separate international agreement has been violated does not establish that this Article has been violated.
Article 11.7. Performance Requirements
1. No Party may impose or enforce any of the following requirements or enforce any commitment or initiative, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory for:
a) export a certain level or percentage of goods or services;
b) to reach a certain degree or percentage of domestic content;
c) to purchase or use or grant preference to goods produced or services rendered in its territory, or to purchase goods from producers or services from service providers in its territory;
d) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment;
e) restrict sales in its territory of the goods or services that such investment produces or provides, by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
f) transfer to a person in its territory technology, a production process or other proprietary knowledge, except where the requirement is imposed or the undertaking or initiative is enforced by a judicial or administrative tribunal or competent authority to remedy an alleged violation of competition laws, or to act in a manner not inconsistent with multilateral agreements relating to the protection of intellectual property rights; or
g) act as the exclusive supplier of the goods it produces or services it provides for a specific regional or global market.
2. A measure that requires an investment to employ a technology to comply generally with applicable health, safety or environmental requirements shall not be considered inconsistent with paragraph 1(f). For greater certainty, Articles 11.3 and 11.4 apply to such a measure.
3. No Party may condition the receipt or continued receipt of an advantage, in connection with an investment in its territory by an investor of a Party or of a non-Party, on the fulfillment of any of the following requirements:
a) to reach acertain degree or percentage of domestic content;
b) to purchase, use or give preference to goods produced in its territory, or to purchase goods from producers in its territory;
c) relate, in any way, the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment; or
d) restrict sales in its territory of the goods or services that such investment produces or renders, by relating such sales in any way to the volume or value of its exports or to the foreign exchange earnings it generates.
4. Nothing in paragraph 3 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment in its territory by an investor of the other Party or of a non-Party, on the requirement that it locate production, provide services, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.
5. Paragraphs 1 and 3 do not apply to any requirements other than those set forth in those paragraphs.
6. Provided that such measures are not applied in an arbitrary or unjustified manner, or do not constitute a disguised restriction on international trade or investment, nothing in paragraphs 1(b) or 1(c), or 3(a) or 3(b) shall be construed to prevent a Party from adopting or maintaining measures, including those of an environmental nature necessary to:
a) ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
b) protect human, animal or plant life or health; or
c) the preservation of living or non-living non-renewable natural resources.
Article 11.8. Senior Management and Boards of Directors
1. Neither Party may require an enterprise of that Party, which is an investment of an investor of the other Party, to appoint individuals of any particular nationality to senior management positions.
2. A Party may require that a majority of the members of a board of directors, or of any committee of such a board, of a company of that Party that is an investment of an investor of the other Party, is of a particular nationality or is resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 11.9. Nonconforming Measures
1. Articles 11.3, 11.4, 11.7 and 11.8 shall not apply to:
a) any existing non-conforming measure maintained by a Party:
i) at the federal or national level, as stipulated in its Annex I List (Non-Conforming Measures);
ii) at the state or regional level, for 6 months after the entry into force of this Agreement and thereafter, as a Party may indicate in its Schedule to Annex I (Nonconforming Measures), in accordance with paragraph 2; or
iii) at the municipal or local level;
b) the continuation or prompt renewal of any nonconforming measure referred to in subsection (a); or
c) the modification of any nonconforming measure referred to in subparagraph (a) provided that such modification does not diminish the degree of conformity of the measure, as in effect prior to the modification, with Articles 11.3, 11.4, 11.7, and 11.8.