2. Nothing in this Chapter shall be construed to oblige a Party to accept the standards of the other Party.
3. Nothing in this Chapter shall be construed to affect the rights and obligations of either Party under the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement, as may be amended.
Article 70. Confidentiality
1. Each Party shall maintain, in accordance with its laws and regulations, the confidentiality of information provided to it in confidence pursuant to this Chapter and shall protect that information from disclosure that could prejudice the competitive position of the persons providing the information.
2. Information obtained pursuant to this Chapter shall not be used by a Party in any criminal proceedings carried out by a court or a judge, unless the information is requested from the other Party and provided to the former Party, through the diplomatic channels or other channels established in accordance with the applicable laws of the requested Party.
Chapter 7. Trade In Services
Article 71. General Principles
The general principles of this Chapter are:
(a) to liberalise trade in services between the Parties, in accordance with third paragraph of the preamble and Article V of the GATS; and
(b) to provide a framework for the Parties to improve the efficiency, competitiveness and diversity of services and service suppliers.
Article 72. Scope and Coverage
1. This Chapter shall apply to measures by a Party affecting trade in services.
2. This Chapter shall not apply to:
(a) in respect of air transport services, measures affecting traffic rights, however granted; or measures affecting services directly related to the exercise of traffic rights, other than measures affecting:
(i) aircraft repair and maintenance services;
(ii) the selling and marketing of air transport services; and
(iii) computer reservation system services;
(b) cabotage in maritime transport services;
(c) subsidies or grants provided by a Party or a state enterprise thereof, including governmentsupported loans, guarantees, insurance and any conditions attached to the receipt or continued receipt of such subsidies or grants;
(d) measures pursuant to immigration laws and regulations;
(e) measures affecting natural persons seeking access to the employment market of a Party, or measures regarding citizenship, residence or employment on a permanent basis; and
(f) government procurement.
3. With respect to financial services, the Annex on Financial Services to the GATS shall apply mutatis mutandis.
Note: The term “Panels” referred to in paragraph 4 of the Annex on Financial Services to the GATS shall be deemed to read “arbitral tribunals” referred to in Chapter 14 of this Agreement.
4. Except for Articles 77, 82, 89 and 114, paragraph 4 of Article 90 and Chapters 13 and 14, any rights and obligations under this Agreement which are not contained in the GATS shall not apply to financial services.
Article 73. Definitions
For the purposes of this Chapter:
(a) the term “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 socalled line maintenance;
(b) the term “Area” means with respect to a Party:
(i) the territory of that Party, including its territorial sea; and
(ii) the exclusive economic zone and the continental shelf with respect to which that Party exercises sovereign rights or jurisdiction in accordance with international law;
(c) the term “commercial presence” means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of an enterprise; or
Note: The term “acquisition” includes partial acquisition of equity participation in an enterprise supplying a service.
(ii) the creation or maintenance of a branch or a representative office, within the Area of a Party for the purposes of supplying a service;
(d) the term “computer reservation system services” means services provided 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;
(e) the term “enterprise” means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentallyowned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(f) the term “enterprise of the other Party” means an enterprise which is either:
(i) constituted or otherwise organised under the law of the other Party and is engaged in substantive business operations in that other Party; or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(AA) natural persons of the other Party; or
(BB) enterprises of the other Party identified under subparagraph (i) above;
(g) an enterprise is:
(i) “owned” by persons of a Party or a non-Party if more than 50 per cent of the equity interest in it is beneficially owned by such persons;
(ii) “controlled” by persons of a Party or a nonParty if such persons have the power to name a majority of its directors or otherwise to legally direct its actions; and
(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;
(h) the term “existing” means in effect as of the date of entry into force of this Agreement;
(i) the term “measure” means any measure by a Party, including that of taxation, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form;
(j) the term “measures by a Party” means measures taken by:
(i) central or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central or local governments or authorities; in fulfilling its obligations and commitments under this Chapter, each Party shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Chapter by its local governments and authorities and non-governmental bodies in the exercise of powers delegated by its central or local governments and authorities within its Area;
(k) the term “measures by a Party affecting trade in services” includes measures in respect of:
(i) the purchase, payment or use of a service;
(ii) the access to and use of, in connection with the supply of a service, services which are required by a Party to be offered to the public generally; and
(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the Area of the other Party;
(l) the term “monopoly supplier of a service” means any person, public or private, which in the relevant market of the Area of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;
(m) the term “natural person of the other Party” means a natural person who resides in the other Party or elsewhere and who under the law of the other Party is a national of the other Party;
(n) the term “person” means either a natural person or an enterprise;
(o) the term “sector” of a service means:
(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Party’s Schedule of specific commitments in Annex 5; or
(ii) otherwise, the whole of that service sector, including all of its subsectors;
(p) the term “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. These activities do not include the pricing of air transport services nor the applicable conditions;
(q) the term “service consumer” means any person that receives or uses a service;
(r) the term “service of the other Party” means a service which is supplied:
(i) from or in the Area of the other Party, or in the case of maritime transport, by a vessel registered under the laws of the other Party, or by a person of the other Party which supplies the service through the operation of a vessel or its use in whole or in part; or
(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of the other Party;
(s) the term “services” includes any service in any sector except services supplied in the exercise of governmental authority;
(t) the term “a service supplied in the exercise of governmental authority” means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;
(u) the term “service supplier” means any person that supplies a service;
Note: Where the service is not supplied directly by an enterprise but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the enterprise) shall, nonetheless, through such presence be accorded the treatment provided for service suppliers under this Chapter. Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the Area where the service is supplied.
(v) the term “service supplier of the other Party” means any natural person of the other Party or enterprise of the other Party, that supplies a Service;
(w) the term “state enterprise” means an enterprise owned or controlled by a Party;
(x) the term “supply of a service” includes the production, distribution, marketing, sale and delivery of a service;
(y) the term “trade in services” means the supply of a service:
(i) from the Area of one Party into the Area of the other Party (“cross-border supply
mode”);
(ii) in the Area of one Party to the service consumer of the other Party (“consumption abroad mode”);
(iii) by a service supplier of one Party, through commercial presence in the Area of the other Party (“commercial presence mode”); and
(iv) by a service supplier of one Party, through presence of natural persons of that Party in the Area of the other Party (“presence of natural persons mode”); and
(z) the term “traffic rights” means the rights for scheduled and non-scheduled services to operate and/or to carry passengers, cargo and mail for remuneration or hire from, to, within, or over a Party, including points to be served, routes to be operated, types of traffic to be carried, capacity to be provided, tariffs to be charged and their conditions, and criteria for designation of airlines, including such criteria as number, ownership and control.
Article 74. Market Access
1. With respect to market access through the modes of supply defined in paragraph (y) of Article 73, each Party shall accord services and service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of specific commitments in Annex 5.
Note: If a Party undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph (y)(i) of Article 73 and if the cross-border movement of capital is an essential part of the service itself, that Party is thereby committed to allow such movement of capital. If a Party undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph (y)(iii) of Article 73, it is thereby committed to allow related transfers of capital into its Area.
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 Area, unless otherwise specified in its Schedule of specific commitments in Annex 5, 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;
Note: This subparagraph does not cover measures of a Party which limit inputs for the supply of services.
(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 75. National Treatment
1. In the sectors inscribed in its Schedule of specific commitments in Annex 5, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the other 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.
Note: Specific commitments assumed under this Article shall not be construed to require either Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.
2. A Party may meet the requirement of paragraph 1 above by according to services and service suppliers of the other
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 a Party compared to like services or service suppliers of the other Party.
4. A Party may not invoke the preceding paragraphs of this Article under Chapter 14 with respect to a measure of the other Party that falls within the scope of an international agreement between them relating to the
avoidance of double taxation.
Article 76. Additional Commitments
The Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 74 and 75, including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party’s Schedule of specific commitments in Annex 5.
Article 77. Schedule of Specific Commitments
1. Each Party shall set out in a schedule the specific commitments it undertakes under Articles 74, 75 and 76.
2. With respect to sectors where the specific commitments are undertaken, each Schedule of specific commitments in Annex 5 shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments;
and
(d) where appropriate, the time-frame for implementation of such commitments.
3. Measures inconsistent with both Articles 74 and 75 shall be inscribed in the column relating to Article 74. This inscription will be considered to provide a condition or qualification to Article 75 as well.
4. With respect to sectors or subsectors where the specific commitments are undertaken and which are scheduled “SS”, all the existing measures inconsistent with Articles 74 and 75 shall be inscribed as terms, limitations, conditions and qualifications, referred to in subparagraphs 2(a) and (b) above.
5. For the purposes of transparency, sectors and subsectors which are not subject to any specific commitment under Article 74, 75 or 76 shall also appear in the Schedules of specific commitments in Annex 5.
6. Schedules of specific commitments shall be annexed to this Agreement as Annex 5.
Note: Services Sectoral Classification List (GATT Secretariat’s Document MTN.GNS/W/120, dated 10 July 1991) serves as a guideline for the Parties in listing all services sectors in their respective schedules.
Article 78. Modification of Schedules
1. Any modification or withdrawal of specific commitments on trade in services shall be made in accordance with paragraph 1 of Article 171. In the negotiations for such modification or withdrawal, the Parties shall endeavour, in line with subparagraph 2(a) of Article XXI of the GATS, to maintain a general level of mutually advantageous commitments not less favourable to trade than that provided for in their Schedules of specific commitments in Annex 5 prior to such negotiations.
2. With regard to the same commitment that appears in a Party’s Schedule of specific commitments under both the GATS and this Agreement, if modification or withdrawal has been made to such commitment with regard to its Schedule of specific commitments under the GATS and compensatory adjustment has been made to the other Party as an “affected Member” in accordance with Article XXI of the GATS, the Parties shall agree to amend this Agreement to incorporate such modification or withdrawal into it without further negotiation, subject to their applicable domestic procedures.
Article 79. Most-Favoured-Nation Treatment
If, after this Agreement enters into force, a Party enters into any agreement on trade in services with a nonParty, it shall consider a request by the other Party for the incorporation in this Agreement of treatment no less favourable than that provided under the former agreement.
Article 80. Domestic Regulation
1. In sectors where specific commitments are undertaken, 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 the other 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. The provisions of paragraph 2 above shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.
4. Where authorisation is required for the supply of a service on which a specific commitment has been made, the competent authorities of a Party shall, within a reasonable period of time after the submission of an application considered complete under that Party’s domestic laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of the Party shall provide, without undue delay, information concerning the status of the application.
5. In sectors where a Party has undertaken specific commitments subject to any terms, limitations, conditions or qualifications set out therein, the Party shall not apply licensing and qualification requirements and technical standards that nullify or impair such specific commitments in a manner which:
(a) does not comply with the following criteria:
(i) based on objective and transparent criteria, such as competence and the ability to supply the service;
(ii) not more burdensome than necessary to ensure the quality of the service; or
(iii) in the case of licensing procedures, not in themselves a restriction on the supply of the service; and
(b) could not reasonably have been expected of that Party at the time the specific commitments in those sectors were made.
6. In sectors not subject to specific commitments in its Schedule, a Party shall endeavour to ensure that licensing and qualification requirements and technical standards are in conformity, to the extent possible, with the criteria outlined in subparagraph 5(a) above.
7. In determining whether a Party is in conformity with its obligations under paragraph 5 above, account shall be taken of international standards of relevant international organisations applicable to that Party.
Note: The term “relevant international organisations” refers to international bodies whose membership is open to the relevant bodies of the Parties.
Article 81. Mutual Recognition
1. A Party may recognise the education or experience obtained, requirements met, or licences or certifications granted in the other Party for the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorisation, licensing or certification of service suppliers of the other Party.
2. Recognition referred to in paragraph 1 above, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement between the Parties or may be accorded unilaterally.
3. Where a Party recognises, by agreement or arrangement between the Party and a non-Party or unilaterally, the education or experience obtained, requirements met or licences or certifications granted in the non-Party, the Party shall accord the other Party an adequate opportunity
to demonstrate that the education or experience obtained, requirements met or licences or certifications granted in the other Party should also be recognised.
Article 82. Transparency
Each Party shall prepare a non-legally binding list providing all relevant laws and regulations affecting the obligations under Articles 74, 75 and/or 76 in all sectors. Such a list shall be exchanged with the other Party and made public at the time of entry into force of this Agreement and shall be subject to future review and revision as necessary.
Note: The list under this Article is made solely for the purposes of transparency, and shall not be construed to affect the rights and obligations of a Party under this Chapter. Any review or revision under this Article is solely for the purposes of updating such list.
Article 83. Monopolies and Exclusive Service Suppliers
1. Each Party shall ensure that any monopoly supplier of a service in its Area does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with the Party’s 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 Party’s specific commitments, the Party shall ensure that such a supplier does not abuse its monopoly position to act in its Area in a manner inconsistent with such commitments.
3. If a Party has reason to believe that a monopoly supplier of a service of the other Party is acting in a manner inconsistent with paragraph 1 or 2 above, it may request the other Party to provide specific information concerning the relevant operations.
4. 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 Area.
Article 84. Emergency Safeguard Measures
The Parties shall enter into consultations with a view to starting negotiations on emergency safeguard measures no later than 6 months after the date of entry into force of this Agreement. The results of such negotiations, if any, shall be incorporated into this Chapter in accordance with paragraph 1 of Article 171.