(a) bankruptcy, insolvency or the protection of the rights of a creditor;
(b) issuing, trading or dealing in securities;
(c) criminal or penal offences;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; or
(e) ensuring compliance with an order or judgment in judicial or administrative proceedings.
4. A Party may not require one of its investors to transfer, or penalize one of its investors for failing to transfer, the income, earnings, profits or other amounts derived from, or attributable to, an investment in the territory of the other Party.
5. Paragraph 4 does not prevent a Party from imposing a measure through the equitable, non-discriminatory and good faith application of its domestic law relating to the matters in subparagraphs 3(a) through 3(e).
6. Notwithstanding the provisions of paragraphs 1, 2 and 4, and without limiting the applicability of paragraph 5, a Party may prevent or limit transfers by a financial institution to, or for the benefit of, an affiliate of or person related to that institution, through the equitable, non-discriminatory and good faith application of a measure relating to maintenance of the safety, soundness, integrity or financial responsibility of financial institutions.
7. Notwithstanding paragraph 1, a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict those transfers under the WTO Agreement and as set out in paragraph 3.
8. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures (2) that restrict transfers if the Party experiences serious balance of payments difficulties, or the threat thereof, provided that those measures:
(a) are in effect for a period not exceeding 18 months, and if exceptional circumstances arise such that a Party seeks to extend those measures, that Party shall coordinate in advance with the other Party concerning the implementation of any proposed extension;
(b) are not confiscatory;
(c) do not constitute a dual or multiple exchange rate practice;
(d) do not otherwise interfere with an investor's ability to earn a market rate of return on any restricted assets (3) in the territory of the Party;
(e) avoid unnecessary harm to the commercial, economic, or financial interests of the other Party;
(f) are temporary and phased out progressively as the situation that warrants the imposition of those measures improves;
(g) are applied on a national treatment or most-favoured-nation-treatment basis, whichever standard is more favorable;
(h) are promptly published by the government authorities responsible for financial services or central bank of the Party.
9. Paragraph 8 does not apply to measures that restrict:
(a) payments or transfers for current transactions (4), unless:
(i) the imposition of those measures complies with the procedures set out in the Articles of Agreement of the International Monetary Fund, adopted at Bretton Woods (New Hampshire) on 22 July 1944; and
(ii) the Party coordinates those measures in advance with the other Party; or
(b) payments or transfers associated with foreign direct investment.
Article 12. Transparency
1. The Parties shall progressively endeavour to improve the transparency of their legislative, regulatory, administrative, and judicial processes in compliance with their respective domestic acts and regulations.
2. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application respecting a matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested persons and the other Party to become acquainted with them.
3. To the extent possible, each Party shall:
(a) publish in advance any measure referred to in paragraph 2 that it proposes to adopt; and
(b) provide interested persons and the other Party a reasonable opportunity to comment on that proposed measure.
4. Upon request by a Party, the other Party shall provide information on a measure that may have an impact on a covered investment.
Article 13. Subrogation
1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance it has entered into in respect of an investment, the other Party shall recognize the validity of the subrogation in favour of the first-mentioned Party or agency to a right or title held by the investor.
2. A Party or an agency of a Party that is subrogated to a right of an investor in accordance with paragraph 1 is entitled to the same rights as those of the investor regarding the investment. Those rights may be exercised by the Party or an agency of the Party or by the investor if the Party or its agency so authorizes.
Article 14. Taxation Measures
1. Except as set out in this Article, this Agreement does not apply to a taxation measure.
2. This Agreement does not affect the rights and obligations of a Party under a tax convention. In the event of inconsistency between this Agreement and a tax convention, that convention prevails.
3. This Agreement does not require a Party to furnish or allow access to information that, if disclosed, would be contrary to the Party's law protecting information concerning the taxation affairs of a taxpayer.
4. Subject to paragraph 2, the provisions of Articles 4 (National Treatment) and 5 (Most- Favoured-Nation Treatment) apply to all taxation measures, other than those on income, capital gains or on the taxable capital of corporations, except that nothing in those Articles shall apply:
(a) to a non-conforming provision of an existing taxation measure;
(b) to the continuation or prompt renewal of a non-conforming provision of an existing taxation measure;
(c) to an amendment to a non-conforming provision of an existing taxation measure to the extent that the amendment does not decrease its conformity at the time of the amendment with those Articles; or
(d) to a new taxation measure that is aimed at ensuring the equitable and effective imposition or collection of taxes (including, for greater certainty, a measure that is taken by a Party to ensure compliance with the Party's taxation system or to prevent the avoidance or evasion of taxes) and that does not arbitrarily discriminate between persons, goods or services of the Parties.
5. Provided that the conditions in paragraph 6 are met:
(a) a claim by an investor that a taxation measure of a Party is in breach of an agreement between a national government authority of that Party and the investor concerning an investment shall be considered a claim for breach of this Agreement; and
(b) the provisions of Article 10 (Expropriation) apply to taxation measures.
6. An investor may not make a claim under paragraph 5 unless:
(a) the investor provides a copy of the notice of claim to the taxation authorities of the Parties; and
(b) six months after receiving notification of the claim by the investor, the taxation authorities of the Parties fail to reach a joint determination that, in the case of subparagraph 5(a), the measure does not contravene that agreement, or in the case of subparagraph 5(b), the measure in question is not an expropriation.
7. If, in connection with a claim by an investor of a Party or a dispute between the Parties, an issue arises as to whether a measure of a Party is a taxation measure, a Party may refer the issue to the taxation authorities of the Parties. A decision of the taxation authorities shall bind a Tribunal formed pursuant to Section C (Settlement of Disputes between an Investor and the Host Party) or arbitral panel formed pursuant to Section D (State-to-State Dispute Settlement Procedures). A Tribunal or arbitral panel seized of a claim or a dispute in which the issue arises may not proceed until it receives the decision of the taxation authorities. If the taxation authorities have not decided the issue within six months of the referral, the Tribunal or arbitral panel shall decide the issue.
8. Each Party shall notify the other Party by diplomatic note of the identity of the taxation authorities referred to in this Article.
Article 15. Health, Safety and Environmental Measures
The Parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, those measures to encourage the establishment, acquisition, expansion or retention in its territory of an investment of an investor. If a Party considers that the other Party has offered such an encouragement, it may request consultations with the other Party and the two Parties shall consult with a view to avoiding the encouragement.
Article 16. Corporate Social Responsibility
Each Party should encourage enterprises operating within its territory or subject to its jurisdiction to incorporate internationally recognized standards of corporate social responsibility in their practices and internal policies, such as statements of principle that have been endorsed or are supported by the Parties. These principles address issues such as labour, the environment, human rights, community relations and anti-corruption.
Article 17. Reservations and Exceptions
1. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), 8 (Senior Management, Boards of Directors and Entry of Personnel) and 9 (Performance Requirements) shall not apply to:
(a)(i) any existing non-conforming measure, maintained in the territory of a Party;
(ii) any measure maintained or adopted after the date of entry into force of this Agreement that, at the time of sale or other disposition of a government's equity interests in, or the assets of, an existing state enterprise or an existing governmental entity:
- prohibits or imposes limitations on the ownership or control of equity interests or assets, or
- imposes nationality requirements relating to senior management or members of the board of directors;
(b) the continuation or prompt renewal of any non-conforming measure referred to in paragraph (a); or
(c) an amendment to any 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 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), 8 (Senior Management, Boards of Directors and Entry of Personnel) and 9 (Performance Requirements).
2. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment), 8 (Senior Management, Board of Directors and Entry of Personnel) and 9 (Performance Requirements) shall not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its schedule to Annex II (Reservations for Future Measures).
3. Article 5 (Most-Favoured-Nation Treatment) shall not apply to treatment accorded by a Party pursuant to agreements set out in Annex III (Exceptions from Most-Favoured-Nation Treatment).
4. In respect of intellectual property rights, a Party may derogate from Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment) and 9(1)(f) (Performance Requirements) in a manner that is consistent with:
(a) the TRIPS Agreement;
(b) an amendment to the TRIPS Agreement in force for both Parties; and
(c) a waiver to the TRIPS Agreement granted pursuant to Article IX of the WTO Agreement.
5. Articles 4 (National Treatment), 5 (Most-Favoured-Nation Treatment) and 8 (Senior Management and Board of Directors) do not apply to:
(a) procurement by a Party or a State enterprise; or
(b) a subsidy or grant provided by a Party or a State enterprise, including a government- supported loan, a guarantee or insurance.
6. Article 5 (Most-Favoured-Nation Treatment) of this Agreement does not apply to financial services.
Article 18. General Exceptions
1. For the purpose of this Agreement:
(a) a Party may adopt or enforce a measure necessary:
(i) to protect human, animal or plant life or health,
(ii) to ensure compliance with domestic law that is not inconsistent with this Agreement, or
(iii) to conserve living or non-living exhaustible natural resources;
(b) provided that the measure referred to in subparagraph (a) is not:
(i) applied in a manner that constitutes arbitrary or unjustifiable discrimination between investments or between investors, or
(ii) a disguised restriction on investment or investment-related international trade.
2. This Agreement does not prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:
(a) protecting investors, depositors, financial market participants, policy-holders, policy- claimants, or persons to whom a fiduciary duty is owed by a financial institution;
(b) maintaining the safety, soundness, integrity or financial responsibility of financial institutions; and
(c) ensuring the integrity and stability of a Party's financial system.
3. This Agreement does not apply to non-discriminatory measures of general application taken by a public entity in pursuit of monetary and related credit or exchange rate policies. This paragraph shall not affect a Party's obligations under Article 9 (Performance Requirements) or 11 (Transfers).
4. This Agreement does not:
(a) require a Party to furnish or allow access to information if that Party determines that the disclosure of this information would be contrary to its essential security interests;
(b) prevent a Party from taking an action that it considers necessary to protect its essential security interests:
(i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment,
(ii) taken in time of war or other emergency in international relations, or
(iii) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or
(c) prevent a Party from fulfilling its obligations under the United Nations Charter for the maintenance of international peace and security.
5. This Agreement does not require a Party to furnish or allow access to information that, if disclosed, would impede law enforcement or would be contrary to the Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet level, personal privacy or the confidentiality of the financial affairs and accounts of individual customers of financial institutions.
6. In the course of a dispute settlement procedure under this Agreement:
(a) a Party is not required to furnish or allow access to information protected under its competition law;
(b) a competition authority of a Party is not required to furnish or allow access to information that is privileged or otherwise protected from disclosure.
7. This Agreement does not apply to a measure adopted or maintained by a Party with respect to a person engaged in a cultural industry. "Person engaged in a cultural industry" means a person engaged in the following activities:
(a) the publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine-readable form, except when printing or typesetting any of the foregoing is the only activity;
(b) the production, distribution, sale or exhibition of film or video recordings;
(c) the production, distribution, sale or exhibition of audio or video music recordings;
(d) the publication, distribution or sale of music in print or machine-readable form; or
(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.
8. If a right or obligation in this Agreement duplicates one under the WTO Agreement, the Parties agree that a measure adopted by a Party in conformity with a waiver decision granted by the WTO pursuant to Article IX of the WTO Agreement is deemed to be also in conformity with the present Agreement. Such conforming measure of either Party may not give rise to a claim by an investor of one Party against the other under Section C (Settlement of Disputes between an Investor and the Host Party) of this Agreement.
Article 19. Denial of Benefits
A Party may deny the benefits of this Agreement to an investor of the other Party that is an enterprise of that Party and to investments of that investor if investors of a non-Party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investments.
Section C. Settlement of Disputes between an Investor and the Host Party
Article 20. Purpose
Without prejudice to the rights and obligations of the Parties under Section D (State-to- State Dispute Settlement Procedures), this Section establishes a mechanism for the settlement of investment disputes.
Article 21. Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise
1. An investor of a Party may submit to arbitration under this Section a claim that:
(a) the respondent Party has breached an obligation under Section B (Substantive Obligations), other than an obligation under:
(i) Article 4 (National Treatment), with respect to the establishment and acquisition of an investment (5),
(ii) Article 8(3) (Senior Management, Boards of Directors and Entry of Personnel), or
(iii) Article 12 (Transparency) or 15 (Health, Safety and Environmental Measures); and
(b) the investor has incurred loss or damage by reason of, or arising out of, that breach.
2. An investor of a Party, on behalf of an enterprise of the respondent Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that:
(a) the respondent Party has breached an obligation under Section B (Substantive Obligations), other than an obligation under:
(i) Article 4 (National Treatment), with respect to the establishment and acquisition of an investment (6),
(ii) Article 8(3) (Senior Management, Boards of Directors and Entry of Personnel), or
(iii) Article 12 (Transparency) or 15 (Health, Safety and Environmental Measures); and
(b) the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
3. A claim to the effect that a restructuring of debt issued by a Party breaches an obligation under this Agreement may not be submitted to arbitration or, if the claim is already submitted to arbitration, may not continue in arbitration under this Section, if the restructuring is a negotiated restructuring at the time of submission, or if the restructuring becomes a negotiated restructuring after the claim is submitted, unless it is alleged that the restructuring violates Article 4 (National Treatment) or Article 5 (Most-Favoured- Nation Treatment).
4. Notwithstanding Article 25(1) (Submission of a Claim to Arbitration), and subject to paragraph 3 of this Article, an investor of another Party may not submit under this Section a claim to the effect that a restructuring of debt issued by a Party breaches an obligation under this Agreement, other than an obligation under Article 4 (National Treatment) or Article 5 (Most-Favoured-Nation Treatment), unless 270 days have elapsed since the events that gives rise to the claim.
Article 22. Conditions Precedent to Submission of a Claim to Arbitration
1. The disputing parties shall hold consultations and attempt to settle a claim amicably before an investor may submit a claim to arbitration. Unless the disputing parties agree to a longer period, consultations shall be held within 60 days of the submission of the notice of intent to submit a claim to arbitration under subparagraph 2(c). The place of consultation shall be the capital of the respondent Party, unless the disputing parties otherwise agree.
2. An investor may submit a claim to arbitration under Article 21 (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) only if:
(a) the investor and, where a claim is made under Article 21(2) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the enterprise, consent to arbitration in accordance with the procedures set out in this Agreement;
(b) at least six months have elapsed since the events giving rise to the claim;
(c) the investor has delivered to the respondent Party a written notice of its intent to submit a claim to arbitration at least 180 days prior to submitting the claim, that notice shall specify:
(i) the name and address of the investor and, where a claim is made under Article 21(2) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the name and address of the enterprise,
(ii) the provisions of this Agreement alleged to have been breached and any other relevant provisions,
(iii) the legal and the factual basis for the claim, including the measures at issue, and
(iv) the relief sought and the approximate amount of damages claimed;
(d) the investor has delivered evidence establishing that it is an investor of the other Party with its notice of intent to submit a claim to arbitration under subparagraph 2(c);
(e) in the case of a claim submitted under Article 21(1) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise):
(i) not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage thereby,
(ii) the investor clearly and unambiguously waives its right to initiate or continue before an administrative tribunal or court under the domestic law of a Party, or other dispute settlement procedures, proceedings with respect to the measure of the respondent Party that is alleged to be a breach referred to in Article 21 (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise), and
(iii) if the claim is for loss or damage to an interest in an enterprise of the other Party that is a juridical person that the investor owns or controls directly or indirectly, the enterprise waives the right referred to under subparagraph (ii);
(f) in the case of a claim submitted under Article 21(2) (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise):
(i) not more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the enterprise has incurred loss or damage thereby, and
(ii) both the investor and the enterprise clearly and unambiguously waive their right to initiate or continue before an administrative tribunal or court under the domestic law of a Party, or other dispute settlement procedures, proceedings with respect to the measure of the respondent Party that is alleged to be a breach referred to in Article 21 (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise).
3. Subparagraphs 2(e)/(ii), (iii) and 2(f)(ii) do not apply to proceedings before a judicial or administrative tribunal or court under the domestic law of the respondent Party for injunctive, declaratory or other extraordinary relief, not involving the payment of damages.
4. The disputing investor or the enterprise shall deliver the consent and waiver required under paragraph 2 to the respondent Party and the investor shall include them in the submission of a claim to arbitration. A waiver from the enterprise under subparagraphs 2(e)(iii) or 2(f)(ii) is not required if the respondent Party has deprived the investor of control of the enterprise.