(a) cabotage in maritime transport services (1);
(b) air services or related services in support of air services (2), other than the following:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(ii) computer reservation system (CRS) services; and
(iv) ground handling services; and
(c) audio-visual services.
Article 8.7. Market Access
A Party shall not maintain or adopt, with regard to market access through establishment or operation by an entrepreneur of the other Party or by a covered enterprise, either on the basis of a territorial subdivision or on the basis of its entire territory, measures that:
(a) impose limitations on (1):
(i) the number of enterprises, whether in the form of numerical quotas, monopolies, exclusive rights or the requirements of an economic needs test;
(ii) the total value of transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of operations or the total quantity of output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(iv) the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment; or
(v) the total number of natural persons that may be employed in a particular sector or that an enterprise may employ and who are necessary for, and directly related to, the performance of the economic activity in the form of numerical quotas or the requirement of an economic needs test; or
(b) restrict or require specific types of legal entity or joint venture through which an entrepreneur of the other Party may perform an economic activity.
Article 8.8. National Treatment
1. Each Party shall accord to entrepreneurs of the other Party and to covered enterprises treatment no less favourable than that it accords, in like situations, to its own entrepreneurs and to their enterprises, with respect to establishment in its territory.
2. Each Party shall accord to entrepreneurs of the other Party and to covered enterprises treatment no less favourable than that it accords, in like situations, to its own entrepreneurs and to their enterprises, with respect to operation in its territory.
3. For greater certainty, paragraphs 1 and 2 shall not be construed as preventing a Party from prescribing statistical formalities or information requirements, in connection with the covered enterprises, provided that those formalities or requirements do not constitute a means to circumvent that Party's obligations pursuant to this Article.
Article 8.9. Most-favoured-nation Treatment
1. Each Party shall accord to entrepreneurs of the other Party and to covered enterprises treatment no less favourable than that it accords, in like situations, to entrepreneurs of a third country and to their enterprises, with respect to establishment in its territory.
2. Each Party shall accord to entrepreneurs of the other Party and to covered enterprises treatment no less favourable than that it accords, in like situations, to entrepreneurs of a third country and to their enterprises, with respect to operation in its territory.
3. Paragraphs 1 and 2 shall not be construed as obliging a Party to extend to entrepreneurs of the other Party and to covered enterprises the benefit of any treatment resulting from:
(a) an international agreement for the avoidance of double taxation or other international agreement or arrangement relating wholly or mainly to taxation; or (b) existing or future measures providing for recognition of qualifications, licences or prudential measures as referred to in Article VI of GATS or paragraph 3 of its Annex on Financial Services.
4. For greater certainty, the treatment referred to in paragraphs 1 and 2 does not include investor-to-state dispute settlement procedures provided for in other international agreements.
5. Substantive provisions in other international agreements concluded by a Party with a third country (1) do not in themselves constitute treatment under this Article. For greater certainty, actions or inactions of a Party in relation to those provisions can constitute treatment (2) and thus can give rise to a breach of this Article to the extent that the breach is not established solely based on the said provisions.
Article 8.10. Senior Management and Boards of Directors
A Party shall not require a covered enterprise to appoint individuals of any particular nationality as executives, managers or members of boards of directors.
Article 8.11. Prohibition of Performance Requirements
1. A Party shall not impose or enforce any of the following requirements or enforce any commitment or undertaking, in connection with the establishment or operation of any enterprise in its territory: (3) (4)
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services supplied in its territory, or to purchase goods or services from natural or juridical persons or any other entity in its territory;
(d) to 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 enterprise;
(e) to restrict sales of goods or services in its territory that such enterprise produces or supplies by relating those sales in any way to the volume or value of its exports or foreign exchange inflows;
(f) to restrict exportation or sale for export;
(g) to transfer technology, a production process or other proprietary knowledge to a natural or juridical person or any other entity in its territory;
(h) to locate the headquarters of such enterprise for a specific region or the world market in its territory;
(i) to hire a given number or percentage of its nationals;
(j) to achieve a given level or value of research and development in its territory;
(k) to supply one or more of the goods produced or services supplied by the enterprise to a specific region or to the world market exclusively from its own territory; or
(l) to adopt:
(i) a rate or amount of royalty below a certain level; or
(ii) a given duration of the term of a licence contract (1);
with regard to any licence contract in existence at the time the requirement is imposed or enforced, or any commitment or undertaking is enforced, or with regard to any future licence contract freely entered into between the enterprise and a natural or juridical person or any other entity in its territory, if the requirement is imposed or enforced or the commitment or undertaking is enforced, in a manner that constitutes a direct interference with that licence contract by an exercise of non-judicial governmental authority of a Party. (2)
2. A Party shall not condition the receipt or continued receipt of an advantage, in comnection with the establishment or operation of any enterprise in its territory, on compliance with any of the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to goods produced in its territory, or to purchase goods from natural or juridical persons or any other entity in its territory;
(c) to 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 enterprise;
(d) to restrict sales of goods or services in its territory that such enterprise produces or supplies by relating those sales in any way to the volume or value of its exports or foreign exchange inflows; or
(e) to restrict exportation or sale for export.
3. Nothing in paragraph 2 shall be construed as preventing a Party from conditioning the receipt or continued receipt of an advantage, in connection with the establishment or operation of any enterprise in its territory, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.
4. Subparagraphs 1(a) to (c), 2(a) and (b) do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programmes.
5. Subparagraphs 1(g) and (1) do not apply when:
(a) the requirement is imposed or enforced, or the commitment or undertaking is enforced, by a court, administrative tribunal or competition authority in order to remedy a violation of competition law; (1) or
(b) a Party authorises use of an intellectual property right in accordance with Article 31 or 31bis of the TRIPS Agreement, or measures requiring the disclosure of data or proprietary information that fall within the scope of, and are consistent with, paragraph 3 of Article 39 of the TRIPS Agreement.
6. Subparagraph 1(1) does not apply if the requirement is imposed or enforced, or the commitment or undertaking is enforced, by a tribunal as equitable remuneration under the Party's copyright laws.
7. Subparagraphs 2(a) and (b) do not apply to requirements imposed or enforced by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
8. This Article is without prejudice to the obligations of a Party under the WTO Agreement.
Article 8.12. Non-conforming Measures and Exceptions
1. Articles 8.7 to 8.11 do not apply to:
(a) any existing non-conforming measure that is maintained by a Party at a level of:
(i) for the United Kingdom
(A) the central government, as set out in its Schedule in Annex I to Annex 8-B;
(B) a regional government, as set out in its Schedule in Annex I to Annex 8-B; or
(C) a local government, other than that referred to in subparagraph (B);
(ii) and for Japan:
(A) the central government, as set out in its Schedule in Annex I to Annex 8-B;
(B) a prefecture, as set out in its Schedule in Annex I to Annex 8-B; or
(C) a local government other than a prefecture;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment of, or modification to, any non-conforming measure referred to in subparagraphs (a) and (b), provided that the amendment or modification does not decrease the conformity of the measure with Articles 8.7 to 8.11 as it existed immediately before the amendment or modification.
2. Articles 8.7 to 8.11 do not apply to any measure by a Party with respect to sectors, sub-sectors or activities as set out in its Schedule in Annex I to Annex 8-B.
3. A Party shall not require, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule in Annex II to Annex 8-B, an entrepreneur of the other Party, by reason of its nationality, to sell or otherwise dispose of an enterprise that exists at the time the measure becomes effective.
4. Articles 8.8 and 8.9 do not apply to any measure that constitutes an exception to, or a derogation from, Article 3 or 4 of the TRIPS Agreement, as specifically provided in Articles 3 to 5 of the TRIPS Agreement.
5. Articles 8.7 to 8.11 do not apply to any measure by a Party with respect to government procurement.
6. Articles 8.7 to 8.10 do not apply to subsidies granted by the Parties.
Article 8.13. Denial of Benefits
A Party may deny the benefits of this Section to an entrepreneur of the other Party that is a juridical person of the other Party and to its covered enterprise if that juridical person is owned or controlled by a natural or juridical person of a third country and the denying Party adopts or maintains measures with respect to the third country that:
(a) are related to the maintenance of international peace and security, including the protection of human rights; and
(b) prohibit transactions with that juridical person or its covered enterprise, or would be violated or circumvented if the benefits of this Section were accorded to them.
Section C. Cross-border Trade In Services
Article 8.14. Scope
1. This Section applies to measures by a Party affecting cross-border trade in services by service suppliers of the other Party. Those measures include among others measures affecting:
(a) the production, distribution, marketing, sale or delivery of a service;
(b) the purchase or use of, or payment for, a service; and
(c) the access to and the use of services offered to the public generally in connection with the supply of a service.
2. This Section does not apply to:
(a) cabotage in maritime transport services (1);
(b) air services or related services in support of air services (2), other than the following:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(ii) computer reservation system (CRS) services; and
(iv) ground handling services;
(c) government procurement;
(d) audio-visual services; and
(e) subsidies, as defined and provided for in Chapter 12.
Article 8.15. Market Access
A Party shall not maintain or adopt, either on the basis of a territorial subdivision or on the basis of its entire territory, measures that:
(a) impose limitations on:
(i) the number of service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test; (1)
(ii) the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test; or
(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; (1) or
(b) restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 8.16. National Treatment
1. Each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that it accords to its own like services and service suppliers.
2. A Party may meet the requirement of paragraph 1 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 the Party compared to like services or service suppliers of the other Party.
4. Nothing in this Article shall be construed as requiring either Party to compensate for any inherent competitive disadvantage which results from the foreign character of the relevant services or service suppliers.
Article 8.17. Most-favoured-nation Treatment
1. Each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that it accords to like services and service suppliers of a third country.
2. Paragraph 1 shall not be construed as obliging a Party to extend to services and service suppliers of the other Party the benefit of any treatment resulting from:
(a) an international agreement for the avoidance of double taxation or other international agreement or arrangement relating wholly or mainly to taxation; or
(b) existing or future measures providing for recognition of qualifications, licences or prudential measures as referred to in Article VI of GATS or paragraph 3 of its Annex on Financial Services.
Article 8.18. Non-conforming Measures
1. Articles 8.15 to 8.17 do not apply to:
(a) any existing non-conforming measure that is maintained by a Party at a level of:
(i) for the United Kingdom:
(A) the central government, as set out in its Schedule in Annex I to Annex 8-B;
(B) a regional government, as set out in its Schedule in Annex I to Annex 8-B; or
(C) a local government, other than that referred to in subparagraph (B); and
(ii) for Japan:
(A) the central government, as set out in its Schedule in Annex I to Annex 8-B;
(B) aprefecture, as set out in its Schedule in Annex I to Annex 8-B; or
(C) alocal government other than a prefecture;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) anamendment of, or modification to, any non-conforming measure referred to in subparagraphs (a) and (b), provided that the amendment or modification does not decrease the conformity of the measure with Articles 8.15 to 8.17 as it existed immediately before the amendment or modification.
2. Articles 8.15 to 8.17 do not apply to any measure by a Party with respect to sectors, sub-sectors or activities as set out in its Schedule in Annex II to Annex 8-B.
Article 8.19. Denial of Benefits
A Party may deny the benefits of this Section to a service supplier of the other Party that is a juridical person of the other Party and to services of that service supplier if that juridical person is owned or controlled by a natural or juridical person of a third country and the denying Party adopts or maintains measures with respect to the third country that:
(a) are related to the maintenance of international peace and security, including the protection of human rights; and
(b) prohibit transactions with the service supplier, or would be violated or circumvented if the benefits of this Section were accorded to the service supplier or to its services.
Section D. Entry and Temporary Stay of Natural Persons
Article 8.20. General Provisions and Scope
1. This Section reflects the strengthened trade relationship between the Parties as well as the desire of the Parties to facilitate entry and temporary stay of natural persons for business purposes on a reciprocal basis, and to ensure transparency of the process.