however, if none of the above is practicable, and the application is rejected due to incompleteness, ensure that they so inform the applicant within a reasonable period of time; and
(e) if an application is rejected, to the extent possible, either upon their own initiative or upon request of the applicant, inform the applicant of the reasons for rejection and, if applicable, the procedures for resubmission of an application; an applicant should not be prevented from submitting another application (9) solely on the basis of a previously rejected application.
8. The competent authorities of a Party shall ensure that authorization, once granted, enters into effect without undue delay, subject to applicable terms and conditions (10).
9. Each Party shall ensure that the authorization fees (11) charged by its competent authorities are reasonable, transparent, based on authority set out in a measure, and do not in themselves restrict the supply of the relevant service.
Article 2.7. Recognition
1. For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorization, licensing or certification of services suppliers, and subject to the requirements of paragraph 3 of this Article, a Party may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular non-Party. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the non-Party concerned or may be accorded autonomously.
2. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1 of this Article, whether existing or future, shall afford adequate opportunity for the other Party to negotiate its accession to such an agreement or arrangement or to negotiate comparable ones with it. Where 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 Partyâs territory should be recognized.
3. A Party shall not accord recognition in a manner which would constitute a means of discrimination between the other Party and non-Party in the application of its standards or criteria for the authorization, licensing or certification of services suppliers, or a disguised restriction on trade in services.
4. Wherever appropriate, recognition should be based on multilaterally agreed criteria. In appropriate cases, Parties shall work in cooperation with relevant intergovernmental and _ non- governmental organizations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions.
Article 2.8. Payments and Transfers
1. Except in the circumstances envisaged in GATS Article XII, a Party shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties as members of the International Monetary Fund in accordance with the Articles of Agreement of the International Monetary Fund, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under GATS Article XII, or at the request of the International Monetary Fund.
Article 2.9. Monopolies and Exclusive Service Suppliers
1, Each Party shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Party's obligations under Article 2.3 (Most-Favoured-Nation Treatment) and 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 territory 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 of this Article, that Party may request the other Party establishing, maintaining or authorising such supplier to provide specific information concerning the relevant operations.
4. If, after the date of entry into force of this Agreement, a Party grants monopoly rights regarding the supply of a service covered by its specific commitments in its Schedule of Specific Commitments in Annex I, that Party shall notify the other Party no later than three months before the intended implementation of the grant of monopoly rights, and Article 2.16 (Modification of Schedules) shall apply.
5. The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Party, formally or in effect, (a) authorizes or establishes a small number of service suppliers and (b) substantially prevents competition among those suppliers in its territory.
Article 2.10. Business Practices
1. Parties recognize that certain business practices of service suppliers, other than those falling under Article 2.9 (Monopolies and Exclusive Service Suppliers), may restrain competition and thereby restrict trade in services.
2. Each Party shall, at the request of the other Party, enter into consultations with a view to eliminating practices referred to in paragraph 1 of this Article. The Party addressed shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Party addressed shall also provide other information available to the requesting Party, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting Party.
Article 2.11. Market Access
1. With respect to market access through the modes of supply identified in Article 2.2 (Definitions), 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 I (12).
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 territory, unless otherwise specified in its Schedule of Specific Commitments in Annex I, 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;
(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 2.12. National Treatment
1. In the sectors inscribed in its Schedule of Specific Commitments in Annex I, 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.
2. A Party may meet the requirement of paragraph 1 of this Article 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.
Article 2.13. Additional Commitments
Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 2.11 (Market Access) or 2.12 (National Treatment), including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule of Specific Commitments in Annex I.
Article 2.14. Schedule of Specific Commitments
1. Each Party shall set out in a schedule the specific commitments it undertakes under Articles 2.11 (Market Access), 2.12 (National Treatment), and 2.13 (Additional Commitments) of this Chapter. With respect to sectors where such commitments are undertaken, each Schedule shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments;
(d) where appropriate the time-frame for implementation of such commitments; and
(e) the date of entry into force of such commitments.
2. Measures inconsistent with both Articles 2.11 (Market Access) and 2.12 (National Treatment) shall be inscribed in the column relating to Article 2.11 (Market Access). In this case the inscription will be considered to provide a condition or qualification to Article 2.12 (National Treatment) as well.
3. Schedules of specific commitments shall be annexed to this Agreement and shall form an integral part thereof.
Article 2.15. Denial of Benefits
Subject to prior notification and consultation, a Party may deny the benefits of this Chapter to a service supplier of the other Party:
(a) to the supply of a service, if it establishes that the service is supplied from or in the territory of a non-Party;
(b) if the service supplier is a juridical person:
(i) owned or controlled by persons of a non-Party or of the denying Party; and
(ii) has no substantive business operations in the territory of the other Party.
(c) in the case of the supply of a maritime transport service, if it establishes that the service is supplied:
(i) by a vessel registered under the laws of a non-Party, and
(ii) by a person which operates and/or uses the vessel in whole or in part but which is of a non-Party.
Article 2.16. Modification of Schedules
1. A Party (referred to in this Article as the "modifying Party") may modify or withdraw any commitment in its Schedule of Specific Commitments in Annex I at any time after three years have elapsed from the date on which that commitment entered into force, provided that:
(a) it notifies the other Party (referred to in this Article as the "affected Party") of its intention to modify or withdraw a commitment no later than three months before the intended date of implementation of the modification or withdrawal; and
(b) upon notification of a Party's intent to make such modification, the Parties shall consult and attempt to reach agreement on the appropriate compensatory adjustment.
2. In achieving a compensatory adjustment, the Parties shall endeavour to maintain a general level of mutually advantageous commitment that is not less favourable to trade than provided for in its Schedule of Specific Commitments in Annex I prior to such negotiations.
3. If agreement under subparagraph (b) of paragraph 1 of this Article is not reached between the modifying Party and the affected Party within three months, the affected Party may refer the matter to an arbitral tribunal in accordance with the procedures set out in Chapter IX (Dispute Settlement) or, where agreed between the Parties, to an alternative arbitration procedure.
4. The modifying Party may not modify or withdraw its commitment until it has made the compensatory adjustments in conformity with the findings of the arbitral tribunal in accordance with paragraph 3 of this Article.
5. If the modifying Party implements its proposed modification or withdrawal and does not comply with the findings of the arbitral tribunal, the affected Party may modify or withdraw substantially equivalent benefits in conformity with the findings of the arbitral tribunal.
Article 2.17. Security Exceptions
Subparagraphs (a), (b) and (c) of paragraph 1 of GATS Article XIV bis shall apply mutatis mutandis to the provisions of this Chapter.
Annex 2-3. Financial Services
Article 1. Scope and Definitions
1. This Annex applies to measures by Parties affecting trade in financial services (17).
2. For the purposes of this Annex:
"financial services" means any services of a financial nature offered by a financial service supplier of a Party. Financial services include the following activities:
(i) Insurance and insurance-related services:
(a) direct insurance (including co-insurance): life; non-life;
(b) reinsurance and retrocession;
(c) insurance inter-mediation, such as brokerage and agency; and
(d) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services; and
(ii) Banking and other financial services (excluding insurance):
(a) acceptance of deposits and other repayable funds from the public;
(b) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transactions;
(c) financial leasing;
(d) all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;
(e) guarantees and commitments;
(f) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
i. money market instruments (including cheques, bills and certificates of deposits);
ii. foreign exchange;
iii. derivative products including, but not limited to, futures and options;
iv. exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
v. transferable securities; and
vi. other negotiable instruments and financial assets, including bullion;
(g) participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
(h) money broking;
(i) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
(j) settlement and clearing services for financial assets, including securities, derivative products and other negotiable instruments;
(k) provision and transfer of financial information, and financial data processing and related software; and
(l) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (a) through (k), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
"financial service supplier" means any natural person or juridical person of a Party that seeks to provide or provides financial services and does not include a public entity;
"new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, that is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party; and
"public entity" means:
(i) a government, a central bank or a monetary authority of a Party or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or
(ii) a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions.
Article 2. Prudential Carve-Out (18)
1. Notwithstanding any other provisions of this Agreement a Party shall not be prevented from adopting or maintaining measures for prudential reasons, which include, but are not limited to, the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier or to ensure the integrity and stability of the financial system.
2. Where measures referred to in paragraph 1 of this Article do not conform with the other provisions of this Agreement, they shall not be used as a means of avoiding that Partyâs commitments or obligations under such provisions.
3. Nothing in this Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual consumers or any confidential or proprietary information in the possession of public entities.
4. For greater certainty, a Party may require the registration of cross- border financial service suppliers of the other Party.
Article 3. Transparency
1. The Parties recognize that transparent regulations and policies governing the activities of financial service suppliers are important in facilitating access of foreign financial service suppliers to, and their operations in, each other's markets. Each Party commits to promoting regulatory transparency in financial services.
2. To the extent practicable, each Party should allow reasonable time between publication of final regulations of general application and their effective date.
3. A Party's regulatory authority shall make an administrative decision on a complete application of a financial service supplier of the other Party relating to the supply of a financial service within 180 days, and shall notify the applicant of the decision without undue delay. An application shall not be considered complete until all relevant proceedings are conducted and all necessary information is received. Where it is not practicable for such a decision to be made within 180 days, the regulatory authority shall notify the applicant without undue delay and shall endeavour to make the decision within a reasonable period of time thereafter.
Article 4. Payment and Clearing Systems
Under terms and conditions that accord national treatment, each Party shall grant to financial service suppliers of the other Party established in its territory access to payment and clearing systems operated by public entities and to official funding and refinancing facilities available in the normal course of ordinary business. This paragraph is not intended to confer access to a Party's lender of last resort facilities.
Article 5. New Financial Services
1. Each Party shall endeavour to permit a financial service supplier of the other Party established in its territory to supply any new financial service that it would permit its own financial service supplier to supply in accordance with its law in like situations, provided that the introduction of the new financial service does not require the adoption of a new law or amendment of an existing law.
2. Where an application is approved, the supply of the new financial services is subject to relevant licensing, institutional or juridical form, or other requirements of the approving Party.
Article 6. Data Processing
1. The Parties recognize that each Party may have its own regulatory requirements concerning the transfer of information and processing of information.
2. Each Party shall permit the transfer of information necessary for the ordinary business of a financial service supplier in its territory, to the extent and under the conditions provided for by the national legislation of the Party transferring such information, in electronic or other forms, to and from its territory for data processing.
3. Nothing in paragraph 2 of this Article prevents a regulatory authority of a Party, for regulatory or prudential reasons, from requiring a financial service supplier in its territory to comply with its laws and regulations in relation to data management and storage and system maintenance, as well as to retain within its territory copies of records, provided that such requirements shall not be used as a means of avoiding the Party's commitments or obligations under this Agreement.
4. Nothing in paragraph 2 of this Article restricts the right of a Party to protect personal data, personal privacy and the confidentiality of individual records and accounts including in accordance with its laws and regulations, provided that such a right shall not be used as a means of avoiding the Party's commitments or obligations under this Agreement.
5. Nothing in paragraph 2 of this Article shall be construed to require a Party to allow the cross-border supply or the consumption abroad of services in relation to which it has not made specific commitments.
Article 7. Expeditious Application Procedures
1. If the competent authorities of a Party require additional information from the applicant in order to process its application, they shall notify the applicant without undue delay.
2. The competent authorities of each Party shall notify the applicant of the outcome of its application without delay after a decision has been taken. In case a decision is taken to deny an application, the reason for the denial shall, to the extent practicable, be made known to the applicant.
Article 8. Dispute Settlement
1. Disputes arising between the Parties on the interpretation or application of this Annex, as well as compliance with the obligations under it, shall be resolved through negotiations.
2. Arbitrators on an arbitral tribunal established in accordance with Chapter IX (Dispute Settlement) for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service under dispute.
Article 9. Recognition
1. A Party may recognize prudential measures of a third Party in determining how the Party's measures relating to financial services shall be applied. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement between that Party and the third Party, or may be accorded autonomously.
2. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1 of this Article with a third party, whether at the time of entry into force of this Agreement or thereafter, shall afford adequate opportunity for the other Party to negotiate its accession to such agreements or arrangements, or to negotiate comparable ones with it, under circumstances in which there would be equivalent regulation, oversight, implementation of such regulation, and, if appropriate, procedures concerning the sharing of information between the Parties to the agreement or arrangement. Where a Party accords recognition autonomously, it shall afford adequate opportunity for the other Party to demonstrate that such circumstances exist.
Chapter III. INVESTMENT
Section A.
Article 3.1.
For the purposes of this Chapter:
“Centre” means the International Centre for Settlement of Investment Disputes (“ICSID”) established by the ICSID Convention;
“claimant” means an investor of a Party that is a partytoaninvestment dispute with the other Party;
“covered investment” means, with respect to a Party, an investment
in its territory of an investor of the other Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
“disputing parties” means the claimant and the respondent;
“disputing party” means either the claimant or the respondent;
“enterprise” means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including a corporation, trust, partnership, sole proprietorship, joint venture, association, or similar organization; and a branch of an enterprise;
“enterprise of a Party” means an enterprise constituted or organized under the law of a Party and a branch located in the territory of a Party and carrying out business activities there;
“existing” means in effect on the date of entry into force of thisAgreement;
“freely usable currency” means “freely usable currency” as determined by the International Monetary Fund under the IMF Articles of Agreement as may be amended;
“ICSID Additional Facility Rules” means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
“ICSID Convention” means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, March 18, 1965;