5. Notwithstanding paragraph 4, for the purpose of protection of investment with respect to the commercial presence mode of service supply, Articles 8.5 (Minimum Standard of Treatment), 8.6 (Compensation for Losses), 8.7 (Expropriation and Compensation), 8.8 (Transfers), 8.15 (Subrogation), 8.16 (Denial of Benefits) shall apply to any measure affecting the supply of a service by a service supplier of a Party through commercial presence in the territory of the other Party, only to the extent that they relate to a covered investment. Section B of this Chapter shall apply to Articles 8.5 (Minimum Standard of Treatment), 8.6 (Compensation for Losses), 8.7 (Expropriation and Compensation), 8.8 (Transfers), 8.15 (Subrogation), 8.16 (Denial of Benefits) with respect to the supply of a service through commercial presence, only to the extent that they relate to a covered investment.
Article 8.3. NATIONAL TREATMENT (10)
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the management, conduct, operation, and sale or other disposition of investments.
Article 8.4. MOST-FAVOURED-NATION TREATMENT (11)
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of any non-Party with respect to the management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of investors of any non-Party with respect to the management, conduct, operation, and sale or other disposition of investments.
3. Paragraph 1 and 2 of this Article shall not be construed to oblige any Party to extend to the investors of the other Party or covered investment any treatment, preference or privilege by virtue of any bilateral or multilateral agreement relating to investment in force or signed prior to the date of entry into force of this Agreement.
4. For greater certainty, the treatment referred to in this Article does not encompass dispute resolution mechanisms or procedures, such as those included in Section B of this Chapter, that are provided for in international investment or trade agreements.
Article 8.5. MINIMUM STANDARD OF TREATMENT
1. Each Party shall accord to covered investments fair and equitable treatment and full protection and security in accordance with customary international law.
2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to covered investments. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide:
(a) "fair and equitable treatment" includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with due process of law; and
(b) "full protection and security" requires each Party to provide the level of police protection required under customary international law.
3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
4. For greater certainty, the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor's expectations does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result.
5. For greater certainty, the mere fact that a subsidy or grant has not been issued, renewed or maintained, or has been modified or reduced, by a Party, does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result.
6. This Article shall be interpreted in accordance with Chapter 8-Annex-A (Customary International Law).
Article 8.6. COMPENSATION FOR LOSSES
1. Notwithstanding Article 8.12(3), each Party shall accord to investors of the other Party, and to covered investments, non-discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict, a state of national emergency, or civil strife.
2. Notwithstanding paragraph 1, if an investor of a Party, in the situations referred to in paragraph 1, suffers a loss in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or part thereof by the latter's forces or authorities; or
(b) destruction of its covered investment or part thereof by the latter's forces or authorities, which was not required by the necessity of the situation,
the latter Party shall provide the investor restitution, compensation, or both, as appropriate, for such a loss. Any compensation shall be made in accordance with Article 8.7(2) through (4), mutatis mutandis.
Article 8.7. EXPROPRIATION AND COMPENSATION (12)
1. Neither Party may expropriate or nationalize a covered investment either directly or indirectly through measures equivalent to expropriation or nationalization (hereinafter referred to as "expropriation"), except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) on payment of compensation in accordance with this Article; and
(d) in accordance with due process of law.
2. The compensation referred to in paragraph 1(c) shall:
(a) be paid without delay;
(b) be equivalent to the fair market value of the expropriated investment at the time when the expropriation was publicly announced or when the expropriation took place (hereinafter referred to as "the date of expropriation"), whichever is earlier; and
(c) be fully realizable and freely transferable.
3. If the fair market value is denominated in a freely usable currency, the compensation referred to in paragraph 1(c) shall be no less than the fair market value determined in accordance with paragraph 2(b), plus interest at a commercially reasonable rate for that currency accrued from the date of expropriation until the date of payment.
4. If the fair market value is denominated in a currency that is not freely usable, the compensation referred to in paragraph 1(c) "converted into the currency of payment at the market rate of exchange prevailing on the date of payment" shall be no less than:
(a) the fair market value determined in accordance with paragraph 2(b), converted into a freely usable currency at the market rate of exchange prevailing on that date, plus
(b) interest at a commercially reasonable rate for that freely usable currency accrued from the date of expropriation until the date of payment.
5. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights, to the extent that such issuance, revocation, limitation, or creation is consistent with the TRIPS Agreement.
6. For greater certainty, the mere fact that a subsidy or grant has not been issued, renewed or maintained, or has been modified or reduced, by a Party, does not constitute an expropriation, even if there is loss or damage to the covered investment as a result.
Article 8.8. TRANSFERS (13)
1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers include:
(a) contributions to capital;
(b) profits, dividends, capital gains, and proceeds from the sale of all or any part of the covered investment or from the partial or complete liquidation of the covered investment;
(c) interest, royalty payments, management fees, technical assistance and other fees;
(d) payments made under a contract, including a loan agreement;
(e) payments made pursuant to Article 8.6 (Compensation for Losses) and Article 8.7 (Expropriation and Compensation);
(f) payments arising out of a dispute; and
(g) earnings and remuneration of a national of a Party who works in a covered investment in the territory of the other Party.
2. Each Party shall permit transfers relating to a covered investment to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.
3. Each Party shall permit returns in kind relating to a covered investment to be made as authorized or specified in a written agreement between the Party and a covered investment or an investor of the other Party.
4. Notwithstanding paragraphs 1 through 3, a Party may prevent a transfer through the equitable, non-discriminatory, and good faith application of its laws and regulations relating to
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading, or dealing in securities, futures, options, or derivatives;
(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 orders or judgments in judicial or administrative proceedings.
5. For greater certainty, provided that such measures are not applied in an arbitrary or unjustifiable manner, and provided that such measures do not constitute a disguised restriction on international trade or investment, paragraphs 1 through 3 shall not be construed to prevent a Party from adopting or maintaining measures that are necessary to secure compliance with laws and regulations, including those relating to the prevention of deceptive and fraudulent practices, that are not inconsistent with this Agreement.
Article 8.9. PERFORMANCE REQUIREMENTS
1. Neither Party may, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of the other Party or of a non-Party in its territory, impose or enforce any requirement or enforce any commitment or undertaking: (14)
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content of goods or services;
(c) to purchase, use, or accord a preference to goods produced in its territory, or to purchase goods from persons 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 investment;
(e) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to transfer a particular technology, a production process, or other proprietary knowledge to a person in its territory;
(g) to supply exclusively from the territory of the Party the goods that such investment produces or the services that it supplies to a specific regional market or to the world market;
(h) to locate the headquarters for a specific region or the world market in its territory; or
(i) to achieve a given percentage or value of research and development in its territory.
2. Neither Party may condition the receipt or continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment in its territory of an investor of the other Party or of a non-Party, on compliance with any requirement:
(a) to achieve a given level or percentage of domestic content of goods or services;
(b) to purchase, use, or accord a preference to goods produced in its territory, or to purchase goods from persons 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 investment; or
(d) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.
3.
(a) Nothing in paragraph 1 shall be construed to prevent a Party, in connection with an investment in its territory of an investor of the other Party or of a non-Party, from imposing or enforcing a requirement or enforcing a commitment or undertaking to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory, provided that such measure is consistent with paragraph 1(f).
(b) Nothing in paragraph 2 shall be construed to prevent a Party, in connection with an investment in its territory of an investor of the other Party or of a non-Party, from conditioning the receipt or continued receipt of an advantage 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.
(c) Paragraph 1(f) does not apply:
(i) when a Party authorizes the use of an intellectual property right in accordance with Article 31 of the TRIPS Agreement, or to measures requiring the disclosure of proprietary information that fall within the scope of, and are consistent with, Article 39 of the TRIPS Agreement; or
(ii) when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal, or competition authority to remedy a practice determined after judicial or administrative process to be anticompetitive under the competition laws of the Party. (15)
(d) Provided that such measures are not applied in an arbitrary or unjustifiable manner, and provided that such measures do not constitute a disguised restriction on international trade or investment, paragraph 1(b), (c), and (f), and 2(a) and (b), shall not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:
(i)necessary to secure compliance with the laws and regulations that are not inconsistent with this Agreement;
(ii) necessary to protect human, animal, or plant life or health; or
(iii) related to the conservation of living and non-living exhaustible natural resources.
(e) Paragraphs 1(a), (b) and (c), and 2(a) and (b), do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs.
(f) Paragraphs 1(b), (c), and (f), and 2(a) and (b), do not apply to government procurement.
(g) Paragraphs 2(a) and (b) do not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
4. For greater certainty, paragraphs 1 and 2 do not apply to any commitment, undertaking, or requirement other than those set out in those paragraphs.
5. This Article does not preclude enforcement of any commitment, undertaking, or requirement between private parties, where a Party did not impose or require the commitment, undertaking, or requirement.
Article 8.10. SENIOR MANAGEMENT AND BOARD OF DIRECTORS
1. Neither Party may require that an enterprise of that Party that is a covered investment appoint to senior management position natural persons of any particular nationality.
2. A Party may require that the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment, comprises a minimum number of persons resident in the territory of that Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
Article 8.11. TRANSPARENCY
1. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application respecting any matter covered by this Chapter are promptly published or otherwise made publicly available.
2. For purposes of this Article, "administrative ruling of general application" means an administrative ruling or interpretation that applies to all persons and fact situations that fall generally within its ambit and that establishes a norm of conduct but does not include:
(a) a determination or ruling made in an administrative or quasi-judicial proceeding that applies to a particular covered investment or investor of the other Party in a specific case; or
(b) a ruling that adjudicates with respect to a particular act or practice.
3. Publication
(a) To the extent possible, each Party shall:
(i) publish in advance any measure referred to in paragraph 1 of this Article that it proposes to adopt; and
(ii) provide interested persons and the other Party a reasonable opportunity to comment on such proposed measures.
(b) With respect to proposed laws and regulations of general application respecting any matter covered by this Chapter that are published in accordance with paragraph 3(a)(i) of this Article, each Party:
(i) shall publish the proposed laws and regulations on an official website or in an official journal of national circulation;
(ii) should, to the extent possible, publish the proposed laws and regulations at least 30 days before the date public comments are due; and
(iii) shall endeavour to take into account the comments received from interested persons with respect to such proposed laws and regulations.
(c) With respect to laws and regulations of general application that are adopted respecting any matter covered by this Chapter, each Party shall:
(i) publish the laws and regulations on an official website or in an official journal of national circulation; and
(ii) to the extent possible, ensure that there is reasonable time between publication and entry into force of the laws and regulations.
4. Provision of Information
(a) At the request of the other Party, a Party shall, within a reasonable period of time, provide information and respond to questions pertaining to any measure referred to in paragraph 1 of this Article that the requesting Party considers might materially affect the operation of this Chapter or otherwise substantially affect its interests under this Chapter.
(b) Any request or information under this paragraph shall be provided to the other Party through the relevant contact points as referred to in Article 14.4 (Overall Contact Points).
(c) Any information provided under this paragraph shall be without prejudice as to whether the measure is consistent with this Chapter.
5. Administrative Proceedings
With a view to administering in a consistent, impartial, and reasonable manner all measures referred to in paragraph 1 of this Article, each Party shall ensure that in its administrative proceedings applying such measures to particular covered investments or investors of the other Party in specific cases:
(a) wherever possible, covered investments or investors of the other Party that are directly affected by a proceeding are provided with reasonable notice, in accordance with domestic procedures, when a proceeding is initiated, including a description of the nature of the proceeding, a statement of the legal authority under which the proceeding is initiated, and a general description of any issue in controversy;
(b) such persons are afforded a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, when time, the nature of the proceeding, and the public interest permit; and
(c) its procedures are in accordance with its domestic law.
6. Review and Appeal
(a) Each Party shall establish or maintain judicial, quasi-judicial, or administrative tribunals or procedures for the purpose of the prompt review and, where warranted, correction of final administrative actions regarding matters covered by this Chapter. Such tribunals shall be impartial and independent of the office or authority entrusted with administrative enforcement and shall not have any substantial interest in the outcome of the matter.
(b) Each Party shall ensure that, in any such tribunals or procedures, the parties to the proceeding are provided with the right to:
(i) a reasonable opportunity to support or defend their respective positions; and
(ii) a decision based on the evidence and submissions of record or, where required by its domestic law, the record compiled by the administrative authority.
(c) Each Party shall ensure, subject to appeal or further review as provided in its domestic law, that such decisions shall be implemented by, and shall govern the practice of, the offices or authorities with respect to the administrative action at issue.
(d) This paragraph 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.
Article 8.12. NON-CONFORMING MEASURES
1. Article 8.3 (National Treatment), Article 8.4 (Most-Favoured-Nation Treatment), Article 8.9 (Performance Requirements) and Article 8.10 (Senior Management and Board of Directors) do not apply to:
(a) any existing non-conforming measures maintained within its territory;
(b) the continuation of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not increase the non- conformity of the measure, as it existed immediately before the amendment, with those obligations.
2. Articles 8.3 (National Treatment) and 8.4 (Most-Favoured-Nation Treatment) do not apply to any measure covered by an exception to, or derogation from, the obligations under Article 3 or 4 of the TRIPS Agreement, as specifically provided in those Articles and in Article 5 of the TRIPS Agreement.
3. Articles 8.3 (National Treatment) and 8.4 (Most-Favoured-Nation Treatment) do not apply to subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance.
4. Articles 8.3 (National Treatment) and 8.4 (Most-Favoured-Nation Treatment) do not apply to government procurement.
5. The Parties will endeavour to progressively remove the non-conforming measures,
Article 8.13. SPECIAL FORMALITIES AND INFORMATION REQUIREMENTS
1. Nothing in Article 8.3 (National Treatment) shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with covered investments, such as a requirement on the filing for establishment of and changes to the covered investments of the other Party, provided that such formalities do not materially impair the protections afforded by a Party to investors of the other Party and covered investments pursuant to this Chapter.
2. Notwithstanding Articles 8.3 (National Treatment) and 8.4 (Most-Favoured- Nation Treatment), a Party may require an investor of the other Party or its covered investment to provide information concerning that investment solely for informational, statistical or administrative purposes. The Party shall protect any confidential business information from any disclosure that would prejudice the competitive position of the investor or the covered investment.
Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its domestic law.
Article 8.14. NON-DEROGATION
This Chapter shall not derogate from any of the following that entitle a covered investment, or, with respect to a Party, an investor of the other Party, to treatment more favourable than that accorded by this Chapter:
(a) laws or regulations, administrative practices or procedures, or administrative or adjudicatory decisions of a Party;
(b) international legal obligations of a Party; or
(c) obligations assumed by a Party, including those contained in an investment agreement.