2. Measures referred to in paragraph 1 of this Article:
(a) Shall be consistent with the Articles of Agreement of the International Monetary Fund so long as the Contracting Party taking the measures is a party to the said Articles of Agreement;
(b) Shall not exceed those necessary to deal with the circumstances set out in paragraph 1 of this Article;
(c) Shall be temporary and shall be eliminated as soon as conditions permit; and
(d) Shall be promptly notified to the other Contracting Party.
3. Nothing in this Agreement shall be regarded as altering the rights enjoyed and obligations undertaken by a Contracting Party as a party to the Articles of Agreement of the International Monetary Fund.
Article 18.
1. Notwithstanding any other provisions of this Agreement, a Contracting Party may adopt or maintain prudential measures with respect to financial services, including measures for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by an enterprise providing financial services, to ensure the integrity and stability of its financial system.
2. In cases where a Contracting Party takes any measure, pursuant to paragraph 1 above, that does not conform with the obligations of the provisions of this Agreement, that Contracting Party shall not use such measure as a means of avoiding its obligations.
Article 19.
1. Nothing in this Agreement shall apply to taxation measures except as expressly provided in paragraphs 2, 3 and 4 of this Article.
2. Articles 1, 3, 7, 10, 22 and 23 shall apply to taxation measures.
3. Articles 14 and 15 shall apply to disputes under paragraph 2 of this Article.
4. Article 20 shall apply to taxation measures regarding the matters set out in paragraph 2 of this Article.
Article 20.
1. The Contracting Parties shall establish a Joint Committee (hereinafter referred to as the "Committee") with a view to accomplishing the objectives of this Agreement. The functions of the Committee shall be:
(a) To discuss and review the implementation and operation of this Agreement;
(b) To review the measures maintained, amended, modified or adopted pursuant to Article 5 of this Agreement for the purpose of contributing to the reduction or elimination of such measures;
(c) To discuss the measures adopted or maintained pursuant to Article 4 of this Agreement for the purpose of encouraging favourable conditions for investors of both Contracting Parties; and
(d) To discuss other investment-related matters concerning this Agreement.
2. The Committee may, as necessary, make appropriate recommendations by consensus to the Contracting Parties for the more effective functioning, or the attainment of the objectives, of this Agreement.
3. The Committee shall be composed of representatives of the Contracting Parties. The Committee shall determine its own rules of procedure to carry out its functions.
4. The Committee may establish sub-committees and delegate specific tasks to such sub-committees. The Committee, upon mutual consent of the Contracting Parties, may hold joint meetings with the private sectors.
5. Unless otherwise decided by the Contracting Parties, the Committee shall meet once a year, and otherwise at the request of either Contracting Party.
Article 21.
Both Contracting Parties recognise that it is inappropriate to encourage investment by investors of the other Contracting Party by relaxing environmental measures. To this effect each Contracting Party should not waive or otherwise derogate from such environmental measures as an encouragement for the establishment, acquisition or expansion in its territory of investments by investors of the other Contracting Party.
Article 22.
1. In fulfilling the obligations under this Agreement, each Contracting Party shall take such reasonable measures as may be available to it to ensure the observance of this Agreement by local governments in its territory.
2. Each Contracting Party reserves the right to deny to an investor of the other Contracting Party that is a legal person or any other entity referred to in sub-paragraph (b) of paragraph (1) of Article 1 and its investments the benefits of this Agreement, if investors of any third country own or control that investor of that other Contracting Party, and
(a) The denying Contracting Party does not maintain normal economic relations with the third country; or
(b) That investor of that other Contacting Party has no substantial business operations in the territory of that other Contracting Party under whose laws it is constituted or organised.
3. The provisions of paragraph 2 of Article 2 of this Agreement shall not be construed so as to oblige a Contracting Party to extend to investors of the other Contracting Party and their investments any preferential treatment resulting from its membership of a free trade area, a customs union, an international agreement for economic integration or a similar international agreement.
Article 23.
1. This Agreement shall enter into force on the thirtieth day after the date of exchange of diplomatic notes informing each other that their respective legal procedures necessary for the entry into force of this Agreement have been completed. It shall remain in force for a period of ten years after its entry into force and shall continue in force unless terminated as provided in paragraph 2 of this Article. This Agreement shall also apply to all investments of investors of either Contracting Party acquired in the territory of the other Contracting Party in accordance with the applicable laws and regulations of that other Contracting Party prior to the entry into force of this Agreement.
2. A Contracting Party may, by giving one year's advance notice in writing to the other Contracting Party, terminate this Agreement at the end of the initial ten year period or at any time thereafter.
3. In respect of investments acquired prior to the date of termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of ten years from the date of termination of this Agreement.
4. This Agreement shall not apply to claims arising out of events which occurred, or to claims which had been settled, prior to its entry into force.
5. The Annexes to this Agreement shall form an integral part of this Agreement.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Agreement.
DONE in duplicate at Seoul, on this twenty-second day of March, 2002, in the Japanese, Korean and English languages, all texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.
FOR THE GOVERNMENT OF JAPAN: 寺田輝介
FOR THE GOVERNMENT OF THE REPUBLIC OF KOREA:
Attachments
EXCEPTIONAL SECTORS OR MATTERS TO ARTICLE 2, PARAGRAPH 3 OF ARTICLE 8, AND ARTICLE 9
THE REPUBLIC OF KOREA
1. Defense industry
2. Broadcasting industry
3. Network operating industry
4. Fisheries
5. Tobacco industry
6. Electricity industry
7. Gas industry
8. Capital transactions with non-residents(won- denominated loans,won- denominated securities with short-term maturities, foreign currency denominated financial credits, guarantees or collaterals, financially unsound corporation's borrowing from non-residents, and derivatives transaction)
9. Foreign acquisition of land
10. Nuclear energy industry
11. Motion pictures industry (Screen quota)
12. Newspaper publishing industry (restrictions on being a publisher or an editor)
13. News agency activities industry (restrictions on being a publisher or an editor)
14. Magazines and periodicals publishing industry (restrictions on being a publisher or an editor)
15. The maintenance, designation or elimination (including privatisation) of a public monopoly other than those covered by Annex II
16. The maintenance, establishment or disposal (including privatisation) of a state enterprise other than those covered by Annex II
17. Subsidies Most- favoured-nation treatment shall be accorded in the sectors or matters specified in 1 to 17 other than 4 and 9.
JAPAN
1. Fisheries within the territorial sea and internal waters
2. Explosives manufacturing ndustry
3. Nuclear energy industry
4. Aircraft industry
5. Arms industry
6. Space industry
7. Broadcasting industry
8. Financial services (deposit insurance)
9. Electricity utility industry
10. Gas utility industry
11. The maintenance, designation or elimination (including privatisation) of a public monopoly
12. The maintenance, establishment or disposal (including privatisation) of a state enterprise
13. Subsidies Most-favoured-nation treatment shall be accorded in the sectors or matters specified in 2 to 13.
Attachments
EXCEPTIONAL SECTORS OR MATTERS TO ARTICLE 2, PARAGRAPH 3 OF ARTICLE 8, AND ARTICLE 9
THE REPUBLIC OF KOREA
1. Rice and barley production industry
2. Beef cattle-farming industry
3. Meat wholesale industry
4. Telecommunications industry (other than network operating industry)
5. Water transport industry
6. Air transport industry
7. Outdoor advertising industry
8. Financial Services (liaison offices of foreign banks, branches of foreign credit information companies, Korea Development Bank and Export-Import Bank of Korea)
9. Registration of aircraft in the national register and matters arising from such registration
10. Matters related to or arising from the nationality of ship, and the acquisition of ship or of any interest in ship
JAPAN
1. Primary industry related to agriculture, try and fisheries (except those covered by Annex I)
2. Oil industry
3. Mining industry
4. Biological preparations manufacturing industry
5. Leater and leather products manufacturing industry
6. Water supply and waterworks industry
7. Railway transport industry
8. Omnibus industry
9. Freight forwarding business industry
10. Water transport industry
11. Air transport industry
12. Telecommunications industry
13. Security industry
14. Heat supply industry
15. Registration of aircraft in the national register and matters arising form such registration
16. Matters related to or arising from the nationality of ship, and the acquisition of ship or of any interest in ship