For the purposes of Article 10.12, the Committee on Investment and Cross-Border Trade in Services shall be composed as follows:
(a) for Costa Rica by representatives of the Ministry of Foreign Trade, or their successors; and
(b) for Ecuador by representatives of the Ministry of Production, Foreign Trade, Investment and Fisheries, or their successors.
Annex 10.13. Professional Services
Development of Professional Services Standards
1. Each Party shall encourage the relevant bodies in its respective territory to develop generally acceptable standards and criteria for the licensing and qualification of professional service suppliers, and to submit to the Commission recommendations on their recognition.
2. The rules and criteria to in 1 may be drawn up in relation to the following aspects:
(a) education: accreditation of educational institutions or academic programs;
(b) examinations: licensing qualification examinations, including alternative methods of evaluation, such as oral examinations and interviews;
(c) experience: the extent and nature of the experience required to obtain a license;
(d) conduct and ethics: rules of professional conduct and the nature of disciplinary actions in case of contravention of these rules;
(e) professional development and renewal of certification: continuing education and the corresponding requirements to obtain the professional certificate;
(f) scope of action: scope or limits of authorized activities; and
(g) local knowledge: requirements on knowledge of aspects such as laws, regulations, language, geography or local climate.
3. Upon receipt of a recommendation referred to paragraph 1, the Commission shall review it within a reasonable period of time to decide whether it is consistent with this Agreement. Based on the Commission's review, cach Party shall encourage its respective competent authorities to implement that recommendation, where appropriate, within a mutually agreed period of time.
Temporary Licenses
4. For mutually agreed individual professional services, each Party shall encourage the competent bodies in its territory to develop procedures for the granting of temporary licenses to professional service suppliers of the other Party.
Professional Services Working Group
5. The Parties, by mutual agreement, may form a Working Group on Professional Services, including representatives of relevant professional bodies of each Party, to facilitate the activities set out in paragraphs 1 and 4.
6. The Working Group below may consider, for individual professional services, the following matters:
(a) procedures to encourage the development of mutual recognition agreements or conventions between their relevant professional bodies;
(b) develop workable procedures on standards licensing and certification of pre- professional service providers;
(c) identify those professional services that are a priority for its work; and (d) other matters of mutual interest related to the provision professional services.
7. The Working Group shall report to the Commission on its progress and future direction with respect to its work.
Review
8. The Commission shall review the implementation of this Annex at least once every three years, or as the Parties deem appropriate.
Chapter 11. Financial Services
Article 11.1. Definitions
For the purposes of this Chapter:
cross-border trade in financial services or cross-border supply financial services means the supply a financial service:
(a) of the territory of one Party to the territory of the other Party;
(b) in the territory of a Party by a person of that Party to a person of the other Party; or
(c) by a national of a Party in the territory of the other Party,
but does not include the supply of a financial service in the territory of a Party for an investment in that ;
self-regulatory entity means any non-governmental entity, including any securities or financial derivatives market or exchange, clearinghouse or other body or association, that exercises proprietary or delegated regulatory or supervisory authority over financial service suppliers or financial institutions;
public entity means a central bank or monetary authority of a Party, or any financial institution owned or controlled. a Party;
financial institution means any financial intermediary or other enterprise that is authorized to do business and that is regulated or supervised as a financial institution in accordance with the law of the Party in whose territory it is located;
financial institution of the other Party means a financial institution, including a branch, located in the tenitorium of a Party and which is controlled by persons of the other Party;
investment means "investment" as defined in Article 15.18 (Definitions), except that, with respect to "loans" and "debt instruments" referred to in that Article:
(a) a loan granted to a financial institution or a debt instrument issued by a financial institution is an investment only when it is treated as regulatory capital by the Party in whose territory it is located the financing institution; and.
(b) a loan granted by a financial institution or a debt instrument owned a financial institution, other than a loan or debt instrument of a financial institution referred to in paragraph (a), is not an investment.
For greater certainty, a pt estain granted by cross-border supplier of financial services, or a debt instrument owned by a cross-border supplier of financial services, other than a loan to a financial institution or a debt instrument issued by a financial institution, is an investment if such loan or instrument meets the criteria for investments set forth in Article 15.18 (Definitions);
Investor of a Party means a "Investor of a Party" as defined in Article 15.18 (Definitions);
new financial service means a financial service not supplied in the territory of the Party, but which is supplied in the of the other Party, and includes any new form of supply of a financial service or the sale of a financial product that is not sold in the the Party;
person of a Party means a "person of a Party" as defined in Article 1.5 (Definitions of General Application) and, for greater certainty, does not include a branch of a company of a non-Party;
financial service supplier of a Party means a company of a Party engaged in the business of supplying a financial service in the territory of that Party;
cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service in the territory of the Party and that seeks to supply or does supply a financial service through the cross-border supply of such services;
financial service means any service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (except insurance), as well as all services incidental or auxiliary to a service of financial nature. Financial services include the following activities:
Services, including insurance and insurance coverage
(a) direct insurance (including coinsurance):
(i) life insurance;
(ii) insurance;
(b) reinsurance and retrocession;
(c) insurance brokerage activities, e.g., insurance brokers and insurance agents;
(d) The services auxiliary to insurance, e.g., consultants, actuaries, risk assessment and claims adjusting;
Financial services and other financial services (including insurance)
(e) acceptance of deposits and other repayable funds from the public;
(f) loans of all types, including personal loans, mortgages, loans and financing of commercial transactions;
(g) financial advisory services;
(h) all payment services and money transfers, credit, charge and similar cards, traveler's checks and bank drafts;
(i) guarantees and commitments;
(j) trading for its own account or for the account of customers, on an exchange, in an over-the-counter market or otherwise, of the following:
(i) money market instruments (including checks, bills of exchange and certificates of deposit);
(i) currencies;
(iii) derivative products, including, but not limited to, futures and options;
(iv) exchange and money market instruments, such as swaps and forward rate agreements;
(v) transferable securities;
(vi) other negotiable instruments and financial assets, including metal;
(k) participation in issues of all kinds of securities, including and placement as agents (publicly or privately), and the provision of services related to such issues;
(l) foreign exchange brokerage;
(m) asset management, e.g., cash or management, collective investment management in all its forms, pension fund administration, custodial and depository services, and trust services;
(n) payment and clearing services in respect of financial assets, including securities, derivatives and other negotiable instruments;
(o) provision and transfer of financial information, and processing financial data and related software, by providers of other financial services; and
(p) advisory, intermediation and other auxiliary financial services in respect of any of the activities specified in the guidelines. (e) to (0), including information and credit analysis, research and advice on investments and. securities portfolios, and advice on acquisitions and corporate restructuring and strategy.
Article 11.2. Scope of Application
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors the other Party and the investments of such investors in financial institutions in the Party's territory; and
(c) cross-border trade in financial services.
2. Chapters 10 (Cross-Border Trade In Services) and 15 (Investment) apply to the measures described in paragraph 1 only to the extent that those Chapters or the Articles of those Chapters are incorporated this Chapter.
(a) Articles 10.11 (Denial of Benefits), 15.9 (Measures Relating to Health, Safety, Environment, Labor Rights and Other Regulatory Requirements), 15.11 (Expropriation and Compensation), 15.12 (Transfers), 15.13 (Denial of Benefits) and 15.14 (Special Formalities and Information Requirements) are incorporated. into and made an integral part of this Chapter.
(b) Article 10.10 (Transfers and Payments) is incorporated into and forms an integral part of this Chapter to the extent that cross-border trade in financial services is subject to the obligations under Article 11.6 (Cross-Border Trade).
3. This Chapter does not apply to the ineiliclas acloptadas or maintained by a Party related to:
(a) activities or services that are part of a pension plan or statutory social security system; or
(b) activities or services carried out for the account or with the guarantee of the Party or with the use of financial resources of the Party, including its public entities,
However, this Chapter shall apply if a Party permits any of the activities or services referred to in paragraphs (a) or (b) to be performed by its financial institutions in competition with a public entity or financial institution.
4. This Chapter does not apply to laws, regulations, or requirements governing the acquisition by governmental agencies of financial services for governmental purposes and not the purpose of sale or use in the provision of services for commercial sale.
Article 11.3. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of financial institutions and investments in financial institutions in its territory.
2. Each Party shall accord to financial institutions of the other Party and to investments of investors of other Party in financial institutions treatment no less favorable than that it accords, in like circumstances, to its own financial institutions and to investments of its own investors in financial institutions, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. For purposes of the national treatment obligations in paragraph 1 of Article 11.6, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favorable than that it accords, in like circumstances, to its own financial service suppliers with respect to the supply of the relevant service.
Article 11.4. Most-Favored-Nation Treatment
Each Party shall accord to investors of the other Party, to financial institutions of the other Party, to investments of investors in financial institutions, and to cross-border financial service suppliers of the other Party, treatment no less favorable than that it accords, in like circumstances, to investors, to financial institutions of the other Party, and to cross-border financial service suppliers of the other Party, treatment no less favorable than that it accords, in like circumstances, to investors, to financial institutions of the other Party, and to cross-border financial service suppliers of the other Party financial institutions, investments of investors in financial institutions and cross-border suppliers of financial services of a non-Party.
Article 11.5. Market Access for Financial Institutions
1. A Party shall not adopt or maintain, with respect to financial institutions of the other Party, on the basis of a regional subdivision or its entire territory, measures that:
(a) impose limitations on:
(i) the number of financial institutions, in the form of numerical quotas, monopolies, exclusive service providers or through the requirement of an economic needs test;
(ii) the total value of assets or financial services transactions in the form of numerical quotas or by requiring an economic needs test;
(iii) the total number of financial services operations or the total amount of financial services output, expressed in designated units, in the form of quotas or by requiring a test of economic needs (1); or
(iv) the total number of natural persons that may be employed in a given financial services sector, or that a financial institution may employ, and that are necessary for the supply of a specific financial service, and are directly related to it, in the form of numerical quotas or through the requirement of an economic needs test; or
(b) restrict or prescribe the specific types of legal entity or joint venture through which a financial institution may provide a service.
2. For purposes of this Article, financial institutions of the other Party include financial institutions that investors of the other Party intend to establish in the territory of the Party.
Article 11.6. Cross-border Trade
1. Each Party shall permit, on terms and conditions that accord national treatment, cross-border financial service suppliers of the other Party to supply the services specified in Annex 11.6 (Cross-Border Trade).
2. Each Party shall permit persons located in its territory and its nationals, wherever located, to purchase financial services from cross-border financial service suppliers of the other Party located in the territory of the other Party. This does not oblige a Party to permit such suppliers to do business or advertise in its territory. Each Party may define doing business and advertising for the purposes of this obligation, provided that such definitions are not inconsistent with paragraph 1.
3. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration or authorization of cross-border suppliers of financial services of the other Party and of financial instruments.
Article 11.7. New Financial Services (2)
1. Each Party shall permit a financial institution of the other Party to supply any new financial service that that Party would permit its own financial institutions to supply in like circumstances, without further legislative action by the Party.
2. Notwithstanding subparagraph I(b) of Article 11.5, a Party may determine the legal and institutional form through which the new financial service may be supplied and may require authorization for the supply of the new financial service. Where a Party requires a financial institution to obtain authorization to supply a new financial service, the decision shall be made within a reasonable period of time and the authorization may be refused only on prudential grounds or for failure to comply with requirements.
Article 11.8. Treatment of Certain Information
Nothing in this Chapter obliges a Party to disclose or allow access to:
(a) information relating to the financial affairs and accounts of individual customers of financial institutions or cross-border financial service providers; or
(b) any confidential information the disclosure of which would impede law enforcement or otherwise be contrary the public interest or would prejudice the legitimate commercial interests of particular persons.
Article 11.9. Senior Management and Boards of Directors
1. Neither Party may require that financial institutions of the other Party hire persons of a particular nationality for senior executive positions or other key personnel.
2. Neither Party may require that more than a simple majority of the Board of Directors of a financial institution of the other Party be composed of nationals of the Party, persons residing in the territory of the Party, or a combination of both.
Article 11.10. Nonconforming Measures
1. Articles 11.3, 1.1.4, 11.5, 11.6 and 11.9 shall not apply to:
(a) any existing non-conforming measure maintained by a Party in:
(i) the central level government, as established by that Party in its Schedule to Annex III; or
(ii) a local level government; (3)
(b) the continuation or prompt renewal of any nonconforming measure referred to in subparagraph (a); or
(c) the modification of any nonconforming measure referred to in subparagraph (a) provided that such modification does not diminish the degree of conformity of the measure as it was in effect:
(i) immediately prior to the amendment, with article 11.3, 11.4, 11.5 or 11.9; or
(ii) as of the date of entry into force of this Agreement, with Article 11.6. 2. Articles 11.3, 11.4, 11.5, 11.6 and 11.9 shall not apply to any measures that a Party adopts or maintains in to sectors, subsectors or activities, as indicated in section B in its Schedule to Annex III.
3. A non-conforming measure set out in a Party's Schedule to Annex I or II shall be treated as a measure to Article 10.2 (National Treatment), 10.3 Most-Favored-Nation Treatment), 15.3 National Treatment), or 15.4 (Most-Favored-Nation Treatment) shall be treated as a measure to which Article 11.3 (National Treatment) or 1.1.4 (Most-Favored-Nation Treatment), as the case may be, does not apply, to the extent that the nation, sector, subsector, or activity set out in the Schedule is covered by this Chapter.
Article 11.11. Exceptions
1. Nothing in this Chapter or this Agreement shall be construed to prevent a Party from adopting or maintaining measures for prudential reasons (4), for the protection of investors, financial market participants, depositors, policyholders, policyholders, insureds or beneficiaries or persons to whom a financial institution or cross-border financial service supplier has a fiduciary obligation, or to ensure the integrity and stability of the financial system. Where such measures are not in accordance with the provisions of this Chapter or this Agreement, they shall not be used as a means of avoiding the Party's obligations under such provisions.
2. Nothing in this Chapter or this Agreement applies to nondiscriminatory measures of a general nature taken by any public entity in pursuance of monetary, credit, related, or exchange tate policies. This paragraph shall not affect a Party's obligations under Article 15.7 (Performance Requirements) with respect to measures covered by Chapter 15 (Investment) or under Articles 1.0.10 (Transfers and Payments) and 15.12 (Transfers).
3. Notwithstanding the provisions of Articles 10.10 (Transfers and Payments) and 15,. 12 (Transfers) as incorporated into this Chapter, a Party may prevent or limit transfers from a financial institution or cross-border financial service supplier to or for the benefit of a person affiliated or related to such institution or supplier through the equitable, non-discriminatory and good faith application measures relating to the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service suppliers. This paragraph is without prejudice to any other provision of this Agreement that permits the Party to restrict transfers.
4. For greater certainty, nothing in this Chapter shall be construed to prevent a Party from adopting or enforcing measures necessary to ensure compliance with laws or regulations that are not inconsistent with this Chapter, including those relating to the prevention of deceptive and. fraudulent practices or address the effects of a breach of a contract of financial services, subject to the requirement that such measures shall not be applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where same conditions prevail, or a disguised restriction on investment in financial institutions or on trade in financial services, as covered by this Chapter.
Article 11.12. Transparency and Administration of Certain Measures
1. The Parties recognize that transparent regulations and policies governing the activities of financial institutions and cross-border financial service suppliers are important to facilitate foreign financial institutions and foreign cross-border financial service suppliers' access to each Party's market as well as operations in the neighborhoods. Each Party undertakes to promote regulatory transparency in financial services.
2. In lieu of Article 22.2 (Publication), each Party, to the extent practicable and in accordance with its law:
(a) publish in advance any regulations of general application relating to matters in this Chapter that it proposes to adopt and the purpose of the regulation; and
(b) provide interested persons and the other Party a reasonable opportunity to comment on the proposed regulations.
The competent authorities (5) of each Party shall make publicly available the requirements, including any necessary documentation, for completing requests related to the supply of financial services.
4. At the request of the interested party, the competent authority of a Party shall inform him of the status of his application. Where the authority requires additional information from the applicant, it shall notify him without undue delay.
5. Within 180 days, the competent authorities of a Party shall make an administrative decision on a complete application by an investor in a financial institution, a financial institution or a cross-border financial service supplier of the other Party relating to the supply of a financial service, and shall promptly notify the applicant of the decision. An application shall not be considered complete until all relevant proceedings have been held and all necessary information has been received. Where it is not practicable to make a decision within 180 days, the regulatory authority shall notify the applicant without undue delay and shall attempt to make the decision thereafter within a reasonable period of time.
6. At the request of an unsuccessful applicant, the competent authority that has refused an application shall inform the applicant, the extent practicable, of the reasons for the refusal of the application.
7. Each Party shall establish appropriate mechanisms to respond to inquiries interested parties with respect to issues of general application covered by this Chapter.
8. Each Party shall ensure that standards of general application adopted or maintained by self-regulatory organizations of the Party are timely published or otherwise made available in such a manner as to enable interested persons to become acquainted with them.
9. To the extent practicable, each Party shall allow a reasonable period of time to elapse between the publication of the final regulations and their entry into force.
10. In adopting final regulations, the Party shall, to the extent practicable and in accordance with its law, consider in writing substantive comments received from interested parties with respect to the proposed regulations.