(h) whenever the specifications for a good are modified subsequent to a determination that the good conforms to the applicable technical regulation or standard, the conformity assessment procedure of the modified good is limited to what is necessary to determine that the good continues to conform to the technical regulation or standard; and
(i) there is a procedure in place to review complaints concerning the operation of a conformity assessment procedure and that corrective action is taken when a complaint is justified.
3. Each Party shall give positive consideration to a request by the other Party to negotiate agreements for the mutual recognition of the results of their respective conformity assessment procedures.
4. Each Party shall, wherever possible, accept the results of the conformity assessment procedures conducted in the territory of the other Party, provided that the procedure offers a satisfactory assurance, equivalent to that provided by a procedure it conducts or a procedure conducted in its territory, the results of which it accepts, and that the relevant good complies with the applicable technical regulation or standard adopted or maintained in that Party's territory.
5. Prior to accepting the results of a conformity assessment procedure pursuant to paragraph 4, and in order to enhance confidence in the permanent reliability of each one of the conformity assessment results, the Parties may consult on matters such as the technical competence of the conformity assessment bodies involved, including verified compliance with relevant international standards through means such as accreditation.
6. Recognizing that it should be to the mutual advantage of the Parties, each Party shall accredit, approve, or otherwise recognize conformity assessment bodies in the territory of the other Party, on terms no less favorable than those accorded to conformity assessment bodies in its territory.
Article 9.7. Authorization Procedures
Each Party shall apply, with such modifications as may be necessary, the relevant provisions of Article 9.6.2, to its authorization procedures.
Article 9.8. Transparency
1. Each Party shall keep a list of its standards-related measures and make them available to the other Party, upon request, and ensure that where full copies of documents are requested by the other Party or by interested persons of the other Party, they are supplied at the same price, apart from the actual cost of delivery, as the price for domestic purchase.
2. Where a Party allows non-governmental persons in its territory to participate in the process of preparation of standards-related measures, it shall also allow non-governmental persons from the territory of the other Party to participate. In such participation, non- governmental persons from the territory of the other Party shall be allowed to express their opinions and comments on the preparation of the standards-related measure.
Article 9.9. Limitations on the Provision of Information
Nothing in this Chapter shall be construed to require a Party to furnish any information the disclosure of which they consider is contrary to its essential security interests.
Article 9.10. Committee on Standards-Related Measures
1. The Parties hereby establish the Committee on Standards-Related Measures, comprising representatives of each Party, pursuant to Annex 9.10.
2. The Committee's functions shall include:
(a) monitoring the implementation, enforcement and administration of this Chapter;
(b) considering any specific matter relating to the standards-related and metrology-related measures of the other Party or any other related measures, whenever a Party has any doubts on the interpretation or application of this Chapter, including the provision of non-mandatory technical advice and recommendations;
(c) facilitating the process by which the Parties make compatible their standards-related and metrology-related measures;
(d) providing a forum for the Parties to consult on issues relating to standards-related and metrology-related measures;
(e) fostering technical cooperation activities between the Parties;
(f) enhancing cooperation on the development and strengthening of standardization systems, technical regulations, conformity assessment procedures and metrology systems of the Parties;
(g) reporting annually to the Commission on the implementation of this Chapter;
(h) facilitating the process of negotiating agreements for mutual recognition between the Parties; and
(i) establishing sub-committees as deemed necessary and determining the scope of action and mandate of such sub-committees.
3. The Committee shall meet as mutually agreed but not less than once a year. The meetings may also be held by telephone, video conference or other means, upon the agreement of the Parties.
Article 9.11. Technical Cooperation
1. Each Party shall, upon request of the other Party, provide:
(a) information and technical assistance on mutually agreed terms and conditions to enhance the standards-related measures of that Party, as well as its activities, processes and systems in this matter; and
(b) information on its technical cooperation programs linked to standards-related measures in specific areas of interest.
2. Each Party shall encourage standardizing bodies in its territory to cooperate with the standardizing bodies in the territories of the other Party, as appropriate, in standardizing activities, such as through membership in international standardizing bodies.
3. Each Party shall, to the fullest extent practicable, inform the other Party of the international agreements or programs it has executed on standards-related measures.
Part II. INVESTMENT, SERVICES AND RELATED MATTERS
Chapter 10. INVESTMENT
Section A. Definitions
Article 10.1. Definitions
For purposes of this Chapter:
disputing investor means an investor that makes a claim under Section C;
disputing parties means the disputing investor and the disputing Party;
disputing Party means a Party against which a claim is made under Section C; disputing party means the disputing investor or the disputing Party;
enterprise means an "enterprise" as defined in Article 2.1, 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;
financial institution means any natural person or enterprise of a Party wishing to supply or supplying financial services under the law of the Party in whose territory it is located;
G7 currency means the currency of Canada, France, Germany, Italy, Japan, the United Kingdom of Great Britain and Northern Ireland or the United States of America;
ICSID means the International Center 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;
investment means every kind of asset that an investor owns or controls, directly or indirectly, and that has the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gains or profits and the assumption of risk. Forms that an investment may take include, but are not limited to:
(a) anenterprise;
(b) shares, stocks, and other forms of equity participation in an enterprise;
(c) bonds, debentures, loans, and other debt instruments of an enterprise;
(d) rights under contracts, including turnkey, construction, management, production, concession or revenue-sharing contracts;
(e) claims to money established and maintained in connection with the conduct of commercial activities;
(f) intellectual property rights;
(g) rights conferred pursuant to domestic law or contract such as concessions, licenses, authorizations and permits, except for those that do not create any rights protected by domestic law; and
(h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens and pledges;
but investment does not mean,
(i) claims to money that arise solely from:
(i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of the other Party; or
(ii) the extension of credit in connection with a commercial transaction, such as trade financing; and
(j) an order entered in a judicial or administrative action.
investment of an investor of a Party means an investment owned or controlled, directly or indirectly, by an investor of such a Party;
investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of such a Party, that makes a juridical act in the territory of the other Party, towards materializing an investment within it, that submits capital or, when applicable, is making or has made an investment;
investor of a non-Party means an investor other than an investor of a Party;
New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York on June 10, 1958;
Secretary-General means the Secretary-General of ICSID; transfers means transfers and international payments; Tribunal means an arbitration tribunal established under Article 10.24 or 10.30;
TRIMS Agreement means Agreement on Trade-Related Investment Measures, which is part of the WTO Agreement; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law, approved by the United Nations General Assembly on December 15, 1976.
Section B. Investment
Article 10.2. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) investments of investors of the other Party in the territory of the Party; and
(c) with respect to Articles 10.7 and 10.18, all investments in the territory of the Party.
2. This Chapter applies to the existing investments at the date of the entry into force of this Agreement, as well as to the investments made or acquired after this date.
3. This Chapter does not apply to:
(a) measures adopted or maintained by a Party relating to investors of the other Party, and investments of such investors, in financial institutions in the Party's territory; and
(b) claims arising out of events which occurred, or claims which had been raised, prior to the entry into force of this Agreement.
4. Nothing in this Chapter shall be construed to prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care.
5. Notwithstanding paragraph 4, if services provided in the exercise of governmental authority are provided in the territory of a Party such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care on a commercial basis or in competition with one or more service providers, those services are covered by the provisions of this Chapter.
Article 10.3. National Treatment
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 establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
2. Each Party shall accord to investments of investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
Article 10.4. Most-Favoured-Nation Treatment
1. Each Party shall accord to investments of investors of the other Party made or materialized in accordance with the laws and regulations of the other Party, and investors of the other Party who have made or materialized such investments, treatment no less favorable than it accords, in like circumstances, to investments made or materialized by investors of any non- Party or investors of such investments.
2. Ifa Party accords more favorable treatment to investments of investors of a non- Party or investors of a non-Party by an agreement establishing, inter alia, a free trade area, a customs union, a common market, an economic union or any other form of regional economic organization to which the Party is a member, it shall not be obliged to accord such treatment to investments of the investors of the other Party or the investors of the other Party.
3. Notwithstanding paragraph 2, if a Party makes any further liberalization, in conformity with Articles 10.9.1 and 10.9.2 by an agreement with a non-Party, it shall afford adequate opportunity to the other Party to negotiate treatment granted therein on a mutually advantageous basis with a view to securing an overall balance of rights and obligations.
Article 10.5. Minimum Standard of Treatment
1. Each Party shall accord to investments of investors of the other Party treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security.
2. The concepts of "fair and equitable treatment" and "full protection and security" in paragraph 1 do not require treatment in addition to or beyond that which is required by the customary international law minimum standard of treatment of aliens.
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.
Article 10.6. Losses and Compensation
Investors of a Party whose investments suffer losses owing to war or other armed conflict, a state of national emergency, revolt, insurrection, riot or other similar situations, and such losses as ones resulting from requisition or destruction of property, which was not caused in combat action or was not required by the necessity of the situation, in the territory of the other Party, shall be accorded by the latter Party treatment, as regards restitution, indemnification, compensation or other forms of settlement, no less favorable than that which the latter Party accords to its own investors or to investors of any non-Party, whichever is more favourable to the investors concerned.
Article 10.7. Performance Requirements
1. Neither Party may impose or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory:
(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 provided in its territory, or to purchase goods or services 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 provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to transfer technology, a production process or other proprietary knowledge to a person in its territory, except when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority to remedy an alleged violation of competition law or to act in a manner not inconsistent with other provisions of this Agreement; or
(g) to act as the exclusive supplier of the goods it produces or services it provides to a specific region or world market.
2. A measure that requires an investment to use a technology to meet generally applicable health, safety or environmental requirements shall not be construed to be inconsistent with subparagraph 1(f). For greater certainty, Articles 10.3 and 10.4 apply to the measure.
3. Neither Party may condition the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, in 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 producers 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 provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.
4. Nothing in paragraph 3 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, in compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory. In the event of any inconsistency between this paragraph and the TRIMS Agreement, the latter shall prevail to the extent of the inconsistency.
5. Paragraphs 1 and 3 do not apply to any requirement other than the requirements set out in those paragraphs.
6. Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in subparagraphs 1(b) or (c) or 3(a) or (b) shall be construed to prevent a Party from adopting or maintaining measures, including environmental measures:
(a) necessary to secure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) necessary for the conservation of living or non-living exhaustible natural resources.
7. The provisions of:
(a) subparagraphs 1(a), (b) and (c), and 3(a) and (b) shall not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs;
(b) subparagraphs 1(b), (c), (f) and (g), and 3(a) and (b) shall not apply to procurement by a Party or a state enterprise; and
(c) subparagraphs 3(a) and (b) shall not apply to requirements imposed by the importing Party relating to the content of goods necessary to qualify for preferential tariff or preferential quotas.
8. This Article does not preclude the application of any commitment, obligation or requisite between private parties.
Article 10.8. Senior Management and Boards of Directors
1. Neither Party may require that an enterprise of a Party that is an investment of an investor of the other Party appoint to senior management positions individuals of any particular nationality.
2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is an investment of an investor of the other Party, be of a particular nationality, or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
Article 10.9. Reservations and Exceptions
1. Articles 10.3, 10.7 and 10.8 shall not apply to:
(a) any existing nonconforming measure that is maintained by:
(i) a Party at the national level, as set out in its Schedule to Annex I; or
(ii) a local government;
(b) the continuation or prompt renewal of any nonconforming measure referred to in subparagraph (a); or
(c) an amendment to any nonconforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 10.3, 10.7 and 10.8.
2. Articles 10.3, 10.7 and 10.8 shall not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex II.
3. Neither Party shall, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule to Annex II, require an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
4. Nothing in this Chapter shall be construed so as to derogate from rights and obligations under international agreements in respect of protection of intellectual property rights to which both Parties are party, including TRIPS Agreement and other treaties concluded under the auspices of the World Intellectual Property Organization.
5. Articles 10.3 and 10.8 shall not apply to: (a) procurement by a Party or a state enterprise; or (b) subsidies or grants provided by a Party or a state enterprise, including government- supported loans, guarantees and insurance.
6. Articles 10.3, 10.7 and 10.8 shall not apply to any voluntary and special investment regime, as is established in Annex 10.9.6.
Article 10.10. Future Liberalization
Through future negotiations, to be scheduled every two years by the Commission after the date of entry into force of this Agreement, the Parties will engage in further liberalisation with a view to reaching the reduction or elimination of the remaining restrictions scheduled in conformity with paragraphs 1 and 2 of Article 10.9 on a mutually advantageous basis and securing an overall balance of rights and obligations.
Article 10.11. Transfers
1. Except as provided in Annex 10.11, each Party shall permit all transfers relating to an investment of an investor of the other Party in the territory of the Party to be made freely and without delay. Such transfers include:
(a) the initial capital and additional amount to maintain or increase an investment;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other fees, returns in kind and other amounts derived from the investment;
(c) proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
(d) payments made under a contract entered into by the investor, or its investment, including payments made pursuant to a loan agreement;
(e) payments made pursuant to Article 10.13; and
(f) payments arising under Section C.
2. Each Party shall permit transfers to be made in a freely usable or convertible currency at the market rate of exchange prevailing on the date of transfer.
3. Neither Party may require its investors to transfer, or penalize its investors that fail to transfer, the income, earnings, profits or other amounts derived from, or attributable to, investments in the territory of the other Party.
4. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities;
(c) criminal or penal offenses;
(d) reports of transfers of currency or other monetary instruments; or