(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. Notwithstanding paragraph 3, a Party may restrict transfers of returns-in-kind in circumstances where it could otherwise restrict such transfers under this Agreement, including as set out in paragraph 4.
Article 12. Subrogation
If a Party, or an agency, institution, statutory body or corporation designated by that Party, makes a payment to an investor of the Party under a guarantee, a contract of insurance or other form of indemnity it has granted in respect of a covered investment, the other Party in whose Area the covered investment was made shall recognise the subrogation or transfer of any rights or title the investor would have possessed under this Agreement in respect of such covered investment but for the subrogation. For greater certainty, the subrogated or transferred right or claim shall not be greater than the original right or claim of the investor.
Article 13. Taxation Measures
1. For the purposes of this Article:
Designated authorities means:
(a) For Australia, the Secretary to the Treasury or an authorised representative of the Secretary; and
(b) For the HKSAR, an authority or its authorised representative to be designated by the Director-General of Trade and Industry;
Tax convention means a convention for the avoidance of double taxation or other bilateral or multilateral taxation agreement or arrangement; and
Taxes and taxation measures include excise duties, but do not include any import or customs duties.
2. Except as provided in this Article, nothing in this Agreement shall apply to taxation measures (7).
3. Articles 10 and 11 shall apply to taxation measures.
4. Notwithstanding paragraph 3, the rights granted and obligations imposed under this Agreement in accordance with Article 11 shall not apply to:
(a) The adoption or enforcement of any taxation measure aimed at ensuring the equitable or effective imposition or collection of taxes including any taxation measure that differentiates between persons based on their place of residence or incorporation, provided that the taxation measure does not arbitrarily discriminate between persons, goods or services of the Parties (8); or
(b) A provision that conditions the receipt, or continued receipt, of an advantage relating to the contributions to, or income of, a pension trust, superannuation fund, or other arrangement to provide pension, superannuation, or similar benefits on a requirement that the Party maintain continuous jurisdiction, regulation, or supervision over such trust, fund, or other arrangement.
5. No investor may invoke Articles 10 or 11 as the basis for a claim under Section C (Settlement of Disputes between an Investor and the Host Party) if it has been determined in accordance with this paragraph that the taxation measure is not an expropriation or that the taxation measure falls within paragraph 4. An investor that seeks to invoke Articles 10 or 11 with respect to a taxation measure must first refer to the designated authorities of the Parties, at the time that it gives its notice of intent under Article 24, the issue of whether that taxation measure is not an expropriation or that it is a taxation measure that falls within paragraph 4. If the designated authorities do not agree to consider the issue or, having agreed to consider it, fail to make a determination within a period of six months of the referral, the investor may submit its claim to arbitration under Article 24. A tribunal established to consider a dispute related to the measure shall accept as binding any determination of the designated authorities of the Parties made under this paragraph.
6. Nothing in this Agreement shall affect the rights and obligations of either Party under any tax convention applicable to the Parties. In the event of any inconsistency relating to a taxation measure between this Agreement and any such tax convention, such convention shall prevail to the extent of the inconsistency.
7. If an issue arises as to whether any inconsistency exists between this Agreement and a tax convention applicable to the Parties, the issue shall be referred to the designated authorities of the Parties. The designated authorities of the Parties shall have six months from the date of referral of the issue to make a determination as to the existence and extent of the inconsistency. If the designated authorities agree, such a period may be extended up to 12 months from the date of referral of the issue. No procedure concerning the measure giving rise to the issue may be initiated under Section B (Settlement of Disputes between the Parties) or Section C (Settlement of Disputes between an Investor and the Host Party) until the expiry of the six-month period, or such other period as may have been agreed by the designated authorities pursuant to the previous sentence. A tribunal or panel established to consider a dispute related to a taxation measure shall accept as binding any determination of the designated authorities made under this paragraph.
8. Nothing in this Agreement shall oblige a Party to extend to the other Party the benefit of any treatment, preference or privilege arising from any tax convention applicable to the Party.
(7) For greater certainty, notwithstanding this paragraph, Section B (Settlement of Disputes between the Parties) and Section C (Settlement of Disputes between an Investor and the Host Party) shall apply where paragraph 3 applies.
(8) The Parties understand that this paragraph must be interpreted by reference to the footnote to Article XIV(d) of GATS as if the Article was not restricted to services or direct taxes.
Article 14. Denial of Benefits
A Party may, at any time, deny the benefits of this Agreement to an investor of the other Party that is an enterprise of that other Party and to investments of that investor if:
(a) Persons of a non-Party own or control the enterprise; and
(b) The denying Party adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investments.
Article 15. Investment and Environmental, Health and other Regulatory Objectives
Nothing in this Agreement shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Agreement that it considers appropriate to ensure that investment activity in its Area is undertaken in a manner sensitive to environmental, health or other regulatory objectives.
Article 16. Corporate Social Responsibility
The Parties affirm the importance of each Party encouraging enterprises operating within its Area or subject to its jurisdiction to voluntarily incorporate into their internal policies those internationally recognised standards, guidelines and principles of corporate social responsibility that have been endorsed or are supported by that Party.
Article 17. Transparency
Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application with respect to any matter covered by this Agreement are promptly published, including through the internet where feasible, or otherwise made available in such a manner as to enable interested persons and the other Party to become acquainted with them.
Article 18. General Exceptions
1. For the purposes of this Agreement and subject to the requirement that such measures are not applied in a manner which would constitute arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures:
(a) Necessary to protect public morals or to maintain public order (9);
(b) Necessary to protect human, animal or plant life or health;
(c) Necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:
(i) The prevention of deceptive and fraudulent practices or to deal with the effects of a default on a contract;
(ii) The protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts; or
(iii) Safety;
(d) Imposed for the protection of national treasures of artistic, historic or archaeological value; or
(e) Relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.
2. The Parties understand that the measures referred to in paragraph 1(b) include environmental measures necessary to protect human, animal or plant life or health.
(9) The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.
Article 19. Essential Security
1. Nothing in this Agreement shall be construed to:
(a) Require a Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests;
(b) Preclude a Party from applying measures that it considers necessary for the protection of its own essential security interests (10); or
(c) Prevent a Party from taking any action in pursuance of the obligations applicable to it under the United Nations Charter for the maintenance of international peace and security.
2. Subject to paragraph 1(a), the other Party shall be informed of measures taken under paragraph 1(b) and paragraph 1(c) and of their termination.
(10) For greater certainty, measures referred to in paragraph 1(b) include: (i) those relating to fissionable and fusionable materials or the materials from which they are derived; (ii) those relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials or relating to the supply of services as carried out directly or indirectly for the purpose of supplying or provisioning a military establishment; (iii) those taken so as to protect critical public infrastructure, whether publicly or privately owned, including communications, power, transport and water infrastructures from deliberate attempts intended to disable, degrade or otherwise interfere with such infrastructures (including measures taken to prevent such attempts); and (iv) those taken in time of national emergency, war or other emergency in international relations.
Article 20. Temporary Safeguard Measures
1. If a Party is in serious balance of payments and external financial difficulties or under threat thereof, or if, in exceptional circumstances, payments or transfers relating to capital movements cause or threaten to cause serious difficulties for macroeconomic management, it may adopt or maintain restrictions on payments or transfers related to covered investments.
2. Restrictions adopted or maintained under paragraph 1 shall:
(a) Be consistent with the Articles of Agreement of the International Monetary Fund;
(b) Avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(c) Not exceed those necessary to deal with the circumstances described in paragraph 1;
(d) Be temporary and be phased out progressively as the situation specified in paragraph 1 improves, and shall not exceed 18 months in duration;
(e) Not be inconsistent with Article 10;
(f) Be applied on a non-discriminatory basis;
(g) In the case of restrictions on capital outflows, not interfere with an investor's ability to earn a market rate of return in the Area of the restricting Party on any restricted assets (11); and
(h) Not be used to avoid necessary macroeconomic adjustment.
3. Restrictions referred to in paragraph 1 shall not apply to payments or transfers relating to foreign direct investment (12).
4. In determining the incidence of restrictions adopted or maintained under paragraph 1, a Party may give priority to economic sectors which are more essential to its economic development. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular sector.
5. Any restrictions adopted or maintained by a Party under paragraph 1, or any changes therein, shall be notified promptly to the other Party.
6. A Party adopting or maintaining any restrictions under paragraph 1 shall respond to the other Party that requests consultations in relation to the restrictions adopted by it, if such consultations are not otherwise taking place outside this Agreement.
(11) The term "restricted assets" in this subparagraph refers only to assets invested in the Area of the restricting Party by an investor of the other Party that are restricted from being transferred out of the Area of the restricting Party.
(12) For the purposes of this Article, "foreign direct investment" means a type of investment by an investor of a Party in the Area of the other Party, through which the investor exercises ownership or control over, or a significant degree of influence on the management of, an enterprise or other direct investment, and tends to be undertaken in order to establish a lasting relationship. For example, ownership of at least 10 per cent of the voting power of an enterprise over a period of at least 12 months generally would be considered foreign direct investment.
Article 21. Prudential Exception and Related Exceptions
1. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from adopting or maintaining reasonable measures for prudential reasons, such as:
(a) Protecting investors, depositors, financial market participants, policy-holders, or persons to whom a fiduciary duty is owed by a financial service supplier;
(b) Maintaining the safety, soundness, integrity or financial responsibility of financial service suppliers; and
(c) Ensuring the integrity and stability of a Party's financial system.
2. Where such measures do not conform with the provisions of this Agreement to which this exception applies, they shall not be used as a means of avoiding the Party's commitments or obligations under those provisions.
3. This Agreement shall not apply to non-discriminatory measures of general application taken by a central bank or monetary authority, or other public entity in pursuit of monetary and related credit or exchange rate policies. This paragraph shall not affect a Party's obligations under Article 11.
Section B. Settlement of Disputes between the Parties
Article 22. Settlement of Disputes between the Parties
Chapter 18 (Consultations and Dispute Settlement) of the FTA, including its Annexes, is incorporated into and made part of this Agreement, mutatis mutandis.
Section C. Settlement of Disputes between an Investor and the Host Party (13) (14)
(13) No claim may be brought under this Section in respect of the following measures of Australia: measures comprising or related to the Pharmaceutical Benefits Scheme, Medicare Benefits Scheme, Therapeutic Goods Administration and Office of the Gene Technology Regulator. A reference to a body or programme in this footnote includes any successor of that body or programme.
(14) No claim may be brought under this Section in respect of a Party's control measures of tobacco products (including products made or derived from tobacco), cigarettes, imitation smoking products, and other smoking products such as Electronic Nicotine Delivery Systems and Electronic Non Nicotine Delivery Systems including electronic cigarettes. A "control measure" of a Party includes measures with respect to production, consumption, importation, distribution, labelling, packaging, advertising, marketing, promotion, sale, purchase or use, as well as fiscal measures such as internal taxes and excise taxes, and enforcement measures, such as inspection, recordkeeping and reporting requirements. "Tobacco products" means products under Chapter 24 of the Harmonised System, including processed tobacco, or any product that contains tobacco, that is manufactured to be used for smoking, sucking, chewing or snuffing.
Article 23. Consultations
1. In the event of an investment dispute, the claimant and the respondent shall initially seek to resolve the investment dispute through consultations, which may include the use of non-binding, third party procedures, such as good offices, conciliation or mediation.
2. The claimant shall deliver to the respondent a written request for consultations setting out a brief description of facts regarding the measure or measures at issue.
3. For greater certainty, the commencement of consultations shall not be construed as recognition of the jurisdiction of the tribunal.
Article 24. Submission of a Claim to Arbitration
1. If an investment dispute has not been resolved within six months of the receipt by the respondent of a written request for consultations in accordance with Article 23.2:
(a) The claimant, on its own behalf, may submit to arbitration under this Section a claim that:
(i) The respondent has breached an obligation under Section A (Definitions and Substantive Obligations); and
(ii) The claimant has incurred loss or damage by reason of, or arising out of, that breach; and
(b) The claimant, on behalf of an enterprise of the respondent that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim that:
(i) The respondent has breached an obligation under Section A (Definitions and Substantive Obligations); and
(ii) The enterprise has incurred loss or damage by reason of, or arising out of, that breach.
2. At least 90 days before submitting any claim to arbitration under this Section, the claimant shall deliver to the respondent a written notice of its intention to submit a claim to arbitration (notice of intent). The notice shall specify:
(a) The name and address of the claimant and, if a claim is submitted on behalf of an enterprise, the name, address and place of incorporation of the enterprise;
(b) For each claim, the provision of this Agreement alleged to have been breached and any other relevant provisions;
(c) The legal and factual basis for each claim; and
(d) The relief sought and the approximate amount of damages claimed.
3. The claimant may submit a claim referred to in paragraph 1:
(a) Under the UNCITRAL Arbitration Rules; or
(b) If the disputing parties agree, to any other arbitral institution or under any other arbitration rules.
4. A claim shall be deemed submitted to arbitration under this Section when the claimant's notice of or request for arbitration (notice of arbitration):
(a) Referred to in the UNCITRAL Arbitration Rules, together with the statement of claim referred to therein, are received by the respondent; or
(b) Referred to under any arbitral institution or arbitration rules selected under paragraph 3(b) is received by the respondent.
A claim asserted by the claimant for the first time after such notice of arbitration is submitted shall be deemed submitted to arbitration under this Section on the date of its receipt under the applicable arbitration rules.
5. The arbitration rules applicable under paragraph 3 that are in effect on the date the claim or claims were submitted to arbitration under this Section shall govern the arbitration, except to the extent that such arbitration rules are modified by this Agreement.
6. The claimant shall provide with the notice of arbitration:
(a) The name of the arbitrator that the claimant appoints; or
(b) The claimant's written consent for the Secretary-General to appoint that arbitrator.
Article 25. Investment Disputes In Financial Services
1. If a claimant submits a claim to arbitration under this Section challenging a measure relating to financial services, all arbitrators appointed to the tribunal shall, to the extent practicable, have expertise or experience in financial services law or practice in addition to the criteria set out in Article 28.
2. If a claimant submits a claim to arbitration under this Section, and the respondent invokes Article 21 as a defence, the following provisions shall apply:
(a) The respondent shall, no later than the date the tribunal fixes for the respondent to submit its counter-memorial, or in the case of an amendment to the notice of arbitration, the date the tribunal fixes for the respondent to submit its response to the amendment, submit in writing to the authorities responsible for financial services of the non-disputing Party15 a request for a joint determination by the authorities of the respondent and the non-disputing Party on the issue of whether and to what extent Article 21 is a valid defence to the claim. The respondent shall promptly provide the tribunal, if constituted, a copy of the request. The arbitration may proceed with respect to the claim only as provided in paragraph 4, paragraph 5 and paragraph 6.
(b) The authorities of the respondent and the non-disputing Party shall attempt in good faith to make a determination as described in subparagraph (a). Any such determination shall be transmitted promptly to the disputing parties, the non-disputing Party and, if constituted, the tribunal. The determination shall be binding on the tribunal and any decision or award issued by the tribunal shall be consistent with that determination.
(c) If the authorities referred to in subparagraph (a) and subparagraph (b) have not made a determination within 120 days of the date of receipt of the respondent's request under subparagraph (a), the respondent or the non-disputing Party may request the establishment of a panel under Section B (Settlement of Disputes between the Parties) to consider whether and to what extent Article 21 is a valid defence to the claim. Unless otherwise agreed by the Parties, the panellists shall have expertise or experience in financial services law or practice, which may include the laws and regulations concerning financial service suppliers.
3. The final report of a panel referred to in paragraph 2(c) shall be binding on the tribunal, and any decision or award issued by the tribunal shall be consistent with the final report.
4. If no request for the establishment of a panel in accordance with paragraph 2(c) has been made within 10 days of the expiration of the 120 day period referred to in paragraph 2(c), the tribunal may proceed with respect to the claim.
5. The tribunal shall draw no inference regarding the application of Article 21 from the fact that the authorities have not made a determination as described in paragraph 2(c).
6. The non-disputing Party may make oral and written submissions to the tribunal regarding the issue of whether and to what extent Article 21 is a valid defence to the claim. Unless it makes such a submission, the non-disputing Party shall be presumed, for the purposes of the arbitration, to take a position on Article 21 that is not inconsistent with that of the respondent.
(15) For the purposes of this Article, the authorities responsible for financial services are: (a) for Australia: (i) the Treasury; and (ii) the Department of Foreign Affairs and Trade; and (b) for the HKSAR: (i) the Financial Services and the Treasury Bureau; and (ii) the Trade and Industry Department.
Article 26. Consent of Each Party to Arbitration
1. Each Party consents to the submission of a claim to arbitration under this Section in accordance with this Agreement.
2. The consent under paragraph 1 and the submission of a claim to arbitration under this Section shall be deemed to satisfy the requirements of Article II of the New York Convention for an "agreement in writing".
Article 27. Conditions and Limitations on Consent of Each Party
1. No claim shall be submitted to arbitration under this Section if more than three years and six months have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under Article 24.1 and knowledge that the claimant (for claims brought under Article 24.1(a)) or the enterprise (for claims brought under Article 24.1(b)) has incurred loss or damage.
2. No claim shall be submitted to arbitration under this Section unless:
(a) The claimant consents in writing to arbitration in accordance with the procedures set out in this Agreement; and
(b) The notice of arbitration is accompanied:
(i) For claims submitted to arbitration under Article 24.1(a), by the claimant's written waiver; and
(ii) For claims submitted to arbitration under Article 24.1(b), by the claimant's and the enterprise's written waivers,
Of any right to initiate or continue before any court or administrative tribunal under the laws and regulations of a Party, or any other dispute settlement procedures, any proceeding with respect to any measure alleged to constitute a breach referred to in Article 24.
3. Notwithstanding paragraph 2(b), the claimant (for claims brought under Article 24.1(a) and the claimant or the enterprise (for claims brought under Article 24.1(b)) may initiate or continue an action that seeks interim injunctive relief and does not involve the payment of monetary damages before a court or administrative tribunal of the respondent, provided that the action is taken for the sole purpose of preserving the claimant's or the enterprise's rights and interests during the pendency of the arbitration.
4. Notwithstanding paragraph 2(b)(ii), a waiver from the enterprise shall not be required if the respondent has deprived the claimant of its control of the enterprise and therefore the claimant cannot provide such a waiver.
Article 28. Selection of Arbitrators
1. Unless the disputing parties otherwise agree, the tribunal shall comprise three arbitrators, one arbitrator appointed by each of the disputing parties and the third, who shall be the presiding arbitrator, appointed by agreement of the disputing parties.
2. The Secretary-General shall serve as appointing authority for an arbitration in accordance with this Section.
3. If a tribunal has not been constituted within 75 days after the date that a claim is submitted to arbitration under this Section, the Secretary-General, on request of a disputing party, shall appoint, in his or her discretion, and, to the extent practicable, in consultation with the disputing parties, the arbitrator or arbitrators not yet appointed. The Secretary-General shall not appoint a natural person of either the respondent or the non-disputing Party as the presiding arbitrator unless the disputing parties otherwise agree. In making the appointment of the arbitrator or arbitrators not yet appointed, the Secretary-General shall take into account the expertise or relevant experience of particular candidates with respect to public international law, international investment law or the resolution of disputes arising under international investment agreements.
4. In addition to any applicable arbitral rules regarding independence and impartiality of arbitrators, arbitrators shall comply with the Code of Conduct for Panellists under Section B (Settlement of Disputes between the Parties) mutatis mutandis, and any other guidance on the application of relevant rules or guidelines on conflicts of interests in international arbitration that the Parties may provide.
Article 29. Conduct of the Arbitration
1. The disputing parties may agree on the place of any arbitration under the arbitration rules applicable under Article 24.3. If the disputing parties fail to reach agreement, the tribunal shall determine the place in accordance with the applicable arbitration rules, provided that the place shall be in the territory of a party to the New York Convention.
2. The non-disputing Party may make oral and written submissions to the tribunal regarding the interpretation of this Agreement.
3. After consultation with the disputing parties, the tribunal may accept and consider written amicus curiae submissions regarding a matter of fact or law within the scope of the investment dispute that may assist the tribunal in evaluating the submissions and arguments of the disputing parties from a person or entity that is not a disputing party but has a significant interest in the arbitral proceedings. Each submission shall:
(a) Identify the author;
(b) Disclose any affiliation, direct or indirect, with any disputing party; and
(c) Identify any person, government or other entity that has provided, or will provide, any financial or other assistance in preparing the submission.
Each submission shall be in English and comply with any page limits and deadlines set by the tribunal. The tribunal shall provide the disputing parties with a reasonable opportunity to respond to such submissions. The tribunal shall ensure that the submissions do not disrupt or unduly burden the arbitral proceedings, or unfairly prejudice any disputing party.