(b) financial data processing as described in subparagraph (o) of the definition of financial service, subject to prior authorization from the relevant regulator, as required. (5)
(c) advisory and other auxiliary financial services, excluding intermediation and credit reference and analysis, relating to banking and other financial services as described in subparagraph (p) of the definition of financial service.
Notwithstanding subparagraph (c), in the event that after the date of entry into force of this Agreement Chile allows credit reference and analysis to be supplied by cross-border financial service suppliers, it shall accord national treatment (as specified in Article 12.2(3)) to cross-border financial service suppliers of the United States. Nothing in this commitment shall be construed to prevent Chile from subsequently restricting or prohibiting the supply of credit reference and analysis services by cross- border financial service suppliers.
7. Itis understood that a Party's commitments on cross-border investment advisory services shall not, in and of themselves, be construed to require the Party to permit the public offering of securities (as defined under its relevant law) in the territory of the Party by cross-border suppliers of the other Party who supply or seek to supply such investment advisory services. A Party may subject the cross-border suppliers of investment advisory services to regulatory and registration requirements.
Annex 12.9. Specific Commitments
Section A. Right of Establishment with Respect to Certain Financial Services
1. In lieu of Article 12.4 with respect to Banking and other Financial Services (excluding Insurance):
(a) Each Party shall permit an investor of the other Party
(i) that does not own or control a financial institution in the Party's territory to establish in that territory a financial institution permitted to supply financial services that such an institution may supply under the domestic law of the Party at the time of establishment, without the imposition of numerical restrictions, and
(ii) that owns or controls a financial institution in the Party's territory to establish in that territory such additional financial institutions as may be necessary to permit the supply of the full range of financial services allowed under the domestic law of the Party at the time of establishment of the additional financial institutions.
The right of establishment shall include the acquisition of existing entities.
(b) Neither Party may restrict or require specific types of juridical form with respect to the initial financial institution that the investor seeks to establish pursuant to subparagraph (a)(i).
(c) Except with respect to the imposition of numerical or juridical form restrictions on establishment of the initial financial institution described in subparagraph (a)(i), a Party may, consistent with Article 12.2, impose terms and conditions on establishment of additional financial institutions described in subparagraph (a)(ii) and determine the institutional and juridical form through which particular permitted financial services or activities are supplied.
(d) A Party may, consistent with Article 12.2, prohibit a particular financial service or activity. (6)
2. For purposes of this Annex:
(a) an "investor of the other Party" means an investor of the other Party engaged in the business of providing banking and other financial services (excluding insurance) in the territory of that Party.
(b) "numerical restrictions" means limitations imposed, either on the basis of a regional subdivision or on the basis of the entire territory of the Party, on the number of financial institutions whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirements of an economic needs test.
3. Notwithstanding the inclusion of the non-conforming measures of Chile in Annex III, Section II, referring to social services, Chile, with respect to the establishment by an investor of the United States of an Administradora de Fondos de Pensiones under Decreto Ley 3.500, shall:
(a) apply subparagraph 1(a) of Section A of this Annex, and
(b) not apply an economic needs test.
No other modification of the effect of the non-conforming measures referring to social services is intended or shall be construed under this paragraph.
4. The specific commitments of the United States under paragraph 1 are subject to the headnotes and non-conforming measures set forth in Sections A and B of Annex III with respect to banking and other financial services (excluding insurance).
5. The specific commitments of Chile under paragraphs 1 and 3 are subject to the headnotes and non- conforming measures set forth in Annex III of Chile with respect to banking and other financial services (excluding insurance).
Section B. Voluntary Savings Plans; Non-Discriminatory Treatment of U.S. Investors
1. Notwithstanding the inclusion of the non-conforming measures of Chile in Annex III, Section II, referring to social services, with respect to voluntary savings pension plans established under Ley
19.768, Chile shall extend the obligations of Article 12.2(1) and (2) and of Article 12.3 to financial institutions of the United States, investors of the United States, and investments of such investors in financial institutions established in Chile. The specific commitment contained in this paragraph shall enter into force by March 1, 2005.
2. Notwithstanding the inclusion of the nonconforming measures of Chile in Annex III, Section II, referring to social services, Chile, as required by its domestic law, shall not establish arbitrary differences with respect to U.S. investors in Administradoras de Fondos de Pensiones under Decrefo Ley 3.500.
Section C. Portfolio Management
1. Each Party shall allow a financial institution (other than a trust company or insurance company), organized outside its territory, to provide investment advice and portfolio management services, excluding (1) custodial services, (2) trustee services, and (3) execution services that are not related to managing a collective investment scheme, to a collective investment scheme located in the Party's territory. This commitment is subject to Article 12.1 and to the provisions of Article 12.5(3) regarding the right to require registration, without prejudice to other means of prudential regulation.
2. Notwithstanding paragraph 1, a Party may require the collective investment scheme located in the Party's territory to retain ultimate responsibility for the management of the collective investment scheme or the funds that it manages.
3. For purposes of paragraphs 1 and 2, collective investment scheme means:
(a) in the United States, an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940; and
(b) in Chile, the following fund management companies subject to supervision by the Superintendencia de Valores y Seguros:
(i) Compañías Administradoras de Fondos Mutuos (Decreto Ley 1.328 de 1976);
(ii) Compañías Administradoras de Fondos de Inversión (Ley 18.815 de 1989);
(iii) Compañías Administradoras de Fondos de Inversión de Capital Extranjero (Ley 18.657 de 1987);
(iv) Compañías Administradoras de Fondos para la Vivienda (Ley 18.281 de 1993); and
(v) Compañías Administradoras Generales de Fondos (Ley 18.045 de 1981).
Section D. Expedited Availability of Insurance Services
Each Party should endeavor to maintain existing opportunities or may wish to consider policies or procedures such as: not requiring product approval for insurance other than sold to individuals or compulsory insurance; allowing introduction of products unless those products are disapproved within a reasonable period of time; and not imposing limitations on the number or frequency of product introductions. This Section does not apply to the specific category of Chilean govemment-supported insurance programs, such as climate insurance.
Section E. Insurance Branching
1. Notwithstanding the inclusion of the nonconforming measures of Chile in Annex III, Section II, referring to insurance market access, excluding any portion of those nonconforming measures referring to financial conglomerates and social services, no later than four years after the date of entry into force of this Agreement, Chile shall allow U.S. insurance suppliers to establish in its territory through branches. Chile may choose how to regulate branches, including their characteristics, structure, relationship to their parent company, capital requirements, technical reserves, and obligations regarding risk patrimony and their investments. (7)
2. Recognizing the principles of federalism under the U.S. Constitution, the history of state regulation of insurance in the United States, and the McCarran-Ferguson Act, the United States will work with the National Association of Insurance Commissioners (NAIC) in its review of those states that do not allow initial entry of a non-US insurance company as a branch to supply life, accident, health (excluding worker's compensation) insurance, non-life insurance, or reinsurance and retrocession to determine whether such entry could be provided in the future. Those states are Arkansas, Arizona, Connecticut, Georgia, Hawaii (branching allowed for reinsurance), Kansas, Maryland, Minnesota, Nebraska, New Jersey, North Carolina, Pennsylvania, Tennessee, Vermont, and Wyoming.
Annex 12.11.
The Parties recognize that Chile-s implementation of the obligations of paragraphs 2 and 9 of Article 12.11 may require legislative and regulatory changes. Chile shall implement the obligations of these paragraphs no later than two years after the date of entry into force of this Agreement.
Annex 12.15. Authorities Responsible for Financial Services
The authority of each Party responsible for financial services shall be:
(a) for Chile, the Ministerio de Hacienda; and
(b) for the United States, the Department of the Treasury for banking and other financial services and the Office of the United States Trade Representative, in coordination with the Department of Commerce and other agencies, for insurance services.
Chapter Thirteen. Telecommunications
Article 13.1. Scope and Coverage
1. This Chapter applies to:
(a) measures adopted or maintained by a Party relating to access to and use of the public telecommunications network and services;
(b) measures adopted or maintained by a Party relating to obligations of major suppliers of public telecommunications services;
(c) measures adopted or maintained by a Party relating to the provision of information services; and
(d) other measures relating to public telecommunication networks or services.
2. Except to ensure that enterprises operating broadcast stations and cable systems have continued access to and use of public telecommunications networks and services, this Chapter does not apply to any measure adopted or maintained by a Party relating to cable or broadcast distribution of radio or television programming.
3. Nothing in this Chapter shall be construed to:
(a) require a Party or require a Party to compel any enterprise to establish, construct, acquire, lease, operate, or provide telecommunications networks or telecommunications services, where such networks or services are not offered to the public generally;
(b) require a Party to compel any enterprise exclusively engaged in the cable or broadcast distribution of radio or television programming to make available its cable or broadcast facilities as a public telecommunications network; or
(c) prevent a Party from prohibiting persons operating private networks from using their networks to provide public telecommunications networks or services to third persons.
Article 13.2. Access to and Use of Public Telecommunications Networks and Services (1)
1. Each Party shall ensure that enterprises of the other Party have access to and use of any public telecommunications service, including leased circuits, offered in its territory or across its borders, on reasonable and non-discriminatory terms and conditions, including as set out in paragraphs 2 through 6.
2. Each Party shall ensure that such enterprises are permitted to:
(a) purchase or lease, and attach terminal or other equipment that interfaces with the public telecommunications network;
(b) provide services to individual or multiple end-users over any leased or owned circuit(s);
(c) connect owned or leased circuits with public telecommunications networks and services in the territory, or across the borders, of that Party or with circuits leased or owned by another person;
(d) perform switching, signaling, processing, and conversion functions; and (e) use operating protocols of their choice.
3. Each Party shall ensure that enterprises of the other Party may use public telecommunications services for the movement of information in its territory or across its borders and for access to
information contained in databases or otherwise stored in machine-readable form in the territory of either Party.
4. Further to Article 23.1 (General Exceptions) and notwithstanding paragraph 3, a Party may take such measures as are necessary to:
(a) ensure the security and confidentiality of messages; or
(b) protect the privacy of non-public personal data of subscribers to public telecommunications services, subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on trade in services.
5. Each Party shall ensure that no condition is imposed on access to and use of public telecommunications networks or services, other than that necessary to:
(a) safeguard the public service responsibilities of providers of public telecommunications networks or services, in particular their ability to make their networks or services available to the public generally; or
(b) protect the technical integrity of public telecommunications networks or services.
6. Provided that conditions for access to and use of public telecommunications networks or services satisfy the criteria set out in paragraph 5, such conditions may include:
(a) a requirement to use specified technical interfaces, including interface protocols, for interconnection with such networks or services; and
(b) a licensing, permit, registration, or notification procedure which, if adopted or maintained, is transparent and applications filed thereunder are processed expeditiously.
Article 13.3. Obligations Relating to Interconnection with Suppliers of Public Telecommunications Services
1. Each Party shall ensure that suppliers of public telecommunications services in its territory provide, directly or indirectly, interconnection with the suppliers of public telecommunications services of the other Party.
2. In carrying out paragraph 1, each Party shall ensure, in accordance with its domestic law and regulations, that suppliers of public telecommunications services in its territory take reasonable steps to protect the confidentiality of commercially sensitive information of, or relating to, suppliers and end- users of public telecommunications services and only use such information for the purpose of providing those services.
Article 13.4. Additional Obligations Relating to Conduct of Major Suppliers of Public Telecommunications Services (2)
Treaiment by Major Suppliers
1. Subject to Annex 13.4(1), each Party shall ensure that major suppliers in its territory accord suppliers of public telecommunications services of the other Party non-discriminatory treatment regarding:
(a) the availability, provisioning, rates, or quality of like public telecommunications services; and
(b) the availability of technical interfaces necessary for interconnection.
Competitive Safeguards
2. (a) Each Party shall maintain appropriate measures for the purpose of preventing suppliers who, alone or together, are a major supplier in its territory from engaging in or continuing anti-competitive practices.
(b) For purposes of subparagraph (a), examples of anti-competitive practices include: (i) engaging in anti-competitive cross-subsidization;
(i) using information obtained from competitors with anti-competitive results; and
(ii) not making available, on a timely basis, to suppliers of public telecommunications services, technical information about essential facilities and commercially relevant information which are necessary for them to provide public telecommunications services.
Unbundling of Network Elements
3. (a) Each Party shall provide its competent body the authority to require that major suppliers in its territory provide suppliers of public telecommunications services of the other Party access to network elements on an unbundled basis for the supply of those services on terms and conditions and at cost-oriented rates that are reasonable and non-discriminatory.
(b) Which network elements will be required to be made available in its territory, and which suppliers may obtain such elements, will be determined in accordance with national law and regulation(s).
(c) In determining the network elements to be made available, each Party's competent body shall consider, at a minimum, in accordance with national law and regulation:
(i) whether access to such network elements as are proprietary in nature is necessary, and whether the failure to provide access to such network elements would impair the ability of suppliers of public telecommunications services of the other Party to provide the services they seek to offer; or
(ii) other factors as established in national law or regulation, as that body construes these factors.
Co-Location
4. (a) Each Party shall ensure that major suppliers in its territory provide to suppliers of public telecommunications services of the other Party physical co-location of equipment necessary for interconnection or access to unbundled network elements on terms, conditions, and at cost-oriented rates that are reasonable and non- discriminatory.
(b) Where physical co-location is not practical for technical reasons or because of space limitations, each Party shall ensure that major suppliers in its territory provide:
(i) altemative solutions; or
(ii) facilitate virtual co-location, on terms, conditions, and at cost- oriented rates that are reasonable and non-discriminatory.
(c) Each Party may determine which premises shall be subject to subparagraphs (a) and (b).
Resale
5. Each Party shall ensure that major suppliers in its territory:
(a) offer for resale, at reasonable rates,(3) to suppliers of public telecommunications services of the other Party, public telecommunications services that such major supplier provides at retail to end users that are not suppliers of public telecommunications services; and
(b) subject to Annex 13.4(5)(b), do not impose unreasonable or discriminatory conditions or limitations on the resale of such services.
Number Portability
6. Each Party shall ensure that major suppliers in its territory provide number portability to the extent technically feasible, on a timely basis, and on reasonable terms and conditions.
Dialing Parity
7. Each Party shall ensure that major suppliers in its territory provide dialing parity to suppliers of public telecommunications services of the other Party and afford suppliers of public telecommunications services of the other Party non-discriminatory access to telephone numbers and related services with no unreasonable dialing delays.
Interconnection
8. (a) General Terms and Conditions Each Party shall ensure that major suppliers in its territory provide interconnection for the facilities and equipment of suppliers of public telecommunications services of the other Party:
(i) at any technically feasible point in the major supplier's network;
(i) under non-discriminatory terms, conditions (including technical standards and specifications), and rates;
(iii) of a quality no less favorable than that provided by such major supplier for its own like services, or for like services of non-affiliated service suppliers or for like services of its subsidiaries or other affiliates;
(iv) in a timely fashion, on terms, conditions (including technical standards and specifications), and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and
(v) on request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.
(b) Options for Interconnecting with Major Suppliers
Each Party shall ensure that suppliers of public telecommunications services of the other Party may interconnect their facilities and equipment with those of major suppliers in its territory pursuant to at least one of the following options:
(i) a reference interconnection offer or other standard interconnection offer containing the rates, terms, and conditions that the major
supplier offers generally to suppliers of public telecommunications services; or
(ii) the terms and conditions of an existing interconnection agreement or through negotiation of a new interconnection agreement.
(c) Public Availability of Interconnection Offers Each Party shall require each major supplier in its territory to make publicly available a reference interconnection offer or other standard interconnection offer containing the rates, terms, and conditions that the major supplier offers generally to suppliers of public telecommunications services.
(d) Public Availability of the Procedures for Interconnection Each Party shall make publicly available the applicable procedures for interconnection negotiations with major suppliers in its territory.
(e) Public Availability of Interconnection Agreements with Major Suppliers Each Party shall:
(i) require major suppliers in its territory to file all interconnection agreements to which they are party with its telecommunications regulatory body, and
(ii) make publicly available interconnection agreements in force between major suppliers in its territory and other suppliers of public telecommunications services in such territory.
Leased Circuits Services (4)
(a) Each Party shall ensure that major suppliers in its territory provide enterprises of the other Party leased circuits services that are public telecommunications services, on terms, conditions, and at rates that are reasonable and non-discriminatory.
(b) In carrying out subparagraph (a), each Party shall provide its telecommunications regulatory body the authority to require major suppliers in its territory to offer leased circuits that are part of the public telecommunications services to enterprises of the other Party at flat-rate prices that are cost-oriented.
Article 13.5. Submarine Cable Systems
1. Each Party shall ensure that enterprises in its territory that operate submarine cable systems accord non-discriminatory treatment for access to submarine cable systems.
2. Whether to apply paragraph 1 may be based on classification by a Party of such submarine cable system within its territory as a public telecommunications service supplier.
Article 13.6. Conditions for Supplying Information Services
1. Neither Party may require an enterprise in its territory that it classifies as a supplier of information services (which supplies such services over facilities that it does not own) to:
(a) supply those services to the public generally;
(b) cost-justify its rates for such services;
(c) file a tariff for such services;
(d) interconnect its networks with any particular customer for the supply of such services; or
(e) conform with any particular standard or technical regulation for interconnection for the supply of such services other than for interconnection to a public telecommunications network.
2. Notwithstanding paragraph 1, a Party may take appropriate action, including any of the actions described in paragraph 1, to remedy a practice of an information services supplier that the Party has found in a particular case to be anti-competitive under its law or regulation(s), or to otherwise promote competition or safeguard the interests of consumers.