2. This Chapter does not apply to the aspects of a measure set out in an entry to a Party's Schedule to Annex I, or to a measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities as set out by that Party in its Schedule to Annex II.
Article 19.3. Right to Regulate
The Parties recognize the right of each Party to regulate economic activity within its territory with regard to any matter under this Chapter in order to meet its legitimate policy objectives.
Article 19.4. Development of Licensing and Qualification Requirements and Procedures
1. If a Party adopts or maintains a measure within the scope of this Chapter, the Party shall, with respect to that measure:
(a) ensure that requirements and procedures are based on criteria that:
(i) are objective and transparent; such criteria may include competence and ability to supply a service or to pursue any other economic activity, including to do so in a manner consistent with the Party's regulatory requirements, such as those relating to health and the protection of the environment; and
(ii) are established in advance and made publicly accessible;
(b) ensure that procedures do not in themselves unduly prevent the fulfilment of a requirement; and
(c) ensure that the measure does not discriminate (1) between men and women.
2. The Parties recognise that the exercise of statutory discretion conferred on a minister with respect to a decision on the granting of an authorization in the public interest is not inconsistent with subparagraph 1(a)(ii), provided that it is exercised consistently with the object of the applicable statute and not in an arbitrary manner, and that this exercise is not otherwise inconsistent with this Agreement.
3. If a Party develops regulations relating to licensing requirements, licensing procedures, qualification requirements, or qualification procedures, the Party shall endeavour to undertake a regulatory impact assessment, as provided in Chapter 26 (Good Regulatory Practices). The regulatory impact assessment shall take into consideration:
(a) the Party's obligations under international trade agreements; and
(b) the impact of the proposed regulation on small- and medium-sized enterprises.
Article 19.5. Administration of Licensing and Qualification Requirements and Procedures
1. Each Party shall ensure that its measures of general application within the scope of this Chapter are administered in a reasonable, objective, and impartial manner.
2. Each Party shall ensure that licensing and qualification procedures used by the competent authority and decisions of the competent authority in the authorisation process are impartial with respect to all applicants. The competent authority should reach its decisions in an independent manner and, in particular, should not be accountable to any person supplying a service or pursuing any other economic activity for which the authorization is required.
3. To the extent practicable, each Party shall avoid requiring an applicant to approach more than one competent authority for each application for authorisation. For greater certainty, a Party may require multiple applications for authorisation if a service or any other economic activity is within the jurisdiction of multiple competent authorities.
4. If a Party requires an authorisation, the competent authority of the Party shall:
(a) to the extent practicable, permit an applicant to submit an application at any time (2);
(b) allow a reasonable period for the submission of an application when specific time periods for applications exist;
(c) initiate the processing of an application without undue delay;
(d) ensure that the processing of an application, including reaching a final decision, is completed within a reasonable timeframe from the submission of a complete application;
(e) at the request of an applicant, provide, without undue delay, information concerning the status of their application;
(f) if an examination is required, schedule the examination at reasonably frequent intervals, and provide a reasonable period of time to enable applicants to request to take an examination;
(g) if possible, accept an application, including an examination, through electronic means under similar conditions of authenticity as paper submissions at all stages of the authorization process; and
(h) accept a copy of a document, that is authenticated in accordance with the legislation of each Party, in place of the original document, unless the original document is required to protect the integrity of the authorisation process.
5. Each Party shall ensure that an authorisation is granted as soon as the competent authority determines that the conditions for the authorisation have been met, and once granted, that the authorisation enters into effect without undue delay, in accordance with its terms and conditions. (3)
6. If an application for an authorisation is considered incomplete, a Party's competent authority shall, within a reasonable period of time, to the extent practicable:
(i) inform the applicant that the application is incomplete;
(ii) at the request of the applicant, identify the additional information required to complete the application, or otherwise provide guidance on why the application is considered incomplete; and
(iii) provide the applicant an opportunity (4) to provide the additional information that is required to complete the application.
7. If a Party's competent authority rejects an application for an authorisation, it shall inform the applicant in writing, including by electronic means, and within a reasonable timeframe from the submission of an application. Upon request of the applicant, the Party's competent authority shall also inform the applicant of the reasons the application was rejected and of the timeframe for an appeal or review against the decision. An applicant should be permitted, within reasonable time limits, to resubmit an application.
Article 19.6. Fees
1. Each Party shall ensure that the authorisation fee charged by a competent authority is reasonable, transparent, and does not restrict the supply of the relevant service or the pursuit of any other economic activity. Having regard to the cost and administrative burden, each Party is encouraged to accept payment of authorisation fees by electronic means.
2. Authorisation fees do not include fees for the use of natural resources, royalties, payments for auction, tendering, or other non-discriminatory means of awarding concessions or mandated contributions to provide a universal service.
Article 19.7. Review of Administrative Decisions
Each Party shall maintain or institute judicial, arbitral, or administrative tribunals or procedures that provide, at the request of a service supplier of a Party, as defined in Article 18.1 (Cross-Border Trade in Services – Definitions) or an investor of a Party, as defined in Article 17.1 (Investment – Definitions), a prompt review of, and if justified, appropriate remedies for, administrative decisions relating to the scope of this Chapter. If the review procedures are not independent of the competent authority entrusted with the administrative decision concerned, each Party shall ensure that the review procedures are applied in a way that provides for an objective and impartial review.
Article 19.8. Transparency
1. If a Party requires an authorisation, the Party shall promptly publish (5), or otherwise make publicly available in writing, the information necessary to comply with the requirements and procedures for obtaining, maintaining, amending, and renewing that authorisation. This information includes, if it exists:
(a) authorisation fees;
(b) contact information of relevant competent authorities;
(c) procedures for appeal or review of decisions concerning applications;
(d) procedures for monitoring or enforcing compliance with the terms and conditions of licences or qualifications;
(e) opportunities for public involvement, such as through hearings or comments;
(f) indicative timeframes for processing of an application; and
(g) the requirements and procedures.
Chapter 20. Financial Services
Article 20.1. Definitions
For the purposes of this Chapter:
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 within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of such a service;
cross-border trade in financial services or cross-border supply of financial services means the supply of a financial service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a 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 by an investment in that territory;
financial institution means a financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under 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 territory of a Party that is controlled by a person of the other Party;
financial service means a service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance), as well as services incidental or auxiliary to a service of a financial nature. Financial services include the following activities:
Insurance and insurance-related services
(a) direct insurance (including co-insurance):
(i) life; and
(ii) non-life;
(b) reinsurance and retrocession;
(c) insurance intermediation, such as brokerage and agency; and
(d) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;
Banking and other financial services (excluding insurance)
(e) acceptance of deposits and other repayable funds from the public;
(f) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;
(g) financial leasing;
(h) all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;
(i) guarantees and commitments;
(j) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(i) money market instruments (including cheques, bills, certificates of deposits);
(ii) foreign exchange;
(iii) derivative products, including futures and options;
(iv) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(v) transferable securities; and
(vi) other negotiable instruments and financial assets, including bullion;
(k) participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
(l) money broking;
(m) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
(n) settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(o) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and
(p) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (e) through (o), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring, and strategy;
financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;
investment means "investment" as defined in Article 17.1 (Definitions), except that, with respect to "a loan to an enterprise" and "a debt instrument of an enterprise" referred to in that Article:
(a) a loan to or debt instrument issued by a financial institution is an investment only if it is treated as regulatory capital by the Party in whose territory the financial institution is located; and
(b) a loan granted by or debt instrument owned by a financial institution, other than a loan to or debt instrument issued by a financial institution referred to in subparagraph (a), is not an investment.
For greater certainty, a loan granted by or debt instrument owned by a cross-border financial service supplier, other than a loan to or debt instrument issued by a financial institution, is an investment for the purposes of Chapter 17 (Investment), if such loan or debt instrument meets the criteria for investments set out in Article 17.1 (Definitions);
investor of a Party means a Party, or a person of a Party, that attempts to make (1), is making, or has made an investment in the territory of the other Party. For the purpose of this definition, a "person of a Party" that is an enterprise of a Party means:
(a) an enterprise that is constituted or organized under the law of that Party and that has substantial business activities in the territory of that Party. A determination of whether an enterprise has substantial business activities in the territory of a Party requires a case-by-case, fact-based inquiry; or
(b) an enterprise that is constituted or organized under the law of that Party, and is directly or indirectly owned or controlled by a national of that Party or by an enterprise mentioned under subparagraph (a);
new financial service means a financial service not supplied in the Party's territory that is supplied within the territory of the other Party, and includes any new form of delivery of a financial service or the sale of a financial product that is not sold in the Party's territory;
person of a Party means "person of a Party" as defined in Article 1.5 (Definitions of General Application) and, for greater certainty, does not include a branch of an enterprise of a non-Party;
public entity means a central bank or monetary authority of a Party, or a financial institution that is owned or controlled by a Party; and
self-regulatory organization means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organization or association, that exercises regulatory or supervisory authority over financial service suppliers or financial institutions by statute or delegation from central or regional government.
Article 20.2. Scope
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors of the other Party, and investments of those investors, in financial institutions in the Party's territory; and
(c) cross-border trade in financial services.
2. Chapter 17 (Investment) and Chapter 18 (Cross-Border Trade in Services) shall apply to measures described in paragraph 1 only to the extent that those Chapters are incorporated into this Chapter.
(a) Article 17.4 (Right to Regulate), Article 17.5 (Non-Derogation), Article 17.8 (Treatment in Case of Armed Conflict, Civil Strife, or Natural Disaster), Article 17.9 (Minimum Standard of Treatment), Article 17.10 (Expropriation), Article 17.11 (Transfer of Funds), Article 17.16 (Denial of Benefits), Article 17.17 (Special Formalities and Information Requirements), Article 17.19 (Exclusions), and Article 18.9 (Denial of Benefits) are hereby incorporated into and made a part of this Chapter.
(b) Sections D and E of Chapter 17 (Investment) are hereby incorporated into and made a part of this Chapter (2) solely for claims that a Party has breached Article 17.8 (Treatment in Case of Armed Conflict, Civil Strife, or Natural Disaster), Article 17.10 (Expropriation), or Article 17.11 (Transfer of Funds), incorporated into this Chapter under subparagraph (a). (3)
(c) Article 18.10 (Payments and Transfers) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 20.6.
3. This Chapter shall not apply to measures adopted or maintained by a Party relating to:
(a) activities or services forming part of a public retirement plan or statutory system of social security; or
(b) activities or services conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities;
except that this Chapter applies to the extent that a Party allows any of the activities or services referred to in subparagraph (a) or (b) to be conducted by its financial institutions in competition with a public entity or a financial institution.
4. This Chapter does not apply to government procurement of financial services.
5. This Chapter does not apply to subsidies or grants with respect to the cross-border supply of financial services, including government-supported loans, guarantees, and insurance.
Article 20.3. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords to its own investors, in like circumstances, 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 the other Party in financial institutions, treatment no less favourable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a government other than at the central level of government, treatment accorded, in like circumstances, by that government to financial institutions of the Party, investors of the Party, and investments of those investors, in financial institutions, of the Party of which it forms a part.
4. For the purposes of the national treatment obligations in Article 20.6, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favourable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service.
5. Whether treatment is accorded in like circumstances depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, financial services, or financial service suppliers on the basis of legitimate public policy objectives.
6. Paragraphs 1 and 2 prohibit discrimination based on nationality. A difference in treatment accorded to an investor of another Party, or their investments, in a financial institution, or a financial institution of another Party and a Party's own investors, or their investments, in a financial institution, or financial institutions does not, in and of itself, establish discrimination based on nationality.
Article 20.4. Most-Favoured-Nation Treatment
1. Each Party shall accord to:
(a) investors of the other Party, treatment no less favourable than that it accords to investors of a non-Party, in like circumstances;
(b) financial institutions of the other Party, treatment no less favourable than that it accords to financial institutions of a non-Party, in like circumstances;
(c) investments of investors of the other Party in financial institutions, treatment no less favourable than that it accords to investments of investors of a non-Party in financial institutions, in like circumstances; and
(d) cross-border financial service suppliers of the other Party and the financial services they supply, treatment no less favourable than that it accords to cross-border financial service suppliers of a non-Party and the financial services they supply, in like circumstances.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment accorded, in like circumstances, by that government to: financial institutions of a non-Party; investors of a non-Party, and investments of those investors, in financial institutions; or financial services or cross- border financial service suppliers of a non-Party.
3. The "treatment" referred to in paragraph 1 and 2 does not include procedures for the resolution of investment disputes between investors and states provided for in other international investment treaties and other trade agreements.
4. Substantive obligations in other international investment treaties and other trade agreements do not in themselves constitute "treatment", and thus cannot give rise to a breach of this Article, absent measures adopted or maintained by a Party pursuant to those obligations.
5. Whether treatment is accorded in like circumstances depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, financial services, or financial service suppliers on the basis of legitimate public policy objectives.
6. Paragraph 1 prohibits discrimination based on nationality. A difference in treatment accorded to an investor of another Party, or their investments, in a financial institution, or a financial institution of another Party and a Party's own investors, or their investments, in a financial institution, or financial institutions does not, in and of itself, establish discrimination based on nationality.
Article 20.5. Market Access for Financial Institutions
1. A Party shall not adopt or maintain with respect to financial institutions of the other Party or investors of the other Party seeking to establish those institutions, either on the basis of a regional subdivision or on the basis of its entire territory, measures that:
(a) impose limitations on:
(i) the number of financial institutions, whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;
(ii) the total value of financial service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of financial service operations or the total quantity of financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test (4); or
(iv) the total number of natural persons that may be employed in a particular financial service sector or that a financial institution may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas or the requirement of an economic needs test; or
(b) restrict or require specific types of legal entity or joint venture through which a financial institution may supply a service.
Article 20.6. Cross-Border Trade
1. Each Party shall permit, under terms and conditions that accord national treatment, cross-border financial service suppliers of the other Party to supply the financial services specified in Annex 20-A (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 a Party other than the permitting Party. This obligation does not require a Party to permit those suppliers to do business or solicit in its territory. A Party may define "doing business" and "solicitation" for the purposes of this obligation provided that those definitions are not inconsistent with paragraph 1.