(iii) insurance intermediation, such as brokerage and agency;
(iv) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;
Banking and other financial services (excluding insurance)
(v) acceptance of deposits and other repayable funds from the public;
(vi) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transactions;
(vii) financial leasing; (viii) all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;
(ix) guarantees and commitments;
(x) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(aa) money market instruments (including cheques, bills, certificates of deposits);
(bb) foreign exchange;
(cc) derivative products including, but not limited to, futures and options;
(dd) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(ee) transferable securities;
(ff) other negotiable instruments and financial assets, including bullion;
(xi) 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;
(xii) money broking;
(xiii) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depositary and trust services;
(xiv) settlement and clearing services for financial assets, including securities, derivative products and other negotiable instruments;
(xv) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services;
(xvi) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
(b) “financial service supplier” means any natural or juridical person of a Party wishing to supply or supplying financial services but the term “financial service supplier” does not include a public entity;
(c) “public entity” means:
(i) a government, a central bank or a monetary authority, of a Party, or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or
(ii) a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions;
(d) “self–regulatory organisation” means any non-government body, including any securities or futures exchange or markets, clearing or payment settlement agency, other organisation or association that is recognised by legislation as a self-regulatory organisation and exercises regulatory or supervisory authority over financial service suppliers established and authorised to supply financial services pursuant to legislation or delegation from central, regional or local governments or authorities, when exercising such authority;
(e) for the purposes of subparagraph (a)(ii) of Article (Definitions) of the Agreement, “services supplied in the exercise of governmental authority” means the following:
(i) activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies;
(ii) activities forming part of a statutory system of social security or public retirement plans; and
(iii) other activities conducted by a public entity for the account or with the guarantee or using the financial resources of the Government;
(f) for the purposes of subparagraph (a)(ii) of Article (Definitions) of the Agreement, if a Party allows any of the activities referred to in subparagraphs (e)(ii) or (e)(iii) to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, “services” shall include such activities; and
(g) Subparagraph (a)(iii) of Article (Definitions) of the Agreement shall not apply to services covered by this Annex.
Article 2. National Treatment
1. Each Party shall grant, on a national treatment basis, to financial service suppliers of another Party established to supply financial services in the Party’s territory, and regulated or supervised by the relevant competent authorities (2), under the Party’s domestic laws, access to payment and clearing systems operated by public entities and to official funding and refinancing facilities available in the normal course of ordinary business. This paragraph is not intended to confer access to the Party’s lender of last resort facilities.
2. Where a Party requires a financial services supplier of another Party established and authorised to supply financial services in the Party´s territory, to be a member of, participate in, or have access to a self-regulatory organisation in order to supply a financial services in the Party’s territory, the Party shall ensure that the self-regulatory organisation observes the obligation of Article 7.6 (National Treatment) of the Agreement.
Article 3. Transparency
1. The competent authorities of each Party shall make available to financial service suppliers domestic requirements and procedures for completing applications relating to the supply of financial services.
2. Where a licence is required for the supply of a financial service, the competent authorities of a Party shall make the requirements of general application for such a licence publicly available. The period of time normally required to reach a decision concerning an application for a licence shall:
(a) be made available to the applicant upon request;
(b) be made publicly available; or
(c) be made available by a combination of both.
Article 4. Expeditious Application Procedures
1. The competent authorities of each Party shall process without undue delay applications related to the supply of financial services submitted by service suppliers of another Party.
2. If the competent authorities of a Party require additional information from the applicant in order to process its application, they shall notify the applicant without undue delay.
3. Upon request by the applicant, the competent authorities of a Party shall provide, without undue delay, information concerning the status of the application.
4. The competent authorities of each Party shall notify the applicant of the outcome of the application promptly after a decision has been taken. In case a decision is taken to deny an application, on request of the concerned applicant, the competent authorities shall, to the extent practicable, make the reason for the denial known to the applicant.
5. Where a licence is required for the supply of a financial service and if the applicable requirements are fulfilled, the competent authorities of a Party shall make an administrative decision, as a rule within six months after the submission of an application is considered complete under that Party’s domestic laws and regulations. Where it is not practicable for such a decision to be made within six months, the competent authority shall notify the applicant without undue delay and shall endeavour to make the decision within a reasonable period of time thereafter. Once the licence is granted, it shall enter into effect without undue delay, subject to applicable terms and conditions.
Article 5. Domestic Regulation
1. Notwithstanding Chapter 7 (Trade in Services) and Chapter 8 (Investment) of the Agreement, a Party shall not be prevented from adopting or maintaining measures for prudential reasons, including for: (a) the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial service supplier; or (b) ensuring the integrity and stability of that Party’s financial system. Where such measures do not conform with Chapter 7 (Trade in Services) or Chapter 8 (Investment) of the Agreement, they shall not be used as a means of avoiding that Party’s commitments or obligations under Chapter 7 (Trade in Services) or Chapter 8 (Investment) of the Agreement.
2. These measures shall not constitute an arbitrary or unjustifiable discrimination against financial service suppliers of another Party in comparison to its own like financial service suppliers, or a disguised restriction on trade in services.
3. Each Party shall endeavour to ensure that the Basel Committee’s “Core Principles for Effective Banking Supervision”, the International Association of Insurance Supervisors’ “Insurance Core Principles”, and the International Organisation of Securities Commissions’ “Objectives and Principles of Securities Regulation” are implemented and applied in its territory.
4. Nothing in Chapter 7 (Trade in Services) of the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
Article 6. Recognition of Prudential Measures
1. A Party may recognise prudential measures of any other Party or non-Party in determining how the Party’s measures relating to financial services shall be applied. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement with the Party or non-Party concerned or may be accorded autonomously.
2. A Party that is a party to such an agreement or arrangement referred to in paragraph 1, whether future or existing, shall afford adequate opportunity for other interested Parties to negotiate their accession to such agreements or arrangements, or to negotiate comparable ones with it, under circumstances in which there would be equivalent regulation, oversight, implementation of such regulation, and, if appropriate, procedures concerning the sharing of information between the parties to the agreement or arrangement. Where a Party accords recognition autonomously, it shall afford adequate opportunity for any other Party to demonstrate that such circumstances exist.
Article 7. Transfers of Information and Processing of Information
No Party shall, subject to its domestic laws, regulations and policies, take measures that prevent transfers of information into or out of the Party’s territory or the processing of financial information, including transfers of data by electronic means, or that, subject to importation rules consistent with international agreements, prevent transfers of equipment, where such transfers of information, processing of financial information or transfers of equipment are necessary for the conduct of the ordinary business of a financial service supplier of another Party. Nothing in this Article restricts the right of a Party to protect personal data, personal privacy and the confidentiality of individual records and accounts so long as such right is not used to circumvent the provisions of this Chapter.
Chapter 8. INVESTMENT
Article 8.1. Scope of Coverage
1. This Chapter applies to commercial presence in all sectors as set out in Annex XVII (Covered Sectors). This Chapter does not apply to commercial presence in services sectors as set out in Article 7.1 (Coverage). (13)
2. This Chapter does not include investment protection and shall be without prejudice to the interpretation or application of other international agreements relating to investment or taxation to which one or several EFTA States and Malaysia are parties. (14)
3. This Chapter shall not apply to:
(a) subsidies or grants provided by a Party; and
(b) government procurement.
Article 8.2. Definitions
1. For the purposes of this Chapter:
(a) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally owned, including any corporation, partnership, joint venture, sole proprietorship or association;
(b) "juridical person of a Party" means a juridical person constituted or otherwise organised under the domestic laws and regulations of a Party and engaged in substantive business operations in that Party;
(c) "natural person" means a person who has the nationality, or is a permanent resident, of a Party in accordance with its domestic laws and regulations;
(d) "commercial presence" means any type of business establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person, or
(ii) the creation or maintenance of a branch or a representative office, within the territory of another Party for the purpose of performing an economic activity.
Article 8.3. National Treatment
Each Party shall, subject to Article 8.4 (Reservations) and the reservations set out in Annex XVIII (Investment Reservations), accord to juridical and natural persons of another Party, and to the commercial presence of such persons, treatment no less favourable than that it accords, in like situations, (15) to its own juridical and natural persons, and to the commercial presence of such persons.
Article 8.4. Reservations (16)
1. Article 8.3 (National Treatment) shall not apply to:
(a) any reservation pertaining to existing or future measures that is listed by a Party in Annex XVIII (Investment Reservations);
(b) the continuation or prompt renewal of any reservation referred to in subparagraph (a);
(c) an amendment to a reservation pertaining to existing measures to the extent that the amendment does not decrease the conformity of the reservation with Article 8.3 (National Treatment), with respect to an EFTA State consistent with Annex XVIII (Investment Reservations) and, with respect to Malaysia consistent with its List A of Reservations under Annex XVIII (Investment Reservations); and
(d) any new reservation adopted by a Party, and incorporated into Annex XVIII (Investment Reservations) which does not affect the overall level of commitments of that Party under this Agreement; to the extent that such reservations are inconsistent with Article 8.3 (National Treatment).
2. As part of the reviews provided for in Article 8.12 (Review) the Parties undertake to review periodically the status of the reservations set out in Annex XVIII (Investment Reservations) with a view of possibly improving their commitments.
3. A Party may, at any time, either upon the request of another Party or unilaterally, remove in whole or in part its reservations set out in Annex XVIII (Investment Reservations) by written notification to the other Parties.
4. A Party may, at any time, incorporate a new reservation into Annex XVIII (Investment Reservations) in accordance with subparagraph 1 (d) by written notification to the other Parties. On receiving such written notification, another Party may request consultations regarding the reservation. On receiving the request for consultations, the Party incorporating the new reservation shall enter into consultations with the requesting Party.
Article 8.5. Key Personnel
1. Each Party shall, subject to its domestic laws and regulations, and national policies, (17) grant natural persons of another Party, and key personnel who are employed by natural or juridical persons of another Party, entry and temporary stay in its territory in order to engage in activities connected with commercial presence.
2. Each Party shall, subject to its domestic laws and regulations, and national policies, permit natural or juridical persons of another Party, and their commercial presence, to employ, in connection with commercial presence, any key personnel of the natural or juridical person?s choice regardless of nationality and citizenship provided that such key personnel has been permitted to enter, stay and work in its territory and that the employment concerned conforms to the terms, conditions and time limits of the permission granted to such key personnel.
3. The Parties shall, subject to their domestic laws and regulations, and national policies, grant entry and temporary stay and provide any necessary confirming documentation to the spouse and minor children of a natural person who has been granted temporary entry, stay and authorisation to work in accordance with paragraphs 1 and 2.
Article 8.6. Right to Regulate
1. The Parties reaffirm their right to regulate within their jurisdictions to achieve legitimate policy objectives, such as the protection of public health, safety, or the environment.
2. A Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion or retention in its territory of a commercial presence of persons of another Party or a non-Party.
Article 8.7. Consultations on Subsidies
1. Notwithstanding Article 8.1 (Scope and Coverage), a Party which considers that it is adversely affected by a subsidy of another Party may request ad hoc consultations with that Party on such matters. Such request shall be accorded sympathetic considerations.
2. No Party shall have recourse to dispute settlement under Chapter 15 (Dispute Settlement) for any request made or consultations held under this Article, or any other dispute arising under this Article.
Article 8.8. Transparency
1. Each Party shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application which pertain to or affect the operation of this Chapter. International agreements pertaining to or affecting commercial presence in non-services sectors to which a Party is a signatory shall also be published.
2. Where publication in accordance with paragraph 1 is not practicable, such information shall be made otherwise publicly available.
3. Nothing in this Chapter shall require a Party to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular juridical persons, public or private.
Article 8.9. Payments and Transfers
1. Except under the circumstances referred to in Article 8.10 (Restrictions to Safeguard the Balance-of-Payments), no Party shall apply restrictions on international transfers and payments for current transactions relating to commercial presence activities in non-services sectors as covered in this Chapter.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of the Agreement of IMF, including the use of exchange actions which are in conformity with the Articles of the Agreement of IMF, provided that no Party shall impose restrictions on capital transactions (18) relating to commercial presence activities in non-services sectors as covered under this Chapter, except under Article 8.9 (Restrictions to Safeguard the Balance-of-Payments) or at the request of the IMF.
Article 8.10. Restrictions to Safeguard the Balance-of-Payments
1. In the event of serious balance-of-payments and external financial difficulties or threat thereof, a Party may adopt or maintain restrictions on commercial presence in the non-services sectors, including on payments or transfers for transactions. It is recognised that particular pressure on the balance of payments of a Party in the process of economic development may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserve adequate for the implementation of its programme of economic development.
2. The restrictions referred to in paragraph 1:
(a) shall not discriminate against the other Party in comparison to non-Party;
(b) shall be consistent with the Articles of Agreement of the IMF;
(c) shall avoid unnecessary damage to the commercial, economic and financial interest of any other Party;
(d) shall not exceed those necessary to deal with the circumstances described in paragraph 1; and
(e) shall be temporary and be phased out progressively as the situation specified in paragraph 1 improves.
3. In determining the incidence of such restrictions, Parties may give priority to the commercial presence in non-services sectors which are more essential to their economic or development programmes. However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular non-services sector.
Article 8.11. General Exceptions
For the purposes of this Chapter Article XIV of the GATS and the chapeau and subparagraphs (f) and (g) of Article XX of the GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 8.12. Security Exceptions
For the purposes of this Chapter, paragraph 1 of Article XIVbis of the GATS and subparagraph (b) (ii) of Article XXI of the GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 8.13. Review
This Chapter shall be subject to periodic review within the framework of the Joint Committee regarding the possibility to further develop the Parties' commitments.
Article 8.14. Denial of Benefits
1. A Party may deny the benefits of this Chapter to a national of a non-Party, or to a juridical person of another Party that is owned or controlled by a non-Party or by a person of a non-Party, if the denying Party:
(a) does not maintain diplomatic relations with the non-Party; or
(b) adopts or maintains measures related to the maintenance of international peace and security, including the protection of human rights, which prohibit transactions with that person or would be violated or circumvented if the benefits of this Chapter were accorded to that person.
Chapter 9. INTELLECTUAL PROPERTY RIGHTS
Article 9.1. Protection of Intellectual Property
1. The Parties shall grant and ensure adequate, effective and non-discriminatory protection of intellectual property rights, and provide for measures for the enforcement of such rights against infringement thereof, counterfeiting and piracy, in accordance with this Chapter and Annex XIX (Protection of Intellectual Property), and the international agreements referred to therein.
2. With respect to intellectual property rights covered by this Chapter, Annex XIX (Protection of Intellectual Property), and in the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), each Party shall accord another Party's nationals treatment no less favourable than that it accords its own nationals. Exemptions from this obligation must be in accordance with Articles 3 and 5 of the TRIPS Agreement.
3. Each Party shall grant another Party's nationals treatment no less favourable than that it accords nationals of a non-Party. If a Party concludes a trade agreement containing provisions on the protection of intellectual property rights with a non-Party, notified under Article XXIV of the GATT 1994, it shall notify the other Parties within reasonable time and accord them treatment no less favourable than that provided under such agreement. The Party concluding such an agreement shall, upon request by another Party, negotiate the incorporation into this Agreement of provisions granting treatment no less favourable than that provided under that agreement. Exemptions from this obligation must be in accordance with the provisions of the TRIPS Agreement, in particular Articles 4 and 5 thereof.
4. In accordance with Article 14.2 (Joint Committee), the Parties may also undertake reviews in the light of any relevant new developments which might warrant modifications or amendments of this Chapter and Annex XIX (Intellectual Property Rights) with a view to improving the intellectual property system.
Article 9.2. General Provision
The Parties may, but shall not be obliged to, implement in their domestic laws and regulations more extensive protection than required by this Chapter, provided that such protection does not contravene this Chapter. The Parties shall be free to determine the appropriate method of implementing this Chapter within their own legal system and practice.
Chapter 10. GOVERNMENT PROCUREMENT
ARTICLE 10.1
Scope and Coverage
1. This Chapter applies to any measure of a Party regarding covered procurement.
2. For the purposes of this Chapter, ?covered procurement? means procurement for governmental purposes:
(a) of goods, services, or any combination thereof
(i)
as specified in each Party?s Appendices to Annex XX
(Government Procurement); and
(ii)
not procured with a view to commercial sale or resale, or for use in the production or supply of goods or services for commercial sale or resale;
(b)
by any contractual means, including purchase, lease, rental or hire purchase, with or without an option to buy;
(c)
for which the value, as estimated in accordance with the rules specified in Appendix 9 (Value of Thresholds) to
Annex
XX