1. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings of general application respecting a matter covered by this Agreement are promptly published or otherwise made available to interested persons and the other Party.

2. To the extent possible, each Party shall:

(a) publish in advance any measure referred to in paragraph 1 that it proposes to adopt; and

(b) provide interested persons and the other Party a reasonable opportunity to comment on that proposed measure.

3. Upon request by a Party, the other Party shall provide information on a measure that may have an impact on a covered investment.

Article 13. Subrogation

1. If a Party or an agency of a Party makes a payment to one of its investors under a guarantee or a contract of insurance it has entered into in respect of an investment, the other Party shall recognize the validity of the subrogation in favour of the first-mentioned Party or agency to a right or title held by the investor.

2. A Party or an agency of a Party, that is subrogated to a right of an investor in accordance with paragraph 1, is entitled to the same rights as those of the investor regarding the investment.

Those rights may be exercised by the Party or an agency of the Party or by the investor if the Party or its agency so authorizes.

Article 14. Taxation Measures

1. Except as set out in this Article, this Agreement does not apply to a taxation measure.

2. This Agreement does not affect the rights and obligations of a Party under a tax convention. In the event of inconsistency between this Agreement and a tax convention, that convention prevails to the extent of the inconsistency.

3. This Agreement does not require a Party to furnish or allow access to information, which if disclosed, would be contrary to the Party's law protecting information concerning the taxation affairs of a taxpayer.

4. Provided that the conditions in paragraph 5 are met:

(a) a claim by an investor that a taxation measure of a Party is in breach of an agreement between a Government authority of that Party and the investor concerning an investment shall be considered a claim for breach of this Agreement; andng taxation measure;

(b) Article 10 (Expropriation) applies to taxation measures.

5. An investor may not make a claim under paragraph 4 unless:

(a) the investor provides a copy of the notice of claim to the taxation authorities of the Parties; and

(b) six months after receiving notification of the claim by the investor, the taxation authorities of the Parties fail to reach a joint determination that, in the case of subparagraph 4(a), the measure does not contravene that agreement, or in the case of subparagraph 4(b), the measure is not an expropriation.

6. If, in connection with a claim by an investor of a Party or a dispute between the Parties, an issue arises as to whether a measure of a Party is a taxation measure, a Party may refer the issue to the taxation authorities of the Parties. A joint determination of the taxation authorities shall bind a Tribunal formed pursuant to Section C (Settlement of Disputes between an Investor and the Host Party) or an arbitral panel formed pursuant to Section D (Settlement of Disputes between the Parties). A Tribunal or arbitral panel seized of a claim or a dispute in which the issue arises may not proceed until it receives the joint determination of the taxation authorities. If the taxation authorities have not determined the issue within six months from the date of the referral, the Tribunal or arbitral panel shall decide the issue.

7. Each Party shall notify the other Party in writing of the identity and contact information of the taxation authorities referred to in this Article.

Article 15. Health, Safety and Environmental Measures

The Parties recognize that it is inappropriate to encourage investment by relaxing their health, safety or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, those measures to encourage the establishment, acquisition, expansion or retention in its area of an investment of an investor. If a Party considers that the other Party has offered such an encouragement, it may request consultations with the other Party and the two Parties shall consult with a view to avoiding the encouragement.

Article 16. Reservations and Exceptions

1. Articles 4 (Non-discriminatory Treatment as Compared with a Party's Own Investors), 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors), 8 (Senior Management, Boards of Directors and Entry of Personnel) and 9 (Performance Requirements) shall not apply to:

(a) (i) any existing non-conforming measure maintained in the area of a Party;

(ii) any measure maintained or adopted after the date of entry into force of this Agreement that, at the time of sale or other disposition of a government's equity interests in, or the assets of, an existing Government enterprise or an existing governmental entity:

- Prohibits or imposes limitations on the ownership or control of equity interests or assets, or

- Imposes nationality requirements relating to senior management or members of the board of directors;

(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or

(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 4 (Non-discriminatory Treatment as Compared with a Party's Own Investors), 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors), 8 (Senior Management, Boards of Directors and Entry of Personnel) and 9 (Performance Requirements).

2. Articles 4 (Non-discriminatory Treatment as Compared with a Party's Own Investors), 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors), 8 (Senior Management, Board of Directors and Entry of Personnel) and 9 (Performance Requirements) shall not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its schedule to Annex II.

3. Article 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors) shall not apply to treatment accorded by a Party pursuant to agreements or arrangements set out in Annex III.

4. In respect of intellectual property rights, a Party may derogate from Articles 4 (Non-discriminatory Treatment as Compared with a Party's Own Investors), 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors) and 9(1)(f) (Performance Requirements) in a manner that is consistent with:

(a) the TRIPS Agreement;

(b) an amendment to the TRIPS Agreement in force for both Parties; and

(c) a waiver to the TRIPS Agreement granted pursuant to Article IX of the WTO Agreement.

5. Articles 4 (Non-discriminatory Treatment as Compared with a Party's Own Investors), 5 (Non-discriminatory Treatment as Compared with a Non-Party's Investors) and 8 (Senior Management, Boards of Directors and Entry of Personnel) shall not apply to:

(a) procurement by a Party or a Government enterprise; or

(b) a subsidy or grant provided by a Party or a Government enterprise, including a government-supported loan, a guarantee or insurance.

Article 17. General Exceptions

1. Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures, including environmental measures:

(a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;

(b) necessary to protect human, animal or plant life or health; or

(c) relating to the conservation of living or non-living exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.

2. This Agreement does not prevent a Party from adopting or maintaining measures for prudential reasons, such as:

(a) protecting investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;

(b) maintaining the safety, soundness, integrity or financial responsibility of financial institutions; and

(c) ensuring the integrity and stability of a Party's financial system.

Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the Party's obligations under such provisions.

3. This Agreement does not apply to non-discriminatory measures of general application taken by a central bank or monetary authority in pursuit of monetary and related credit or exchange rate policies. This paragraph shall not affect a Party's obligations under Article 9 (Performance Requirements) or Article 11 (Transfers).

4. This Agreement does not:

(a) require a Party to furnish or allow access to information if that Party determines that the disclosure of this information would be contrary to its essential security interests;

(b) prevent a Party from taking an action that it considers necessary to protect its essential security interests:

(i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment,

(ii) taken in time of war or other emergency in international relations, o (iii) relating to the implementation of policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or

(c) prevent a Party from taking any action pursuant to the obligations applicable to it under the United Nations Charter for the maintenance of international peace and security.

5. This Agreement does not require a Party to furnish or allow access to information which if disclosed would impede law enforcement or would be contrary to any of its laws, including the Party's law protecting the deliberative and policy-making processes of the executive branch of government at the cabinet or executive council level, personal privacy, the confidentiality of the financial affairs and accounts of individual customers of financial institutions or confidential information concerning particular investors or investments, the disclosure of which would prejudice legitimate commercial interests of particular investors.

6. In the course of a dispute settlement procedure under this Agreement:

(a) a Party is not required to furnish or allow access to information protected under its competition law;

(b) a competition authority of a Party is not required to furnish or allow access to information that is privileged or otherwise protected from disclosure.

7. This Agreement does not apply to a measure adopted or maintained by a Party with respect to a person engaged in a cultural industry. "Person engaged in a cultural industry" means a person engaged in the following activities:

(a) the publication, distribution or sale of books, magazines, periodicals or newspapers in print or machine-readable form, except when printing or typesetting any of the foregoing is the only activity;

(b) the production, distribution, sale or exhibition of film or video recordings;

(c) the production, distribution, sale or exhibition of audio or video music recordings;

(d) the publication, distribution or sale of music in print or machine-readable form; or

(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.

8. If a right or obligation in this Agreement duplicates one under the WTO Agreement, the Parties agree that a measure adopted by a Party in conformity with a waiver decision granted by the WTO pursuant to Article IX ofthe WTO Agreement is deemed to be also in conformity with this Agreement. Such conforming measure of either Party may not give rise to a claim by anInvestor of one Party against the other under Section C (Settlement of Disputes between an Investor and the Host Party).

Article 18. Denial of Benefits

A Party may, at any time including after the institution of arbitration proceedings in accordance with Section C (Settlement of Disputes between an Investor and the Host Party), deny the benefits of this Agreement to an investor of the other Party that is an enterprise of that Party and to investments of that investor if:

(a) investors of a non-Party own or control the enterprise and the denying Party adopts or maintains measures with respect to the non-Party:

(i) that prohibit transactions with the enterprise, or

(ii) that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its covered investments; or

(b) investors of a non-Party or of the denying Party own or control the enterprise and the enterprise has no substantial business activities in the area of the Party under whose law it is constituted or organized.

Section C. Settlement of Disputes between an Investor and the Host Party

Article 19. Purpose

Without prejudice to the rights and obligations of the Parties under Section D (Settlement of Disputes between the Parties), this Section establishes a mechanism for the settlement of disputes between an investor and the host Party.

Article 20. Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise

1. An investor of a Party may submit to arbitration under this Section a claim that:

(a) the respondent Party has breached an obligation under Section B (Substantive Obligations), other than an obligation under Articles 8(3) (Senior Management, Boards of Directors and Entry of Personnel), 12 (Transparency), 15 (Health, Safety and Environmental Measures); and

(b) the investor has incurred loss or damage by reason of, or arising out of, that breach.

2. An investor of a Party, on behalf of an enterprise of the respondent Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Section a claim that:

(a) the respondent Party has breached an obligation under Section B (Substantive Obligations), other than an obligation under Articles 8(3) (Senior Management, Boards of Directors and Entry of Personnel), 12 (Transparency), 15 (Health, Safety and Environmental Measures); and

(b) the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

Article 21. Conditions Precedent to Submission of a Claim to Arbitration

1. The disputing parties shall hold consultations and attempt to settle a claim amicably before an investor may submit a claim to arbitration. Unless the disputing parties agree to a longer period, consultations shall be held within 60 days of the submission of the notice of intent to submit a claim to arbitration under subparagraph 2(c). The place of consultation would be Hong Kong, if the Hong Kong Special Administrative Region is the respondent Party, and Ottawa, if Canada is the respondent Party, unless the disputing parties otherwise agree.

2. An investor may submit a claim to arbitration under Article 20 (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise) only if:

(a) the investor and, where a claim is made under Article 20(2) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the enterprise, consent to arbitration in accordance with the procedures set out in this Agreement;

(b) at least six months have elapsed since the events giving rise to the claim;

(c) the investor has delivered to the respondent Party a written notice of its intent to submit a claim to arbitration at least 90 days prior to submitting the claim, which notice shall specify:

(i) the name and address of the investor and, where a claim is made under Article 20(2) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise), the name and address of the enterprise,

(ii) the provisions of this Agreement alleged to have been breached and any other relevant provisions,

(iii) the legal and the factual basis for the claim, including the measures at issue, and

(iv) the relief sought and the approximate amount of damages claimed;

(d) the investor has delivered evidence establishing that it is an investor of the other Party with its notice of intent to submit a claim to arbitration under subparagraph 2(c);

(e) in the case of a claim submitted under Article 20(1) (Claim by an Investor of a Party on Its Own Behalf or on Behalf of an Enterprise):

(i) not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage thereby,

(ii) the investor waives its right to initiate or continue before an administrative tribunal or court under the law of a Party, or other dispute settlement procedures, including those under any agreement between a non-Party and the disputing Party, proceedings with respect to the measure of the respondent Party that is alleged to be a breach referred to in Article 20 (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise), and

(iii) if the claim is for loss or damage to an interest in an enterprise of the respondent Party that is a juridical person that the investor owns or controls directly or indirectly, the enterprise waives the right referred to under subparagraph (ii);

(f) in the case of a claim submitted under Article 20(2) (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise):

(i) not more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the enterprise has incurred loss or damage thereby, and

(ii) both the investor and the enterprise waive their right to initiate or continue before an administrative tribunal or court under the law of a Party, or other dispute settlement procedures, including those under any agreement between a non-Party and the disputing Party, proceedings with respect to the measure of the respondent Party that is alleged to be a breach referred to in Article 20 (Claim by an Investor of a Party on its Own Behalf or on Behalf of an Enterprise).

3. Subparagraphs 2(e)(ii), (iii) and 2(f)(ii) do not apply to proceedings before a judicial or administrative tribunal or court under the law of the respondent Party for injunctive, declaratory or other extraordinary relief, not involving the payment of damages.

4. The disputing investor or the enterprise shall deliver the consent and waiver required under paragraph 2 to the respondent Party and the investor shall include them in the submission of a claim to arbitration. A waiver from the enterprise under subparagraphs 2(e)(iii) or 2(f)(ii) is not required if the respondent Party has deprived the investor of control of the enterprise.

Article 22. Special Rules Regarding Financial Services

1. With respect to:

(a) financial institutions of a Party; and

(b) investors of a Party, and investments of those investors, in financial institutions in the respondent Party's area,

This Section applies only in respect of claims that the respondent Party has breached an obligation under Article 10 (Expropriation), 11 (Transfers) or 18 (Denial of Benefits).

2. Where an investor or respondent Party claims that a dispute involves measures adopted or maintained by the respondent Party relating to financial institutions of the other Party or Investors of the other Party and their investments in financial institutions in the respondent Party's area, or where the respondent Party invokes Articles 11(6) (Transfers), 17(2) or 17(3) (General Exceptions), the arbitrators shall, in addition to the criteria set out in Article 25(2) (Arbitrators), have expertise or experience in financial services law or practice, which may include the regulation of financial institutions.

3. Where an investor submits a claim to arbitration under this Section, and the respondent Party invokes Article 11(6) (Transfers), 17(2) or 17(3) (General Exceptions), at the request of that Party, the Tribunal shall request a report in writing from the Parties on the issue of whether and to what extent the invoked paragraph is a valid defence to the claim of the investor. The Tribunal may not proceed pending receipt of a report under this Article.

4. Where the Tribunal requests a report under paragraph 3, the Parties shall prepare a written report. If the Parties cannot agree, they shall submit the issue to an arbitral panel constituted in accordance with Section D (Settlement of Disputes between the Parties) that shall prepare the written report. The report shall be transmitted to the Tribunal and be binding on it.

5. The Tribunal may decide the matter where, within 70 days of the referral by the Tribunal, no request for the constitution of an arbitral panel pursuant to paragraph 4 has been made and no report has been received by the Tribunal.

Article 23. Submission of a Claim to Arbitration

1. An investor that meets the conditions precedent in Article 21 (Conditions Precedent to Submission of a Claim to Arbitration) may submit a claim to arbitration under the UNCITRAL Arbitration Rules.

2. Except to the extent modified by this Agreement, the arbitration is governed by the arbitration rules applicable under paragraph 1 that are in effect on the date that the claim is submitted to arbitration under this Section.

3. The Parties may adopt supplemental rules of procedure that complement the arbitration rules applicable under paragraph 1 and these rules apply to the arbitration. The Parties shall promptly publish the supplemental rules of procedure that they adopt or otherwise make them available to interested persons.

4. A claim is submitted to arbitration under this Section when the notice of arbitration under Article 3 of the UNCITRAL Arbitration Rules is received by the respondent Party.

5. Each Party shall notify the other Party in writing of the place of delivery of notices and other documents.

6. If, following the submission of a claim to arbitration under this Section, the investor fails to take any steps in the proceeding during six consecutive months, and subject to both disputing Parties agreeing otherwise, the investor shall be deemed to have withdrawn its claim and to have discontinued the proceedings. Thereupon, the claim of the investor shall be deemed not to have been filed under this Section and the authority of any tribunal constituted to hear that claim to have lapsed.

Article 24. Consent to Arbitration

1. Each Party consents to the submission of a claim to arbitration in accordance with the procedures set out in this Agreement. Failure to meet a condition precedent listed in Article 21 (Conditions Precedent to Submission of a Claim to Arbitration) nullifies that consent.

2. The consent given in paragraph 1 and the submission by an investor of a claim to arbitration satisfies the requirement of Article II of the New York Convention for an agreement in writing.

Article 25. Arbitrators

1. Except in respect of a Tribunal constituted under Article 26 (Consolidation), and unless the disputing parties agree otherwise, the Tribunal shall be composed of three arbitrators. One arbitrator shall be appointed by each of the disputing parties and the third, who will be the presiding arbitrator, shall be appointed by agreement of the disputing parties.

2. Arbitrators shall have expertise or experience in public international law, international investment or international trade rules, or the resolution of disputes arising under international investment or international trade agreements. Arbitrators shall be independent of, and not be affiliated with or take instructions from, either Party and the disputing investor.

3. If the disputing parties do not agree on the remuneration of the arbitrators before the Tribunal is constituted, reference should be made to the prevailing rate for arbitrators published by the International Centre for Settlement of Investment Disputes.

4. If a Tribunal, other than a Tribunal constituted under Article 26 (Consolidation), has not been constituted within 90 days from the date that a claim is submitted to arbitration, a disputing party may ask the Secretary-General of the PCA to appoint the arbitrator or arbitrators not yet appointed. The Secretary-General of the PCA shall make the appointment at his or her own discretion and, to the extent practicable, this appointment shall be made in consultation with the disputing parties. The Secretary-General of the PCA may not appoint as presiding arbitrator a natural person of a Party.

Article 26. Consolidation

1. A disputing party that seeks a consolidation order under this Article shall request that the Secretary-General of the PCA establish a Tribunal and shall specify in the request:

(a) the name of the respondent Party or investors against which the order is sought;

(b) the nature of the order sought; and

(c) the grounds for the order sought.

2. The disputing party shall deliver a copy of the request to the respondent Party or investors against which the order is sought.

3. Within 60 days of receiving the request, the Secretary-General of the PCA shall establish a Tribunal composed of three arbitrators. The Secretary-General of the PCA shall appoint one member who is a natural person of the respondent Party, one member who is a natural person of the Party of the investors that submitted the claims, and a presiding arbitrator who is not a natural person of a Party.

4. A Tribunal constituted under this Article shall be constituted under the UNCITRAL Arbitration Rules and shall conduct its proceedings in accordance with those Rules, except as modified by this Agreement.

5. If a Tribunal constituted under this Article is satisfied that claims submitted to arbitration under Article 23 (Submission of a Claim to Arbitration) have a question of law or fact in common, the Tribunal may, in the interest of fair and efficient resolution of the claims and after hearing the disputing parties, by order:

(a) assume jurisdiction over, and hear and determine together, all or part of the claims; or

(b) assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in resolving the other claims.

6. Where a Tribunal has been constituted under this Article, an investor that has submitted a claim to arbitration under Article 23 (Submission of a Claim to Arbitration) and that has not been named in a request made under paragraph 1 may make a written request to the Tribunal that it be included in an order made under paragraph 5, and shall specify in the request:

(a) the name and address of the investor;

(b) the nature of the order sought; and

(c) the grounds for the order is sought.

7. An investor referred to in paragraph 6 shall deliver a copy of its request to the disputing parties named in a request under paragraph 1.

8. A Tribunal constituted under Article 23 (Submission of a Claim to Arbitration) does not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal constituted under this Article has assumed jurisdiction.

9. On application of a disputing party, a Tribunal constituted under this Article, pending its decision under paragraph 5, may order that the proceedings of a Tribunal constituted under Article 23 (Submission of a Claim to Arbitration) be stayed unless the latter Tribunal has already adjourned its proceedings.

Article 27. Documents to, and Participation of, the Non-respondent Party

1. The UNCITRAL Transparency Rules shall apply with respect to the participation of the nonrespondent Party in arbitration proceedings under this Section except as modified by this Agreement.

2. The respondent Party shall deliver to the non-respondent Party a copy of the notice of intent to submit a claim to arbitration and other documents submitted along with such notice within 30 days of the date those documents have been delivered to the respondent Party. The nonrespondent Party is entitled, upon request and at its cost, to receive from the respondent Party a copy of the evidence that has been tendered to the Tribunal, copies of pleadings filed in the arbitration, and the written argument of the disputing parties. The non-respondent Party receiving such information shall treat the information as if it were the respondent Party.

3. The non-respondent Party may make oral and written submissions to a Tribunal only on questions of interpretation of this Agreement and has the right to attend hearings held under this Section.