In accordance with the provisions of Article 14.10 (Expropriation), the Parties confirm their common understanding that:
(a) indirect expropriation results from a measure or series of measures by a Party that has an effect equivalent to a direct expropriation without a formal transfer of title or right of ownership;
(b) the determination of whether a measure or series of measures by a Party constitutes an indirect expropriation requires a case-by-case, fact-based analysis that considers, among other factors:
(i) the economic impact of the measure or series of measures, although the mere fact that the measure or series of measures of a Party generates an adverse economic effect on the value of an investment does not imply that an indirect expropriation has occurred;
(ii) the extent to which the measure or a series of measures interferes with the distinguishable and reasonable expectations of the investment; and
(iii) the nature of the measure or series of measures; and
(c) except in exceptional circumstances, such as where a measure or series of measures are so severe in light of their objective that they cannot reasonably be perceived as having been adopted and applied in good faith, non-discriminatory measures of a Party that are designed and applied on the basis of public utility or social interest (13) or that have objectives such as public health, safety and environmental protection, do not constitute indirect expropriation.
Annex 14-C. WRITTEN SUBMISSIONS FILED BY A PERSON OR ENTITY THAT IS NOT A DISPUTING PARTY
Pursuant to Article 14.30 (Submissions by a person or entity that is not a disputing Party):
1. An application for leave to file pleadings by a person or entity that is not a disputing Party shall:
(a) be in writing, dated and signed by the person submitting the application, and shall include the address and other details of the applicant;
(b) be no longer than five typed pages;
(c) describe the applicant, including, if relevant, its membership and legal status (e.g., company, trade association or non-governmental organization), its general objectives, the nature of its activities, as well as any parent organization (including any organization that directly or indirectly controls the applicant);
(d) disclose whether the applicant has any affiliation, directly or indirectly, with a disputing party;
(e) identify any government, person or organization that provided financial or other assistance for the preparation of the brief;
(f) specify the nature of the applicant's interest in the arbitration;
(g) identify the specific factual or legal issues in the arbitration that the petitioner has addressed in its brief;
(h) explain why the Tribunal should accept the brief; and
(i) in an arbitration language.
2. The brief filed by a non-disputing party shall:
(a)be dated and signed by the person submitting it;
(b) be concise and not exceed 20 typed pages, including appendices;
(c) make a precise statement supporting the applicant's position on the issues; and
(d) refer only to matters within the scope of the dispute.
Annex 14-D. EXCLUSIONS
In accordance with the provisions of Article 14.36 (Exclusions):
1. A decision by a Party to prohibit or restrict the acquisition of an investment in its territory by an investor of the other Party, or its investment, under Article 24.2 (Essential Security) shall not be subject to the dispute settlement provisions of this Chapter or Chapter 21 (Dispute Settlement).
2. Article 14.14 (Measures Relating to Health, Safety, Environment and Labor Rights) shall not be subject to the dispute resolution provisions of Section B of this Chapter or Chapter 21 (Dispute Resolution).
3. Measures adopted by a Party to preserve or maintain public order that may affect natural persons shall not be subject to the dispute settlement provisions of Section B of this Chapter or Chapter 21 (Dispute Settlement).
Chapter 15. CROSS-BORDER TRADE IN SERVICES
Article 15.1. SCOPE
1. This Chapter applies to measures adopted or maintained by a Party affecting cross- border trade in services supplied by service suppliers of the other Party, including those relating to:
(a) the production, distribution, marketing, sale and supply of a service;
(b) the purchase, use or payment of a service;
(c) access to and use of distribution and transportation systems or telecommunications networks and services related to the supply of a service;
(d) the presence in its territory of a service supplier of the other Party; or
(e) the provision of a bond or other form of financial guarantee as a condition for the provision of a service.
2. Articles 15.4 and 15.7 shall apply to measures of a Party affecting the supply of a service in its territory by a covered investment (1).
3. This Chapter does not apply to:
(a) financial services, as defined in Chapter 16 (Financial Services), except as provided in Chapter 16 (Financial Services);
(b) air services, including domestic and international air transport services, scheduled and non-scheduled, and related support services, except:
(i) aircraft repair and maintenance services;
(ii) the sale and marketing of air transportation services; and
(iii) computerized reservation system (CRS) services;
(c) public procurement, as defined in Chapter 12 (Public Procurement);
(d) a subsidy or assistance, including a government-backed loan, guarantee or insurance, provided by a Party or a State enterprise; and
(e) services provided in the exercise of governmental authority, such as law enforcement, social rehabilitation services, pension or unemployment insurance or social security services, social welfare, public education, public training, health and child care or child protection.
3. This Chapter does not impose any obligation on a Party with respect to a national of the other Party who seeks access to its labor market or who has permanent employment in its territory, or to confer any right on such national with respect to such access or employment.
Article 15.2. NATIONAL TREATMENT
Each Party shall accord to a service supplier of the other Party treatment no less favorable than the treatment it accords, in like circumstances, to its own service suppliers.
Article 15.3. MOST-FAVORED-NATION TREATMENT
Each Party shall accord to service suppliers of the other Party treatment no less favorable than the treatment it accords, in like circumstances, to service suppliers of a non-Party.
Article 15.4. MARKET ACCESS
A Party may not adopt or maintain measures that:
(a) impose limitations:
(i) to the number of service providers, either in the form of a numerical quota, monopoly, exclusive service provider or through the requirement of an economic needs test;
(ii) to the total value of assets or service transactions in the form of a numerical quota or by requiring an economic needs test;
(iii) the total number of service operations or the total quantity of service output, expressed in terms ofa designated numerical unit, in the form of a quota or by requiring an economic needs test (2); or
(iv) the total number of natural persons who may be employed ina given service sector or who may be employed by a service supplier and who are necessary for and directly related to the supply of a specific service, in the form of a numerical quota or through the requirement of an economic needs test; or
(b) restrict or prescribe the specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 15.5. LOCAL PRESENCE
A Party may not require as a condition for the cross-border supply of a service to the service supplier of the other Party:
(a) establishing or maintaining a representative office or other form of enterprise in its territory; or
(b) residing in its territory.
Article 15.6. NON-CONFORMING MEASURES
1. Articles 15.2, 15.3, 15.4 and 15.5 do not apply to:
(a) an existing non-conforming measure that is maintained by a Party at the level:
(i) central government, as established by that Party in its Schedule to Annex I; or
(ii) local government;
(b) the continuation or prompt renewal of a nonconforming measure referred to in subparagraph (a); or
(c) the modification of a non-conforming measure referred to in subparagraph (a) above (a) provided that such modification does not diminish the degree of conformity of the measure with Articles 15.2, 15.3, 15.4 and 15.5, as in effect immediately prior to the modification.
2. Articles 15.2, 15.3, 15.4 and 15.5 do not apply to a measure that a Party adopts or maintains in relation to a sector, sub-sector or activity, as indicated in its Schedule to Annex II.
Article 15.7. NATIONAL REGULATIONS
1. The Parties take note of their mutual obligations relating to domestic regulation under Article VI:4 of the GATS and reaffirm their commitment to the development of any necessary disciplines under that Article. Should any such disciplines be adopted by WTO Members, the Parties shall jointly review them, as appropriate, with a view to determining whether this Article needs to be supplemented.
2. Where a Party requires an authorization for the supply ofa service, the competent authorities of that Party shall, within a reasonable period of time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision regarding its application. At the request of the applicant, the competent authorities of the Party shall, without undue delay, provide information concerning the status of the application. This obligation shall not apply to authorization requirements that fall within the scope of Article 15.6.2.
Article 15.8. RECOGNITION
1. For the purpose of complying, in whole or in part, with its standards or criteria for the authorization or certification of service suppliers or the licensing of service suppliers, and subject to the requirements of paragraph 4, a Party may recognize education or experience obtained, requirements met, or licenses or certificates granted in a particular country. Such recognition, which may be effected by harmonization or otherwise, may be based on an agreement or arrangement with the country concerned or may be granted autonomously.
2. Where a Party recognizes, autonomously or by means of an agreement or arrangement, education or experience obtained, qualifications completed or licenses or certificates granted in the territory of a non-Party, nothing in Article 15.3 shall be construed to require the Party to grant such recognition to education or experience obtained, qualifications completed or licenses or certificates granted in the territory of the other Party.
3. A Party that is a party to an existing or future agreement or convention of the type referred to in paragraph 1 shall provide adequate opportunity for the other Party, if the other Party is interested, to negotiate its accession to such an agreement or convention or to negotiate with it comparable agreements or conventions. Where a Party grants recognition autonomously, it shall provide adequate opportunity for the other Party to demonstrate that education, experience, licenses or certificates obtained or requirements fulfilled in the territory of that other Party should be subject to recognition.
4. No Party shall grant recognition in a manner that would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization or certification of service suppliers or the granting of licenses to them, or a disguised restriction on trade in services.
5. Parties should encourage the relevant professional service agencies in their territory to:
(a) exchange information on existing standards and criteria for the authorization, licensing and certification of professional service providers; and
(b) consider the use of the standards and criteria in Annex 15-A in discussions for a potential agreement or arrangement referred to in paragraph 1.
Article 15.9. DENIAL OF BENEFITS
Subject to prior notification and consultations (3) pursuant to Article 22.2 (Notification and Provision of Information), a Party may deny the benefits of this Chapter to a service supplier of the other Party if the service supplier is an enterprise owned or controlled by a person of a non-Party or of the denying Party that does not have substantial business activities in the territory of the other Party.
Article 15.10. TRANSFERS AND PAYMENTS
1. Each Party shall allow transfers and payments related to the cross-border supply of services to be made freely and without delay into and out of its territory.
2. Each Party shall permit such transfers and payments related to the cross-border supply of services to be made in a freely circulating currency at the market rate of exchange prevailing at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay the making of a transfer or payment, through the equitable, non-discriminatory and good faith application of its national law with respect to:
(a) bankruptcy, insolvency or protection of creditors' rights;
(b) issuance, trading or operations of securities, futures, options or derivatives;
(c) financial reporting or record keeping of transfers when necessary to cooperate with law enforcement or financial regulatory authorities;
(d) criminal offenses; or
(e) to ensure compliance with an order or judgment in a judicial or administrative proceeding or an award in an arbitration proceeding.
4. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of Agreement of the International Monetary Fund, nor the provisions of Annex 14-A (Payments and Capital Movements).
Article 15.11. DEFINITIONS
For the purposes of this Chapter:
cross border trade in services or cross border supply of services means to provide a service:
(a) from the territory of one Party to the territory of the other Party;
(b) in the territory of a Party, by a person of that Party, to a person of the other Party; or
(c) by anational ofa Party in the territory of the other Party,
but does not include supplying a service in the territory of a Party for a covered investment, as defined in Article 14.37 (Definitions);
company means a company as defined in Article 1.6 (Definitions of General Application) and a branch of a company;
enterprise of a Party means an enterprise of a Party as defined in Article 1.6 (Definitions of General Application) and a branch office located in the territory of a Party conducting business therein;
measures adopted or maintained by a Party means a measure adopted or maintained by:
(a) a national government or authority or a local government; or
(b) a non-governmental body in the exercise of powers delegated to it by a government or a national or local authority.
service supplier of a Party means a person of the Party who intends to supply or does supply a service (4);
professional services means a service the supply of which requires specialized higher education or equivalent training or experience, and the exercise of which is authorized or restricted by a Party but does not include services supplied by persons engaged in a trade or the crews of ships and aircraft.
aircraft repair and maintenance services means activities performed on an aircraft or part of an aircraft while the aircraft is out of service and does not include so-called line maintenance;
computer reservation system (CRS) services means services provided through computerized systems that contain information about air carriers' schedules, seat availability, fares and fare-setting rules, and through which reservations can be made or tickets issued;
services supplied in the exercise of governmental authority means any service that is supplied neither on a commercial basis nor in competition with one or more service suppliers; and
sale or marketing of an air transport service means the opportunities for the air carrier concerned to freely sell and market its air transport services, and all aspects of marketing, such as market research, advertising and distribution, but does not include the pricing of air transport services or the applicable terms and conditions.
Chapter 16. FINANCIAL SERVICES
Article 16.1. SCOPE
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) a financial institution of the other Party;
(b) an investor of the other Party, or an investment of such investor, in a financial institution in the territory of the Party; and
(c) cross-border trade in financial services.
2. Chapters 14 (Investment) and 15 (Cross-Border Trade in Services) shall apply to the measures described in paragraph 1 only to the extent that such Chapters or Articles of such Chapters are incorporated into this Chapter.
3. Articles 14.9 (Transfers), 14.10 (Expropriation), 14.13 (Denial of Benefits), 14.14 (Measures Relating to Health, Safety, Environment and Labor Rights), 14.16 (Special Formalities and Information Requirements) and 15.9 (Denial of Benefits) are incorporated into and form an integral part of this Chapter.
4. Section B (Investor - State Dispute Settlement) of Chapter 14 (Investment) is incorporated into this Chapter and is an integral part of this Chapter only for cases alleging a Party's breach of Articles 14.9 (Transfers), 14.10 (Expropriation), or 14.13 (Denial of Benefits), as incorporated into this Chapter.
5. Article 15.10 (Transfers and Payments) is incorporated into and made an integral part of this Chapter to the extent that cross-border trade in financial services is subject to the obligations under Article 16.5.
6. This Chapter does not apply to measures adopted or maintained by a Party relating to:
(a) activities or services that are part of a public retirement plan or a Social Security system established by law; or
(b) activities or services performed for the account or with the guarantee of the Party or with the use of financial resources of the Party, including its public entities.
Likewise, this Chapter shall not prevent a Party, including its public entities, from carrying out or supplying such activities exclusively in its territory.
Article 16.2. NATIONAL TREATMENT
1. Each Party shall accord to an investor of the other Party treatment no less favorable than the treatment 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 or an investment in financial institutions in its territory.
2. Each Party shall accord to a financial institution of the other Party and to an investment of an investor of the other Party in financial institutions treatment no less favorable than the treatment 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. For purposes of the national treatment obligations in Article 16.5.1, a Party shall accord to cross-border financial service suppliers of the other Party treatment no less favorable than that it accords to its own financial service suppliers, in like circumstances, with respect to the supply of the relevant service.
4. Differences in market share, profitability or size do not in themselves establish a breach of obligations under this Article.
Article 16.3. MOST-FAVORED-NATION TREATMENT
1. Each Party shall accord to an investor of the other Party, a financial institution of the other Party, an investment of an investor in a financial institution and a cross-border financial service supplier of the other Party treatment no less favorable than the treatment it accords, in like circumstances, to investors, financial institutions, investments of investors in financial institutions and cross-border financial service suppliers of a non- Party.
2. A Party may recognize a prudential measure of a non-Party in the application of a measure covered by this Chapter. Such recognition may be:
(a) granted autonomously;
(b) achieved by harmonization or other means; or
(c) based on a convention or agreement with a non-Party.
3. A Party granting recognition of a prudential measure under paragraph 2 shall provide adequate opportunity for the other Party to demonstrate that circumstances exist in which there is or will be regulation, supervision and enforcement of the prudential measure equivalent regulation and, if appropriate, that there are or will be procedures relating to the exchange of information between the Parties.
4. Where a Party grants recognition of prudential measures in accordance with paragraph 2(c) and the circumstances set out in paragraph 3 exist, the Party shall provide adequate opportunity for the other Party to negotiate accession to the convention or agreement or to negotiate a comparable convention or agreement.
Article 16.4. RIGHT OF ESTABLISHMENT
1. A Party shall permit an investor of the other Party that does not own or control a financial institution in the territory of the Party to establish, without the imposition of numerical restrictions or requirements of specific types of legal form, a financial institution that is permitted to supply a financial service that a similar institution of the Party could supply under the Party's law at the time of establishment. The obligation not to impose a requirement to adopt a specific legal form does not prevent a Party from imposing a condition or requirement in connection with the establishment of a particular type of entity chosen by an investor of the other Party.
2. A Party shall permit an investor of the other Party that owns or controls a financial institution in the territory of the Party to establish such additional financial institutions as may be necessary to enable the supply of the full range of financial services permitted under the Party's domestic law at the time of the establishment of the additional financial institutions. Subject to Article 16.2, a Party may impose a term or condition on the establishment of additional financial institutions and determine the institutional and legal form to be used for the supply of a specified financial service or the conduct of a specified activity.
3. The right of establishment under paragraphs 1 and 2 shall include the acquisition of an existing entity.
4. Subject to Article 16.2, a Party may prohibit a particular financial service or activity. Such a prohibition may not apply to all financial services or to an entire sub-sector of financial services such as banking activities.