Article 8.3. Market Access
1. With respect to market access through the modes of supply defined in Article 8.1, each Party shall accord to services and service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments in Annex 8-A (13).
2. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or the total quantity of services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test (14);
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 8.4. National Treatment
1. In the sectors inscribed in its Schedule of Specific Commitments, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.(15)
2. A Party may meet the requirement in paragraph 1 by according to services and service suppliers of the other Party either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like service or service suppliers of the other Party.
Article 8.5. Additional Commitments
The Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Article 8.3 or Article 8.4, including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule of Specific Commitments.
Article 8.6. Schedule of Specific Commitments
1. Each Party shall set out in its Schedule the specific commitments it undertakes under Articles 8.3, 8.4, and 8.5. With respect to sectors where such commitments are undertaken, each Schedule of specific commitments shall specify:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments; and
(d) where appropriate, the time frame for implementation of such commitments.
2. Measures inconsistent with Articles 8.3 and 8.4 shall be inscribed in the column relating to Article 8.3. In this case, the inscription will be considered to provide a condition or qualification to Article 8.4 as well.
3. Schedules of Specific Commitments shall be annexed to this Chapter and shall form an integral part of this Agreement.
4. Neither Party may adopt new, or more, discriminatory measures with regard to services and service supplier of the other Party in comparison with treatment accorded pursuant to the specific commitments undertaken in conformity with paragraph 1. (16)
Article 8.7. Domestic Regulation
1. In sectors where specific commitments are undertaken, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. (a) Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for a prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
(b) The provisions of subparagraph (a) shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.
3. Where authorisation is required for the supply of a service on which a specific commitment has been made, the competent authorities of a Party shall, within a reasonable period of time after the submission of an application considered complete under its domestic laws and regulations, inform the applicant of the decision concerning the application. On the request of the applicant, the competent authorities of the Party shall provide, without undue delay, information concerning the status of the application.
4. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the Parties shall jointly review the results of the negotiations on disciplines on these measures pursuant to Article VI.4 of GATS, with a view to incorporating them into this Chapter. The Parties note that such disciplines aim to ensure that such requirements are, inter alia:
(a) based on objective and transparent criteria, such as competence and the ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the service; and
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.
5. (a) In sectors in which a Party has undertaken specific commitments, pending the incorporation of the disciplines referred to in paragraph 4, that Party shall not apply licensing and qualification requirements and technical standards that nullify or impair its obligation under this Agreement in a manner which:
(i) does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c); and
(ii) could not reasonably have been expected of that Party at the time the specific commitments in those sectors were made.
(b) In determining whether a Party is in conformity with the obligation under paragraph 5(a), account shall be taken of international standards of relevant international organisations applied by that Party. (17)
6. In sectors where specific commitments regarding professional services are undertaken, each Party shall provide for adequate procedures to verify the competence of professionals of the other Party.
Article 8.8. Transparency
1. Each Party shall publish promptly all relevant measures of general application which pertain to or affect the operation of this Chapter. International agreements pertaining to or affecting trade in services to which a Party is a signatory shall also be published. 2. Where publication as referred to in paragraph 1 is not practicable, such information shall be made otherwise publicly available. 3. Each Party shall promptly and at least annually inform the Committee on Trade in Services referred to in Article 8.14 of the introduction of any new, or any changes to existing, laws, regulations or administrative guidelines which significantly affect trade in services covered by its specific commitments under this Chapter. 4. Each Party shall respond promptly to all requests by the other Party for specific information on any of its measures of general application or international agreements within the meaning of paragraph 1. Each Party shall also establish one or more enquiry points to provide specific information to the other Party, upon request, on all such matters as well as those subject to the notification requirement in paragraph 3. Such enquiry points shall be established within two years from the date of entry into force of this Agreement. 5. Each Party may notify to the Committee on Trade in Services referred to in Article 8.14 any measure, taken by the other Party, which it considers affects the operation of this Chapter.
Article 89. Recognition
1. For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorisation, licensing, or certification of services suppliers, and subject to the requirements of paragraph 4, a Party may recognise the education or experience obtained, requirements met, or licenses or certifications granted in the other Party. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement between the Parties or the relevant competent bodies or may be accorded autonomously.
2. Where a Party recognises, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted in the territory of a non-Party, the Party is not obliged to accord such recognition to the education or experience obtained, requirements met, or licenses or certifications granted in the territory of the other Party.
3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 2, whether existing or future, shall afford adequate opportunity for the other Party, upon request, to negotiate its accession to such an agreement or arrangement or to negotiate a comparable one with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for the other Party to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Party's territory should be recognised.
4. A Party shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorisation, licensing, or certification of service suppliers, or a disguised restriction on trade in services.
5. Each Party shall endeavour:
(a) within 12 months from the date on which this Agreement takes effect for it, to inform the Committee on Trade in Services of its existing recognition measures and state whether such measures are based on agreements or arrangements of the type referred to in paragraph 1;
(b) to promptly inform the Committee on Trade in Services as far in advance as possible of the opening of negotiations on an agreement or arrangement of the type referred to in paragraph 1 in order to provide adequate opportunity to the other Party to indicate their interest in participating in the negotiations before they enter a substantive phase; and
(c) to promptly inform the Committee on Trade in Services when it adopts new recognition measures or significantly modifies existing ones and state whether the measures are based on an agreement or arrangement of the type referred to in paragraph 1.
6. Wherever appropriate, recognition should be based on multilaterally agreed criteria. In appropriate cases, the Parties shall work in cooperation with relevant intergovernmental and non-governmental organisations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions.
Article 8.10. Payments and Transfers
1. Except under the circumstances envisaged in Article XII (Restrictions to Safeguard the Balance of Payments) of GATS, a Party shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties as members of the International Monetary Fund under the Articles of Agreement of the International Monetary Fund ("Articles of Agreement"), including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article XII (Restrictions to Safeguard the Balance of Payments) of GATS or at the request of the International Monetary Fund.
Article 8.11. Denial of Benefits
Subject to prior notification and consultation, a Party may deny the benefits of this Chapter to service suppliers of the other Party where the service is being supplied by a juridical person, if it is:
(a) owned or controlled by persons of a non-Party and has no substantive business operations in the territory of the other Party;
(b) owned or controlled by persons of the denying Party and has no substantive business operations in the territory of the other Party; or
(c) owned or controlled by persons of a non-Party, and the denying Party adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the juridical person or that would be violated or circumvented if the benefits of this Chapter were accorded to the juridical person.
Article 8.12. Monopolies and Exclusive Service Suppliers
1. Each Party shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Party's obligations and specific commitments.
2. Where a Party's monopoly supplier competes, either directly or through an affiliated company, in the supply of a service outside the scope of its monopoly rights and which is subject to that Party's specific commitments, the Party shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such commitments.
3. If a Party has reason to believe that a monopoly supplier of a service of the other Party is acting in a manner inconsistent with paragraph 1 or 2, that Party may request the other Party establishing, maintaining or authorizing such supplier to provide specific information concerning the relevant operations.
4. This Article shall also apply to cases of exclusive service suppliers, where a Party, formally or in effect, (a) authorises or establishes a small number of service suppliers and (b) substantially prevents competition among those suppliers in its territory.
Article 8.13. Subsidies
1. The Parties shall review the issue of disciplines on subsidies related to trade in services in the light of any disciplines agreed under Article XV of GATS with a view to their incorporation into this Agreement.
2. At the request of a Party which considers that it is adversely affected by a subsidy of the other Party, the Parties shall enter into consultations on such matters.
Article 8.14. Committee on Trade In Services
1. The Parties hereby establish a Committee on Trade in Services (hereinafter referred to as the "Committee"), comprising representatives of each Party.
2. The Committee's functions shall include:
(a) reviewing the implementation and operation of this Chapter;
(b) identifying and recommending measures to promote trade in services; and
(c) at a Party's request, consulting on any matter arising under this Chapter.
3. The Committee shall meet within one year after the date this Agreement enters into force and annually thereafter unless the Parties otherwise agree. The Committee shall inform the Joint Commission of the results of each meeting.
Article 8.15. Business Practices
1. The Parties recognise that certain business practices of service suppliers, other than those falling under Article 8.12, may restrain competition and thereby restrict trade in services.
2. Each Party shall, on the request of the other Party ("Requesting Party"), enter into consultations with a view to eliminating practices referred to in paragraph 1. The Party addressed ("Requested Party"), shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Requested Party shall also provide other information available to the Requesting Party, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the Requesting Party.
Article 8.16. Contact Points
Each Party shall designate one or more contact points to facilitate communications between the Parties on any matter covered by this Chapter, and shall provide details of such contact points to the other Party. Each Party shall notify each other promptly of any amendments to the details of its contact points.
Chapter 9. Financial Services
Article 9.1. Scope and Coverage
1. This Chapter applies to measures affecting the supply of financial services.
2. Nothing in this Chapter shall be construed to prevent a Party, including its public entities, from exclusively conducting or providing in its territory:
(a) activities or services forming part of a public retirement plan or statutory system of social security;
(b) activities or services for the account or with the guarantee or using the financial resources of the Party, including its public entities; or
(c) activities or services conducted by a central bank, monetary authority or any other public entity in pursuit of monetary or exchange rate policies.
3. This Chapter does not apply to laws, regulations, or requirements governing the procurement by government agencies of financial services purchased for governmental purposes and not with a view to commercial resale or use in the supply of services for commercial sale.
Article 9.2. National Treatment
1. In the sectors inscribed in its Schedule of Specific Commitments in Annex 8-A with regards to Financial Services, and subject to any conditions and qualifications set out therein, each Party shall accord to financial services and financial service suppliers of the other Party, in respect of all measures affecting the supply of financial services, treatment no less favourable than that it accords to its own like financial services and financial service suppliers (18).
2. A Party may meet the requirement in paragraph 1 by according to financial services and financial service suppliers of the other Party either formally identical treatment or formally different treatment to that it accords to its own like financial services and financial service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of financial services or financial service suppliers of the Party compared to like financial service or financial service suppliers of the other Party.
Article 9.3. Market Access for Financial Institutions
1. With respect to market access through the financial services supply, each Party shall accord to financial services and financial service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments in Annex 8-A.
2. In sectors where market access commitments are undertaken, the measures which a Party shall not adopt or maintain, either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments in Annex 8-A, are defined as:
(a) limitations on the number of financial service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;
(b) limitations on the total value of financial service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of financial service operations or on 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 (19);
(d) limitations on the total number of natural persons that may be employed in a particular financial service sector or that a financial service suppliers 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;
(e) measures which restrict or require specific types of legal entity or joint venture through which a financial institution may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 9.4. Treatment of Certain Information
Nothing in this Chapter 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 9.5. Prudential Carve Out
1. Notwithstanding any other provisions of this Chapter or Chapter 12 (Investment), a Party shall not be prevented from adopting or maintaining measures for prudential reasons, including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system.
2. Where such measures do not conform to the provisions of this Agreement referred to in paragraph 1, they shall not be used as a means of avoiding the Party's commitments or obligations under such provisions.
Article 9.6. Transparency (20)
1. The Parties recognise that transparent regulations and policies governing the activities of financial service suppliers are important in facilitating access to, and their operations in, each other's markets. Each Party commits to promote regulatory transparency in financial services.
2. Each Party shall ensure that all measures of general application to which this Chapter shall apply are administered in a reasonable, objective, and impartial manner.
3. In lieu of paragraph 2 of Article 18.1 (Publication), each Party, to the extent possible:
(a) shall publish in advance any regulations of general application relating to the subject matter of this Chapter that it proposes to adopt and the purpose of the regulations; and
(b) shall provide interested persons and the other Party a reasonable opportunity to comment on such proposed regulations.
4. To the extent possible, each Party shall endeavour to allow reasonable time between publication of final regulations of general application and their effective date.
5. Each Party shall establish or maintain appropriate channels for receiving inquiries regarding measures of general application covered by this Chapter.
6. Each Party's regulatory authorities shall make publicly available the requirements, including any documentation required, for completing applications relating to the supply of financial services.
7. A Party's regulatory authority shall inform the applicant of the status of its application within the timeframe as stipulated by relevant regulations. If the authority requires additional information from the applicant, it shall notify the applicant without undue delay.
8. A Party's regulatory authority shall make an administrative decision on a completed application of financial service suppliers of the other Party relating to the supply of a financial service within the timeframe as stipulated by relevant regulations, and shall promptly notify the applicant of the decision. An application shall not be considered complete until all necessary information is received. Where it is not practicable for an administrative decision to be made within 180 days, the regulatory authority shall notify the applicant without undue delay and shall endeavour to make the decision within the timeframe as stipulated by relevant regulations thereafter.
9. On the request of an unsuccessful applicant, a regulatory authority that has denied an application shall, to the extent possible, inform the applicant of the reasons for denial of the application.
Article 9.7. Payment and Clearing Systems
Under terms and conditions that accord national treatment, each Party shall grant financial institutions of the other Party established in its territory access to payment and clearing systems (21) operated by public entities, and to official funding and refinancing facilities available in the normal course of ordinary business. This Article is not intended to confer access to the Party's lender of last resort facilities.
Article 9.8. Recognition of Prudential Measures
1. A Party may recognise prudential measures of a 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 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 the other Party to negotiate its accession to such an agreement or arrangement, 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 the other Party to demonstrate that such circumstances exist.
Article 9.9. Specific Commitments (22)
Annex 9-A sets out certain specific commitments by each Party.
Article 9.10. Committee on Financial Services
1. The Committee on Financial Services (hereinafter referred to as the "Committee") established in accordance with Article 19.4 (Committees and Other Bodies) shall comprise officials of each Party responsible for financial services as set out in paragraph 2 of Annex 9-A.
2. The Committee shall:
(a) supervise the implementation of this Chapter and its further elaboration; and
(b) consider issues regarding financial services that are referred to it by a Party, including ways for the Parties to cooperate more effectively in the financial services sector.
3. The Committee shall meet as agreed, to assess the functioning of this Agreement as it applies to financial services.
Article 9.11. Consultations
1. A Party may request consultations with the other Party regarding any matter arising under this Agreement that affects financial services. The other Party shall give due consideration to the request.
2. Consultations under this Article shall include officials of the authorities specified in paragraph 2 of Annex 9-A.
Article 9.12. Dispute Settlement
Panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service under dispute.
Article 9.13. Prior Consultation for Investment Disputes In Financial Services
Where an investor of a Party in financial institutions submits a claim under Article 12.12 (Settlement of Investment Disputes between a Party and an Investor of the Other Party), and the respondent invokes Article 9.5 as a defence, upon request from the respondent, both Parties shall consult with each other and attempt in good faith to make a determination which shall be binding on the tribunal within 180 days after the claim is submitted.
Article 9.14. Definitions
For the purposes of this Chapter: financial service means any service of a financial nature offered by a financial service supplier of a Party. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance). Financial services include the following activities: