Annex 10-A. Public Debt
The rescheduling of the debts of a Party, or of such Party's institutions owned or controlled through ownership interests by such Party, and the rescheduling of any of such Party's debts owed to creditors in general are not subject to any provision of Section A other than Articles 10.03 and 10.04.
Annex 10-B. Customary International Law
The Parties confirm their shared understanding that "customary international law" generally and as specifically referenced in Articles 10.05, 10.06, and Annex 10-C results from a general and consistent practice of States that they follow from a sense of legal obligation. With regard to Article 10.05, the customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the economic rights and interests of aliens.
Annex 10-C. Expropriation
The Parties confirm their shared understanding that:
1. Article 10.07.1 is intended to reflect customary international law concerning the obligation of States with respect to expropriation.
2. An action or a series of actions by a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right or property interest in an investment.
3. Article 10.07.1 addresses two situations. The first is direct expropriation, where an investment is nationalized or otherwise directly expropriated through formal transfer of title or outright seizure.
4. The second situation addressed by Article 10.07.1 is indirect expropriation, where an action or series of actions by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.
(a) The determination of whether an action or series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers, among other factors:
(i) the economic impact of the government action, although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;
(ii) the extent to which the government action interferes with distinct, reasonable investment-backed expectations; and
(iii) the character of the government action.
(b) Except in rare circumstances, nondiscriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.
Annex 10-D. Submission of a Claim to Arbitration
1. An investor of a Party may not submit to arbitration under Section B a claim that a Party has breached an obligation under Section A either:
(a) on its own behalf under Article 10.16.1(a), or
(b) on behalf of an enterprise of a Party that is a juridical person that the investor owns or controls directly or indirectly under Article 10.16.1(b),
if the investor or the enterprise, respectively, has alleged that breach of an obligation under Section A in proceedings before a court or administrative tribunal of a Party.
2. For greater certainty, if an investor of a Party elects to submit a claim of the type described in paragraph 1 to a court or administrative tribunal of the other Party, that election shall be definitive, and the investor may not thereafter submit the claim to arbitration under Section B.
3. Notwithstanding Article 10.18, an investor of a Party may not submit to arbitration under Section B a claim relating to an investment in sovereign debt instruments with a maturity of less than one year unless one year has elapsed from the date of the events giving rise to the claim.
Annex 10-E. Service of Documents on a Party under Section B
The Republic of Nicaragua
Notices and other documents in disputes under Section B shall be served on the Republic of Nicaragua by delivery to:
Dirección General de Comercio Exterior Ministerio de Fomento, Industria y Comercio (MIFIC) Managua, Nicaragua
The Republic of China (Taiwan)
Notices and other documents in disputes under Section B shall be served on the Republic of China (Taiwan) by delivery to:
Department of Investment Services Ministry of Economy Affairs Taipei, the Republic of China (Taiwan)
or their successor.
Chapter 11. Cross-Border Trade In Services
Article 11.01. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party affecting cross-border trade in services by service suppliers of the other Party. Such measures include measures affecting:
(a) the production, distribution, marketing, sale, and delivery of a service;
(b) the purchase or use of, or payment for, a service;
(c) the access to and use of distribution, transport, or telecommunications networks and services in connection with the supply of a service;
(d) the presence in its territory of a service supplier of the other Party; and
(e) the provision of a bond or other form of financial security as a condition for the supply of a service.
2. For purposes of this Chapter, "measures adopted or maintained by a Party" means measures adopted or maintained by:
(a) central or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central or local governments or authorities.
3. Articles 11.05, 11.08 and 11.09 also apply to measures by a Party affecting the supply of a service in its territory by an investor of the other Party as defined in Article 10.28 (Definitions) or a covered investment. (1)
4. This Chapter does not apply to:
(a) financial services, as defined in Article 12.21 (Definitions), except as provided in paragraph 3;
(b) air services, including domestic and international air transportation services, whether scheduled or non-scheduled, and related services in support of air services, other than:
(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service; and
(ii) specialty air services;
(c) government procurement; or
(d) subsidies or grants provided by a Party, including government supported loans, guarantees and insurance.
5. This Chapter does not impose any obligation on a Party with respect to a national of the other Party seeking access to its employment market, or employed on a permanent basis in its territory, and does not confer any right on that national with respect to that access or employment.
6. This Chapter does not apply to services supplied in the exercise of governmental authority. A "service 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.
Article 11.02. National Treatment
A Party shall accord to service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to its own service suppliers.
Article 11.03. Most-Favored-Nation Treatment
A Party shall accord to service suppliers of the other Party treatment no less favourable than that it accords, in like circumstances, to service suppliers of a non-Party.
Article 11.04. Standard of Treatment
A Party shall accord to cross-border services and service providers of the other Party the better of the treatment required by Articles 11.02 and 11.03.
Article 11.05. Market Access
No Party may adopt or maintain in its territory measures that:
(a) impose limitations on:
(i) the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers, or the requirement of an economic needs test;
(ii) the total value of service transactions or assets in form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of service operations or on 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;(2) or
(iv) 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; or
(b) restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service.
Article 11.06. Local Presence
No Party may require a service supplier of the other Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border supply of a service.
Article 11.07. Non-conforming Measures
1. Articles 11.02, 11.03, 11.05, and 11.06 do not apply to:
(a) any existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I; or
(ii) a local level of government;
(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 11.02, 11.03, 11.05, and 11.06.
2. Articles 11.02, 11.03, 11.05 and, 11.06 do not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities as set out in its Schedule to Annex II.
Article 11.08. Transparency In Developing and Applying Regulations (3)
Further to Chapter 20 (Transparency):
(a) each Party shall maintain or establish appropriate mechanisms for responding to inquiries from interested persons regarding its regulations relating to the subject matter of this Chapter;
(b) at the time it adopts final regulations relating to the subject matter of this Chapter, each Party shall, to the extent possible, including on request, address in writing substantive comments received from interested persons with respect to the proposed regulations; and
(c) to the extent possible, each Party shall allow a reasonable time between publication of final regulations and their effective date.
Article 11.09. Domestic Regulation
1. Where a Party requires authorization for the supply of a service, the Party's competent authorities shall, within a reasonable time after the submission of an application considered complete under its laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the Party's competent authorities shall provide, without undue delay, information concerning the status of the application. This obligation shall not apply to authorization requirements that are within the scope of Article 11.07.2.
2. 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, each Party shall endeavor to ensure, as appropriate for individual sectors, that any such measures that it adopts or maintains are:
(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.
3. If the results of the negotiations related to Article VI:4 of the GATS (or the results of any similar negotiations undertaken in other multilateral fora in which the Parties participate) enter into effect for each Party, this Article shall be amended, as appropriate, after consultations between the Parties, to bring those results into effect under this Agreement. The Parties will coordinate on such negotiations as appropriate.
Article 11.10. Mutual Recognition
1. For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorization, licensing, or certification of services suppliers, and subject to the requirements of paragraph 4, a Party may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular country, including the other Party and a non-Party. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the country concerned or may be accorded autonomously.
2. Where a Party recognizes, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted in the territory of the other Party or a non-Party, nothing in Article 11.03 shall be construed to require the Party to accord such recognition to the education or experience obtained, requirements met, or licenses or certifications granted in the territory of any other Party.
3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for the other Party, if that other Party is interested, 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 recognized.
4. No Party may accord recognition in a manner that would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization, licensing, or certification of services suppliers, or a disguised restriction on trade in services.
5. Annex 11.10 (Professional Services) applies to measures adopted or maintained by a Party relating to the licensing or certification of professional service suppliers as set out in that Annex.
Article 11.11. Transfers and Payments
1. Each Party shall permit all transfers and payments relating 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 relating to the cross-border supply of services to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer or payment through the equitable, non-discriminatory, and good faith application of its laws relating to:
(a) bankruptcy, insolvency, or the protection of the rights of creditors;
(b) issuing, trading, or dealing in securities, futures, options, or derivatives;
(c) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(d) criminal or penal offenses; or
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings.
Article 11.12. Implementation
The Parties shall consult annually, or as otherwise agreed, to review the implementation of this Chapter and consider other issues of mutual interest.
Article 11.13. Denial of Benefits
Subject to prior notification and consultation in accordance with Articles 20.03 (Notification and Provision of Information) and 22.05 (Consultations), a Party may deny the benefits of this Chapter to a service provider of the other Party where the Party decides, according to its effective law that the service is being provided by an enterprise that is owned or controlled by persons of a non-Party having no substantial business activities in the territory of the other Party.
Article 11.14. Procedures
The Parties shall establish procedures for:
(a) a Party to notify and include in its relevant Schedule
(i) amendments of measure referred to in Article 11.07. (1) and (2); and
(ii) quantitative restrictions in accordance with Article 11.05;
(b) consultations on reservations or quantitative restrictions for further liberalization, if any.
Article 11.15. Definitions
For purposes of this Chapter:
cross-border trade in services or cross-border supply of services means the supply of a service:
(a) from the territory of one Party into the territory of the other Party;
(b) in the territory of one Party by a person of that Party to a person of the other Party; or
(c) by a national of a Party in the territory of the other Party;
but does not include the supply of a service in the territory of a Party by an investor of the other Party as defined in Article 10.28 (Definitions) or a covered investment;
enterprise means an "enterprise" as defined in Article 2.01 (Definitions), and a branch of an enterprise;
enterprise of a Party means an enterprise constituted or organized under the laws of that Party, and a branch located in the territory of that Party and carrying out business activities there;
government procurement means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or with a view to use in the production or supply of goods or services for commercial sale or resale;
professional services means services, the provision of which requires specialized postsecondary education, or equivalent training or experience, and for which the right to practice is granted or restricted by a Party, but does not include services provided by trades-persons or vessel and aircraft crew members;
service supplier of a Party means a person of a Party that seeks to supply or supplies a service; (4)and
specialty air services means any non-transportation air services, such as aerial fire- fighting, sightseeing, spraying, surveying, mapping, photography, parachute jumping, glider towing, and helicopter-lift for logging and construction, and other airborne agricultural, industrial, and inspection services.
Chapter 12. Financial Services
Article 12.01. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors of the other Party, and investments of such investors, in financial institutions in the Party's territory; and
(c) cross-border trade in financial services.
2. Chapters 10 (Investment) and 11 (Cross Border Trade in Services) apply to measures described in paragraph 1 only to the extent that such Chapters or Articles of such Chapters are incorporated into this Chapter.
(a) Articles 10.07 (Expropriation and Compensation), 10.08 (Transfers), 10.11 (Investment and Environment), 10.12 (Denial of Benefits), 10.14 (Special Formalities and Information Requirements), and 11.13 (Denial of Benefits) are hereby incorporated into and made a part of this Chapter;
(b) Section B of Chapter 10 (Investment) is hereby incorporated into and made a part of this Chapter solely for claims that a Party has breached Article 10.07 (Expropriation and Compensation), 10.08 (Transfers), 10.12 (Denial of Benefits), or 10.14 (Special Formalities and Information Requirement), as incorporated into this Chapter;
(c) Article 11.11 (Transfers and Payments) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 12.05.
3. This Chapter does not apply to measures adopted or maintained by a Party relating to:
(a) activities or services forming part of a public retirement plan or statutory system of social security; or
(b) activities or services conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities,
except that this Chapter shall apply if a Party allows any of the activities or services referred to in subparagraph (a) or (b) to be conducted by its financial institutions in competition with a public entity or a financial institution.
4. The provisions of this Chapter shall prevail upon the provisions of the other Chapters, except in cases that an express remission is made to those Chapters.
Article 12.02. National Treatment
1. A Party shall accord to investors of the other Party treatment no less favorable than that it accords to its own investors, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.
2. A Party shall accord to financial institutions of the other Party and to investments of investors of the other Party in financial institutions treatment no less favorable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. For purposes of the national treatment obligations in Article 12.05.1, 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.