(i) apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Member State’s territory; or
(ii) apply to non-residents in order to ensure the imposition or collection of taxes in the Member State’s territory; or
(iii) apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or
(iv) apply to consumers of services supplied in or from the territory of another Member State in order to ensure the imposition or collection of taxes of such consumers derived from sources in the Member State’s territory; or
(v) distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or
(vi) determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Member State’s tax base. Tax terms or concepts in paragraph 3(a) of Article 27 and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Member State taking the measure.
Section II. Capital Movement
Article 28.
1. Within the framework of this Chapter, there shall be no restrictions between the Member States on the movement of capital relating to the establishment in another Member States territory of a company or firm of that Member State.
2. The movement of capital not relating to establishment between the Member States shall be ensured in accordance with the international agreements to which they are parties.
3. The Member States agree to review the present provision within two years after the entry into force of the Agreement amending the Convention establishing the European Free Trade Association of 21 June 2001 in order to broaden the scope of, and ultimately eliminate the remaining restrictions to, the movement of capital.
Chapter X. Trade In Services
Article 29. Principles and Scope
1. Within the framework of, and subject to, the provisions of this Convention, there shall be no restrictions on the right to supply services within the territory of the Member States in respect of natural persons, companies or firms of Member States who are established in a Member State other than that of the natural person, company or firm for whom the services are intended.
2. For the purposes of this Chapter, services shall be considered to be services within the meaning of this Convention where they are normally supplied for remuneration
(a) from the territory of one Member State into the territory of another Member State;
(b) in the territory of a Member State to the service consumer of another Member State in accordance with paragraph 7 below;
(c) by service supplier of a Member State, through presence of natural persons of that Member State in the territory of another Member State in accordance with paragraph 7 below.
3. Annexes L to O contain specific provisions and exemptions regarding the right to supply services. The Member States shall endeavour to eliminate gradually remaining discriminations, which they may maintain in accordance with Annexes L to O. The Member States agree to review the present provision, including its Annexes, within two years after the entry into force of the Agreement amending the Convention establishing the European Free Trade Association of 21 June 2001 with a view to reducing, and ultimately eliminating, the remaining restrictions.
4. From the date of entry into force of the Agreement amending the Convention establishing the European Free Trade Association of 21 June 2001, neither Member State shall adopt new, or more, discriminatory measures as regards services or service suppliers of another Member State, in comparison with the treatment accorded to its own like services or service suppliers.
5. In sectors covered by an exemption as contained in Annexes L to O, each Member State shall accord to services or service suppliers of another Member State treatment no less favourable than that accorded to like services or service suppliers of third parties other than the European Community. As regards any new agreements concluded between any Member State and the European Community, the Member States further undertake to extend to each other, on the basis of reciprocity, the benefits of such agreements, subject to a decision by the Council.
6. The right to supply services in the field of road, rail and air transport shall be governed by the provisions of Article 35 and Annexes P and Q, subject to the specific provisions and exemptions set out in Annex M.
7. The supply or consumption of services by natural persons as provided for in paragraphs 2(b) and (c) shall be governed by the relevant provisions of Article 20, Annex K and the Protocol to Annex K on movement of persons between Liechtenstein and Switzerland, in accordance with the principles set out hereinafter.
Article 30. National Treatment
Within the scope of application of this Chapter, and without prejudice to any special provisions contained herein:
(a) Member States shall grant treatment no less favourable than that accorded to their own natural persons, companies or firms providing services;
(b) each Member State may regulate services activities within its territory in so far as these regulations do not discriminate against natural persons, companies or firms of the other Member States in comparison to its own natural persons, companies or firms.
Article 31. Financial Market Regulation
1. In respect of financial services, this Chapter does not prejudice the right of the Member States to adopt measures necessary for prudential grounds in order to ensure the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed, or to ensure the integrity and stability of the financial system. These measures shall not discriminate against natural persons, companies or firms of the other Member States in comparison to its own natural persons, companies or firms.
2. Nothing in this Chapter shall be construed to require a Member State 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 32. Recognition
1. The mutual recognition between the Member States of diplomas, certificates and other evidence of formal qualifications, and the coordination of the provisions laid down by law, regulation or administrative action in the Member States concerning the taking up and pursuit of activities by natural persons, shall be governed by the relevant provisions of Article 22, Annex K and Appendix 3 thereto and the Protocol to Annex K on movement of persons between Liechtenstein and Switzerland.
2. A Member State may enter into an agreement or arrangement with a particular State providing for the recognition of standards, criteria for authorization, licensing or certification of service suppliers, in which case it shall offer adequate opportunity for any other Member State to negotiate its accession to such an agreement or arrangement or to negotiate comparable ones with it.
3. Where a Member State accords recognition as provided for in paragraph 2 autonomously, it shall afford adequate opportunity for any other Member State to demonstrate that experience, licences or certifications obtained or requirements met in that other Member States territory should be recognised.
4. A Member State 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 to trade in services.
Article 33. Exceptions
1. The provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that Member State are connected, even occasionally, with the exercise of official authority.
2. The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the applicability of provisions laid down by law, regulation or administrative action providing for special treatment of foreign service suppliers on grounds of public policy, public security, public health or the environment.
3. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between States where like conditions prevail, or a disguised restriction on trade in services, nothing in this Convention shall be construed to prevent the adoption or enforcement by any Member State of measures:
(a) inconsistent with Article 30, provided that the difference in treatment is aimed at ensuring the equitable or effective (5) imposition or collection of direct taxes in respect of services or service suppliers of other Member States;
(b) inconsistent with paragraph 5 of Article 29, provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Member State is bound.
Article 34. Public Procurement
Nothing in this Chapter shall be construed to impose any obligations with respect to public procurement.
Article 35. Transport
The Member States shall liberalise the access to each others transport markets for the carriage of passengers and goods by road, rail and air in accordance with the provisions set out in Annex P and Annex Q respectively.
Chapter XI. Dumping
Article 36.
Anti-dumping measures, countervailing duties and measures against illicit commercial practices attributable to third countries shall not be applied in relations between the Member States.
Chapter XII. Public Procurement
Article 37.
1. The Member States reaffirm their rights and obligations under the WTO Agreement on Government Procurement (GPA). Under this Convention, the Member States broaden the scope of their commitments under the WTO Government Procurement Agreement with an aim to pursue liberalisation in public procurement markets in accordance with Annex R.
2. To this effect, the Member States shall secure non-discriminative, transparent and reciprocal access to their respective public procurement markets and shall ensure open and effective competition based on equal treatment.
Chapter XIII. Current Payments
Article 38.
Current payments connected with the movement of goods, persons, services or capital as defined in Article 28 between Member States within the framework of the provisions of this Convention shall be free of all restrictions.
Chapter XIV. Exceptions and Safeguards
Article 39. Security Exceptions
Nothing in this Convention shall prevent a Member State from taking any measures:
(a) which it considers necessary to prevent the disclosure of information contrary to its essential security interests;
(b) which relate to the production of, or trade in, arms, munitions and war materials or other products or services indispensable for defence purposes or to research, development or production indispensable for defence purposes, provided that such measures do not impair the conditions of competition in respect of products or services not intended for specifically military purposes;
(c) which it considers essential to its own security in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.
Safeguard measures
Article 40.
1. If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Member State may unilaterally take appropriate measures under the conditions and procedures set out in Article 41.
2. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Convention.
3. The safeguard measures shall apply with regard to all Member States.
4. This Article is without prejudice to the application of specific safeguard provisions set out in the Annexes to this Convention or of special safeguard measures in accordance with Article 5 of the WTO Agreement on Agriculture.
Article 41.
1. A Member State which is considering taking safeguard measures under Article 40, shall, without delay, notify the other Member States through the Council and shall provide all relevant information.
2. The Member States shall immediately enter into consultations in the Council with a view to finding a commonly acceptable solution.
3. The Member State concerned may not take safeguard measures until one month has elapsed after the date of notification under paragraph 1, unless the consultation procedure under paragraph 2 has been concluded before the expiration of the stated time limit. When exceptional circumstances requiring immediate action exclude prior examination, the Member State concerned may apply forthwith the protective measures strictly necessary to remedy the situation.
4. The Member State concerned shall, without delay, notify the measures taken to the Council and shall provide all relevant information.
5. The safeguard measures taken shall be the subject of consultations in the Council every three months from the date of their adoption with a view to their abolition before the date of expiry envisaged, or to the limitation of their scope of application.
Each Member State may at any time request the Council to review such measures.
Chapter XV. Economic and Monetary Policy Co-operation
Article 42.
The Member States shall exchange views and information concerning the implementation of this Convention and the impact of the integration on economic activities and on the conduct of economic and monetary policies. Furthermore, they may discuss macro-economic situations, policies and prospects. This exchange of views and information shall take place on a non-binding basis.
Chapter XVI. Institutional Provisions
Article 43. The Council
1. It shall be the responsibility of the Council
(a) To exercise such powers and functions as are conferred upon it by this Convention;
(b) To decide on amendments to this Convention in accordance with the provisions herein;
(c) To supervise the application of this Convention and keep its operation under review;
(d) To consider whether further action should be taken by Member States in order to promote the attainment of the objectives of the Association;
(e) To facilitate the establishment of closer links with other States and unions of States;
(f) To seek to establish such relationships with other international organisations as may facilitate the attainment of the objectives of the Association;
(g) To negotiate trade and co-operation agreements between the Member States and any other State, union of States or international organisation;
(h) To endeavour to resolve disputes that may arise regarding the interpretation or application of this Convention; and
(i) To consider any other matter that may affect the operation of this Convention.
2. Each Member State shall be represented in the Council and shall have one vote.
3. The Council may decide to set up such organs, committees and other bodies, as
It considers necessary to assist it in accomplishing its tasks. These organs, committees and other bodies are listed in Annex S.
4. In exercising its responsibility under this Article, the Council may take
Decisions, which shall be binding on all Member States, and may make recommendations to Member States.
5. Decisions and recommendations of the Council shall be made by unanimous
Vote, except in so far as this Convention provides otherwise. Decisions or recommendations shall be regarded as unanimous unless any Member State casts a negative vote. Decisions and recommendations which are to be made by majority vote,
Require the affirmative vote of three Member States.
6. If the number of the Member States changes, the Council may decide to amend the number of votes required for decisions and recommendations which are to be made by majority vote.
Article 44. Administrative Arrangements of the Association
The Council shall take decisions for the following purposes:
(a) to lay down the Rules of Procedure of the Council and of any other bodies of the Association, which may include provision that procedural questions may be decided by majority vote;
(b) to make arrangements for the secretariat services required by the Association;
(c) to establish the financial arrangements necessary for the administrative expenses of the Association, the procedure for establishing a budget and the apportionment of those expenses between the Member States.
Article 45. Legal Capacity, Privileges and Immunities
1. The legal capacity, privileges and immunities to be recognised and granted by the Member States in connection with the Association shall be laid down in a Protocol to this Convention.
2. The Council, acting on behalf of the Association, may conclude with the Government of the State in whose territory the headquarters will be situated an agreement relating to the legal capacity and the privileges and immunities to be recognised and granted in connection with the Association.
Chapter XVII. Consultations and Dispute Settlement
Article 46. Scope
The provisions of this Chapter shall apply to any matter arising from this Convention, unless otherwise specified in this Convention.
Article 47. Consultations
1. The Member States shall at all times endeavour to agree on the interpretation and application of this Convention, and shall make every attempt through cooperation and consultations to arrive at a mutually satisfactory resolution of any matter that might affect its operation.
2. Any Member State may bring any matter, which concerns the interpretation or application of this Convention before the Council. The Council shall be provided with all information, which might be of use in making possible an in-depth examination of the situation, with a view to finding an acceptable solution. To this end, the Council shall examine all possibilities to maintain the good functioning of the Convention.
3. A meeting of the Council shall be held within 30 days from the receipt of the request for consultations.
Article 48. Arbitration
1. In case a Member State considers that a measure applied by another Member State violates the Convention and the matter has not been resolved within 45 days after consultations have been held pursuant to Article 47, such matter may be referred to arbitration by one or more Member States parties to the dispute by means of a written notification addressed to the Member State complained against. A copy of this notification shall be communicated to all Member States so that each may determine whether it has a substantial interest in the matter. Where more than one Member State requests the submission to an arbitration tribunal of a dispute with the same Member State relating to the same question a single arbitration tribunal should be established to consider such disputes whenever feasible.
2. A Member State which is not a party to the dispute, on delivery of a written notice to the disputing Member States, shall be entitled to make written submissions to the arbitration tribunal, receive written submissions of the disputing Member States, attend all hearings and make oral submissions.
3. The award of the arbitration tribunal shall be final and binding upon the Member States parties to the dispute and shall be complied with promptly.
4. The establishment and functioning of the arbitration tribunal and the implementation of arbitral awards are governed by the rules set out in Annex T.
Chapter XVIII. General Provisions
Article 49. Obligations Under other International Agreements
1. Nothing in this Convention shall be regarded as exempting any Member State from obligations which it has undertaken by virtue of agreements with third States or multilateral agreements to which they are parties.
2. This Convention shall be without prejudice to the rules applicable to Member States governed by the Agreement on the European Economic Area, the Nordic cooperation and the regional union between Switzerland and Liechtenstein
Article 50. Rights and Obligations of the Member States
The Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Convention. They shall abstain from any measure which could jeopardize the attainment of the objectives of this Convention.
Article 51. Transparency
1. The Member States shall publish their laws, or otherwise make publicly available their laws, regulations, procedures and administrative rulings and judicial decisions of general application as well as the international agreements which may affect the operation of this Convention.
2. The Member States shall promptly respond to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.
Article 52. Confidentiality
The representatives, delegates and experts of the Member States, as well as officials and other servants acting under this Convention shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy, in particular information about undertakings, their business relations or their cost components.
Article 53. Annex
1. The Annexes, Appendices and Protocols to this Convention shall form an integral part of it.
2. The Annexes to this Convention are the following:
Arbitration.
Territorial application.
The Council may decide to amend the provisions to this paragraph.
3. The Council may decide to amend Annexes A, C, H, S and T, as well as the Appendices to Annexes E, F, K, P, Q and R, unless otherwise provided in the Annexes.
4 6. The Committee established under Annex I may decide to amend Article 3 of that Annex as well as the Appendix thereto. It shall inform the Council of its decisionmaking.
Article 54. Ratification
1. This Convention shall be ratified by the signatory States. The instruments of ratification shall be deposited with the Government of Sweden, which shall notify all other signatory States.
2. The Government of Norway shall act as Depositary as of 17 November 1995.
3. The Council may decide to amend the provisions of this Article.
Article 55. Entry Into Force
This Convention shall enter into force on the deposit of instruments of ratification by all signatory States.
Article 56. Accession and Association
1. Any State may accede to this Convention, provided that the Council decides to approve its accession, on such terms and conditions as may be set out in that decision. The instrument of accession shall be deposited with the Depositary, which shall notify all other Member States. This Convention shall enter into force in relation to an acceding State on the date indicated in that decision.
2. The Council may negotiate an agreement between the Member States and any other State, union of States or international organisation, creating an association embodying such reciprocal rights and obligations, common actions and special procedures as may be appropriate. Such an agreement shall be submitted to the Member States for acceptance and shall enter into force provided that it is accepted by all Member States. Instruments of acceptance shall be deposited with the Depositary, which shall notify all other Member States.
3. Any State acceding to this Convention shall apply to become a party to the free trade agreements between the Member States on the one hand and third states, unions of states or international organisations on the other.
Article 57. Withdrawal
1. Any Member State may withdraw from this Convention provided that it gives twelve months notice in writing to the Depositary, which shall notify all other Member States.
2. Before the withdrawal takes effect, the Member States shall agree on appropriate arrangements and equitable cost-sharing relating to the withdrawal.
Article 58. Territorial Application
This Convention shall apply to the territories of the Member States except as provided for in Annex U.
Article 59. Amendment
Except as otherwise provided for in this Convention, an amendment to the provisions of this Convention shall be subject to a decision of the Council which shall be submitted to the Member States for acceptance in accordance with their internal legal requirements. It shall enter into force, unless otherwise provided, on the first day of the second month following the deposit of the instruments of acceptance by all Member States with the Depositary, which shall notify all other Member States.