(b) the financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector that have an effect equivalent to the effect of the measure in the Party's financial services sector.
Article 11.21. Definitions
For purposes of this Chapter:
cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of such services;
cross-border trade in financial services or cross-border supply of financial services means the supply of a financial 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 one Party in the territory of the other Party,
but does not include the supply of a financial service in the territory of a Party by an investor of the other Party, or a BIT investment, in a financial institution of the other Party;
financial institution means any financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the law of the Party in whose territory it is located;
financial institution of the other Party means a financial institution, including a branch, located in the territory of a Party that is controlled by persons of the other Party;
financial service means any service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance), as well as services incidental or auxiliary to a service of a financial nature. Financial services include the following activities:
Insurance and insurance-related services
(a) Direct insurance (including co-insurance):
(i) life,
(ii) non-life;
(b) Reinsurance and retrocession;
(c) Insurance intermediation, such as brokerage and agency;
(d) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment, and claim settlement services.
Banking and other financial services (excluding insurance)
(e) Acceptance of deposits and other repayable funds from the public;
(f) Lending of all types, including consumer credit, mortgage credit, factoring, and financing of commercial transactions;
(g) Financial leasing;
(h) All payment and money transmission services, including credit, charge and debit cards, travelers checks, and bankers drafts;
(i) Guarantees and commitments;
(j) Trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(i) money market instruments (including checks, bills, certificates of deposits);
(ii) foreign exchange;
(iii) derivative products including, but not limited to, futures and options;
(iv) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(v) transferable securities;
(vi) other negotiable instruments and financial assets, including bullion;
(k) Participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
(l) Money broking;
(m) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository, and trust services;
(n) Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(o) Provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services;
(p) Advisory, intermediation, and other auxiliary financial services on all the activities listed in subparagraphs (e) through (o), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;
investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of a Party, that seeks to make, is making, or has made a BIT investment in a financial institution in the territory of the other Party;
new financial service means a financial service not supplied in the Party's territory that is supplied within the territory of the other Party, and includes any new form of delivery of a financial service or the sale of a financial product that is not sold in the Party's territory;
person of a Party means "person of a Party" as defined in Article 1.3 (Definitions) and, for greater certainty, does not include a branch of an enterprise of a non-Party;
public entity means a central bank or monetary authority of a Party, or any financial institution owned or controlled by a Party; and
self-regulatory organization means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organization or association, that exercises its own or delegated regulatory or supervisory authority over financial service suppliers or financial institutions.
ANNEX 11-A. Cross-border trade
Insurance and insurance-related services
United States
1. For the United States, Article 11.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (a) of the definition of crossborder supply of financial services in Article 11.21 with respect to:
(a) insurance of risks relating to:
(i) maritime shipping and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability arising therefrom; and
(ii) goods in international transit;
(b) reinsurance and retrocession, services auxiliary to insurance as referred to in subparagraph (d) of the definition of financial service, and insurance intermediation such as brokerage and agency as referred to in subparagraph (c) of the definition of financial service.
2. For the United States, Article 11.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (c) of the definition of crossborder supply of financial services in Article 11.21 with respect to insurance services.
Bahrain
1. For Bahrain, Article 11.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (a) of the definition of cross-border supply of financial services in Article 11.21 with respect to:
(a) insurance of risks relating to:
(i) maritime shipping and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability arising therefrom; and
(ii) goods in international transit;
(b) reinsurance and retrocession;
(c) services auxiliary to insurance as referred to in subparagraph (d) of the definition of financial service in Article 11.21; and
(d) insurance intermediation, such as brokerage and agency as referred to in subparagraph (c) of the definition of financial service, with respect to the types of insurance risks covered in subparagraph (a) and (b).
2. For Bahrain, Article 11.5.1 applies to the cross-border supply of or trade in financial services as defined in subparagraph (c) of the definition of cross-border supply of financial services in Article 11.21 with respect to insurance services.
3. Bahrain's commitments pursuant to subparagraph 1(a)(i), and brokerage of such risks, shall apply one year after the entry into force of this Agreement, or when Bahrain has implemented the necessary amendments in its relevant legislation, whichever occurs earlier.
Banking and other financial services (excluding insurance)
Each Party shall undertake the obligations of Article 11.5.1 with respect to the provision and transfer of financial information and financial data processing and related software as referred to in subparagraph (o) of the definition of financial service in Article 11.21, and advisory and other auxiliary services, excluding intermediation, as referred to in subparagraph (p) of the definition of financial service.
ANNEX 11-B. Specific commitments
Expedited Availability of Insurance
The Parties understand that Bahrain requires prior product approval before the introduction of new insurance products. The Bahrain Monetary Agency (BMA) shall provide that once an enterprise seeking approval for insurance products files all the required information with the BMA, the BMA shall grant approval or issue disapproval according to its regulations for the sale of the new product within 60 days. The Parties understand that the BMA does not maintain any limitations on the number or frequency of new product introductions.
Portfolio Management
1. A Party shall allow a financial institution (other than a trust company), organized outside its territory, to provide investment advice and portfolio management services, excluding (1) custodial services, (2) trustee services, and (3) execution services that are not related to managing a collective investment scheme, to a collective investment scheme located in the Party's territory. This commitment is subject to Article 11.1 and to the provisions of Article 11.5.3.
2. For purposes of paragraph 1, collective investment scheme means:
(a) for Bahrain, a "scheme" as defined in Circular No. OG/356/92 dated November 18, 1992, regarding the Regulation with Respect to the General Supervision, Operation, and Marketing of Collective Investment Schemes; and
(b) for the United States, an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940.
New Financial Services
In addition to Bahrain's commitment to allow a new financial service to be supplied consistent with Article 11.6, Bahrain undertakes to consult with the United States, on request, in circumstances where an application by a financial institution of the United States to supply a new service has been denied. Insurance
1. In the context of Bahrain's review of the regulatory framework for the insurance sector, Bahrain shall ensure that any laws, regulations, and rules that are developed as a result of the review will treat enterprises of the United States on a non-discriminatory basis, subject only to any relevant non-conforming measures listed in Bahrain's Schedule to Annex III.
2. Bahrain shall ensure that insurance suppliers established in the territory of Bahrain prior to the date of signature of this Agreement are allowed to maintain the scope of their business activities in existence on that date, as well as any increase in the scope of such business activities authorized prior to the date of entry into force of this Agreement. For greater certainty, this paragraph shall not be construed to prevent Bahrain from applying future non-discriminatory prudential measures to such suppliers.
ANNEX 11-C. Self-regulatory organizations
The Parties recognize that certain requirements of the Bahrain Stock Exchange are not consistent with the obligations of Articles 11.2 and 11.3. Bahrain shall ensure that, no later than 24 months from the date of entry into force of this Agreement, self-regulatory organizations in Bahrain will modify their regulations, including those dealing with requirements for broker/dealers, in order to bring them into compliance with these obligations. Until that time, Bahrain confirms that U.S. financial institutions established in Bahrain will be granted membership in and allowed to operate on the Bahrain Stock Exchange, provided that they meet applicable requirements maintained by the Exchange.
ANNEX 11-D. Authorities responsible for financial services
The authority of each Party responsible for financial services is:
(a) for Bahrain, the Bahrain Monetary Agency; and
(b) for the United States, the Department of the Treasury for banking and other financial services and the Office of the United States Trade Representative, in coordination with the Department of Commerce and other agencies, for insurance services.
Chapter Twelve. Telecommunications
Article 12.1. Scope and Coverage
1. This Chapter applies to measures affecting trade in the telecommunications sector.
2. Except to ensure that enterprises operating broadcast stations and cable systems have continued access to and use of public telecommunications services, this Chapter does not apply to any measure relating to broadcast or cable distribution of radio or television programming.
3. Nothing in this Chapter shall be construed to:
(a) require a Party, or require a Party to compel any enterprise, to establish, construct, acquire, lease, operate, or provide telecommunications networks or services not offered to the public generally; or
(b) require a Party to compel any enterprise exclusively engaged in the broadcast or cable distribution of radio or television programming to make available its broadcast or cable facilities as a public telecommunications network.
Article 12.2. Access to and Use of Public Telecommunications Services
1. Each Party shall ensure that service suppliers of the other Party have access to and use of any public telecommunications service, including leased circuits, offered in its territory or across its borders, on reasonable and non-discriminatory terms and conditions, including as set out in paragraphs 2 through 4.
2. Each Party shall ensure that service suppliers of the other Party are permitted to:
(a) purchase or lease, and attach terminal or other equipment that interfaces with, a public telecommunications network;
(b) provide services to individual or multiple end-users over leased circuits; (1)
(c) connect owned or leased circuits with public telecommunications networks and services in the territory, or across the borders, of that Party or with circuits leased or owned by another service supplier;
(d) perform switching, signaling, processing, and conversion functions; and
(e) use operating protocols of their choice in the supply of any service.
3. Each Party shall ensure that service suppliers of the other Party may use public telecommunications services for the movement of information in its territory or across its borders and for access to information contained in databases or otherwise stored in machine-readable form in the territory of either Party.
4. Notwithstanding paragraph 3, a Party may take such measures as are necessary to ensure the security and confidentiality of messages, provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or disguised restriction on trade in services.
Article 12.3. Obligations Relating to Suppliers of Public Telecommunications Services (2)
Interconnection
1. (a) Each Party shall ensure that suppliers of public telecommunications services in its territory provide, directly or indirectly, interconnection with suppliers of public telecommunications services of the other Party at reasonable rates.
(b) In carrying out subparagraph (a), each Party shall ensure that suppliers of public telecommunications services in its territory take reasonable steps to protect the confidentiality of commercially sensitive information of, or relating to, suppliers and end-users of public telecommunications services obtained as a result of interconnection arrangements and only use such information for the purpose of providing these services. Number Portability
2. Each Party shall ensure that suppliers of public telecommunications services in its territory provide number portability to the extent technically feasible, and on reasonable terms and conditions. (3)
Dialing Parity
3. Each Party shall ensure that suppliers of public telecommunications services in its territory provide dialing parity to suppliers of public telecommunications services of the other Party. (4)
Article 12.4. Additional Obligations Relating to Major Suppliers of Public Telecommunications Services (5)
Treatment by Major Suppliers
1. Each Party shall ensure that a major supplier in its territory accords suppliers of public telecommunications services of the other Party, licensed within its territory, no less favorable treatment than such major supplier accords to its subsidiaries, its affiliates, or non-affiliated service suppliers regarding:
(a) the availability, provisioning, rates, or quality of like public telecommunications services; and (b) the availability of technical interfaces necessary for interconnection.
Competitive Safeguards
2. (a) Each Party shall maintain appropriate measures for the purpose of preventing suppliers that, alone or together, are a major supplier in its territory from engaging in or continuing anti-competitive practices.
(b) The anti-competitive practices referred to in subparagraph (a) include in particular:
(i) engaging in anti-competitive cross-subsidization;
(ii) using information obtained from competitors with anticompetitive results; and (iii) not making available, on a timely basis, to suppliers of public telecommunications services, technical information about essential facilities and commercially relevant information that are necessary for them to provide services.
Resale
3. Each Party shall ensure that a major supplier in its territory:
(a) offers for resale, at reasonable rates, (6) to suppliers of public telecommunications services of the other Party, public telecommunications services that the major supplier provides at retail to end-users that are not suppliers of public telecommunications services; and
(b) does not impose unreasonable or discriminatory conditions or limitations on the resale of such services. (7)
Unbundling of Network Elements
4. Each Party shall provide its telecommunications regulatory body the authority to require a major supplier in its territory to offer access to network elements on an unbundled basis on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent for the supply of public telecommunications services. Interconnection
5. (a) General Terms and Conditions Each Party shall ensure that a major supplier in its territory provides interconnection for the facilities and equipment of suppliers of public telecommunications services of the other Party:
(i) at any technically feasible point in the major supplier's network;
(ii) under non-discriminatory terms, conditions (including technical standards and specifications), and rates;
(iii) of a quality no less favorable than that provided by the major supplier for its own like services, for like services of non-affiliated service suppliers, or for its subsidiaries or other affiliates;
(iv) in a timely fashion, and on terms and conditions (including technical standards and specifications), and at cost-oriented rates, that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the suppliers need not pay for network components or facilities that they do not require for the service to be provided; and
(v) on request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.
(b) Options for Interconnecting with Major Suppliers Each Party shall ensure that suppliers of public telecommunications services of the other Party may interconnect their facilities and equipment with those of a major supplier in its territory pursuant to at least one of the following options:
(i) a reference interconnection offer or another standard interconnection offer containing the rates, terms, and conditions that the major supplier offers generally to suppliers of public telecommunications services; or
(ii) the terms and conditions of an interconnection agreement in effect or through negotiation of a new interconnection agreement.
(c) Public Availability of Interconnection Offers Each Party shall require a major supplier in its territory to make publicly available a reference interconnection offer or other standard interconnection offer containing the rates, terms, and conditions that the major supplier offers generally to suppliers of public telecommunications services.
(d) Public Availability of Procedures for Interconnection Negotiations Each Party shall make publicly available the applicable procedures for interconnection negotiations with a major supplier in its territory.
(e) Public Availability of Interconnection Agreements Concluded with Major Suppliers
(i) Each Party shall require a major supplier in its territory to file all interconnection agreements to which it is party with its telecommunications regulatory body or other relevant body.
(ii) Each Party shall make publicly available interconnection agreements in force between a major supplier in its territory and other suppliers of public telecommunications services in its territory. Provisioning and Pricing of Leased Circuits Services
6. (a) Each Party shall ensure that a major supplier in its territory provides service suppliers of the other Party leased circuits services that are public telecommunications services on terms and conditions, and at rates, that are reasonable and non-discriminatory.
(b) In carrying out subparagraph (a), each Party shall provide its telecommunications regulatory body the authority to require a major supplier in its territory to offer leased circuits services that are public telecommunications services to service suppliers of the other Party at capacity-based, cost-oriented prices.
Co-Location
7. (a) Subject to subparagraphs (b) and (c), each Party shall ensure that a major supplier in its territory provides to suppliers of public telecommunications services of the other Party physical co-location of equipment necessary for interconnection on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent.
(b) Where physical co-location is not practical for technical reasons or because of space limitations, each Party shall ensure that a major supplier in its territory:
(i) provides an alternative solution; or
(ii) facilitates virtual co-location, on terms and conditions, and at cost-oriented rates, that are reasonable, non-discriminatory, and transparent.