2. The dispute settlement provisions of this Section and of Chapter Twenty shall not apply to the matters referred to in Annex 1138.2.
Section C. Definitions
Article 1139. Definitions
For purposes of this Chapter:
disputing investor means an investor that makes a claim under Section B;
disputing parties means the disputing investor and the disputing Party; disputing party means the disputing investor or the disputing Party;
disputing Party means a Party against which a claim is made under Section B;
enterprise means an "enterprise" as defined in Article 201 (Definitions of General Application), and a branch of an enterprise;
enterprise of a Party means an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there.
equity or debt securities includes voting and non-voting shares, bonds, convertible debentures, stock options and warrants;
G7 Currency means the currency of Canada, France, Germany, Italy, Japan, the United Kingdom of Great Britain and Northern Ireland or the United States;
ICSID means the International Centre for Settlement of Investment Disputes;
ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, March 18, 1965;
InterAmerican Convention means the InterAmerican Convention on International Commercial Arbitration, done at Panama, January 30, 1975;
investment means:
(a) an enterprise;
(b) an equity security of an enterprise;
(c) a debt security of an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the debt security is at least three years,
but does not include a debt security, regardless of original maturity, of a state enterprise;
(d) a loan to an enterprise
(i) where the enterprise is an affiliate of the investor, or
(ii) where the original maturity of the loan is at least three years,
but does not include a loan, regardless of original maturity, to a state enterprise;
(e) an interest in an enterprise that entitles the owner to share in income or profits of the enterprise;
(f) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution, other than a debt security or a loan excluded from subparagraph (c) or (d);
(g) real estate or other property, tangible or intangible, acquired in the expectation or used for the purpose of economic benefit or other business purposes; and
(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory, such as under
(i) contracts involving the presence of an investor's property in the territory of the Party, including turnkey or construction contracts, or concessions, or
(ii) contracts where remuneration depends substantially on the production, revenues or profits of an enterprise;
but investment does not mean,
(i) claims to money that arise solely from
(i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of another Party, or
(ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by subparagraph (d); or
(j) any other claims to money,
that do not involve the kinds of interests set out in subparagraphs (a) through (h);
investment of an investor of a Party means an investment owned or controlled directly or indirectly by an investor of such Party;
investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of such Party, that seeks to make, is making or has made an investment;
investor of a non-Party means an investor other than an investor of a Party, that seeks to make, is making or has made an investment;
New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
Secretary-General means the Secretary-General of ICSID; transfers means transfers and international payments; Tribunal means an arbitration tribunal established under Article 1120 or 1126; and
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law, approved by the United Nations General Assembly on December 15, 1976.
Annex 1120.1. Submission of a Claim to Arbitration
Mexico
With respect to the submission of a claim to arbitration:
(a) an investor of another Party may not allege that Mexico has breached an obligation under:
(i) Section A or Article 1503(2) (State Enterprises), or
(ii) Article 1502(3)(a) (Monopolies and State Enterprises) where the monopoly has acted in a manner inconsistent with the Party's obligations under Section A, both in an arbitration under this Section and in proceedings before a Mexican court or administrative tribunal; and
(b) where an enterprise of Mexico that is a juridical person that an investor of another Party owns or controls directly or indirectly alleges in proceedings before a Mexican court or administrative tribunal that Mexico has breached an obligation under:
(i) Section A or Article 1503(2) (State Enterprises), or
Mexico
Where Mexico is the disputing Party, the applicable arbitration rules apply to the publication of an award.
United States
Where the United States is the disputing Party, either the United States or a disputing investor that is a party to the arbitration may make an award public.
Annex 1138.2. Exclusions from Dispute Settlement
Canada
A decision by Canada following a review under the Investment Canada Act, with respect to whether or not to permit an acquisition that is subject to review, shall not be subject to the dispute settlement provisions of Section B or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).
Mexico
A decision by the National Commission on Foreign Investment ("Comisión Nacional de Inversiones Extranjeras") following a review pursuant to Annex I, page IM4, with respect to whether or not to permit an acquisition that is subject to review, shall not be subject to the dispute settlement provisions of Section B or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).
Chapter Twelve. CROSS-BORDER TRADE IN SERVICES
Article 1201. Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to cross- border trade in services by service providers of another Party, including measures respecting:
(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 and transportation systems in connection with the provision of a service;
(d) the presence in its territory of a service provider of another Party; and
(e) the provision of a bond or other form of financial security as a condition for the provision of a service.
2. This Chapter does not apply to:
(a) financial services, as defined in Chapter Fourteen (Financial Services);
(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) procurement by a Party or a state enterprise; or
(d) subsidies or grants provided by a Party or a state enterprise, including government-supported loans, guarantees and insurance.
3. Nothing in this Chapter shall be construed to:
(a) impose any obligation on a Party with respect to a national of another Party seeking access to its employment market, or employed on a permanent basis in its territory, or to confer any right on that national with respect to that access or employment; or
(b) prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care, in a manner that is not inconsistent with this Chapter.
Article 1202. National Treatment
1. Each Party shall accord to service providers of another Party treatment no less favorable than that it accords, in like circumstances, to its own service providers.
2. The treatment accorded by a Party under paragraph 1 means, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to service providers of the Party of which it forms a part.
Article 1203. Most-Favored-Nation Treatment
Each Party shall accord to service providers of another Party treatment no less favorable than that it accords, in like circumstances, to service providers of any other Party or of a non-Party.
Article 1204. Standard of Treatment
Each Party shall accord to service providers of any other Party the better of the treatment required by Articles 1202 and 1203.
Article 1205. Local Presence
No Party may require a service provider of another 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 provision of a service.
Article 1206. Reservations
1. Articles 1202, 1203 and 1205 do not apply to:
(a) any existing non-conforming measure that is maintained by
(i) a Party at the federal level, as set out in its Schedule to Annex I,
(ii) a state or province, for two years after the date of entry into force of this Agreement, and thereafter as set out by a Party in its Schedule to Annex I in accordance with paragraph 2, or
(iii) a local 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 1202, 1203 and 1205.
2. Each Party may set out in its Schedule to Annex I, within two years of the date of entry into force of this Agreement, any existing non-conforming measure maintained by a state or province, not including a local government.
3. Articles 1202, 1203 and 1205 do not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out in its Schedule to Annex I.
Article 1207. Quantitative Restrictions
1. Each Party shall set out in its Schedule to Annex V any quantitative restriction that it maintains at the federal level.
2. Within one year of the date of entry into force of this Agreement, each Party shall set out in its Schedule to Annex V any quantitative restriction maintained by a state or province, not including a local government.
3. Each Party shall notify the other Parties of any quantitative restriction that it adopts, other than at the local government level, after the date of entry into force of this Agreement and shall set out the restriction in its Schedule to Annex V.
4. The Parties shall periodically, but in any event at least every two years, endeavor to negotiate the liberalization or removal of the quantitative restrictions set out in Annex V pursuant to paragraphs 1 through 3.
Article 1208. Liberalization of Non-Discriminatory Measures
Each Party shall set out in its Schedule to Annex VI its commitments to liberalize quantitative restrictions, licensing requirements, performance requirements or other non-discriminatory measures.
Article 1209. Procedures
The Commission shall establish procedures for:
(a) a Party to notify and include in its relevant Schedule
(i) state or provincial measures in accordance with Article 1206(2),
(ii) quantitative restrictions in accordance with Article 1207(2) and (3),
(iii) commitments pursuant to Article 1208, and
(iv) amendments of measures referred to in Article 1206(1)(c); and
(b) consultations on reservations, quantitative restrictions or commitments with a view to further liberalization.
Article 1210. Licensing and Certification
1. With a view to ensuring that any measure adopted or maintained by a Party relating to the licensing or certification of nationals of another Party does not constitute an unnecessary barrier to trade, each Party shall endeavor to ensure that any such measure:
(a) is based on objective and transparent criteria, such as competence and the ability to provide a service;
(b) is not more burdensome than necessary to ensure the quality of a service; and
(c) does not constitute a disguised restriction on the cross-border provision of a service.
2. Where a Party recognizes, unilaterally or by agreement, education, experience, licenses or certifications obtained in the territory of another Party or of a non-Party:
(a) nothing in Article 1203 shall be construed to require the Party to accord such recognition to education, experience, licenses or certifications obtained in the territory of another Party; and
(b) the Party shall afford another Party an adequate opportunity to demonstrate that education, experience, licenses or certifications obtained in that other Party's territory should also be recognized or to conclude an agreement or arrangement of comparable effect.
3. Each Party shall, within two years of the date of entry into force of this Agreement, eliminate any citizenship or permanent residency requirement set out in its Schedule to Annex I that it maintains for the licensing or certification of professional service providers of another Party. Where a Party does not comply with this obligation with respect to a particular sector, any other Party may, in the same sector and for such period as the noncomplying Party maintains its requirement, solely have recourse to maintaining an equivalent requirement set out in its Schedule to Annex I or reinstating:
(a) any such requirement at the federal level that it eliminated pursuant to this Article; or
(b) on notification to the non-complying Party, any such requirement at the state or provincial level existing on the date of entry into force of this Agreement.
4. The Parties shall consult periodically with a view to determining the feasibility of removing any remaining citizenship or permanent residency requirement for the licensing or certification of each other's service providers.
5. Annex 1210.5 applies to measures adopted or maintained by a Party relating to the licensing or certification of professional service providers.
Article 1211. Denial of Benefits
1. A Party may deny the benefits of this Chapter to a service provider of another Party where the Party establishes that:
(a) the service is being provided by an enterprise owned or controlled by nationals of a non-Party, and
(i) the denying Party does not maintain diplomatic relations with the non-Party, or
(ii) the denying Party adopts or maintains measures with respect to the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise; or
(b) the cross-border provision of a transportation service covered by this Chapter is provided using equipment not registered by any Party.
2. Subject to prior notification and consultation in accordance with Articles 1803 (Notification and Provision of Information) and 2006 (Consultations), a Party may deny the benefits of this Chapter to a service provider of another Party where the Party establishes that the service is being provided by an enterprise that is owned or controlled by persons of a non- Party and that has no substantial business activities in the territory of any Party.
Article 1212. Sectoral Annex
Annex 1212 applies to specific sectors.
Article 1213. Definitions
1. For purposes of this Chapter, a reference to a federal, state or provincial government includes any non-governmental body in the exercise of any regulatory, administrative or other governmental authority delegated to it by that government.
2. For purposes of this Chapter:
cross-border provision of a service or cross-border trade in services means the provision of a service:
(a) from the territory of a Party into the territory of another Party,
(b) in the territory of a Party by a person of that Party to a person of another Party, or
(c) by a national of a Party in the territory of another Party,
but does not include the provision of a service in the territory of a Party by an investment, as defined in Article 1139 (investment Definitions), in that territory;
enterprise means an "enterprise" as defined in Article 201 (Definitions of General Application), and a branch of an enterprise;
enterprise of a Party means an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there;
professional services means services, the provision of which requires specialized post-secondary 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 tradespersons or vessel and aircraft crew members;
quantitative restriction means a non-discriminatory measure that imposes limitations on:
(a) the number of service providers, whether in the form of a quota, a monopoly or an economic needs test, or by any other quantitative means; or
(b) the operations of any service provider, whether in the form of a quota or an economic needs test, or by any other quantitative means;