(a) reviewing and monitoring the implementation and operation of this Chapter and each Party’s Schedules in Annexes XVI to XIX;
(b) exchanging information and discussing regulatory or other issues relating to the supply of maritime transport services, including with respect to relevant laws and regulations, existing or proposed, and their implementation;
(c) exchanging information and discussing regulatory or other issues relating to the supply of delivery services, including with respect to relevant laws and regulations, existing or proposed, and their implementation;
(d) carrying out the functions provided for in Article 3.69 (International Mobile Roaming Services);
(e) holding consultations referred to in paragraph 2 of Article 5.3 (Capital Movements) and paragraph 6 of Article 5.5 (Restrictions in Case of Balance of Payments and External Financial Difficulties) of Chapter 5 (Capital Movements, Payments and Transfers);
(f) exchanging information on any other matters related to this Chapter;
(g) examining possible improvements to this Chapter;
(h) discussing any issue related to this Chapter or Chapter 5 (Capital Movements, Payments and Transfers) as may be agreed upon between the representatives of the Parties; and
(i) carrying out other functions as may be delegated by the Joint Committee pursuant to subparagraph 2 (e) of Article 15.1 (Joint Committee) of Chapter 15 (Institutional Provisions).
3. The Sub-Committee on Services and Investment shall be composed of representatives of the Parties including officials of relevant ministries or agencies in charge of the issues to be addressed. The Sub-Committee on Services and Investment may invite representatives of relevant entities other than the Governments of the Parties with the necessary expertise relevant to the issues to be addressed.
Article 3.4. Denial of Benefits
A Party may deny the benefits of this Chapter and Chapter 5 (Capital Movements, Payments and Transfers) to an investor or service supplier of another Party that is a legal person of that Party, or to a covered enterprise of that legal person, if:
(a) a non-Party or a person of a non-Party owns or controls the legal person; and
(b) the denying Party adopts or maintains a measure with respect to the non-Party or the person of the non-Party which is related to the maintenance of international peace and security, including the protection of human rights, and prohibits transactions with that legal person or covered enterprise, or which would be violated or circumvented if the benefits of this Chapter or Chapter 5 (Capital Movements, Payments and Transfers) were accorded to that legal person or its covered enterprise
Section 3.2. INVESTMENT LIBERALISATION
Article 3.5. Scope
This Section shall apply to measures of a Party affecting the establishment of an enterprise to perform economic activities and the operation of such an enterprise by:
(a) investors of another Party;
(b) covered enterprises; and
(c) with respect to Article 3.10 (Performance Requirements), all enterprises in the Party which adopts or maintains the measure.
Article 3.6. Market Access
A Party shall not adopt or maintain with respect to establishment of an enterprise by an investor of another Party or by a covered enterprise, or operation of a covered enterprise, a measure, whether it applies to the Party as a whole or to any division thereof, that:
(a) imposes limitations on: (17)
(i) the number of enterprises that may carry out a specific economic activity whether in the form of numerical quotas, monopolies, exclusive suppliers or the requirement of an economic needs test;
(ii) the total value of transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(iii) the total number of operations or the total quantity of output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(iv) the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment; or
(v) the total number of natural persons that may be employed in a particular sector or that an enterprise may employ and who are necessary for, and directly related to, the performance of an economic activity, in the form of numerical quotas or the requirement of an economic needs test; or
(b) restricts or requires a specific type of legal entity or joint venture through which an investor of another Party may perform an economic activity.
Article 3.7. National Treatment
Each Party shall accord to investors of another Party and to covered enterprises treatment no less favourable than the treatment it accords, in like situations, to its own investors and to their enterprises with respect to the establishment or operation in that Party.
Article 3.8. Most-Favoured-Nation Treatment
1. Each Party shall accord to investors of another Party and to covered enterprises treatment no less favourable than that it accords, in like situations, to investors of a non-Party and to their enterprises, with respect to establishment or operation in that Party. (18)
2. Paragraph 1 shall not be construed as obliging a Party to extend to investors of another Party or to covered enterprises the benefit of any treatment resulting from measures providing for recognition, including the recognition of the standards or criteria for the authorisation, licensing, or certification of a natural person or enterprise to carry out an economic activity, or the recognition of prudential measures as referred to in paragraph 3 of the GATS Annex on Financial Services.
3. For greater certainty, the “treatment” referred to in paragraph 1 does not include investor-to-state dispute settlement procedures provided for in other international agreements.
4. For greater certainty, the existence of substantive provisions in other international agreements concluded by a Party with a non-Party, or the mere formal transposition of those provisions into domestic law to the extent that it is necessary in order to incorporate them into the domestic legal order, do not in themselves constitute the “treatment” referred to in paragraph 1. Measures of a Party pursuant to those provisions may constitute such treatment and thus give rise to a breach of this Article.
Article 3.9. Senior Management and Boards of Directors
A Party shall not require a covered enterprise to appoint to senior management or board of director positions natural persons of a particular nationality or who are resident in the Party.
Article 3.10. Performance Requirements
1. A Party shall not, in connection with the establishment or operation of any enterprise in that Party, impose or enforce any requirement or enforce any commitment or undertaking: (19)
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services supplied in that Party, or to purchase goods or services from a person in that Party;
(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that enterprise;
(e) to restrict sales of goods or services in that Party that the enterprise produces or supplies by relating those sales in any way to the volume or value of its exports or foreign exchange inflows;
(f) to restrict exportation or sale for export;
(g) to transfer technology, a production process or other proprietary knowledge to a person in that Party;
(h) to locate the regional or world headquarters of an enterprise in that Party;
(i) to hire a given number or percentage of natural persons of that Party;
(j) to achieve a given level or value of research and development in that Party;
(k) to supply one or more of the goods produced or services supplied by such enterprise to a specific region or to the world market exclusively from that Party; or
(l) to adopt:
(i) a rate or amount of royalty below a certain level; or
(ii) a given duration of the term of a licence contract; (20)
with regard to any licence contract in existence at the time the requirement is imposed or enforced, or any commitment or undertaking is enforced, or with regard to any future licence contract freely entered into between the enterprise and a natural or legal person or any other entity in that Party, if the requirement is imposed or enforced or the commitment or undertaking is enforced, in a manner that constitutes a direct interference with that licence contract by an exercise of a non-judicial governmental authority of Party. (21)
2. A Party shall not, in connection with the establishment or operation of any enterprise in that Party, make the receipt or continued receipt of an advantage conditional upon compliance with any requirement:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to goods produced or services supplied in that Party, or to purchase goods or services from a person in its territory;
(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that enterprise;
(d) to restrict sales of goods or services in that Party that the enterprise produces or supplies by relating those sales in any way to the volume or value of its exports or foreign exchange inflows; or
(e) to restrict exportation or sale for export.
3. For greater certainty, nothing in paragraph 1 shall be construed as preventing the enforcement by a Party of an undertaking voluntarily given (22) by a person in relation to a takeover or merger.
4. Nothing in paragraph 2 shall be construed as preventing a Party, in connection with the establishment or operation of any enterprise in that Party, from making the receipt or continued receipt or an advantage conditional upon compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in that Party.
5. Subparagraphs 1(a) to (c) and 2(a) and (b) do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programmes.
6. Subparagraphs 1(g) and (l) do not apply when:
(a) the requirement is imposed or enforced, or the commitment or undertaking is enforced, by a court or administrative tribunal, or by a competition authority pursuant to a Party’s competition law; or
(b) a Party authorises the use of an intellectual property right in accordance with Article 31 or Article 31bis of the TRIPS Agreement, or adopts or maintains measures requiring the disclosure of data or proprietary information that fall within the scope of, and are consistent with, paragraph 3 of Article 39 of the TRIPS Agreement.
7. Subparagraph 1(l) does not apply if the requirement is imposed or enforced, or the commitment or undertaking is enforced, by a tribunal as equitable remuneration under the Party’s copyright laws.
8. Subparagraphs 2(a) and (b) do not apply to requirements imposed or enforced by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
9. This Article is without prejudice to the obligations of a Party under the Agreement on Trade-Related Investment Measures set out in Annex 1A to the WTO Agreement.
10. For greater certainty, this Article does not preclude the enforcement of any requirement, commitment or undertaking between private parties, if a Party did not impose the requirement, commitment or undertaking.
Article 3.11. Investment and Sustainable Development
1. The Parties recognise the importance of environmental protection in connection with the establishment and operation of enterprises and reaffirm the Parties’ rights and obligations relating to the protection of the environment, including climate change, provided for in this Agreement.
2. The Parties recognise the importance of encouraging the adherence to responsible business practices by covered enterprises and reaffirm the Parties’ obligations in this regard, as set out in Article 13.11 (Responsible Business Conduct) of Chapter 13 (Trade and Sustainable Development).
Article 3.12. Non-Conforming Measures
1. Articles 3.6 (Market Access), 3.7 (National Treatment), 3.8 (Most- Favoured-Nation Treatment), 3.9 (Senior Management and Boards of Directors) and 3.10 (Performance Requirements) do not apply to:
(a) an existing non-conforming measure that is maintained by a Party at the level of:
(i) the central level of government, as set out by that Party in its Schedule to Annex XVI (Existing Measures);
(ii) a regional level of government, as set out by that Party in its Schedule to Annex XVI (Existing Measures); or
(iii) a local government;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or
(c) an amendment to a 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 3.6 (Market Access), 3.7 (National Treatment), 3.8 (Most-Favoured-Nation Treatment), 3.9 (Senior Management and Boards of Directors) or 3.10 (Performance Requirements).
2. Articles 3.6 (Market Access), 3.7 (National Treatment), 3.8 (Most- Favoured-Nation Treatment), 3.9 (Senior Management and Boards of Directors) and 3.10 (Performance Requirements) do not apply to a measure of a Party that is consistent with the reservations, conditions or qualifications specified with respect to a sector, subsector or activity, as set out by that Party in its Schedule to Annex XVII (Future Measures).
3. In respect of intellectual property rights, a Party may derogate from subparagraph 1(g) of Article 3.10 (Performance Requirements) and Articles 3.7 (National Treatment) and 3.8 (Most-Favoured-Nation Treatment) if permitted by the TRIPS Agreement, including any amendments to the TRIPS Agreement in force for all Parties, and waivers to the TRIPS Agreement adopted pursuant to Article IX of the WTO Agreement.
4. Notwithstanding Articles 3.7 (National Treatment) and 3.8 (Most-Favoured- Nation Treatment), a Party may require an investor of another Party, or its covered enterprise, to provide information concerning that enterprise for informational or statistical purposes, provided that those requests are reasonable and not unduly burdensome. The Party shall protect confidential business information from any disclosure that would prejudice the competitive position of the investor or the covered enterprise. This paragraph does not prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application ofits law.
Section 3.3. CROSS-BORDER TRADE IN SERVICES
Article 3.13. Scope
This Section shall apply to measures of a Party affecting cross-border trade in services by service suppliers of another Party. Such measures include:
(a) the production, distribution, marketing, sale or delivery of a service;
(b) the purchase or use of, or payment for, a service;
(c) the access to and use of, in connection with the supply of a service, services which are required by a Party to be offered to the public generally; and
(d) the provision of a bond or other form of financial security as a condition for the supply of a service.
Article 3.14. Market Access
A Party shall not adopt or maintain, a measure, whether it applies to the Party as a whole or to any division thereof, that:
(a) imposes a limitation on:
(i) the number of services suppliers, whether in the form of a numerical quota, monopoly, exclusive service suppliers or the requirement of an economic needs test;
(ii) the total value of service transactions or assets in the 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 service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (23) or
(b) restricts or requires a specific type of legal entity or joint venture through which a service supplier may supply a service.
Article 3.15. Local Presence
A Party shall not require a service supplier of another Party to establish or maintain an enterprise, or to be resident, in that Party as a condition for the cross- border supply of a service.
Article 3.16. National Treatment
1. Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords to its own like services and service suppliers.
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of another 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 services or service suppliers of another Party.
4. Nothing in this Article shall be construed as requiring a Party to compensate for any inherent competitive disadvantage which results from the foreign character of the relevant services or service suppliers.
Article 3.17. Most-Favoured-Nation Treatment
1. Each Party shall accord to services and service suppliers of another Party treatment no less favourable than that it accords to like services and service suppliers of a non-Party. (24)
2. Paragraph 1 shall not be construed as obliging a Party to extend to services and service suppliers of another Party the benefit of any treatment resulting from measures providing for recognition, including of the standards or criteria for the authorisation, licencing, or certification of a natural person or enterprise to carry out an economic activity, or of prudential measures as referred to in paragraph 3 of the GATS Annex on Financial Services.
3. For greater certainty, the existence of substantive provisions in other international agreements concluded by a Party with a non-Party, or mere formal transposition of those provisions into domestic law to the extent that it is necessary in order to incorporate them into the domestic legal order, do not in themselves constitute the “treatment” referred to in paragraph 1. Measures of a Party pursuant to those provisions may constitute such treatment and thus give rise to a breach of this Article.
Article 3.18. Non-Conforming Measures
1. Article 3.14 (Market Access), Article 3.15 (Local Presence), Article 3.16 (National Treatment), and Article 3.17 (Most-Favoured-Nation Treatment) 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 XVI (Existing Measures);
(ii) a regional level of government, as set out by that Party in its Schedule to Annex XVI (Existing Measures); or
(iii) 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 Article 3.14 (Market Access), Article 3.15 (Local Presence), Article 3.16 (National Treatment) or Article 3.17 (Most- Favoured-Nation Treatment).
2. Article 3.14 (Market Access), Article 3.15 (Local Presence), Article 3.16 (National Treatment), and Article 3.17 (Most-Favoured-Nation Treatment) do not apply to any measure of a Party that is consistent with the reservations, conditions or qualifications specified with respect to sectors, sub-sectors or activities, as set out by that Party in its Schedule to Annex XVII (Future Measures).
Section 3.4. ENTRY AND TEMPORARY STAY OF NATURAL PERSONS
Article 3.19. General Provisions and Scope
1. This Section reflects the preferential trade relationship between the Parties as well as the desire of the Parties to facilitate entry and temporary stay of natural persons for business purposes on a reciprocal basis, and to ensure transparency of the process.
2. This Section applies to measures by a Party affecting entry into that Party by natural persons of another Party, who are business visitors for establishment purposes, intra-corporate transferees, contractual service suppliers, independent professionals and short-term business visitors and to measures affecting their business activities during their temporary stay in the former Party.
3. To the extent that commitments are not undertaken in this Section, all requirements provided for in the law of a Party regarding the entry and temporary stay shall continue to apply, including rules concerning the length of stay.
4. Notwithstanding the provisions of this Section, all requirements provided for in the law of a Party regarding work and social security measures shall continue to apply, including rules concerning minimum wages and collective wage agreements.
5. Commitments on the entry and temporary stay of natural persons for business purposes do not apply in cases where the intent or effect of the entry and temporary stay is to interfere with or otherwise affect the outcome of any labour or management dispute or negotiation, or the employment of any natural person who is involved in such a dispute or negotiation.
6. This Section does not apply to measures:
(a) affecting natural persons of a Party seeking access to the employment market of another Party; or
(b) regarding nationality or citizenship, residence or employment on a permanent basis.
7. This Section shall not prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, the Party, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to another Party under the terms of this Section. (25)
8. This Section, Annex XVIII (Business Visitors for Establishment Purposes, Intra-Corporate Transferees, and Short-Term Business Visitors) and Annex XIX (Contractual Service Suppliers and Independent Professionals) only apply to a Party’s territory described in subparagraph (1)(a) of Article 1.2 (Territorial Application) of Chapter 1 (General Provisions).
Article 3.20. Definitions
For the purposes of this Section:
(a) “business visitors for establishment purposes” means natural persons working in a senior position within a legal person of a Party, who:
(i) are responsible for setting up an enterprise of the same group in the Party granting entry;
(ii) do not offer or provide services or engage in any economic activity other than that which is required for the purposes of the establishment of that enterprise; and
(iii) do not receive remuneration from a source located in the Party granting entry;
(b) “contractual service suppliers” means natural persons employed by a legal person of a Party that:
(i) is itself not an agency for placement and supply services of personnel and is not acting through such an agency;
(ii) is not established in the Party granting entry; and
(iii) has concluded a bona fide contract to supply a service to a final consumer in another Party, requiring the presence on a temporary basis of its employees in that Party in order to fulfil the contract to supply the service in question; (26)