Article 3.40. Conditions for Authorisation
1. Each Party shall ensure that measures relating to authorisation are based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner.
2. The criteria (41) referred to in paragraph 1 shall be:
(a) objective;
(b) transparent;
(c) clear;
(d) impartial;
(e) made public in advance, to the extent practicable; and
(f) easily accessible.
3. If a Party adopts or maintains a measure relating to authorisation, it shall ensure that:
(a) the competent authority concerned processes applications, and reaches and administers its decisions objectively and impartially and in a manner independent of the undue influence of any person carrying out the economic activity for which authorisation is required;
(b) the procedures themselves do not prevent fulfilment of the requirements; and
(c) those measures do not discriminate between men and women. (42)
Subsection 3.5.2. PROVISIONS OF GENERAL APPLICATION
Article 3.41. Review Procedures for Administrative Decisions
Each Party shall maintain judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected investor or service supplier of another Party, for a prompt review of, and where justified, appropriate remedies for, administrative decisions (43) that affect the pursuit of an activity referred to in subparagraphs 1(a) to (c) of Article 3.30 (Scope). Where these procedures are not independent of the competent authority entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
Article 3.42. Opportunity to Comment Before Entry Into Force
1. To the extent practicable and in a manner consistent with its legal system for adopting measures, each Party (44) shall publish in advance:
(a) any laws or regulations of general application it proposes to adopt; or
(b) documents that provide sufficient details about that possible new law or regulation to allow another Party to assess whether and how their interests might be significantly affected.
2. To the extent practicable and in a manner consistent with its legal system for adopting measures, each Party is encouraged to apply paragraph 1 to procedures and administrative rulings of general application it proposes to adopt.
3. To the extent practicable and in a manner consistent with its legal system for adopting measures, each Party shall provide the other Parties with a reasonable opportunity to comment on those proposed measures or documents published under paragraphs 1 or 2.
4. To the extent practicable and in a manner consistent with its legal system for adopting measures, each Party shall consider comments received under paragraph 3.45
5. In publishing the law or regulation referred to in subparagraph 1(a), or in advance of such publication, to the extent practicable and in a manner consistent with its legal system for adopting measures, a Party is encouraged to explain the purpose and rationale of the law or regulation.
6. Each Party shall, to the extent practicable, endeavour to allow reasonable time between publication of the text of the law or regulation referred to in subparagraph 1(a) and the date on which service suppliers must comply with the law or regulation.
Article 3.43. Regulatory Cooperation
1. To promote further services liberalisation, the Parties shall:
(a) consider cooperating on regulatory issues of mutual interest by:
(i) discussing regulatory approaches that underpin their criteria for authorisation;
(ii) sharing best-practices and expertise;
(iii) participating in international dialogues; and
(iv) sharing trade-related information.
(b) endeavour to encourage their competent authorities to consider cooperating with competent authorities of another Party on regulatory issues of mutual interest by the same means provided in subparagraphs (a)(i) to (iv).
2. This Article shall not apply with respect to financial services.
Subsection 3.53. FINANCIAL SERVICES
Article 3.44. Scope
1. This Sub-Section shall apply to measures of a Party affecting the supply of financial services in addition to Sections 3.1 to 3.4 (General Provisions, Investment Liberalisation, Cross-Border Trade in Services, and Entry and Temporary Stay of Natural Persons for Business Purposes) of this Chapter and Sub-Section 3.5.1 (Domestic Regulation) and Sub-Section 3.5.2 (Provisions of General Application) of this Section.
2. For the purposes of the application of Article 3.1 (Scope) of Section 3.1 (General Provisions) to this Sub-Section, the term “activities performed in the exercise of governmental authority” means the following:
(a) activities conducted by a central bank or a monetary authority or by any other public entity in pursuit of monetary or exchange rate policies;
(b) activities forming part of a statutory system of social security or public retirement plans; and
(c) other activities conducted by a public entity for the account or with the guarantee or using the financial resources of a Party or its public entities.
3. For the purposes of the application of Article 3.1 (Scope) of Section 3.1 (General Provisions) to this Sub-Section, if a Party allows any of the activities referred to in subparagraph 2(b) or (c) to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, “activities performed in the exercise of governmental authority” does not include those activities.
4. The definition of “activities performed in the exercise of governmental authority” in Section 3.1 (General Provisions) does not apply to services covered by this Sub-Section.
5. Article 3.9 (Senior Management and Boards of Directors) of Section 3.2 (Investment Liberalisation) shall not apply to measures covered by this Sub- Section.
Article 3.45. Definitions
For the purposes of this Chapter:
(a) “financial service” means any service of a financial nature offered by a financial service supplier of a Party. Financial services include the following activities:
Insurance and insurance-related services
(i) direct insurance (including co-insurance):
(aa) life;
(ab) non-life;
(ii) reinsurance and retrocession;
(iii) insurance intermediation, such as brokerage and agency; and
(iv) services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;
Banking and other financial services (excluding insurance)
(v) acceptance of deposits and other repayable funds from the public;
(vi) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;
(vii) financial leasing;
(viii) all payment and money transmission services, including credit, charge and debit cards, travellers’ cheques, e- payments and bankers drafts;
(ix) guarantees and commitments;
(x) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(aa) money market instruments (including cheques, bills, certificates of deposits);
(ab) foreign exchange;
(ac) derivative products, including futures and options;
(ad) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(ae) transferable securities; and
(af) other negotiable instruments and financial assets, including bullion;
(xi) 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;
(xii) money broking;
(xiii) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
(xiv) settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(xv) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and
(xvi) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
(b) “financial service supplier” means a person of a Party wishing to supply or supplying financial services but does not include a public entity;
(c) “new financial services” means a financial service not supplied in the Party that is supplied in another 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;
(d) “public entity” means
(i) a government, a central bank or monetary authority of a Party, or any entity owned or controlled by a Party that is principally engaged in carrying out governmental functions or activities for governmental purposes, but does not include an entity principally engaged in supplying financial services on commercial terms; or
(ii) a private entity performing functions normally performed by a central bank or monetary authority when exercising those functions; and
(e) “self-regulatory organisations” means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organisation or association, that exercises regulatory or supervisory authority over financial service suppliers by statute or delegation from central or regional government.
Article 3.46. New Financial Services
1. Each Party shall, in accordance with its law, permit a financial service supplier of another Party to supply a new financial service that the Party would permit its own like financial service suppliers to supply without adopting a law or modifying an existing law, in like situations.
2. A Party may determine the institutional and juridical form (46) through which the new financial service may be supplied and may require authorisation or its renewal for the supply of the service from the relevant regulator. Where such authorisation is required, a decision shall be made within a reasonable period of time, and the authorisation or its renewal may only be refused for prudential reasons, including if such prudential reasons arise out of the Party’s international obligations.
3. Each Party shall endeavour to collaborate and share knowledge relating to developments in financial services including financial integrity, consumer wellbeing and protection, financial inclusion, financial data, competition and financial stability through innovation in financial services, by sharing best practice and facilitating cross-border development of new financial services.
4. The Parties understand that nothing in this Article prevents a financial service supplier of a Party from applying to another Party to request that it authorises the supply of a financial service that is not supplied in any Party. That application shall be subject to the law of the Party receiving the application, and for greater certainty, shall not be subject to paragraphs 1 to 2.
Article 3.47. Financial Information and Data
1. No Party shall restrict a financial service supplier of another Party from transferring or processing information, including by electronic means, or from transferring equipment in accordance with this Agreement and any applicable domestic laws and regulations, where such transfers or processing are necessary in the course of the business of that financial service supplier.
2. The Parties affirm that paragraph 1 of Article 4.11 (Cross-border Data Flows) of Chapter 4 (Digital Trade) applies to cross-border data transfers of financial service suppliers.
3. Notwithstanding paragraph 1 of this Article and paragraph 1 of Article 4.11 (Cross-Border Data Flows) of Chapter 4 (Digital Trade), each Party has the right to require that information of a financial service supplier is used, stored or processed in that Party where it is not able to ensure access to data required for the purposes of financial regulation and supervision. Before imposing such requirements on the financial service supplier of another Party with respect to use, storage or processing of financial information in that Party, the Party or its financial regulators shall endeavour to consult that other Party or its financial regulators and, as far as practicable, provide the financial service supplier with a reasonable opportunity to remediate any lack of access to information.
4. For greater certainty, nothing in this Article shall prevent a Party from adopting or maintaining measures in accordance with paragraph 2 of Article 4.12 (Protection of Personal Data and Privacy) of Chapter 4 (Digital Trade).
Article 3.48. Payments and Clearing
Under terms and conditions that accord national treatment under Article 3.7 (National Treatment) of Section 3.2 (Investment Liberalisation) and Article 3.16 (National Treatment) of Section 3.3 (Cross-Border Trade in Services), each Party shall grant to established financial service suppliers of another Party access to payment and clearing systems operated by public entities, and to official funding and refinancing facilities available in the normal course of ordinary business. This Article shall not confer access to the Party’s lender of last resort facilities.
Article 3.49. Senior Management and Boards of Directors
1. No Party shall require established financial service suppliers of another Party to engage natural persons of any particular nationality as members of the board of directors, senior managerial or other essential personnel.
2. No Party shall require that more than a minority of the board of directors of established financial service suppliers of another Party be composed of persons residing in that Party.
3. This Article is subject to each Party’s reservations as set out in Annex XVI(Existing Measures) and Annex XVII (Future Measures).
Article 3.50. Self-Regulatory Organisations
If a Party requires a financial service supplier of another Party to be a member of, participate in, or have access to, a self-regulatory organisation in order to provide a financial service in or into that Party, or grants a privilege or advantage when supplying a financial service through a self-regulatory organisation, it shall ensure that the self-regulatory organisation observes the obligations contained in Article 3.6 (Market Access), Article 3.7 (National Treatment) and Article 3.8 (Most-Favoured Nation Treatment) of Section 3.2 (Investment Liberalisation) and Article 3.14 (Market Access), Article 3.16 (National Treatment) and Article 3.17 (Most-Favoured Nation Treatment) of Section 3.3 (Cross-Border Trade in Services).
Article 3.51. Prudential Carve-Out
1. Nothing in this Agreement shall prevent a Party from adopting or maintaining measures for prudential reasons (47), including:
(a) the protection of investors, depositors, policyholders, or persons to whom a financial service supplier owes a fiduciary duty;
(b) the maintenance of the safety, soundness, integrity, or financial responsibility of a financial service supplier; or
(c) ensuring the integrity and stability of the Party’s financial system.
2. Where such measures do not conform with the provisions of this Agreement, they shall not be used as a means of avoiding the Party’s commitments or obligations under this Agreement.
Article 3.52. Confidential Information
Nothing in this Agreement shall be construed to require a Party 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 3.53. International Standards
Each Party shall make its best endeavour to ensure that internationally agreed standards for regulation and supervision in the financial services sector and for the fight against tax evasion and avoidance are implemented and applied in that Party. Such internationally agreed standards are, inter alia, the Basel Committee’s “Core Principles for Effective Banking Supervision”, the standards and principles of the International Association of Insurance Supervisors, the International Organisation of Securities Commissions’ “Objectives and Principles of Securities Regulation”, the Financial Action Task Force’s “FATF Recommendations” and the standards of the Global Forum on Transparency and Exchange of Information for Tax Purposes of the OECD.
Article 3.54. Recognition of Prudential Measures
1. A Party may recognise prudential measures of a non-Party in the application of measures covered by this Sub-Section. (48) That recognition may be:
(a) accorded autonomously;
(b) achieved through harmonisation or other means; or
(c) based upon an agreement or arrangement with a non-Party.
2. A Party that accords recognition of prudential measures under paragraph 1 shall provide adequate opportunity to another Party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation and, if appropriate, procedures concerning the sharing of information between the relevant Parties.
3. If a Party accords recognition of prudential measures under subparagraph 1(c) and the circumstances set out in paragraph 2 exist, that Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.
Subsection 3.5.4. TELECOMMUNICATIONS SERVICES
Article 3.55. Scope
1. This Sub-Section applies to measures of a Party affecting the supply of telecommunications services in addition to Sections 3.1 to 3.4 (General Provisions, Investment Liberalisation, Cross-Border Trade in Services, and Entry and Temporary Stay of Natural Persons for Business Purposes) of this Chapter and Sub-Section 3.5.1 (Domestic Regulation) and Sub-Section 3.5.2 (Provisions of General Application) of this Section.
2 This Sub-Section does not apply to:
(a) measures affecting services providing, or exercising editorial control over, content transmitted using telecommunications networks or services; or
(b) measures relating to broadcast or cable distribution of radio or television programming, except to ensure that a service supplier operating a broadcast station or cable system has continued access to and use of public telecommunications networks and services.
Article 3.56. Definitions
For the purposes of this Sub-Section:
(a) “associated facilities” means those services, physical infrastructures and other facilities associated with a telecommunications network or service which enable or support the provision of services via that network or service or have the potential to do so;
(b) “end-user” means a final consumer of or subscriber to a public telecommunications service, including a service supplier other than a supplier of public telecommunications services;
(c) “essential facilities” means facilities of a public telecommunications network or service that:
(i) are exclusively or predominantly provided by a single or limited number of suppliers; and
(ii) cannot feasibly be economically or technically substituted in order to supply a service;
(d) “interconnection” means the linking of public telecommunications networks used by the same or different suppliers of telecommunications networks or services in order to allow the users of one supplier to communicate with users of the same or another supplier or to access services provided by another supplier. Services may be provided by the suppliers involved or any other supplier who has access to the network;
(e) “international mobile roaming service” means a mobile service provided pursuant to an agreement between suppliers of public telecommunications services that enables an end-user whose mobile handset or other device normally accesses public telecommunication services in a Party to use their mobile handset or other device for voice, data or messaging services in another Party;
(f) “leased circuit” means telecommunications services or facilities, including those of a virtual or non-physical nature, between two or more designated points that are set aside for the dedicated use of, or availability to, a user;
(g) “major supplier” means a supplier of telecommunications networks or services which has the ability to materially affect the terms of participation, having regard to price and supply, in a relevant market for public telecommunications networks or services as a result of control over essential facilities or the use of its position in that market;
(h) “network element” means a facility or equipment used in supplying a telecommunications service, including features, functions and capabilities provided by means of that facility or equipment;
(i) “non-discriminatory” means treatment no less favourable than that accorded, in like situations, to other service suppliers and users of like public telecommunications networks or services;
(j) “number portability” means the ability of end-users who so request to retain the same telephone numbers, at the same location in the case of a fixed line, when switching between the same category of suppliers of public telecommunications services;
(k) “public telecommunications network” means any telecommunications network used for the provision of public telecommunications services between network termination points;
(l) “public telecommunications service” means any telecommunications service that is offered to the public generally;
(m) “reference interconnection offer” means an interconnection offer by a major supplier that is made publicly available, so that any supplier of public telecommunications services that is willing to accept it may obtain interconnection with the major supplier on that basis;
(n) “telecommunications” means the transmission and reception of signals by any electromagnetic means;
(o) “telecommunications network” means transmission systems and, if applicable, switching or routing equipment and other resources, including network elements which are not active, which permit the transmission and reception of signals by wire, radio, optical, or other electromagnetic means;
(p) “telecommunications regulatory authority” means the body or bodies responsible for the regulation of telecommunications networks and services covered by this Sub-Section;
(q) “telecommunications service” means a service which consists wholly or mainly in the transmission and reception of signals over telecommunications networks, including over networks used for broadcasting, but does not include a service providing, or exercising editorial control over, content transmitted using telecommunications networks and services;