(b) connect private leased or owned circuits with public telecommunications transport networks and services of that Party or with circuits leased or owned by another enterprise;
(c) use operating protocols of their choice; and
(d) perform switching, signalling, and processing functions.
3. Each Party shall ensure that enterprises of the other Party may use public telecommunications transport networks and services for the movement of information in its territory or across its borders, including for intra-corporate communications of these enterprises, and for access to information contained in data bases or otherwise stored in machine-readable form in the territory of either Party.
4. Further to Article 28.3 (General exceptions), and notwithstanding paragraph 3, a Party shall take appropriate measures to protect:
(a) the security and confidentiality of public telecommunications transport services; and
(b) the privacy of users of public telecommunications transport services,
subject to the requirement that these measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade.
5. Each Party shall ensure that no condition is imposed on access to and use of public telecommunications transport networks or services other than as necessary to:
(a) safeguard the public service responsibilities of suppliers of public telecommunications transport networks or services, in particular their ability to make their networks or services available to the public generally;
(b) protect the technical integrity of public telecommunications transport networks or services; or
(c) ensure that service suppliers of the other Party do not supply services limited by the Party's reservations as set out in its Schedule to Annex I or II.
6. Provided that they satisfy the criteria in paragraph 5, conditions for access to and use of public telecommunications transport networks or services may include:
(a) restrictions on resale or shared use of these services;
(b) a requirement to use specified technical interfaces, including interface protocols, for connection with such networks or services;
(c) requirements, where necessary, for the inter-operability of these services;
(d) type approval of terminal or other equipment that interfaces with the network and technical requirements relating to the attachment of that equipment to the networks;
(e) restrictions on connection of private leased or owned circuits with these networks or services or with circuits leased or owned by another enterprise; and
(f) notification, registration and licensing.
Article 15.4. Competitive Safeguards on Major Suppliers
1. Each Party shall maintain appropriate measures to prevent suppliers that, alone or together, are a major supplier from engaging in or continuing anti-competitive practices.
2. The anti-competitive practices referred to in paragraph 1 include:
(a) engaging in anti-competitive cross-subsidisation;
(b) using information obtained from competitors with anti-competitive results; and
(c) not making available to other service suppliers, on a timely basis, technical information about essential facilities and commercially relevant information which are necessary for them to supply services.
Article 15.5. Access to Essential Facilities
1. Each Party shall ensure that a major supplier in its territory makes available its essential facilities, which may include, among other things, network elements, operational support systems or support structures, to suppliers of telecommunications services of the other Party on reasonable and non-discriminatory terms and conditions and cost- oriented rates.
2. Each Party may determine, in accordance with its laws, those essential facilities required to be made available in its territory.
Article 15.6. Interconnection
1. Each Party shall ensure that a major supplier in its territory provides interconnection:
(a) at any technically feasible point in the network;
(b) under non-discriminatory terms, conditions, including technical standards and specifications, and rates;
(c) of a quality no less favourable than that provided for its own like services or for like services of non-affiliated service suppliers or of its subsidiaries or other affiliates;
(d) in a timely fashion, on terms, conditions, (including technical standards and specifications) and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that a supplier need not pay for network components or facilities that it does not require for the services to be supplied; and
(e) upon 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.
2. A supplier that is authorised to supply telecommunications services has the right to negotiate a new interconnection agreement with other suppliers of public telecommunications transport networks and services. Each Party shall ensure that major suppliers are required to establish a reference interconnection offer or negotiate interconnection agreements with other suppliers of telecommunications networks and services.
3. Each Party shall ensure that suppliers of public telecommunications transport services that acquire information from another such supplier during the process of negotiating interconnection arrangements use that information solely for the purpose for which it was supplied and respect at all times the confidentiality of information transmitted or stored.
4. Each Party shall ensure that the procedures applicable for interconnection to a major supplier shall be made publicly available.
5. Each Party shall ensure that a major supplier makes publicly available either its interconnection agreements or reference interconnection offer if it is appropriate. Article 15.7 Authorisation to supply telecommunications services
Each Party should ensure that the authorisation to supply telecommunications services, wherever possible, is based upon a simple notification procedure.
Article 15.8. Universal Service
1. Each Party has the right to define the kind of universal service obligations it wishes to maintain.
2. Each Party shall ensure that any measure on universal service that it adopts or maintains is administered in a transparent, objective, non-discriminatory and competitively neutral manner. Each Party shall also ensure that any universal service obligation it imposes is not more burdensome than necessary for the kind of universal service that the Party has defined.
3. All suppliers should be eligible to ensure universal service. If a supplier is to be designated as the supplier of a universal service, a Party shall ensure that the selection is made through an efficient, transparent and non-discriminatory mechanism.
Article 15.9. Scarce Resources
1. Each Party shall administer its procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, in an objective, timely, transparent and non-discriminatory manner.
2. Notwithstanding Articles 8.4 (Market access) and 9.6 (Market access), a Party may adopt or maintain a measure that allocates and assigns spectrum and that manages frequencies. Accordingly, each Party retains the right to establish and apply its spectrum and frequency management policies that may limit the number of suppliers of public telecommunications transport services. Each Party also retains the right to allocate frequency bands taking into account present and future needs.
3. Each Party shall make the current state of allocated frequency bands publicly available but shall not be required to provide detailed identification of frequencies allocated for specific government use. Article 15.10 Number portability Each Party shall ensure that suppliers of public telecommunications transport services in its territory provide number portability on reasonable terms and conditions. Article 15.11 Regulatory authority
1. Each Party shall ensure that its regulatory authority is legally distinct and functionally independent from any supplier of telecommunications transport networks, services or equipment, including if a Party retains ownership or control of a supplier of telecommunications transport networks or services.
2. Each Party shall ensure that its regulatory authority's decisions and procedures are impartial with respect to all market participants and are administered in a transparent and timely manner.
3. Each Party shall ensure that its regulatory authority is sufficiently empowered to regulate the sector, including by ensuring that it has the power to:
(a) require suppliers of telecommunications transport networks or services to submit any information the regulatory authority considers necessary for the administration of its responsibilities; and
(b) enforce its decisions relating to the obligations set out in Articles 15.3 through 15.6 through appropriate sanctions that may include financial penalties, corrective orders or the suspension or revocation of licences.
Article 15.12. Resolution of Telecommunication Disputes
Recourse to regulatory authorities
1. Further to Articles 27.3 (Administrative proceedings) and 27.4 (Review and appeal), each Party shall ensure that: (a) enterprises have timely recourse to its regulatory authority to resolve disputes with suppliers of public telecommunications transport networks or services regarding the matters covered in Articles 15.3 through 15.6 and that, under
the law of the Party, are within the regulatory authority's jurisdiction. As appropriate, the regulatory authority shall issue a binding decision to resolve the dispute within a reasonable period of time; and
(b) suppliers of telecommunications networks or services of the other Party requesting access to essential facilities or interconnection with a major supplier in the Party's territory have, within a reasonable and publicly specified period of time, recourse to a regulatory authority to resolve disputes regarding the appropriate terms, conditions and rates for interconnection or access with that major supplier.
Appeal and review of regulatory authority determinations or decisions
2. Each Party shall ensure that an enterprise whose interests are adversely affected by a determination or decision of a regulatory authority may obtain review of the determination or decision by an impartial and independent judicial, quasi-judicial or administrative authority, as provided in the law of the Party. The judicial, quasi-judicial or administrative authority shall provide the enterprise with written reasons supporting its determination or decision. Each Party shall ensure that these determinations or decisions, subject to appeal or further review, are implemented by the regulatory authority.
3. An application for judicial review does not constitute grounds for non-compliance with the determination or decision of the regulatory authority unless the relevant judicial authority stays this determination or decision.
Article 15.13. Transparency
1. Further to Articles 27.1 (Publication) and 27.2 (Provision of information), and in addition to the other provisions in this Chapter relating to the publication of information, each Party shall make publicly available:
(a) the responsibilities of a regulatory authority in an easily accessible and clear form, in particular where those responsibilities are given to more than one body;
(b) its measures relating to public telecommunications transport networks or services, including:
(i) regulations of its regulatory authority, together with the basis for these regulations;
(ii) tariffs and other terms and conditions of services;
(iii) specifications of technical interfaces;
(iv) conditions for attaching terminal or other equipment to the public telecommunications transport networks;
(v) notification, permit, registration, or licensing requirements, if any; and
(c) information on bodies responsible for preparing, amending and adopting standards-related measures.
Article 15.14. Forbearance
The Parties recognise the importance of a competitive market to achieve legitimate public policy objectives for telecom- munications services. To this end, and to the extent provided in its law, each Party may refrain from applying a regulation to a telecommunications service when, following analysis of the market, it is determined that effective competition is achieved.
Article 15.15. Relation to other Chapters
If there is any inconsistency between this Chapter and another Chapter, this Chapter prevails to the extent of the incon- sistency.
Chapter SIXTEEN. Electronic Commerce
Article 16.1. Definitions
For the purposes of this Chapter:
delivery means a computer program, text, video, image, sound recording or other delivery that is digitally encoded; and
electronic commerce means commerce conducted through telecommunications, alone or in conjunction with other information and communication technologies.
Article 16.2. Objective and Scope
1. The Parties recognise that electronic commerce increases economic growth and trade opportunities in many sectors and confirm the applicability of the WTO rules to electronic commerce. They agree to promote the development of electronic commerce between them, in particular by cooperating on the issues raised by electronic commerce under the provisions of this Chapter.
2. This Chapter does not impose an obligation on a Party to allow a delivery transmitted by electronic means except in accordance with the Party's obligations under another provision of this Agreement.
Article 16.3. Customs Duties on Electronic Deliveries
1. A Party shall not impose a customs duty, fee, or charge on a delivery transmitted by electronic means.
2. For greater certainty, paragraph 1 does not prevent a Party from imposing an internal tax or other internal charge on a delivery transmitted by electronic means, provided that the tax or charge is imposed in a manner consistent with this Agreement.
Article 16.4. Trust and Confidence In Electronic Commerce
Each Party should adopt or maintain laws, regulations or administrative measures for the protection of personal information of users engaged in electronic commerce and, when doing so, shall take into due consideration international standards of data protection of relevant international organisations of which both Parties are a member.
Article 16.5. General Provisions
Considering the potential of electronic commerce as a social and economic development tool, the Parties recognise the importance of:
(a) clarity, transparency and predictability in their domestic regulatory frameworks in facilitating, to the maximum extent possible, the development of electronic commerce;
(b) interoperability, innovation and competition in facilitating electronic commerce; and
(c) facilitating the use of electronic commerce by small and medium sized enterprises.
Article 16.6. Dialogue on Electronic Commerce
1. Recognising the global nature of electronic commerce, the Parties agree to maintain a dialogue on issues raised by electronic commerce, which will address, among other things:
(a) the recognition of certificates of electronic signatures issued to the public and the facilitation of cross-border certifi- cation services;
(b) the liability of intermediary service suppliers with respect to the transmission, or the storage of information;
(c) the treatment of unsolicited electronic commercial communications; and
(d) the protection of personal information and the protection of consumers and businesses from fraudulent and deceptive commercial practices in the sphere of electronic commerce.
2. The dialogue in paragraph 1 may take the form of exchange of information on the Parties' respective laws, regulations, and other measures on these issues, as well as sharing experiences on the implementation of such laws, regulations and other measures.
3. Recognising the global nature of electronic commerce, the Parties affirm the importance of actively participating in multilateral fora to promote the development of electronic commerce.
Article 16.7. Relation to other Chapters
In the event of an inconsistency between this Chapter and another chapter of this Agreement, the other chapter prevails to the extent of the inconsistency.
Chapter SEVENTEEN. Competition Policy
Article 17.1. Definitions
For the purposes of this Chapter:
anti-competitive business conduct means anti-competitive agreements, concerted practices or arrangements by competitors, anti-competitive practices by an enterprise that is dominant in a market, and mergers with substantial anti-competitive effects; and,
service of general economic interest means, for the European Union, a service that cannot be provided satisfactorily and under conditions, such as price, objective quality characteristics, continuity, and access to the service, consistent with the public interest, by an undertaking operating under normal market conditions. The operation of a service of general economic interest must be entrusted to one or more undertakings by the state by way of a public service assignment that defines the obligations of the undertakings in question and of the state.
Article 17.2. Competition Policy
1. The Parties recognise the importance of free and undistorted competition in their trade relations. The Parties acknowledge that anti-competitive business conduct has the potential to distort the proper functioning of markets and undermine the benefits of trade liberalisation.
2. The Parties shall take appropriate measures to proscribe anti-competitive business conduct, recognising that such measures will enhance the fulfilment of the objectives of this Agreement.
3. The Parties shall cooperate on matters relating to the proscription of anti-competitive business conduct in the free trade area in accordance with the Agreement between the European Communities and the Government of Canada Regarding the Application of their Competition Laws, done at Bonn on 17 June 1999.
4. The measures referred to in paragraph 2 shall be consistent with the principles of transparency, non-discrimination, and procedural fairness. Exclusions from the application of competition law shall be transparent. A Party shall make available to the other Party public information concerning such exclusions provided under its competition law.
Article 17.3. Application of Competition Policy to Enterprises
1. A Party shall ensure that the measures referred to in Article 17.2.2 apply to the Parties to the extent required by its law.
2. For greater certainty:
(a) in Canada, the Competition Act, R.S.C. 1985, c. C-34 is binding on and applies to an agent of Her Majesty in right of Canada, or of a province, that is a corporation, in respect of commercial activities engaged in by the corporation in competition, whether actual or potential, with other persons to the extent that it would apply if the agent were not an agent of Her Majesty. Such an agent may include state enterprises, monopolies, and enterprises granted special or exclusive rights or privileges; and
(b) in the European Union, state enterprises, monopolies, and enterprises granted special rights or privileges are subject to the European Union's rules on competition. However, enterprises entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly are subject to these rules, in so far as the application of these rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.
Article 17.4. Dispute Settlement
Nothing in this Chapter shall be subject to any form of dispute settlement pursuant to this Agreement.
Chapter EIGHTEEN. State Enterprises, Monopolies, and Enterprises Granted Special Rights or Privileges
Article 18.1. Definitions
For the purposes of this Chapter: covered entity means:
(a) a monopoly;
(b) a supplier of a good or service, if it is one of a small number of goods or services suppliers authorised or established by a Party, formally or in effect, and the Party substantially prevents competition among those suppliers in its territory;
(c) any entity to which a Party has granted, formally or in effect, special rights or privileges to supply a good or service, substantially affecting the ability of any other enterprise to supply the same good or service in the same geographical area under substantially equivalent conditions, and allowing the entity to escape, in whole or in part, competitive pressures or market constraints (1); or
(d) a state enterprise;
designate means to establish or authorise a monopoly, or to expand the scope of a monopoly to cover an additional good or service;
in accordance with commercial considerations means consistent with customary business practices of a privately held enterprise in the relevant business or industry; and
non-discriminatory treatment means the better of national treatment and most-favoured-nation treatment as set out in this Agreement.
Article 18.2. Scope
1. The Parties confirm their rights and obligations under Articles XVII:1 through XVII:3 of the GATT 1994, the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994, and Articles VIII:1 and VIIL:2 of GATS, all of which are hereby incorporated into and made part of this Agreement.
2. This Chapter does not apply to the procurement by a Party of a good or service purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of a good or service for commercial sale, whether or not that procurement is a "covered procurement" within the meaning of Article 19.2 (Scope and coverage).
3. Articles 18.4 and 18.5 do not apply to the sectors set out in Article 8.2 (Scope) and Article 9.2 (Scope).
4 Articles 18.4 and 18.5 do not apply to a measure of a covered entity if a reservation of a Party, taken against a national treatment or most-favoured nation treatment obligation, as set out in that Party's Schedule to Annex I, II, or III, would be applicable if the same measure had been adopted or maintained by that Party.
Article 18.3. State Enterprises, Monopolies and Enterprises Granted Special Rights or Privileges
1. Without prejudice to the Parties' rights and obligations under this Agreement, nothing in this Chapter prevents a Party from designating or maintaining a state enterprise or a monopoly or from granting an enterprise special rights or privileges.
2. A Party shall not require or encourage a covered entity to act in a manner inconsistent with this Agreement.
Article 18.4. Non-discriminatory Treatment
1. Each Party shall ensure that in its territory a covered entity accords non-discriminatory treatment to a covered investment, to a good of the other Party, or to a service supplier of the other Party in the purchase or sale of a good or service.
2. If a covered entity described in paragraphs (b) through (d) of the definition of "covered entity" in Article 18.1 acts in accordance with Article 18.5.1, the Party in whose territory the covered entity is located shall be deemed to be in compliance with the obligations set out in paragraph 1 in respect of that covered entity.
Article 18.5. Commercial Considerations
1. Each Party shall ensure that a covered entity in its territory acts in accordance with commercial considerations in the purchase or sale of goods, including with regard to price, quality, availability, marketability, transportation, and other terms and conditions of purchase or sale, as well as in the purchase or supply of services, including when such goods or services are supplied to or by an investment of an investor of the other Party.
2. Provided that a covered entity's conduct is consistent with Article 18.4 and Chapter Seventeen (Competition Policy), the obligation contained in paragraph 1 does not apply:
(a) in the case of a monopoly, to the fulfilment of the purpose for which the monopoly has been created or for which special rights or privileges have been granted, such as a public service obligation or regional development; or,
(b) in the case of a state enterprise, to the fulfilment of its public mandate.
Chapter NINETEEN. Government Procurement
Article 19.1. Definitions
For the purposes of this Chapter: