2. Treatment granted under other existing or future agreements concluded by one of the Parties and notified under Article V or Article V bis of the GATS shall not be subject to paragraph 1.
3. If a Party concludes an agreement of the type referred to in paragraph 2 after the entry into force of this Agreement or amends such agreement, it shall notify the other Parties without delay. The former Party shall, upon request by any other Party, negotiate the incorporation into this Agreement of a treatment no less favourable than that provided under such agreement. Any such incorporation should ensure an overall balance of commitments undertaken by each Party under this Chapter.
4. The rights and obligations of the Parties in respect of advantages accorded to adjacent countries shall be governed by paragraph 3 of Article II of the GATS, which is hereby incorporated into and made part of this Chapter.
Article 3.5. Market Access
Subject to Article 3.17, a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire Area measures defined as in subparagraphs 2 (a) to 2 (f) of Article XVI of the GATS, (7) with respect to market access through the modes of supply identified in subparagraph (a) (i) of Article 3.3.
Article 3.6. National Treatment
1. Subject to Article 3.17, each Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers. (8)
2. A Party may meet the requirement of paragraph 1 by according to services and service suppliers of any other 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 any other Party.
Article 3.7. Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for the prompt review of and, where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.
3. Where authorisation is required for the supply of a service, the competent authorities of each Party shall, within a reasonable period of time after the submission of an application considered complete under domestic law, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of the Party shall provide, without undue delay, information concerning the status of the application.
4. (a) Pending incorporation of results referred to in subparagraph 4 (c), each Party shall ensure that measures relating to qualification requirements and procedures, technical standards, and licensing requirements and procedures that it adopts or maintains are:
(i) based on objective and transparent criteria, such as competence and the ability to supply the service; and
(ii) in the case of licensing procedures, not in themselves a restriction on the supply of the service.
(b) This paragraph shall not apply to a sector or subsector where a Party does not have any obligations on Market Access and National Treatment under its Appendix to Annex X.
(c) If the results of the negotiations related to paragraph 4 of Article VI of the GATS enter into effect, the Parties shall jointly review such results, and decide on incorporation of such results into this Agreement.
(d) The Parties confirm their rights and obligations under Article VI of the GATS.
5. In determining whether a Party is in conformity with its obligations under paragraph 4, account shall be taken of international standards of relevant international organisations (9) applied by that Party.
6. Each Party shall provide for adequate procedures to verify the competence of professionals of any other Party.
Article 3.8. Recognition
1. For the purpose of the fulfilment, in whole or in part, of its relevant standards or criteria for the authorisation, licensing or certification of service suppliers, each Party shall give due consideration to any requests by another Party to recognise the education or experience obtained, requirements met, or licences or certifications granted in that other Party. Such recognition may be based upon an agreement or arrangement with that other Party, or otherwise be accorded autonomously.
2. Where a Party recognises, by agreement or arrangement, the education or experience obtained, requirements met, or licences or certifications granted, in a non- party, that Party shall afford another Party adequate opportunity to negotiate its accession to such an agreement or arrangement, whether existing or future, or to negotiate a comparable agreement or arrangement with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for another Party to demonstrate that the education or experience obtained, requirements met, or licences or certifications granted, in the Area of that other Party should also be recognised.
3. Any such agreement or arrangement or autonomous recognition shall be in conformity with the relevant provisions of the WTO Agreement, in particular paragraph 3 of Article VI of the GATS.
Article 3.9. Movement of Natural Persons
1. This Article applies to measures affecting natural persons who are service suppliers of a Party, and natural persons of a Party who are employed by a service supplier of a Party, in respect of the supply of a service.
2. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, nor shall it apply to measures regarding nationality or permanent resident status, residence or employment on a permanent basis.
3. Natural persons covered by an EFTA State's List of Reservations under Annex X or by Hong Kong, China's List of Commitments on Movement of Natural Persons under Annex X shall be allowed to supply the service in accordance with the terms of that List.
4. This Chapter shall not prevent a Party from applying measures to regulate the entry of natural persons of another Party into, or their temporary stay in, its Area, 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 any Party under the terms set out in an EFTA State's List of Reservations under Annex X or Hong Kong, China's List of Commitments on Movement of Natural Persons under Annex X. (10)
Article 3.10. Transparency
The rights and obligations of the Parties in respect of transparency shall be governed by paragraphs 1 and 2 of Article III and by Article III bis of the GATS, which are hereby incorporated into and made part of this Chapter.
Article 3.11. Monopolies and Exclusive Service Suppliers
The rights and obligations of the Parties in respect of monopolies and exclusive service suppliers shall be governed by paragraphs 1, 2 and 5 of Article VIII of the GATS, which are hereby incorporated into and made part of this Chapter.
Article 3.12. Business Practices
The rights and obligations of the Parties in respect of business practices shall be governed by Article IX of the GATS, which is hereby incorporated into and made part of this Chapter.
Article 3.13. Subsidies
1. A Party which considers that it is adversely affected by a subsidy of another Party may request ad hoc consultations with that Party on such matters. The requested Party shall enter into such consultations. (11)
2. The Parties shall review any disciplines agreed under Article XV of the GATS with a view to incorporating them into this Chapter.
Article 3.14. Payments and Transfers
1. Except under the circumstances envisaged in Article 3.15, a Party shall not apply restrictions on international transfers and payments for current transactions with another Party.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of the Agreement of the International Monetary Fund (hereinafter referred to as the "IMF"), including the use of exchange actions which are in conformity with the Articles of the Agreement of the IMF, provided that a Party shall not impose restrictions on capital transactions inconsistently with the obligations under this Chapter regarding such transactions, except under Article 3.15 or at the request of the IMF.
Article 3.15. Restrictions to Safeguard the Balance of Payments
1. The Parties shall endeavour to avoid the imposition of restrictions to safeguard the balance of payments.
2. Any restriction to safeguard the balance of payments adopted or maintained by a Party under and in conformity with Article XII of the GATS shall apply under this Chapter.
Article 3.16. Exceptions
The rights and obligations of the Parties in respect of general exceptions and security exceptions shall be governed by Article XIV and paragraph 1 of Article XIV bis of the GATS, which are hereby incorporated into and made part of this Chapter.
Article 3.17. Lists of Reservations and Commitments
1. Articles 3.4 to 3.6 shall not apply to:
(a) existing measures that a Party may maintain, renew at any time or modify without reducing their level of conformity with Articles 3.4 to 3.6, with respect to an EFTA State consistent with its List of Reservations under Annex X and, with respect to Hong Kong, China consistent with its First List of Reservations under Annex X; and
(b) measures that a Party may adopt, maintain or modify, with respect to an EFTA State consistent with its List of Reservations under Annex X and, with respect to Hong Kong, China consistent with its Second List of Reservations under Annex X.
2. The commitments of a Party under Article 3.9 are set out, with respect to an EFTA State, in its List of Reservations under Annex X and, with respect to Hong Kong, China, in its List of Commitments on Movement of Natural Persons under Annex X.
Article 3.18. Modification of Lists of Reservations and Commitments
A Party that intends to modify its reservations or commitments under its Appendix to Annex X shall follow the procedures, which shall be adopted by the Joint Committee within 12 months following the entry into force of this Agreement.
Article 3.19. Review
With the objective of further liberalising trade in services between them, the Parties shall review at least every two years, or more frequently if so agreed, their respective Lists under Annex X, taking into account in particular any autonomous liberalisation and on-going work under the auspices of the WTO. The first such review shall take place no later than three years after the entry into force of this Agreement.
Article 3.20. Relationship to Investment and Taxation Agreements
This Chapter shall be without prejudice to the interpretation or application of other international agreements relating to investment and taxation to which Hong Kong, China and one or several EFTA States are parties. (12)
Article 3.21. Annexes
The following Annexes form an integral part of this Chapter:
(a) Annex VII with Respect to Disciplines on Domestic Regulation; (13)
(b) Annex VII with Respect to Financial Services;
(c) Annex IX with Respect to Telecommunications Services; And
(d) Annex X containing the Lists of Reservations and Commitments.
Chapter 4. INVESTMENT
Article 4.1. Scope and Coverage (14)
1. This Chapter shall apply to commercial presence in sectors other than services sectors covered by Chapter 3. (15)
2. This Chapter shall be without prejudice to the interpretation or application of other international agreements relating to investment and taxation to which one or several EFTA States and Hong Kong, China are parties. (16)
Article 4.2. Definitions
For the purposes of this Chapter,
(a) “juridical person” means any legal entity duly constituted or otherwise organised under domestic law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(b) “juridical person of another Party” means a juridical person constituted or otherwise organised under the domestic law of that Party and engaged in substantive business operations in any Party;
(c) “natural person” means:
(i) with respect to an EFTA State, a person who has the nationality of that EFTA State or is a permanent resident of that EFTA State in accordance with its domestic law;
(ii) with respect to Hong Kong, China, a person who is a permanent resident of the Hong Kong Special Administrative Region of the People’s Republic of China in accordance with its domestic law;
(d) “commercial presence” means any type of business establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person, or
(ii) the creation or maintenance of a branch or a representative office, in another Party for the purpose of performing an economic activity.
Article 4.3. National Treatment
Each Party shall accord to juridical and natural persons of another Party and to the commercial presence of such persons, treatment no less favourable than that it accords, in like situations, to its own juridical and natural persons and to the commercial presence of such persons.
Article 4.4. Reservations
1. Article 4.3 shall not apply to:
(a) Any Reservation of a Party as Set Out In Annex XI;
(b) an amendment to a reservation referred to in subparagraph (a), to the extent that the amendment does not decrease the conformity of the reservation with Article 4.3; and
(c) any new reservation adopted by a Party, and incorporated into Annex XI which does not affect the overall level of commitments of that Party under this Agreement;
to the extent that such reservations are inconsistent with Article 4.3.
2. As part of the reviews provided for in Article 4.10, the Parties undertake to review at least every three years the status of the reservations set out in Annex XI with a view to reducing or removing the reservations.
3. A Party may, at any time, either upon request of another Party or unilaterally, remove, in whole or in part, reservations set out in Annex XI by written notification to the other Parties.
4. A Party may, at any time, incorporate a new reservation into Annex XI in accordance with subparagraph 1 (c) by written notification to the other Parties. On receiving such written notification, another Party may request consultations regarding the reservation. At the written request of a Party, the Party incorporating the new reservation shall enter into consultations with the requesting Party within 30 days after the date of receipt of the request. (17)
Article 4.5. Key Personnel
1. Each Party shall, subject to its domestic law, endeavour to grant natural persons of another Party who have established or seek to establish commercial presence in that Party, and key personnel employed by natural or juridical persons of another Party, temporary entry and stay in that Party for the purpose of engaging in economic activities connected with commercial presence.
2. Each Party shall, subject to its domestic law, endeavour to permit natural or juridical persons of another Party, and their commercial presence, to employ, in connection with commercial presence, any key personnel of the natural or juridical person's choice regardless of nationality and citizenship provided that such key personnel has been permitted to enter, stay and work in that Party and that the employment concerned conforms to the terms, conditions and time limits of the permission granted to such key personnel.
3. The Parties shall, subject to their respective domestic law, endeavour to grant temporary entry and stay and provide any necessary confirming documentation to the spouse and minor children of a person who has been granted temporary entry, stay and authorisation to work in accordance with paragraphs 1 and 2. The spouse and minor children shall be admitted for the period of the stay of that person.
Article 4.6. Right to Regulate
1. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure consistent with this Chapter that is in the public interest, such as measures to meet health, safety or environmental concerns and reasonable measures for prudential purposes.
2. A Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion or retention in that Party of a commercial presence of persons of another Party or a non-party.
Article 4.7. Payments and Transfers
1. Except under the circumstances envisaged in Article 4.8, a Party shall not apply restrictions on current payments and capital movements relating to commercial presence activities in non-services sectors.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of the Agreement of the IMF, including the use of exchange actions which are in conformity with the Articles of the Agreement of the IMF, provided that a Party shall not impose restrictions on capital transactions inconsistent with its obligations under this Chapter.
Article 4.8. Restrictions to Safeguard the Balance of Payments
1. The Parties shall endeavour to avoid the imposition of restrictions to safeguard the balance of payments.
2. The rights and obligations of the Parties in respect of such restrictions shall be governed by paragraphs 1 to 3 of Article XII of the GATS, which are hereby incorporated into and made part of this Chapter, mutatis mutandis.
3. A Party adopting or maintaining such restrictions shall promptly notify the Joint Committee.
Article 4.9. Exceptions
The rights and obligations of the Parties in respect of general exceptions and security exceptions shall be governed by Article XIV and paragraph 1 of Article XIV bis of the GATS, which are hereby incorporated into and made part of this Chapter, mutatis mutandis.
Article 4.10. Review
This Chapter shall be subject to periodic review within the framework of the Joint Committee regarding the possibility of further developing the Parties' commitments.
Chapter 5. PROTECTION OF INTELLECTUAL PROPERTY
Article 5. Protection of Intellectual Property
1. The Parties shall grant and ensure adequate, effective and non-discriminatory protection of intellectual property rights, and provide for measures for the enforcement of such rights against infringement thereof, counterfeiting and piracy, in accordance with the provisions of this Article, Annex XII and the international agreements referred to therein.
2. With regard to the protection of intellectual property, the Parties shall accord to each other's nationals (18) treatment no less favourable than that they accord to their own nationals. Exemptions from this obligation must be in accordance with the substantive provisions of Articles 3 and 5 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the "TRIPS Agreement").
3. With regard to the protection of intellectual property, the Parties shall accord to each other's nationals treatment no less favourable than that they accord to nationals of any non-party. Exemptions from this obligation must be in accordance with the substantive provisions of the TRIPS Agreement, in particular Articles 4 and 5 thereof.
4. The Parties agree, upon request of any Party to the Joint Committee, to review the provisions contained in this Article and Annex XII, with a view to further developing adequate levels of protection and implementation.
Chapter 6. GOVERNMENT PROCUREMENT
Article 6. Government Procurement
1. The rights and obligations of the Parties in respect of government procurement shall be governed by the provisions on government procurement in the WTO agreements applicable between Hong Kong, China and the respective EFTA State, which are hereby incorporated into and made part of this Chapter, mutatis mutandis.
2. The Parties shall co-operate in the Joint Committee, with the aim of improving their suppliers' access to each other's government procurement markets and enhancing transparency in government procurement.
Chapter 7. COMPETITION
Article 7.1. Rules of Competition Concerning Undertakings
1. The Parties recognise that certain practices or conducts of undertakings which have as their object or effect the prevention, restriction or distortion of competition are incompatible with this Agreement in so far as they may affect trade between the Parties.
2. Paragraph 1 shall not be construed as to create any direct obligations for undertakings.
3. The Parties involved shall co-operate and consult in their dealings with anti- competitive practices as outlined in paragraph 1.
4. In the event that co-operation and consultation in accordance with paragraph 3 does not lead to any satisfactory result, the affected Party may request consultations in the Joint Committee with a view to reaching a mutually acceptable solution. The Parties involved shall give the Joint Committee all the assistance required to examine the case.
5. No Party may have recourse to dispute settlement procedures under this Agreement in respect of any issue arising from or relating to this Chapter.
Article 7.2. Review
The Parties agree to review this Chapter in the Joint Committee with a view to elaborating further steps in light of future developments. The first review shall take place within three years after the entry into force of this Agreement.
Chapter 8. TRADE AND ENVIRONMENT
Article 8.1. Context and Objectives
1. The Parties recall the Stockholm Declaration on the Human Environment of 1972, the Rio Declaration on Environment and Development of 1992, Agenda 21 on Environment and Development of 1992, and the Johannesburg Plan of Implementation on Sustainable Development of 2002.
2. The Parties recognise that economic development, social development and environmental protection are interdependent and mutually supportive components of sustainable development. They underline that closer economic partnership can play an important role in promoting sustainable development.
3. The Parties reaffirm their commitment to promote the development of international and bilateral trade in such a way as to contribute to the objective of sustainable development and to integrate and reflect this objective in the Parties' trade relationship.
Article 8.2. Scope
Except as otherwise provided in this Chapter, this Chapter applies to measures adopted or maintained by the Parties affecting trade-related and investment-related aspects of environmental issues.
Article 8.3. Right to Regulate and Levels of Protection
1. Recognising the right of each Party to establish its own level of environmental protection and to adopt or modify accordingly its domestic law and policies in a manner consistent with this Agreement, each Party will seek to ensure that its domestic law, policies and practices provide for and encourage high levels of environmental protection, consistent with standards, principles and agreements referred to in Article 8.5, and will strive to further improve the level of protection provided for in domestic law and policies.
2. The Parties recognise the importance, when preparing and implementing measures related to environmental protection that affect trade and investment between them, of taking account of relevant scientific, technical and other information, and relevant international standards, guidelines and recommendations.
Article 8.4. Upholding Levels of Protection In the Application and Enforcement of Laws, Regulations or Standards
1. The Parties will faithfully enforce their environmental laws, regulations and standards.