1. Nothing in this Agreement shall apply to measures in respect of cultural industries. "Cultural industries" means natural persons or enterprises engaged in any of the following activities:
(a) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but does not include the sole activity of printing or typesetting any of the foregoing;
(b) the production, distribution, sale or exhibition of film or video recordings;
(c) the production, distribution, sale or exhibition of audio or video music recordings;
(d) the publication, distribution, sale or exhibition of music in print or machine readable form; or
(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.
2. Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures, including environmental measures:
(a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) relating to the conservation of living or non-living exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.
3. Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining reasonable measures for prudential reasons, such as:
(a) the protection of depositors, financial market participants and investors 9, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;
(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
(c) ensuring the integrity and stability of a Contracting Party's financial system.
4. Nothing in this Agreement shall apply to non-discriminatory measures of general application taken by any public entity 10 in pursuit of monetary and related credit policies or exchange rate policies. This paragraph shall not affect a Contracting Party's obligations under Article 12.
5. Nothing in this Agreement shall be construed:
(a) to require a Contracting Party to furnish or allow access to any information if the Contracting Party determines that the disclosure of that information is contrary to its essential security interests;
(b) to prevent a Contracting Party from taking any actions that it considers necessary for the protection of its essential security interests:
(i) relating to the traffic in arms, ammunition and implements of war and to such traffic and transactions in other goods, materials, services and technology undertaken directly or indirectly for the purpose of supplying a military or other security establishment,
(ii) in time of war or other emergency in international relations, or
(iii) relating to the implementation of national policies or international agreements respecting the non-proliferation of nuclear weapons or other nuclear explosive devices; or
(c) to prevent a Contracting Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
(a) Nothing in this Agreement shall be construed to require a Contracting Party to furnish or allow access to information the disclosure of which would impede law enforcement or would be contrary to the Contracting Party's law protecting Cabinet confidences, personal privacy or the confidentiality of the financial affairs and accounts of individual customers of financial institutions.
(b) Nothing in this Agreement shall be construed to require, during the course of any dispute settlement procedure under this Agreement, a Contracting Party to furnish or allow access to information protected under its competition laws, or a competition authority of a Contracting Party to furnish or allow access to any other information that is privileged or otherwise protected from disclosure.
(c) In subparagraph (b),
"competition authority" means the following until otherwise notified by a Contracting Party:
(i) for Canada, the Commissioner of Competition; and
(ii) for China, the authority for enforcement of anti-monopoly law under the State Council.
The Contracting Parties shall notify each other promptly by diplomatic note of the successors to the competition authorities identified in sub-paragraphs (i) and (ii).
"information protected under its competition laws" means:
(i) for Canada, information within the scope of section 29 of the Competition Act, R.S. 1985, c.34, or any successor provision; and
(ii) for China, information protected from disclosure under the relevant provisions of the Anti-Monopoly Law, the Pricing Law and the Law Against Unfair Competition, or any successor provisions.
7. Any measure adopted by a Contracting Party in conformity with a decision adopted by the World Trade Organization pursuant to Article IX:3 of the WTO Agreement shall be deemed to be also in conformity with this Agreement. An investor purporting to act pursuant to Article 20 of this Agreement may not claim that such a conforming measure is in breach of this Agreement.
Article 34. Exclusions
Article 15 and Part C of this Agreement do not apply to the decisions set out in Annex D.34.
Article 35. Entry Into Force and Termination
1. The Contracting Parties shall notify each other through diplomatic channels that they have completed the internal legal procedures for the entry into force of this Agreement. This Agreement shall enter into force on the first day of the following month after the second notification is received, and shall remain in force for a period of at least fifteen years.
2. After the expiration of the initial fifteen-year period, this Agreement shall continue to be in force. Either Contracting Party may at any time thereafter terminate this Agreement. The termination will be effective one year after notice of termination has been received by the other Contracting Party.
3. With respect to investments made prior to the date of termination of this Agreement, Articles 1 to 34, as well as paragraph 4 of this Article, shall continue to be effective for an additional fifteen-year period from the date of termination.
4. The Annexes and footnotes to this Agreement constitute integral parts
Of this Agreement.
Conclusion
IN WITNESS WHEREOF, the duly authorized representatives of their respective Governments have signed this Agreement.
DONE in duplicate at_, this_day of
_2012, in the English, French and Chinese languages,
All texts being equally authentic.
FOR THE GOVERNMENT OF CANADA
FOR THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA
Annex B.8 Exceptions
1. Canada reserves the right to adopt or maintain any measure that does not conform to the obligations in Articles 5, 6 or 7, provided that in the Schedule of Canada, including its headnote, in Annex II to the Free Trade Agreement between Canada and the Republic of Peru, as done at Lima on 29 May 2008, Canada reserved the right to adopt or maintain that measure in respect of investors or investments of investors of Peru. For greater certainty, this right is reserved even if the Canada-Peru Free Trade Agreement is no longer in force.
2. China reserves the right to adopt or maintain any measure that does not conform to the obligations in Articles 5, 6 or 7, provided that in Chapter 10 of the Free Trade Agreement between China and the Republic of Peru, as done at Beijing on 28 April 2008, China reserved the right to adopt or maintain that measure in respect of investors or investments of investors of Peru. For greater certainty, this right is reserved even if the China-Peru Free Trade Agreement is no longer in force.
Annex B.10
Expropriation
The Contracting Parties confirm their shared understanding that:
1. Indirect expropriation results from a measure or series of measures of a Contracting Party that has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.
2. The determination of whether a measure or series of measures of a Contracting Party constitutes an indirect expropriation requires a case-bycase, fact-based inquiry that considers, among other factors:
(a) the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures of a Contracting Party has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred;
(b) the extent to which the measure or series of measures interferes with distinct, reasonable, investment-backed expectations; and
(c) the character of the measure or series of measures.
3. Except in rare circumstances, such as if a measure or series of measures is so severe in light of its purpose that it cannot be reasonably viewed as having been adopted and applied in good faith, a non-discriminatory measure or series of measures of a Contracting Party that is designed and applied to protect the legitimate public objectives for the well-being of citizens, such as health, safety and the environment, does not constitute indirect expropriation.
Annex B.12
Transfers and Exchange Formalities
With regards to China:
1. The obligations in Article 12(1) shall apply provided that the transfer complies with the relevant formalities stipulated by the present laws and regulations of China relating to exchange control. These formalities:
(a) shall not be used as a means of avoiding China's commitments or obligations under this Agreement; and
(b) shall not be made more restrictive than the formalities required at the time when original investment was made.
2. With respect to these formalities, China shall accord to investors of Canada or covered investments of Canadian investors treatment no less favourable than the treatment that China accords to third country investors or investments of such investors. To the extent that these formalities are no longer required according to the relevant laws of China, Article 12(1) shall apply without restrictions.
3. A transfer shall be deemed to have been made 'without delay' within the meaning of Article 12(1) if effected within such period as is normally required for the completion of transfer formalities. The said period shall commence on the day on which the relevant request has been submitted to the relevant foreign exchange administration with full and authentic documentation and information and may not exceed two months.
Annex C.21
Conditions Precedent to Submission of a Claim to Arbitration: Party-Specific Requirements
Where the claim concerns a measure of China:
1. Upon receipt of the Notice of Intent or at any time prior, China shall require that an investor make use of the domestic administrative reconsideration procedure. If the investor considers that the dispute still exists four months 11 after the investor has applied for the administrative reconsideration, or where no such remedies are available, the investor may submit its claim to arbitration.
2. An investor who has initiated proceedings before any court of China with respect to the measure of China alleged to be a breach of an obligation under Part B may only submit a claim to arbitration under Article 20 if the investor has withdrawn the case from the national court before judgment has been made on the dispute. This requirement does not apply to the domestic administrative reconsideration procedure referred to in paragraph 1.
Where the claim concerns a measure of Canada:
3. The investor and, where the claim is for loss or damage to an interest in an enterprise of Canada that is a juridical person that the investor owns or controls directly or indirectly, the enterprise shall waive their right to initiate or continue before any administrative tribunal or court under the law of any Contracting Party, or other dispute settlement procedures, any proceedings with respect to the measure of Canada that is alleged to be a breach referred to in Article 20, except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the law of Canada.
4. The waiver required under paragraph 3 shall be delivered to Canada and shall be included in the submission of a claim to arbitration. A waiver from the enterprise shall not be required if Canada has deprived a disputing investor of control of an enterprise.
Annex C.29
Submissions by Non-Disputing Parties
1. The application for leave to file a non-disputing party submission shall:
(a) be made in writing, dated and signed by the person filing the application, and include the address and other contact details of the applicant;
(b) be no longer than 5 typed pages;
(c) describe the applicant, including, where relevant, its
Membership and legal status (e.g., company, trade association or other non-governmental organization), its general objectives, the
Nature of its activities, and any parent organization (including any organization that directly or indirectly controls the applicant); o (d) disclose whether the applicant has any affiliation, direct or indirect, with any disputing party; o (e) identify any government, person or organization that has provided any financial or other assistance in preparing the submission;
(f) specify the nature of the interest that the applicant has in the arbitration, including an explanation of how the submission would assist the Tribunal in the determination of a factual or legal issue related to the proceedings by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties;
(g) identify the specific issues of fact or law in the arbitration that the applicant has addressed in its written submission; and o (h) be made in a language of the arbitration.
2. The submission filed by a non-disputing party shall:
(a) be dated and signed by the person filing the submission; o (b) be concise, and in no case longer than 20 typed pages, including any appendices;
(c) set out a precise statement supporting the applicant's position on the issues; and
(d) only address matters within the scope of the dispute.
Annex D.34 Exclusions
1. A decision by Canada following a review under the Investment Canada Act, an Act respecting investment in Canada, with respect to whether or not to:
(a) initially approve an investment 12 that is subject to review; or o (b) permit an investment that is subject to national security review;
Shall not be subject to the dispute settlement provisions under Article 15 and Part C of this Agreement.
2. A decision by China following a review under the Laws, Regulations and
Rules relating to the regulation of foreign investment, with respect to whether or not to:
(a) initially approve an investment that is subject to review; or o (b) permit an investment that is subject to national security review 13;
Shall not be subject to the dispute settlement provisions under Article 15 and Part C of this Agreement.
Endnotes
1 For greater certainty, the elements "seeks to make" and "is making" in the definition of an investor are only applicable with respect to Article 5.
2 For Canada, "provincial government" includes a territorial government.
3 For greater certainty, the treatment accorded by a Contracting Party under this Article means, with respect to a provincial government, treatment accorded, in like circumstances, by that provincial government to investors, and to investments of investors, of a non-Contracting Party.
4 For greater certainty, the treatment accorded by a Contracting Party under this Article means, with respect to a provincial government, treatment accorded, in like circumstances, by that provincial government to investors, and to investments of investors, of the Contracting Party of which it forms a part.
5 The exception described in this paragraph applies without prejudice to the rights reserved by Canada and China in paragraph 3.
6 Annex B.10 shall apply to this paragraph.
7 Annex B.12 shall apply to this Article.
8 "Current transactions" has the meaning set out in Article XXX(d) of the Articles of Agreement of the International Monetary Fund.
9 It is understood that the term "investors" in this provision means investors in the financial markets of a Contracting Party.
10 "Public entity" means a central bank or monetary authority of a Contracting Party, or any financial institution owned or controlled by a Contracting Party.
11 The time limit of "four months" in this paragraph is based on the relevant provisions of the Law of the People's Republic of China on Administrative Reconsideration (adopted at the 9th Meeting of the Standing Committee of the Ninth National People's Congress on April 29, 1999) on the date of the entry into force of this Agreement. In the event that China revises the relevant provisions on the time limit for the administrative reconsideration stipulated in the Law of the People's Republic of China on Administrative Reconsideration in the future, China shall, in a timely manner, provide Canada with relevant information and may request consultations with Canada pursuant to Article 18 of this Agreement.
12 For Canada, the concept of "initially approve an investment" in paragraph 1 means all decisions made with respect to whether or not to permit an investment under the Investment Canada Act. 13
13 For China, "national security review" may include a review of various forms of investments for national security purposes. At the time of the entry into force of this Agreement, the specific legal document on China's national
Security review is the Circular of the General Office of the State Council on the Establishment of the Security Review System For The Merger and Acquisition of Domestic Enterprises by Foreign Investors, focusing on the review of mergers and acquisitions of domestic enterprises by foreign investors.