3. This Chapter shall not apply to subsidies granted to compensate the damage caused by natural disasters or other exceptional occurrences.
Note: For greater certainty, the term “other exceptional occurrences” does not exclude pandemic.
4. Articles 14.4 and 14.5 shall not apply to subsidies, the total amounts or the budgets for which are less than 450,000 special drawing rights (hereinafter referred to as “SDR”) per recipient or sector for a period of three consecutive years.
5. This Chapter shall not apply to subsidies related to trade in goods covered by Annex 1 to the Agreement on Agriculture, and subsidies related to trade in fish, fish products and forestry products.
6. Article 14.6 shall not apply to subsidies granted temporarily to respond to a national or global economic emergency. Such subsidies shall be targeted, economical, effective and efficient in order to remedy the identified temporary national or global economic emergency
7. This Chapter shall not apply to subsidies related to audio-visual services.
8. Article 14.6 shall not apply to subsidies granted by local governments of each Party. In fulfilling its obligations under this Chapter, each Party shall take such reasonable measures as may be available to it to ensure the observance of the provisions of this Chapter by local governments of that Party.
9. In the event of any inconsistency between this Chapter and Chapter 7, Chapter 7 shall prevail to the extent of the inconsistency.
Article 14.4. Notification
1. Each Party shall notify the other Party in the English language of the legal basis, form, amount or budget for subsidies and, where possible, the name of the recipient of any specific subsidy granted or maintained by the former Party, every two years from the date of entry into force of this Agreement.
Note: For the purposes of this paragraph, in the case of subsidies which have previously been notified, the information provided in updated notifications may be limited to indicating any modifications, or the absence thereof, from the previous notification.
2. If either Party makes publicly available on an official website the information specified in paragraph 1, the notification pursuant to that paragraph shall be deemed to have been made. If either Party notifies subsidies pursuant to paragraph 2 of Article 25 of the Agreement on Subsidies and Countervailing Measures, the Party shall be considered to have met the requirement of paragraph 1 with respect to such subsidies.
3. With regard to subsidies related to services, this Article shall only apply to the following sectors:
(a) architectural and engineering services;
(b) banking services;
(c) computer services;
(d) construction services;
(e) energy services;
(f) environmental services;
(g) express delivery services;
(h) insurance services;
(i) telecommunications services; and
(j) transport services.
Article 14.5. Consultations
1. In the event that either Party considers that a subsidy of the other Party has or could have a significant negative effect on trade or investment between the Parties, the former Party may submit a request for consultations in writing. The Parties shall enter into consultations with a view to resolving the matter, provided that the request includes an explanation of how the subsidy has or could have a significant negative effect on trade or investment between the Parties.
2. During the consultations referred to in paragraph 1, the Party receiving the request for consultations shall consider providing relevant information on the subsidy, on request of the other Party, such as:
(a) the legal basis of the subsidy and policy objective or purpose of the subsidy;
(b) the form of the subsidy such as a grant, loan, guarantee, repayable advance, equity injection or tax concession;
(c) dates and duration of the subsidy and any other time limits attached to it, including the date of inception of provision of the subsidy;
(d) eligibility requirements of the subsidy;
(e) the total amount or the annual amount budgeted for the subsidy and the possibility of limiting the subsidy;
(f) where possible, the recipient of the subsidy; and
(g) any other information, including statistical data, permitting an assessment of the effects of the subsidy on trade or investment between the Parties.
3. To facilitate the consultations referred to in paragraph 1, the Party receiving the request for consultations shall provide the other Party with relevant information on the subsidy in question in writing no later than 90 days after the date of receipt of the request for consultations.
4. In the event that any information specified in paragraph 2 is not provided by the Party receiving the request for consultations, that Party shall provide a written response which includes the explanation for the absence of such information no later than 90 days after the date of receipt of the request for consultations.
Article 14.6. Prohibited Subsidies
The following subsidies of a Party that have or could have a significant negative effect on trade or investment between the Parties shall be prohibited:
(a) legal or other arrangements whereby a government or a public body is responsible for guaranteeing debts or liabilities of an enterprise, without any limitation as to the amount and duration of such guarantee; and
(b) subsidies for restructuring an ailing or insolvent enterprise without the enterprise having prepared a credible restructuring plan. Such a restructuring plan shall be prepared within a reasonable period of time after such enterprise have received temporary liquidity support. The restructuring plan shall be based on realistic assumptions with a view to ensuring the return to long-term viability of the ailing or insolvent enterprise within a reasonable period of time. The enterprise itself or its owners shall contribute significant funds or assets to the costs of restructuring.
Note: For greater certainty, nothing in this Article shall prevent either Party from providing subsidies by way of temporary liquidity support in the form of loan guarantees or loans limited to the amount needed to keep the enterprise in business for the time necessary to prepare a restructuring or liquidation plan.
Article 14.7. Use of Subsidies
Each Party shall endeavor to ensure that enterprises use subsidies only for the specific purpose for which the subsidies were granted.
Chapter 15. State-Owned Enterprises and Designated Monopolies
Article 15.1. Objectives
The Parties recognize the importance of ensuring that state-owned enterprises and designated monopolies do not adopt or maintain anti-competitive practices affecting trade between the Parties, insofar as the application of the provision of this Chapter does not obstruct the performance, in law or in fact, of the particular public tasks or public service obligations assigned to them.
Article 15.2. Definitions
For the purposes of this Chapter:
(a) the term “Arrangement” means the Arrangement on Officially Supported Export Credits, developed within the framework of the Organisation for Economic Co-operation and Development (hereinafter referred to as “OECD”) or a successor undertaking, whether developed within or outside of the OECD framework, that has been adopted by at least 12 original WTO Members that were Participants to the Arrangement as of January 1, 1979;
(b) the term “commercial activities” means activities which an enterprise undertakes with an orientation towards profit-making and which result in the production of a good or the supply of a service, which will be sold to a consumer in the relevant market in quantities and at prices determined by the enterprise;
Note: For greater certainty, activities undertaken by an enterprise which operates on a non-profit basis or a cost-recovery basis are not activities undertaken with an orientation towards profit-making.
(c) the term “commercial considerations” means considerations of price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale, or other factors that would normally be taken into account in the commercial decisions of a privately-owned enterprise operating in the relevant business or industry;
(d) the term “designate a monopoly” means to establish or authorize a monopoly, or to expand the scope of a monopoly to cover an additional good or service;
(e) the term “designated monopoly” means an entity, including a consortium or a government agency, that in a relevant market in the Area of a Party is designated as the sole supplier or purchaser of a good or service, but does not include an entity that has been granted an exclusive intellectual property right solely by reason of such grant;
(f) the term “public service mandate” means a government mandate pursuant to which a state-owned enterprise makes available a service, directly or indirectly, to the general public in its Area;
Note: For greater certainty, a service to the general public includes:
(a) the distribution of goods; and
(b) the supply of general infrastructure services that includes, but not limited to, public utility services such as transport, electricity, gas and water supply.
(g) the term “service supplied in the exercise of governmental authority” means a service supplied in the exercise of governmental authority as defined in the GATS and, if applicable, in the Annex on Financial Services to the GATS; and
(h) the term “state-owned enterprise” means an enterprise that is principally engaged in commercial activities in which a Party:
(i) directly owns more than 50 percent of the share capital;
(ii) controls, through ownership interests, the exercise of more than 50 percent of the voting rights;
(iii) holds the power to appoint a majority of members of the board of directors or any other equivalent management body; or
(iv) has the power to legally direct the actions of the enterprise or otherwise exercises an equivalent degree of control in accordance with its laws and regulations.
Article 15.3. Scope
1. This Chapter shall apply to state-owned enterprises and designated monopolies, engaged in commercial activities. Where they engage both in commercial and in non-commercial activities, only the commercial activities shall be covered by this Chapter.
2. This Chapter shall apply to state-owned enterprises and designated monopolies at all levels of government.
3. This Chapter shall not apply to government procurement.
4. This Chapter shall not apply to any service supplied in the exercise of governmental authority.
5. This Chapter shall not apply to a state-owned enterprise or a designated monopoly, if in any one of the three previous consecutive fiscal years the annual revenue derived from the commercial activities of the enterprise or monopoly concerned was less than 200 million SDR.
6. Article 15.6 shall not apply with respect to the supply of financial services by astate-owned enterprise pursuant to a government mandate, if that supply of financialservices:
(a) supports exports or imports, provided that those financial services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favorable than those that could be obtained for comparable financial services in the commercial market;
(b) supports private investment outside the Area of the Party, provided that those financial services are:
(i) not intended to displace commercial financing; or
(ii) offered on terms no more favorable than those that could be obtained for comparable financial services in the commercial market; or
(c) is offered on terms consistent with the Arrangement, provided that it falls within the scope of the Arrangement.
7. Article 15.6 shall not apply to the sectors set out in paragraph 2 of Article 7.1.
Article 15.4. Relation to the WTO Agreement
The Parties affirm their rights and obligations under paragraphs 1 through 3 of Article XVII of the GATT 1994, the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994, as well as paragraphs 1, 2 and 5 of Article VIII of the GATS.
Article 15.5. General Provisions
1. Without prejudice to the rights and obligations of each Party under this Chapter, nothing in this Chapter shall prevent a Party from establishing or maintaining a state-owned enterprise or designating a monopoly.
2. Neither Party shall require or encourage a state-owned enterprise or a designated monopoly to act in a manner inconsistent with this Chapter.
Article 15.6. Non-Discriminatory Treatment and Commercial Considerations
1. Each Party shall ensure that each of its state-owned enterprises and designated monopolies, when engaging in commercial activities:
(a) acts in accordance with commercial considerations in its purchase or sale of a good or service, except to fulfill any terms of its public service mandate that are not inconsistent with subparagraph (b) or (c);
(b) in its purchase of a good or service:
(i) accords to a good or service supplied by an enterprise of the other Party treatment no less favorable than that it accords to a like good or a like service supplied by its own enterprises or enterprises of a non-Party; and
(ii) accords to a good or service supplied by an enterprise that is an investment of an investor of the other Party in its Area treatment no less favorable than that it accords to a like good or a like service supplied by enterprises in the relevant market in its Area that are investments of its own investors or investors of a non-Party; and
(c) in its sale of a good or service:
(i) accords to an enterprise of the other Party treatment no less favorable than that it accords to its own enterprises or enterprises of a non-Party; and
(ii) accords to an enterprise that is an investment of an investor of the other Party in its Area treatment no less favorable than that it accords to enterprises in the relevant market in its Area that are investments of its own investors or investors of a non-Party.
Note: This paragraph shall not apply with respect to the purchase or sale of shares, stock or other forms of equity by a state-owned enterprise or a designated monopoly as a means of its equity participation in another enterprise.
2. Each Party shall ensure that each of its designated monopolies does not use its monopoly position to engage in, either directly or indirectly, including through its dealings with its parent, subsidiaries or other entities the Party or the designated monopoly owns, anticompetitive practices in a non-monopolized market in its Area that negatively affect trade or investment between the Parties.
Note: For greater certainty, a Party may comply with the requirements of this paragraph through the enforcement or implementation of its generally applicable competition law, its economic regulatory laws and regulations or other appropriate measures.
3. Subparagraphs 1(b) and (c) shall not preclude a state-owned enterprise or a designated monopoly from:
(a) purchasing or selling goods or services on different terms or conditions, including those relating to price, provided that such different terms or conditions are made in accordance with commercial considerations; or
(b) refusing to purchase or sell goods or services, provided that such refusal is made in accordance with commercial considerations.
Article 15.7. Regulatory Framework
1. The Parties respect and shall endeavor to follow relevant international standards including, inter alia, the OECD Guidelines on Corporate Governance of State-Owned Enterprises.
2. Each Party shall endeavor to ensure that any regulatory body or any other body exercising a regulatory function that the Party establishes or maintains is independent from, and not accountable to, any of the enterprises regulated by that body, and acts impartially in like circumstances with respect to all enterprises regulated by that body, including state-owned enterprises and designated monopolies.
Note: For greater certainty, the impartiality with which the body exercises its regulatory functions is to be assessed by reference to a general pattern or practice of that body.
3. Each Party shall apply its laws and regulations to state-owned enterprises and designated monopolies in a consistent and non-discriminatory manner.
Article 15.8. Information Exchange
1. Each Party shall provide to the other Party, or otherwise make publicly available on an official website, a list of its state-owned enterprises, at the central level of government, no later than six months after the date of entry into force of this Agreement, and thereafter shall update the list annually.
Note: For the purposes of this paragraph, the term “the central level of government” means:
(a) for Bangladesh, the Government of Bangladesh; and
(b) for Japan, the Government of Japan.
2. Each Party shall promptly notify the other Party of, or otherwise make publicly available on an official website, the designation of a monopoly and the terms of its designation.
3. A Party which has a reason to believe that its interests under this Chapter are being adversely affected by the commercial activities of a state-owned enterprise or a designated monopoly (hereinafter referred to in this Article as “the entity”) of the other Party may request the other Party in writing to provide information on the commercial activities of the entity related to the carrying out of the provisions of this Chapter in accordance with paragraph 4.
4. The requested Party shall provide the following information, provided that the request includes an explanation of how the activities of the entity may be affecting the interests of the requesting Party under this Chapter and indicates which of the following information shall be provided:
(a) the organizational structure, and the composition of the board of directors or any other equivalent management body, of the entity;
(b) the percentage of shares that the requested Party, its state-owned enterprises or its designated monopolies cumulatively own, and the percentage of voting rights that they cumulatively hold, in the entity;
(c) a description of any special shares or special voting or other rights that the requested Party, its state-owned enterprises or its designated monopolies hold, where such rights are different from those attached to the general common shares of the entity;
(d) a description of the government departments or public bodies which regulate the entity, a description of the reporting requirements imposed on the entity by those departments or public bodies, and the rights and practices, where possible, of those departments or public bodies with respect to the appointment, dismissal or remuneration of senior executives and members of the board of directors or any other equivalent management body of the entity;
(e) annual revenue and total assets of the entity over the most recent three-year period for which information is available;
(f) any exemptions, immunities and related measures from which the entity benefits under the laws and regulations of the requested Party; and
(g) any additional information regarding the entity that is publicly available, including annual financial reports, third party audits and financial support by the government.
5. When a Party provides written information pursuant to a request under this Article and informs the requesting Party that it considers the information to be confidential, the requesting Party shall not disclose the information without the prior consent of the Party providing the information.
6. The requested Party shall endeavor to provide the information requested pursuant to paragraph 4 no later than two months after the date of that request.
Article 15.9. Technical Cooperation
The Parties shall, where appropriate and subject to available resources, engage in mutually agreed technical cooperation activities, including:
(a) exchanging information regarding the Parties’ experiences in improving the corporate governance and operations of their state-owned enterprises;
(b) sharing best practices on policy approaches to ensure a level playing field between state-owned and privately-owned enterprises, including policies related to competitive neutrality; and
(c) organizing international seminars, workshops, training or any other appropriate forum for sharing technical information and expertise related to the corporate governance and operations of state-owned enterprises.
Chapter 16. Improvement of the Business Environment
Article 16.1. Basic Principles
1. Each Party shall, in accordance with its laws and regulations, take appropriate measures to further improve the business environment for the juridical persons of the other Party conducting business activities in the Area of the former Party.
2. The Parties shall, in accordance with their respective laws and regulations, promote cooperation to further improve the business environment in the respective Parties.
Article 16.2. Sub-Committee on Improvement of the Business Environment
1. For the purpose of the effective implementation and operation of this Chapter, the Parties hereby establish a Sub-Committee on Improvement of the Business Environment (hereinafter referred to in this Chapter as “the Sub-Committee”).
2. The functions of the Sub-Committee shall be:
(a) reviewing findings reported by a Liaison Office on Improvement of the Business Environment (hereinafter referred to in this Chapter as “the Liaison Office”) to be designated by each Party in accordance with Article 16.3;
(b) discussing, and seeking ways to resolve in a timely manner, issues related to the business environment on its own initiative or based on the findings reported by the Liaison Office;
(c) reporting its findings and making recommendations, including those on measures that should be taken by the Parties, to the Parties;
(d) reviewing, where appropriate, the measures taken by the Parties related to such recommendations referred to in subparagraph (c);
(e) making available to the public, in a mutually determined manner, the recommendations referred to in subparagraph (c) and the results of the review referred to in subparagraph (d);
(f) cooperating, in an appropriate manner, with other Sub-Committees established under this Agreement, with a view to avoiding unnecessary duplication of works. The forms of such cooperation may include:
(i) informing the results of its consideration to such other Sub-Committees;
(ii) seeking opinions from such other Sub-Committees;
(iii) inviting to the Sub-Committee the members of such other Sub-Committees; and
(iv) if appropriate, transferring the relevant issues to such other Sub-Committees;
(g) reporting in a timely manner the findings and recommendations referred to in subparagraph (c) to the Joint Committee; and
(h) carrying out other functions as may be delegated by the Joint Committee.
3. The issues to be discussed by the Sub-Committee may include:
(a) improvement of transparency in business related rules, regulations, administrative procedures and administrative decisions;
(b) measures to simplify and expedite administrative procedures;
(c) ways to facilitate business activities in the Parties; and
(d) other issues related to the business environment.
4. The Sub-Committee shall be composed of representatives of the Governments of the Parties including officials of relevant Ministries or Agencies in charge of the issues to be discussed. The Sub-Committee may invite representatives of relevant entities other than the Governments of the Parties with the necessary expertise relevant to the issues to be discussed.