4. In the event of any inconsistency between this Chapter and another Chapter of this Agreement, the other Chapter shall prevail to the extent of the inconsistency, except that, where paragraphs 1 through 3 apply, this Chapter shall prevail over Chapter 9 (Trade in Services).
5. A requirement of a Party that a service supplier of the other Party post a bond or other form of financial security as a condition for the cross-border supply of a service does not of itself make this Chapter applicable to measures adopted or maintained by the Party relating to such cross-border supply of the service. This Chapter shall apply to measures adopted or maintained by the Party relating to the posted bond or financial security, to the extent that the bond or financial security is a covered investment.
Article 14.4. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than it accords, in like circumstances, (9) to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.
3. For greater certainty, the treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment accorded in like circumstances, by that regional level of government to investors, and to investments of investors, of the Party of which it forms a part.
Article 14.5. Most-Favoured Nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than it accords, in like circumstances, to investors and their investments of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than it accords, in like circumstances, to investments in its territory of investors of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.
3, For greater certainty, the treatment referred to in this Article shall not encompass international dispute resolution procedures or mechanisms, such as those included in Section B (Investor-State Dispute Settlement).
Article 14.6. Prohibition of Performance Requirements (10)(11) (12)
1, Neither Party shall, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party or of a non-Party in its territory, impose or enforce any requirement:
(a) to export a given level or percentage of goods or services;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced in its territory or to purchase goods from persons in its territory;
(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment;
(e) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to transfer a particular technology, a production process or other proprietary knowledge to a person in its territory; or
(g) to supply exclusively from the territory of the Party the goods that such investment produces or the services that it supplies to a specific region or to the world market.
2. Neither Party shall condition the receipt or continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party or of a non-Party in its territory, on compliance with any requirement:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to goods produced in its territory or to purchase goods from persons in its territory;
(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or
(d) to restrict sales of goods or services in its territory that such investment produces or supplies by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.
3. For greater certainty, nothing in paragraph 1 shall be construed to prevent a Party, in connection with the establishment, acquisition, expansion, management, conduct, operation, or sale or other disposition of an investment of an investor of a Party or of an non-Party in its territory, from imposing or enforcing a requirement or enforcing a commitment or undertaking to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development in its territory, provided that it is consistent with paragraph 1(f).
4. Paragraph 1(f) shall not apply:
(a) if a Party authorises use of an intellectual property right in accordance with the TRIPS Agreement, or to measures requiring the disclosure of proprietary information that fall within the scope of, and are consistent with, Article 39 of the TRIPS Agreement; or
(b) if the requirement is imposed or the commitment or undertaking enforced by a court, administrative tribunal, or competition authority to remedy a practice determined after judicial or administrative process to be anticompetitive under that Party’s competition laws and regulations.(13)
5. Nothing in paragraph 2 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment of an investor of a Party or of a non-Party in its territory, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities or carry out research and development in its territory.
6. 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, paragraphs 1(b), 1(c), 1(f), 2(a) and 2(b) shall not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:
(a) necessary to secure compliance with laws and regulations that are not inconsistent with this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) related to the conservation of living and non-living exhaustible natural resources.
7. Paragraphs 1(a), 1(b), 1(c), 2(a) and 2(b) shall not apply to qualification requirements for goods and services with respect to export promotion and foreign aid programs.
8. Paragraphs 2(a) and 2(b) shall not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
Article 14.7. Minimum Standard of Treatment
1. Each Party shall accord to covered investments fair and equitable treatment and full protection and security.
2. For greater certainty:
(a) “fair and equitable treatment” requires each Party to not deny justice in any legal or administrative proceedings;
(b) “full protection and security” requires each Party to take such measures as may be reasonably necessary to ensure the protection and security of the covered investment; and
(c) the concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required under the customary international law minimum standard of treatment, (14) and do not create additional substantive rights.
3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
4. For greater certainty, the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor’s expectations does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result.
Article 14.8. Treatment In Case of Armed Conflict or Civil Strife
1. Each Party shall accord to investors of the other Party, and to covered investments, with respect to measures it adopts or maintains relating to losses suffered by investments in its territory owing to armed conflict or civil strife, treatment no less favourable than that it accords, in like circumstances, to:
(a) its own investors and their investments; and
(b) investors of a non-Party and their investments. 2. Notwithstanding paragraph 1, if an investor of a Party, in the situations referred to in paragraph 1, suffers a loss in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or part thereof by the latter's forces or authorities; or
(b) destruction of its covered investment or part thereof by the latter's forces or authorities, which was not required by the necessity of the situation, the latter Party shall provide the investor with restitution, compensation or both, as appropriate, for such loss. (15)
Article 14.9. Transfers
1. Each Party shall allow all transfers relating to a covered investment to be
made freely and without delay into and out of its territory. Such transfers include:
2. (a) contributions to capital, including the initial contribution;
(b) profits, capital gains, dividends, royalties, technical assistance and technical and management fees, interest and other current income accruing
from any covered investment;
(c) proceeds from the total or partial sale or liquidation of any covered investment;
(d) payments made under a contract, including a loan agreement;
(e) payments made in accordance with Article 14.8 and Article 14.11;
(f) payments arising out of the settlement of a dispute by any means including adjudication, arbitration or the agreement of the parties to the dispute; and
(g) earnings and other remuneration of personnel engaged from abroad in connection with that investment.
2. Each Party shall allow such transfers relating to a covered investment to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer through the equitable, non-discriminatory and good faith application of its laws and regulations relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading, or dealing in securities, futures, options or derivatives;
(c) criminal or penal offences and the recovery of the proceeds of crime;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities;
(e) ensuring compliance with orders or judgments in judicial or administrative proceedings;
(f) taxation;
(g) social security, public retirement, or compulsory savings schemes; and
(h) severance entitlements of employees.
Article 14.10. Senior Management and Boards of Directors
1. Neither Party shall require that an enterprise of that Party that is a covered investment appoint to a senior management position a natural person of any particular nationality.
2. A Party may require that a majority or less than a majority of the board of directors, or any committee thereof of an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
Article 14.11. Expropriation and Compensation (16)
1. A Party shall not expropriate or nationalise a covered investment either directly or through measures equivalent to expropriation or nationalisation (expropriation), except:
(a) for a public purpose;
(b) in a non-discriminatory manner;
(c) on payment of prompt, adequate and effective compensation; and
(d) in accordance with due process of law.
2. The compensation referred to in paragraph 1(c) shall:
(a) be paid without delay;(17)
(b) be equivalent to the fair market value of the expropriated investment at the time when or immediately before the expropriation was publicly announced, or when the expropriation occurred, whichever is applicable;
(c) not reflect any change in value because the intended expropriation had become known earlier; and
(d) be effectively realisable and freely transferable between the territories of the Parties.
3. The compensation referred to in paragraph 1(c) shall include appropriate interest. The compensation, including any accrued interest, shall be payable either in the currency of the expropriating Party or, if requested by the investor, in a freely usable currency.
4. If an investor requests payment in a freely useable currency, the compensation referred to in paragraph 1(c), including any accrued interest, shall be converted into the currency of payment at the market rate of exchange prevailing on the date of payment.
5. This Article does not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement or to the revocation, limitation or creation of intellectual property rights, to the extent that the issuance, revocation, limitation or creation is consistent with the TRIPS Agreement. (18)
Article 14.12. Subrogation
1. If a Party or designated agency of a Party makes a payment to an investor of that Party under a guarantee, a contract of insurance or other form of indemnity it has granted on non-commercial risk in respect of a covered investment, the other Party in whose territory the covered investment was made shall recognise the subrogation or transfer of any rights the investor would have possessed under this Chapter with respect to the covered investment but for the subrogation, and the investor shall be precluded from pursuing these rights to the extent of the subrogation.
2. The subrogated or transferred right or claim shall not be greater than the original right or claim of the investor. (19)
Article 14.13. Denial of Benefits (20)
A Party may deny the benefits of this Chapter:
(a) to an investor of the other Party that is an enterprise of the other Party and to investments of that investor if:
(i) persons of a non-Party or the denying Party own or control the enterprise; and
(ii) the enterprise has no substantial business activities in the territory of the other Party;
(b) to an investor of the other Party that is an enterprise of the other Party and to investments of that investor ift
(i) persons of a non-Party own or control the enterprise; and
(ii) the denying Party adopts or maintains measures with respect to the non-Party or a person of the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments; or
(c) to an investor of the other Party if a person of a non-Party owns or controls the enterprise and the denying Party does not maintain diplomatic relations with that non-Party.
Article 14.14. Non–Conforming Measures
(a) any existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in its Schedule to Annex I (Trade in Services and Investment Schedules); or
(ii) a regional level of government, as set out by that Party in its Schedule to Annex I (Trade in Services and Investment Schedules); or
(iii) a local level of government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in subparagraph (a), to the extent that the amendment does not decrease the conformity of the measure, as it existed at the date of entry into force of the Party's Schedule to Annex I (Trade in Services and Investment Schedules), with Article 14.4, Article 14.5, Article 14.6 or Article 14.10.
2. Article 14.4, Article 14.5, Article 14.6 and Article 14.10, shall not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors, or activities, as set out in its Schedule to Annex II (Trade in Services and Investment Schedules).
3. Article 14.4 and Article 14.5 shall not apply to any measure that falls within Article 5 of the TRIPS Agreement, and any measure that is covered by an exception to, or derogation from, the obligations under Article 3 or Article 4 of the TRIPS Agreement.
Article 14.15. Special Formalities and Disclosure of Information
1. Nothing in Article 14.4 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with covered investments, such as a residency requirement for registration or a requirement that covered investments be legally constituted under the laws or regulations of the Party, provided that such formalities do not substantially impair the protections afforded by a Party to investors of the other Party and covered investments in accordance with this Chapter.
2. Notwithstanding Article 14.4, a Party may require an investor of the other Party, or its covered investment, to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect any confidential information which has been provided from any disclosure that would prejudice legitimate commercial interests of the investor or its covered investment. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.
Article 14.16. Promotion of Regulatory Objectives
Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health, public morals, social welfare, consumer protection or the promotion and protection of cultural diversity or other regulatory objectives.
Article 14.17. Corporate Social Responsibility
Each Party reaffirms the importance of encouraging enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate into their internal policies those internationally recognised standards, guidelines and principles of corporate social responsibility that have been endorsed or are supported by that Party.
Article 14.18. Committee on Investment
1. The Parties hereby establish a Committee on Investment (Investment Committee) consisting of representatives of the Parties.
2. The Investment Committee shall meet within two years from the date of entry into force of this Agreement and thereafter as agreed by the Parties. Meetings may be conducted in person, or by any other means as determined by the Parties.
3. The Investment Committee's functions shall be:
(a) to monitor and review the implementation of this Chapter;
(b) to consider any other matters related to this Chapter identified by the Parties;
(c) to report to the Joint Committee as required; and
(d) to consider and recommend to the Joint Committee any amendments to this Chapter.
Section Section B: Investor-State Dispute Settlement
Article 14.19. Definitions
For the purposes of this Section: Appointing Authority means:
(i) In the case of arbitration under Article 14.25, the Secretary General of ICSID;
(ii) In the case of arbitration under Article 14.25, the Secretary General of the Permanent Court of Arbitration; or
(iii) Any person as agreed between the disputing parties;
disputing investor means an investor of a Party that makes a claim against another Party;
disputing parties means a disputing investor and a disputing Party;
disputing Party means a Party against which a claim is made under this Section;
disputing party means a disputing investor or a disputing Party; ICSID means the International Centre for Settlement of Investment Disputes;
ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
ICSID Convention means the Convention of the Settlement of Investment Disputed between States and National of other States, done at Washington on 18 March 1965;
New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958; and
Non-disputing Party means the Party of the disputing investor;
UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on the International Trade Law, approved by the United Nations General Assembly on 15 December 1976.
Article 14.20. Scope
1. This Section shall apply to disputes between a Party and an investor of another Party concerning an alleged breach of an obligation of the former under Section A which causes loss or damage to the covered investment of the investor ("investment dispute").
2. This Section shall not apply to investment disputes which have occurred prior to the date of entry into force of this Agreement.