(b) otherwise, the whole of that service sector, including all of its subsectors;
selling and marketing of air transport services mean opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution. These activities do not include the pricing of air transport services nor the applicable conditions;
services include any service in any sector except services supplied in the exercise of governmental authority;
service consumer means any person that receives or uses a service; service of the other Party means a service which is supplied:
(a) from or in the territory of that other Party, or in the case of maritime transport, by a vessel registered under the laws of that other Party, or by a person of that other Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or
(b) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Party,;
service supplier means any person of a Party that seeks to supply or supplies a service; (2)
supply of a service includes the production, distribution, marketing, sale and delivery of a service;
trade in services is defined as the supply of a service:
(a) from the territory of a Party into the territory of the other Party;
(b) in the territory of a Party to the service consumer of the other Party;
(c) by a service supplier of a Party, through commercial presence in the territory of the other Party;
(d) by a service supplier of a Party, through presence of natural persons of a Party in the territory of the other Party;
traffic rights mean the right for scheduled and non-scheduled services to operate and/or to carry passengers, cargo and mail for remuneration or hire from, to, within, or over the territory of a Party, including points to be served, routes to be operated, types of traffic to be carried, capacity to be provided, tariffs to be charged and their conditions, and criteria for designation of airlines, including such criteria as number, ownership, and control.
Article 9.2. Scope and Coverage (3)
1. This Chapter applies to measures adopted or maintained by Parties affecting trade in services.
2. This Chapter shall not apply to:
(a) government procurement
(b) services supplied in the exercise of governmental authority;
(c) subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance; and
(d) national and international air transport services, whether scheduled or non scheduled, and services directly related to the exercise of traffic rights, other than:
(i) aircraft repair and maintenance services;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system services; and
(iv) other ancillary services that facilitate the operation of air carriers, as contained in Annex 9A (Schedules of Specific Commitments).
3. This Chapter shall not apply to measures affecting natural persons of the other Party seeking access to the employment market of the other Party, or measures regarding nationality, citizenship, residence or employment on a permanent basis.
4. Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, 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 of a specific commitment. (4)
Article 9.3. Schedules of Specific Commitments
1. Each Party shall set out in its Schedule of Specific Commitments, the specific commitments it undertakes in accordance with Articles 9.5, 9.6, and 9.7.
2. With respect to sectors where such commitments are undertaken, each Schedule of Specific Commitments shall specify:
(a) terms, limitations and conditions on market access; (b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments referred to in Article 9.7; and
(d) where appropriate, the time-frame for implementation of such commitments; and the date of entry into force of such commitments.
3. Measures inconsistent with both Articles 9.5 and 9.6 shall be inscribed in the column relating to Article 9.5. In this case, the inscription will be considered to provide a condition or qualification to Article 9.6 as well.
4. The Parties' Schedules of Specific Commitments are set forth in Annex 9A (Schedules of Specific Commitments).
Article 9.4. Most-Favoured Nation Treatment (5)
1. Except as provided for in its List of MFN Exemptions contained in Annex 9B (MFN Exemptions), a Party shall accord immediately and unconditionally, in respect of all measures covered by this Chapter, to services and service suppliers of the other Party treatment no less favourable than that it accords to like services and service suppliers of any non-Party.
2. The obligations of paragraph 1 shall not apply to treatment granted under other existing or future agreements concluded by one of the Parties and notified under Article V or V bis of the GATS as well as treatment granted in accordance with Article VII of the GATS.
3. 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 Agreement.
4. If, after the entry into force of this Agreement, a Party enters into any agreement on trade in services notified under Article V or Article V bis of the GATS with a non- Party, it shall, upon request by the other Party, afford adequate opportunity to that Party to negotiate the benefits granted therein.
Article 9.5. Market Access
1. With respect to market access through the modes of supply identified in the definition of "trade in services" contained in Article 9.1, each Party shall accord services and service suppliers of the other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule of Specific Commitments. (6)
2. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt, either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule of Specific Commitments, are defined as:
(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the tequirements of an economic needs test;
(b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; (7)
(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
Article 9.6. National Treatment
1. With respect to the services sectors inscribed in its Schedule of Specific Commitments, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of the 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 in paragraph 1 by according to services and service suppliers of the 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 by a Party shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of that Party compared to the like service or service suppliers of the other Party.
Article 9.7. Additional Commitments
The Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 9.5 and 9.6, including those regarding qualification, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule of Specific Commitments.
Article 9.8. Modification of Schedules
Upon written request by a Party, the Parties shall hold consultations to consider any modification or withdrawal of a specific commitment in the requesting Party's Schedule of Specific Commitments. The consultations shall be held within three months after the requesting Party made its request. In the consultations, the Parties shall aim to ensure that a general level of mutually advantageous commitments no less favourable to trade than that provided for in the Schedule of Specific Commitments prior to such consultations is maintained. Modifications of Schedules are subject to any procedures adopted by the Joint Committee established in Chapter 17 (Administration of the Agreement).
Article 9.9. Domestic Regulation:
1. In sectors where specific commitments are undertaken, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. (a) Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, on 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.
(b) The provisions of subparagraph (a) shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.
3. Where authorisation is required for the supply of a service on which a specific commitment under this Chapter has been made, the competent authorities of each Party shall:
(a) within a reasonable period of time after the submission of an application considered complete under domestic laws and regulations, inform the applicant of the decision concerning the application;
(b) in the case of an incomplete application for processing under the Party's domestic laws and regulations, within a reasonable period of time, to the extent practicable, at the request of the applicant, identify the additional information that is required to complete the application or otherwise provide guidance on why the application is considered incomplete and provide the applicant with the opportunity to provide the additional information that is required to complete the application;
(c) on request of the applicant, provide without undue delay information concerning the status of the application; and
(d) if an application is rejected, to the extent possible, either upon their own initiative or upon request of the applicant, inform the applicant the reasons for rejection and, if applicable, the procedures for resubmission of an application. An applicant should not be prevented from submitting another application solely on the basis of a previously rejected application.
4. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, in sectors where specific commitments are undertaken, the Parties shall endeavour to ensure, as appropriate for individual sectors, that such tequirements are:
(a) based on objective and transparent criteria, such as competence and the ability to supply the service;
(b) not more burdensome than necessary to ensure the quality of the service; and
(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.
5. In sectors where specific commitments regarding professional services are undertaken, each Party shall provide for adequate procedures to verify the competence of professionals of the other Party.
6. The Parties shall jointly review the results of the negotiations on disciplines on domestic regulation, pursuant to Article VI.4 of the GATS, to consider incorporating them into this Chapter.
Article 9.10. Recognition
1. For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorisation, licensing or certification of service suppliers, and subject to paragraph 3, a Party may recognise, or encourage its relevant competent bodies to recognise, the education or experience obtained, requirements met, or licences or certifications granted in the other Party. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement between the Parties or their relevant competent bodies, or may be accorded autonomously.
2. Where a Party recognises, by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted in the territory of a non-party, that Party shall afford the other 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 the other Party to demonstrate that the education, experience, licences or certifications obtained or requirements met in that other Party's territory should also be recognised.
3. A Party shall not accord recognition in a manner which would constitute a means of discrimination between the other Party and non-parties in the application of its standards or criteria for the authorisation, licensing or certification of service suppliers, or a disguised restriction on trade in services.
4. The Parties agree to encourage, where applicable and to the extent practicable, the relevant bodies in their respective territories responsible for issuance and recognition of professional and vocational qualifications to:
(a) strengthen cooperation and to explore possibilities for mutual recognition of respective professional and vocational qualifications; and
(b) pursue mutually acceptable standards and criteria for licensing and certification with respect to service sectors of mutual importance to the Parties.
Article 9.11. Payments and Transfers
1. Except under the circumstances envisaged in Article 9.12, a Party shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties as members of the International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article 9.12 or at the request of the International Monetary Fund.
Article 9.12. 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. Where a Party to this Agreement is in serious balance of payments and external financial difficulties, or under threat thereof, it may adopt or maintain restrictive measures with regard to trade in services, including on payments and transfers.
3. 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 Agreement. A Party adopting or maintaining such restrictions, or changing existing restrictions, shall promptly notify the Joint Committee thereof.
Article 9.13. Denial of Benefits
A Party may deny the benefits of this Chapter to a service supplier that is a juridical person of the other Party, if persons of a non-Party own or control that juridical person and the denying Party:
(a) does not maintain diplomatic relations with the non-Party; or
(b) adopts or maintains measures with respect to the non-Party or the person of the non-Party that prohibit transactions with the juridical person or that would be violated or circumvented if the benefits of this Chapter were accorded to the juridical person.
Article 9.14. Review
The Parties shall consult annually, or as otherwise agreed, with the aim to determine their mutual interest in reviewing their Schedules of Specific Commitments and their Lists of MEN Exemptions.
Article 9.15. Subcommittee on Trade In Services
1. A Subcommittee on Trade in Services (hereinafter referred to as the "Subcommittee") is hereby established, consisting of representatives of each Party. The Subcommittee shall meet, in person or by any other technological means as determined by the Parties, at such times as agreed by the Parties and when they deem it appropriate, to consider matters arising under this Chapter.
2. The Subcommittee may consider any matter arising under this Chapter.
3. In relation to a matter referred to in paragraph 2, the functions of the Subcommittee shall include:
(a) monitoring the implementation and operation of this Chapter;
(b) facilitating the exchange of information between the Parties, as well as technical cooperation on trade in services;
(c) reviewing topics of interest to the Parties related to trade in services that are discussed in this Chapter;
(d) considering other matters on trade in services related to this Chapter that are of mutual interest.
(e) making recommendations to the Joint Committee with regards to matters of its competence; and
(f) carrying out other functions as may be assigned by the Joint Committee or agreed by the Parties.
4. The Joint Committee shall establish the working procedures of the Subcommittee.
Article 9.16. Annexes
The following annexes form an integral part of this Chapter:
(a) Annex 9A (Schedules of Specific Commitments);
(b) Annex 9B (MFN Exemptions);
(c) Annex 9C (Telecommunication Services);
(d) Annex 9D (Sub-Committee on Trade in Services); and
(e) Annex 9E (Financial Services).
ANNEX 9D. SUBCOMMITTEE ON TRADE IN SERVICES
For the purposes of Article 9.15 (Subcommittee on Trade in Services), the Subcommittee on Trade in Services shall be integrated as follows:
(a) for Costa Rica by representatives of the Ministry of Foreign Trade, or its successors; and
(b) for United Arab Emirates by representatives of the Ministry of Economy, or its successors.
ANNEX 9E. FINANCIAL SERVICES
1. Scope and Definition
(a) This Annex applies to measures affecting the supply of financial services. Reference to the supply of a financial service in this Annex shall mean the supply of a service as defined in Article 9.1 (Definitions).
(b) For the purposes of subparagraph 2(b) of Article 9.2 (Scope and Coverage), "services supplied in the exercise of governmental authority" means the following:
(i) activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies;
(ii) activities forming part of a statutory system of social security or public retirement plans; and
(iii) other activities conducted by a public entity for the account or with the guarantee or using the financial resources of the Government.
(c) For the purposes of subparagraph 2(b) of Article 9.2 (Scope and Coverage), if a Party allows any of the activities referred to in subparagraphs (b)(ii) or (b)(iii) of this paragraph to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, "services" shall include such activities.
(d) A service supplied in the exercise of governmental authority as defined in Article 9.1 (Definitions) shall not apply to services covered by this Annex.
2. Domestic Regulation
(a) Notwithstanding any other provisions of Chapter 9 (Trade in Services), a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system. Where such measures do not conform with the provisions of Chapter 9 (Trade in Services), they shall not be used as a means of avoiding the Party's commitments or obligations under Chapter 9 (Trade in Services).
(b) Nothing in Chapter 9 (Trade in Services) shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
3. Recognition
(a) A Party may recognize prudential measures of any other country in determining how the Party's measures relating to financial services shall be applied. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the country concerned or may be accorded autonomously.
(b) A Party that is a party to such an agreement or arrangement referred to in subparagraph (a), whether future or existing, shall afford adequate opportunity for other interested Party to negotiate their accession to such agreements or arrangements, or to negotiate comparable ones with it, under circumstances in which there would be equivalent regulation, oversight, implementation of such regulation, and, if appropriate, procedures concerning the sharing of information between the parties to the agreement or arrangement. Where a Party accords recognition autonomously, it shall afford adequate opportunity for any other Party to demonstrate that such circumstances exist.
4. Dispute Settlement
Panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service under dispute.
5. Definitions
For the purposes of this Annex:
(a) A financial service is any service of a financial nature offered by a financial service supplier of a Party. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance). Financial services include the following activities:
Insurance and insurance-related services
(i) Direct insurance (including co-insurance):
(A) life
(B) non-life
(ii) Reinsurance and retrocession;
(iii) Insurance intermediation, such as brokerage and agency;
(iv) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.
Banking and other financial services (excluding insurance)
(v) Acceptance of deposits and other repayable funds from the public;