2. In applying the principles of paragraph 1, the Parties shall:
(a) not introduce cargo-sharing clauses in future bilateral agreements with third countries, other than in those exceptional circumstances where liner shipping companies from the Party concerned would not otherwise have an effective opportunity to ply for trade to and from the third country concerned;
(b) prohibit cargo-sharing arrangements in future bilateral agreements concerning dry and liquid bulk trade;
(c) abolish, upon the entry into force of this Agreement, all unilateral measures and administrative, technical and other barriers which could have restrictive or discriminatory effects on the free supply of services in international maritime transport.
3. Each Party shall permit international maritime service suppliers of the other Party to have a commercial presence in its territory under conditions of establishment and operation no less favourable than those accorded to its own service suppliers or those of any third country, whichever are the better, in accordance with the conditions inscribed in its Schedule.
Section 3. Telecommunications Services
Article 109. Definitions
For the purposes of this section:
(a) "telecommunications services" means the transport of electro-magnetic signals - sound, data image and any combinations thereof, excluding broadcasting. (8) Therefore, commitments in this sector do not cover the economic activity consisting of content provision which require telecommunications services for its transport. The provision of that content, transported via a telecommunications service, is subject to the specific commitments undertaken by the Parties in other relevant sectors.
(b) a "regulatory authority" means the body or bodies with any of the regulatory tasks assigned in relation to the issues mentioned in this section.
(c) "essential telecommunications facilities" mean facilities of a public telecommunications transport network and service that:
(i) are exclusively or predominantly provided by a single supplier or a limited number of suppliers; and
(ii) cannot feasibly be economically or technically substituted in order to provide a service.
Article 110. Regulatory Authority
1. Regulatory authorities for telecommunications services shall be separate from, and not accountable to, any supplier of basic telecommunications services.
2. The decisions of and the procedures used by regulatory authorities shall be impartial with respect to all market participants.
3. A supplier affected by the decision of a regulatory authority shall have a right to appeal against that decision.
Article 111. Supply of Services
1. Where a licence is required, the terms and conditions for such a license shall be made publicly available and the period of time normally required to reach a decision concerning an application for a licence shall be made publicly available.
2. Where a licence is required, the reasons for the denial of a licence shall be made known to the applicant upon request.
Article 112. Major Suppliers
1. A major supplier is a supplier which has the ability to materially affect the terms of participation having regard to price and supply in the relevant market for basic telecommunications services as a result of:
(a) control over essential facilities; or
(b) the use of its position in the market.
2. Appropriate measures shall be maintained for the purpose of preventing suppliers who, alone or together, are a major supplier from engaging in or continuing anti-competitive practices.
3. The anti-competitive practices referred to above shall include in particular:
(a) engaging in anti-competitive cross-subsidisation;
(b) using information obtained from competitors with anti-competitive results; and
(c) not making available to other services suppliers on a timely basis technical information about essential facilities and commercially relevant information which are necessary for them to supply services.
Article 113. Interconnection
1. This section applies to linking with suppliers providing public telecommunications transport networks or services in order to allow the users of one supplier to communicate with users of another supplier and to access services provided by another supplier.
2. Interconnection with a major supplier shall be ensured at any technically feasible point in the network. Such interconnection shall be provided:
(a) under non-discriminatory terms, conditions (including technical standards and specifications) and rates and of a quality no less favourable than that provided for its own like services or for like services of non-affiliated service suppliers or for its subsidiaries or other affiliates;
(b) in a timely fashion, on terms, conditions (including technical standards and specifications) and cost-oriented rates that are transparent, reasonable, having regard to economic feasibility, and sufficiently unbundled so that the supplier need not pay for network components or facilities that it does not require for the service to be provided; and
(c) upon request, at points in addition to the network termination points offered to the majority of users, subject to charges that reflect the cost of construction of necessary additional facilities.
4. The procedures applicable for interconnection to a major supplier shall be made publicly available.
5. Major suppliers shall make interconnection agreements available to service suppliers of the Parties to ensure non-discrimination, and/or shall publish reference interconnection offers in advance, unless they are already available to the public.
Article 114. Scarce Resources
Any procedures for the allocation and use of scarce resources, including frequencies, numbers and rights of way, shall be carried out in an objective, timely, transparent and nondiscriminatory manner.
Article 115. Universal Service
1. Each Party has the right to define the kind of universal service obligation it wishes to maintain.
2. The provisions governing universal service shall be transparent, objective and nondiscriminatory. They shall also be neutral with respect to competition and be no more burdensome than necessary.
Chapter II. Financial Services
Article 116. Scope
1. This Chapter applies to measures adopted or maintained by the Parties affecting trade in financial services.
2. For the purposes of this Chapter, trade in financial services is defined as the supply of a financial service through the following modes:
(a) from the territory of a Party into the territory of the other Party (mode 1);
(b) in the territory of a Party to the financial service consumer of the other Party (mode 2);
(c) by a financial service supplier of a Party, through commercial presence in the territory of the other Party (mode 3);
(d) by a financial service supplier of a Party, through presence of natural persons in the territory of the other Party (mode 4).
3. Nothing in this Chapter shall be construed to impose any obligation with respect to government procurement, which is subject to Title IV of this Part of the Agreement.
4. The provisions of this Chapter shall not apply to subsidies granted by the Parties. The Parties shall review the issue of disciplines on subsidies related to trade in financial services, with a view to incorporating in this Agreement any disciplines agreed under Article XV of GATS.
5. This Chapter does not apply to:
(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.
6. For the purposes of paragraph 5, if a Party allows any of the activities referred to in paragraph 5(ii) or (iii) to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, this Chapter applies to such activities.
Article 117. Definitions
For the purposes of this Chapter:
1. "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;
2. "measures adopted or maintained by a Party" means measures taken by:
(i) central, regional or local governments and authorities; and
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;
3. "financial service supplier" means any natural or legal person that seeks to supply or supplies financial services but the term "financial service supplier" does not include a public entity;
4. "public entity" means:
(i) a government, a central bank or a monetary authority of a Party, or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or
(ii) a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions;
5. "commercial presence" means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a legal person, or
(ii) the creation or maintenance of a branch or a representative office, within the territory of a Party for the purpose of supplying a financial service;
6. "legal person" means any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
7. "legal person of a Party" means a legal person constituted or otherwise organised under the law of the Community or its Member States or of Chile. Should such a legal person have only its registered office or central administration in the territory of the Community or Chile, it shall not be considered as a Community or a Chilean legal person respectively, unless it is engaged in substantive business operations in the territory of the Community or Chile, respectively.
8. "natural person" means a national of one of the Member States or of Chile according to their respective legislation.
9. "financial service" means any service of a financial nature offered by a financial service supplier of a Party. Financial services comprise 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;
(vi) lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transactions;
(vii) financial leasing;
(viii) all payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;
(ix) guarantees and commitments;
(x) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:
(A) money market instruments, including cheques, bills, certificates of deposits;
(B) foreign exchange;
(C) derivative products including, but not limited to, futures and options;
(D) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(E) transferable securities;
(F) other negotiable instruments and financial assets, including bullion.
(xi) participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
(xii) money broking;
(xiii) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;
(xiv) settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(xv) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services;
(xvi) advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy.
10. "new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, that is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party.
Article 118. Market Access
1. With respect to market access through the modes of supply identified in Article 116, each Party shall accord financial services and financial 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 referred to in Article 120.
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, are defined as:
(a) limitations on the number of financial services suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
(b) limitations on the total value of financial 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 financial 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; (9)
(d) limitations on the total number of natural persons that may be employed in a particular financial service sector or that a financial service supplier may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas or a requirement of an economic needs test;
(e) measures which restrict or require specific types of legal entities or joint ventures through which a financial service supplier of the other Party may supply a financial 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 119. National Treatment
1. In the sectors inscribed in its Schedule, and subject to the conditions and qualifications set out therein, each Party shall accord to financial services and financial service suppliers of the other Party, in respect of all measures affecting the supply of financial services, treatment no less favourable than that it accords to its own like financial services and financial service suppliers. (10)
2. A Party may meet the requirement of paragraph 1 by according to financial services and financial service suppliers of the other Party, either formally identical treatment or formally different treatment to that it accords to its own like financial services and financial 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 financial services or financial service suppliers of a Party compared to like financial services or financial service suppliers of the other Party.
Article 120. Schedule of Specific Commitments
1. The specific commitment undertaken by each Party under Articles 118 and 119 are set out in the Schedule included in Annex VIII. With respect to sectors where such commitments are undertaken, each Schedule specifies:
(a) terms, limitations and conditions on market access;
(b) conditions and qualifications on national treatment;
(c) undertakings relating to additional commitments referred to in paragraph 3;
(d) where appropriate the time-frame for implementation of such commitments and the date of entry into force of such commitments.
2. Measures inconsistent with both Articles 118 and 119 are inscribed in the column relating to Article 118. In this case, the inscription is considered to provide a condition or qualification to Article 119 as well.
3. Where a Party undertakes specific commitments on measures affecting trade in financial services not subject to scheduling under Articles 118 and 119, such commitments are inscribed in its Schedule as additional commitments.
Article 121. New Financial Services
1. A Party shall permit financial service suppliers of the other Party established in its territory to offer in its territory any new financial service within the scope of the subsectors and financial services committed in its Schedule and subject to the terms, limitations, conditions and qualifications established in that Schedule and provided that the introduction of this new financial service does not require a new law or the modification of an existing law.
2. A Party may determine the legal form through which the service may be provided and may require authorisation for the provision of the financial service. Where such authorisation is required, a decision shall be taken within a reasonable period of time and the authorisation may only be refused for prudential reasons.
Article 122. Data Processing In the Financial Services Sector
1. Each Party shall permit a financial service supplier of the other Party to transfer information in electronic or other form, into and out of its territory, for data processing where such processing is required in the ordinary course of business of such financial service supplier.
2. Where the information referred to in paragraph 1 consists of or contains personal data, the transfer of such information from the territory of one Party to the territory of the other Party shall take place in accordance with the domestic law regulating the protection of individuals with respect to the transferring and processing of personal data of the Party out of whose territory the information is transferred.
Article 123. Effective and Transparent Regulation In the Financial Services Sector
1. Each Party shall, to the extent practicable, provide in advance to all interested persons any measure of general application that the Party proposes to adopt in order to allow an opportunity for such persons to comment on the measure. Such measure shall be provided:
(a) by means of an official publication; or
(b) in other written or electronic form.
2. Each Party's appropriate financial authority shall make available to interested persons its requirements for completing applications relating to the supply of financial services.
3. On the request of an applicant, the appropriate financial authority shall inform the applicant of the status of its application. If such authority requires additional information from the applicant, it shall notify the applicant without undue delay.
4. Each Party shall make its best endeavours to implement and apply in its territory internationally agreed standards for regulation and supervision in the financial services sector and for the fight against money laundering. For this purpose, the Parties shall cooperate and exchange information and experience within the Special Committee on Financial Services referred to in Article 127.
Article 124. Confidential Information
Nothing in this Chapter:
(a) shall require any of the Parties to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.
(b) shall be construed to require a Party to disclose information relating to the financial affairs and accounts of individual customers of financial service suppliers, or any confidential or proprietary information in the possession of public entities.
Article 125. Prudential Carve Out
1. Nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:
(a) the protection of investors, depositors, financial market participants, policy-holders, or persons to whom a fiduciary duty is owed by a financial services supplier;
(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial services suppliers; and (c) ensuring the integrity and stability of a Party's financial system.
2. Where such measures do not conform with the provisions of this Chapter, they shall not be used as a means of avoiding the Party's commitments or obligations under the Chapter.
Article 126. Recognition
1. A Party may recognise prudential measures of the other Party in determining how the Party's measures relating to financial services shall be applied. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement or may be accorded autonomously.
2. A Party that is a party to an agreement or arrangement with a third party such as those referred to in paragraph 1, whether future or existing, shall afford adequate opportunity for the other Party to negotiate its 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 the other Party to demonstrate that such circumstances exist.