1. For the purposes of the fulfilment, in whole or in part, of a Party's standards or criteria for the authorisation, licensing or certification of a service supplier, and subject to the requirements of paragraph 4, it may recognise the education or experience obtained, requirements met, or licences or certifications granted, in the territory of the other Party or a non-Party. That recognition, which may be achieved through harmonisation or otherwise, may be based on an agreement or arrangement with the Party or non-Party concerned, or may be accorded autonomously.
2. If a Party recognises, autonomously or by agreement or arrangement, the education or experience obtained, requirements met, or licenses or certifications granted, in the territory of a non-Party, nothing in Article 5 (Most-Favoured-Nation Treatment) shall be construed to require the Party to accord recognition to the education or experience obtained, requirements met, or licences or certifications granted, in the territory of the other Party.
3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity to the other Party, on request, to negotiate its accession to that agreement or arrangement, or to negotiate a comparable agreement or arrangement. If a Party accords recognition autonomously, it shall afford adequate opportunity to the other Party to demonstrate that education, experience, licences or certifications obtained or requirements met in the other Party's territory should be recognised.
4. A Party shall not accord recognition in a manner that 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 a service supplier, or a disguised restriction on trade in services.
5. As set out in Annex 7-A (Professional Services), the Parties shall endeavour to facilitate trade in professional services, including through the establishment of a Professional Services Working Group.
ANNEX 7-A. Professional services
Licensing, certification and mutual recognition
1. The Parties shall encourage relevant bodies in their respective territories to develop mutually acceptable standards and criteria for licensing and certification of professional services suppliers.
2. Without limiting the potential scope of work, the standards and criteria referred to in paragraph 1 may be developed with regard to the following matters:
(a) education — accreditation of schools or academic programs;
(b) examinations — qualifying examinations for licensing, including alternative methods of assessment, such as oral examinations and interviews;
(c) experience — length and nature of experience required for licensing;
(d) conduct and ethics — standards of professional conduct and the nature of disciplinary action for non-conformity with those standards;
(e) professional development and re-certification — continuing education and ongoing requirements to maintain professional certification;
(f) scope of practice — extent of, or limitations on, permissible activities;
(g) local knowledge — requirements for knowledge of such matters as local laws, regulations, geography, or climate; and
(h) consumer protection — alternatives to any residency requirements, including bonding, professional liability insurance, and client restitution funds, to provide for the protection of consumers.
3. A Party may consider, if feasible, taking steps to implement a temporary or project specific licensing or registration regime based on a foreign supplier's home licence or recognised professional body membership, without the need for further written examination. That temporary or limited licence regime should not operate to prevent a foreign supplier from gaining a local licence once that supplier satisfies the applicable local licensing requirements.
4. On request of the other Party, a Party shall to the extent practicable provide information concerning standards and criteria for the licensing and certification of professional service suppliers, including information concerning the appropriate regulatory or other body to consult regarding these standards and criteria.
Consultations
5. Without prejudice to each Party's rights and obligations under this Agreement, and while recognising the right to regulate and to introduce new regulations on the supply of services in order to meet policy objectives, each Party should refrain from raising new barriers to trade in professional services. Where a Party considers that a new barrier has been adopted, or is proposed to be adopted, it may request consultations with the other Party.
Working Group
6. The Parties hereby establish a Working Group on Professional Services, comprising representatives of each Party, to facilitate activities listed in paragraphs 1 to 4. The Working Group shall meet annually, or as agreed by the Parties.
7. The issues that the Working Group should consider, for professional services generally and, as appropriate, for individual professional services, include:
(a) procedures for fostering the development of mutual recognition arrangements between relevant bodies;
(b) the feasibility of developing model procedures for the licensing and certification of professional services suppliers; and
(c) other issues of mutual interest relating to the supply of professional services.
8. In implementing this Annex, the Working Group should consider, as appropriate, relevant bilateral, plurilateral and multilateral agreements relating to professional services.
9. To assist the Working Group in its activities, the Parties should, as appropriate, encourage the involvement of relevant industry bodies. This may include encouraging relevant industry bodies to provide joint views on potential initiatives within the scope ofthe Working Group's activities, including views on mutual recognition opportunities. The Parties should consider and provide a response to any joint views, advancing projects where feasible and mutually agreed.
10. Each Party shall encourage its relevant bodies to implement any decisions or recommendations of the Working Group within a mutually agreed time.
11. The Working Group, at each meeting, shall review progress made, including with respect to any recommendation for initiatives to promote mutual recognition of standards and criteria and temporary licensing, and agree on the further direction of its work.
Chapter 08. Investment
Section A.
Article 1. Definitions
For the purposes of this Chapter:
(a) "Centre" means the International Centre for Settlement of Investment Disputes (ICSID) established by the ICSID Convention;
(b) "claimant" means an investor of a Party that is a party to an investment dispute with the other Party. If that investor is a natural person, who is a permanent resident of a Party and a national of the other Party, that natural person may not submit a claim to arbitration against that latter Party;
(c) "disputing parties" means the claimant and the respondent;
(d) "disputing party" means either the claimant or the respondent;
(e) "enterprise" means
(i) any entity constituted or organised under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association or similar organisation; and
(ii) a branch of an enterprise;
(f) "enterprise of a Party" means an enterprise constituted or organised under the law of a Party, or a branch located in the territory of a Party and carrying out business activities there (1);
(g) "freely usable currency" means "freely usable currency" as determined by the International Monetary Fund under its Articles of Agreement;
(h) "ICC Arbitration Rules" means the arbitration rules of the International Chamber of Commerce;
(i) "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;
(j) "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, March 18, 1965;
(k) "investment" means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:
(i) an enterprise;
(ii) shares, stock and other forms of equity participation in an enterprise;
(iii) bonds, debentures, other debt instruments and loans; (2) (3)
(iv) futures, options and other derivatives;
(v) turnkey, construction, management, production, concession, revenue-sharing and other similar contracts;
(vi) intellectual property rights;
(vii) licences, authorisations, permits and similar rights conferred pursuant to the Party's law; and
(viii) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens and pledges,
but investment does not mean an order or judgment entered in a judicial or administrative action;
(l) "investor of a non-Party" means, with respect to a Party, an investor that attempts to make,(4) is making, or has made an investment in the territory of that Party, that is not an investor of a Party;
(m) "investor of a Party" means a Party, or a national (5) or an enterprise of a Party, that attempts to make, is making, or has made an investment in the territory of the other Party;
(n) "measure" includes any law, regulation, procedure, requirement or practice;
(o) "non-disputing Party" means the Party that is not a party to an investment dispute;
(p) "New York Convention' means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;
(q) "person" means a natural person or an enterprise;
(r) "protected information" means confidential business information or information that is privileged or otherwise protected from disclosure under a Party's law, including classified government information;
(s) "respondent" means the Party that is a party to an investment dispute;
(t) "Secretary-General" means the Secretary-General of ICSID;
(u) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1C to the WTO Agreement;(6) and
(v) "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations Commission on International Trade Law.
Article 2. Scope
1. This Chapter shall apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party;
(b) covered investments; and
(c) all investments in the territory of that Party with respect to:
(i) Article 7 (Prohibition of Performance Requirements); and
(ii) Article 20 (investment and Environmental, Health and other Regulatory Objectives).
2. This Chapter shall not apply to:
(a) subsidies or grants provided by a Party or to any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic investors and investments; or
(b) a natural person who is a permanent resident but not a citizen of a Party where:
(i) the provisions of an investment protection agreement between the other Party and the country of which the person is a citizen have already been invoked in respect of the same matter; or
(ii) the person is a citizen of the other Party.
3. An enterprise of a Party shall not be treated as an investor of the other Party, but any investments in that enterprise by investors of that other Party shall be protected by this Chapter.
4. Nothing in this Chapter shall be construed to impose an obligation on a Party to privatise.
5. A Party's obligations under this Chapter shall apply to measures adopted or maintained by:
(a) the central, regional or local governments or authorities of that Party; and
(b) any person, including a state enterprise or any other body, when it exercises any governmental authority delegated to it by central, regional or local governments or authorities of that Party. (7)
Article 3. Relation to other Chapters
1. 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.
2. A requirement of a Party that a service supplier of the other Party post a bond ot 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.
3. This Chapter shall not apply to measures adopted or maintained by a Party to the extent that they are covered by Chapter 9 (Financial Services).
Article 4. National Treatment (8)
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale ot other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that 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 5. Most-favoured-nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors 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 that 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 does not encompass international dispute resolution procedures or mechanisms such as those included in Section B (Investor-State Dispute Settlement).
Article 6. Minimum Standard of Treatment
1. Each Party shall accord to covered investments treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security. (9)
2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the standard of treatment to be afforded to covered investments. 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 by the customary international law minimum standard of treatment of aliens referred to in paragraph 1 and do not create additional substantive rights. The obligation in paragraph 1 to provide:
(a) "fair and equitable treatment" includes the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) "full protection and security" requires each Party to provide the level of police protection required under customary international law.
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.
5. For greater certainty, the mere fact that a subsidy or grant has not been issued, renewed or maintained, or has been modified or reduced, by a Party, does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result.
Article 7. Prohibition of Performance Requirements
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, or enforce any commitment or undertaking, to: (10)
(a) export a given level or percentage of goods or services;
(b) achieve a given level or percentage of domestic content;
(c) purchase, use or accord a preference to goods produced in its territory, or to purchase goods from persons in its territory;
(d) 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) 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) transfer a particular technology, a production process or other proprietary knowledge to a person in its territory; or
(g) supply exclusively from the territory of the Party the goods that such investment produces or the services that such investment supplies to a specific regional market or to the world market.
2. Neither Party may 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 in its territory of an investor of a Party or of a non-Party, on compliance with any requirement to:
(a) achieve a given level or percentage of domestic content;
(b) purchase, use or accord a preference to goods produced in its territory, or to purchase goods from persons in its territory;
(c) 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) 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. (a) 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 in its territory of an investor of a Party or of a non-Party, 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.
(b) Paragraph 1(f) shall not apply:
(i) when a Party authorises use of an intellectual property right in accordance with Article 31 (11) of 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
(ii) when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority to remedy a practice determined after judicial or administrative process to be anticompetitive under a Party's competition laws. (12)
(c) Provided that such measures are not applied in an arbitrary or unjustifiable manner, and provided that such measures do not constitute a disguised restriction on investment or international trade, paragraphs 1(b), (c), and (f), and 2(a) and (b), shall not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:
(i) necessary to secure compliance with laws and regulations that are not inconsistent with this Agreement;
(ii) necessary to protect human, animal, or plant life or health; or
(iii) related to the conservation of living or non-living exhaustible natural resources.
(d) Paragraphs 1(a), (b), and (c), and 2(a) and (b), do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs.
(e) Paragraphs 1(b), (c), (), and (g), and 2(a) and (b), do not apply to government procurement.
(f) Paragraphs 2(a) and (b) do not apply to requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas.
4. For greater certainty, paragraphs 1 and 2 do not apply to any requirement other than the requirements set out in those paragraphs.
5. This Article does not preclude enforcement of any commitment, undertaking, or requirement between private parties, where a Party did not impose or require the commitment, undertaking, or requirement.
Article 8. Senior Management and Boards of Directors
1. A Party shall not 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 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 9. Special Formalities and Information Requirements
1. Nothing in Article 4 (National Treatment) shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with a covered investment, such as a residency requirement for registration or a requirement that a covered investment be legally constituted under the laws or regulations of the Party, provided that these formalities do not materially impair the protections afforded by the Party to investors of the other Party and covered investments pursuant to this Chapter.
2. Notwithstanding Articles 4 (National Treatment) and 5 (Most-Favoured-Nation Treatment), 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 such information that is confidential from any disclosure that would prejudice the competitive position of the investor or the 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.