(a) The EFTA Secretariat, for the EFTA States; and
(b) The Ministry of Foreign Trade, or its successor, for Ecuador.
Article 2.18. State Trading Enterprises
Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994 apply and are hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.19. General Exceptions
Article XX of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.20. Security Exceptions
Article XXI of the GATT 1994 applies and is hereby incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.21. Balance-of-Payments
1. A Party may, in accordance with the GATT 1994, in particular Articles XI, XV and XVIII section B, and the WTO Understanding on the Balance of Payments Provisions of the GATT 1994, adopt or maintain trade restrictive measures.
2. A Party adopting or maintaining measures according to this Article shall promptly notify the Joint Committee thereof.
Article 2.22. Sub-Committee on Trade In Goods
1. A Sub-Committee on Trade in Goods (Sub-Committee) is hereby established.
2. The mandate of the Sub-Committee is set out in Annex VIII (Mandate of the Sub- Committee on Trade in Goods).
Chapter 3. TRADE IN SERVICES
Article 3.1. Scope and Coverage
1. This Chapter applies to measures by Parties affecting trade in services and taken by central, regional or local governments and authorities as well as by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities.
2. With respect to air transport services, this Chapter shall not apply to measures affecting air traffic rights or measures affecting services directly related to the exercise of air traffic rights, except as provided for in paragraph 3 of the GATS Annex on Air Transport Services. The definitions of paragraph 6 of the GATS Annex on Air Transport Services are hereby incorporated and made part of this Agreement.
3. Nothing in this Chapter shall be construed to impose any obligation with respect to government procurement, which is subject to Chapter 6 (Government Procurement).
Article 3.2. Incorporation of Provisions from the GATS
Where a provision of this Chapter provides that a provision of the GATS is incorporated into and made part of this Agreement, the meaning of the terms used in the GATS provision shall be understood as follows:
(a) "Member" means Party;
(b) "Schedule" means a Schedule referred to in Article 3.18 (Schedules of Specific Commitments) and contained in Annex [X (Schedules of Specific Commitments); and
(c) "specific commitment" means a specific commitment in a Schedule referred to in Article 3.18 (Schedules of Specific Commitments).
Article 3.3. Definitions
1. For the purposes of this Chapter, the following definitions of Article I of the GATS are hereby incorporated into and made part of this Agreement:
(a) "trade in services";
(b) "services"; and
(c) "a service supplied in the exercise of governmental authority.
2. For the purposes of this Chapter:
(a) "service supplier" means any person that supplies, or seeks to supply, a service; (6)
(b) "natural person of another Party" means a natural person who, under the legislation of that other Party, is:
(i) a national of that other Party who resides in the territory of any Member of the WTO; or
(ii) a permanent resident of that other Party who resides in the territory of a Party, if that other Party accords substantially the same treatment to its permanent residents as to its nationals in respect of measures affecting trade in services. For the purpose of the supply of a service through presence of natural persons (Mode 4), this definition covers a permanent resident of that other Party who resides in the territory of a Party or in the territory of any Member of the WTO;
(c) "juridical person of another Party" means a juridical person which is either:
(i) constituted or otherwise organised under the law of that other Party, and is engaged in substantive business operations in the territory of:
(aa) a Party; or
(bb) any Member of the WTO and is owned or controlled by natural persons of that other Party or by juridical persons that meet all the conditions of subparagraph (i)(aa); or
(ii) in the case of the supply of a service through commercial presence, owned or controlled by:
(aa) natural persons of that other Party; or
(bb) juridical persons of that other Party identified under subparagraph (c)(i).
(6) Where the service is not supplied or sought to be supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (ie. the juridical person) shall, nonetheless, through such commercial presence be accorded the treatment provided for service suppliers under this Chapter. Such treatment shall be extended to the commercial presence through which the service is supplied or sought to be supplied and need not be extended to any other parts of the service supplier located outside the territory where the service is supplied or sought to be supplied.
3. For the purposes of this Chapter, the following definitions of Article XXVIII of the GATS are hereby incorporated into and made part of this Agreement:
(a) "measure" ;
(b) "supply of a service";
(c) "measures by Members affecting trade in services";
(d) "commercial presence";
(e) "sector" of a service;
(f) "service of another Member";
(g) "monopoly supplier ofa service";
(h) "service consumer";
(i) "person";
(j) "juridical person";
(k) "owned", "controlled" and "affiliated"; and
(l) "direct taxes".
Article 3.4. Most-Favoured-Nation Treatment
1. Without prejudice to measures taken in accordance with Article VI of the GATS, and except as provided for in its List of MFN Exemptions contained in Annex X (List of MEN Exemptions), each Party shall accord immediately and unconditionally, in respect of all measures affecting the supply of services, to services and service suppliers of another Party treatment no less favourable than the treatment it accords to like services and service suppliers of any non-party.
2. Treatment granted under other existing or future agreements concluded by a Party and notified under Article V or Article Vbis of the GATS shall not be subject to paragraph 1.
3. If a Party enters into an agreement with a non-Party which has been notified under Article V or Article Vbis of the GATS, it shall, upon request from another Party, afford adequate opportunity to the other Parties to negotiate, on a mutually advantageous basis, the benefits granted therein.
4. The provision of this Chapter shall not be construed so as to prevent any Party from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous zones of services that are both locally produced and consumed.
Article 3.5. Market Access
Article XVI of the GATS applies and is hereby incorporated into and made part of this Agreement.
Article 3.6. National Treatment
Article XVII of the GATS applies and is hereby incorporated into and made part of this Agreement.
Article 3.7. Additional Commitments
Article XVII of the GATS applies and is hereby incorporated into and made part of this Agreement.
Article 3.8. Domestic Regulation
1. Each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.
2. Each Party shall maintain or institute, as soon as practicable, judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier of another Party, 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.
3. Where authorisation is required by a Party for the supply of a service, the competent authorities of that Party shall, within a reasonable period of time after the submission of an application is considered complete under that Party's domestic laws and regulations, inform the applicant of the decision concerning the application. At the request of the applicant, the competent authorities of that Party shall provide, without undue delay, information concerning the status of the application.
4. Each Party shall ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures, in all services sectors, are based on objective and transparent criteria, such as competence and the ability to supply the service.
5. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures do not constitute unnecessary barriers to trade in services, the Joint Committee shall take a decision aiming at incorporating into the Agreement any disciplines developed in the WTO in accordance with paragraph 4 of Article VI of the GATS. The Parties may also, jointly or bilaterally, decide to develop further disciplines.
6. (a) In sectors in which a Party has undertaken specific commitments, pending the entry into force of a decision incorporating WTO disciplines for these sectors pursuant to paragraph 5, and, if agreed between Parties, disciplines developed jointly or bilaterally under this Agreement pursuant to paragraph 5, the Party shall not apply qualification requirements and procedures, technical standards and licensing requirements and procedures that nullify or impair such specific commitments in a manner which is:
(i) more burdensome than necessary to ensure the quality of the service; or
(ii) in the case of licensing procedures, in itself a restriction on the supply of the service.
(b) In determining whether a Party is in conformity with the obligation under subparagraph (a), account shall be taken of international standards of relevant international organisations (7) applied by that Party.
7. Each Party shall provide for adequate procedures to verify the competence of professionals of another Party.
Article 3.9. Recognition
1. For the purposes of the fulfilment of its relevant standards or criteria for the authorisation, licensing or certification of service suppliers, each Party shall give due consideration to any requests by another Party to recognise the education or experience obtained, requirements met, or licences or certifications granted in that other Party. Such recognition may be based upon an agreement or arrangement with that other Party, or otherwise be accorded autonomously.
2. Where a Party recognises, by agreement or arrangement, the education or experience obtained, requirements met, or licences or certifications granted, in the territory of a non-party, that Party shall afford another 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 another Party to demonstrate that the education or experience obtained, requirements met, or licences or certifications granted, in the territory of that other Party should also be recognised.
3. Any such agreement or arrangement or autonomous recognition shall be in conformity with the relevant provisions of the WTO Agreement, in particular paragraph 3 of Article VII of the GATS.
Article 3.10. Movement of Natural Persons
1. This Article applies to measures affecting natural persons who are service suppliers of a Party, and natural persons ofa Party who are employed by a service supplier of a Party, with respect to the supply of a service.
2. This Chapter shall not apply to measures affecting natural persons seeking access to the employment market of a Party, nor shall it apply to measures regarding nationality, residence or employment on a permanent basis.
3. Natural persons covered by a specific commitment shall be allowed to supply the service in accordance with the terms of that commitment.
4. This Chapter shall not prevent a Party from applying measures to regulate the entry of natural persons of another Party 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. (8)
Article 3.11. Transparency
Paragraphs 1 and 2 of Article II and Article [bis of the GATS apply and are hereby incorporated into and made part of this Agreement.
Article 3.12. Monopolies and Exclusive Service Suppliers
Paragraphs 1, 2 and 5 of Article VII of the GATS apply and are hereby incorporated into and made part of this Agreement.
Article 3.13. Business Practices
Article IX of the GATS applies and is hereby incorporated into and made part of this Agreement.
Article 3.14. Payments and Transfers
1. Except under the circumstances envisaged in Article 3.15 (Restriction to Safeguard the Balance of Payments), a Party shall not apply restrictions on international transfers and payments for current transactions with another Party.
2. Nothing in this Chapter shall affect the rights and obligations of the Parties under the Articles of the Agreement of the International Monetary Fund (IMF), including the use of exchange actions which are in conformity with the Articles of the Agreement of the IMF, provided that a Party shall not impose restrictions on capital transactions inconsistently with its specific commitments regarding such transactions, except under Article 3.15 (Restriction to Safeguard the Balance of Payments) or at the request of the IMF.
Article 3.15. Restrictions to Safeguard the Balance of Payments
1. Paragraphs 1 to 3 of Article XII of the GATS apply and are hereby incorporated into and made part of this Agreement.
2. A Party adopting or maintaining such restrictions shall promptly notify the Joint Committee thereof.
Article 3.16. Subsidies
1. A Party which considers that it is adversely affected by a subsidy of another Party may request ad hoc consultations with that Party on such matters. The requested Party shall enter into such consultations.
2. The Parties shall review any disciplines agreed under Article XV of the GATS with a view to incorporating them into this Agreement.
Article 3.17. Exceptions
Article XIV and paragraph 1 of Article XIV bis of the GATS apply and are hereby incorporated into and made part of this Agreement.
Article 3.18. Schedules of Specific Commitments
1. Each Party shall set out in a Schedule the specific commitments it undertakes under Articles 3.5 (Market Access), 3.6 (National Treatment) and 3.7 (Additional Commitments). With respect to sectors where such commitments are undertaken, each Schedule 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 3.7 (Additional Commitments); and
(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 3.5 (Market Access) and 3.6 (National Treatment) shall be subject to paragraph 2 of Article XX of the GATS.
3. The Parties' Schedules of Specific Commitments are set out in Annex IX (Schedules of Specific Commitments).
Article 3.19. Modification of Schedules
The Parties shall, upon written request by a Party, 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 from the receipt of the 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 the procedures set out in Articles 10 (Joint Committee) and 12.2 (Amendments).
Article 3.20. Review
With the objective of further liberalising trade in services between them, the Parties shall review at least every three years, or more frequently if so agreed, their Schedules of Specific Commitments and their Lists of MFN Exemptions, taking into account in particular any autonomous liberalisation and on-going work under the auspices of the WTO. The first such review shall take place no later than three years from the entry into force of this Agreement.
Article 3.21. Annexes
The following Annexes form an integral part of this Chapter:
(a) Annex IX (Schedules of Specific Commitments);
(b) Annex X (List of MFN Exemptions);
(c) Annex XI (Financial Services);
(d) Annex XII (Telecommunications Services);
(e) Annex XII (Movement of Natural Persons Supplying Services);
(f) Annex XIV (Maritime Transport and Related Services).
Chapter 4. ESTABLISHMENT
Article 4.1. Scope and Coverage
1. This Chapter applies to commercial presence in all sectors, with the exception of services sectors as set out in Article 3.1 (Scope and Coverage). (9)
2. This Chapter shall be without prejudice to the interpretation or application of other international agreements relating to investment or taxation to which one or several EFTA States and Ecuador are parties.
3. Nothing in this Chapter shall be construed to impose any obligation with respect to government procurement, which is subject to Chapter 6 (Government Procurement).
Article 4.2. Definitions
For the purposes of this Chapter:
(a) "Juridical person" means any legal entity duly constituted or otherwise organised 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;
(b) "Juridical person of a Party" means a juridical person constituted or otherwise organised under the law of a Party and engaged in substantive business operations in that Party;
(c) "natural person" means a person who has the nationality of a Party in accordance with its domestic laws and regulations, or is a permanent resident of a Party in accordance with its domestic laws and regulations, who resides in the territory of a Party, if that Party accords substantially the same treatment to its permanent residents as to its nationals in respect of measures affecting commercial presence;
(d) "commercial presence" means any type of business establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person, or
(ii) the creation or maintenance of a branch or a representative office, within the territory of another Party for the purpose of performing an economic activity.
Article 4.3. National Treatment
Each Party shall, subject to Article 4.4 (Reservations) and the reservations set out in Annex XV (List of Reservations), accord to juridical and natural persons of another Party, and to the commercial presence of such persons, treatment no less favourable than that it accords, in like situations (10), to its own juridical and natural persons, and to the commercial presence of such persons. (11)
Article 4.4. Reservations
1. Article 4.3 (National Treatment) shall not apply to:
(a) any reservation in Annex XV (List of Reservations);
(b) an amendment to a reservation referred to in sub-paragraph (a) to the extent that the amendment does not decrease the conformity of the reservation with Article 4.3 (National Treatment);
(c) any new reservation adopted by a Party, and incorporated into Annex XV (List of Reservations) which does not affect the overall level of commitments of that Party under this Agreement;