5. Subparagraphs (a) and (b) of Article 7.4 (Principles) apply as from five years after the date of entry into force of this Agreement.
Article 7.4. Principles
A Party shall:
(a) refrain from adopting measures providing for local content requirements or any other offset affecting the other Party's products, service suppliers, investors or enterprises;
(b) refrain from adopting measures requiring to form a partnership with local companies, unless those partnerships are deemed necessary for technical reasons and that Party can demonstrate those reasons upon request of the other Party;
(c) ensure that any measures concerning the authorisation, certification and licensing procedures that are applied, in particular, to equipment, plants and associated transmission network infrastructures, are objective, transparent, non-arbitrary and do not discriminate amongst applicants from the Parties;
(d) ensure that administrative fees and charges imposed on or in connection with the:
(i) importation and use of products originating in the other Party, by the other Party's suppliers, are subject to Articles 2.18 (Administrative Fees, Other Charges and Formalities on Imports and Exports) and 4.10 (Fees and Charges); and
(i) provision of services by the other Party's suppliers are subject to Articles 8.18 (Scope and Definitions), 8.19 (Conditions for Licensing and Qualification) and 8.20 (Licensing and Qualification Procedures); and
(e) ensure that the terms, conditions and procedures for the connection and access to electricity transmission grids are transparent and do not discriminate against suppliers of the other Party.
Article 7.5. Standards, Technical Regulations and Conformity Assessment
1. This Article applies to the products covered by the tariff headings listed in Annex 7 (List of Tariff Headings). The Parties may agree to include other products in this list by exchange of letters.
2. If relevant international standards established by the International Organization for Standardization or the International Electrotechnical Commission exist, the Parties shall use those international standards, or their relevant parts, as a basis for any standard, technical regulation or conformity assessment procedure, except when those international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued. In those cases, a Party shall, upon request of the other Party, identify the part of the respective standard, technical regulation or conformity assessment procedure which substantially deviates from the relevant international standard and provide justification as to the reasons for the deviation.
3. If appropriate, the Parties shall specify technical regulations based on product requirements in terms of performance, including safety and environmental performance, rather than design or descriptive characteristics.
4. A Party accepting a supplier's declaration of conformity as a positive assurance of conformity shall endeavour not to require the submission of test results.
5. Ifa Party requires test reports, whether alone, as the basis of, or in conjunction with other assurances of conformity, or as positive assurance that a product is in conformity with its relevant standards or technical regulations, it shall endeavour to accept test reports in form of the International Electrotechnical Commission System of Conformity Assessment Schemes for Electrotechnical Equipment and Components (IECEE CB Scheme) Test Reports without requiring any further testing.
6. If a Party requires third party's certification for product, it shall endeavour to accept a valid CB Test Certificate under the IECEE CB Scheme as sufficient assurance of conformity without requiring any further conformity assessment or administrative procedures or approvals.
7. This Article is without prejudice to the Parties applying requirements not related to the products in question, such as zoning laws or building codes.
Article 7.6. Exceptions
1. This Chapter is subject to Articles 2.22 (General Exceptions), 8.53 (General Exceptions) and 9.3 (Security and General Exceptions).
2. Nothing in this Chapter shall be construed as preventing a Party from adopting or enforcing measures necessary for the safe operation of the energy networks concerned, or the safety of the energy supply, subject to the requirement that those measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties' products, service suppliers or investors under like circumstances, or a disguised restriction on trade and investment between the Parties.
Article 7.7. Implementation and Cooperation
1. The Parties shall cooperate and exchange information on any issues relating to the implementation of this Chapter in the relevant specialised committees established pursuant to Article 17.2 (Specialised Committees). The Trade Committee may decide to adopt appropriate implementing measures to this effect.
2. The Parties shall exchange information, regulatory experiences and best practices in areas such as:
(a) the design and non-discriminatory implementation of measures promoting the use of energy from renewable sources;
(b) technical regulations, standards and conformity assessment procedures, such as those relating to grid code requirements.
3. The Parties shall promote cooperation, with respect to domestic or regional technical regulations, regulatory concepts, standards, requirements and conformity assessment procedures which comply with international standards, in relevant regional fora.
Chapter 8. Liberalisation of Investment, Trade In Services and Electronic Commerce
Section A. General Provisions
Article 8.1. Objectives and Scope
1. The Parties, affirming their respective commitments under the WTO Agreement and their commitment to create a better climate for the development of trade and investment between the Parties, hereby lay down the necessary arrangements for the progressive liberalisation of investment and trade in services and for cooperation on electronic commerce.
2. Consistent with the provisions of this Chapter, each Party retains the right to adopt, maintain and enforce measures necessary to pursue legitimate policy objectives such as the protection of the environment and public health, social policy, the integrity and stability of the financial system, the promotion of security and safety, and the promotion and protection of cultural diversity.
3. This Chapter does not apply to measures affecting natural persons seeking access to the employment market of a Party, nor does it apply to measures regarding 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 (5) accruing to any Party under the terms of a specific commitment in this Chapter and its Annexes.
5. Nothing in this Chapter shall be construed as limiting the obligations of the Parties under Chapter 9 (Government Procurement) or to impose any additional obligation relating to government procurement.
6. This Chapter does not apply to subsidies granted by the Parties (6), except for Article 8.8 (Performance Requirements).
7. A Party's decision not to issue, renew or maintain a subsidy or grant shall not constitute a breach of Article 8.8 (Performance Requirements) in the following circumstances:
(a) in the absence of any of the Party's specific commitments to the investor under law or contract to issue, renew, or maintain that subsidy or grant; or
(b) in accordance with any terms or conditions attached to the issuance, renewal or maintenance of the subsidy or grant.
8. This Chapter does not apply to the Parties' respective social security systems or to activities in the territory of each Party, which are connected, even occasionally, with the exercise of official authority.
Article 8.2. Definitions
1. For the purposes of this Chapter:
(a) "aircraft repair and maintenance services" during which an aircraft is withdrawn from service" means such activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include so-called line maintenance;
(b) "computer reservation system (CRS) services" means services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued;
(c) "cross-border supply of services" means the supply of a service:
(i) from the territory of a Party into the territory of the other Party; or
(ii) in the territory of a Party to the service consumer of the other Party;
(d) "economic activities" includes activities of an industrial, commercial and professional character and activities of craftsmen, but does not include activities performed in the exercise of governmental authority;
(e) "enterprise" means a juridical person, branch (7) or representative office set up through establishment;
(f) "establishment" means the setting up, including the acquisition, of a juridical person or creation of a branch or a representative office in the Union or in Viet Nam, respectively (8), with a view to establishing or maintaining lasting economic links;
(g) "ground handling services" means the supply at an airport of the following services: airline representation, administration and supervision; passenger handling; baggage handling; ramp services; catering; air cargo and mail handling; fuelling of an aircraft, aircraft servicing and cleaning; surface transport; flight operation, crew administration and flight planning; ground handling services does not include security, aircraft repair and maintenance, or management or operation of essential centralised airport infrastructure such as de-icing facilities, fuel distribution systems, baggage handling systems, and fixed intra-airport transport systems;
(h) "investor" means a natural person or a juridical person of a Party that seeks to establish (9), is establishing or has established an enterprise in the territory of the other Party;
(i) "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;
(j) "juridical person of a Party" means a juridical person of the Union or a juridical person of Viet Nam, set up in accordance with the domestic laws and regulations of the Union or its Member States, or of Viet Nam, respectively, and engaged in substantive business operations (10) in the territory of the Union or of Viet Nam, respectively;
(k) "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;
(l) "natural person" means a natural person of a Party as defined in subparagraph (h) of Article 1.5;
(m) "operation" means, with respect to an enterprise, the conduct, management, maintenance, use, enjoyment, sale or other forms of disposal of the enterprise (11);
(n) "selling and marketing of air transport services" means opportunities for the air carrier concerned to freely sell and market its air transport services, including all aspects of marketing such as market research, advertising and distribution; those activities do not include the pricing of air transport services nor the applicable conditions;
(o) "services" means any service in any sector except services supplied in the exercise of governmental authority;
(p) "services supplied and activities performed in the exercise of governmental authority" means services supplied or activities performed neither on a commercial basis nor in competition with one or more economic operators;
(q) "service supplier" of a Party means any natural or juridical person of a Party that supplies a service; and
(r) "subsidiary" of a juridical person of a Party means a juridical person which is controlled by another juridical person of that Party in accordance with its domestic laws and regulations (12).
2. A juridical person is:
(a) "owned" by natural or juridical persons of one of the Parties if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party; or
(b) "controlled" by natural or juridical persons of one of the Parties if such persons have the power to name a majority of its directors or otherwise to legally direct its actions.
3. Notwithstanding the definition of a "juridical person of a Party" in subparagraph 1(j), shipping companies established outside the Union or Viet Nam and controlled by nationals of a Member State of the Union or of Viet Nam, respectively, shall also be covered by this Chapter if their vessels are registered in accordance with the respective domestic laws and regulations in a Member State or in Viet Nam and fly the flag of that Member State or of Viet Nam, respectively.
Section B. Liberalisation of Investment
Article 8.3. Scope
1. This Section applies to measures adopted or maintained by a Party affecting the establishment or the operation of an enterprise by an investor of the other Party in the territory of the Party that adopts or maintains those measures.
2. This Section does not apply to:
(a) audio-visual services;
(b) mining, manufacturing and processing (13) of nuclear materials;
(c) production of or trade in arms, munitions and war material;
(d) national maritime cabotage (14);
(e) domestic 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 during which an aircraft is withdrawn from service;
(ii) the selling and marketing of air transport services;
(iii) computer reservation system services (CRS), and
(iv) ground handling services;
and
(f) services supplied and activities performed in the exercise of governmental authority.
Article 8.4. Market Access
1. With respect to market access through establishment and maintenance of an enterprise, each Party shall accord treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its respective Schedule of Specific Commitments in Annex 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments).
2. In sectors where market access commitments are undertaken, the measures which a Party shall not adopt or maintain 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 in Annex 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively, are defined as:
(a) limitations on the number of enterprises that may perform a specific economic activity, whether in the form of numerical quotas, monopolies, exclusive rights or the requirements of an economic needs test;
(b) limitations on the total value of transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
(c) limitations on the total number of operations or on the total quantity of output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;
(d) 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;
(e) measures which restrict or require specific types of legal entity or joint ventures through which an investor of the other Party may perform an economic activity; and
(f) limitations on the total number of natural persons that may be employed in a particular sector or that an investor may employ and who are necessary for, and directly related to, the performance of the economic activity in the form of numerical quotas or the requirement of an economic needs test.
Article 8.5. National Treatment
1. In the sectors inscribed in its respective Schedule of Specific Commitments in Annexes 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments) and subject to any conditions and qualifications set out therein, each Party shall accord to investors of the other Party and to their enterprises, with respect to establishment in its territory, treatment no less favourable than that accorded, in like situations, to its own investors and to their enterprises.
2. A Party shall accord to investors of the other Party and to their enterprises (15), with respect to the operation of those enterprises, treatment no less favourable than that accorded, in like situations, to its own investors and to their enterprises.
3. Notwithstanding paragraph 2 and, in the case of Viet Nam subject to Annex 8-C (Exemption for Viet Nam on National Treatment), a Party may adopt or maintain any measure with respect to the operation of an enterprise provided that such measure is not inconsistent with the commitments set out in Annex 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively, where such measure is:
(a) a measure that is adopted on or before the date of entry into force of this Agreement;
(b) a measure referred to in subparagraph (a) that is being continued, replaced or amended after the date of entry into force of this Agreement, provided the measure is no less consistent with paragraph 2 after it is continued, replaced or amended than the measure as it existed prior to its continuation, replacement or amendment; or
(c) a measure not falling within subparagraph (a) or (b), provided it is not applied in respect of, or in a way that causes loss or damage to, enterprises established in the territory of the Party before the date of entry into force of such measure (15).
Article 8.6. Most-Favoured-Nation Treatment
1. Each Party shall accord to investors of the other Party and to their enterprises as regards their operation in its territory, treatment no less favourable than the treatment it accords, in like situations, to investors of a third country and their enterprises.
2. Paragraph 1 does not apply to the following sectors:
(a) communication services, except for postal services and telecommunication services;
(b) recreational, cultural and sporting services;
(c) fishery and aquaculture;
(d) forestry and hunting; and
(e) mining, including oil and gas.
3. Paragraph 1 shall not be construed as obliging a Party to extend to the investors of the other Party or their enterprises the benefit of any treatment granted pursuant to any bilateral, regional or multilateral agreement that entered into force before the date of entry into force of this Agreement.
4. Paragraph 1 shall not be construed as obliging a Party to extend to the investors of the other Party or their enterprises the benefit of:
(a) any treatment granted pursuant to any bilateral, regional or multilateral agreement which includes commitments to abolish substantially all barriers to the operation of enterprises among the parties or requires the approximation of legislation of the parties in one or more economic sectors (17);
(b) any treatment resulting from any international agreement for the avoidance of double taxation or other international agreement or arrangement relating wholly or mainly to taxation; or
(c) any treatment resulting from measures providing for the recognition of qualifications, licences or prudential measures in accordance with Article VII of GATS or its Annex on Financial Services.
5. For greater certainty, the "treatment" referred to in paragraph 1 does not include dispute resolution procedures or mechanisms, such as resolution of investment disputes between investors and states, provided for in any other bilateral, regional or multilateral agreements. Substantive obligations in such agreements do not in themselves constitute "treatment" and thus cannot be taken into account when assessing a breach of this Article. Measures by a Party pursuant to those substantive obligations shall be considered "treatment".
6. This Article shall be interpreted in accordance with the principle of ejusdem generis (18).
Article 8.7. Schedule of Specific Commitments
The sectors liberalised by each Party pursuant to this Section and the terms, limitations, conditions and qualifications referred to in Articles 8.4 (Market Access), 8.5 (National Treatment) and 8.8 (Performance Requirements) are set out in each Party's Schedule of Specific Commitments included in Appendix 8-A-2 to Annex 8-A (The Union's Schedule of Specific Commitments) or in Appendix 8-B-1 to Annex 8-B (Viet Nam's Schedule of Specific Commitments), respectively.
Article 8.8. Performance Requirements
1. In the sectors inscribed in its Schedule of Specific Commitments in Annex 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively, and subject to any conditions and qualifications set out therein, a Party shall not impose or enforce any of the following requirements which are mandatory or enforceable under domestic law or under administrative rulings, in connection with the establishment or operation of any enterprise of investors of a Party or of a third country in its territory:
(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 or services provided in its territory, or to purchase goods or services from natural persons or enterprises 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 enterprise;
(e) to restrict sales of goods or services in its territory that such enterprise produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;
(f) to transfer technology, a production process or other proprietary knowledge to a natural person or enterprises in its territory; or
(g) to supply exclusively from the territory of the Party a good produced or a service provided by the enterprise to a specific regional or world market.
2. In the sectors inscribed in its Schedule of Specific Commitments in Annex 8-A (The Union's Schedule of Specific Commitments) or 8-B (Viet Nam's Schedule of Specific Commitments), respectively, and subject to any conditions and qualifications set out therein, a Party shall not condition the receipt or continued receipt of an advantage, in connection with the establishment or operation of an enterprise of an investor of a Party or of a third country in its territory, on compliance with any of the following requirements:
(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 producers 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 enterprise; or
(d) to restrict sales of goods or services in its territory that such enterprise produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.
3. Paragraph 2 shall not be construed as preventing a Party from conditioning the receipt or continued receipt of an advantage in connection with any enterprise in its territory on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and devel- opment in its territory.
4. Subparagraph 1(f) shall not be construed as preventing the application of a requirement imposed or a commitment or undertaking enforced by a court, administrative tribunal or competition authority, in order to remedy an alleged violation of competition laws.
5. Subparagraphs 1(a) to 1(c), 2(a) and 2(b) do not apply to qualification requirements for goods or services with respect to participation in export promotion and foreign aid programmes.
6. For greater certainty, subparagraphs 2(a) and 2(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.
7. For greater certainty, paragraphs 1 and 2 do not apply to any requirement other than the requirements set out in those paragraphs.
8. This Article does not apply to measures adopted or maintained by a Party in accordance with subparagraph 8(b) of Article Il of GATT 1994.