(a) Article C-01 (Market Access - National Treatment) and such other provisions of this Agreement as are necessary to give effect to that Article shall apply to taxation measures to the same extent as does Article III of the GATT 1994; and
(b) Article C-12 (Market Access - Export Taxes) shall apply to taxation measures.
4. Subject to paragraph 2:
(a) Article H-02 (Cross-Border Trade in Services - National Treatment) shall apply to taxation measures on income, capital gains or the taxable capital of corporations that relate to the purchase or consumption of particular services; and
(b) Articles G-02 and G-03 (Investment - National Treatment and Most-Favoured Nation Treatment) and Articles H-02 and H-03 (Cross-Border Trade in Services National Treatment and Most-Favoured-Nation Treatment) shall apply to all taxation measures, other than those on income, capital gains or on the taxable capital of corporations, taxes on estates, inheritances, gifts and generation-skipping transfers, except that nothing in those Articles shall apply:
(c) any most-favoured-nation obligation with respect to an advantage accorded by a Party pursuant to a tax convention;
(d) to a non-conforming provision of any existing taxation measure;
(e) to the continuation or prompt renewal of a non-conforming provision of any existing taxation measure;
(f) to an amendment to a non-conforming provision of any existing taxation measure to the extent that the amendment does not decrease its conformity, at the time of the amendment, with any of those Articles; or
(g) to any new taxation measure aimed at ensuring the equitable and effective imposition or collection of taxes and that does not arbitrarily discriminate between persons, goods or services of the Parties or arbitrarily nullify or impair benefits accorded under those Articles, in the sense of Annex N-04.
5. Subject to paragraph 2 and without prejudice to the rights and obligations of the Parties under paragraph 3, Article G-06(3), (4) and (5) (Performance Requirements) shall apply to taxation measures.
6. Article G-10 (Expropriation and Compensation) shall apply to taxation measures except that no investor may invoke that Article as the basis for a claim under Article G-17 (Claim by an Investor of a Party on Its Own Behalf) or G-18 (Claim by an Investor of a Party on Behalf of an Enterprise), where it has been determined pursuant to this paragraph that the measure is not an expropriation. The investor shall refer the issue of whether the measure is not an expropriation for a determination to the appropriate competent authorities set out in Annex O-03.6 at the time that it gives notice under Article G-20 (Notice of Intent to Submit a Claim to Arbitration). If the competent authorities do not agree to consider the issue or, having agreed to consider it, fail to agree that the measure is not an expropriation within a period of six months of such referral, the investor may submit its claim to arbitration under Article G-21 (Submission of a Claim to Arbitration).
Article O-04. Balance of Payments
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures that restrict transfers where the Party experiences serious balance of payments difficulties, or the threat thereof, and such restrictions are consistent with this Article.
2. As soon as practicable after a Party imposes a measure under this Article, the Party shall:
(a) submit any current account exchange restrictions to the IMF for review under Article VIII of the Articles of Agreement of the IMF;
(b) enter into good faith consultations with the IMF on economic adjustment measures to address the fundamental underlying economic problems causing the difficulties; and
(c) adopt or maintain economic policies consistent with such consultations.
3. A measure adopted or maintained under this Article shall:
(a) avoid unnecessary damage to the commercial, economic or financial interests of the other Party;
(b) not be more burdensome than necessary to deal with the balance of payments difficulties or threat thereof;
(c) be temporary and be phased out progressively as the balance of payments situation improves;
(d) be consistent with paragraph 2(c) and with the Articles of Agreement of the IMF; and
(e) be applied on a national treatment or most-favoured-nation treatment basis, whichever is better.
4. A Party may adopt or maintain a measure under this Article that gives priority to services that are essential to its economic program, provided that a Party may not impose a measure for the purpose of protecting a specific industry or sector unless the measure is consistent with paragraph 2(c) and with Article VIII(3) of the Articles of Agreement of the IMF.
5. Restrictions imposed on transfers:
(a) where imposed on payments for current international transactions, shall be consistent with Article VIII(3) of the Articles of Agreement of the IMF;
(b) where imposed on international capital transactions, shall be consistent with Article VI of the Articles of Agreement of the IMF and be imposed only in conjunction with measures imposed on current international transactions under paragraph 2(a);
(c) where imposed on transfers covered by Article G-09 (Investment -Transfers) and transfers related to trade in goods, may not substantially impede transfers from being made in a freely usable currency at a market rate of exchange; and
(d) may not take the form of tariff surcharges, quotas, licences or similar measures.
Article O-05. Disclosure of Information
Nothing in this Agreement shall be construed to require a Party to furnish or allow access to information the disclosure of which would impede law enforcement or would be contrary to the Party's law protecting personal privacy or the financial affairs and accounts of individual customers of financial institutions.
Article O-06. Cultural Industries
Annex O-06 applies to the Parties with respect to cultural industries. Article O-07:
Article O-07. Definitions
For purposes of this Chapter:
cultural industries means persons engaged in any of the following activities:
(a) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
(b) the production, distribution, sale or exhibition of film or video recordings;
(c) the production, distribution, sale or exhibition of audio or video music recordings;
(d) the publication, distribution or sale of music in print or machine readable form; or
(e) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television and cable broadcasting undertakings and all satellite programming and broadcast network services;
international capital transactions means "international capital transactions" as defined under the Articles of Agreement of the IMF;
IMF means the International Monetary Fund;
payments for current international transactions means "payments for current international transactions" as defined under the Articles of Agreement of the IMF;
tax convention means a convention for the avoidance of double taxation or other international taxation agreement or arrangement;
taxes and taxation measures do not include:
(a) a "customs duty" as defined in Article C-18 (Market Access Definitions); or
(b) the measures listed in exceptions (b), (c) and (d) of that definition; and
transfers means international transactions and related international transfers and payments.
Annex O-03.1. Double taxation
1. The Parties agree to conclude a bilateral double taxation agreement within a reasonable time after the date that this Agreement enters into force.
2. The Parties agree that upon conclusion of a bilateral double taxation agreement, they will agree to an exchange of letters setting out the relationship between the double taxation agreement and Article O-03 of the Agreement.
Chapter P. Final Provisions
Article P-01. Annexes, Appendices and Notes
The Annexes, Appendices and Notes to this Agreement constitute integral parts of this Agreement.
Article P-02. Amendments
1. The Parties may agree on any modification of or addition to this Agreement.
2. When so agreed, and approved in accordance with the applicable legal procedures of each Party, a modification or addition shall constitute an integral part of this Agreement.
Article P-03. Entry Into Force
This Agreement shall enter into force on June 2, 1997, on an exchange of written notifications certifying the completion of necessary legal procedures.
Article P-04. Accession of Chile to the NAFTA
The Parties shall work toward the early accession of Chile to the NAFTA.
Article P-05. Duration and Termination
This Agreement shall remain in force unless terminated by either Party on six months' notice to the other Party.
Article P-06. Authentic Texts
The English, French and Spanish texts of this Agreement are equally authentic.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement. DONE in Santiago, on the 5th day of December, one thousand nine hundred ninety six, in duplicate, in the English, French and Spanish languages.
FOR THE GOVERNMENT OF CANADA
FOR THE GOVERNMENT OF THE REPUBLIC OF CHILE
Attachments
Annex I. Reservations for existing measures and liberalization commitments (chapters g and h)
1. The Schedule of a Party sets out, pursuant to Articles G-08(1) (Investment) and H-06(1) (Cross-Border Trade in Services), the reservations taken by that Party with respect to existing measures that do not conform with obligations imposed by:
a. Article G-02 or H-02 (National Treatment);
b. Article G-03 or H-03 (Most-Favored-Nation Treatment);
c. Article H-05 (Local Presence);
d. Article G-06 (Performance Requirements); or
e. Article G-07 (Senior Management and Boards of Directors), and, in certain cases, sets out commitments for immediate or future liberalization.
2. Each reservation sets out the following elements:
a. Sector refers to the general sector in which the reservation is taken;
b. Sub-Sector refers to the specific sector in which the reservation is taken;
c. Industry Classification refers, where applicable, to the activity covered by the reservation according to domestic industry classification codes;
d. Type of Reservation specifies the obligation referred to in paragraph 1 for which a reservation is taken;
e. Level of Government indicates the level of government maintaining the measure for which a reservation is taken;
f. Measures identifies the laws, regulations or other measures, as qualified, where indicated, by the Description element, for which the reservation is taken.
A measure cited in the Measures element
i. means the measure as amended, continued or renewed as of the date of entry into force of this Agreement, and
ii. includes any subordinate measure adopted or maintained under the authority of and consistent with the measure
g. Description sets out commitments, if any, for liberalization on the date of entry into force of this Agreement, and the remaining non-conforming aspects of the existing measures for which the reservation is taken; an
h. Phase-Out sets out commitments, if any, for liberalization after the date of entry into force of this Agreement.
3. In the interpretation of a reservation, all elements of the reservation shall be considered. A reservation shall be interpreted in the light of the relevant provisions of the Chapters against which the reservation is taken. To the extent that:
a. the Phase-Out element provides for the phasing out of non-conforming aspects of measures, the Phase-Out element shall prevail over all other elements;
b. the Measures element is qualified by a liberalization commitment from the Description element, the Measures element as so qualified shall prevail over all other elements; and
c. the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements considered in their totality is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case the other elements shall prevail to the extent of that discrepancy.
4. Where a Party maintains a measure that requires that a service provider be a citizen, permanent resident or resident of its territory as a condition to the provision of a service in its territory, a reservation for that measure taken with respect to Article H-02, H-03 or H-05 shall operate as a reservation with respect to Article G-02, G-03 or G-06 to the extent of that measure.
5. The listing of a measure in this Annex is without prejudice to a future claim that Annex II may apply to the measure or some application of the measure.
6. Unless otherwise stated in the Description element, a Chilean juridical person includes an enterprise of the other Party that is constituted or organized in Chile in a form which under Chilean law is recognized as being a juridical person.
7. For purposes of this Annex:
CPC means Central Product Classification (CPC) numbers as set out in Statistical Office of the United Nations, Statistical Papers, Series M, No. 77, Provisional Central Product Classification, 1991; and
SIC means with respect to Canada, Standard Industrial Classification (SIC) numbers as set out in Statistics Canada, Standard Industrial Classification, fourth edition, 1980.
Annex I. Schedule of Canada
Sector:
Agriculture
Sub-Sector:
Industry Classification:
Type of Reservation:
National Treatment (Article G-02)
Level of Government:
Federal
Measures:
Farm CreditCorporation Act, S.C. 1993, c. 14
Description:
Investment
Loans by the Farm Credit Corporation may be made only to:
1. individuals who are Canadian citizens or permanent residents;
2. corporations related to farming in Canada controlled by Canadian citizens or permanent residents; or
3. cooperative farm associations, all members of which are Canadian citizens or permanent residents.
Phase-Out:
None
Sector:
All Sectors
Sub-Sector:
Industry Classification:
Type of Reservation:
National Treatment (Articles G-02, H-02)
Most-Favoured Nation Treatment (Articles G-03, H-03)
Local Presence (Article H-05)
Performance Requirements (Article G-06)
Senior Management and Boards of Directors (Article G-07)
Level of Government:
Provincial
Measures:
All existing non-conforming measures of all provinces and territories
Description:
Phase-Out:
None
Sector:
All Sectors
Sub-Sector:
Industry Classification:
Type of Reservation:
National Treatment (Article G-02)
Performance Requirements (Article G-06)
Senior Management and Boards of Directors (Article G-07)
Level of Government:
Federal
Measures:
Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.)
Investment Canada Regulations, SOR/85611