(iv) if none of the above is practicable, and the application is rejected due to incompleteness, ensure that the applicant is informed within a reasonable period of time;
(j) if an application is rejected, inform the applicant, to the extent practicable, either on its own initiative or on the request of the applicant, of the reasons for rejection and, if applicable, the procedures for resubmission of an application;
(k) ensure that the authorisation fees (9) charged by the competent authority are reasonable, are transparent and do not in themselves restrict the supply of the relevant service or the pursuit of any other economic activity; and
(l) ensure that the authorisation, once granted, enters into effect without undue delay subject to the applicable terms and conditions.
Article 18.19. Sub-Committee on Financial Services
1. The Sub-Committee on Financial Services established by Article 1.10.1(i) (Sub-Committees and Other Bodies of Part III of this Agreement) shall meet annually, unless otherwise agreed, to:
(a) monitor the implementation and operation of this Chapter;
(b) consider matters regarding financial services that are referred to it by a Party;
(c) provide a forum for dialogue between the Parties on the regulation of the financial services sector with a view to improving mutual knowledge of their respective regulatory systems and to cooperate in the development of international standards;
(d) participate in dispute settlement procedures in accordance with Article 18.22 (Investment Disputes in Financial Services); and
(e) to assess the functioning of this Agreement as it applies to financial services.
2. Further to paragraph 1 of Article 1.10 (Sub-Committees and other Bodies of Part III of this Agreement), the composition of the Sub-Committee on Financial Services shall include financial services experts and representatives of authorities in charge of financial services policy. For Mexico, the authority responsible for financial services policy is the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) or its successor.
3. On request of either Party, the Sub-Committee on Financial Services shall discuss the development of appropriate guidelines for the interpretation of this Chapter. The Joint Council may adopt such guidelines by means of a recommendation.
Article 18.20. Consultations
1. A Party may request, in writing, consultations with the other Party regarding any matter arising under this Agreement that affects financial services. The other Party shall accord sympathetic consideration to that request. The consulting Parties shall report the results of their consultations to the Sub-Committee on Financial Services.
2. Each Party shall ensure that its delegation in the consultations includes officials with the relevant expertise in financial services or financial institutions covered by this Chapter. For Mexico, the officials of the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) or its successor fulfil this requirement.
3. Nothing in this Article shall be construed as requiring a Party to derogate from its law regarding the sharing of information among financial authorities or the requirements of an agreement or arrangement between financial authorities of the Parties, or require financial authorities to take any action that would interfere with specific regulatory, supervisory, administrative or enforcement matters.
4. Nothing in this Article shall be construed as preventing a Party from requiring information for supervisory purposes concerning a financial institution, or a cross-border financial service supplier, located in the territory of other Party. That Party may approach the financial authority of the other Party to seek the information.
Article 18.21. Dispute Settlement
1. Chapter 31 (Dispute Settlement), including Annexes 31-A (Rules of Procedure) and 31-B (Code of Conduct), applies as modified by this Article to the settlement of disputes concerning the application and interpretation of the provisions of this Chapter.
2. In addition to the requirements set out in Article 31.9 (Requirements for Panellists), panellists shall have expertise or experience in financial services law or practice, which may include the regulation of financial institutions, unless the Parties agree otherwise.
3. The Joint Committee shall, no later than six months after the date of entry into force of this Agreement, adopt a list of at least 15 individuals, fulfilling the requirements set out in paragraph 2, who are willing and able to serve as panellists. The list shall be composed of three sub-lists:
(a) a sub-list of individuals of the European Union;
(b) a sub-list of individuals of Mexico; and
(c) a sub-list of individuals who shall serve as chairperson to the panel.
4. For the purposes of this Chapter, the sub-lists referred to in paragraph 3 shall, after adoption, replace the sub-lists set out in paragraph 1 of Article 31.8 (Lists of Panellists).
5. In any dispute where a panel finds a measure to be inconsistent with the obligations of this Agreement and the measure affects:
(a) the financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector that have an effect equivalent to the effect of the measure in the financial services sector of the other Party; or
(b) only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector.
Article 18.22. Investment Disputes In Financial Services
1. Section D (Resolution of Investment Disputes) of Chapter 10 (Investment) as incorporated and made part of this Chapter by Article 18.2.8 applies, as modified by this Article, to:
(a) investment disputes pertaining to measures to which this Chapter applies and in which an investor claims that a Party has breached paragraph 2 of Article 10.7 (National Treatment), paragraph 2 of Article 10.8 (Most-Favoured-Nation Treatment), Articles 10.15 (Treatment of Investors and of Covered Investments), 10.16 (Transfers), 10.17 (Compensation for Losses), 10.18 (Expropriation and Compensation) or 10.52 (Denial of Benefits); or
(b) investment disputes commenced pursuant to Section D (Resolution of Investment Disputes) of Chapter 10 (Investment) in which Article 18.13 (Prudential Carve-Out) has been invoked.
2. In the case of an investment dispute pursuant to subparagraph 1(a), or if the respondent invokes Article 18.13 (Prudential Carve-Out) pursuant to subparagraph 1(b) within 60 days of the submission of a claim to the Tribunal in accordance with Article 10.26 (Submission of a Claim to the Tribunal), the division of the Tribunal hearing the case shall appoint, after consulting the disputing parties and pursuant to Article 10.44 (Expert Reports), one or more experts from the list of experts adopted by the Joint Committee to report to it on any factual issue concerning financial services matters raised by a disputing party in the proceedings. The list of experts shall be adopted by the Joint Council no later than six months after the entry into force of this Agreement and shall be composed of six experts who have demonstrated expertise or experience in financial services law or practice, which may include the regulation of financial institutions. If the list has not been adopted on the day that the claim is submitted pursuant to Article 10.26 (Submission of a Claim to the Tribunal), the experts shall be appointed from the individuals who have been designated and notified to the other Party by a Party or both Parties for the purposes of adopting that list.
3. The respondent may refer the matter in writing to the Sub-Committee on Financial Services for a decision as to whether and, if so, to what extent the exception under Article 18.13 (Prudential Carve-Out) is a valid defence to the claim. This referral shall not be made later than the date which the Tribunal fixes for the respondent to deliver its submission. If the respondent refers the matter to the Sub-Committee on Financial Services pursuant to this paragraph, the periods of time or proceedings referred to in Section D of (Resolution of Investment Disputes) of Chapter 10 (Investment) are suspended.
4. In a referral pursuant to paragraph 3, the Sub-Committee on Financial Services may make a joint determination as to whether and to what extent a prudential carve-out in accordance with Article 18.13 is a valid defence to the claim and transmit a copy thereof to the investor and the Tribunal. If the joint determination concludes that Article 18.13 is a valid defence to all parts of the claim in its entirety, the investor is deemed to have withdrawn its claim and the proceedings are discontinued in accordance with Article 10.40 (Discontinuance). If the joint determination concludes that Article 18.13 is a valid defence to only parts of the claim, the joint determination is binding on the Tribunal with respect to those parts of the claim. In that case, the suspension of the periods of time or proceedings described in paragraph 3 does not apply and the investor may proceed with the remaining parts of the claim.
5. If the Sub-Committee on Financial Services has not made a joint determination within three months after the referral of the matter by the respondent, the suspension of the periods of time or proceedings referred to in paragraph 3 does not apply and the investor may proceed with its claim.
6. At the request of the respondent and in case the Sub-Committee on Financial Services failed to make a joint determination within the three months period referred to in paragraph 5, the Tribunal shall decide as a preliminary matter whether and to what extent Article 18.13 is a valid defence. Failure of the respondent to make that request is without prejudice to the right of the respondent to assert Article 18.13 as a defence in a later phase of the proceedings. The Tribunal shall draw no adverse inference from the fact that the Sub-Committee on Financial Services has not agreed on a joint determination.
7. Proceedings pursuant to paragraph 6 shall be conducted by the division of the Tribunal established to hear the claim and shall in particular ensure that the disputing parties have an opportunity to present at least one written submission. The division of the Tribunal shall issue its preliminary decision within 120 days after the reception of the last submission. If the Tribunal requires additional time to issue its preliminary decision, it shall provide the reasons for the delay. If the division of the Tribunal concludes that Article 18.13 is a valid defence applicable to the entire claim, the investor is deemed to have withdrawn its claim and the proceedings are discontinued in accordance with Article 10.40 (Discontinuance). If the division of the Tribunal concludes that Article 18.13 is a valid defence applicable to only parts of the claim, the proceedings shall continue with the remaining parts of the claim.
Chapter 19. DIGITAL TRADE
Article 19.1. Definitions
For the purposes of this Chapter:
(a) "consumer" means any natural person, or enterprise if provided for in the law of the Party concerned, using or requesting a publicly available telecommunications service for purposes outside their trade, business, craft or profession;
(b) "data message" means information generated, sent, received or stored by electronic, optical or similar means;
(c) "electronic authentication service" means a service that enables to confirm:
(i) the identity of a natural person or enterprise, or
(ii) the origin and integrity of a data message from the time when it was first generated in its final form;
(d) "electronic signature" means data in electronic form affixed to or logically associated with a data message, which may be used to identify the signatory of that data message and to indicate its approval of the information contained in that data message, to ensure its origin and integrity in a way that any subsequent alteration in the data is detectable;
(e) "electronic trust service" means an electronic service consisting of the creation, verification and validation of electronic signatures, electronic time stamps, electronic registered delivery, certified digitisation services, website authentication and certificates related to those services;
(f) "end-user" means any natural person, or enterprise if provided for in the law of the Party concerned, using or requesting a publicly available telecommunications service, either as a consumer or for trade, business, craft or professional purposes;
(g) "trust service provider" means a natural person or enterprise who provides electronic trust services; and
(h) "unsolicited commercial electronic message" means an electronic message, including at least electronic mail, short message system (SMS) and multimedia message system (MMS) messages, which is sent for commercial purposes, without the consent of the recipient or despite the explicit rejection of the recipient, directly to end-users via a telecommunications network and, to the extent provided for under the law of a Party, other telecommunications services.
Article 19.2. Scope
1. This Chapter applies to measures of a Party affecting trade enabled by electronic means.
2. This Chapter does not apply to:
(a) gambling services;
(b) broadcasting services;
(c) audio-visual services;
(d) services of notaries or equivalent professions;
(e) legal representation services; and
(f) government procurement with the exception of Articles 19.7, 19.8 and 19.11.
Article 19.3. General Principles
The Parties recognise the economic growth and opportunities provided by digital trade and the importance of adopting frameworks that promote consumer confidence in digital trade and of avoiding unnecessary barriers to its use and development.
Article 19.4. Right to Regulate
The Parties affirm the right to regulate within their territories in order to achieve legitimate policy objectives, such as those relating to public health, social services, public education, safety, environment, public morals, social or consumer protection, privacy and data protection, the promotion and protection of cultural diversity, or competition.
Article 19.5. Customs Duties on Electronic Transmissions
1. A Party shall not impose customs duties on electronic transmissions between a person of a Party and a person of the other Party.
2. For greater certainty, paragraph 1 does not preclude a Party from imposing internal taxes, fees or other charges on electronic transmissions, provided those taxes, fees or charges are imposed in a manner consistent with this Agreement.
Article 19.6. No Prior Authorisation
1. Each Party shall ensure that the supply of services by electronic means is not subject to prior authorisation.
2. Paragraph 1 is without prejudice to authorisation requirements which are not specifically and exclusively targeted at services provided by electronic means, or which apply to telecommunications services.
Article 19.7. Electronic Contracts
Each Party shall ensure that its legal system allows the conclusion of contracts by electronic means and that those contracts shall not be denied legal effect, validity or enforceability solely on the ground of having been concluded by electronic means. (10)
Article 19.8. Electronic Trust and Authentication Services
1. A Party shall not deny the legal validity of an electronic trust or an electronic authentication service solely on the basis that the service is provided in electronic form.
2. A Party shall not adopt or maintain measures regulating electronic trust and electronic authentication services that would:
(a) prohibit parties to an electronic transaction from mutually determining the appropriate electronic methods for their transaction; or
(b) prevent parties to an electronic transaction from having the opportunity to establish before judicial or administrative authorities that their electronic transaction complies with any legal requirements with respect to electronic trust and electronic authentication services.
3. Notwithstanding paragraph 2, a Party may require that, for a particular category of electronic transactions, the method of electronic authentication meets certain performance standards or is certified by an authority accredited in accordance with its law. Such requirements shall be objective, transparent and non-discriminatory and shall relate only to the specific characteristics of the category of electronic transactions concerned.
4. The Parties shall encourage the use of interoperable electronic trust and electronic authentication services, and the mutual recognition of electronic trust and electronic authentication services provided by recognised trust services providers.
Article 19.9. Protection of Online Consumers
1. The Parties recognise the importance of maintaining and adopting transparent and effective measures that contribute to consumer trust, including but not limited to measures that protect consumers from fraudulent and deceptive commercial practices when they engage in electronic commerce transactions.
2. Each Party shall adopt or maintain measures that contribute to consumer trust, including measures that proscribe fraudulent and deceptive commercial practices that cause harm or potentially cause harm to consumers.
3. The Parties recognise the importance of cooperation between their respective consumer protection agencies or other relevant bodies on activities related to electronic commerce between the Parties in order to improve consumer trust and thereby enhance consumer welfare.
Article 19.10. Unsolicited Commercial Electronic Messages
1. Each Party shall adopt or maintain measures that:
(a) require senders of unsolicited commercial electronic messages to facilitate the ability of end‑users to prevent ongoing reception of those messages; or
(b) require the consent, as specified according to the laws and regulations of each Party, of recipients to receive commercial electronic messages.
2. Each Party shall ensure that unsolicited commercial electronic messages are clearly identifiable as such, clearly disclose on whose behalf they are sent and contain the necessary information to enable end-users to request cessation free of charge and at any moment.
3. Each Party shall provide recourse against senders of unsolicited commercial electronic messages that do not comply with the measures adopted or maintained pursuant to paragraphs 1 and 2.
4. The Parties shall endeavour to cooperate in appropriate cases of mutual concern regarding the regulation of unsolicited commercial electronic messages.
Article 19.11. Source Code
1. A Party may not require the transfer of, or access to, source code of software owned by a natural person or enterprise of the other Party.
2. For greater certainty, paragraph 1 does not:
(a) prevent a Party from adopting or maintaining measures to achieve a legitimate public policy objective, including to ensure security and safety, for instance in the context of a certification procedure, in accordance with Articles 18.13 (Prudential Carve-Out), 32.1 (General Exceptions) and Article 2.8 (Security Exception) of Part IV of the Agreement; and.
(b) apply to the voluntary transfer of or granting of access to source code on a commercial basis by a person of the other Party, for instance in the context of a public procurement transaction or a freely negotiated contract.
3. Nothing in this Article shall affect:
(a) requirements by a court, administrative tribunal or competition authority to remedy a violation of competition laws;
(b) intellectual property rights and their enforcement; and
(c) the right of a Party to take any action or not disclose any information that it considers necessary for the protection of its essential security interests relating to the procurement of arms, ammunition or war materials, or to procurement indispensable for national security or for national defence purposes.
Article 19.12. Open Internet Access
Each Party shall endeavour to ensure that, subject to applicable policies and laws and regulations, end-users in its territory are able to:
(a) access, distribute and use services and applications of their choice available on the Internet, subject to reasonable and non-discriminatory network management;
(b) connect devices of their choice to the Internet, provided that such devices do not harm the network; and
(c) have access to information on the network management practices of their Internet access service supplier.
Article 19.13. Cooperation
1. Recognising the global nature of digital trade, the Parties shall cooperate on regulatory matters and best practices through the existing sectoral dialogues, which shall, among others, address:
(a) the recognition and facilitation of interoperable cross-border electronic trust and authentication services;
(b) the treatment of direct marketing communications;
(c) the challenges for small and medium-sized enterprises in digital trade;
(d) the protection of consumers and the building of consumer trust in the ambit of electronic commerce;
(e) common cyber security issues; and
(f) any other matter relevant for the development of digital trade.
2. The cooperation on regulatory matters and best practises referred to in paragraph 1 shall focus on the exchange of information and views on the Parties' respective legislation on those as well as on the implementation of such legislation.
3. The Parties affirm the importance of actively participating in multilateral fora to promote the development of digital trade.
Article 19.14. Review Clause on Data Flows
The Parties shall reassess within three years after the date of entry into force of this Agreement the need for inclusion of provisions on the free flow of data into this Agreement.
Chapter 20. CAPITAL MOVEMENTS, PAYMENTS AND TRANSFERS AND TEMPORARY SAFEGUARD MEASURES
Article 20.1. Current Account
Without prejudice to other provisions of this Agreement, each Party shall allow any transfers or payments with regard to transactions on the current account of the balance of payments between the Parties that fall within the scope of this Agreement, in freely convertible currency, and in accordance with the Articles of Agreement of the International Monetary Fund adopted in Bretton Woods, New Hampshire on 22 July 1944, as applicable.
Article 20.2. Capital Movements
Without prejudice to other provisions of this Agreement, each Party shall allow, with regard to transactions on the capital and financial account of balance of payments, the free movement of capital for the purpose of liberalisation of investments and other transactions, as provided for in Section B (Liberalisation of Investments) of Chapter 10 (Investment), Chapter 11 (Cross-Border Trade in Services), Chapter 12 (Temporary Presence of Natural Persons for Business Purposes) and Chapter 18 (Financial Services).
Article 20.3. Application of Laws and Regulations Relating to Capital Movements, Payments or Transfers
1. Article 10.16 (Transfers) and subparagraph 6(a) of Article 18.2 (Scope), as well as Articles 20.1 and 20.2 shall not preclude a Party from applying its laws and regulations relating to:
(a) bankruptcy, insolvency and the protection of the rights of creditors;
(b) issuing, trading or dealing in financial instruments;
(c) financial reporting or record keeping of capital movements, payments or transfers where necessary to assist law enforcement or financial regulatory authorities;
(d) criminal or penal offences, or deceptive or fraudulent practices;
(e) ensuring compliance with orders or judgments in adjudicatory proceedings; or
(f) social security, public retirement or compulsory savings schemes.
2. Those laws and regulations shall not be applied in an arbitrary or discriminatory manner, or in a manner which otherwise constitutes a disguised restriction on capital movements, payments or transfers.
Article 20.4. Temporary Safeguard Measures
1. In exceptional circumstances of serious difficulties for the operation of the European Union's economic and monetary union, or threat thereof, the European Union may adopt or maintain safeguard measures with regard to capital movements, payments or transfers. Those measures shall be limited to the extent that is strictly necessary to address such difficulties and shall be in force for a period not exceeding six months.
2. Measures imposed by the European Union pursuant to paragraph 1 shall not constitute a means of arbitrary or unjustifiable discrimination between Mexico and a third country. The European Union shall inform Mexico forthwith and present a schedule for the removal of such measures as soon as possible.
Article 20.5. Restrictions In Case of Balance of Payments,External Financing and Macroeconomic Difficulties
1. A Party may adopt or maintain restrictive measures with regard to capital movements, payments or transfers: (11)
(a) in cases of serious balance-of-payments or external financial difficulties, or threat thereof; (12) or
(b) in cases of exceptional circumstances in which payments or transfers relating to capital movements cause or threaten to cause serious macroeconomic difficulties related to monetary and exchange rate policies in Mexico or a Member State of the European Union.
2. The measures referred to in paragraph 1 shall:
(a) be consistent with the Articles of Agreement of the International Monetary Fund, as applicable;
(b) not exceed those necessary to deal with the situation described in paragraph 1;
(c) be temporary and be phased out progressively as the situation specified in paragraph 1 improves;
(d) avoid unnecessary damage to the commercial, economic and financial interests of the other Party;
(e) not treat the other Party less favourably than a third country in like situations; and
(f) not be used as a substitute for macroeconomic policies that are needed for warranted external adjustment.