CHAPTER 17

FINANCIAL SERVICES

Article 17.1: Definitions

For the purposes of this Chapter:

covered person means

(a)       a financial institution of another Party; or

(b)        a  cross-border  financial  service  supplier  of  another  Party  that  is  subject  to regulation, supervision, and licensing, authorization, or registration by a financial regulatory authority of the Party1;

computing facilities means computer servers and storage devices for the processing or storage of information for the conduct of business within the scope of the license, authorization, or registration of a covered person, but does not include computer servers or storage devices of or used to access:

(a)       financial market infrastructures;

(b)       exchanges or markets for securities or for derivatives such as futures, options, and swaps; or

(c)        non-governmental bodies that exercise regulatory or supervisory authority over covered persons;

cross-border  financial  service  supplier  of  a  Party  means  a  person  of  a  Party  that is engaged in the business of supplying a financial service within the territory  of the Party and that seeks to supply or supplies a financial service through the  cross-border supply of such a service;

1     For greater certainty, whenever a cross-border financial service supplier of another Party is subject to regulation, supervision, and licensing, authorization, or registration by a financial regulatory authority of the Party, that supplier is a covered person for the purposes of this Chapter. For greater certainty, if a financial regulatory authority of the Party foregoes imposition of certain regulatory or supervisory requirements on the condition that a cross-border financial service supplier of another Party comply with certain regulatory or supervisory requirements imposed by a financial regulatory authority of the other Party, that supplier is a covered person.

cross-border  trade  in  financial  services  or  cross-border  supply  of  financial  services

means the supply of a financial service:

(a)       from the territory of a Party into the territory of another Party;

(b)       in the territory of a Party by a person of that Party to a person of another Party; or

(c)       by a national of a Party in the territory of another Party,

but does not include the supply of a financial service in the territory of a Party by a covered investment;

financial institution means a financial intermediary or other enterprise that is  authorized to do business and regulated or supervised as a financial institution  under the law of the Party in whose territory it is located;

financial institution of another Party means a financial institution, including a   branch, located in the territory of a Party that is controlled by persons of another Party;

financial market infrastructures means multi-participant systems in which covered persons participate with other financial service suppliers, including the operator of the system, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions;

financial service means a service of a financial nature. Financial services include all insurance and  insurance-related  services,  and  all  banking  and  other   financial services (excluding insurance), as well as services incidental or auxiliary    to a service of a financial nature. Financial services include the following activities:

Insurance and insurance-related services

(a)        direct insurance (including co-insurance): (i) life;

(ii)       non-life;

(b)       reinsurance and retrocession;

(c)       insurance intermediation, such as brokerage and agency; and

(d)       services auxiliary to insurance, such as consultancy, actuarial, risk assessment, and claim settlement services;

Banking and other financial services (excluding insurance)

(e)       acceptance of deposits and other repayable funds from the public;

(f)        lending of all types, including consumer credit, mortgage credit,  factoring and financing of commercial transaction;

(g)       financial leasing;

(h)        all  payment  and money transmission services, including credit, charge and debit cards, travelers checks, and bankers drafts;

(i)        guarantees and commitments;

(j)         trading for own account or for account of customers, whether on an  exchange, in an over-the-counter market or otherwise, the  following:

(i)         money        market   instruments   (including   checks,     bills, certificates of deposits);

(ii)       foreign exchange;

(iii)      derivative products, including futures and options;

(iv)       exchange rate  and  interest  rate  instruments,  including products such as swaps, forward rate agreements;

(v)       transferable securities; and

(vi)      other negotiable instruments and financial assets, including bullion;

(k)       participation in issues   of all kinds of securities, including   underwriting  and placement as agent (whether publicly or privately) and provision of services related to such issues;

(l)        money broking;

(m)      asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository, and trust services;

(n)        settlement  and  clearing  services  for  financial  assets,  including  securities, derivative products, and other negotiable instruments;

(o)        provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and

(p)        advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (e) through (o), including credit reference and analysis, investment and portfolio research and   advice,  advice  on  acquisitions,  and  on corporate restructuring and strategy;

financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;

investment means “investment” as defined in Article 1 4 .1 (Investment – Definitions), except that with respect to “loans” and “debt instruments” referred to in that Article:

(a)        a loan to or debt instrument issued by a financial institution is an investment only if it is treated as regulatory capital by the Party in  whose territory the financial institution is located; and

(b)        a loan granted by or debt instrument owned by a financial institution, other than a  loan  to  or  debt  instrument  issued  by  a  financial institution referred to in subparagraph (a), is not an investment;

for greater certainty,  a loan granted by or debt instrument owned by a cross-border  financial service supplier, other than a loan to or debt instrument issued by a  financial institution, is an investment for the purposes of Chapter 14 (Investment),  if such loan or debt instrument meets the criteria for investments set out in Article 14.1 (Investment – Definitions);

investor of a Party means a Party, or a person of a Party, that attempts to make2,  is making, or has made an investment in the territory of another Party;

new financial service means a financial service not supplied in the Party’s  territory that is supplied within the territory of another Party, and includes any  new form of delivery of a financial service or the sale of a financial product that is  not sold in the Party’s territory;

person of a Party means “person of a Party” as defined in Article 1.3 (General Definitions)

and, for greater certainty, does not include a branch of an enterprise  of a non-Party;

public  entity  means  a  central  bank  or  monetary  authority  of  a  Party,  or  any financial institution that is owned or controlled by a Party; and

2 For greater certainty, the Parties understand that an investor “attempts to make” an investment when that investor has taken concrete action or actions to make an investment, such as channeling  resources or capital in order to set up a business, or applying for permits or licenses.

self-regulatory organization means a non-governmental body, including  a securities or futures exchange or market, clearing agency, or other organization or  association, that exercises regulatory or supervisory authority over financial  service suppliers or financial institutions by statute or delegation from central or  regional government.

Article 17.2: Scope

  1. 1. This Chapter applies to a measure adopted or maintained by a Party relating to: (a)     a financial institution of another Party;

(b)        an investor of another Party, and an investment of that investor, in a financial institution in the Party’s territory; and

(c)       cross-border trade in financial services.

  1. 2. Chapter 14 (Investment) and Chapter 15 (Cross-Border Trade in Services)  apply to a measure described in paragraph 1 only to the extent that those Chapters are incorporated into this C

(a)       Article   14.6   (Investment – Minimum   Standard   of   Treatment),   Article

14.7  (Investment –Treatment in the Case of Armed Conflict or Civil Strife), Article 14.8 (Investment, Expropriation and Compensation), Article 14.9 (Investment – Transfers), Article 14.13X (Investment – Special Formalities and Information Requirements), Article 15.11 (Cross-Border Trade in Services, Denial of Benefits), Article 14.16 (Investment –Investment and Environmental, Health, Safety, and other Regulatory Objectives) and Article 14.14 (Investment

– Denial of Benefits) are incorporated into and made a part of this Chapter.

(b)       Article 15.12 (Cross-Border Trade in Services –   Payments and Transfers) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to   Article 17.3.3 (National Treatment), Article 17.5.1 (b) and (c) (Market Access), and Article 17.6 (Cross-Border Trade Standstill).

  1. 3. This Chapter does not apply to a measure adopted or maintained by a Party relating to: (a)         an activity or a service forming part of a public retirement plan or statutory

system of social security; or

(b)        an activity or a service conducted for the account or with the  guarantee or using the financial resources of the Party, including its public entities,

except that this Chapter shall apply to the extent that a Party allows any of the activities or services referred to in subparagraph (a) or (b) to be conducted by its  financial institutions in competition with a public entity or a financial institution.

  1. 4. This Chapter does not apply to government procurement of financial services.
  1. 5. This Chapter does not apply to a subsidy or a grant provided by a Party, including a government supported loan, guarantee, and insurance, with respect to the cross-border supply of financial services by a cross-border supplier of another Party.

Article 17.3: National Treatment

  1. 1. Each Party shall accord to an investor of another Party treatment no less favorable than that it accords to its own investors, in like circumstances, with  respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions, and investments in financial institutions in its ter
  1. 2. Each Party shall accord to a financial institution of another Party, and to an investment of an investor of another Party in a financial institution, treatment no  less favorable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investme
  1. 3. Each Party shall accord to:

(a)        a financial service or a cross-border financial service supplier of another Party seeking to supply or supplying the financial services as specified by the Party in Annex 17-A (Cross-Border Trade); and

(b)       a financial service or a cross-border financial service supplier of another Party seeking to supply or supplying financial services subject to paragraph 4,

treatment no less favorable than that it accords to its own financial services and financial service suppliers, in like circumstances.

  1. Subparagraph 3(b) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party’s territory. A Party may define “doing business” and “solicitation” in its law for the purposes of this paragraph.
  1. The treatment to be accorded by a Party under paragraphs 1, 2, and 3 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable

treatment accorded, in like circumstances, by that government to financial institutions of the Party; investors of the Party, and investments of those investors, in financial institutions; or financial services or financial service suppliers, of the Party.

  1. For greater certainty, whether treatment is accorded in “like circumstances” under this Article depends on the totality of  the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions,    investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.

Article 17.4: Most-Favored-Nation Treatment

  1. 1. Each Party shall accord to:

(a)        an investor of another Party, treatment no less favorable than that it  accords to investors of any other Party or of a non-Party, in like circumstances;

(b)        a financial institution of another Party, treatment no less favorable  than that it accords to financial institutions of any other Party or of  a non-Party, in like circumstances;

(c)        an investment of an investor    of  another  Party  in  a financial institution, treatment no less favorable than that it accords to investments of  investors of any   other   Party   or   of   a   non-Party   in   financial   institutions,  in  like circumstances; and

(d)       a financial service or cross-border financial service supplier of another Party, treatment   no  less  favorable  than  that  it  accords  to  financial services and cross-border  financial  service  suppliers  of  any  other  Party  or  of  a  non- Party, in like circumstances.

  1. 2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to financial institutions of any other Party or a non-Party; investors of any other Party or a non-Party, and investments of those investors, in financial institutions; or financial services or cross-border financial service suppliers of any other Party or non-Party.
  1. 3. For the purposes of this Article, the “treatment” referred to in paragraph 1 excludes provisions in other trade or investment agreements that establish international dispute resolution procedures or impose substantive obligations; rather, “treatment” only includes measures adopted or maintained by the other Annex Party, which may include measures adopted or maintained pursuant to or consistent with substantive obligations in other trade or investment agreem
  1. For greater certainty, whether treatment is accorded in “like circumstances” under this Article depends on the totality of  the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions,    investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.

Article 17.5: Market Access

  1. 1. No Party shall adopt or maintain with respect to:

(a)        a financial institution of  another Party or, an investor of another Party seeking to establish those institutions;

(b)        a cross-border financial service supplier of another Party seeking to supply or supplying the financial services as specified by the Party in Annex 17-A (Cross- Border Trade); or

(c)        a cross-border financial service supplier of another Party seeking to supply or supplying financial services, subject to paragraph 2,

either on the basis of a regional subdivision or on the basis of its entire territory, a measure that:

(d)    imposes a limitation on:

(i)         the  number  of  financial  institutions    or cross-border financial service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers  or the requirement of an economic needs test;

(ii)        the total value of financial service transactions or assets in  the form of numerical quotas or the requirement of an economic needs test;

(iii)       the total number of financial service operations or the total  quantity of financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;3 or

(iv)       the total number of natural persons that may be employed in a particular financial  service  sector  or  that  a  financial institution    or cross-border service supplier may  employ  and  who  are  necessary  for,  and directly

3 Subparagraph (d)(iii) does not cover measures of a Party which limit inputs for the supply of financial services.

related  to,  the  supply of  a  specific  financial  service   in  the  form  of numerical quotas or the requirement of an economic needs test; or

(e)       restricts or requires specific types of legal entity or joint venture through which a financial institution or cross-border service supplier may supply a service.

  1. Subparagraph 1(c) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party’s territory. A Party may define “doing business” and “solicitation” in its law for the purposes of this paragraph.
  1. No Party shall require a cross-border financial service supplier of another Party to establish or maintain a representative office or an enterprise, or to be resident, in its territory as a condition for the cross-border supply of a financial service, with respect to the financial services referred to in Article 17.6 (Cross-Border Trade Standstill) and the financial services as specified by the Party in Annex 17-A (Cross-Border Trade).
  1. 4. For greater certainty, a Party may require the registration or authorization of a cross-border financial service supplier of another Party or of a financial instrum

Article 17.6:  Cross-Border Trade Standstill

No Party shall adopt a measure restricting any type of cross-border trade in financial services by cross-border financial service suppliers of another Party that the Party permitted on January 1, 1994, or that is inconsistent with Article 17.3.3 (National Treatment), with respect to the supply of those services.

Article 17.7: New Financial Services4

  1. Each Party shall permit a financial institution of another Party to supply a new financial service that the Party would permit its own financial institutions, in like  circumstances,  to supply  without  adopting  a  law  or  modifying  an  existing   law.5 Notwithstanding Article

17.5.1(a) and (e) (Market Access),  a Party may determine the institutional and juridical form through which the new  financial service may be supplied and may require authorization for the supply of  the service.  If a Party requires a financial institution to obtain authorization to  supply a new financial service, the Party shall decide within a reasonable period of time

whether to issue the authorization and may refuse the authorization only for prudential reasons.

4 The Parties understand that nothing in this Article prevents a financial institution of a Party from  applying to another Party to request that it authorize the supply of a financial service that is not supplied in the territory of any Party. That application shall be subject to the law of the Party to which the application is made and, for greater certainty, shall not be subject to this Article.

5 For greater certainty, a Party may issue a new regulation or other subordinate measure in permitting the supply of the new financial service.

Article 17.8: Treatment of Customer Information

Nothing in this Chapter requires a Party to disclose information related to the financial affairs or accounts of individual customers of financial institutions or cross-border financial service suppliers.

Article 17.9: Senior Management and Boards of Directors

  1. 1. No Party shall require a financial institution of another Party to engage a natural person of a particular nationality as senior managerial or other essential
  1. 2. No Party shall require that more than a simple majority of the board of directors  of a financial institution of another Party be composed of nationals of the Party,  persons residing in the territory of the Party, or a combination thereof.

Article 17.10: Non-Conforming Measures

  1. 1. Article  3  (National  Treatment),  Article  17.4  (Most-Favored-Nation   Treatment), Article 17.5 (Market Access),  and Article 17.9 (Senior Management and Boards of  Directors) shall not apply to:

(a)       any existing non-conforming measure that is maintained by a Party at:

(i)        the central level of government, as set out by that Party in Section A of its

Schedule to Annex III;

(ii)       a regional level of government, as set out by that Party in Section A of its

Schedule to Annex III;

(iii)     a local level of government;

(b)       the  continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or

(c)        an amendment to a non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure as it existed:

(i)        immediately before the amendment, with Articles 17.3.1 and 17.3.2

(National  Treatment),  Article  17.4  (Most-Favored-Nation Treatment),  Article  17.5.1(a)  (Market  Access), or  Article   17.9 (Senior Management and Boards of Directors); or

(ii)        on  the  date  of  entry  into  force  of  the  Agreement for  the Party applying the non-conforming measure with Article 17.3.3 (National Treatment), Article 17.5.1(b) (Market Access), or Article 17.5.1(c) (Market Access).

  1. 2. Article 3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5  (Market  Access),  Article  17.6  (Cross-Border  Trade  Standstill),  and Article 17.9 (Senior Management and Boards of Directors) shall not apply to  a measure that a Party adopts or maintains with  respect to  a sector, subsector, or an activity, as set out by that Party in Section B of its Schedule to Annex III.
  1. 3. A non-conforming measure, set out in a Party’s Schedule to Annex I or II as not subject to Article 1 4 . 4 (Investment – National Treatment), Article 5 (Investment – Most- Favored-Nation Treatment), Article 14.11 (Investment – Senior Management and Boards of Directors), Article  1 5 . 3   (Cross Border Trade in Services – National  Treatment)  or  Article

15.4   (Cross Border Trade in Services – Most-Favored-Nation  Treatment), shall be treated as a non-conforming measure not subject to Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation                                       Treatment)   or    Article  17.9  (Senior  Management  and  Boards  of Directors), as the case may be, to  the extent that the measure, sector, subsector or activity set out in the Party’s schedule to Annex I or II is covered by this Chapter.

  1. 4. (a)  Article 3 (National Treatment) shall not apply to   a measure  that  falls within an exception to, or derogation from, the obligations which are imposed by:

(i)        Article 20.5 (Intellectual Property National Treatment); or

(ii)        Article 3 of the TRIPS Agreement, if the exception or  derogation relates  to  matters  not  addressed  by  Chapter  20   (Intellectual Property).

(b)        Article 17.4 (Most-Favored-Nation Treatment) shall not apply to  any measure that falls within Article 5 of the TRIPS Agreement, or  an  exception  to,  or derogation from, the obligations which are imposed by:

(i)        Article 20.5 (Intellectual Property, National Treatment); or

(ii)       Article 4 of the TRIPS Agreement.

Article 17.11: Exceptions

  1. 1. Notwithstanding the other  provisions  of  this  Agreement   except  for Chapter 2 (National  Treatment  and  Market  Access  for  Goods),  Chapter  3  (Agriculture),  Chapter

4 (Rules  of  Origin), Chapter 5 (Origin  Procedures),  Chapter  6   (Textiles  and  Apparel), Chapter 7  (Customs Administration and Trade Facilitation), Chapter 1 0  (Trade Remedies), Chapter 9 (Sanitary and Phytosanitary Measures), and Chapter 11   (Technical  Barriers  to Trade), a Party shall not be prevented from adopting or maintaining a measure for prudential reasons,6 including for the protection of   investors, depositors, policy holders, or persons to whom a fiduciary duty is owed  by a financial institution or cross-border financial service supplier, or to ensure  the  integrity  and  stability  of  the  financial  system.  If  the measure does not  conform with the provisions of this Agreement to which this exception applies, they  shall not be used as a means of avoiding  the Party’s commitments or obligations under those provisions.

  1. 2. Nothing in this Chapter, Chapter 14 (Investment), Chapter 15 (Cross- Border Trade in Services), Chapter 18 (Telecommunications) including specifically Article 126 (Relation to Other Chapters), or Chapter 19 (Digital Trade), shall apply to a non-discriminatory measure of  general  application  taken by a public entity in pursuit of monetary and related credit policies or  exchange rate policies. This paragraph shall not affect a Party’s obligations under Article 1 4 .10 (Performance Requirements) with respect to a measure covered by  Chapter

14 (Investment), under Article 14.9 (Investment, Transfers) or Article 15.12 (Cross Border

Trade in Services, Payments  and Transfers).

  1. 3. Notwithstanding Article 9 (Investment, Transfers) and Article 15.12  (Cross Border Trade in Services – Payments and Transfers), as incorporated into this Chapter, a Party may prevent or limit  a transfer by a financial institution or a cross-border financial service supplier to, or for the benefit of, an affiliate of or person related to such institution or supplier, through the equitable, non-discriminatory and good faith application of a measure   relating to maintenance of the safety, soundness, integrity, or financial  responsibility of financial institutions or cross-border financial service suppliers. This paragraph does not prejudice any other provision of this Agreement that  permits a Party to restrict transfers.
  1. 4. For greater certainty, nothing in this Chapter shall be construed to prevent a Party from  adopting  or  maintaining a  measure  necessary to  secure  compliance  with    laws  or regulations  that  are  not  inconsistent  with  this  Chapter,  including  those   relating to the prevention of deceptive and fraudulent practices or to deal with the   effects of a default on financial services contracts, subject to the requirement that the measure is not  applied  in  a manner which would constitute a means of arbitrary or unjustifiable discrimination between

6   The Parties understand that the term “prudential reasons” includes the maintenance of the  safety, soundness, integrity, or financial responsibility of individual financial institutions or cross-border financial service suppliers as well as the safety, and financial and operational integrity of  payment and clearing systems.

Parties  or  between  Parties  and   non-Parties where like conditions prevail, or a disguised restriction on investment  in financial institutions or cross-border trade in financial services as covered by  this Chapter.

Article 17.12: Recognition

  1. 1. A Party may recognize prudential measures of another Party or a non-  Party in the application of a measure covered by this Chapter. That recognition  may be:

(a)       accorded autonomously;

(b)       achieved through harmonization or other means; or

(c)       based upon an agreement or arrangement with another Party or a non-Party.

  1. 2. A Party that accords recognition of prudential measures under paragraph 1 shall provide adequate  opportunity  to  another  Party  to  demonstrate  that  circumstances exist in which there are or would be equivalent regulation,  oversight, implementation of regulation and, if appropriate, procedures  concerning the sharing of information between the relevant Part
  1. 3. If a Party accords recognition of prudential measures under paragraph 1(c)   and the circumstances set out in paragraph 2 exist, that Party  shall provide adequate opportunity to another  Party to  negotiate  accession  to  the  agreement  or   arrangement, or to negotiate a comparable agreement or arrangeme
  1. 4. For greater certainty, nothing in Article 17.4 (Most-Favored-Nation Treatment) requires a Party to accord recognition to prudential measures of any other Party.

Article 17.13: Transparency and Administration of Certain Measures

  1. 1. Chapter   28   (Good   Regulatory   Practices)   and   Chapter   29   (Publication   and

Administration) shall not apply to a measure relating to the subject matter of this Chapter.

  1. 2. Each Party shall ensure that all measures of general application to which this Chapter applies are administered in a reasonable, objective and impartial  manner.
  1. 3. Each Party shall, to the extent practicable:

(a)        publish in advance any such regulation that it proposes to adopt and the purpose of the regulation; and

(b)       provide interested persons and other Parties with a reasonable  opportunity to

comment on that proposed regulation.

  1. 4. At the time that it adopts a final regulation, a Party should, to the extent practicable, address in writing the substantive comments received from interested  persons and other Parties with respect to the proposed regulation.   For greater certainty, a Party may address those comments collectively on an official government
  1. 5. To the extent practicable, each Party should allow a reasonable period of time between publication of a final regulation of general application and the date when it enters into
  1. 6. Each Party  shall  maintain  or  establish  appropriate  mechanisms  for   responding  to inquiries  from interested persons  and other Parties regarding measures  of  general  application covered by this C
  1. 7. If a Party requires authorization for the supply of a financial service, it shall ensure that its financial regulatory authorities:

(a)       to the extent practicable, permit an applicant to submit an application at any time; (b)       allow a reasonable period for the submission of an application if specific time

periods for applications exist;

(c)        provide to service suppliers and persons seeking to supply a service the information necessary to comply with the requirements and procedures for obtaining, maintaining, amending, and renewing such authorization;

(d)       to the extent practicable, provide an indicative timeframe for processing of an application;

(e)       endeavor to accept applications in electronic format;

(f)        accept copies of documents that are authenticated in accordance with the Party’s domestic law, in place of original documents, unless the financial regulatory authorities require original documents to protect the integrity of the authorisation process;

(g)        at the request of the applicant, provide without undue delay information concerning the status of the application;

(h)        in  the  case  of  an  application  considered  complete  under  domestic  laws  and regulations, within a reasonable period of time taking into account the available resources of the competent authority after the submission of the application, ensure that the processing of an application is completed, and that the applicant is informed of the decision concerning the application, to the extent possible in writing;

(i)       in the case of an application considered incomplete under domestic law, within a reasonable period of time, to the extent practicable:

(i)        inform the applicant that the application is incomplete;

(ii)       at the request of the applicant provide guidance on why the application is considered incomplete;

(iii)      provide the applicant with the opportunity7  to provide the additional information that is required to complete the application; and

if none of the actions in subparagraphs (i) through (iii) is practicable, and the application is rejected due to incompleteness, ensure that the applicant is informed within a reasonable period of time;

(j)        in the case of a rejected application, to the extent practicable, either on its own initiative or upon the request of the applicant, inform the applicant of the reasons for rejection and, if applicable, the procedures for resubmission of an application;

(k)       with respect to authorization fees8 charged by financial regulatory authorities:

(i)        provide applicants with a schedule of fees or information on how fee amounts are calculated; and

(ii)       do not use the fees as a means of avoiding the Party’s commitments or obligations under this Chapter; and

(l)        ensure that authorization, once granted, enters into effect without undue delay.

Article 17.14: Self-Regulatory Organizations

If a Party requires a financial institution or a cross-border financial service  supplier of another Party to be a member of, participate in, or have access to, a self-regulatory organization in order to provide a financial service in or into its  territory,  it  shall  ensure  that  the  self- regulatory organization observes the  obligations contained in this Chapter.

7 For greater certainty, such opportunity does not require a competent authority to provide extensions of deadlines.

8 Authorization fees include licensing fees and fees relating to qualification procedures but do not include fees for the use of natural resources, payments for auction, tendering or other non-discriminatory means of awarding concessions,

or mandated contributions to universal service provision.

Article 17.15: Payment and Clearing Systems

Under  terms  and  conditions  that  accord  national  treatment,  each  Party  shall grant financial institutions of another Party established in its territory access  to payment and clearing systems operated by  public entities, and to official  funding  and refinancing  facilities  available in  the  normal course  of ordinary  business. This Article does not confer or require access to the Party’s lender of last  resort facilities.

Article 17.16: Expedited Availability of Insurance Services

The  Parties  recognize  the  importance  of  maintaining  and  developing    regulatory procedures to expedite the offering of insurance services by licensed suppliers. These procedures may include: allowing introduction of products  unless those products are disapproved within a reasonable period of time; not  requiring product approval or authorization of insurance lines for insurance other  than insurance sold to individuals or compulsory insurance; or not imposing limitations  on  the  number  or  frequency  of  product  introductions.    If  a  Party  maintains regulatory product approval procedures, that Party shall endeavor to  maintain or improve those procedures, as appropriate, to expedite availability of insurance services by licensed suppliers.

Article 17.19:  Transfer of Information

No Party shall prevent a covered person from transferring information, including personal information, into and out of the Party’s territory by electronic or other means when this activity is for the conduct of business within the scope of the license, authorization, or registration of that covered person. Nothing in this Article restricts the right of a Party to adopt or maintain measures to  protect  personal  data, personal privacy  and  the  confidentiality  of individual records and accounts, provided that such measures are not used to circumvent the commitments or obligations of this Article.

Article 17.20:  Location of Computing Facilities

  1. The Parties recognize that immediate, direct, complete, and ongoing access by a Party’s financial regulatory authorities to information of covered persons, including information underlying the transactions and operations of such persons, is critical to financial regulation and supervision, and recognize the need to eliminate any potential limitations on such access.
  1. No Party shall require a covered person to use or locate computing facilities in the Party’s territory as a condition for conducting business in that territory, so long as the Party’s financial regulatory authorities, for regulatory and supervisory purposes, have immediate, direct, complete, and ongoing access to information processed or stored on computing facilities that the covered

person uses or locates outside the Party’s territory.9

  1. 3. Each Party shall, to the extent practicable, provide a covered person with a reasonable opportunity to remediate a lack of access to information as described in paragraph 2 before the Party requires the covered person to use or locate computing facilities in the Party’s territory or the territory of another jurisdiction.10
  1. 4. Nothing in this Article restricts the right of a Party to adopt or maintain measures to protect personal data, personal privacy and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent the commitments or obligations of this Artic

Article 17.21: Committee on Financial Services

  1. 1. The  Parties  hereby  establish  a  Committee  on  Financial  Services   (Committee).   The principal representative of each Party shall be an official of the  Party’s authority responsible for financial services set out in Annex 17-B (Authorities Responsible for Financial Services).
  1. 2. The Committee shall supervise the implementation   of   this   Chapter   and   its   further elaboration, including by considering issues regarding financial services that are referred to it by  a
  1. 3. The  Committee  shall  meet  as  the Parties decide  to  assess   the  functioning  of  this Agreement as it applies to financial services. The Committee shall inform the Commission of the results of any meeting. The Parties may invite, as appropriate, representatives of their domestic financial regulatory authorities to attend meetings of the Comm

9 For greater certainty, access to information includes access to information of a covered person that is processed or stored on computing facilities of the covered person or on computing facilities of a third-party service supplier. For greater certainty, a Party may adopt or maintain a measure that is not inconsistent with this Agreement, including any measure consistent with Article 17.11.1 (Exceptions), including a measure requiring a covered person to obtain prior authorization from a financial regulatory   authority to designate a particular enterprise as a recipient of such information, or a measure adopted or maintained  by a financial regulatory authority  in the exercise of its authority over a covered person’s business continuity planning practices with respect to maintenance of   the operation of computing facilities.

10  For greater certainty, so long as a Party’s financial regulatory authorities do not have access to information as described in paragraph 2, the Party may, subject to paragraph 3, require a covered person to use or locate computing

facilities either in the territory of the Party or the territory of another jurisdiction where the Party has such access.

Article 17.22: Consultations

  1. 1. A Party may request, in writing, consultations with another Party  regarding any matter arising under this Agreement that affects financial services. The other Party shall give sympathetic consideration to the request to hold consultations. The consulting Parties shall report the results of their consultations to the Comm
  1. A Party may request information on any existing non-conforming measure of another Party as referred to in Article 17.10.1 (Non-Conforming Measures). Each Party’s financial authorities specified in Annex 17-B (Authorities Responsible for Financial Services) shall be the contact point to respond to those requests and to facilitate the exchange of information regarding the operation of measures covered by those requests.
  1. 3. For greater certainty, nothing in this Article shall be construed to require a Party to derogate from its law regarding sharing of information between financial regulators or the requirements of an agreement or arrangement between financial authorities of the Parties, or to require a regulatory authority to take any action that would interfere with specific regulatory, supervisory, administrative or enforcement m

Article 17.23: Dispute Settlement

  1. 1. Chapter 31 (Dispute Settlement) shall apply as modified by this Article to the settlement of disputes arising under this C
  1. 2. For disputes arising under this Chapter or a dispute in which a Party invokes Article 17.11 (Exceptions), when selecting panelists to compose a panel under Article 10 (Dispute Settlement, Panel Composition), each disputing Party shall select panelists so that:

(a)        the chairperson has expertise or experience in financial services law or practice, such as the regulation of financial institutions, and meets the qualifications set out in paragraph 1 of Article 31.9 (Dispute Settlement, Qualification of Panelists); and

(b)       each of the other panelists:

(i)  has expertise or experience in financial services law or practice, such as the regulation of financial institutions, and meets the qualifications set out in paragraph (1)(b) through (1)(d) of Article 31.10 (Dispute Settlement, Panel Composition); or

(ii)  meets the qualifications set out in paragraph 1 of Article 31.9 (Dispute

Settlement, Qualification of Panelists).

  1. 3. If a Party seeks to suspend benefits in the financial services sector, a panel that reconvenes to make a determination on the proposed suspension of benefits,   in  accordance  with  Article

3 1 .20  (Dispute Settlement, Non-Implementation  –  Suspension  of  Benefits),  shall  seek  the views of financial services experts, as  necessary.

  1. 4. Notwithstanding Article 20 (Dispute Settlement, Non-Implementation – Suspension of Benefits), when a panel’s   determination is that a Party’s measure is inconsistent with this Agreement and the measure affects:

(a)        only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector; or

(b)        the financial services sector and any other sector, the complaining Party may not suspend benefits in the financial services sector that have an effect that exceeds the effect of the measure in the complaining Party’s financial services sector.

ANNEX 17-A

CROSS-BORDER TRADE

Canada1

Insurance and Insurance-Related Services

  1. Articles 14.3.3 (National Treatment) and 14.5.1 (Market Access) apply to the cross- border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 14.1 (Definitions), with respect to:

(a) insurance of risks relating to:

(i)        maritime transport and commercial aviation and space launching and freight (including satellites), with such insurance to cover any or all of the following: the goods being transported, the vehicle transporting the goods, and any liability deriving therefrom; and

(ii)      goods in international transit; (b) reinsurance and retrocession;

(c) services auxiliary to insurance as described in subparagraph (d) of the definition of “financial service” in Article 14.1 (Definitions); and

(d) insurance  intermediation  such  as  brokerage  and  agency,  as  referred  to  in subparagraph (c) of the definition of “financial service” in Article 14.1 (Definitions) of insurance of risks related to services listed in subparagraphs (a) and (b) of this paragraph.

Banking and Other Financial Services (excluding insurance)

  1. Articles 14.3.3 (National Treatment) and 14.5.1 (Market Access) apply to the cross- border supply of or trade in financial services, as defined in subparagraphs (a) of the definition of “cross-border supply of financial services” in Article 14.1 (Definitions), with respect to:

(a)       the  provision  and  transfer  of  financial  information  and  financial  data processing as described in subparagraph (o) of the definition of “financial service” in Article 14.1 (Definitions);

(b)       advisory  and  other  auxiliary  financial  services,  and  credit  reference  and analysis, excluding intermediation, relating to banking and other financial services as described in subparagraph (p) of the definition of financial service” in Article 14.1 (Definitions); and

(c)       electronic  payment  services  for  payment  card  transactions  falling  within

1   For greater clarity, Canada requires that a cross-border financial services supplier maintain a local agent and records in Canada.

subparagraph (h) of the definition of “financial service” in Article 14.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:

  1. i. the processing  of  financial  transactions,  such  as  verification  of financial balances, authorization of transactions, notification of banks (or credit card issuers) of individual transactions and provision of daily summaries and instructions regarding the net financial position of relevant institutions for authorized transactions; and
  1. ii. those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions,

but not including the transfer of funds to and from transactors’ accounts.2

(d)       the following services where they are provided to a collective investment scheme located in Canada:

(i)      investment advice; and

(ii)     portfolio management services, excluding:

  1. trustee services; and
  1. custodial services and execution services that are not related to managing a collective investment scheme.
  1. 3. For the purposes of paragraph 3, in Canada:

(a)        payment card means a “payment card” as defined under the Payment Card Networks Act as of January 1, 2015. For greater certainty, physical and electronic forms or credit and debit cards are included in the definition. For greater certainty, credit cards include pre-paid cards.

(b)         a collective investment scheme means, an “investment fund”3 as defined under the relevant Securities Act.

2 Nothing in this subparagraph shall prevent a Party from adopting or maintaining measures to protect personal data, personal privacy, and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent the commitments or obligations of this subparagraph.  For greater certainty, nothing in this subparagraph prevents a Party from adopting or maintaining measures that regulate fees, such as interchange or switching fees, or that impose fees.

3 In Canada, a financial institution organized in the territory of another Party can only provide custodial services to a collective investment scheme located in Canada if the financial institution has shareholders’ equity equivalent to at least $100 million.

Mexico

Insurance and insurance-related services

  1. 1. Article 3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border  supply  of  financial  services”  in  Article  17.1  (Definitions), with  respect to:

(a)       insurance of risks relating to:

(i)         maritime  shipping  and  commercial  aviation,  space  launching  and freight (including satellites), with such insurance to cover all or any of the  following:  the  goods  being  transported; and  the  vehicle transporting the goods, when such vehicles have foreign registration or are property of persons domiciled abroad, and

(ii)       goods in international transit; and

(b)       any other insurance of risks, if the person seeking to purchase the insurance demonstrates that none of the insurance companies authorized to operate in Mexico is able or deems convenient to enter into such insurance proposed to it;

(c)       reinsurance and retrocession;

(d)       insurance intermediation, as referred to in subparagraph (c) of the definition of “financial service” in Article 17.1 (Definitions), and services auxiliary to insurance, as referred to in subparagraph (d) of the definition of “financial service” in Article 17.1 (Definitions), only in respect of insurance referred to in the section of Mexico in this annex.

Banking and other financial services (excluding insurance)

  1. 2. Article 3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

(a)        provision   and   transfer   of   financial   information,   and   financial   data processing and related software, as referred to in subparagraph (o)  of the definition of “financial service” in Article 14.1 (Definitions);

(b)        advisory and other auxiliary services,4  excluding intermediation, and credit reference and analysis, relating to banking and other financial services, as referred to in  subparagraph (p) of the definition of “financial service” in Article 17.1 (Definitions);

(c)        the following services where they are provided to a collective investment scheme in Mexico:

(iii)      investment advice; and

(iv)      portfolio management services, excluding:

  1. trustee services; and
  1. custodial services and execution services that are not related to managing a collective investment scheme; and

(d)   electronic payment services for payment card transactions falling within subparagraph (h) of the definition of “financial service” in Article 17.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:

(i)         receiving   and   sending   messages   for:   authorization   requests, authorization                          responses     (approvals     or     declines),     stand-in authorizations, adjustments, refunds, returns, retrievals, charge backs and related administrative messages;

(ii)        calculation of fees and balances derived from transactions of acquirers and issuers, and receiving and sending messages related to this process to acquirers and issuers, and their agents and representatives;

(iii)       the provision of periodic reconciliation, summaries and instructions regarding the net financial position of acquirers and issuers, and their agents and representatives for approved transactions;

(iv)       value-added services related to the main processing activities referred to in subparagraphs (i), (ii) and (iii), such as fraud prevention and mitigation activities, and administration of loyalty programs; and

(v)        those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions, as referenced in subparagraphs (i-iv),

but not including the transfer of funds to and from transactors’ accounts,

For Mexico, a payment card means a credit card, debit card, and reloadable card in

4 The Parties understand that advisory and other auxiliary financial services do not include those services referred to in subparagraphs (e) through (o) of the definition of “financial service” in Article 17.1 (Definitions).

physical form or electronic format, as defined under Mexican law.5

  1. 4. For the purposes of paragraph 2(b) and 2(c), in Mexico a collective investment scheme means, the “Managing Companies of Investment Funds (Sociedades Operadoras de Fondos de Inversión)” established under the Investment Funds Law (Ley de Fondos de Inversión). A financial institution organized in the territory of another Party will only be authorized to provide portfolio management services to a collective investment scheme located in Mexico if it provides the same services in the territory of the Party where it is established.

5 Nothing in this subparagraph shall prevent a Party from adopting or maintaining measures to protect personal data, personal privacy, and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent the commitments or obligations of this subparagraph. For greater certainty, nothing in this subparagraph prevents a Party from adopting or maintaining measures that regulate fees, such as interchange or switching fees, or that impose fees.

United States

Insurance and insurance-related services

  1. 1. Article 13.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of  “cross-border  supply  of  financial  services”  in  Article  17.1  (Definitions), with  respect to:

(a)       insurance of risks relating to:

(i)         maritime shipping and commercial aviation and space launching and freight  (including satellites),  with  such  insurance to cover any or all  of the  following:  the  goods  being  transported,  t h e   vehicle transporting the goods, and any liability arising therefrom; and

(ii)       goods in international transit; and

(b)       reinsurance  and  retrocession;  services  auxiliary  to  insurance,  as  referred to in subparagraph (d) of the definition of “financial  service” in Article 17.1 (Definitions); and insurance intermediation, such as brokerage and agency, as referred to in  subparagraph (c) of the definition of “financial service” in Article  17.1 (Definitions).

Banking and other financial services (excluding insurance)

  1. 2. Article 3.3 (National Treatment) and 17.5.1 (Market Access) shall apply to the cross- border supply of or trade in financial services, as defined in subparagraph (a) of the definition of  “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

(a)        provision and transfer of financial information, and financial data processing and related software, as referred to in subparagraph (o)  of the definition of “financial service” in Article 17.1 (Definitions);

(b)       advisory and other auxiliary services, excluding intermediation, relating to banking and other financial services, as referred to in  subparagraph (p) of the definition of “financial service” in Article 17.1 (Definitions);

(c)       investment advice to a collective investment scheme located in the Party’s territory;

(d)       portfolio management services, excluding

(i)        trustee services; and

(ii)        custodial  services  and  execution  services  that  are  not  related to managing a collective investment scheme; and

(e)        electronic  payment  services  for  payment  card  transactions  falling  within subparagraph (h) of the definition of “financial service” in Article 17.1 (Definitions), and within subcategory 71593 of the United Nations Central Product Classification, Version 2.1, and including only:

(i)         the processing of financial transactions such as verification of financial balances, authorization of transactions, notification of banks (or credit card issuers) of individual transactions and provision of daily summaries and instructions regarding the net financial position of relevant institutions for authorized transactions; and

(ii)        those services that are provided on a business-to-business basis and use proprietary networks to process payment transactions,

but not including the transfer of funds to and from transactors’ accounts.

For the United States, a payment card means a credit card, charge card, debit card, check card, automated teller machine (ATM) card, prepaid card, and other physical or electronic products or services for performing similar functions as such cards, and the unique account number associated with that card, product, or service.1

  1. For the purposes of subparagraphs 2(c) and 2(d), for the United States, a collective investment scheme means an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940.2

1 Nothing in this subparagraph shall prevent a Party from adopting or maintaining measures to protect personal data, personal privacy, and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent the commitments or obligations of this subparagraph. For greater certainty, nothing in this subparagraph prevents a Party from adopting or maintaining measures that regulate fees, such as interchange or switching fees, or that impose fees.

2 Custodial services are included in the scope of the commitment made by the United States under this Annex only with respect to investments for which the primary market is outside the territory of the Party.

ANNEX 17-B

AUTHORITIES RESPONSIBLE FOR FINANCIAL SERVICES

The authorities for each Party responsible for financial services are: (a)       for Canada, the Department of Finance of Canada;

(b)       for Mexico, the Ministry of Finance and Public Credit (Secretaría de

Hacienda y Crédito Público);

(c)        for United States, the Department of the Treasury for purposes of Annex 17- C, Mexico-United States Investment Disputes and for  all  matters  involving banking,  securities,  and  financial  services  other than insurance, and the Department of the Treasury, in cooperation with the Office of the U.S. Trade Representative, for insurance matters.

ANNEX 17-C

MEXICO-UNITED STATES INVESTMENT DISPUTES IN FINANCIAL SERVICES

  1. Annex 14-D (Mexico-United States Investment Disputes) shall apply as modified by this Annex to the settlement of a qualifying investment dispute under this Chapter.
  1. In the event that a disputing party considers that a qualifying investment dispute under this Chapter cannot be settled by consultation and negotiation:

(a)       the claimant, on its own behalf, may submit to arbitration under Annex 14-D

a claim:

(i)        that the respondent has breached:

(A)       Article 17.3.1 (National Treatment), Article 17.3.2 (National Treatment),  or  Article 17.4.1(a) (Most-Favored-Nation  Treatment), Article 17.4.1(b) (Most-Favored-Nation Treatment), Article 17.4.1(c) Most-Favored-Nation Treatment)1  except with respect to the establishment or acquisition of an investment; or

(B)       Article 14.8 (Investment, Expropriation and Compensation) as incorporated into this Chapter under Article 17.2.2(a) (Scope), except with respect to indirect expropriation; and

(ii)        that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

(b)        the claimant, on behalf of a financial institution of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under Annex 14-D a claim:

(i)        that the respondent has breached:

(A)       Article 17.3.1 (National Treatment), Article 17.3.2 (National Treatment), Article 17.4.1(a) (Most-Favored-Nation Treatment), Article   17.4.1(b)   (Most-Favored-Nation   Treatment),   or   Article

1   For the purposes of this paragraph and paragraph (b), the “treatment” referred to in Article 17.4.1(a) (Most- Favored-Nation Treatment), Article 17.4.1(b) (Most-Favored-Nation Treatment), and Article 17.4.1(c) Most- Favored-Nation Treatment) excludes provisions in other trade or investment agreements that establish international dispute resolution procedures or impose substantive obligations; rather, “treatment” only includes measures adopted or maintained by the other Annex Party, which may include measures adopted or maintained pursuant to or consistent with substantive obligations in other trade or investment agreements.

17.4.1(c) (Most-Favored-Nation Treatment), except with respect to the establishment or acquisition of an investment; or

(B)       Article 14.8 (Investment, Expropriation and Compensation) as incorporated into this Chapter under Article 17.2.2(a), except with respect to indirect expropriation; and

(ii)        that the financial institution has incurred loss or damage by reason of, or arising out of, that breach.

  1. If an investor of an Annex Party submits a claim to arbitration under Annex 14-D as modified by this Annex:

(a)       the presiding arbitrator and the other arbitrators shall be selected so that the presiding arbitrator has expertise or experience in financial services law or practice such as the regulation of financial institutions, and, to the extent practicable, the other arbitrators have expertise or experience in financial services law or practice such as the regulation of financial institutions; and

(b)       the respondent shall endeavor to consult with its domestic financial regulatory authorities on the claim.

  1. 4. No claim shall be submitted to arbitration under Annex 14-D as modified by this Annex unless the conditions in Article 1 of Annex 11-D are satisfied, except the relevant time periods in subparagraph (b) and (c) of that article shall each be 18 months.
  1. 5. If an investor of an Annex Party submits a claim to arbitration under Annex 11-D as modified by this Annex, and the respondent invokes Article 111 (Exceptions) as  a defense, the following provisions of this Article shall apply.

(a)        The respondent shall, no later than the date the tribunal fixes for  the respondent to submit its counter-memorial, or in the case of an amendment to the notice of arbitration, the date the tribunal fixes  for the respondent to submit its response to the amendment, submit in writing to the authorities responsible for financial services of the Annex Party of the claimant, as set out in Annex 17-B (Authorities  Responsible for Financial Services), a request for a joint  determination by the authorities of the respondent and the Annex Party of  the claimant on the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim.

(i)         The respondent shall set out in the request the text of a proposed joint determination that specifies the claims to which it considers Article 17.11 (Exceptions) a valid defense.

(ii)        The respondent shall promptly provide the tribunal, if constituted, a copy of the request.

(iii)       The authorities of the Annex Party of the claimant shall notify the authorities of the respondent in writing that the request has been received.

(iv)      The arbitration may proceed with respect to the claim only as provided in subparagraph (f).2

(b)        The authorities referred to in subparagraph (a) shall attempt in good faith to make a joint determination as described in  that  subparagraph within

120 days of the date of the written request for that determination. The authorities may, in extraordinary circumstances, agree to extend the date for a joint determination for up to 60 additional days.

(c)        The  authorities  of  the  Annex  Party  of  the  claimant  shall  notify  the authorities of the respondent within 120 days of the date of the written request for a joint determination   under subparagraph (a), or within the period agreed under subparagraph (b), whichever is longer, whether  the authorities of the Annex Party of the claimant agree to the proposed joint determination submitted under subparagraph (a)(i), propose an alternative joint determination, or will not, for any reason,       agree to a joint determination.

(d)       If the authorities of the Annex Party of the claimant make no notification under subparagraph (c), they shall be presumed to take a position that is consistent with that of the authorities of the respondent, and a joint determination shall deemed to be made regarding the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim as set out in the proposed joint determination submitted under subparagraph (a)(i).

(e)       Any joint determination made or deemed to be made shall be transmitted promptly to the disputing parties, the Committee and, if constituted, to the tribunal. The joint determination shall be binding on the tribunal and any decision  or award issued by the tribunal  must  be consistent with that determination.

(f)        If the authorities referred to in subparagraph (a), within 120 days of the date of the written request for a joint determination  under subparagraph (a) or within the date agreed under subparagraph (d), whichever is longer, have not made a determination as described in subparagraph (a), the tribunal shall decide the issue left unresolved by the authorities.

2  The term “joint determination” as used in this subparagraph refers to a determination by the authorities responsible   for financial services of the respondent and of the Annex Party of the claimant, as set out in Annex

17-B (Authorities Responsible for Financial Services).

(i)         The tribunal shall draw no inference regarding the application of Article 17.11 (Exceptions) from the fact that the competent authorities have not  made a determination as described in subparagraph (a).

(ii)      The  Annex  Party  of  the  claimant  may  make  oral  and  written submissions to the tribunal regarding the issue of whether and to what extent Article 17.11 (Exceptions) is a valid defense to the claim.  Unless it makes such a submission, the Annex Party of the claimant shall be presumed, for purposes of the arbitration, to take a position on Article 17.11 (Exceptions) not inconsistent with that of the respondent.

(g)       The arbitration referred to in subparagraph (a) may proceed with respect to the  claim:

(i)        10 days after the date a joint determination under subparagraph (a) has been received by the disputing parties and, if  constituted, the tribunal; or

(ii)       10 days after the expiration of the 120-day period following the request for a joint determination   under subparagraph (a) or the expiration of the  period agreed under subparagraph (b), whichever is longer.

(h)       On the request of the respondent made within 30 days after the expiration of the 120-day period following the request for a joint determination   under subparagraph (a), or within 30 days of the period agreed under subparagraph (b), whichever is longer, or, if the tribunal has not been constituted as of the expiration of the 120-day or the period agreed under subparagraph (b), within

30 days after the tribunal is constituted, the tribunal shall address and decide

the issue or issues left unresolved by the authorities as referred to in subparagraph (c) prior to deciding the merits of the claim for which Article

17.11 (Exceptions) has been invoked by the respondent as a defense. Failure of the respondent to make such a request is without prejudice to the right of the respondent to invoke Article 17.11 (Exceptions) as a defense at any appropriate phase of the arbitration.

  1. 6. If a respondent asserts that the measure alleged to be a breach is within the scope of a non-conforming measure set out in Annex III, Article 10 of Annex 14-D (Mexico-United States Investment Disputes, Interpretation of Annexes) shall apply to any request of the respondent for an interpretation of the Commission on the issue.

ANNEX 14-D

LOCATION OF COMPUTING FACILITIES

Article 14.20 (Location of Computer Facilities) does not apply to existing measures of Canada for one year after the entry into force of this Agreement.

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