Title:Annex VII -- Schedule of Mexico
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:54040                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
                                      Annex VII 
                                  Schedule of Mexico 
                                      Section A 
 
 
          Sector:                    Financial Services 
 
          Sub-Sector:                Holding Companies (Sociedades 
                                     Controladoras) 
                                     Commercial Banks (Instituciones de 
                                     Cr dito) 
 
          Industry Classification:   Holding Companies (Not applicable) 
                                     CMAP 811030    Commercial Banks 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) 
                                     National Treatment  (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley para Regular las Agrupaciones 
                                     Financieras, Art culo 18 
 
                                     Ley de Instituciones de Cr dito, 
                                     Art culos 11, 15 
 
          Description:               Aggregate foreign investments in 
                                     holding companies and in commercial 
                                     banks are limited to 30 percent of 
                                     common stock capital ("capital 
                                     ordinario").  These percentage limits 
                                     do not apply to investments in foreign 
                                     financial affiliates as such term is 
                                     defined in, and subject to terms and 
                                     conditions under, Sections B and C of 
                                     this Schedule. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-1  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
          Sector:                    Financial Services 
 
          Sub-Sector:                Securities Firms (Casas de Bolsa) 
                                     Securities Specialists (Especialistas 
                                     Burs tiles) 
 
          Industry Classification:   CMAP 812001    Securities Firms 
                                                    Securities Specialists 
                                                    (Not Applicable) 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) 
                                     National Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley del Mercado de Valores, Art culo 
                                     17-II 
 
          Description:               Aggregate foreign investments in 
                                     securities firms and securities 
                                     specialists are limited to 30 percent 
                                     of capital ("capital social") and 
                                     individual foreign investments are 
                                     limited to 10 percent of capital, 
                                     while individual investments by 
                                     Mexicans may, with approval from the 
                                     Secretar a de Hacienda y Cr dito 
                                     P blico, rise to 15 percent of 
                                     capital.  These percentage limits do 
                                     not apply to investments in foreign 
                                     financial affiliates as such term is 
                                     defined in, and subject to terms and 
                                     conditions under, Sections B and C of 
                                     this Schedule. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-2  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
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          Sector:                    Financial Services 
 
          Sub-Sector:                General Deposit Warehouses (Almacenes 
                                     Generales de Dep sito) 
                                     Financial Leasing Companies 
                                     (Arrendadoras Financieras) 
                                     Financial Factoring Companies 
                                     (Empresas de Factoraje Financiero) 
                                     Bonding Companies (Instituciones de 
                                     Fianzas) 
 
          Industry Classification:   CMAP 811042    General Deposit 
                                                    Warehouses 
                                     CMAP 811043    Financial Leasing 
                                                    Companies Financial 
                                                    Factoring Companies 
                                                    (Not Applicable) 
                                     CMAP 813001    Bonding Companies 
 
          Type of Reservation:       Establishment of Financial Intitutions 
                                     (Article 1403) 
                                     National Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley General de Organizaciones y 
                                     Actividades Auxiliares del Cr dito, 
                                     Art culo 8-III-1 
 
                                     Ley Federal de Instituciones de 
                                     Fianzas, Art culo 15-XIII 
 
          Description:               Aggregate foreign investments in 
                                     general deposit warehouses, financial 
                                     leasing companies, financial factoring 
                                     companies and bonding companies must 
                                     be less than 50 percent of paid-in 
                                     capital ("capital pagado").  These 
                                     percentage limits do not apply to 
                                     investments in foreign financial 
                                     affiliates as such term is defined in, 
                                     and subject to terms and conditions 
                                     under, Section B of this Schedule. 
 
          Phase-Out:                 None 
 
 
 
           
 
                                       VII-M-3  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
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          Sector:                    Financial Services 
 
          Sub-Sector:                Credit Unions (Uniones de Cr dito) 
                                     Financial Agents (Comisionistas 
                                     Financieros) 
                                     Foreign Exchange Firms (Casas de 
                                     Cambio) 
 
          Industry Classification:   CMAP 811041    Credit Unions 
                                                    Financial Agents (Not 
                                                    Applicable) 
                                     CMAP 811044    Foreign Exchange Firms 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) National 
                                     Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley General de Organizaciones y 
                                     Actividades Auxiliares del Cr dito, 
                                     Art culos 8-III-1, 82-III 
 
                                     Ley de Instituciones de Cr dito, 
                                     Art culo 92 
 
                                     Reglas de la Secretar a de Hacienda y 
                                     Cr dito P blico  
          Description:               Foreign investments in credit unions, 
                                     financial agents and foreign exchange 
                                     firms are not allowed.  This 
                                     limitation does not apply to 
                                     investments in foreign financial 
                                     affiliates as such term is defined in, 
                                     and subject to terms and conditions 
                                     under, Section B of this Schedule. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
           
 
          Sector:                    Financial Services 
 
                                       VII-M-4  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
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          Sub-Sector:                Development Banks (Bancos de 
                                     Desarrollo) 
 
          Industry Classification:   CMAP 811021    Development Banks 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) National 
                                     Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley de Instituciones de Cr dito, 
                                     Art culo 33 
 
          Description:               Foreign investments in development 
                                     banks are not allowed.  
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-5  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
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          Sector:                    Financial Services 
 
          Sub-Sector:                Insurance Companies (Instituciones de 
                                     Seguros) 
 
          Industry Classification:   CMAP 813002    Insurance Companies 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) National 
                                     Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley General de Instituciones y 
                                     Sociedades Mutualistas de Seguros, 
                                     Art culo 29-I 
 
          Description:               Aggregate foreign investments in 
                                     insurance companies must be less than 
                                     50 percent of paid-in capital 
                                     ("capital pagado").  This percentage 
                                     limit does not apply to investments in 
                                     foreign financial affiliates as such 
                                     term is defined in Sections B and C of 
                                     this Schedule, or in insurance 
                                     companies, in both cases subject to 
                                     terms and conditions under Sections B 
                                     and C of this Schedule. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-6  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
          Sector:                    Financial Services 
 
          Sub-Sector:                Holding Companies (Sociedades 
                                     Controladoras) 
                                     Securities Firms (Casas de Bolsa) 
                                     Securities Specialists (Especialistas 
                                     Burs tiles) 
                                     General Deposit Warehouses (Almacenes 
                                     Generales de Dep sito) 
                                     Financial Leasing Companies 
                                     (Arrendadoras Financieras) 
                                     Financial Factoring Companies 
                                     (Empresas de Factoraje Financiero) 
                                     Savings and Loan Companies (Sociedades 
                                     de Ahorro y Pr stamo) 
                                     Managing Companies of Investment 
                                     Companies (Sociedades Operadoras de 
                                     Sociedades de Inversi n) 
                                     Investment Companies (Sociedades de 
                                     Inversi n) 
                                     Bonding Companies (Instituciones de 
                                     Fianzas) 
                                     Insurance Companies (Instituciones de 
                                     Seguros)   
 
          Industry Classification:                  Holding Companies (Not 
                                                    Applicable) 
                                     CMAP 812001    Securities Firms  
                                                    Securities Specialists 
                                                    (Not Applicable) 
                                     CMAP 811042    General Deposit 
                                                    Warehouses 
                                     CMAP 811043    Financial Leasing 
                                                    Companies 
                                                    Financial Factoring 
                                                    Companies (Not 
                                                    Applicable) 
                                                    Saving and Loans 
                                                    Companies (Not 
                                                    Applicable) 
                                     CMAP 812003    Managing Companies of 
                                                    Investment Companies 
                                     CMAP 812002    Investment Companies 
                                     CMAP 813001    Bonding Companies 
                                     CMAP 813002    Insurance Companies 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) 
                                     National Treatment (Article 1405) 
 
                                       VII-M-7  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
 
          Level of Government:       Federal 
 
          Measures:                  Ley para Regular las Agrupaciones 
                                     Financieras, Art culo 18 
 
                                     Ley del Mercado de Valores, Art culo 
                                     17-II 
 
                                     Ley General de Organizaciones y 
                                     Actividades Auxiliares del Cr dito, 
                                     Art culos 8-III-1, 38-G 
 
                                     Ley de Sociedades de Inversi n, 
                                     Art culos 9-III, 29-VI 
 
                                     Ley Federal de Instituciones de 
                                     Fianzas, Art culo 15-XIII 
 
                                     Ley General de Instituciones y 
                                     Sociedades  Mutualistas de Seguros, 
                                     Art culo 29-I 
 
          Description:               Foreign governments and foreign state 
                                     enterprises may not invest, directly 
                                     or indirectly, in holding companies, 
                                     securities firms, securities 
                                     specialists, general deposit 
                                     warehouses, financial leasing 
                                     companies, financial factoring 
                                     companies, savings and loan companies, 
                                     managing companies of investment 
                                     companies, investment companies, 
                                     bonding companies or insurance 
                                     companies. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-8  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
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          Sector:                    Financial Services 
 
          Sub-Sector:                Commercial Banks (Instituciones de 
                                     Cr dito) 
 
          Industry Classification:   CMAP 811030    Commercial Banks 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) National 
                                     Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley de Instituciones de Cr dito, 
                                     Art culo 15 
 
          Description:               Foreign entities that exercise 
                                     governmental functions may not invest, 
                                     directly or indirectly, in commercial 
                                     banks. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-9  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
          Sector:                    Financial Services 
 
          Sub-Sector:                Insurance 
 
          Industry Classification:   CMAP 813002    Insurance 
 
          Type of Reservation:       Cross-Border Trade (Article 1404) 
                                     National Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley General de Instituciones y 
                                     Sociedades Mutualistas de Seguros, 
                                     Art culo 3 
 
          Description:               Mexico reserves its existing 
                                     prohibitions and restrictions on 
                                     cross-border trade in insurance 
                                     services, which do not now include 
                                     restrictions on the right of 
                                     individuals to purchase, by physical 
                                     mobility, life and health insurance.  
                                     Mexico is not reserving its present 
                                     restrictions with respect to the 
                                     ability of residents of Mexico to 
                                     purchase from cross-border insurance 
                                     providers of another Party the 
                                     following types of insurance: 
 
                                     (a)  tourist insurance (including 
                                          travel accident and motor vehicle 
                                          insurance for non-resident 
                                          tourists, but not insurance of 
                                          risks of liability to third 
                                          parties) for individuals, 
                                          purchased without solicitation 
                                          via physical mobility of such 
                                          individuals;  
 
                                     (b)  (i)  cargo insurance to and from 
                                               each Party, purchased 
                                               without solicitation, for 
                                               goods in international 
                                               transit from point of origin 
                                               to final destination, and  
 
                                          (ii) insurance purchased without 
                                               solicitation for a vehicle 
                                               during the period of its use 
 
                                       VII-M-10  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
                                               in transportation of cargo 
                                               (other than insurance of 
                                               risks of liabilities to 
                                               third parties), provided 
                                               such vehicle is licensed and 
                                               registered outside Mexico 
                                               (including vehicles in 
                                               maritime shipping, 
                                               commercial aviation, space 
                                               launching and freight 
                                               (including satellites)); and 
 
                                     (c)  intermediary services incidental 
                                          to subparagraphs (a) and (b) 
                                          purchased without solicitation. 
 
                                     For greater clarity, this reservation 
                                     does not apply to reinsurance. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-11  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(A) - Mexico                                           
           _____________________ 
 
          Sector:                    Financial Services 
 
          Sub-Sector:                Banking 
 
          Industry Classification:   CMAP 811021    Development Banks 
                                     CMAP 811030    Commercial Banks 
 
          Type of Reservation:       Establishment of Financial 
                                     Institutions (Article 1403) Cross- 
                                     Border Trade (Article 1404) 
                                     National Treatment (Article 1405) 
 
          Level of Government:       Federal 
 
          Measures:                  Ley Org nica de Nacional Financiera, 
                                     Art culo 7 
 
                                     Ley Org nica del Banco Nacional del 
                                     Ej rcito, la Fuerza A rea y la Armada 
 
          Description:               The following activities are reserved 
                                     solely to Mexican development banks: 
 
                                     (a)  acting as custodians of 
                                          securities and cash funds 
                                          deposited by or in the 
                                          administrative or judiciary 
                                          authorities, and acting as 
                                          custodian of goods that have been 
                                          seized according to Mexican 
                                          measures; and 
 
                                     (b)  managing the savings funds, 
                                          retirement plans and any other 
                                          funds or property of the 
                                          personnel of the Secretar a de la 
                                          Defensa Nacional, Secretar a de 
                                          Marina and the Mexican armed 
                                          forces, and performing other 
                                          financial activities pertaining 
                                          to the financial resources of 
                                          such personnel. 
 
          Phase-Out:                 None 
 
 
 
 
 
 
                                       VII-M-12  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
                                      Section B 
 
                Establishment and Operation of Financial Institutions 
 
 
          Type of Reservation:     Establishment of Financial Institutions 
                                   (Article 1403) 
                              National Treatment (Article 1405) 
 
          1.   The provisions of paragraphs 2 through 10 of this Section 
          shall apply during the transition period, except as otherwise 
          specifically provided in paragraphs 9 and 10 of this Section. 
 
          2.   For the types of financial institutions listed in the chart 
          in this paragraph, the maximum capital to be authorized by Mexico 
          for a foreign financial affiliate, measured as a percentage of 
          the aggregate capital of all financial institutions of the same 
          type in Mexico, shall not exceed the percentage set forth in the 
          chart in this paragraph: 
 
               Type of Financial Institution Maximum Individual Capital to               
_____________________________ _____________________________ 
                                             Be Authorized (Percentage of                                           
  _____________ 
                                             the Aggregate Capital of All 
                                             Institutions of the Same Type) 
 
               Commercial Banks                             1.5% 
               Securities Firms                             4.0% 
               Insurance Companies 
                    Casualty                           1.5% 
                    Life and Health                         1.5% 
 
          In the case of an acquisition by an investor of another Party of 
          a financial institution established in Mexico, the sum of the 
          authorized capital of the acquired institution and the authorized 
          capital of any foreign financial affiliate already controlled by 
          the acquiror may not, at the time of acquisition or at any time 
          thereafter during the transition period, exceed the applicable 
          limit set forth in the chart in this paragraph. 
 
          This paragraph will not apply to new or existing Mexican 
          insurance companies invested in by insurance investors of another 
          Party (or their affiliates) pursuant to paragraph 7 of this 
          Section or paragraph 4 of Section C of this Schedule. 
 
 
 
 
                                       VII-M-13  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
          3.   For purposes of the proper administration of the capital 
          limits in this Section, the following provisions shall apply: 
 
               (a)  Each foreign financial affiliate shall have an 
                    authorized capital determined by Mexico, and the paid- 
                    in capital of such an institution shall not be less 
                    than that authorized at the time of approval of its 
                    establishment.  After the time of establishment, Mexico 
                    may permit authorized capital to exceed paid-in 
                    capital.  Authorized capital shall not be reduced by 
                    any measure of Mexico (other than prudential measures) 
                    below paid-in capital.  The maximum size of the 
                    operations of each foreign financial affiliate shall be 
                    determined, on a national treatment basis, as a 
                    function of the lesser of its capital or its authorized 
                    capital. 
 
               (b)  Mexico reserves the right to impose limitations on 
                    transfers of assets or liabilities by foreign financial 
                    affiliates that have the effect of evading the capital 
                    limits set forth in this Schedule.  This subparagraph 
                    does not apply to bona fide transfers of funds to make                                
      ____ ____ 
                    overnight deposits or bona fide transfers of banking                                    
      ____ ____ 
                    liabilities. 
 
          4.   No foreign financial affiliate may issue subordinated 
          debentures, other than to the investor of another Party that owns 
          and controls the affiliate.   
 
          5.   The aggregate of the authorized capital of all foreign 
          financial affiliates of the same type, measured as a percentage 
          of the aggregate capital of all financial institutions of such 
          type in Mexico, shall not exceed the percentage set forth in the 
          chart in this paragraph for that type of institution, except for 
          insurance companies as set out in paragraph 6 of this Section.  
          Beginning one year after the date of entry into force of this 
          Agreement, these initial limits shall increase annually in equal 
          increments so as to reach the final limits specified in the chart 
          in this paragraph at the beginning of the last year of the 
          transition period: 
 
 
          Type of Financial Institution      Percentage of Total Capital          
_____________________________      ___________________________ 
                                       Initial Limit        Final Limit 
 
               Commercial banks                 8%                    15% 
 
                                       VII-M-14  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
               Securities firms                10%                    20% 
               Factoring companies             10%                    20% 
               Leasing companies               10%                    20% 
 
          Any capital in existence as of the date of signature of this 
          Agreement of a foreign bank branch established in Mexico prior to 
          such date shall be excluded from each of the aggregate capital 
          limits referred to in this Schedule. 
 
          6.   The aggregate of the authorized capital of all foreign 
          insurance affiliates, measured as a percentage of the aggregate 
          capital of all insurance companies in Mexico, shall not exceed 
          the percentage set forth in the chart in this paragraph for the 
          respective one-year periods beginning on each of the following 
          dates: 
 
                    Date                     Percentage of Total Capital                     ____                
    ___________________________ 
 
               January 1, 1994                            6% 
               January 1, 1995                            8% 
               January 1, 1996                            9% 
               January 1, 1997                           10% 
               January 1, 1998                           11% 
               January 1, 1999                           12% 
 
          If the date of entry into force of this Agreement occurs on a 
          date prior to January 1, 1994, that date shall become the initial 
          date for purposes of this chart, and each succeeding anniversary 
          of the date of entry into force of this Agreement shall become 
          the next succeeding date in this chart, with the percentages 
          listed in this chart applying to each of the respective periods 
          as so adjusted.  If the date of entry into force of this 
          Agreement occurs on a date after January 1, 1994, the dates and 
          corresponding limits in this chart shall not be changed. 
 
          The individual and aggregate capital limits described in 
          paragraphs 2 and 6 of this Section shall be measured separately 
          (through separate accounting) for life and non-life insurance 
          operations, but both types of insurance operations may be 
          conducted either by a single or separate foreign financial 
          affiliates.   
 
          7.   An insurance investor of another Party may elect an 
          alternative procedure for investment in Mexico through phasing-in 
          an equity interest in a new or existing Mexican insurance 
          company, and thereby exempt such Mexican company from the capital 
 
                                       VII-M-15  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
          limits in paragraphs 2 and 6 of this Section.  In order to 
          qualify, the percentage of the Mexican insurance company's common 
          voting stock that is owned by Mexican persons must not be less 
          than the levels set forth in the chart in this paragraph for the 
          respective one-year periods beginning on each of the following 
          dates: 
 
                    Date                Mexican Interest                     ____               
________________ 
 
               January 1, 1994                 70% 
               January 1, 1995                 65% 
               January 1, 1996                 60% 
               January 1, 1997                 55% 
               January 1, 1998                 49% 
               January 1, 1999                 25% 
 
          If the date of entry into force of this Agreement occurs on a 
          date prior to January 1, 1994, that date shall become the initial 
          date for purposes of this chart, and each succeeding anniversary 
          of the date of entry into force of this Agreement shall become 
          the next succeeding date in this chart, with the percentages 
          listed in this chart applying to each of the respective periods 
          as  adjusted.  If the date of entry into force of this Agreement 
          occurs on a date after January 1, 1994, the dates and 
          corresponding limits in this chart shall nonetheless not be 
          changed. 
 
          On and after January 1, 2000 (or, if the date of entry into force 
          of this Agreement occurs on a date prior to January 1, 1994, on 
          and after the sixth anniversary of such date), the percentage 
          requirement of Mexican ownership set forth in this paragraph 
          shall no longer apply. 
 
          This paragraph is further modified by paragraph 4 of Section C of 
          this Schedule to the extent set forth therein.   
 
          8.   The aggregate assets of foreign financial affiliates that 
          are limited scope financial institutions within the meaning of 
          paragraph 2 of Section C of this Schedule shall not exceed three 
          percent of the sum of: 
 
               (a)  the aggregate assets of all commercial banks in Mexico; 
                    plus 
 
               (b)  the aggregate assets of all types of limited scope 
                    financial institutions in Mexico.   
 
                                       VII-M-16  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
          Lending by affiliates of automobile manufacturing companies with 
          respect to the manufacturers' vehicles shall not be subject to or 
          taken into account in determining compliance with this three 
          percent limit.   
 
          9.   The limits in paragraphs 2, 5, 6 and 8 of this Section shall 
          be removed at the end of the transition period.  If the sum of 
          the authorized capital of foreign financial affiliates, measured 
          as a percentage of the aggregate capital of all financial 
          institutions of such type in Mexico, reaches the percentage set 
          forth in the chart in this paragraph for such type of 
          institutions, then Mexico shall have the right, once during the 
          four years following the end of the transition period, to freeze 
          such aggregate capital percentage at its then-existing level: 
 
               Commercial banks                    25% 
               Securities firms                    30% 
 
          If applied, such a restriction will have a duration not to exceed 
          a period of three years.   
 
          10.  Mexico may deny a license to establish a foreign financial 
          affiliate during the transition period (and, in the case of 
          paragraph 9 of this Section, during the additional periods 
          described in that paragraph) if after such issuance the sum of 
          the authorized capital of all foreign financial affiliates of the 
          same type would exceed the applicable percentage limit for that 
          type of institution in paragraph 5, 6, 8 or 9 of this Section. 
 
          11.  The provisions of paragraphs 12 through 17 of this Section 
          shall apply immediately upon the date of entry into force of this 
          Agreement and at all times thereafter, except as otherwise 
          specifically provided in such paragraphs.  Any amendment or 
          modification to a measure adopted or maintained pursuant to 
          paragraphs 12 through 15 of this Section shall not decrease the 
          conformity of the measure, as it existed immediately before such 
          amendment or modification, with Articles 1403 through 1408. 
 
          12.  Mexico may require that a foreign financial affiliate (other 
          than a foreign insurance affiliate) be wholly-owned by an 
          investor of another Party.  Mexico may also restrict any foreign 
          financial affiliate from establishing agencies, branches, or 
          other direct or indirect subsidiaries in the territory of any 
          other country.   
 
          13.  Following the transition period, acquisition of a commercial 
 
                                       VII-M-17  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
          bank established in Mexico, or of the assets or liabilities 
          thereof, by an investor of another Party will only be authorized 
          by Mexico, subject to reasonable prudential considerations on a 
          case-by-case basis, if the sum of the capital of the acquired 
          commercial bank and the capital of any foreign commercial bank 
          affiliate already controlled by the acquiror would not exceed 
          four percent of the aggregate capital of all commercial banks in 
          Mexico.   
 
          14.  Mexico may adopt measures that (a) limit eligibility to 
          establish a foreign financial affiliate in Mexico to an investor 
          of another Party that is, directly or through any of its 
          affiliates, engaged in the same general type of financial 
          services in the territory of the other Party; and (b) limit such 
          investor (together with its affiliates) to no more than one 
          institution of the same type in Mexico.  In determining what 
          types of operations an investor of another Party is engaged in 
          for purposes of the preceding sentence, all types of insurance 
          shall be considered to be only one type of financial service; but 
          both life and non-life insurance operations may be conducted 
          either by a single or separate foreign financial affiliates.   
 
                           Governmental Insurance Programs 
 
          Type of Reservation:     Establishment of Financial Institutions 
                                   (Articles 1403) 
                              Cross-Border Trade (Article 1404) 
                              National Treatment (Article 1405) 
 
          15.  The activities and operations of the existing Mexican 
          governmental insurance programs conducted by Aseguradora 
          Mexicana, S.A. or Aseguradora Hidalgo, S.A. (including insurance 
          for government employees, agencies, instrumentalities and public 
          entities) are excluded from Articles 1403, 1404 and 1405 for so 
          long as such firm is controlled by the Government of Mexico and 
          for a commercially reasonable time after such governmental 
          control ceases. 
 
                                  Cross-Border Trade 
 
          Type of Reservation:     Cross-Border Trade (Article 1404) 
 
          16.  In order to avoid impairment of the conduct of Mexico's 
          monetary and exchange rate policies, cross-border financial 
          service providers of another Party shall not be permitted to 
          provide financial services into the territory of Mexico or to 
 
                                       VII-M-18  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
          residents of Mexico, and residents of Mexico may not purchase 
          financial services from cross-border financial service providers 
          of another Party, if such transactions are denominated in Mexican 
          pesos. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-19  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(B) - Mexico                                            
          _____________________ 
 
 
 
 
                   Existing Operations of Foreign Commercial Banks 
 
          Type of Reservation:     Establishment of Financial Institutions 
                                   (Article 1403) 
                              National Treatment (Article 1405) 
                              Most-Favored-Nation Treatment (Article 1406) 
                              New Financial Services and Data Processing 
                              (Article 1407) 
                              Senior Management and Boards of Directors 
                              (Article 1408) 
 
          17.  The benefits of this Agreement shall not be extended to a 
          foreign bank branch existing in Mexico on the date of entry into 
          force of this Agreement.  The existing legal regime will continue 
          to apply to such a branch for so long as it operates in that 
          form.  Such a branch shall be permitted to convert to a 
          subsidiary pursuant to the terms of this Schedule, and on 
          conversion shall be covered by this Agreement.  In the event of 
          conversion the existing capital of such branch on the date of 
          signature of this Agreement shall not be counted against such 
          foreign commercial bank affiliate's individual capital limit, or 
          the aggregate capital limits for commercial banks. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-20  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(C) - Mexico                                           
           _____________________ 
 
           
 
                                      Section C 
 
                                 Specific Commitments 
 
 
          1.   Mexico shall retain discretion to approve, on a case-by-case 
          basis, any affiliation of a commercial bank or securities firm 
          with a commercial or industrial corporation that is established 
          in Mexico, if Mexico determines that such affiliation is harmless 
          and, in the case of banking, either (a) not substantial, or (b) 
          the financial-related activities of the commercial or industrial 
          corporation account for at least 90 percent of its annual income 
          worldwide, and the non-financial activities of such commercial or 
          industrial corporation are of a type that Mexico determines to be 
          acceptable.  Affiliation with a non-resident commercial or 
          industrial corporation that is not established in Mexico will not 
          be a reason for denial of an application to establish or acquire 
          a commercial bank or securities firm in Mexico. 
 
          2.   Non-bank investors of another Party shall be permitted to 
          establish one or more limited scope financial institutions in 
          Mexico to provide separately consumer lending, commercial 
          lending, mortgage lending or credit card services on terms no 
          less favorable than those applied to like domestic firms under 
          Mexican measures.  Mexico may permit lending services closely 
          related to the principal authorized business of a limited scope 
          financial institution to be carried out by that institution.  
          Such institutions shall be provided the opportunity to raise 
          funds in the securities market for business operations subject to 
          normal terms and conditions.  Mexico may restrict such limited 
          scope financial institutions from taking deposits. 
 
          3.   Within two years of the date of entry into force of this 
          Agreement, Mexico shall conduct a study of the desirability of 
          and, if desirable, the possible methods of establishing limited 
          scope securities firms which would have more limited powers than 
          current securities firms.  Such limited scope securities firms 
          would be subject to differing capital requirements, depending on 
          the type and extent of business conducted, that would permit 
          lower minimum capital requirements than those currently 
          applicable to Mexican securities firms.  The basis of the study 
          will be prudential considerations and opportunities for 
          investment in the securities sector.  As part of the second 
          annual meeting of the Committee required under Article 1412,  
          Mexico shall report to the other Parties on the outcome of the 
          study, including any plans for the establishment of new 
          categories of securities firms. 
 
                                       VII-M-21  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(C) - Mexico                                           
           _____________________ 
 
           
 
          4.   Notwithstanding paragraph 7 of Section B of this Schedule, 
          an insurance investor of another Party that together with its 
          affiliates had as of July 1, 1992 an active investment or 
          ownership interest of 10 percent or more in a Mexican insurance 
          company that was specifically approved by Mexico, may:  (a) 
          exercise any contract right or option in existence as of July 1, 
          1992 with respect to ownership interests in such Mexican 
          insurance company; and (b) effective the earlier of January 1, 
          1996 or two years following the date of entry into force of this 
          Agreement, acquire a controlling interest of up to 100 percent in 
          such Mexican insurance company.  Before the effective date 
          described in clause (b) of the preceding sentence, an insurance 
          investor of another Party (together with its affiliates) 
          described in that sentence may exercise any existing contract 
          right or option described in clause (a) of that sentence, and 
          choose to expand its interest in such Mexican insurance company 
          to the extent consistent with paragraph 7 of Section B of this 
          Schedule, or maintain its existing interest.  Mexico shall 
          maintain discretion to permit acceleration of the schedule for 
          equity participation in a Mexican insurance company by an 
          insurance investor of another Party described in the first 
          sentence of this paragraph. 
 
          5.   An investor of another Party that in accordance with Section 
          B is authorized to establish or acquire, and establishes or 
          acquires, a commercial bank or securities firm in Mexico may also 
          establish a financial holding company in Mexico, and thereby 
          establish or acquire other types of financial institutions in 
          Mexico, under the terms of Mexican measures. 
 
          6.   Mexico shall administer its licensing and approval 
          procedures during the transition period in a manner that does not 
          deny the benefits of the liberalization of existing measures 
          described in its Schedule to enterprises of another Party that 
          are ultimately controlled by nationals of that Party. 
 
 
                                     Definitions 
 
 
          For purposes of Sections B and C of this Schedule: 
 
          capital means the following, as defined in Mexican measures, 
          applied on a national treatment basis: 
 
             Type of Financial Institution     Concept of "Capital"             
_____________________________     ____________________ 
 
 
                                       VII-M-22  
 
 
 
 
 
 
 
  
 
 
 
 
 
                                                      Annex VII(C) - Mexico                                           
           _____________________ 
 
           
 
               commercial banks              capital neto 
               securities firms              capital global 
               insurance companies 
                    casualty            requerimiento bruto 
                                             de solvencia (allocation to 
                                             casualty insurance) 
                    life and health          requerimiento bruto 
                                             de solvencia (allocation to 
                                             life and health insurance) 
               factoring companies           capital contable 
               leasing companies             capital contable; 
 
          investor of another Party means an investor of another Party as 
          defined in Article 1403(5); 
 
          foreign commercial bank affiliate means a foreign financial 
          affiliate that is a commercial bank; 
 
          foreign financial affiliate means a financial institution 
          established in Mexico and owned and controlled by an investor of 
          another Party; 
 
          foreign insurance affiliate means a foreign financial affiliate 
          that is an insurance company;  
 
          insurance investor of another Party means an investor of another 
          Party that is an insurance company; and 
 
          transition period means the period beginning with the date of 
          entry into force of this Agreement and ending on the earlier of 
          January 1, 2000, or six years from the date of entry into force 
          of this Agreement.   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                       VII-M-23  
 
 
 
 
 
 
 
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