Title:Financial Services -- Chapter Fourteen
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:44088

                                    Chapter Fourteen 
 
                                   Financial Services 
 
 
            Article 1401:  Scope and Coverage 
 
            1.   This Chapter applies to measures adopted or maintained by 
            a Party relating to: 
 
                 (a)  financial institutions of another Party; 
 
                 (b)  investors of another Party, and investments of such 
                      investors, in financial institutions in the Party's 
                      territory; and  
 
                 (c)  cross-border trade in financial services. 
 
            2.   Articles 1109 through 1111, 1113, 1114 and 1211 are hereby 
            incorporated into and made a part of this Chapter.  Articles 
            1115 through 1138 are hereby incorporated into and made a part 
            of this Chapter solely for breaches by a Party of Articles 1109 
            through 1111, 1113 and 1114, as incorporated into this Chapter. 
 
            3.   Nothing in this Chapter shall be construed to prevent a 
            Party, including its public entities, from exclusively 
            conducting or providing in its territory: 
 
                 (a)  activities or services forming part of a public 
                      retirement plan or statutory system of social 
                      security; or 
 
                 (b)  activities or services for the account or with the 
                      guarantee or using the financial resources of the 
                      Party, including its public entities. 
 
            4.   Annex 1401.4 applies to the Parties specified in that 
            Annex. 
 
 
            Article 1402:  Self-Regulatory Organizations 
 
                 Where a Party requires a financial institution or a cross- 
            border financial service provider of another Party to be a 
            member of, participate in, or have access to, a self-regulatory 
            organization to provide a financial service in or into the 
            territory of that Party, the Party shall ensure observance of 
            the obligations of this Chapter by such self-regulatory 
            organization. 
 
 
 
 
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            Article 1403:  Establishment of Financial Institutions 
 
            1.   The Parties recognize the principle that an investor of 
            another Party should be permitted to establish a financial 
            institution in the territory of a Party in the juridical form 
            chosen by such investor. 
 
            2.   The Parties also recognize the principle that an investor 
            of another Party should be permitted to participate widely in a 
            Party's market through the ability of such investor to: 
 
                 (a)  provide in that Party's territory a range of 
                      financial services through separate financial 
                      institutions as may be required by that Party;  
 
                 (b)  expand geographically in that Party's territory; and 
 
                 (c)  own financial institutions in that Party's territory 
                      without being subject to ownership requirements 
                      specific to foreign financial institutions.  
 
            3.   Subject to Annex 1403.3, at such time as the United States 
            permits commercial banks of another Party located in its 
            territory to expand through subsidiaries or direct branches 
            into substantially all of the United States market, the Parties 
            shall review and assess market access provided by each Party in 
            relation to the principles in paragraphs 1 and 2 with a view to 
            adopting arrangements permitting investors of another Party to 
            choose the juridical form of establishment of commercial banks. 
 
            4.   Each Party shall permit an investor of another Party that 
            does not own or control a financial institution in the Party's 
            territory to establish a financial institution in that 
            territory.  A Party may:  
 
                 (a)  require an investor of another Party to incorporate 
                      under the Party's law any financial institution it 
                      establishes in the Party's territory; or 
 
                 (b)  impose terms and conditions on establishment that are 
                      consistent with Article 1405. 
 
            5.   For purposes of this Article, "investor of another Party" 
            means an investor of another Party engaged in the business of 
            providing financial services in the territory of that Party. 
 
 
            Article 1404:  Cross-Border Trade 
 
            1.   No Party may adopt any measure restricting any type of 
            cross-border trade in financial services by cross-border 
 
 
                                          14-2  
 
 
 
 
 
 
  
 
 
 
 
 
            financial service providers of another Party that the Party 
            permits on the date of entry into force of this Agreement, 
            except to the extent set out in Section B of the Party's 
            Schedule to Annex VII. 
 
            2.   Each Party shall permit persons located in its territory, 
            and its nationals wherever located, to purchase financial 
            services from cross-border financial service providers of 
            another Party located in the territory of that other Party or 
            of another Party.  This obligation does not require a Party to 
            permit such providers to do business or solicit in its 
            territory.  Subject to paragraph 1, each Party may define 
            "doing business" and "solicitation" for purposes of this 
            obligation. 
 
            3.   Without prejudice to other means of prudential regulation 
            of cross-border trade in financial services, a Party may 
            require the registration of cross-border financial service 
            providers of another Party and of financial instruments.  
 
            4.   The Parties shall consult on future liberalization of 
            cross-border trade in financial services as set out in Annex 
            1404.4. 
 
 
            Article 1405:  National Treatment 
 
            1.   Each Party shall accord to investors 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 
            territory. 
 
            2.   Each Party shall accord to financial institutions of 
            another Party and to investments of investors of another Party 
            in financial institutions 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 investments.   
 
            3.   Subject to Article 1404, where a Party permits the cross- 
            border provision of a financial service it shall accord to the 
            cross-border financial service providers of another Party 
            treatment no less favorable than that it accords to its own 
            financial service providers, in like circumstances, with 
            respect to the provision of such service.   
 
 
 
                                          14-3  
 
 
 
 
 
 
  
 
 
 
 
 
            4.   The treatment that a Party is required to accord under 
            paragraphs 1, 2 and 3 means, with respect to a measure of any 
            state or province:   
 
                 (a)  in the case of an investor of another Party with an 
                      investment in a financial institution, an investment 
                      of such investor in a financial institution, or a 
                      financial institution of such investor, located in a 
                      state or province, treatment no less favorable than 
                      the treatment accorded to an investor of the Party in 
                      a financial institution, an investment of such 
                      investor in a financial institution, or a financial 
                      institution of such investor, located in that state 
                      or province, in like circumstances; and  
 
                 (b)  in any other case, treatment no less favorable than 
                      the most favorable treatment accorded to an investor 
                      of the Party in a financial institution, its 
                      financial institution or its investment in a 
                      financial institution, in like circumstances.   
 
            For greater certainty, in the case of an investor of another 
            Party with investments in financial institutions or financial 
            institutions of such investor, located in more than one state 
            or province, the treatment required under subparagraph (a) 
            means: 
 
                 (c)  treatment of the investor that is no less favorable 
                      than the most favorable treatment accorded to an 
                      investor of the Party with an investment located in 
                      such states, in like circumstances; and  
 
                 (d)  with respect to an investment of the investor in a 
                      financial institution or a financial institution of 
                      such investor, located in a state or province, 
                      treatment no less favorable than that accorded to an 
                      investment of an investor of the Party, or a 
                      financial institution of such investor, located in 
                      that state or province, in like circumstances.   
 
            5.   A Party's treatment of financial institutions and cross- 
            border financial service providers of another Party, whether 
            different or identical to that accorded to its own institutions 
            or providers in like circumstances, is consistent with 
            paragraphs 1 through 3 if the treatment affords equal 
            competitive opportunities. 
 
            6.   A Party's treatment affords equal competitive 
            opportunities if it does not disadvantage financial 
            institutions and cross-border financial services providers of 
            another Party in their ability to provide financial services as 
 
 
                                          14-4  
 
 
 
 
 
 
  
 
 
 
 
 
            compared with the ability of the Party's own financial 
            institutions and financial services providers to provide such 
            services, in like circumstances. 
 
            7.   Differences in market share, profitability or size do not 
            in themselves establish a denial of equal competitive 
            opportunities, but such differences may be used as evidence 
            regarding whether a Party's treatment affords equal competitive 
            opportunities. 
 
 
            Article 1406:  Most-Favored-Nation Treatment 
 
            1.   Each Party shall accord to investors of another Party, 
            financial institutions of another Party, investments of 
            investors in financial institutions and cross-border financial 
            service providers of another Party treatment no less favorable 
            than that it accords to the investors, financial institutions, 
            investments of investors in financial institutions and cross- 
            border financial service providers of any other Party or of a 
            non-Party, in like circumstances. 
 
            2.   A Party may recognize prudential measures of another Party 
            or of a non-Party in the application of measures covered by 
            this Chapter.  Such recognition may be: 
 
                 (a)  accorded unilaterally; 
 
                 (b)  achieved through harmonization or other means; or 
 
                 (c)  based upon an agreement or arrangement with the other 
                      Party or non-Party. 
 
            3.   A Party according recognition of prudential measures under 
            paragraph 2 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 Parties. 
 
            4.   Where a Party accords recognition of prudential measures 
            under paragraph 2(c) and the circumstances set out in paragraph 
            3 exist, the Party shall provide adequate opportunity to 
            another Party to negotiate accession to the agreement or 
            arrangement, or to negotiate a comparable agreement or 
            arrangement. 
 
 
            Article 1407:  New Financial Services and Data Processing  
 
 
 
 
                                          14-5  
 
 
 
 
 
 
  
 
 
 
 
 
            1.   Each Party shall permit a financial institution of another 
            Party to provide any new financial service of a type similar to 
            those services that the Party permits its own financial 
            institutions, in like circumstances, to provide under its 
            domestic law.  A Party may determine the institutional and 
            juridical form through which the service may be provided and 
            may require authorization for the provision of the service.  
            Where such authorization is required, a decision shall be made 
            within a reasonable time and the authorization may only be 
            refused for prudential reasons.  
 
            2.   Each Party shall permit a financial institution of another 
            Party to transfer information in electronic or other form, into 
            and out of the Party's territory, for data processing where 
            such processing is required in the ordinary course of business 
            of such institution. 
 
 
            Article 1408:  Senior Management and Boards of Directors 
 
            1.   No Party may require financial institutions of another 
            Party to engage individuals of any particular nationality as 
            senior managerial or other essential personnel. 
 
            2.   No Party may 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 1409:  Reservations and Specific Commitments 
 
            1.   Articles 1403 through 1408 do not apply to: 
 
                 (a)  any existing non-conforming measure that is 
                      maintained by 
 
                      (i)  a Party at the federal level, as set out in 
                           Section A of its Schedule to Annex VII, 
 
                      (ii) a state or province, for the period ending on 
                           the date specified in Annex 1409.1 for that 
                           state or province, and thereafter as described 
                           by the Party in Section A of its Schedule to 
                           Annex VII in accordance with Annex 1409.1, or 
 
                      (iii)     a local government; 
 
                 (b)  the continuation or prompt renewal of any non- 
                      conforming measure referred to in subparagraph (a); 
                      or 
 
 
                                          14-6  
 
 
 
 
 
 
  
 
 
 
 
 
                 (c)  an amendment to any 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 immediately before the 
                      amendment, with Articles 1403 through 1408. 
 
            2.   Articles 1403 through 1408 do not apply to any non- 
            conforming measure that a Party adopts or maintains in 
            accordance with Section B of its Schedule to Annex VII. 
 
            3.   Section C of each Party's Schedule to Annex VII sets out 
            certain specific commitments by that Party. 
 
            4.   Where a Party has set out a reservation to Article 1102, 
            1103, 1202 or 1203 in its Schedule to Annex I, II, III or IV, 
            the reservation shall be deemed to constitute a reservation to 
            Article 1405 or 1406, as the case may be, to the extent that 
            the measure, sector, subsector or activity set out in the 
            reservation is covered by this Chapter. 
 
 
            Article 1410:  Exceptions 
 
            1.   Nothing in this Part shall be construed to prevent a Party 
            from adopting or maintaining reasonable measures for prudential 
            reasons, such as: 
 
                 (a)  the protection of investors, depositors, financial 
                      market participants, policy-holders, policy- 
                      claimants, or persons to whom a fiduciary duty is 
                      owed by a financial institution or cross-border 
                      financial service provider; 
 
                 (b)  the maintenance of the safety, soundness, integrity 
                      or financial responsibility of financial institutions 
                      or cross-border financial service providers; and 
 
                 (c)  ensuring the integrity and stability of a Party's 
                      financial system. 
 
            2.   Nothing in this Part applies to non-discriminatory 
            measures of general application taken by any 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 1106 (Investment - Performance 
            Requirements) with respect to measures covered by Chapter 
            Eleven (Investment) or Article 1109 (Investments - Transfers). 
 
            3.   Article 1405 shall not apply to the granting by a Party to 
            a financial institution of an exclusive right to provide a 
            financial service referred to in Article 1401(3)(a). 
 
 
                                          14-7  
 
 
 
 
 
 
  
 
 
 
 
 
            4.   Notwithstanding Article 1109(1), (2) and (3), as 
            incorporated into this Chapter, and without limiting the 
            applicability of Article 1109(4), as incorporated into this 
            Chapter, a Party may prevent or limit transfers by a financial 
            institution or cross-border financial services provider to, or 
            for the benefit of, an affiliate of or person related to such 
            institution or provider, through the equitable, non- 
            discriminatory and good faith application of measures relating 
            to maintenance of the safety, soundness, integrity or financial 
            responsibility of financial institutions or cross-border 
            financial service providers.  This paragraph does not prejudice 
            any other provision of this Agreement that permits a Party to 
            restrict transfers. 
 
 
            Article 1411:  Transparency 
 
            1.   In lieu of Article 1802(2) (Publication), each Party 
            shall, to the extent practicable, provide in advance to all 
            interested persons any measure of general application that the 
            Party proposes to adopt in order to allow an opportunity for 
            such persons to comment on the measure.  Such measure shall be 
            provided: 
 
                 (a)  by means of official publication; 
 
                 (b)  in other written form; or 
 
                 (c)  in such other form as permits an interested person to 
                      make informed comments on the proposed measure. 
 
            2.   Each Party's regulatory authorities shall make available 
            to interested persons their requirements for completing 
            applications relating to the provision of financial services. 
 
            3.   On the request of an applicant, the regulatory authority 
            shall inform the applicant of the status of its application.  
            If such authority requires additional information from the 
            applicant, it shall notify the applicant without undue delay. 
 
            4.   A regulatory authority shall make an administrative 
            decision on a completed application of an investor in a 
            financial institution, a financial institution or a cross- 
            border financial service provider of another Party relating to 
            the provision of a financial service within 120 days, and shall 
            promptly notify the applicant of the decision.  An application 
            shall not be considered complete until all relevant hearings 
            are held and all necessary information is received.  Where it 
            is not practicable for a decision to be made within 120 days, 
            the regulatory authority shall notify the applicant without 
 
 
 
                                          14-8  
 
 
 
 
 
 
  
 
 
 
 
 
            undue delay and shall endeavor to make the decision within a 
            reasonable time thereafter. 
 
            5.   Nothing in this Chapter requires a Party to furnish or 
            allow access to:   
 
                 (a)  information related to the financial affairs and 
                      accounts of individual customers of financial 
                      institutions or cross-border financial service 
                      providers; or  
 
                 (b)  any confidential information, the disclosure of which 
                      would impede law enforcement or otherwise be contrary 
                      to the public interest or prejudice legitimate 
                      commercial interests of particular enterprises.   
 
            6.   Each Party shall maintain or establish one or more inquiry 
            points no later than 180 days after the date of entry into 
            force of this Agreement, to respond in writing as soon as 
            practicable, to all reasonable inquiries from interested 
            persons regarding measures of general application covered by 
            this Chapter.  
 
 
            Article 1412:  Financial Services Committee 
 
            1.   The Parties hereby establish the 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 1412.1. 
 
            2.   Subject to Article 2001(2)(d) (Free Trade Commission), the 
            Committee shall: 
 
                 (a)  supervise the implementation of this Chapter and its 
                      further elaboration; 
 
                 (b)  consider issues regarding financial services that are 
                      referred to it by a Party; and 
 
                 (c)  participate in the dispute settlement procedures in 
                      accordance with Article 1415. 
 
            3.   The Committee shall meet annually to assess the 
            functioning of this Agreement as it applies to financial 
            services.  The Committee shall inform the Commission of the 
            results of each annual meeting. 
 
 
 
 
 
 
                                          14-9  
 
 
 
 
 
 
  
 
 
 
 
 
            Article 1413:  Consultations 
 
            1.   A Party may request 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.  The consulting Parties shall 
            report the results of their consultations to the Committee at 
            its annual meeting. 
 
            2.   Consultations under this Article shall include officials 
            of the authorities specified in Annex 1412.1.  
 
            3.   A Party may request that regulatory authorities of another 
            Party participate in consultations under this Article regarding 
            that other Party's measures of general application which may 
            affect the operations of financial institutions or cross-border 
            financial service providers in the requesting Party's 
            territory. 
 
            4.   Nothing in this Article shall be construed to require 
            regulatory authorities participating in consultations under 
            paragraph 3 to disclose information or take any action that 
            would interfere with individual regulatory, supervisory, 
            administrative or enforcement matters. 
 
            5.   Where a Party requires information for supervisory 
            purposes concerning a financial institution in another Party's 
            territory or a cross-border financial service provider in 
            another Party's territory, the Party may approach the competent 
            regulatory authority in the other Party's territory to seek the 
            information. 
 
            6.   Annex 1413.6 shall apply to further consultations and 
            arrangements. 
 
 
            Article 1414:  Dispute Settlement 
 
            1.   Section B of Chapter Twenty (Institutional Arrangements 
            and Dispute Settlement Procedures) applies as modified by this 
            Article to the settlement of disputes arising under this 
            Chapter.  
 
            2.   The Parties shall establish by January 1, 1994 and 
            maintain a roster of up to 15 individuals who are willing and 
            able to serve as financial services panelists.  Financial 
            services roster members shall be appointed by consensus for 
            terms of three years, and may be reappointed. 
 
            3.   Financial services roster members shall: 
 
 
 
                                         14-10  
 
 
 
 
 
 
  
 
 
 
 
 
                 (a)  have expertise or experience in financial services 
                      law or practice, which may include the regulation of 
                      financial institutions; 
 
                 (b)  be chosen strictly on the basis of objectivity, 
                      reliability and sound judgment; and 
 
                 (c)  meet the qualifications set out in Article 2009(2)(b) 
                      and (c) (Roster). 
 
            4.   Where a Party claims that a dispute arises under this 
            Chapter, Article 2011 (Panel Selection) shall apply, except 
            that: 
 
                 (a)  where the disputing Parties so agree, the panel shall 
                      be composed entirely of panelists meeting the 
                      qualifications in paragraph 3; and  
 
                 (b)  in any other case, 
 
                      (i)  each disputing Party may select panelists 
                           meeting the qualifications set out in paragraph 
                           3 or in Article 2010(1) (Qualifications of 
                           Panelists), and 
 
                      (ii) if the Party complained against invokes Article 
                           1410, the chair of the panel shall meet the 
                           qualifications set out in paragraph 3. 
 
            5.   In any dispute where a panel finds a measure to be 
            inconsistent with the obligations of this Agreement and the 
            measure affects: 
 
                 (a)  only the financial services sector, the complaining 
                      Party may suspend benefits only in the financial 
                      services sector; 
 
                 (b)  the financial services sector and any other sector, 
                      the complaining Party may suspend benefits in the 
                      financial services sector that have an effect 
                      equivalent to the effect of the measure in the 
                      Party's financial services sector; or 
 
                 (c)  only a sector other than the financial services 
                      sector, the complaining Party may not suspend 
                      benefits in the financial services sector. 
 
 
 
 
 
 
 
                                         14-11  
 
 
 
 
 
 
  
 
 
 
 
 
            Article 1415:  Investment Disputes in Financial Services 
 
            1.   Where an investor of another Party submits a claim under 
            Article 1116 or 1117 to arbitration under Section B of Chapter 
            Eleven (Investment - Settlement of Disputes between a Party and 
            an Investor of Another Party) against a Party and the disputing 
            Party invokes Article 1410, on request of the disputing Party, 
            the Tribunal shall refer the matter in writing to the Committee 
            for a decision.  The Tribunal may not proceed pending receipt 
            of a decision or report under this Article. 
 
            2.   In a referral pursuant to paragraph 1, the Committee shall 
            decide the issue of whether and to what extent Article 1410 is 
            a valid defense to the claim of the investor.  The Committee 
            shall transmit a copy of its decision to the Tribunal and to 
            the Commission.  The decision shall be binding on the Tribunal. 
 
            3.   Where the Committee has not decided the issue within 60 
            days of the receipt of the referral under paragraph 1, the 
            disputing Party or the Party of the disputing investor may 
            request the establishment of an arbitral panel under Article 
            2008 (Request for an Arbitral Panel).  The panel shall be 
            constituted in accordance with Article 1414.  Further to 
            Article 2017 (Final Report), the panel shall transmit its final 
            report to the Committee and to the Tribunal.  The report shall 
            be binding on the Tribunal. 
 
            4.   Where no request for the establishment of a panel pursuant 
            to paragraph 3 has been made within 10 days of the expiration 
            of the 60-day period referred to in paragraph 3, the Tribunal 
            may proceed to decide the matter. 
 
 
            Article 1416:  Definitions 
 
            For purposes of this Chapter: 
 
            cross-border financial service provider of a Party means a 
            person of a Party that is engaged in the business of providing 
            a financial service within the territory of the Party and that 
            seeks to provide or provides financial services through the 
            cross-border provision of such services; 
 
            cross-border provision of a financial service or cross-border 
            trade in financial services means the provision of a financial 
            service: 
 
                 (a)  from the territory of a Party into the territory of 
                      another Party, 
 
 
 
 
                                         14-12  
 
 
 
 
 
 
  
 
 
 
 
 
                 (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 provision of a service in the 
            territory of a Party by an investment in that territory; 
 
            financial institution means any 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 service means a service of a financial nature, 
            including insurance, and a service incidental or auxiliary to a 
            service of a financial nature; 
 
            financial service provider of a Party means a person of a Party 
            that is engaged in the business of providing a financial 
            service within the territory of that Party;  
 
            investment means "investment" as defined in Article 1139 
            (Investment - Definitions), except that, with respect to 
            "loans" and "debt securities" referred to in that Article: 
 
                 (a)  a loan to or debt security issued by a financial 
                      institution is an investment only where 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 security owned by a 
                      financial institution, other than a loan to or debt 
                      security of a financial institution referred to in 
                      subparagraph (a), is not an investment; 
 
            for greater certainty: 
 
                 (c)  a loan to, or debt security issued by, a Party or a 
                      state enterprise thereof is not an investment; and 
 
                 (d)  a loan granted by or debt security owned by a cross- 
                      border financial service provider, other than a loan 
                      to or debt security issued by a financial 
                      institution, is an investment if such loan or debt 
                      security meets the criteria for investments set out 
                      in Article 1139; 
 
 
                                         14-13  
 
 
 
 
 
 
  
 
 
 
 
 
            investor of a Party means a Party or state enterprise thereof, 
            or a person of that Party, that seeks to make, makes, or has 
            made an investment; 
 
            new financial service means a financial service not provided in 
            the Party's territory that is provided 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 
            Chapter Two (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 owned or controlled by a 
            Party; and 
 
            self-regulatory organization means any non-governmental body, 
            including any securities or futures exchange or market, 
            clearing agency, or other organization or association, that 
            exercises its own or delegated regulatory or supervisory 
            authority over financial service providers or financial 
            institutions. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-14  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1401.4                                             
                  ____________ 
 
 
                                      Annex 1401.4 
 
                              Country-Specific Commitments 
 
 
                 For Canada and the United States, Article 1702(1) and (2) 
            of the Canada - United States Free Trade Agreement is hereby 
            incorporated into and made a part of this Agreement. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-15  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1403.3                                             
                  ____________ 
 
 
                                      Annex 1403.3 
 
                                Review of Market Access 
 
 
                 The review of market access referred to in Article 1403(3) 
            shall not include the market access limitations specified in 
            Section B of the Schedule of Mexico to Annex VII. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-16  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1404.4                                             
                  ____________ 
 
 
                                      Annex 1404.4 
 
                 Consultations on Liberalization of Cross-Border Trade 
 
 
                 No later than January 1, 2000, the Parties shall consult 
            on further liberalization of cross-border trade in financial 
            services.  In such consultations the Parties shall, with 
            respect to insurance: 
 
                 (a)  consider the possibility of allowing a wider range of 
                      insurance services to be provided on a cross-border 
                      basis in or into their respective territories; and 
 
                 (b)  determine whether the limitations on cross-border 
                      insurance services specified in Section A of the 
                      Schedule of Mexico to Annex VII shall be maintained, 
                      modified or eliminated. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-17  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1409.1                                             
                  ____________ 
 
 
                                      Annex 1409.1 
 
                           Provincial and State Reservations 
 
 
            1.   Canada may set out in Section A of its Schedule to Annex 
            VII by the date of entry into force of this Agreement any 
            existing non-conforming measure maintained at the provincial 
            level. 
 
            2.   The United States may set out in Section A of its Schedule 
            to Annex VII by the date of entry into force of this Agreement 
            any existing non-conforming measures maintained by California, 
            Florida, Illinois, New York, Ohio and Texas.  Existing non- 
            conforming state measures of all other states may be set out by 
            January 1, 1995. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-18  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1412.1                                             
                  ____________ 
 
 
                                      Annex 1412.1 
 
                     Authorities Responsible for Financial Services 
 
 
            The authority of each Party responsible for financial services 
            shall be: 
 
                 (a)  for Canada, the Department of Finance of Canada; 
 
                 (b)  for Mexico, the Secretar a de Hacienda y Cr dito 
                      P blico; and 
 
                 (c)  for the United States, the Department of the Treasury 
                      for banking and other financial services and the 
                      Department of Commerce for insurance services. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                         14-19  
 
 
 
 
 
 
  
 
 
 
 
 
                                                               Annex 1413.6                                             
                  ____________ 
 
 
                                      Annex 1413.6 
 
                         Further Consultations and Arrangements 
 
 
            Section A - Limited Scope Financial Institutions 
 
                 Three years after the date of entry into force of this 
            Agreement, the Parties shall consult on the aggregate limit on 
            limited scope financial institutions described in paragraph 8 
            of Section B of the Schedule of Mexico to Annex VII. 
 
            Section B - Payments System Protection 
 
            1.   If the sum of the authorized capital of foreign commercial 
            bank affiliates (as such term is defined in the Schedule of 
            Mexico to Annex VII), measured as a percentage of the aggregate 
            capital of all commercial banks in Mexico, reaches 25 percent, 
            Mexico may request consultations with the other Parties on the 
            potential adverse effects arising from the presence of 
            commercial banks of the other Parties in the Mexican market and 
            the possible need for remedial action, including further 
            temporary limitations on market participation.  The 
            consultations shall be completed expeditiously.    
 
            2.   In considering the potential adverse effects, the Parties 
            shall take into account:   
 
                 (a)  the threat that the Mexican payments system may be 
                      controlled by non-Mexican persons;  
 
                 (b)  the effects foreign commercial banks established in 
                      Mexico may have on Mexico's ability to conduct 
                      monetary and exchange-rate policy effectively; and  
 
                 (c)  the adequacy of this Chapter in protecting the 
                      Mexican payments system. 
 
            3.   If no consensus is reached on the matters referred to in 
            paragraph 1, any Party may request the establishment of an 
            arbitral panel under Article 1414 or Article 2008 (Request for 
            an Arbitral Panel).  The panel proceedings shall be conducted 
            in accordance with the Model Rules of Procedure established 
            under Article 2012 (Rules of Procedure).  The Panel shall 
            present its determination within 60 days after the last 
            panelist is selected or such other period as the Parties to the 
            proceeding may agree.  Article 2018 (Implementation of Final 
            Report) and 2019 (Non-Implementation -- Suspension of Benefits) 
 
 
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                                                               Annex 1413.6                                             
                  ____________ 
 
 
            shall not apply in such proceedings. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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