Title:Oterh Provisions - Chapter 21
Author: White House
Document-Date: 29 Sept 1993
Content-Type: text/plain; CHARSET=US-ASCII
Content-Length:21950                                       PART EIGHT 
                                    OTHER PROVISIONS 
 
                                  Chapter Twenty-One  
 
                                       Exceptions 
 
 
            Article 2101:  General Exceptions 
 
            1.   For purposes of: 
 
                 (a)  Part Two (Trade in Goods), except to the extent that 
                      a provision of that Part applies to services or 
                      investment, and 
 
                 (b)  Part Three (Technical Barriers to Trade), except to 
                      the extent that a provision of that Part applies to 
                      services, 
 
            GATT Article XX and its interpretative notes, or any equivalent 
            provision of a successor agreement to which all Parties are 
            party, are incorporated into and made part of this Agreement.  
            The Parties understand that the measures referred to in GATT 
            Article XX(b) include environmental measures necessary to 
            protect human, animal or plant life or health, and that GATT 
            Article XX(g) applies to measures relating to the conservation 
            of living and non-living exhaustible natural resources. 
 
            2.   Provided that such measures are not applied in a manner 
            that would constitute a means of arbitrary or unjustifiable 
            discrimination between countries where the same conditions 
            prevail or a disguised restriction on trade between the 
            Parties, nothing in: 
 
                 (a)  Part Two (Trade in Goods), to the extent that a 
                      provision of that Part applies to services, 
 
                 (b)  Part Three (Technical Barriers to Trade), to the 
                      extent that a provision of that Part applies to 
                      services, 
 
                 (c)  Chapter Twelve (Cross-Border Trade in Services), and 
 
                 (d)  Chapter Thirteen (Telecommunications),  
 
            shall be construed to prevent the adoption or enforcement by 
            any Party of measures necessary to secure compliance with laws 
            or regulations that are not inconsistent with the provisions of 
            this Agreement, including those relating to health and safety 
            and consumer protection. 
 
 
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            Article 2102:  National Security 
 
            1.   Subject to Articles 607 (Energy - National Security 
            Measures) and 1018 (Government Procurement - Exceptions), 
            nothing in this Agreement shall be construed: 
 
                 (a)  to require any Party to furnish or allow access to 
                      any information the disclosure of which it determines 
                      to be contrary to its essential security interests; 
 
                 (b)  to prevent any Party from taking any actions that it 
                      considers necessary for the protection of its 
                      essential security interests 
 
                      (i)  relating to the traffic in arms, ammunition and 
                           implements of war and to such traffic and 
                           transactions in other goods, materials, services 
                           and technology undertaken directly or indirectly 
                           for the purpose of supplying a military or other 
                           security establishment, 
 
                      (ii) taken in time of war or other emergency in 
                           international relations, or 
 
                      (iii)     relating to the implementation of national 
                                policies or international agreements 
                                respecting the non-proliferation of nuclear 
                                weapons or other nuclear explosive devices; 
                                or 
 
                 (c)  to prevent any Party from taking action in pursuance 
                      of its obligations under the United Nations Charter 
                      for the maintenance of international peace and 
                      security. 
 
 
            Article 2103:  Taxation 
 
            1.   Except as set out in this Article, nothing in this 
            Agreement shall apply to taxation measures. 
 
            2.   Nothing in this Agreement shall affect the rights and 
            obligations of any Party under any tax convention.  In the 
            event of any inconsistency between this Agreement and any such 
            convention, that convention shall prevail to the extent of the 
            inconsistency. 
 
 
 
 
 
 
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            3.   Notwithstanding paragraph 2: 
 
                 (a)  Article 301 (Market Access - National Treatment) and 
                      such other provisions of this Agreement as are 
                      necessary to give effect to that Article shall apply 
                      to taxation measures to the same extent as does 
                      Article III of the GATT; and 
 
                 (b)  Article 314 (Market Access - Export Taxes) and 
                      Article 604 (Energy - Export Taxes) shall apply to 
                      taxation measures. 
 
            4.   Subject to paragraph 2: 
 
                 (a)  Article 1202 (Cross-Border Trade in Services - 
                      National Treatment) and Article 1405 (Financial 
                      Services - National Treatment) shall apply to 
                      taxation measures on income, capital gains or on the 
                      taxable capital of corporations, and to those taxes 
                      listed in paragraph 1 of Annex 2103.4, that relate to 
                      the purchase or consumption of particular services, 
                      and 
 
                 (b)  Articles 1102 and 1103 (Investment - National 
                      Treatment and Most-Favored Nation Treatment), 
                      Articles 1202 and 1203 (Cross-Border Trade in 
                      Services - National Treatment and Most-Favored Nation 
                      Treatment) and Articles 1405 and 1406 (Financial 
                      Services - National Treatment and Most-Favored Nation 
                      Treatment) shall apply to all taxation measures, 
                      other than those on income, capital gains or on the 
                      taxable capital of corporations, taxes on estates, 
                      inheritances, gifts and generation-skipping transfers 
                      and those taxes listed in paragraph 1 of Annex 
                      2103.4, 
 
            except that nothing in those Articles shall apply 
 
                 (c)  any most-favored-nation obligation with respect to an 
                      advantage accorded by a Party pursuant to a tax 
                      convention, 
 
                 (d)  to a non-conforming provision of any existing 
                      taxation measure, 
 
 
 
 
 
 
 
 
 
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                 (e)  to the continuation or prompt renewal of a non- 
                      conforming provision of any existing taxation 
                      measure, 
 
                 (f)  to an amendment to a non-conforming provision of any 
                      existing taxation measure to the extent that the 
                      amendment does not decrease its conformity, at the 
                      time of the amendment, with any of those Articles, 
 
                 (g)  to any new taxation measure aimed at ensuring the 
                      equitable and effective imposition or collection of 
                      taxes and that does not arbitrarily discriminate 
                      between persons, goods or services of the Parties or 
                      arbitrarily nullify or impair benefits accorded under 
                      those Articles, in the sense of Annex 2004, or 
 
                 (h)  to the measures listed in paragraph 2 of Annex 
                      2103.4. 
 
            5.   Subject to paragraph 2 and without prejudice to the rights 
            and obligations of the Parties under paragraph 3, Article 
            1106(3), (4) and (5) (Investment - Performance Requirements) 
            shall apply to taxation measures. 
 
            6.   Article 1110 (Investment - Expropriation) shall apply to 
            taxation measures except that no investor may invoke that 
            Article as the basis for a claim under Article 1116 or 1117, 
            where it has been determined pursuant to this paragraph that 
            the measure is not an expropriation.  The investor shall refer 
            the issue of whether the measure is not an expropriation for a 
            determination to the appropriate competent authorities set out 
            in Annex 2103.6 at the time that it gives notice under Article 
            1119.  If the competent authorities do not agree to consider 
            the issue or, having agreed to consider it, fail to agree that 
            the measure is not an expropriation within a period of six 
            months of such referral, the investor may submit its claim to 
            arbitration under Article 1120. 
 
 
            Article 2104:  Balance of Payments 
 
            1.   Nothing in this Agreement shall be construed to prevent a 
            Party from adopting or maintaining measures that restrict 
            transfers where the Party experiences serious balance of 
            payments difficulties, or the threat thereof, and such 
            restrictions are consistent with paragraphs 2 through 4 and 
            are: 
 
                 (a)  consistent with paragraph 5 to the extent they are 
                      imposed on other transfers than cross-border trade in 
                      financial services; or 
 
 
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                 (b)  consistent with paragraphs 6 and 7 to the extent they 
                      are imposed on cross-border trade in financial 
                      services.  
 
            General Rules 
 
            2.   As soon as practicable after a Party imposes a measure 
            under this Article, the Party shall: 
 
                 (a)  submit any current account exchange restrictions to 
                      the IMF for review under Article VIII of the Articles 
                      of Agreement of the IMF; 
 
                 (b)  enter into good faith consultations with the IMF on 
                      economic adjustment measures to address the 
                      fundamental underlying economic problems causing the 
                      difficulties; and  
 
                 (c)  adopt or maintain economic policies consistent with 
                      such consultations. 
 
            3.   A measure adopted or maintained under this Article shall: 
 
                 (a)  avoid unnecessary damage to the commercial, economic 
                      or financial interests of another Party; 
 
                 (b)  not be more burdensome than necessary to deal with 
                      the balance of payments difficulties or threat 
                      thereof; 
 
                 (c)  be temporary and be phased out progressively as the 
                      balance of payments situation improves;  
 
                 (d)  be consistent with paragraph 2(c) and with the 
                      Articles of Agreement of the IMF; and 
 
                 (e)  be applied on a national treatment or 
                      most-favored-nation treatment basis, whichever is 
                      better. 
 
            4.   A Party may adopt or maintain a measure under this Article 
            that gives priority to services that are essential to its 
            economic program, provided that a Party may not impose a 
            measure for the purpose of protecting a specific industry or 
            sector unless the measure is consistent with paragraph 2(c) and 
            with Article VIII(3) of the Articles of Agreement of the IMF. 
 
            Restrictions on Transfers Other than Cross-Border Trade in 
            Financial Services 
 
 
 
 
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            5.   Restrictions imposed on transfers, other than on cross- 
            border trade in financial services: 
 
                 (a)  where imposed on payments for current international 
                      transactions, shall be consistent with Article 
                      VIII(3) of the Articles of Agreement of the IMF; 
 
                 (b)  where imposed on international capital transactions, 
                      shall be consistent with Article VI of the Articles 
                      of Agreement of the IMF and be imposed only in 
                      conjunction with measures imposed on current 
                      international transactions under paragraph 2(a);  
 
                 (c)  where imposed on transfers covered by Article 1109 
                      (Investment - Transfers) and transfers related to 
                      trade in goods, may not substantially impede 
                      transfers from being made in a freely usable currency 
                      at a market rate of exchange; and 
 
                 (d)  may not take the form of tariff surcharges, quotas, 
                      licenses or similar measures. 
 
            Restrictions on Cross-Border Trade in Financial Services 
 
            6.   A Party imposing a restriction on cross-border trade in 
            financial services: 
 
                 (a)  may not impose more than one measure on any transfer, 
                      unless consistent with paragraph 2(c) and with 
                      Article VIII(3) of the Articles of Agreement of the 
                      IMF; and 
 
                 (b)  shall promptly notify and consult with the other 
                      Parties to assess the balance of payments situation 
                      of the Party and the measures it has adopted, taking 
                      into account among other elements 
 
                      (i)  the nature and extent of the balance of payments 
                           difficulties of the Party, 
 
                      (ii) the external economic and trading environment of 
                           the Party, and 
 
                      (iii)     alternative corrective measures that may be 
                                available. 
 
            7.   In consultations under paragraph 6(b), the Parties shall: 
 
                 (a)  consider if measures adopted under this Article 
                      comply with paragraph 3, in particular paragraph 
                      3(c); and  
 
 
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                 (b)  accept all findings of statistical and other facts 
                      presented by the IMF relating to foreign exchange, 
                      monetary reserves and balance of payments, and shall 
                      base their conclusions on the assessment by the IMF 
                      of the balance of payments situation the Party 
                      adopting the measures. 
 
 
            Article 2105:  Disclosure of Information 
 
                 Nothing in this Agreement shall be construed to require a 
            Party to furnish or allow access to information the disclosure 
            of which would impede law enforcement or would be contrary to 
            the Party's law protecting personal privacy or the financial 
            affairs and accounts of individual customers of financial 
            institutions. 
 
 
            Article 2106:  Cultural Industries 
 
                 Annex 2106 applies to the Parties specified in that Annex 
            with respect to cultural industries. 
 
 
            Article 2107:  Definitions 
 
            For purposes of this Chapter: 
 
            cultural industries means persons engaged in any of the 
            following activities: 
 
                 (a)  the publication, distribution, or sale of books, 
                      magazines, periodicals or newspapers in print or 
                      machine readable form but not including the sole 
                      activity of printing or typesetting any of the 
                      foregoing; 
 
                 (b)  the production, distribution, sale or exhibition of 
                      film or video recordings;  
 
                 (c)  the production, distribution, sale or exhibition of 
                      audio or video music recordings; 
 
                 (d)  the publication, distribution or sale of music in 
                      print or machine readable form; or 
 
                 (e)  radiocommunications in which the transmissions are 
                      intended for direct reception by the general public, 
                      and all radio, television and cable broadcasting 
                      undertakings and all satellite programming and 
                      broadcast network services; 
 
 
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            international capital transactions means "international capital 
            transactions" as defined under the Articles of Agreement of the 
            IMF; 
 
            IMF means the International Monetary Fund; 
 
            payments for current international transactions means "payments 
            for current international transactions" as defined under the 
            Articles of Agreement of the IMF; 
 
            tax convention means a convention for the avoidance of double 
            taxation or other international taxation agreement or 
            arrangement;  
 
            taxes and taxation measures do not include: 
 
                 (a)  a "customs duty" as defined in Article 318 (Market 
                      Access - Definitions); or 
 
                 (b)  the measures listed in exceptions (b), (c), (d) and 
                      (e) of that definition; and 
 
            transfers means international transactions and related 
            international transfers and payments. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                               Annex 2103.4                                             
                  ____________ 
 
 
                                      Annex 2103.4 
 
                               Specific Taxation Measures 
 
 
            1.   For purposes of Article 2103(4)(a) and (b), the listed tax 
            is the asset tax under the Asset Tax Law ("Ley del Impuesto al 
            Activo") of Mexico. 
 
            2.   For purposes of Article 2103(4)(h), the listed tax is any 
            excise tax on insurance premiums adopted by Mexico to the 
            extent that such tax would, if levied by Canada or the United 
            States, be covered by Article 2103(4)(d), (e) or (f). 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                               Annex 2103.6                                             
                  ____________ 
 
 
                                      Annex 2103.6 
 
                                 Competent Authorities 
 
 
            For purposes of this Chapter:  competent authority means 
 
                 (a)  in the case of Canada, the Assistant Deputy Minister 
                      for Tax Policy, Department of Finance; 
 
                 (b)  in the case of Mexico, the Deputy Minister of Revenue 
                      of the Ministry of Finance and Public Credit 
                      ("Secretar a de Hacienda y Cr dito P blico"); 
 
                 (c)  in the case of the United States, the Assistant 
                      Secretary of the Treasury (Tax Policy), Department of 
                      the Treasury. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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                                                                 Annex 2106                                              
                   __________ 
 
 
                                       Annex 2106 
 
                                  Cultural Industries 
 
 
                 Notwithstanding any other provision of this Agreement, as 
            between Canada and the United States, any measure adopted or 
            maintained with respect to cultural industries, except as 
            specifically provided in Article 302 (Market Access - Tariff 
            Elimination), and any measure of equivalent commercial effect 
            taken in response, shall be governed under this Agreement 
            exclusively in accordance with the provisions of the Canada - 
            United States Free Trade Agreement.  The rights and obligations 
            between Canada and any other Party with respect to such 
            measures shall be identical to those applying between Canada 
            and the United States. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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