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Trade Agreements

AGREEMENT ESTABLISHING THE ASEAN-AUSTRALIA- NEW ZEALAND FREE TRADE AREA

TABLE OF CONTENTS

Preamble

Chapter 1. Establishment of Free Trade Area,

Objectives and General Definitions

Chapter 2. Trade in Goods

Chapter 3. Rules of Origin

Annex on Operational Certification Procedures

▪ Appendix on Minimum Data Requirements – Application for a Certificate of Origin

▪ Appendix on Minimum Data Requirements – Certificate of Origin

Chapter 4. Customs Procedures

Chapter 5. Sanitary and Phytosanitary Measures

Chapter 6. Standards, Technical Regulations and

Conformity Assessment Procedures

Chapter 7. Safeguard Measures

Chapter 8. Trade in Services

Annex on Financial Services

Annex on Telecommunications

▪ Appendix on Transitional Arrangements

Chapter 9. Movement of Natural Persons

Chapter 10. Electronic Commerce

Chapter 11. Investment

Annex on Expropriation and Compensation

Chapter 12. Economic Co-operation

Chapter 13. Intellectual Property

Chapter 14. Competition

Chapter 15. General Provisions and Exceptions

Chapter 16. Institutional Provisions

Chapter 17. Consultations and Dispute Settlement

Annex on Rules of Procedure for Arbitral Tribunal Proceedings

Annex on Optional Procedures for Composing Arbitral Tribunals

Chapter 18. Final Provisions

Annexes:

Annex 1. Schedules of Tariff Commitments

Annex 2. Product Specific Rules

Appendix on the Indicative List of Textile Finishing Processes

Annex 3. Schedules of Specific Services

Commitments

Annex 4. Schedules of Movement of Natural Persons

Commitments

PREAMBLE

The Governments of Brunei Darussalam, the Kingdom of Cambodia (Cambodia), the Republic of Indonesia (Indonesia), the Lao People’s Democratic Republic (Lao PDR), Malaysia, the Union of Myanmar (Myanmar), the Republic of the Philippines (Philippines), the Republic of Singapore (Singapore), the Kingdom of Thailand (Thailand) and the Socialist Republic of Viet Nam (Viet Nam), collectively, the Member States of the Association of Southeast Asian Nations, and Australia and New Zealand;

REINFORCING the longstanding ties of friendship and co- operation among them;

RECALLING the Framework for the AFTA-CER Closer Economic Partnership endorsed by Ministers in Ha Noi, Viet Nam on 16 September 2001;

DESIRING to minimise barriers and deepen and widen economic linkages among the Parties; lower business costs; increase trade and investment; enhance economic efficiency; create a larger market with more opportunities and greater economies of scale for business;

CONFIDENT that this Agreement establishing an ASEAN- Australia-New Zealand Free Trade Area will strengthen economic partnerships, serve as an important building block towards regional economic integration and support sustainable economic development;

RECOGNISING the important role and contribution of business in enhancing trade and investment among the Parties and the need to further promote and facilitate co- operation and utilisation of the greater business opportunities provided by this Agreement;

CONSIDERING the different levels of development among ASEAN Member States and between ASEAN Member States, Australia and New Zealand and the need for flexibility, including special and differential treatment, especially for the newer ASEAN Member States; as well as the need to facilitate the increasing participation of newer ASEAN Member States in this Agreement and the expansion of their exports, including, inter alia, through strengthening of their domestic capacity, efficiency and competitiveness;

REAFFIRMING the respective rights and obligations and undertakings of the Parties under the World Trade Organization Agreement and other existing international agreements and arrangements;

RECOGNISING the positive momentum that regional trade agreements and arrangements can have in accelerating regional and global trade liberalisation, and their role as building blocks for the multilateral trading system;

HAVE AGREED AS FOLLOWS:

 

CHAPTER 1

ESTABLISHMENT OF FREE TRADE AREA, OBJECTIVES AND GENERAL DEFINITIONS

Article 1 Objectives

The objectives of this Agreement are to:

(a) progressively liberalise and facilitate trade in goods among the Parties through, inter alia, progressive elimination of tariff and non-tariff barriers in substantially all trade in goods among the Parties;

(b) progressively liberalise trade in services among

the Parties, with substantial sectoral coverage;

(c) facilitate, promote and enhance investment opportunities among the Parties through further development of favourable investment environments;

(d) establish a co-operative framework for strengthening, diversifying and enhancing trade, investment and economic links among the Parties; and

(e) provide special and differential treatment to ASEAN Member States, especially to the newer ASEAN Member States, to facilitate their more effective economic integration.

 

Article 2

Establishment of the ASEAN-Australia-New Zealand Free Trade Area

The Parties hereby establish, consistent with Article XXIV of GATT 1994 and Article V of GATS, an ASEAN, Australia and New Zealand Free Trade Area.

Article 3

General Definitions

For the purposes of this Agreement, unless the context otherwise requires:

(a) AANZFTA means the ASEAN-Australia-New

Zealand Free Trade Area;

(b) Agreement means the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area;

(c) Agreement on Customs Valuation means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;

(d) ASEAN means the Association of Southeast Asian Nations which comprises of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand and the Socialist Republic of Viet Nam and whose members are referred to in this Agreement collectively as the ASEAN Member States and individually as an ASEAN Member State;

(e) customs duties means any customs or import duty and a charge of any kind, including any tax or surcharge, imposed in connection with the importation of a good, but does not include any:

(i) charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of GATT 1994, in respect of the like domestic product or in respect of an article from which the imported product has been manufactured or produced in whole or in part;

(ii) anti-dumping or countervailing duty applied consistently with the provisions of Article VI of GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, as may be amended and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement, as may be amended; or

(iii) fee or any charge commensurate with the

cost of services rendered;

(f) days means calendar days, including weekends

and holidays;

(g) FTA Joint Committee means the ASEAN, Australia and New Zealand FTA Joint Committee established pursuant to Article 1 (FTA Joint Committee) of Chapter 16 (Institutional Provisions);

(h) GATS means the General Agreement on Trade in

Services in Annex 1B to the WTO Agreement;

(i) GATT 1994 means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;

(j) HS Code means the Harmonized Commodity Description and Coding System established by the International Convention on the Harmonized Description and Coding System signed at Brussels on 14 June 1983, as amended;

(k) IMF Articles of Agreement means the Articles of Agreement of the International Monetary Fund;

(l) newer ASEAN Member States means the Kingdom of Cambodia, the Lao People's Democratic Republic, the Union of Myanmar and the Socialist Republic of Viet Nam;

(m) originating good means a good that qualifies as

originating under Chapter 3 (Rules of Origin);

(n) Parties means the ASEAN Member States,

Australia and New Zealand collectively;

(o) Party means an ASEAN Member State or

Australia or New Zealand;

(p) TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, in Annex 1C to the WTO Agreement;

(q) WTO means the World Trade Organization; and

(r) WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on 15 April 1994.

 

CHAPTER 2

TRADE IN GOODS

Article 1

Reduction and/or Elimination of Customs Duties

Except as otherwise provided in this Agreement, each Party shall progressively reduce and/or eliminate customs duties on originating goods of the other Parties in accordance with its schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments).

Article 2

Acceleration of Tariff Commitments

1. Nothing in this Agreement shall preclude all Parties from negotiating and entering into arrangements to accelerate and/or improve tariff commitments made under this Agreement. An agreement among all Parties to accelerate and/or improve tariff commitments shall be incorporated into this Agreement, in accordance with Article 6 (Amendments) of Chapter 18 (Final Provisions). Such acceleration and/or improvement of tariff commitments shall be implemented by all the Parties.

2. Two or more Parties may also consult to consider accelerating and/or improving tariff commitments set out in their schedules of tariff commitments in Annex 1 (Schedules of Tariff Commitments). An agreement between these Parties to accelerate and/or improve their respective tariff commitments under this Agreement shall be incorporated into this Agreement, in accordance with Article 6 (Amendments) of Chapter 18 (Final Provisions). Tariff concessions arising from such acceleration and/or improvement of tariff commitments shall be extended to all Parties.

3. A Party may, at any time, unilaterally accelerate the reduction and/or elimination of customs duties on originating goods of the other Parties set out in its schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments). A Party intending to do so shall inform the other Parties before the new rate of customs duties takes effect, or in any event, as early as practicable.

Article 3

Elimination of Agricultural Export Subsidies

Consistent with their rights and obligations under the WTO Agreement, each Party agrees to eliminate and not reintroduce all forms of export subsidies for agricultural goods destined for the other Parties.

Article 4

National Treatment on Internal Taxation and Regulation

Each Party shall accord national treatment to the goods of the other Parties in accordance with Article III of GATT 1994. To this end, Article III of GATT 1994 shall be incorporated into and shall form part of this Agreement, mutatis mutandis.

Article 5

Fees and Charges Connected with Importation and Exportation

1. Each Party shall ensure that fees and charges connected with importation and exportation shall be consistent with its rights and obligations under GATT 1994.

2. Each Party shall make available details of the fees and charges that it imposes in connection with importation and exportation and, to the extent possible and in accordance with its domestic laws and regulations, make such information available on the internet.

3. A Party may not require consular transactions, including related fees and charges, in connection with the importation of any good of any other Party.

Article 6

Publication and Administration of Trade Regulations

1. Article X of GATT 1994 shall be incorporated into and shall form part of this Agreement, mutatis mutandis.

2. In accordance with its domestic laws and regulations and to the extent possible, each Party shall make laws, regulations, decisions and rulings of the kind referred to in Paragraph 1 available on the internet.

Article 7

Quantitative Restrictions and Non-Tariff Measures

1. No Party shall adopt or maintain any prohibition or quantitative restriction on the importation of any good of any other Party or on the exportation of any good destined for the territory of any other Party, except in accordance with its WTO rights and obligations or this Agreement. To this end, Article XI of GATT 1994 shall be incorporated into and shall form part of this Agreement, mutatis mutandis.

2. Except as otherwise provided in this Agreement, a Party shall not adopt or maintain any non-tariff measure on the importation of any good of any other Party or on the exportation of any good destined for the territory of any other Party, except in accordance with its WTO rights and obligations or in accordance with this Agreement.

3. Each Party shall ensure the transparency of its non- tariff measures permitted under Paragraph 2 and shall ensure that any such measures are not prepared, adopted or applied with the view to or with the effect of creating unnecessary obstacles to trade among the Parties.

4. The Goods Committee established pursuant to Article 11 (Committee on Trade in Goods) shall review non-tariff measures covered by this Chapter with a view to considering the scope for additional means to enhance the facilitation of trade in goods between the Parties. The Goods Committee shall submit to the FTA Joint Committee an initial report on progress in its work, including any recommendations, within two years of entry into force of this Agreement. Any Party may nominate measures for consideration by the Goods Committee.

Article 8

Import Licensing

1. Each Party shall ensure that all automatic and non- automatic import licensing measures are implemented in a transparent and predictable manner, and applied in accordance with the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement.

2. Each Party shall promptly notify the other Parties of existing import licensing procedures. Thereafter, each Party shall notify the other Parties of any new import licensing procedures and any modification to its existing import licensing procedures, to the extent possible 60 days before it takes effect, but in any case no later than within 60 days of publication. The information in any notification under this Article shall be in accordance with Article 5.2 and 5.3 of the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement.

3. Upon request of another Party, a Party shall, promptly and to the extent possible, respond to the request of that Party for information on import licensing requirements of general application.

 

Article 9

Modification of Concessions

In exceptional circumstances where a Party faces unforeseen difficulties in implementing its tariff commitments, that Party may, with the agreement of all other interested Parties, modify or withdraw a concession contained in its schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments). In order to seek to reach such agreement, the relevant Party shall engage in negotiations with any interested Parties. In such negotiations, the Party proposing to modify or withdraw its concessions shall maintain a level of reciprocal and mutually advantageous concessions no less favourable to the trade of all other interested Parties than that provided for in this Agreement prior to such negotiations, which may include compensatory adjustments with respect to other goods. The mutually agreed outcome of the negotiations, including any compensatory adjustments, shall apply to all the Parties and shall be incorporated into this Agreement in accordance with Article 6 (Amendments) of Chapter 18 (Final Provisions).

Article 10

Contact Points and Consultations

1. Each Party shall designate a contact point to facilitate communication among the Parties on any matter relating to this Chapter.

2. Where a Party considers that any proposed or actual measure of another Party or Parties may materially affect trade in goods between the Parties, that Party may, through the contact point, request detailed information relating to that measure and, if necessary, request consultations with a view to resolving any concerns about the measure. The other Party or Parties shall respond promptly to such requests for information and consultations.

Article 11

Committee on Trade in Goods

1. The Parties hereby establish a Committee on Trade in Goods (Goods Committee) consisting of representatives of the Parties. The Goods Committee may meet at the request of any Party or the FTA Joint Committee to consider any matter arising under this Chapter, or under:

(a) Chapter 3 (Rules of Origin);

(b) Chapter 4 (Customs Procedures);

(c) Chapter 5 (Sanitary and Phytosanitary

Measures);

(d) Chapter 6 (Standards, Technical Regulations and

Conformity Assessment Procedures); and

(e) Chapter 7 (Safeguard Measures).

2. The functions of the Goods Committee shall include:

(a) reviewing implementation of, and measures taken pursuant to, the Chapters referred to in Paragraph 1;

(b) receiving reports from, and reviewing the work of:

(i) the ROO Sub-Committee established pursuant to Article 18 (Sub-Committee on Rules of Origin) of Chapter 3 (Rules of Origin);

(ii) the SPS Sub-Committee established pursuant to Article 10 (Meetings Among the Parties on Sanitary and Phytosanitary Matters) of Chapter 5 (Sanitary and Phytosanitary Measures); and

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(iii) the STRACAP Sub-Committee established pursuant to Article 13 (Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures) of Chapter 6 (Standards, Technical Regulations and Conformity Assessment Procedures);

(c) implementing the work programme provided for in Article 7.4 (Quantitative Restrictions and Non- Tariff Measures);

(d) identifying and recommending measures to promote and facilitate improved market access, including any acceleration of tariff commitments under Article 2.1 (Acceleration of Tariff Commitments); and

(e) reporting, as required, to the FTA Joint

Committee.

3. The Goods Committee may agree to establish subsidiary working groups or refer issues for consideration to the ROO Sub-Committee established pursuant to Article 18 (Sub-Committee on Rules of Origin) of Chapter 3 (Rules of Origin).

4. The meetings of the Goods Committee may occur in person, or by any other means as mutually determined by the Parties.

Article 12

Application

Each Party shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Chapter by the regional and local governments and authorities within its territories.

 

CHAPTER 3

RULES OF ORIGIN

Article 1

Definitions

For the purposes of this Chapter:

(a) aquaculture means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding, or protection from predators;

(b) back-to-back Certificate of Origin means a Certificate of Origin issued by an intermediate exporting Party’s Issuing Authority/Body based on the Certificate of Origin issued by the first exporting Party;

(c) CIF means the value of the good imported and includes the cost of freight and insurance up to the port or place of entry into the country of importation. The valuation shall be made in accordance with Article VII of GATT 1994 and the Agreement on Customs Valuation;

(d) FOB means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad. The valuation shall be made in accordance with Article VII of GATT 1994 and the Agreement on Customs Valuation;

(e) generally accepted accounting principles means the recognised consensus or substantial

authoritative support in a Party, with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;

(f) good means any merchandise, product, article or material;

(g) identical and interchangeable materials means materials that are fungible as a result of being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into the finished product cannot be distinguished from one another for origin purposes by virtue of any markings or mere visual examination;

(h) indirect material means a good used in the production, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:

(i) fuel and energy;

(ii) tools, dies and moulds;

(iii) spare parts and materials used in the

maintenance of equipment and buildings;

(iv) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;

(v) gloves, glasses, footwear, clothing, safety equipment and supplies;

(vi) equipment, devices and supplies used for testing or inspecting goods;

(vii) catalysts and solvents; and

(viii) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production;

(i) material means any matter or substance used or consumed in the production of goods or physically incorporated into a good or subjected to a process in the production of another good;

(j) non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter;

(k) originating material means a material that qualifies as originating under this Chapter;

(l) producer means a person who grows, mines, raises, harvests, fishes, traps, hunts, farms, captures, gathers, collects, breeds, extracts, manufactures, processes or assembles a good;

(m) production means methods of obtaining goods including growing, mining, harvesting, farming, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, producing, processing or assembling a good;

(n) Product Specific Rules are rules in Annex 2 (Product Specific Rules) that specify that the materials used to produce a good have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy a regional value content criterion or a combination of any of these criteria; and

(o) packing materials and containers for transportation means goods used to protect a good during its transportation, different from those containers or materials used for its retail sale.

Article 2

Originating Goods

1. For the purposes of this Chapter, a good shall be treated as an originating good if it is either:

(a) wholly produced or obtained in a Party as provided in Article 3 (Goods Wholly Produced or Obtained);

(b) not wholly produced or obtained in a Party provided that the good has satisfied the requirements of Article 4 (Goods Not Wholly Produced or Obtained); or

(c) produced in a Party exclusively from originating materials from one or more of the Parties,

and meets all other applicable requirements of this Chapter.

2. A good which complies with the origin requirements of Paragraph 1 will retain its eligibility for preferential tariff treatment if exported to a Party and subsequently re- exported to another Party.

 

Article 3

Goods Wholly Produced or Obtained

For the purposes of Article 2.1(a) (Originating Goods), the following goods shall be considered as wholly produced or obtained:

(a) plants and plant goods, including fruit, flowers, vegetables, trees, seaweed, fungi and live plants, grown, harvested, picked, or gathered in a Party1;

(b) live animals born and raised in a Party;

(c) goods obtained from live animals in a Party;

(d) goods obtained from hunting, trapping, fishing, farming, aquaculture, gathering, or capturing in a Party;

(e) minerals and other naturally occurring substances extracted or taken from the soil, waters, seabed or beneath the seabed in a Party;

(f) goods of sea-fishing and other marine goods taken from the high seas, in accordance with international law 2, by any vessel registered or recorded with a Party and entitled to fly the flag of that Party;

1

For the purposes of this Article, “in a Party” means the land, territorial sea, Exclusive Economic Zone, Continental Shelf over which a Party exercises sovereignty, sovereign rights or jurisdiction, as the case may be, in accordance with international law.

For the avoidance of doubt, nothing contained in the above definition shall be construed as conferring recognition or acceptance by one Party of the outstanding maritime and territorial claims made by any other Party, nor shall be taken as pre- judging the determination of such claims.

2

“International law” refers to generally accepted international law such as the United Nations Convention on the Law of the Sea.

(g) goods produced on board any factory ship registered or recorded with a Party and entitled to fly the flag of that Party from the goods referred to in Subparagraph (f);

(h) goods taken by a Party, or a person of a Party, from the seabed or beneath the seabed beyond the Exclusive Economic Zone and adjacent Continental Shelf of that Party and beyond areas over which third parties exercise jurisdiction under exploitation rights granted in accordance with international law3;

(i) goods which are:

(i) waste and scrap derived from production and consumption in a Party provided that such goods are fit only for the recovery of raw materials; or

(ii) used goods collected in a Party provided that such goods are fit only for the recovery of raw materials; and

(j) goods produced or obtained in a Party solely from products referred to in Subparagraphs (a) to (i) or from their derivatives.

Article 4

Goods Not Wholly Produced or Obtained

1. For the purposes of Article 2.1(b) (Originating Goods), except for those goods covered under Paragraph 2, a good shall be treated as an originating good if:

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“International law” refers to generally accepted international law such as the United Nations Convention on the Law of the Sea.

(a) the good has a regional value content of not less than 40 per cent of FOB calculated using the formulae as described in Article 5 (Calculation of Regional Value Content), and the final process of production is performed within a Party; or

(b) all non-originating materials used in the production of the good have undergone a change in tariff classification at the four-digit level (i.e. a change in tariff heading) of the HS Code in a Party.

2. In accordance with Paragraph 1, a good subject to Product Specific Rules shall be treated as an originating good if it meets those Product Specific Rules.

3. For a good not specified in Annex 2 (Product Specific Rules), a Party shall permit the producer or exporter of the good to decide whether to use Paragraph 1(a) or (b) when determining if the good is originating.

4. If a good is specified in Annex 2 (Product Specific Rules) and the relevant provisions of that Annex provide a choice of rule between a regional value content based rule of origin, a change in tariff classification based rule of origin, a specific process of production, or a combination of any of these, a Party shall permit the producer or exporter of the good to decide which rule to use in determining if the good is originating.

Article 5

Calculation of Regional Value Content

1. For the purposes of Article 4 (Goods Not Wholly Produced or Obtained), the formula for calculating the regional value content will be either:

(a) Direct Formula

 

where:

(a) AANZFTA Material Cost is the value of originating materials, parts or produce that are acquired or self-produced by the producer in the production of the good;

(b) Labour Cost includes wages, remuneration and

other employee benefits;

(c) Overhead Cost is the total overhead expense;

(d) Other Costs are the costs incurred in placing the good in the ship or other means of transport for export including, but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees and service charges;

(e) FOB is the free-on-board value of the goods as

defined in Article 1 (Definitions); and

(f) Value of Non-Originating Materials is the CIF value at the time of importation or the earliest ascertained price paid for all non-originating materials, parts or produce that are acquired by the producer in the production of the good. Non- originating materials include materials of undetermined origin but do not include a material that is self-produced.

2. The value of goods under this Chapter shall be determined in accordance with Article VII of GATT 1994 and the Agreement on Customs Valuation.

Article 6

Cumulative Rules of Origin

For the purposes of Article 2 (Originating Goods), a good which complies with the origin requirements provided therein and which is used in another Party as a material in the production of another good shall be considered to originate in the Party where working or processing of the finished good has taken place.

Article 7

Minimal Operations and Processes

Where a claim for origin is based solely on a regional value content, the operations or processes listed below, undertaken by themselves or in combination with each other, are considered to be minimal and shall not be taken into account in determining whether or not a good is originating:

(a) ensuring preservation of goods in good condition

for the purposes of transport or storage;

(b) facilitating shipment or transportation;

(c) packaging4 or presenting goods for transportation

or sale;

(d) simple processes, consisting of sifting, classifying, washing, cutting, slitting, bending, coiling and uncoiling and other similar operations;

(e) affixing of marks, labels or other like distinguishing signs on products or their packaging; and

(f) mere dilution with water or another substance that does not materially alter the characteristics of the goods.

 

Article 8

De Minimis

1. A good that does not satisfy a change in tariff classification requirement pursuant to Article 4 (Goods Not Wholly Produced or Obtained) will nonetheless be an originating good if:

(a) (i) for a good, other than that provided for in Chapters 50 to 63 of the HS Code, the value of all non-originating materials used in the production of the good that did not undergo the required change in tariff classification does not exceed 10 per cent of the FOB value of the good;

(ii) for a good provided for in Chapters 50 to 63 of the HS Code, the weight of all non- originating materials used in its production that did not undergo the required change in tariff classification does not exceed 10 per cent of the total weight of the good, or the

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This excludes encapsulation which is termed “packaging” by the electronics industry.

value of all non-originating materials used in the production of the good that did not undergo the required change in tariff classification does not exceed 10 per cent of the FOB value of the good; and

(b) the good meets all other applicable criteria of this Chapter.

2. The value of such materials shall, however, be included in the value of non-originating materials for any applicable regional value content requirement.

 

Article 9

Accessories, Spare Parts and Tools

1. For the purposes of determining the origin of a good, accessories, spare parts, tools and instructional or other information materials presented with the good shall be considered part of that good and shall be disregarded in determining whether all the non-originating materials used in the production of the originating good have undergone the applicable change in tariff classification, provided that:

(a) the accessories, spare parts, tools and instructional or other information materials presented with the good are not invoiced separately from the originating good; and

(b) the quantities and value of the accessories, spare parts, tools and instructional or other information materials presented with the good are customary for that good.

2. Notwithstanding Paragraph 1, if the good is subject to a regional value content requirement, the value of the accessories, spare parts, tools and instructional or other information materials presented with the good shall be taken into account as originating or non-originating materials, as

the case may be, in calculating the regional value content of the good.

3. Paragraphs 1 and 2 do not apply where accessories, spare parts, tools and instructional or other information materials presented with the good have been added solely for the purpose of artificially raising the regional value content of that good, provided it is proven subsequently by the importing Party that they are not sold therewith.

Article 10

Identical and Interchangeable Materials

The determination of whether identical and interchangeable materials are originating materials shall be made either by physical segregation of each of the materials or by the use of generally accepted accounting principles of stock control applicable, or inventory management practice, in the exporting Party.

Article 11

Treatment of Packing Materials and Containers

1. Packing materials and containers for transportation and shipment of a good shall not be taken into account in determining the origin of any good.

2. Packing materials and containers in which a good is packaged for retail sale, when classified together with that good, shall not be taken into account in determining whether all of the non-originating materials used in the production of the good have met the applicable change in tariff classification requirements for the good.

3. If a good is subject to a regional value content requirement, the value of the packing materials and containers in which the good is packaged for retail sale shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.

Article 12

Indirect Materials

An indirect material shall be treated as an originating material without regard to where it is produced and its value shall be the cost registered in the accounting records of the producer of the good.

Article 13

Recording of Costs

For the purposes of this Chapter, all costs shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the Party in which the goods are produced.

Article 14

Direct Consignment

A good will retain its originating status as determined under Article 2 (Originating Goods) if the following conditions have been met:

(a) the good has been transported to the importing Party without passing through any non-Party; or

(b) the good has transited through a non-Party,provided that:

(i) the good has not undergone subsequent production or any other operation outside the territories of the Parties other than

unloading, reloading, storing, or any other operations necessary to preserve them in good condition or to transport them to the importing Party;

(ii) the good has not entered the commerce of a non-Party; and

(iii) the transit entry is justified for geographical,economic or logistical reasons.

Article 15

Certificate of Origin

A claim that goods are eligible for preferential tariff treatment shall be supported by a Certificate of Origin issued by an Issuing Authority/Body notified to the other Parties as set out in this Chapter’s Annex on Operational Certification Procedures.

Article 16

Denial of Preferential Tariff Treatment

The Customs Authority of the importing Party may deny a claim for preferential tariff treatment when:

(a) the good does not qualify as an originating good;or

(b) the importer, exporter or producer fails to comply with any of the relevant requirements of this Chapter.

Article

17 Review and Appeal

The importing Party shall grant the right of appeal in matters relating to the eligibility for preferential tariff treatment to producers, exporters or importers of goods traded or to be

traded between the Parties, in accordance with its domestic laws, regulations and administrative practices.

Article 18

Sub-Committee on Rules of Origin

1. For the purpose of the effective and uniform implementation of this Chapter, the Parties hereby establish a Sub-Committee on Rules of Origin (ROO Sub-Committee). The functions of the ROO Sub-Committee shall include:

(a) monitoring of the implementation and

administration of this Chapter;

(b) discussion of any issue that may have arisen in the course of implementation, including any matters that may have been referred to the ROO Sub-Committee by the Goods Committee established pursuant to Article 11 (Committee on Trade in Goods) of Chapter 2 (Trade in Goods) or the FTA Joint Committee;

(c) discussion of any proposed modifications of the rules of origin under this Chapter; and

(d) consultation on issues relating to rules of origin and administrative co-operation.

2. The ROO Sub-Committee shall consist of representatives of the Parties. It shall meet from time to time as mutually determined by the Parties.

3. The ROO Sub-Committee shall commence a review of Article 6 (Cumulative Rules of Origin) no earlier than 12 months, and no later than 18 months following entry into force of this Agreement. This review will consider the extension of the application of cumulation to all value added to a good within AANZFTA. The ROO Sub-Committee shall submit to the Goods Committee established pursuant to

Article 11 (Committee on Trade in Goods) of Chapter 2 (Trade in Goods) a final report, including any recommendations, within three years of entry into force of this Agreement.

4. The ROO Sub-Committee shall commence a review of the application of the chemical reaction rule and other chemical process rules to Chapters 28 to 40 of the HS Code and other Product Specific Rules identified by Parties, no earlier than 12 months and no later than 18 months, following entry into force of this Agreement. The ROO Sub- Committee shall submit to the Goods Committee established pursuant to Article 11 (Committee on Trade in Goods ) of Chapter 2 (Trade in Goods) a final report, including any recommendations, within three years of entry into force of this Agreement.

Article 19

Consultations, Review and Modification

1. The Parties shall consult regularly to ensure that this Chapter is administered effectively, uniformly and consistently in order to achieve the spirit and objectives of this Agreement.

2. This Chapter may be reviewed and modified in accordance with Article 6 (Amendments) of Chapter 18 (Final Provisions) as and when necessary, upon request of a Party, and subject to the agreement of the Parties, and may be open to such reviews and modifications as may be agreed upon by the FTA Joint Committee.

 

ANNEX ON OPERATIONAL CERTIFICATION PROCEDURES

For the purpose of implementing Chapter 3 (Rules of Origin), the following operational procedures on the issuance and verification of Certificates of Origin and other related administrative matters shall be observed by each Party.

AUTHORITIES

Rule 1

The Certificate of Origin shall be issued by an Issuing Authority/Body of the exporting Party. Details of the Issuing Authorities/Bodies shall be notified by each Party, through the ASEAN Secretariat, prior to the entry into force of this Agreement. Any subsequent changes shall be promptly notified by each Party, through the ASEAN Secretariat.

Rule 2

1. The Issuing Authorities/Bodies shall provide the names, addresses, specimen signatures and specimens of the impressions of official seals of their respective Issuing Authorities/Bodies to the other Parties, through the ASEAN Secretariat. The Issuing Authorities/Bodies shall submit electronically to the ASEAN Secretariat the above information and specimens for dissemination to the other Parties. Any subsequent changes shall be promptly notified through the ASEAN Secretariat.

2. Any Certificate of Origin issued by a person not included in the list may not be honoured by the Customs Authority of the importing Party.

Rule 3

For the purpose of determining originating status, the Issuing Authorities/Bodies shall have the right to call for supporting documentary evidence and/or other relevant information to carry out any check considered appropriate in accordance with respective domestic laws, regulations and administrative practices.

APPLICATIONS

Rule 4

1. The manufacturer, producer, or exporter of the good or its authorised representative shall apply in writing or by electronic means to an Issuing Authority/Body, in accordance with the exporting Party’s domestic laws, regulations and the Issuing Authority’s/Body’s procedures, requesting a pre- exportation examination of the origin of the good to be exported.

2. The result of the examination, subject to review periodically or whenever appropriate, shall be accepted as the supporting evidence in issuing a Certificate of Origin for the good to be exported thereafter.

3. Pre-exportation examination need not apply to a good for which, by its nature, origin can be easily determined.

Rule 5

The manufacturer, producer, or exporter of the good or its authorised representative shall apply for the Certificate of Origin by providing appropriate supporting documents and other relevant information, proving that the good to be exported qualifies as originating.

PRE-EXPORTATION EXAMINATION

Rule 6

The Issuing Authority/Body shall, to the best of its competence and ability, carry out proper examination, in accordance with the domestic laws and regulations of the exporting Party or the procedures of the Issuing Authority/Body, upon each application for the Certificate of Origin to ensure that:

(i) the application and the Certificate of Origin are duly completed and signed by the authorised signatory;

(ii) the good is an originating good in accordance with Article 2 (Originating Goods) of Chapter 3 (Rules of Origin);

(iii) other statements in the Certificate of Origin correspond to appropriate supporting documents and other relevant information; and

(iv) information to meet the minimum data requirements listed in this Annex’s Appendix 1 (Minimum Data Requirements – Application for a Certificate of Origin) is provided for the goods being exported.

ISSUANCE OF CERTIFICATE OF ORIGIN

Rule 7

1. The format of the Certificate of Origin is to be determined by the Parties and it must contain the minimum data requirements listed in this Annex’s Appendix 2 (Minimum Data Requirements – Certificate of Origin).

2. The Certificate of Origin shall comprise one original and two copies.

3. The Certificate of Origin shall:

(i) be in hardcopy;

(ii) bear a unique reference number separately

given by each place or office of issuance;

(iii) be in the English language; and

(iv) bear an authorised signature and official seal of the Issuing Authority/Body. The signature and official seal may be applied electronically.

4. The original Certificate of Origin shall be forwarded by the exporter to the importer for submission to the Customs Authority of the importing Party. Copies shall be retained by the Issuing Authority/Body and the exporter.

5. Multiple goods declared on the same Certificate of Origin shall be allowed, provided that each good is originating in its own right.

Rule 8

To implement Article 2 (Originating Goods) of Chapter 3 (Rules of Origin), the Certificate of Origin issued by the Issuing Authority/Body shall specify the relevant origin conferring criteria.

Rule 9

Neither erasures nor superimpositions shall be allowed on the Certificate of Origin. Any alteration shall be made by striking out the erroneous material and making any addition required. Such alterations shall be approved by a person authorised to sign the Certificate of Origin and certified by

the appropriate Issuing Authority/Body. Unused spaces shall be crossed out to prevent any subsequent addition.

Rule 10

1. The Certificate of Origin shall be issued as near as possible to, but no later than three working days after, the date of exportation.

2. Where a Certificate of Origin has not been issued as provided for in Paragraph 1 due to involuntary errors or omissions or other valid causes, the Certificate of Origin may be issued retroactively, but no longer than 12 months from the date of exportation, bearing the words “ISSUED RETROACTIVELY”.

3. An Issuing Authority/Body of an intermediate Party shall issue a back-to-back Certificate of Origin, if an application is made by the exporter while the good is passing through that intermediate Party, provided that:

(i) a valid original Certificate of Origin or its certified

true copy is presented;

(ii) the period of validity of the back-to-back Certificate of Origin does not exceed the period of validity of the original Certificate of Origin;

(iii) the consignment which is to be re-exported using the back-to-back Certificate of Origin does not undergo any further processing in the intermediate Party, except for repacking or logistics activities such as unloading, reloading, storing, or any other operations necessary to preserve them in good condition or to transport them to the importing Party;

(iv) the back-to-back Certificate of Origin contains relevant information from the original Certificate

of Origin in accordance with the minimum data requirements in this Annex’s Appendix 2 (Minimum Data Requirements – Certificate of Origin). The FOB value shall be the FOB value of the goods exported from the intermediate Party; and

(v) the verification procedures in Rule 17 and Rule 18 shall also apply to the back-to-back Certificate of Origin.

Rule 11

In the event of theft, loss or destruction of a Certificate of Origin, the manufacturer, producer, exporter or its authorised representative may apply to the Issuing Authority/Body for a certified true copy of the original Certificate of Origin. The copy shall be made on the basis of the export documents in their possession and bear the words “CERTIFIED TRUE COPY”. This copy shall bear the date of issuance of the original Certificate of Origin. The certified true copy of a Certificate of Origin shall be issued no longer than 12 months from the date of issuance of the original Certificate of Origin.

PRESENTATION

Rule 12

1. For the purpose of claiming preferential tariff treatment, the importer shall submit to the Customs Authority at the time of import declaration the Certificate of Origin and other documents as required, in accordance with the procedures of the Customs Authority or domestic laws and regulations of the importing Party.

2. Notwithstanding Paragraph 1, a Party may elect not to require the submission of the Certificate of Origin.

Rule 13

The following time limits for the presentation of the Certificate of Origin shall be observed:

(i) the Certificate of Origin shall be valid for a period of 12 months from the date of issue and must be submitted to the Customs Authority of the importing Party within that period;

(ii) where the Certificate of Origin is submitted to the Customs Authority of the importing Party after the expiration of the time limit for its submission, such Certificate of Origin shall still be accepted, subject to the importing Party’s domestic laws, regulations or administrative practices, when failure to observe the time limit results from force majeure or other valid causes beyond the control of the importer and/or exporter; and

(iii) the Customs Authority of the importing Party may accept such Certificate of Origin, provided that the goods have been imported before the expiration of the time limit of that Certificate of Origin.

Rule 14

The Certificate of Origin shall not be required for:

(i) goods originating in the exporting Party and not exceeding US$200.00 FOB value or such higher amount specified in the importing Party’s domestic laws, regulations or administrative practices; or

(ii) goods sent through the post not exceeding US$200.00 FOB value or such higher amount

specified in the importing Party’s domestic laws, regulations or administrative practices,

provided that the importation does not form part of one or more importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the submission of the Certificate of Origin.

Rule 15

1. Where the origin of the good is not in doubt, the discovery of minor transcription errors or discrepancies in documentation shall not ipso facto invalidate the Certificate of Origin, if it does in fact correspond to the goods submitted.

2. For multiple goods declared under the same Certificate of Origin, a problem encountered with one of the goods listed shall not affect or delay the granting of preferential tariff treatment and customs clearance of the remaining goods listed in the Certificate of Origin.

Rule 16

1. Each Party shall require that the Issuing Authority/Body, manufacturer, producer, exporter, importer, and their authorised representatives maintain for a period of not less than three years after the date of exportation or importation, as the case may be, all records relating to that exportation or importation which are necessary to demonstrate that the good for which a claim for preferential tariff treatment was made qualifies for preferential tariff treatment. Such records may be in electronic form.

2. Information relating to the validity of the Certificate of Origin shall be furnished upon request of the importing Party by an official authorised to sign the Certificate of Origin and certified by the appropriate Issuing Authority/Body.

3. Any information communicated between the Parties concerned shall be treated as confidential and shall be used for the validation of Certificates of Origin purposes only.1

ORIGIN VERIFICATION

Rule 17

1. The Customs Authority of the importing Party may verify the eligibility of a good for preferential tariff treatment in accordance with its domestic laws, regulations or administrative practices.

2. If the Customs Authority of the importing Party has reasonable doubts as to the authenticity or accuracy of the information included in the Certificate of Origin or other documentary evidence, it may:

(i) institute retroactive checking measures to establish the validity of the Certificate of Origin or other documentary evidence of origin;

(ii) request information from the relevant importer of a good for which preferential tariff treatment was claimed; and

(iii) issue written requests to the Issuing Authority/Body of the exporting Party for information from the exporter or producer.

3. A request for information in accordance with Paragraph 2(iii) shall not preclude the use of the verification visit provided for in Rule 18.

4. The recipient of a request for information under Paragraph 2 shall provide the information requested within a period of 90 days from the date the written request is made.

1

This Paragraph shall be read with reference to the confidentiality provisions of Article 5 (Confidentiality) of Chapter 18 (Final Provisions).

5. The Customs Authority of the importing Party shall provide written advice as to whether the goods are eligible for preferential tariff treatment to all the relevant parties within 60 days from receipt of information necessary to make a decision.

VERIFICATION VISIT

Rule 18

1. If the Customs Authority of the importing Party wishes to undertake a verification visit, it shall issue a written request to the Issuing Authority/Body of the exporting Party at least 30 days in advance of the proposed verification visit.

2. If the Issuing Authority/Body of the exporting Party is not a government agency, the Customs Authority of the importing Party shall notify the Customs Authority of the exporting Party of the written request to undertake the verification visit.

3. The written request referred to in Paragraphs 1 and 2 shall at a minimum include:

(i) the identity of the Customs Authority issuing the

request;

(ii) the name of the exporter or the producer of the exporting Party whose good is subject to the verification visit;

(iii) the date the written request is made;

(iv) the proposed date and place of the visit;

(v) the objective and scope of the proposed visit, including specific reference to the good subject to the verification; and

(vi) the names and titles of the officials of the Customs Authority or other relevant authorities of the importing Party who will participate in the visit.

4. The Issuing Authority/Body of the exporting Party shall notify the exporter or producer of the intended verification visit by the Customs Authority or other relevant authorities of the importing Party and request the exporter or producer to:

(i) permit the Customs Authority or other relevant authorities of the importing Party to visit their premises or factory; and

(ii) provide information relating to the origin of the

good.

5. The Issuing Authority/Body shall advise the exporter or producer that, should they fail to respond by a specified date, preferential tariff treatment may be denied.

6. The Issuing Authority/Body of the exporting Party shall advise the Customs Authority of the importing Party within 30 days of the date of the written request from the Customs Authority of the importing Party whether the exporter or producer has agreed to the request for a verification visit.

7. The Customs Authority of the importing Party shall not visit the premises or factory of any exporter or producer in the territory of the exporting Party without written prior consent from the exporter or producer.

8. The Customs Authority of the importing Party shall complete any action to verify eligibility for preferential tariff treatment and make a decision within 150 days of the date of the request to the Issuing Authority/Body under Paragraph 1. The Customs Authority of the importing Party shall provide written advice as to whether goods are eligible for

preferential tariff treatment to the relevant parties within ten days of the decision being made.

9. Parties shall maintain the confidentiality of information classified as confidential collected in the process of verification and shall protect that information from disclosure that could prejudice the competitive position of the person who provided the information. The information classified as confidential may only be disclosed to those authorities responsible for the administration and enforcement of origin determination.2

SUSPENSION OF PREFERENTIAL TARIFF TREATMENT

Rule 19

1. The Customs Authority of the importing Party may suspend preferential tariff treatment to a good that is the subject of an origin verification action under this Annex for the duration of that action or any part thereof.

2. The importing Party may release the goods to the importer subject to any administrative measures deemed necessary, provided that they are not held to be subject to import prohibition or restriction and there is no suspicion of fraud.

3. In the event that a determination is made by the Customs Authority of the importing Party that the good qualifies as an originating good of the exporting Party, any suspended preferential tariff treatment shall be reinstated.

Rule 20

When the destination of any goods exported to a specified Party is changed after their export from the exporting Party, but before clearance by the importing Party, the exporter,

2

This Paragraph shall be read with reference to the confidentiality provisions of Article 5 (Confidentiality) of Chapter 18 (Final Provisions).

manufacturer, producer or its authorised representative shall apply in writing to the Issuing Authority/Body for a new Certificate of Origin for the goods changing destination. The application shall include the original Certificate of Origin relating to the goods.

Rule 21

For the purpose of implementing Article 14 (Direct Consignment) of Chapter 3 (Rules of Origin) where transportation is effected through the territory of any non- Party, the following shall be provided to the Customs Authority of the importing Party:

(i) a through Bill of Lading issued in the exporting

Party;

(ii) a Certificate of Origin issued by the relevant Issuing Authority/Body of the exporting Party, unless not required pursuant to Rule 12.2 or Rule 14;

(iii) a copy of the original commercial invoice in

respect of the good; and

(iv) supporting documents in evidence that the requirements of Article 14 (Direct Consignment) of Chapter 3 (Rules of Origin) have been complied with.

Rule 22

1. The Customs Authority of the importing Party may accept Certificates of Origin in cases where the sales invoice is issued either by a company located in a third country or by an exporter for the account of that company, provided that the goods meet the requirements of Chapter 3 (Rules of Origin).

2. The words “SUBJECT OF THIRD-PARTY INVOICE (name of company using the invoice)” shall appear on the Certificate of Origin.

ACTION AGAINST FRAUDULENT ACTS

Rule 23

When it is suspected that fraudulent acts in connection with the Certificate of Origin have been committed, the government authorities concerned shall co-operate in the action to be taken in the respective Party against the persons involved, in accordance with the Party’s respective laws and regulations.

GOODS IN TRANSPORT OR STORAGE

Rule 24

Originating goods which are in the process of being transported from the exporting Party to the importing Party, or which are in temporary storage in a bonded area in the importing Party, should be accorded preferential tariff treatment if they are imported into the importing Party on or after the date of entry into force of this Agreement, subject to the submission of a Certificate of Origin issued retroactively to the Customs Authority of the importing Party and subject to domestic laws, regulations or administrative practices of the importing Party.

SETTLEMENT OF DISPUTES

Rule 253

1. In the case of a dispute concerning origin determination, classification of goods or other matters, the

3

This Rule is without prejudice to a Party’s rights under Chapter 17 (Consultations and Dispute Settlement).

government authorities concerned in the importing and exporting Parties shall consult each other with a view to resolving the dispute, and the result shall be reported to the other Parties for information.

2. If no settlement can be reached bilaterally, the dispute may be referred to the ROO Sub-Committee established pursuant to Article 18 (Sub-Committee on Rules of Origin) of Chapter 3 (Rules of Origin).

Appendix 1

Minimum Data Requirements – Application for a Certificate of Origin

The minimum data to be included in an application for a Certificate of Origin are:

1. Exporter details The name, address and contact details of the

exporter

2. Shipment details

(a separate application must be made for each shipment)

(i) Consignee name and address (ii) Sufficient details to identify the consignment, such as importer’s purchase order number, invoice number and date and Air Way Bill or Sea Way Bill or Bill of Lading (iii) Port of Discharge, if known

3. Full description

of goods

(i) Detailed description of the goods, including HS Code (6-digit level), and if applicable, product number and brand name (ii) The relevant origin conferring criteria

4. Exporter’s

declaration

Declaration completed by the exporter or its authorised representative, signed and dated, and annotated with the signatory’s name and designation. The declaration shall include a statement that the details provided in the application are true and correct

Appendix 2

Minimum Data Requirements – Certificate of Origin

The minimum data to be included in the Certificate of Origin are:

1. Exporter details The name and address and contact details of the exporter

2. Shipment details(a Certificate of Origin can only apply to a single shipment of goods)

(i) Consignee name and address (ii) Sufficient details to identify the consignment, such as importer’s purchase order number, invoice number and date and Air Way Bill or Sea Way Bill or Bill of Lading (iii) Port of Discharge, if known

3. Full description of goods

(i) Detailed description of the goods, including HS Code (6-digit level), and if applicable, product number and brand name (ii) The relevant origin conferring criteria (iii) FOB Value1

4. Certification by Issuing Authority/Body

Certification by the Issuing Authority/Body that, based on the evidence provided, the goods specified in the Certificate of Origin meet all the relevant requirements of Chapter 3 (Rules of Origin)

5. Certificate of Origin number

A unique number assigned to the Certificate of Origin by the Issuing Authority/Body

1

In the case of Australia and New Zealand, a Certificate of Origin or back-to-back Certificate of Origin which does not state the FOB value shall be accompanied by a declaration made by the exporter stating the FOB value of each good described in the Certificate of Origin.

 

CHAPTER 4

CUSTOMS PROCEDURES

Article 1

Objectives

The objectives of this Chapter are to:

(a) ensure predictability, consistency and transparency in the application of customs laws and regulations of the Parties;

(b) promote efficient, economical administration of customs procedures, and the expeditious clearance of goods;

(c) simplify customs procedures; and

(d) promote co-operation among the customs

administrations of the Parties.

Article

2 Scope

This Chapter applies, in accordance with the Parties’ respective laws, regulations and policies, to customs procedures applied to goods traded among the Parties.

Article 3

Definitions

For the purposes of this Chapter:

(a) customs law means such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation, and transit/transhipment

 

of goods, as they relate to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party; and

(b) customs procedures means the treatment applied by the customs administration of a Party to goods, which are subject to that Party’s customs law.

Article 4

Customs Procedures and Facilitation

1. Each Party shall ensure that its customs procedures and practices are predictable, consistent, transparent and facilitate trade, including through the expeditious clearance of goods.

2. Customs procedures of each Party shall, where possible and to the extent permitted by its customs law, conform with the standards and recommended practices of the World Customs Organization.

3. The customs administration of each Party shall review its customs procedures with a view to their simplification to facilitate trade.

Article 5

Customs Co-operation

1. To the extent permitted by its domestic law, the customs administration of each Party may, as deemed appropriate, assist the customs administration of each other Party, in relation to:

(a) the implementation and operation of this Chapter;

(b) developing and implementing customs best

practice and risk management techniques;

(c) providing, where possible, prior notice of changes to laws, regulations, and relevant procedures and guidelines that would affect the operation of this Agreement;

(d) simplifying and harmonising customs procedures;

(e) advancing technical skills and the use of technology; and

(f) application of the Agreement on Customs Valuation.

2. Subject to available resources, the customs administrations of the Parties may, as deemed appropriate, explore and undertake co-operation projects, including:

(a) capacity building programmes to enhance the capability of customs personnel of ASEAN Member States; and

(b) technical assistance programmes to facilitate the Parties’ development and implementation of Single Windows.

Article 6

Use of Automated Systems

1. The customs administration of each Party, where applicable, shall endeavour to have its own system that supports electronic customs transactions.

2. In implementing initiatives, the customs administration of each Party shall take into account the relevant standards and best practices recommended by the World Customs

Organization, taking into consideration the available infrastructure and capabilities of each Party.

Article 7 Valuation

The Parties shall determine the customs value of goods traded among them in accordance with the provisions of the Agreement on Customs Valuation.1

Article 8 Advance Rulings

1. Each Party, through its customs administration or other relevant authorities, to the extent permitted by its domestic laws, regulations and administrative determinations, on the application of a person described in Paragraph 2(a), shall provide in writing advance rulings in respect of the tariff classification, questions arising from the application of the principles of the Agreement on Customs Valuation and/or origin of goods.

2. Where available, each Party shall adopt or maintain procedures for advance rulings, which shall:

(a) provide that an importer in its territory or an exporter or producer in the territory of another Party may apply for an advance ruling before the importation of the goods in question;

(b) require that an applicant for an advance ruling provide a detailed description of the goods and all relevant information needed to process an application for an advance ruling;

1

In the case of Cambodia, the Agreement on Customs Valuation, as implemented in accordance with the provisions of the Protocol on the Accession of the Kingdom of Cambodia to the WTO shall apply mutatis mutandis.

(c) provide that its customs administration may, at any time during the course of an evaluation of an application for an advance ruling, request that the applicant provide additional information within a specified period;

(d) provide that any advance ruling be based on the facts and circumstances presented by the applicant, and any other relevant information in the possession of the decision-maker; and

(e) provide that an advance ruling be issued to the applicant expeditiously, within the period specified in each Party’s domestic laws, regulations or administrative determinations.

3. A Party may reject requests for an advance ruling where the additional information requested by it in accordance with Paragraph 2(c) is not provided within the specified period.

4. Subject to Paragraphs 1 and 5 and where available, each Party shall apply an advance ruling to all importations of goods described in that ruling imported into its territory for three years from the date of that ruling, or such other period as specified in that Party's domestic laws, regulations or administrative determinations.

5. A Party may modify or revoke an advance ruling upon a determination that the ruling was based on an error of fact or law (including human error), the information provided is false or inaccurate, if there is a change in domestic law consistent with this Agreement, or there is a change in a material fact or circumstance on which the ruling is based.

6. Where an importer claims that the treatment accorded to an imported good should be governed by an advance ruling, the customs administration may evaluate whether the facts and circumstances of the importation are consistent with the facts and circumstances upon which an advance ruling was based.

Article 9 Risk Management

1. The Parties shall administer customs procedures so as to facilitate the clearance of low-risk goods and focus on high-risk goods. To enhance the flow of goods across their borders the customs administration of each Party shall regularly review these procedures.

2. Where a customs administration of a Party deems that the inspection of goods is not necessary to authorise clearance of the goods from customs control, that Party shall endeavour to provide a single point for the documentary or electronic processing of those goods.

Article 10 Confidentiality

1. Nothing in this Chapter shall be construed to require any Party to furnish or allow access to confidential information pursuant to this Chapter, the disclosure of which it considers would:

(a) be contrary to the public interest as determined by its legislation;

(b) be contrary to any of its legislation including, but not limited to, legislation protecting personal privacy or the financial affairs and accounts of individual customers of financial institutions;

(c) impede law enforcement; or

(d) prejudice legitimate commercial interests, which may include competitive position, of particular enterprises, public or private.

2. Where a Party provides information to another Party in accordance with this Chapter and designates the information as confidential, the Party receiving the information shall maintain the confidentiality of the information, use it only for the purposes specified by the Party providing the information, and not disclose it without the specific written permission of the Party providing the information.

Article 11 Enquiry Points

1. Each Party shall designate one or more enquiry points to address enquiries from interested persons concerning customs matters, and shall make available on the internet and/or in print form, information concerning procedures for making such enquiries.

2. Each Party shall publish on the internet and/or in print form all statutory and regulatory provisions and any customs administrative procedures applied or enforced by its customs administration, not including law enforcement procedures and internal operational guidelines.

Article 12 Consultations

The customs administrations of the Parties will encourage consultation with each other regarding significant customs issues that affect goods traded among the Parties.

Article 13 Review and Appeal

1. Each Party shall ensure that the importers in its territory have access to administrative review within the customs administration that issued the decision subject to review or, where applicable, the higher authority supervising the administration and/or judicial review of the determination

taken at the final level of administrative review, in accordance with the Party's domestic law.

2. The decision on appeal shall be given to the appellant and the reasons for such decision shall be provided in writing.

3. The level of administrative review may include any authority supervising the customs administration of a Party.

 

CHAPTER 5

SANITARY AND PHYTOSANITARY MEASURES

Article 1 Objectives

The objectives of this Chapter are to:

(a) facilitate trade among the Parties while protecting human, animal or plant life or health in the territory of each Party;

(b) provide greater transparency in and understanding of the application of each Party’s regulations and procedures relating to sanitary and phytosanitary measures;

(c) strengthen co-operation among the competent authorities of the Parties which are responsible for matters covered by this Chapter; and

(d) enhance practical implementation of the principles and disciplines contained within the SPS Agreement.

Article 2 Scope

This Chapter shall apply to all sanitary and phytosanitary measures of a Party that may, directly or indirectly, affect trade among the Parties.

Article 3 Definitions

For the purposes of this Chapter:

(a) competent authorities means those authorities within each Party recognised by the national government as responsible for developing and administering the various sanitary and phytosanitary measures within that Party;

(b) international standards, guidelines and recommendations shall have the same meaning as set out in paragraph 3 of Annex A to the SPS Agreement;

(c) sanitary or phytosanitary measure shall have the same meaning as set out in paragraph 1 of Annex A to the SPS Agreement; and

(d) SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement.

Article 4 General Provisions

1. Each Party affirms its rights and obligations with respect to each other Party under the SPS Agreement.

2. Each Party commits to apply the principles of the SPS Agreement in the development, application or recognition of any sanitary or phytosanitary measure with the intent to facilitate trade among the Parties while protecting human, animal or plant life or health in the territory of each Party.

Article 5 Equivalence

1. The Parties shall strengthen co-operation on equivalence in accordance with the SPS Agreement and relevant international standards, guidelines and recommendations, in order to facilitate trade among the Parties.

2. To facilitate trade, the competent authorities of the relevant Parties may develop equivalence arrangements and make equivalence decisions, in particular in accordance with Article 4 of the SPS Agreement and with the guidance provided by the relevant international standard setting bodies and by the WTO Committee on Sanitary and Phytosanitary Measures established pursuant to Article 12 of the SPS Agreement.

3. A Party shall, upon request, enter into negotiations with the aim of achieving bilateral recognition arrangements of the equivalence of specified sanitary or phytosanitary measures.

Article 6 Competent Authorities and Contact Points

1. Each Party shall provide each other Party with a description of its competent authorities and their division of responsibilities.

2. Each Party shall provide each other Party with a contact point to facilitate distribution of requests or notifications made in accordance with this Chapter.

3. Each Party shall ensure the information provided under Paragraphs 1 and 2 is kept up to date.

Article 7 Notification

1. Each Party acknowledges the value of exchanging information on its sanitary or phytosanitary measures.

2. Each Party agrees to provide timely and appropriate information directly to the contact points of the relevant Parties where a:

(a) change in animal or plant health status may affect existing trade;

(b) significant sanitary or phytosanitary non- compliance associated with an export consignment is identified by the importing Party; and

(c) provisional sanitary or phytosanitary measure against or affecting the exports of another Party is considered necessary to protect human, animal or plant life or health within the importing Party.

3. The exporting Party should, to the extent possible, endeavour to provide information to the importing Party if the exporting Party identifies that an export consignment which may be associated with a significant SPS risk has been exported.

Article 8 Co-operation

1. Each Party shall explore opportunities for further co- operation, collaboration and information exchange with the other Parties on sanitary and phytosanitary matters of mutual interest consistent with the objectives of this Chapter.

2. In relation to Paragraph 1, each Party shall endeavour to co-ordinate with regional or multilateral work programmes with the objective of avoiding unnecessary duplication and to maximise the benefits from the application of resources.

3. Each Party agrees to further explore how it can strengthen co-operation on the provision of technical assistance especially in relation to trade facilitation.

4. Any two Parties may, by mutual agreement, co-operate on adaptation to regional conditions in accordance with the

SPS Agreement and relevant international standards, guidelines and recommendations, in order to facilitate trade between the Parties.

Article 9 Consultations

Where a Party considers that a sanitary or phytosanitary measure affecting trade between it and another Party warrants further discussion, it may, through the contact points, request a detailed explanation of the sanitary or phytosanitary measure and if necessary, request to hold consultations in an attempt to resolve any concerns on specific issues arising from the application of the sanitary or phytosanitary measure. The other Party shall respond promptly to any requests for such explanations, and if so requested, shall enter into consultations, within 30 days from the date of the request. The Parties to the consultations shall make every effort to reach a mutually satisfactory resolution through consultations within 60 days from the date of the request, or a timeline mutually agreed upon by the consulting Parties. Should the consultations fail to achieve resolution, the matter shall be forwarded to the FTA Joint Committee.

Article 10 Meetings Among the Parties on Sanitary and Phytosanitary Matters

1. The Parties hereby establish a Sub-Committee on Sanitary and Phytosanitary Matters (SPS Sub-Committee), consisting of representatives from the relevant government agencies of each Party. The SPS Sub-Committee shall meet within one year of the entry into force of this Agreement and thereafter as mutually determined by the Parties.

2. The SPS Sub-Committee shall review the progress made by the Parties in implementing their commitments under this Chapter and may set up subsidiary working

groups, as agreed between or among the relevant Parties, to consider specified issues relating to this Chapter.

3. Competent authorities of any two Parties may meet to make decisions bilaterally implementing the commitments under this Chapter. Each Party shall provide to the SPS Sub- Committee updates on the status of their work.

4. Subject to Paragraph 1, meetings under this Article shall occur as and when mutually determined by the relevant Parties and all decisions and/or records made shall be by mutual agreement of the relevant Parties. Meetings may occur in person, by teleconference, by video conference, or through any other means as mutually determined by the Parties.

Article 11

Non-Application of Chapter 17 (Consultations and Dispute Settlement)

Chapter 17 (Consultations and Dispute Settlement) shall not apply to any matter arising under this Chapter.

 

CHAPTER 6

STANDARDS, TECHNICAL REGULATIONS AND CONFORMITY ASSESSMENT PROCEDURES

Article 1 Objectives

The objectives of this Chapter are to facilitate trade in goods among the Parties by:

(a) ensuring that standards, technical regulations, and conformity assessment procedures do not create unnecessary obstacles to trade;

(b) promoting mutual understanding of each Party’s standards, technical regulations, and conformity assessment procedures;

(c) strengthening information exchange and co- operation among the Parties in relation to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures;

(d) strengthening co-operation among the Parties in the work of international bodies related to standardisation and conformity assessments; and

(e) providing a framework to implement supporting mechanisms to realise these objectives.

Article 2 Scope

1. For the mutual benefit of the Parties, this Chapter applies to all standards, technical regulations and conformity

assessment procedures of the Parties that may affect trade in goods between the Parties except:

(a) purchasing specifications prepared by governmental bodies for the production or consumption requirements of such bodies; and

(b) sanitary or phytosanitary measures as defined in

Chapter 5 (Sanitary and Phytosanitary Measures).

2. Nothing in this Chapter shall limit the right of a Party to prepare, adopt and apply standards, technical regulations and conformity assessment procedures only to the extent necessary to fulfil a legitimate objective. Such legitimate objectives are, inter alia, national security requirements; the prevention of deceptive practices; protection of human health or safety; animal or plant life or health; or the environment.

Article 3 Definitions

For the purposes of this Chapter, the definitions set out in Annex 1 to the Agreement on Technical Barriers to Trade (TBT Agreement) in Annex 1A to the WTO Agreement shall apply.

Article 4 Affirmation of the TBT Agreement

1. Each Party affirms its rights and obligations with respect to each other Party under the TBT Agreement.

2. Each Party shall take such reasonable measures as may be available to it to ensure compliance, in the implementation of this Chapter, by local government and non-governmental bodies within its territory which are responsible for the preparation, adoption and application of standards, technical regulations and conformity assessment procedures.

Article 5 Standards

1. With respect to the preparation, adoption and application of standards, each Party shall ensure that its standardising body or bodies accept and comply with Annex 3 to the TBT Agreement.

2. Each Party shall encourage the standardising body or bodies in its territory to co-operate with the standardising body or bodies of other Parties. Such co-operation shall include, but is not limited to:

(a) exchange of information on standards;

(b) exchange of information relating to standard setting procedures; and

(c) co-operation in the work of international standardising bodies in areas of mutual interest.

Article 6 Technical Regulations

1. Where relevant international standards exist or their completion is imminent, each Party shall use them, or relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.

2. Each Party shall give positive consideration to accepting as equivalent, technical regulations of another Party, even if these regulations differ from its own, provided it is satisfied that these regulations adequately fulfil the objectives of its own regulations.

3. Where a Party does not accept a technical regulation of another Party as equivalent to its own it shall, upon request of the other Party, explain the reasons for its decision.

Article 7 Conformity Assessment Procedures

1. Each Party shall give positive consideration to accepting the results of conformity assessment procedures of other Parties, even where those procedures differ from its own, provided it is satisfied that those procedures offer an assurance of conformity with applicable technical regulations or standards equivalent to its own procedures.

2. Each Party shall seek to enhance the acceptance of the results of conformity assessment procedures conducted in the territories of other Parties with a view to increasing efficiency, avoiding duplication and ensuring cost effectiveness of the conformity assessments. In this regard, each Party may choose, depending on the situation of the Party and the specific sectors involved, a broad range of approaches. These may include but are not limited to:

(a) recognition by a Party of the results of conformity assessments performed in the territory of another Party;

(b) recognition of co-operative arrangements between accreditation bodies in the territories of the Parties;

(c) mutual recognition of conformity assessment procedures conducted by bodies located in the territory of each Party;

(d) accreditation of conformity assessment bodies in the territory of another Party;

(e) use of existing regional and international multilateral recognition agreements and arrangements;

(f) designating conformity assessment bodies located in the territory of another Party to perform conformity assessment; and

(g) suppliers’ declaration of conformity.

3. Each Party shall exchange information with other Parties on its experience in the development and application of the approaches in Paragraph 2(a) to (g) and other appropriate approaches with a view to facilitating the acceptance of the results of conformity assessment procedures.

4. A Party shall, upon request of another Party, explain its reasons for not accepting the results of any conformity assessment procedure performed in the territory of that other Party.

Article 8 Co-operation

1. The Parties shall intensify their joint efforts in the field of standards, technical regulations and conformity assessment procedures with a view to facilitating access to each other’s markets.

2. Each Party shall, upon request of another Party, give positive consideration to proposals to supplement existing co-operation on standards, technical regulations and conformity assessment procedures. Such co-operation, which shall be on mutually determined terms and conditions, may include but is not limited to:

(a) advice or technical assistance relating to the development and application of standards, technical regulations and conformity assessment procedures;

(b) co-operation between conformity assessment bodies, both governmental and non- governmental, in the territories of each of the Parties such as:

(i) use of accreditation to qualify conformity assessment bodies; and

(ii) enhancing infrastructure in calibration, testing, inspection, certification and accreditation to meet relevant international standards, recommendations and guidelines;

(c) co-operation in areas of mutual interest in the work of relevant regional and international bodies relating to the development and application of standards and conformity assessment procedures such as enhancing participation in the existing frameworks for mutual recognition developed by relevant regional and international bodies; and

(d) enhancing co-operation in the development and improvement of technical regulations and conformity assessment procedures such as:

(i) co-operation in the development and promotion of good regulatory practice;

(ii) transparency, including ways to promote improved access to information on standards, technical regulations and conformity assessment procedures; and

(iii) management of risks relating to health, safety, the environment and deceptive practices.

3. Upon request of another Party, a Party shall give positive consideration to a sector-specific proposal that the requesting Party makes for further co-operation under this Chapter.

Article 9 Consultations

1. Each Party shall give prompt and positive consideration to any request from another Party for consultations on issues relating to the implementation of this Chapter.

2. Where a matter covered under this Chapter cannot be clarified or resolved as a result of consultations, the Parties concerned may establish an ad hoc working group with a view to identifying a workable and practical solution to facilitate trade. The ad hoc working group shall comprise representatives of the Parties concerned.

3. Where a Party declines a request from another Party to establish an ad hoc working group, it shall, upon request of the other Party, explain the reasons for its decision.

Article 10 Agreements or Arrangements

1. Parties shall seek to identify trade-facilitating initiatives regarding standards, technical regulations and conformity assessment procedures that are appropriate for particular issues or sectors.

2. Such trade-facilitating initiatives may include agreements or arrangements on regulatory issues, such as

alignment of standards, convergence or equivalence of technical regulations conformity assessment procedures and compliance issues.

3. Parties to an existing agreement or arrangement shall give consideration to extending such an agreement or arrangement to another Party upon request of that Party. Such consideration may be subject to appropriate confidence building processes to ensure equivalency of relevant standards, technical regulations and/or conformity assessment procedures.

4. Where a Party declines a request of another Party to consider extending the application of an existing agreement or arrangement it shall, upon request of that Party, explain the reasons for its decision.

Article 11 Transparency

1. Each Party affirms its commitment to ensuring that information regarding proposed new or amended standards, technical regulations and conformity assessment procedures is made available in accordance with the relevant requirements of the TBT Agreement.

2. Each Party shall ensure that the information relating to standards, technical regulations and conformity assessment procedures is published. Such information should be made available in printed form and, where possible, in electronic form.

Article 12 Contact Points

1. Each Party shall designate a contact point or contact points who shall, for that Party, have responsibility for co- ordinating the implementation of this Chapter.

2. Each Party shall provide each of the other Parties with the name of the designated contact point or contact points and the contact details of the relevant official in that organisation, including telephone, facsimile, email and any other relevant details.

3. Each Party shall notify each of the other Parties promptly of any change of their contact points or any amendments to the details of the relevant officials.

4. Each Party shall ensure that its contact point or contact points facilitate the exchange of information between the Parties on standards, technical regulations and conformity assessment procedures, in response to all reasonable requests for such information from a Party.

Article 13

Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures

1. The Parties hereby establish a Sub-Committee on Standards, Technical Regulations and Conformity Assessment Procedures (STRACAP Sub-Committee), consisting of representatives of the Parties, to promote and monitor the implementation and administration of this Chapter.

2. The STRACAP Sub-Committee shall meet as mutually determined by the Parties. Meetings may be conducted in person, or by any other means as mutually determined by the Parties.

3. The STRACAP Sub-Committee shall determine its terms of reference in accordance with this Chapter.

4. The STRACAP Sub-Committee shall determine its work programme in response to priorities as identified by the Parties.

CHAPTER 7

SAFEGUARD MEASURES

Article 1 Scope

This Chapter applies to safeguard measures adopted or maintained by a Party affecting trade in goods among the Parties during the transitional safeguard period.

Article 2 Definitions

For the purposes of this Chapter:

(a) domestic industry means, with respect to an imported good, the producers as a whole of the like or directly competitive goods operating within a Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;

(b) global safeguard measure means a measure applied under Article XIX of GATT 1994 and the Agreement on Safeguards in Annex 1A to the WTO Agreement (Safeguards Agreement) or Article 5 of the Agreement on Agriculture in Annex 1A to the WTO Agreement (Agreement on Agriculture);

(c) provisional measure means a provisional safeguard measure described in Article 7 (Provisional Safeguard Measures);

(d) safeguard measure means a transitional safeguard measure described in Article 6 (Scope and Duration of Transitional Safeguard Measures);

(e) serious injury means a significant overall impairment in the position of a domestic industry;

(f) threat of serious injury means serious injury that, on the basis of facts and not merely on allegation, conjecture, or remote possibility, is clearly imminent; and

(g) transitional safeguard period means, in relation to a particular good, the period from the entry into force of this Agreement until three years after the customs duty on that good is to be eliminated, or reduced to its final commitment, in accordance with that Party’s schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments).

Article 3

Imposition of a Safeguard Measure

If, as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of another Party or Parties is being imported into the territory of a Party during the transitional safeguard period for that good in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry that produces like or directly competitive goods, that Party may:

(a) suspend the further reduction of any rate of customs duty provided for under this Agreement on the good; or

(b) increase the rate of customs duty on the good to a level not exceeding the lesser of:

(i) the most-favoured-nation applied rate of duty on the good in effect at the time the action is taken; or

(ii) the most-favoured-nation applied rate of duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.

Article 4 Investigation

1. A Party shall take a safeguard measure only following an investigation by that Party’s competent authorities in accordance with the same procedures as those provided for in Article 3 and Article 4.2 of the Safeguards Agreement; and to this end, Article 3 and Article 4.2 of the Safeguards Agreement shall be incorporated into and shall form part of this Agreement, mutatis mutandis.

2. Each Party shall ensure that its competent authorities complete any such investigation expeditiously and, in any event, within one year following the date of its initiation.

Article 5 Notification

1. A Party shall immediately notify the other Parties, in writing, on:

(a) initiating an investigation under Article 4 (Investigation);

(b) making a finding of serious injury or threat thereof caused by increased imports of an originating good of another Party or Parties resulting from the reduction or elimination of a customs duty on that originating good;

(c) taking a decision to apply or extend a safeguard measure;

(d) taking a decision to progressively liberalise an existing safeguard measure; or

(e) applying a provisional measure.

2. A Party shall provide promptly to the other Parties a copy of the public version of the report of its competent authorities required under Article 4 (Investigation).

3. In making a notification pursuant to Paragraph 1(c), the Party applying or extending a safeguard measure shall provide the other Parties with evidence of serious injury or threat of serious injury caused by increased imports of an originating good of another Party or Parties as a result of the reduction or elimination of a customs duty pursuant to this Agreement. Such notification shall include:

(a) a precise description of the originating good subject to the proposed safeguard measure including its heading or subheading under the HS Code, on which the schedules of tariff commitments in Annex 1 (Schedules of Tariff Commitments) are based;

(b) a precise description of the proposed safeguard measure; and

(c) the proposed date of the safeguard measure’s introduction, its expected duration, and a timetable for progressive liberalisation of the measure, if applicable. In the case of an extension of a measure, evidence that the domestic industry concerned is adjusting shall also be provided.

Upon request, the Party applying or extending a safeguard measure shall provide additional information as another Party or Parties may consider necessary.

4. A Party proposing to apply or extend a safeguard measure shall provide adequate opportunity for prior consultations with those Parties which would be affected by the safeguard measure with a view to reviewing the information provided under Paragraphs 2 and 3 arising from the investigation referred to in Article 4 (Investigation), exchanging views on the safeguard measure and reaching an agreement on compensation as set forth in Article 8 (Compensation).

5. Where a Party applies a provisional measure referred to in Article 7 (Provisional Safeguard Measures), on request of another Party or Parties, consultations shall be initiated immediately after such application.

6. The provisions on notification in this Chapter shall not require a Party to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.

Article 6 Scope and Duration of Transitional Safeguard Measures

1. A Party may not maintain a safeguard measure:

(a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment;

(b) for a period exceeding two years, except that the period may be extended by up to one year if the competent authorities of that Party determine, in conformity with the procedures referred to in

Article 4 (Investigation), that the safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting; or

(c) for a period exceeding three years, including any extension.

2. A safeguard measure shall not be applied against an originating good of a Party which is an ASEAN Member State, as long as its share of imports of the good concerned in the importing Party does not exceed three per cent of the total imports from the other Parties, provided that those Parties with less than three per cent import share collectively account for not more than nine per cent of total imports of the good concerned from the other Parties.

3. Where the expected duration of the safeguard measure is over one year, the importing Party shall ensure that the safeguard measure is progressively liberalised at regular intervals during the period of application.

4. When a Party terminates a safeguard measure on a good, the rate of customs duty for that good shall be no higher than the rate that, according to the Party’s schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments), would have been in effect as if the safeguard measure had never been applied.

5. Regardless of its duration or whether it has been subject to extension, a safeguard measure on a good shall terminate following the end of the transitional safeguard period for such good.

6. No safeguard measure shall be applied again to the import of a particular originating good which has been subject to such a safeguard measure, for a period of time

equal to the duration of the previous safeguard measure, or two years, whichever is longer.

7. A Party shall not apply a safeguard measure to an originating good imported up to the limit of quota quantities granted under tariff rate quotas applied in accordance with its schedule of tariff commitments in Annex 1 (Schedules of Tariff Commitments).

Article 7 Provisional Safeguard Measures

1. In critical circumstances, where delay would cause damage which would be difficult to repair, a Party may take a provisional measure, pursuant to a preliminary determination that there is clear evidence that increased imports of an originating good from another Party or Parties have caused or are threatening to cause serious injury to a domestic industry.

2. The duration of such a provisional measure shall not exceed 200 days, during which time the relevant requirements of Article 2 (Definitions), Article 3 (Imposition of a Safeguard Measure), Article 4 (Investigation), Article 5 (Notification) and Article 6 (Scope and Duration of Transitional Safeguard Measures) shall be met. The duration of any provisional measure shall be counted as part of the initial period and any extension as referred to in Article 6 (Scope and Duration of Transitional Safeguard Measures).

3. The customs duty imposed as a result of the provisional measure shall be refunded if the subsequent investigation referred to in Article 4 (Investigation) does not determine that increased imports of the originating good have caused or threatened to cause serious injury to a domestic industry.

 

Article 8 Compensation

1. The Party proposing to apply a safeguard measure shall, in consultation with the exporting Party or Parties who would be affected by such a measure, provide to that Party or Parties mutually agreed adequate means of trade compensation in the form of substantially equivalent level of concessions or other obligations to that existing under this Agreement between the Party applying the safeguard measure and the exporting Party or Parties who would be affected by such a measure.

2. In seeking compensation under Paragraph 1 for a safeguard measure, if the Parties mutually agree, they may hold consultations in the Goods Committee established pursuant to Article 11 (Committee on Trade in Goods) of Chapter 2 (Trade in Goods) to determine the substantially equivalent level of concessions to that existing under this Agreement between the Party taking the safeguard measure and the exporting Party or Parties who would be affected by such a measure prior to any suspension of equivalent concessions. Any proceedings arising from such consultations shall be completed within 30 days from the date on which the safeguard measure was applied.

3. If no agreement on the compensation is reached within the time frame specified in Paragraph 2, the Party or Parties against whose originating good the measure is applied may suspend the application of substantially equivalent concessions to the trade of the Party applying the safeguard measure. The Party or Parties may suspend the concessions only for the minimum period necessary to achieve the substantially equivalent effects and only while the safeguard measure is maintained. The right of suspension provided for in this Paragraph shall not be exercised for the first two years that a safeguard measure is in effect, provided that the safeguard measure has been applied as a result of an

absolute increase in imports and that such a safeguard measure conforms to this Chapter.

4. A Party shall notify the other Parties in writing at least 30 days before suspending concessions under Paragraph 3.

5. The obligation to provide compensation under Paragraph 1 and the right to suspend substantially equivalent concessions under Paragraph 3 shall terminate on the termination of the safeguard measure.

Article 9 Relationship to the WTO Agreement

1. Each Party retains its rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture. This Agreement does not confer any additional rights or obligations on the Parties with regard to global safeguard measures.

2. A Party shall not apply a safeguard measure or provisional measure, as provided in Article 6 (Scope and Duration of Transitional Safeguard Measures) or Article 7 (Provisional Safeguard Measures) on a good that is subject to a measure that the Party has applied pursuant to Article XIX of GATT 1994 and the Safeguards Agreement, the Agreement on Agriculture or any other relevant provisions in the WTO Agreement, nor shall a Party continue to maintain a safeguard measure or provisional measure on a good that becomes subject to a measure that the Party applies pursuant to Article XIX of GATT 1994 and the Safeguards Agreement, the Agreement on Agriculture or any other relevant provisions in the WTO Agreement.

3. A Party considering the imposition of a global safeguard measure on an originating good of another Party or Parties shall initiate consultations with that Party or Parties as far in advance of taking such measure as practicable.

 

CHAPTER 8

TRADE IN SERVICES

Article 1 Scope and Coverage

1. This Chapter applies to measures by a Party affecting trade in services.

2. For the purposes of this Chapter, measures by a Party means measures taken by:

(a) central, regional, or local governments and authorities; and

(b) non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities.

3. In fulfilling its obligations and commitments under this Chapter, each Party shall take such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non- governmental bodies within its territory.

4. This Chapter shall not apply to measures affecting:

(a) government procurement;

(b) subsidies or grants including government- supported loans, guarantees, and insurance, provided by a Party or to any conditions attached to the receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service consumers or service suppliers;

(c) services supplied in the exercise of governmental authority within the territory of each respective Party, as defined in Article 2(q) (Definitions), or

(d) in respect of air transport services, measures affecting traffic rights however granted; or measures affecting services directly related to the exercise of traffic rights, other than measures affecting:

(i) aircraft repair and maintenance services;

(ii) the selling and marketing of air transport

services; and

(iii) computer reservation system services.

5. The Parties note the multilateral negotiations pursuant to the review of the GATS Annex on Air Transport Services. Upon the conclusion of such multilateral negotiations, the Parties shall conduct a review for the purpose of discussing appropriate amendments to this Agreement so as to incorporate the results of such multilateral negotiations.

6. Nothing in this Chapter shall apply to measures affecting natural persons seeking access to the employment market of another Party, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.

Article 2 Definitions

For the purposes of this Chapter:

(a) aircraft repair and maintenance services means such activities when undertaken on an aircraft or a part thereof while it is withdrawn from

service and do not include so-called line maintenance;

(b) commercial presence means any type of business or professional establishment, including through:

(i) the constitution, acquisition or maintenance of a juridical person; or

(ii) the creation or maintenance of a branch or a representative office, within the territory of a Party for the purpose of supplying a service;

(c) computer reservation system services means services provided by computerised systems that contain information about air carriers’ schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued;

(d) juridical person means any entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or government- owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(e) juridical person of a Party means a juridical

person which is either:

(i) constituted or otherwise organised under the law of that Party, and is engaged in substantive business operations in the territory of that Party or any other Party; or

(ii) in the case of supply of a service through commercial presence, owned or controlled by:

(A) natural persons of that Party; or

(B) juridical persons of that Party

identified under Subparagraph (e)(i);

(f) In the case of Thailand and Viet Nam, a juridical

person is:

(i) owned by persons of a Party if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party;

(ii) controlled by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;

(iii) affiliated with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;

(g) measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(h) measures by a Party affecting trade in

services includes measures in respect of:

(i) the purchase or use of, or payment for, a

service;

(ii) the access to and use of, in connection with the supply of a service, services which are

required by those Parties to be offered to the public generally; and

(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of the other Party;

(i) monopoly supplier of a service means any person, public or private, which in the relevant market of the territory of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;

(j) natural person of a Party means a natural person who resides in the territory of that Party or elsewhere and who under the law of that Party:

(i) is a national of that Party; or

(ii) has the right of permanent residence 1 in that Party, in the case of a Party which accords substantially the same treatment to its permanent residents as it does to its nationals in respect of measures affecting trade in services, provided that no Party is obligated to accord to such permanent residents treatment more favourable than would be accorded by that Party to such permanent residents;

(k) person means a natural person or a juridical

person;

1

Where a Party has made a reservation with respect to permanent residents in its schedules under this Agreement, that reservation shall not prejudice the Parties’ rights and obligations in GATS.

(l) sector of a service means:

(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Party’s schedules of specific commitments in Annex 3 (Schedules of Specific Services Commitments); and

(ii) otherwise, the whole of that service sector, including all of its subsectors;

(m) selling and marketing of air transport services means opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution. These activities do not include the pricing of air transport services nor the applicable conditions;

(n) services includes any service in any sector except services supplied in the exercise of governmental authority;

(o) service of another Party means a service which is supplied:

(i) from or in the territory of that other Party; or

(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Party;

(p) service supplier means a person that supplies a service2;

(q) a service supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;

(r) supply of a service includes the production, distribution, marketing, sale and delivery of a service;

(s) trade in services means the supply of a service:

(i) from the territory of one Party into the territory of any other Party;

(ii) in the territory of one Party to the service consumer of any other Party;

(iii) by a service supplier of one Party, through commercial presence in the territory of any other Party;

(iv) by a service supplier of one Party, through presence of natural persons of a Party in the territory of any other Party; and

(t) traffic rights means the right for scheduled and non-scheduled services to operate and/or carry passengers, cargo and mail for remuneration or

2

Where the service is not supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. juridical person) shall, nonetheless, through such presence be accorded the treatment provided for service suppliers under this Agreement. Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the territory where the service is supplied.

hire from, to within, or over the territory of a Party, including points to be served, routes to be operated, types of traffic to be carried, capacity to be provided, tariffs to be charged and their conditions, and criteria for designation of airlines, including such criteria as number, ownership, and control.

Article 3 National Treatment

1. In sectors inscribed in its schedules of specific commitments in Annex 3 (Schedules of Specific Services Commitments) or Annex 4 (Schedules of Movement of Natural Persons Commitments), and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.3

2. A Party may meet the requirement of Paragraph 1 by according to services and service suppliers of any other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.

3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like services or service suppliers of any other Party.

3

Specific commitments assumed under this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

Article 4 Market Access

1. With respect to market access through the modes of supply identified in Article 2(s) (Definitions), each Party shall accord services and service suppliers of any other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its schedules of specific commitments in Annex 3 (Schedules of Specific Services Commitments) or Annex 4 (Schedules of Movement of Natural Persons Commitments).4

2. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its schedules of specific commitments in Annex 3 (Schedules of Specific Services Commitments) or Annex 4 (Schedules of Movement of Natural Persons Commitments), are defined as:

(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;

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

4

If a Party undertakes a market-access commitment in relation to the supply of a services through the mode of supply referred to in Article 2(s)(i) (Definitions) and if the cross-border movement of capital is an essential part of the service itself, that Party is thereby committed to allow such movement of capital. If a Party undertakes a market-access commitment through the mode of supply referred to in Article 2(s)(iii) (Definitions), it is hereby committed to allow related transfers of capital into its territory.

(c) limitations on the total number of service operations or on the total quantity of services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test5;

(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;

(e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and

(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.

Article 5 Additional Commitments

The Parties may negotiate commitments with respect to measures affecting trade in services not subject to Article 3 (National Treatment) or Article 4 (Market Access), including those regarding qualifications, standards or licensing matters. Such commitments shall be set out in a Party’s schedules of specific commitments in Annex 3 (Schedules of Specific Services Commitments) and Annex 4 (Schedules of Movement of Natural Persons Commitments).

5

Subparagraph (c) does not cover measures of a Party which limit inputs for the supply of services.

Article 6

Review of Commitments

The Parties shall enter into successive rounds of negotiations, beginning not later than three years from the date of entry into force of this Agreement, and periodically thereafter as determined by the FTA Joint Committee, with a view to further improving specific commitments under this Chapter so as to progressively liberalise trade in services among the Parties.

Article 7

Consultations on Most-Favoured-Nation Treatment

1. Subject to Paragraph 2, if, after this Agreement enters into force, a Party enters into any agreement on trade in services with a non-Party in which it provides treatment to services or service suppliers of that non-Party more favourable than it accords to like services or service suppliers of other Parties under this Agreement, any other Party may request consultations to discuss the possibility of extending, under this Agreement, treatment no less favourable than that provided under the agreement with the non-Party. The requested Party shall enter into consultations with the requesting Party bearing in mind the overall balance of benefits. The requesting Party shall notify all the other Parties of their request for consultations under this Paragraph.

2. No Party shall be obliged to apply Paragraph 1 with respect to treatment provided under any bilateral or plurilateral agreement between an individual ASEAN Member State, or individual ASEAN Member States, and non-Parties or Australia or New Zealand.

3. The consulting Parties shall notify the results of the consultations to all other Parties as soon as practicable and by no later than the next meeting of the Services Committee established pursuant to Article 24 (Committee on Trade in Services) following the conclusion of consultations.

4. Notwithstanding Paragraph 1, a Party shall not be obliged to enter into consultations in relation to treatment provided under any international agreement that entered into force or was signed prior to the date of entry into force of this Agreement including, in respect of agreements on the liberalisation of trade in goods or services or investment, any measures taken as part of a wider process of economic integration or trade liberalisation between the parties to such agreements.

Article 8

Schedules of Specific Commitments

1. Each Party shall set out in a schedule the specific commitments it undertakes under Article 3 (National Treatment), Article 4 (Market Access) and Article 5 (Additional Commitments). With respect to sectors where such commitments are undertaken, each schedule shall specify:

(a) terms, limitations and conditions on market access;

(b) conditions and qualifications on national treatment;

(c) undertakings relating to additional commitments;

(d) where appropriate, the time-frame for implementation of such commitments; and

(e) the date of entry into force of such commitments.

2. Measures inconsistent with both Market Access and National Treatment shall be inscribed in the column relating to Market Access. In this case, the inscription will be

considered to provide a condition or qualification to National Treatment as well.

3. Schedules of specific services commitments shall be set out in Annex 3 (Schedules of Specific Services Commitments) of this Agreement. The specific commitments in respect of the supply of a service by a service supplier of one Party through presence of natural persons of a Party in the territory of another Party shall be set out in Annex 4 (Schedules of Movement of Natural Persons Commitments) of this Agreement.

Article 9 Modification of Schedules

1. A Party may modify or withdraw any commitment in its schedule of specific commitments in Annex 3 (Schedules of Specific Services Commitments) or Annex 4 (Schedules of Movement of Natural Persons Commitments), at any time after three years have elapsed from the date on which this Agreement enters into force, in accordance with the procedures set out in Article XXI of GATS, mutatis mutandis, and the Procedures for the Implementation of Article XXI of GATS set out in WTO document S/L/80 of 29 October 1999 (the GATS Article XXI Procedures), mutatis mutandis, as amended from time to time.

2. For the avoidance of doubt, references in Article XXI of GATS and the GATS Article XXI Procedures to the “Secretariat” and the “Council for Trade in Services” shall each be read as references to the FTA Joint Committee.

Article 10 Domestic Regulation

1. In sectors where specific commitments are undertaken, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.

2. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures, do not constitute unnecessary barriers to trade in services, the Parties shall jointly review the results of the WTO negotiations on disciplines on such measures, pursuant to Article VI.4 of GATS, and shall amend this Article, as appropriate, after consultations among the Parties, to bring the results of those negotiations into effect under this Agreement. The Parties note that the disciplines arising from such negotiations shall aim to ensure that qualification requirements and procedures, technical standards and licensing requirements and procedures are, inter alia:

(a) based on objective and transparent criteria, such as competence and the ability to supply the service;

(b) not more burdensome than necessary to ensure the quality of the service; and

(c) in the case of licensing procedures, not in themselves a restriction on the supply of the service.

3. In sectors in which a Party has undertaken specific commitments under Article 3 (National Treatment), Article 4 (Market Access) and Article 5 (Additional Commitments), pending the incorporation of the disciplines referred to in Paragraph 2, that Party shall not apply licensing and qualification requirements and technical standards that nullify or impair such specific commitments under this Agreement in a manner which:

(a) does not comply with the criteria outlined in Paragraph 2(a), (b) or (c); and

(b) could not reasonably have been expected of that Party at the time the specific commitments in those sectors were made.

4. In determining whether a Party is in conformity with its obligations under Paragraph 3(a), account shall be taken of international standards of relevant international organisations applied by that Party.6

5. Where authorisation is required for the supply of a service on which a specific commitment has been made, the competent authorities of that Party shall:

(a) in the case of an incomplete application, at the request of the applicant, identify all the additional information that is required to complete the application and provide the opportunity to remedy deficiencies within a reasonable timeframe;

(b) within a reasonable period of time after the submission of an application considered complete under domestic laws and regulations, inform the applicant of the decision concerning the application;

(c) at the request of the applicant, provide, without undue delay, information concerning the status of the application under consideration; and

(d) if an application is terminated or denied, to the maximum extent possible, inform the applicant in writing, and without delay, the reasons for such action. The applicant will have the possibility of resubmitting, at its discretion, a new application.

6. In sectors where specific commitments regarding professional services are undertaken, each Party shall

The term “relevant international organisations” refers to international bodies whose membership is open to the relevant bodies of all the Parties.

provide for adequate procedures to verify the competency of professionals of the other Parties.

7. Subject to its domestic laws and regulations, each Party shall permit service suppliers of the other Parties to use the business names under which they ordinarily trade in the territories of the other Parties and otherwise ensure that the use of business names is not unduly restricted.

Article 11 Transparency

1. The Parties recognise that transparent measures governing trade in services are important in facilitating the ability of service suppliers to gain access to, and operate in, each others’ markets. Each Party shall promote regulatory transparency in trade in services.

Publication

2. Each Party shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force:

(a) all relevant measures of general application affecting trade in services; and

(b) all international agreements pertaining to, or affecting, trade in services to which a Party is a signatory.

3. To the extent possible, each Party shall make the measures and international agreements of the kind referred to in Paragraph 2 available on the internet.

4. Where publication referred to in Paragraphs 2 and 3 is not practicable, such information7 shall be made otherwise publicly available.

5. To the extent provided for under its domestic legal framework, each Party shall endeavour to provide a reasonable opportunity for comments by interested persons of the Parties on measures referred to in Paragraph 2(a) before adoption.

Contact Points

6. Each Party shall designate a contact point to facilitate communications among the Parties on any matter covered by this Chapter. Upon the request of another Party, the contact point shall:

(a) identify the office or official responsible for the relevant matter; and

(b) assist as necessary in facilitating communications with the requesting Party with respect to that matter.

7. Each Party shall respond promptly to all requests by any other Party for specific information on:

(a) any measures referred to in Paragraph 2(a) or international agreements referred to in Paragraph 2(b); and

(b) any new, or any changes to existing, laws, regulations or administrative guidelines which significantly affect trade in services covered by the Party’s specific commitments under this

For greater certainty, the Parties agree that such information may be published in each Party’s chosen language.

Chapter, whether or not the other Party has been previously notified of the new or changed law, regulation or administrative guideline.

Article 12

Development and Application of Regulations

Administrative Processes

1. With a view to administering in a consistent, impartial and reasonable manner its laws, regulations, procedures and administrative rulings of general application affecting trade in services, each Party shall ensure that its administrative agencies, in applying such laws, regulations, procedures and administrative rulings to particular services or service suppliers of another Party in specific cases through administrative processes, including adjudication, rule-making, licensing, determination and approval processes:

(a) to the extent provided under its domestic legal framework, and where possible, provide service suppliers of the other Party that are directly affected by an administrative process with reasonable notice that the process is taking place;

(b) to the extent provided under its domestic legal framework, endeavour to afford such service suppliers with reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, when time, the nature of the process and the public interest permit; and

(c) follow procedures that are in accordance with its

laws.

Review and Appeal

2. Each Party shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose of the prompt review 8, and, where warranted, correction of final administrative actions resulting from the processes covered by Paragraph 1. Where such procedures or tribunals are not independent of the agency entrusted with the administrative action concerned, each Party shall ensure that the tribunals or procedures provide for an objective and impartial review.

3. Each Party shall ensure that, in any such tribunal or under any such procedures, the parties to any proceedings are provided with the right to:

(a) a reasonable opportunity to support or defend their respective positions; and

(b) a decision in accorda

 

ANNEX 1B

GENERAL AGREEMENT ON TRADE IN SERVICES

 

 

PART I   SCOPE AND DEFINITION

            Article I  Scope and Definition

PART II   GENERAL OBLIGATIONS AND DISCIPLINES

Article II             Most-Favoured-Nation Treatment

Article III            Transparency

Article III bis       Disclosure of Confidential Information

Article IV            Increasing Participation of Developing Countries

Article V             Economic Integration

Article V bis        Labour Markets Integration Agreements

Article VI            Domestic Regulation

Article VII           Recognition

Article VIII         Monopolies and Exclusive Service Suppliers

Article IX            Business Practices

Article X             Emergency Safeguard Measures

Article XI            Payments and Transfers

Article XII           Restrictions to Safeguard the Balance of Payments

Article XIII         Government Procurement

Article XIV         General Exceptions

Article XIV bis    Security Exceptions

Article XV           Subsidies

PART III   SPECIFIC COMMITMENTS

Article XVI       Market Access

Article XVII        National Treatment

Article XVIII       Additional Commitments

PART IV          PROGRESSIVE LIBERALIZATION

Article XIX         Negotiation of Specific Commitments

Article XX         Schedules of Specific Commitments

Article XXI         Modification of Schedules

PART V           INSTITUTIONAL PROVISIONS

Article XXII      Consultation

Article XXIII     Dispute Settlement and Enforcement

Article XXIV       Council for Trade in Services

Article XXV      Technical Cooperation

Article XXVI       Relationship with Other International Organizations

PART VI          FINAL PROVISIONS

Article XXVII      Denial of Benefits

Article XXVIII    Definitions

Article XXIX       Annexes

 

Annex on Article II Exemptions

Annex on Movement of Natural Persons Supplying Services under the Agreement

Annex on Air Transport Services

Annex on Financial Services

Second Annex on Financial Services

Annex on Negotiations on Maritime Transport Services

Annex on Telecommunications

Annex on Negotiations on Basic Telecommunications

 

GENERAL AGREEMENT ON TRADE IN SERVICES

 

 

Members,

          Recognizing the growing importance of trade in services for the growth and development of the world economy;

          Wishing to establish a multilateral framework of principles and rules for trade in services with a view to the expansion of such trade under conditions of transparency and progressive liberalization and as a means of promoting the economic growth of all trading partners and the development of developing countries;

          Desiring the early achievement of progressively higher levels of liberalization of trade in services through successive rounds of multilateral negotiations aimed at promoting the interests of all participants on a mutually advantageous basis and at securing an overall balance of rights and obligations, while giving due respect to national policy objectives;

          Recognizing the right of Members to regulate, and to introduce new regulations, on the supply of services within their territories in order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulations in different countries, the particular need of developing countries to exercise this right;

          Desiring to facilitate the increasing participation of developing countries in trade in services and the expansion of their service exports including, inter alia, through the strengthening of their domestic services capacity and its efficiency and competitiveness;

          Taking particular account of the serious difficulty of the least-developed countries in view of their special economic situation and their development, trade and financial needs;

 

                        Hereby agree as follows:

 


PART I

SCOPE AND DEFINITION

Article I

Scope and Definition

 

1.This Agreement applies to measures by Members affecting trade in services.

2.For the purposes of this Agreement, trade in services is defined as the supply of a service:

(a)        from the territory of one Member into the territory of any other Member;

(b)        in the territory of one Member to the service consumer of any other Member;

(c)        by a service supplier of one Member, through commercial presence in the territory of any other Member;

(d)        by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.

 

3.For the purposes of this Agreement:

(a)          "measures by Members" means measures taken by:

(i)           central, regional or local governments and authorities;  and

(ii)          non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

In fulfilling its obligations and commitments under the Agreement, each Member shall take such reasonable measures as may be available to it to ensure their observance by regional and local governments and authorities and non-governmental bodies within its territory;

(b)        "services" includes any service in any sector except services supplied in the exercise of governmental authority;

(c)        "a service supplied in the exercise of governmental authority" means any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.

 


PART II

GENERAL OBLIGATIONS AND DISCIPLINES

Article II

Most-Favoured-Nation Treatment

 

1.With respect to any measure covered by this Agreement, each Member shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country.

2.A Member may maintain a measure inconsistent with paragraph 1 provided that such a measure is listed in, and meets the conditions of, the Annex on Article II Exemptions.

3.The provisions of this Agreement shall not be so construed as to prevent any Member from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous frontier zones of services that are both locally produced and consumed.

 


Article III

Transparency

 

1.Each Member shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application which pertain to or affect the operation of this Agreement.  International agreements pertaining to or affecting trade in services to which a Member is a signatory shall also be published.

2.Where publication as referred to in paragraph 1 is not practicable, such information shall be made otherwise publicly available.

3.Each Member shall promptly and at least annually inform the Council for Trade in Services of the introduction of any new, or any changes to existing, laws, regulations or administrative guidelines which significantly affect trade in services covered by its specific commitments under this Agreement.

4.Each Member shall respond promptly to all requests by any other Member for specific information on any of its measures of general application or international agreements within the meaning of paragraph 1.  Each Member shall also establish one or more enquiry points to provide specific information to other Members, upon request, on all such matters as well as those subject to the notification requirement in paragraph 3.  Such enquiry points shall

be established within two years from the date of entry into force of the Agreement Establishing the WTO (referred to in this Agreement as the "WTO Agreement").  Appropriate flexibility with respect to the time-limit within which such enquiry points are to be established may be agreed upon for individual developing country Members.  Enquiry points need not be depositories of laws and regulations.

5.Any Member may notify to the Council for Trade in Services any measure, taken by any other  Member, which it considers affects the operation of this Agreement.

 


Article III bis

Disclosure of Confidential Information

                        Nothing in this Agreement shall require any Member to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.

Article IV

Increasing Participation of Developing Countries

1.The increasing participation of developing country Members in world trade shall be facilitated through negotiated specific commitments, by different Members pursuant to Parts III and IV of this Agreement, relating to:

(a)        the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis;

(b)        the improvement of their access to distribution channels and information networks;  and

(c)        the liberalization of market access in sectors and modes of supply of export interest to them.

2.Developed country Members, and to the extent possible other Members, shall establish contact points within two years from the date of entry into force of the WTO Agreement to facilitate the access of developing country Members' service suppliers to information, related to their respective markets, concerning:

(a)        commercial and technical aspects of the supply of services;

(b)        registration, recognition and obtaining of professional qualifications;  and

(c)        the availability of services technology.

3.Special priority shall be given to the least-developed country Members in the implementation of paragraphs 1 and 2.  Particular account shall

be taken of the serious difficulty of the least-developed countries in accepting negotiated specific commitments in view of their special economic situation and their development, trade and financial needs.

 

 

Article V

Economic Integration

 

1.This Agreement shall not prevent any of its Members from being a party to or entering into an agreement liberalizing trade in services between or among the parties to such an agreement, provided that such an agreement:

(a)        has substantial sectoral coverage1, and

(b)        provides for the absence or elimination of substantially all discrimination, in the sense of Article XVII, between or among the parties, in the sectors covered under subparagraph (a), through:

(i)           elimination of existing discriminatory measures, and/or

(ii)          prohibition of new or more discriminatory measures,

either at the entry into force of that agreement or on the basis of a reasonable time-frame, except for measures permitted under Articles XI, XII, XIV and XIV bis.

2. evaluating whether the conditions under paragraph 1(b) are met, consideration may be given to the relationship of the agreement to a wider process of economic integration or trade liberalization among the countries concerned.

3.(a)Where developing countries are parties to an agreement of the type referred to in paragraph 1, flexibility shall be provided for regarding the conditions set out in paragraph 1, particularly with reference to subparagraph (b) thereof, in accordance with the level of development of the countries concerned, both overall and in individual sectors and subsectors.

 (b) Notwithstanding paragraph 6, in the case of an agreement of the type referred to in paragraph 1 involving only developing countries, more favourable treatment may be granted to juridical persons owned or controlled by natural persons of the parties to such an agreement.

-----------------------------------------

1This condition is understood in terms of number of sectors, volume of trade affected and modes of supply. In order to meet this condition, agreements should not provide for the a priori exclusion of any mode of supply.

4.Any agreement referred to in paragraph 1 shall be designed to facilitate trade between the parties to the agreement and shall not in respect of any Member outside the agreement raise the overall level of barriers to trade in services within the respective sectors or subsectors compared to the level applicable prior to such an agreement.

5.If, in the conclusion, enlargement or any significant modification of any agreement under paragraph 1, a Member intends to withdraw or modify a specific commitment inconsistently with the terms and conditions set out in its Schedule, it shall provide at least 90 days advance notice of such modification or withdrawal and the procedure set forth in paragraphs 2, 3 and 4 of Article XXI shall apply.

6.A service supplier of any other Member that is a juridical person constituted under the laws of a party to an agreement referred to in paragraph 1 shall be entitled to treatment granted under such agreement, provided that it engages in substantive business operations in the territory of the parties to such agreement.

7.(a) Members which are parties to any agreement referred to in paragraph 1 shall promptly notify any such agreement and any enlargement or any significant modification of that agreement to the Council for Trade in Services. They shall also make available to the Council such relevant information as may be requested by it.  The Council may establish a working  party to examine such an agreement or enlargement or modification of that agreement and to report to the Council  on its consistency with this Article.

(b) Members which are parties to any agreement referred to in paragraph 1 which is implemented on the basis of a time-frame shall report periodically to the Council for Trade in Services on its implementation. The Council may establish a working party to examine such reports if it deems such a working party necessary.

(c) Based on the reports of the working parties referred to in subparagraphs (a) and (b), the Council may make recommendations to the parties as it deems appropriate.

8.A Member which is a party to any agreement referred to in paragraph 1 may not seek compensation for trade benefits that may accrue to any other Member from such agreement. 

 

 

 

Article V bis

Labour Markets Integration Agreements

 

       This Agreement shall not prevent any of its Members from being a party to an agreement establishing full integration2 of the labour markets between or among the parties to such an agreement, provided that such an agreemen

(a)          exempts citizens of parties to the agreement from requirements concerning residency and work permits;

(b)          is notified to the Council for Trade in Services.

 

Article VI

Domestic Regulation

1.In sectors where specific commitments are undertaken, each Member shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.

2.(a)          Each Member shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services.  Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the  Member shall ensure that the procedures in fact provide for an objective and impartial review.

 (b)          The provisions of subparagraph (a) shall not be construed to require a Member to institute such tribunals or procedures where this would be inconsistent with its constitutional structure or the nature of its legal system.

3. Where authorization is required for the supply of a service on which a specific commitment has been made, the competent authorities of a Member shall, within a reasonable period of time after the submission of an application considered complete under domestic laws and regulations, inform the applicant of the decision concerning the application.  At the request of the applicant, the competent authorities of the Member shall provide, without undue delay, information concerning the status of the application.

--------------------------------------

2Typically, such integration provides citizens of the parties concerned with a right of  free entry to the employment markets of the parties and includes measures concerning conditions of pay, other conditions of employment and social benefits.

4. With a view to ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the Council for Trade in Services shall, through appropriate bodies it may establish, develop any necessary disciplines.  Such disciplines shall aim to ensure that such requirements are, inter alia:

(a)        based on objective and transparent criteria, such as competence and the ability to  supply the service;

(b)        not more burdensome than necessary to ensure the quality of the service;

(c)        in the case of licensing procedures, not in themselves a restriction on the supply of the service.

5.(a)          In sectors in which a Member has undertaken specific commitments, pending the entry into force of disciplines developed in these sectors pursuant to paragraph 4, the  Member shall not apply licensing and qualification requirements and technical standards that nullify or impair such specific commitments in a manner which:

(i)           does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c);  and

(ii)          could not reasonably have been expected of that Member at the time the specific commitments in those sectors were made.

(b)          In determining whether a Member is in conformity with the obligation under paragraph 5(a), account shall be taken of international standards of relevant international organizations3 applied by that Member.

6.In sectors where specific commitments regarding professional services are undertaken, each Member shall provide for adequate procedures to verify the competence of professionals of any other Member.

 


Article VII

Recognition

1.For the purposes of the fulfilment, in whole or in part, of its standards or criteria for the authorization, licensing or certification of services suppliers, and subject to the requirements of paragraph 3, a Member may recognize the education or experience obtained, requirements met, or licenses or certifications granted in a particular country.  Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the country concerned or may be accorded autonomously.

--------------------------------------

3The term "relevant international organizations" refers to international bodies whose membership is open to the relevant bodies of at least all Members of the WTO.

 

2.A Member that is a party to an agreement or arrangement of the type referred to in paragraph 1, whether existing or future, shall afford adequate opportunity for other interested Members to negotiate their accession to such an agreement or arrangement or to negotiate comparable ones with it.  Where a Member accords recognition autonomously, it shall afford adequate opportunity for any other Member to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Member's territory should be recognized.

3.A Member shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorization, licensing or certification of services suppliers, or a disguised restriction on trade in services.

4.Each Member shall:

(a)        within 12 months from the date on which the WTO Agreement takes effect for it, inform the Council for Trade in Services of its existing recognition measures and state whether such measures are based on agreements or arrangements of the type referred to in paragraph 1; 

(b)        promptly inform the Council for Trade in Services as far in advance as possible of the opening of negotiations on an agreement or arrangement of the type referred to in paragraph 1 in order to provide adequate opportunity to any other Member to indicate their interest in participating in the negotiations before they enter a substantive phase;

(c)        promptly inform the Council for Trade in Services when it adopts new recognition measures or significantly modifies existing ones and state whether the measures are based on an agreement or arrangement of the type referred to in paragraph 1.

5.Wherever appropriate, recognition should be based on multilaterally agreed criteria.  In appropriate cases, Members shall work in cooperation with relevant intergovernmental and non-governmental organizations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions.

 

 


Article VIII

Monopolies and Exclusive Service Suppliers

 

1.Each Member shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Member's obligations under Article II and specific commitments.

2.Where a Member's monopoly supplier competes, either directly or through an affiliated company, in the supply of a service outside the scope of its monopoly rights and which is subject to that Member's specific commitments, the Member shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such commitments.

3.The Council for Trade in Services may, at the request of a Member which has a reason to believe that a monopoly supplier of a service of any other Member is acting in a manner inconsistent with paragraph 1 or 2, request the Member establishing, maintaining or authorizing such supplier to provide specific information concerning the relevant operations.

4.If, after the date of entry into force of the WTO Agreement, a Member grants monopoly rights regarding the supply of a service covered by its specific commitments, that Member shall notify the Council for Trade in Services no later than three months before the intended implementation of the grant of monopoly rights and the provisions of paragraphs 2, 3 and 4 of Article XXI shall apply.

5.The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Member, formally or in effect, (a) authorizes or establishes a small number of service suppliers and (b) substantially prevents competition among those suppliers in its territory.

 

 

Article IX

Business Practices

 

1.Members recognize that certain business practices of service suppliers, other than those falling under Article VIII, may restrain competition and thereby restrict trade in services.

2.Each Member shall, at the request of any other Member, enter into consultations with a view to eliminating practices referred to in paragraph 1.  The Member addressed shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question.  The Member addressed shall also provide other information available to the requesting Member, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting Member.

Article X

Emergency Safeguard Measures

 

1.There shall be multilateral negotiations on the question of emergency safeguard measures based on the principle of non-discrimination.  The results of such negotiations shall enter into effect on a date not later than three years from the date of entry into force of the WTO Agreement.

2.In the period before the entry into effect of the results of the negotiations referred to in paragraph 1, any Member may, notwithstanding the provisions of paragraph 1 of Article XXI, notify the Council on Trade in Services of its intention to modify or withdraw a specific commitment after a period of one year from the date on which the commitment enters into force;  provided that the Member shows cause to the Council that the modification or withdrawal cannot await the lapse of the three-year period provided for in paragraph 1 of Article XXI.

3.The provisions of paragraph 2 shall cease to apply three years after the date of entry into force of the WTO Agreement.

 

Article XI

Payments and Transfers

1.Except under the circumstances envisaged in Article XII, a Member shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.

2.Nothing in this Agreement shall affect the rights and obligations of the members of the International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Member shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article XII or at the request of the Fund.

 

Article XII

Restrictions to Safeguard the Balance of Payments

1.In the event of serious balance-of-payments and external financial difficulties or threat thereof, a Member may adopt or maintain restrictions on trade in services on which it has undertaken specific commitments, including on payments or transfers for transactions related to such commitments.  It is recognized that particular pressures on the balance of payments of a Member in the process of economic development or economic transition may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserves adequate for the implementation of its programme of economic development or economic transition.

2.The restrictions referred to in paragraph 1:

(a)        shall not discriminate among Members;

(b)        shall be consistent with the Articles of Agreement of the International Monetary Fund;

(c)        shall avoid unnecessary damage to the commercial, economic and financial interests of any other Member;

(d)        shall not exceed those necessary to deal with the circumstances described in paragraph 1;

(e)        shall be temporary and be phased out progressively as the situation specified in paragraph 1 improves.

3.In determining the incidence of such restrictions, Members may give priority to the supply of services which are more essential to their economic or development programmes.  However, such restrictions shall not be adopted or maintained for the purpose of protecting a particular service sector.

4.Any restrictions adopted or maintained under paragraph 1, or any changes therein, shall be promptly notified to the General Council.

5.(a)          Members applying the provisions of this Article shall consult promptly with the  Committee on Balance-of-Payments Restrictions on restrictions adopted under this Article.

(b)          The Ministerial Conference shall establish procedures4 for periodic consultations with the objective of enabling such recommendations to be made to the Member concerned as it may deem appropriate.

(c)          Such consultations shall assess the balance-of-payment situation of the Member concerned and the restrictions adopted or maintained under this Article, taking into account, inter alia, such factors as:

(i)           the nature and extent of the balance-of-payments and the external financial difficulties;

(ii)          the external economic and trading environment of the consulting Member;

(iii)         alternative corrective measures which may be available.

(d)          The consultations shall address the compliance of any restrictions with paragraph 2, in particular the progressive phaseout of restrictions in accordance with paragraph 2(e).

(e)          In such consultations, all findings of statistical and other facts presented by the International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments, shall be accepted and conclusions shall be based on the assessment by the Fund of the balance-of-payments and the external financial situation of the consulting Member.

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4It is understood that the procedures under paragraph 5 shall be the same as the GATT 1994 procedures.

6.If a Member which is not a member of the International Monetary Fund wishes to apply the provisions of this Article, the Ministerial Conference shall establish a review procedure and any other procedures necessary.


Article XIII

Government Procurement

1.Articles II, XVI and XVII shall not apply to laws, regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale.

2.There shall be multilateral negotiations on government procurement in services under this Agreement within two years from the date of entry into force of the WTO Agreement.

Article XIV

General Exceptions

           Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member of measures:

(a)        necessary to protect public morals or to maintain public order;5

(b)        necessary to protect human, animal or plant life or health;

(c)        necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:

(i)           the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts;

(ii)          the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;

(iii)         safety;

-----------------------------------------

5The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.

(d)        inconsistent with Article XVII, provided that the difference in treatment is aimed at ensuring the equitable or effective6 imposition or collection of direct taxes in respect of services or service suppliers of other Members;

(e)        inconsistent with Article II, provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Member is bound.

 

 

Article XIV bis

Security Exceptions

1.Nothing in this Agreement shall be construed:

(a)        to require any Member to furnish any information, the disclosure of which it considers contrary to its essential security interests; or

--------------------

6Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include measures taken by a Member under  its taxation system which:

(b)        to prevent any Member from taking any action which it considers necessary for the protection of its essential security interests:

(i)           relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;

(ii)          relating to fissionable and fusionable materials or the materials from which they are derived;

(iii)        taken in time of war or other emergency in international relations;  or

(c)        to prevent any Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

2.The Council for Trade in Services shall be informed to the fullest extent possible of measures taken under paragraphs 1(b) and (c) and of their termination.

 

 

Article XV

Subsidies

1.Members recognize that, in certain circumstances, subsidies may have distortive effects on trade in services.  Members shall enter into negotiations with a view to developing the necessary multilateral disciplines to avoid such trade-distortive effects.7  The negotiations shall also address the appropriateness of countervailing procedures.  Such negotiations shall recognize the role of subsidies in relation to the development programmes of developing countries and take into account the needs of Members, particularly developing country Members, for flexibility in this area.  For the purpose of such negotiations, Members shall exchange information concerning all subsidies related to trade in services that they provide to their domestic service suppliers.

2.Any Member which considers that it is adversely affected by a subsidy of another Member may request consultations with that Member on such matters.  Such requests shall be accorded sympathetic consideration.

 

PART III

SPECIFIC COMMITMENTS

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7A future work programme shall determine how, and in what time-frame, negotiations on such multilateral disciplines will be conducted.

 

Article XVI

Market Access

 

1.With respect to market access through the modes of supply identified in Article I, each Member shall accord services and service suppliers of any other Member treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule.8

2.In sectors where market-access commitments are undertaken, the measures which a Member shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule, are defined as:

(a)        limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;

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

(c)        limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;9

(d)        limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;

(e)        measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service;  and

(f)        limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.

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8If a Member undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is an essential part of the service itself, that Member is thereby committed to allow such movement of capital.  If a Member undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of capital into its territory.

9Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services.

 


Article XVII

National Treatment

 

1.In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers.10

2.A Member may meet the requirement of paragraph 1 by according to services and service suppliers of any other Member, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.

3.Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Member compared to like services or service suppliers of any other  Member.

 

Article XVIII

Additional Commitments

        Members may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles XVI or XVII, including those regarding qualifications, standards or licensing matters.  Such commitments shall be inscribed in a Member's Schedule.

 

PART IV

PROGRESSIVE LIBERALIZATION

 

Article XIX

Negotiation of  Specific Commitments

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10Specific commitments assumed under this Article shall not be construed to require any Member to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

1.In pursuance of the objectives of this Agreement, Members shall enter into successive rounds of negotiations, beginning not later than five years from the date of entry into force of the WTO Agreement and periodically thereafter, with a view to achieving a progressively higher level of liberalization.  Such negotiations shall be directed to the reduction or elimination of the adverse effects on trade in services of measures as a means of providing effective market access.  This process shall take place with a view to promoting the interests of all participants on a mutually advantageous basis and to securing an overall balance of rights and obligations.

2.The process of liberalization shall take place with due respect for national policy objectives and the level of development of individual Members, both overall and in individual sectors.  There shall be appropriate flexibility for individual developing country Members for opening fewer sectors, liberalizing fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching to such access conditions aimed at achieving the objectives referred to in Article IV.

3.For each round, negotiating guidelines and procedures shall be established.  For the purposes of establishing such guidelines, the Council for Trade in Services shall carry out an assessment of trade in services in overall terms and on a sectoral basis with reference to the objectives of this Agreement, including those set out in paragraph 1 of Article IV.  Negotiating guidelines shall establish modalities for the treatment of liberalization undertaken autonomously by Members since previous negotiations, as well as for the special treatment for least-developed country Members under the provisions of paragraph 3 of Article IV.

4.The process of progressive liberalization shall be advanced in each such round through bilateral, plurilateral or multilateral negotiations directed towards increasing the general level of specific commitments undertaken by Members under this Agreement.

 

Article XX

Schedules of Specific Commitments

 

1.Each Member shall set out in a schedule the specific commitments it undertakes under Part III of this Agreement.  With respect to sectors where such commitments are undertaken, each Schedule shall specify:

(a)          terms, limitations and conditions on market access;

(b)          conditions and qualifications on national treatment;

(c)          undertakings relating to additional commitments;

(d)           where appropriate the time-frame for implementation of such commitments;  and

(e)          the date of entry into force of such commitments.

 

2.Measures inconsistent with both Articles XVI and XVII shall be inscribed in the column relating to Article XVI.  In this case the inscription will be considered to provide a condition or qualification to Article XVII as well.

3.Schedules of specific commitments shall be annexed to this Agreement and shall form an integral part thereof.

 


Article XXI

Modification of Schedules

1.(a)          A Member (referred to in this Article as the "modifying Member") may modify or withdraw any commitment in its Schedule, at any time after three years have elapsed from the date on which that commitment entered into force, in accordance with the provisions of this Article.

 (b)          A modifying Member shall notify its intent to modify or withdraw a commitment pursuant to this Article to the Council for Trade in Services no later than three months before the intended date of implementation of the modification or withdrawal.

2.(a)          At the request of any Member the benefits of which under this Agreement may be affected (referred to in this Article as an "affected Member") by a proposed modification or withdrawal notified under subparagraph 1(b), the modifying Member shall enter into negotiations with a view to reaching agreement on any necessary compensatory adjustment.  In such negotiations and agreement, the Members concerned shall endeavour to maintain a general level of mutually advantageous commitments not less favourable to trade than that provided for in Schedules of specific commitments prior to such negotiations.

(b)          Compensatory adjustments shall be made on a most-favoured-nation basis.

3.(a)          If agreement is not reached between the modifying Member and any affected Member before the end of the period provided for negotiations, such affected Member may refer the matter to arbitration.  Any affected Member that wishes to enforce a right that it may have to compensation must participate in the arbitration.

  (b)          If no affected Member has requested arbitration, the modifying Member shall be free to implement the proposed modification or withdrawal.

4.(a)          The modifying Member may not modify or withdraw its commitment until it has made compensatory adjustments in conformity with the findings of the arbitration.

(b)          If the modifying Member implements its proposed modification or withdrawal and does not comply with the findings of the arbitration, any affected Member that participated in the arbitration may modify or withdraw substantially equivalent benefits in conformity with those findings.  Notwithstanding Article II, such a modification or withdrawal may be implemented solely with respect to the modifying Member.

5.The Council for Trade in Services shall establish procedures for rectification or modification of Schedules.  Any Member which has modified or withdrawn scheduled commitments under this Article shall modify its Schedule according to such procedures.

PART V

INSTITUTIONAL PROVISIONS

Article XXII

Consultation

 

1.Each Member shall accord sympathetic consideration to, and shall afford adequate opportunity for, consultation regarding such representations as may be made by any other Member with respect to any matter affecting the operation of this Agreement.  The Dispute Settlement Understanding (DSU) shall apply to such consultations.

2.The Council for Trade in Services or the Dispute Settlement Body (DSB) may, at the request of a Member, consult with any Member or Members in respect of any matter for which it has not been possible to find a satisfactory solution through consultation under paragraph 1.

3.A Member may not invoke Article XVII, either under this Article or Article XXIII, with respect to a measure of another Member that falls within the scope of an international agreement between them relating to the avoidance of double taxation.  In case of disagreement between Members as to whether a measure falls within the scope of such an agreement between them, it shall be open to either Member to bring this matter before the Council for Trade in Services.11  The Council shall refer the matter to arbitration.  The decision of the arbitrator shall be final and binding on the Members

 

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11With respect to agreements on the avoidance of double taxation which exist on the date of entry into force of the WTO Agreement, such a matter may be brought before the Council for Trade in Services only with the consent of both parties to such an agreement.

 

Article XXIII

Dispute Settlement and Enforcement

 

1.If any Member should consider that any other Member fails to carry out its obligations or specific commitments under this Agreement, it may with a view to reaching a mutually satisfactory resolution of the matter have recourse to the DSU.

2.If the DSB considers that the circumstances are serious enough to justify such action, it may authorize a Member or Members to suspend the application to any other Member or Members of obligations and specific commitments in accordance with Article 22 of the DSU.

3.If any Member considers that any benefit it could reasonably have expected to accrue to it under a specific commitment of another Member under Part III of this Agreement is being nullified or impaired as a result of the application of any measure which does not conflict with the provisions of this Agreement, it may have recourse to the DSU.  If the measure is determined by the DSB to have nullified or impaired such a benefit, the Member affected shall be entitled to a mutually satisfactory adjustment on the basis of paragraph 2 of Article XXI, which may include the modification or withdrawal of the measure.  In the event an agreement cannot be reached between the Members concerned, Article  22 of the DSU shall apply.

 

Article XXIV

Council for Trade in Services

 

1.The Council for Trade in Services shall carry out such functions as may be assigned to it to facilitate the operation of this Agreement and further its objectives.  The Council may establish such subsidiary bodies as it considers appropriate for the effective discharge of its functions.

2.The Council and, unless the Council decides otherwise, its subsidiary bodies shall be open to participation by representatives of all Members.

3.The Chairman of the Council shall be elected by the Members.

 

Article XXV

Technical Cooperation

1.Service suppliers of Members which are in need of such assistance shall have access to the services of contact points referred to in paragraph 2 of Article IV.

2.Technical assistance to developing countries shall be provided at the multilateral level by the Secretariat and shall be decided upon by the Council for Trade in Services.

 

Article XXVI

Relationship with Other International Organizations

 

     The General Council shall make appropriate arrangements for consultation and cooperation with the United Nations and its specialized agencies as well as with other intergovernmental organizations concerned with services.

PART VI

FINAL PROVISIONS

 

Article XXVII

Denial of Benefits

 

A Member may deny the benefits of this Agreement:

(a)        to the supply of a service, if it establishes that the service is supplied from or in the territory of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement; 

(b)        in the case of the supply of a maritime transport service, if it establishes that the service is supplied:

(i)           by a vessel registered under the laws of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement, and

(ii)          by a person which operates and/or uses the vessel in whole or in part but which is of a non-Member or of a Member to which the denying Member does not apply the WTO Agreement;

(c)        to a service supplier that is a juridical person, if it establishes that it is not a service supplier of another Member, or that it is a service supplier of a Member to which the denying Member does not apply the WTO Agreement.

 

Article XXVIII

Definitions

 

For the purpose of this Agreement:

(a)        "measure" means any measure by a Member, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(b)        "supply of a service" includes the production, distribution, marketing, sale and delivery of a service;

(c)        "measures by Members affecting trade in services" include measures in respect of

(i)           the purchase, payment or use of a service;

(ii)          the access to and use of, in connection with the supply of a service, services which are required by those Members to be offered to the public generally;

(iii)         the presence, including commercial presence, of persons of a Member for the supply of a service in the territory of another Member;

(d)        "commercial presence" means any type of business or professional establishment, including through

(i)           the constitution, acquisition or maintenance of a juridical person, or

(ii)          the creation or maintenance of a branch or a representative office,within the territory of a Member for the purpose of supplying a service;

(e)        "sector" of a service means,

(i)           with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Member's Schedule,

(ii)          otherwise, the whole of that service sector, including all of its subsectors;

(f)        "service of another Member" means a service which is supplied,

(i)           from or in the territory of that other Member, or in the case of maritime transport, by a vessel registered under the laws of that other Member, or by a person of that other Member which supplies the service through the operation of a vessel and/or its use in whole or in part; or

(ii)          in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Member;

(g)      "service supplier" means any person that supplies a service;12

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12Where the service is not supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall, nonetheless, through such presence be accorded the treatment provided for service suppliers under the Agreement.  Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the territory where the service is supplied.

(h)        "monopoly supplier of a service" means any person, public or private, which in the relevant market of the territory of a Member is authorized or established formally or in effect by that Member as the sole supplier of that service;

(i)         "service consumer" means any person that receives or uses a service;

(j)         "person" means either a natural person or a juridical person;

(k)        "natural person of another Member" means a natural person who resides in the territory of that other Member or any other Member, and who under the law of that other Member:

(i)           is a national of  that other Member; or

(ii)          has the right of permanent residence in that other Member, in the case of a Member which:

1.          does not have nationals; or

2.          accords substantially the same treatment to its permanent residents as it does to its nationals in respect of measures affecting trade in services, as notified in its acceptance of or accession to the WTO Agreement, provided that no Member is obligated to accord to such permanent residents treatment more favourable than would be accorded by that other Member to such permanent residents.  Such notification shall include the assurance to assume, with respect to those permanent residents, in accordance with its laws and regulations, the same responsibilities that other Member bears with respect to its nationals;

(l)         "juridical person" means any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(m)       "juridical person of another Member" means a juridical person which is either:

(i)           constituted or otherwise organized under the law of that other Member, and is engaged in substantive business operations in the territory of that Member or any other Member; or

(ii)          in the case of the supply of a service through commercial presence, owned or controlled by:

1. natural persons of that Member; or

2. juridical persons of that other Member identified under subparagraph (i);

(n)        a juridical person is:

(i)           "owned" by persons of a Member if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Member;

(ii)          "controlled" by persons of a Member if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;

(iii)         "affiliated" with another person when it controls, or is controlled by, that other person;  or when it and the other person are both controlled by the same person;

(o)        "direct taxes" comprise all taxes on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.

 

 

Article XXIX

Annexes

                        The Annexes to this Agreement are an integral part of this Agreement.

ANNEX ON ARTICLE II EXEMPTIONS

Scope

1.This Annex specifies the conditions under which a Member, at the entry into force of this Agreement, is exempted from its obligations under paragraph 1 of Article II.

2.Any new exemptions applied for after the date of entry into force of the WTO Agreement shall be dealt with under paragraph 3 of Article IX of that Agreement. Review

3.The Council for Trade in Services shall review all exemptions granted for a period of more than 5 years.  The first such review shall take place no more than 5 years after the entry into force of the WTO Agreement.

4.The Council for Trade in Services in a review shall:

(a)        examine whether the conditions which created the need for the exemption still prevail;  and

(b)        determine the date of any further review.

Termination

5.The exemption of a Member from its obligations under paragraph 1 of Article II of the Agreement with respect to a particular measure terminates on the date provided for in the exemption.

6. In principle, such exemptions should not exceed a period of 10 years.  In any event, they shall be subject to negotiation in subsequent trade liberalizing rounds.

7. A Member shall notify the Council for Trade in Services at the termination of the exemption period that the inconsistent measure has been brought into conformity with paragraph 1 of Article II of the Agreement.

Lists of Article II Exemptions

[The agreed lists of exemptions under paragraph 2 of Article II will be annexed here in the treaty copy of the WTO Agreement.]

 

ANNEX ON MOVEMENT OF NATURAL PERSONS

SUPPLYING SERVICES UNDER THE AGREEMENT

 

1.This Annex applies to measures affecting natural persons who are service suppliers of a Member, and natural persons of a Member who are employed by a service supplier of a Member, in respect of the supply of a service.

2.The Agreement shall not apply to measures affecting natural persons seeking access to the employment market of a Member, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.

3.In accordance with Parts III and IV of the Agreement, Members may negotiate specific commitments applying to the  movement of all categories of natural persons supplying services under the Agreement.  Natural persons covered by a specific commitment shall be allowed to supply the service in accordance with the terms of that commitment.

4.The Agreement shall not prevent a Member from applying measures to regulate the entry of natural persons into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across, its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Member under the terms of a specific commitment.13

 

ANNEX ON AIR TRANSPORT SERVICE

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13The sole fact of requiring a visa for natural persons of certain Members and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.

1.This Annex applies to measures affecting trade in air transport services, whether scheduled or non-scheduled, and ancillary services.  It is confirmed that any specific commitment or obligation assumed under this Agreement shall not reduce or affect a Member's obligations under bilateral or multilateral agreements that are in effect on the date of entry into force of the WTO Agreement.

2.The Agreement, including its dispute settlement procedures, shall not apply to measures affecting:

(a)        traffic rights, however granted;  or

(b)        services directly related to the exercise of traffic rights,

                        except as provided in paragraph 3 of this Annex.

3.The Agreement shall apply to measures affecting:

(a)        aircraft repair and maintenance services;

(b)        the selling and marketing of air transport services;

(c)        computer reservation system (CRS) services.

4.The dispute settlement procedures of the Agreement may be invoked only where obligations or specific commitments have been assumed by the concerned Members and where dispute settlement procedures in bilateral and other multilateral agreements or arrangements have been exhausted.

5.The Council for Trade in Services shall review periodically, and at least every five years, developments in the air transport sector and the operation of this Annex with a view to considering the possible further application of the Agreement in this sector.

6.Definitions:

 (a)          "Aircraft repair and maintenance services" mean such activities when undertaken on an aircraft or a part thereof while it is withdrawn from service and do not include so-called line maintenance.

(b)          "Selling and marketing of air transport services" mean opportunities for the air carrier concerned to sell and market freely its air transport services including all aspects of marketing such as market research, advertising and distribution.  These activities do not include the pricing of air transport services nor the applicable conditions.

(c)          "Computer reservation system (CRS) services" mean services provided by computerised systems that contain information about air carriers' schedules, availability, fares and fare rules, through which reservations can be made or tickets may be issued.

 (d)          "Traffic rights" mean the right for scheduled and non-scheduled services to operate and/or to carry passengers, cargo and mail for remuneration or hire from, to, within, or over the territory of a Member, including points to be served, routes to be operated, types of traffic to be carried, capacity to be provided, tariffs to be charged and their conditions, and criteria for designation of airlines, including such criteria as number, ownership, and control.

 

ANNEX ON FINANCIAL SERVICES

 

1.Scope and Definition

(a)          This Annex applies to measures affecting the supply of financial services.  Reference to the supply of a financial service in this Annex shall mean the supply of a service as defined in paragraph 2 of Article I of the Agreement. 

(b)          For the purposes of subparagraph 3(b) of Article I of the Agreement, "services supplied in the exercise of governmental authority" means the following:

(i)         activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies;

(ii)        activities forming part of a statutory system of social security or public retirement plans;  and

(iii)       other activities conducted by a public entity for the account or with the guarantee or using the financial resources of the Government.

(c)          For the purposes of subparagraph 3(b) of Article I of the Agreement, if a Member allows any of the activities referred to in subparagraphs (b)(ii) or (b)(iii) of this paragraph to be conducted by its financial service suppliers in competition with a public entity or a financial service supplier, "services" shall include such activities.

(d)          Subparagraph 3(c) of Article I of the Agreement shall not apply to services covered by this Annex.

2.Domestic Regulation

(a)          Notwithstanding any other provisions of the Agreement, a Member shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, or to ensure the integrity and stability of the financial system.  Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the Member's commitments or obligations under the Agreement.               

(b)          Nothing in the Agreement shall be construed to require a Member to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.

3.Recognition

(a)          A Member may recognize prudential measures of any other country in determining how the Member's measures relating to financial services shall be applied.  Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the country concerned or may be accorded autonomously.

(b)          A Member that is a party to such an agreement or arrangement referred to in subparagraph (a), whether future or existing, shall afford adequate opportunity for other interested Members to negotiate their accession to such agreements or arrangements, or to negotiate comparable ones with it, under circumstances in which there would be equivalent regulation, oversight, implementation of such regulation, and, if appropriate, procedures concerning the sharing of information between the parties to the agreement or arrangement.  Where a Member accords recognition autonomously, it shall afford adequate opportunity for any other Member to demonstrate that such circumstances exist.

(c)          Where a Member is contemplating according recognition to prudential measures of any other country, paragraph 4(b) of Article VII shall not apply.

4.Dispute Settlement  Panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service under dispute.

5.Definitions

For the purposes of this Annex:

(a)          A financial service is any service of a financial nature offered by a financial service supplier of a Member.  Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance).  Financial services include the following activities:

Insurance and insurance-related services

(i)         Direct insurance (including co-insurance):

(A)        life

(B)        non-life

(ii)        Reinsurance and retrocession;

(iii)       Insurance intermediation, such as brokerage and agency;

(iv)       Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.

Banking and other financial services (excluding insurance)

(v)        Acceptance of deposits and other repayable funds from the public;

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

(vii)      Financial leasing;

(viii)     All payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;

(ix)       Guarantees and commitments;

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

(A) money market instruments (including cheques, bills, certificates of deposits);money market instruments (including cheques, bills, certificates of deposits);

(B) foreign exchange;foreign exchange;

(C) derivative products including, but not limited to, futures and options;derivative products including, but not limited to, futures and options;

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

(E) tranferable securities transferable securities;

(F) other negotiable instruments and financial assets, including bullion.other negotiable instruments and financial assets, including bullion.

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

(xii)      Money broking;      

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

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

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

(xvi)      Advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy.

(b)          A financial service supplier means any natural or juridical person of a Member wishing to supply or supplying financial services but the term "financial service supplier" does not include a public entity.

(c)          "Public entity" means:

(i)         a government, a central bank or a monetary authority, of a Member, or an entity owned or controlled by a Member, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms;  or

(ii)        a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions.

 

SECOND ANNEX ON FINANCIAL SERVICES

 

1.Notwithstanding Article II of the Agreement and paragraphs 1 and 2 of the Annex on Article II Exemptions, a Member may, during a period of 60 days beginning four months after the date of entry into force of the WTO Agreement, list in that Annex measures relating to financial services which are inconsistent with paragraph 1 of Article II of the Agreement.

2.Notwithstanding Article XXI of the Agreement, a Member may, during a period of 60 days beginning four months after the date of entry into force of the WTO Agreement, improve, modify or withdraw all or part of the specific commitments on financial services inscribed in its Schedule.

3.The Council for Trade in Services shall establish any procedures necessary for the application of paragraphs 1 and 2.

 

ANNEX ON NEGOTIATIONS ON MARITIME TRANSPORT SERVICES

 

1.Article II and the Annex on Article II Exemptions, including the requirement to list in the Annex any measure inconsistent with most-favoured-nation treatment that a Member will maintain, shall enter into force for international shipping, auxiliary services and access to and use of port facilities only on:

(a)        the implementation date to be determined under paragraph 4 of the Ministerial Decision on Negotiations on Maritime Transport Services; or,

(b)        should the negotiations not succeed, the date of the final report of the Negotiating Group on Maritime Transport Services provided for in that Decision.

2.Paragraph 1 shall not apply to any specific commitment on maritime transport services which is inscribed in a Member's Schedule.

3.From the conclusion of the negotiations referred to in paragraph 1, and before the implementation date, a Member may improve, modify or withdraw all or part of its specific commitments in this sector without offering compensation,  notwithstanding the provisions of Article XXI.

 

 

ANNEX ON TELECOMMUNICATIONS

1.Objectives

Recognizing the specificities of the telecommunications services sector and, in particular, its dual role as a distinct sector of economic activity and as the underlying transport means for other economic activities, the Members have agreed to the following Annex with the objective of elaborating upon the provisions of the Agreement with respect to measures affecting access to and use of public telecommunications transport networks and services.  Accordingly, this Annex provides notes and supplementary provisions to the Agreement.

2.Scope

(a)          This Annex shall apply to all measures of a Member that affect access to and use of public telecommunications transport networks and services.14

(b)          This Annex shall not apply to measures affecting the cable or broadcast distribution of radio or television programming.

(c)          Nothing in this Annex shall be construed:

(i)         to require a Member to authorize a service supplier of any other Member to establish, construct, acquire, lease, operate, or supply telecommunications transport networks or services, other than as provided for in its Schedule;  or

(ii)        to require a Member (or to require a Member to oblige service suppliers under its jurisdiction) to establish, construct, acquire, lease, operate or supply telecommunications transport networks or services not offered to the public generally.

3.Definitions

                        For the purposes of this Annex:

(a)          "Telecommunications" means the transmission and reception of signals by any electromagnetic means.

(b)          "Public telecommunications transport service" means any telecommunications transport service required, explicitly or in effect, by a Member to be offered to the public generally.  Such services may include, inter alia, telegraph, telephone, telex, and data transmission typically involving the real-time transmission of customer-supplied information between two or more points without any end-to-end change in the form or content of the customer's information.

(c)          "Public telecommunications transport network" means the public telecommunications infrastructure which permits telecommunications between and among defined network termination points.

(d)          "Intra-corporate communications" means telecommunications through which a company communicates within the company or with or among its subsidiaries, branches and, subject to a  Member's domestic laws and regulations, affiliates.  For these purposes, "subsidiaries", "branches" and, where applicable, "affiliates" shall be as defined by each Member.  "Intra-corporate communications" in this Annex excludes commercial or non-commercial services that are supplied to companies that are not related subsidiaries, branches or affiliates, or that are offered to customers or potential customers.

(e)          Any reference to a paragraph or subparagraph of this Annex includes all subdivisions thereof.

---------------------------------

14This paragraph is understood to mean that each Member shall ensure that the obligations of this Annex are applied with respect to suppliers of public telecommunications transport networks and services by whatever measures are necessary.

4.Transparency

        In the application of Article III of the Agreement, each Member shall ensure that relevant information on conditions affecting access to and use of public telecommunications transport networks and services is publicly available, including:  tariffs and other terms and conditions of service; specifications of technical interfaces with such networks and services;  information on bodies responsible for the preparation and adoption of standards affecting such access and use;  conditions applying to attachment of terminal or other equipment;  and notifications, registration or licensing requirements, if any.

5.Access to and use of Public Telecommunications Transport Networks and Services

(a)          Each Member shall ensure that any service supplier of any other Member is accorded access to and use of public telecommunications transport networks and services on reasonable and non-discriminatory terms and conditions, for the supply of a service included in its Schedule.  This obligation shall be applied, inter alia, through paragraphs (b) through (f).15

(b)          Each Member shall ensure that service suppliers of any other Member have access to and use of any public telecommunications

transport network or service offered within or across the border of that  Member, including private leased circuits, and to this end shall ensure, subject to paragraphs (e) and (f), that such suppliers are permitted:

-----------------------------------------

15The term "non-discriminatory" is understood to refer to most-favoured-nation and national treatment as defined in the Agreement, as well as to reflect sector-specific usage of the term to mean "terms and conditions no less favourable than those accorded to any other user of like public telecommunications transport networks or services under like circumstances". 

(i)           to purchase or lease and attach terminal or other equipment which interfaces with the network and which is necessary to supply a supplier's services;

(ii)        to interconnect private leased or owned circuits with public telecommunications transport networks and services or with circuits leased or owned by another service supplier; and

(iii)       to use operating protocols of the service supplier's choice in the supply of any service, other than as necessary to ensure the availability of telecommunications transport networks and services to the public generally.

(c)          Each Member shall ensure that service suppliers of any other Member may use public telecommunications transport networks and services for the movement of information within and across borders, including for intra-corporate communications of such service suppliers, and for access to information contained in data bases or otherwise stored in machine-readable form in the territory of any Member.  Any new or amended measures of a Member significantly affecting such use shall be notified and shall be subject to consultation, in accordance with relevant provisions of the Agreement.

(d)          Notwithstanding the preceding paragraph, a Member may take such measures as are necessary to ensure the security and confidentiality of messages, subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade in services.

(e)          Each Member shall ensure that no condition is imposed on access to and use of public telecommunications transport networks and services other than as necessary:

(i)        to safeguard the public service responsibilities of suppliers of public telecommunications transport networks and services, in particular their ability to make their networks or services available to the public generally;

(ii)        to protect the technical integrity of public telecommunications transport networks or services; or

(iii)       to ensure that service suppliers of any other Member do not supply services unless permitted pursuant to commitments in the Member's Schedule.

(f)           Provided that they satisfy the criteria set out in paragraph (e), conditions for access to and use of public telecommunications transport networks and services may include:

(i)           restrictions on resale or shared use of such services;

(ii)        a requirement to use specified technical interfaces, including interface protocols, for inter-connection with such networks and services;

(iii)       requirements, where necessary, for the inter-operability of such services and to encourage the achievement of the goals set out in paragraph 7(a);

(iv)       type approval of terminal or other equipment which interfaces with the network and technical requirements relating to the attachment of such equipment to such networks;

(v)        restrictions on inter-connection of private leased or owned circuits with such networks or services or with circuits leased or owned by another service supplier; or

(vi)       notification, registration and licensing.

(g)          Notwithstanding the preceding paragraphs of this section, a developing country Member may, consistent with its level of development, place reasonable conditions on access to and use of public telecommunications transport networks and services necessary to strengthen its domestic telecommunications infrastructure and service capacity and to increase its participation in international trade in telecommunications services.  Such conditions shall be specified in the Member's Schedule.

6.         Technical Cooperation

(a)          Members recognize that an efficient, advanced telecommunications infrastructure in countries, particularly developing countries, is essential to the expansion of their trade in services.  To this end, Members endorse and encourage the participation, to the fullest extent practicable, of developed and developing countries and their suppliers of public telecommunications transport networks and services and other entities in the development programmes of international and regional organizations, including the International Telecommunication Union, the United Nations Development Programme, and the International Bank for Reconstruction and Development.

(b)          Members shall encourage and support telecommunications cooperation among developing countries at the international, regional and sub-regional levels.

(c)          In cooperation with relevant international organizations, Members shall make available, where practicable, to developing countries information with respect to telecommunications services and developments in telecommunications and information technology to assist in strengthening their domestic telecommunications services sector.

(d)          Members shall give special consideration to opportunities for the least-developed countries to encourage foreign suppliers of telecommunications services to assist in the transfer of technology, training and other activities that support the development of their telecommunications infrastructure and expansion of their telecommunications services trade.

7.         Relation to International Organizations and Agreements

(a)          Members recognize the importance of international standards for global compatibility and inter-operability of telecommunication networks and services and undertake to promote such standards through the work of relevant international bodies, including the International Telecommunication Union and the International Organization for Standardization.

(b)          Members recognize the role played by intergovernmental and non-governmental organizations and agreements in ensuring the efficient operation of domestic and global telecommunication

services, in particular the International Telecommunication Union.  Members shall make appropriate arrangements, where relevant, for consultation with such organizations on matters arising from the implementation of this Annex.

 

 

ANNEX ON NEGOTIATIONS ON BASIC TELECOMMUNICATIONS

 

1.Article II and the Annex on Article II Exemptions, including the requirement to list in the Annex any measure inconsistent with most-favoured-nation treatment that a Member will maintain, shall enter into force for basic telecommunications only on:

(a)        the implementation date to be determined under paragraph 5 of the Ministerial Decision on Negotiations on Basic Telecommunications;  or,

(b)        should the negotiations not succeed, the date of the final report of the Negotiating Group on Basic Telecommunications provided for in that Decision.

2.Paragraph 1 shall not apply to any specific commitment on basic telecommunications which is inscribed in a Member's Schedule.


[1] This condition is understood in terms of number of sectors, volume of trade affected and modes of supply. In order to meet this condition, agreements should not provide for the a priori exclusion of any mode of supply.

[2] Typically, such integration provides citizens of the parties concerned with a right of  free entry to the employment markets of the parties and includes measures concerning conditions of pay, other conditions of employment and social benefits.

[3] The term "relevant international organizations" refers to international bodies whose membership is open to the relevant bodies of at least all Members of the WTO.

[4] It is understood that the procedures under paragraph 5 shall be the same as the GATT 1994 procedures.

[5] The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.

[6] Measures that are aimed at ensuring the equitable or effective imposition or collection of direct taxes include measures taken by a Member under  its taxation system which:

(i)            apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Member's territory;  or

(ii)           apply to non-residents in order to ensure the imposition or collection of taxes in the Member's territory;  or

(iii)          apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures;  or

(iv)          apply to consumers of services supplied in or from the territory of another Member in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Member's territory;  or

(v)           distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them;  or

(vi)          determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Member's tax base.

Tax terms or concepts in paragraph (d) of Article XIV and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Member taking the measure.

[7] A future work programme shall determine how, and in what time-frame, negotiations on such multilateral disciplines will be conducted.

[8] If a Member undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(a) of Article I and if the cross-border movement of capital is an essential part of the service itself, that Member is thereby committed to allow such movement of capital.  If a Member undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in subparagraph 2(c) of Article I, it is thereby committed to allow related transfers of capital into its territory.

[9] Subparagraph 2(c) does not cover measures of a Member which limit inputs for the supply of services.

[10] Specific commitments assumed under this Article shall not be construed to require any Member to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

[11] With respect to agreements on the avoidance of double taxation which exist on the date of entry into force of the WTO Agreement, such a matter may be brought before the Council for Trade in Services only with the consent of both parties to such an agreement.

[12] Where the service is not supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall, nonetheless, through such presence be accorded the treatment provided for service suppliers under the Agreement.  Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the territory where the service is supplied.

[13] The sole fact of requiring a visa for natural persons of certain Members and not for those of others shall not be regarded as nullifying or impairing benefits under a specific commitment.

[14] This paragraph is understood to mean that each Member shall ensure that the obligations of this Annex are applied with respect to suppliers of public telecommunications transport networks and services by whatever measures are necessary.

[15] The term "non-discriminatory" is understood to refer to most-favoured-nation and national treatment as defined in the Agreement, as well as to reflect sector-specific usage of the term to mean "terms and conditions no less favourable than those accorded to any other user of like public telecommunications transport networks or services under like circumstances". 

ASEAN Framework Agreement on Services

The Governments of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Vietnam, Member States of the Association of South East Asian Nations (hereinafter referred to as “ASEAN”);

RECOGNISING the Singapore Declaration of 1992 which provides that ASEAN shall move towards a higher plane of economic cooperation to secure regional peace and prosperity;

RECALLING that the Heads of Government, at the Fourth Summit held in Singapore on 27-28 January 1992 declared that an ASEAN Free Trade Area (AFTA) shall be established in the region;

NOTING that the Framework Agreement on Enhancing ASEAN Economic Cooperation signed in Singapore on 28 January 1992 provides that ASEAN Member States shall explore further measures on border and non-border areas of cooperation to supplement and complement the liberalisation of trade;

RECOGNISING that intra-ASEAN economic cooperation will secure a liberal trading framework for trade in services which would strengthen and enhance trade in services among ASEAN Member States;

DESIRING to mobilise the private sector in the realisation of economic development of ASEAN Member States in order to improve the efficiency and competitiveness of their service industry sector;

REITERATING their commitments to the rules and principles of the General Agreement on Trade in Services (hereinafter referred to as “GATS”) and noting that Article V of GATS permits the liberalising of trade in services between or among the parties to an economic integration agreement;

AFFIRMING that ASEAN Member States shall extend to one another preference in trade in services;

HAVE AGREED AS FOLLOWS:

Article I : Objectives

The objectives of the Member States under the ASEAN Framework Agreement on Services (hereinafter referred to as “this Framework Agreement”) are:

a. to enhance cooperation in services amongst Member States in order to improve the efficiency

and competitiveness, diversify production capacity and supply and distribution of services of their service suppliers within and outside ASEAN; b. to eliminate substantially restrictions to trade in services amongst Member States; and c. to liberalise trade in services by expanding the depth and scope of liberalisation beyond those

undertaken by Member States under the GATS with the aim to realising a free trade area in services.

Article II : Areas of Cooperation

1 . All Member States shall participate in the cooperation arrangements under this Framework Agreement. However, taking cognizance of paragraph 3 of Article I of this Framework Agreement on Enhancing ASEAN Economic Cooperation, two or more Member States may proceed first if other Member States are not ready to implement these arrangements.

2. Member States shall strengthen and enhance existing cooperation efforts in service sectors and develop cooperation in sectors that are not covered by existing cooperation arrangements, through inter alia:

a. establishing or improving infrastructural facilities; b. joint production, marketing and purchasing arrangements; c. research and development; and d. exchange of information.

3. Member States shall identify sectors for cooperation and formulate Action Plans, Programmes and Understandings that shall provide details on the nature and extent of cooperation.

Article III : Liberalisation

Pursuant to Article 1 (c), Member States shall liberalise trade in services in a substantial number of sectors within a reasonable time-frame by:

a. eliminating substantially all existing discriminatory measures and market access limitations

amongst Member States; and b. prohibiting new or more discriminatory measures and market access limitations.

Article IV : Negotiation of Specific Commitments

1. Member States shall enter into negotiations on measures affecting trade in specific service sectors. Such negotiations shall be directed towards achieving commitments which are beyond those inscribed in each Member State’s schedule of specific commitments under the GATS and for which Member States shall accord preferential treatment to one another on an MFN basis.

2. Each Member State shall set out in a schedule, the specific commitments it shall undertake under paragraph 1 .

3. The provisions of this Framework Agreement shall not be so construed as to prevent any Member State from conferring or according advantages to adjacent countries in order to facilitate exchanges limited to contiguous frontier zones of services that are both locally produced and consumed.

Article V : Mutual Recognition

1 . Each Member State may recognise the education or experience obtained,requirements met, or licenses or certifications granted in another Member State, for the purpose of licensing or certification of service suppliers. Such recognition may be based upon an agreement or arrangement with the Member State concerned or may be accorded autonomously.

2. Nothing in paragraph 1 shall be so construed as to require any Member State to accept or to enter into such mutual recognition agreements or arrangements.

————————————————————————————————— 1. These agreements or arrangements are concluded for Member State only. In the event a Member State wishes to join such agreements or arrangements, it should be given equal opportunity to do at any time.

Article VI : Denial of Benefits

The benefits of this Framework Agreement shall be denied to a service supplier who is a natural person of a non-Member State or a juridical person owned or controlled by persons of a non-Member State constituted under the laws of a Member State, but not engaged in substantive business operations in the territory of Member State(s)

Article VII : Settlement of Disputes

1 . The Protocol on Dispute Settlement Mechanism for ASEAN shall generally be referred to and applied with respect to any disputes arising from, or any differences between Member States concerning the interpretation or application of, this Framework Agreement or any arrangements arising therefrom.

2. A specific dispute settlement mechanism may be established for the purposes of this Framework Agreement which shall form an integral part of this Framework Agreement.

Article VIII : Supplementary Agreements or Arrangements

Schedules of specific commitments and Understandings arising from subsequent negotiations under this Framework Agreement and any other agreements or arrangements, Action Plans and Programmes arising thereunder shall form an integral part of this Framework Agreement.

Article IX : Other Agreements

1 . This Framework Agreement or any action taken under it shall not affect the rights and obligations of the Member States under any existing agreements2 to which they are parties.

2. Nothing in this Framework Agreement shall affect the rights of the Member States to enter into other agreements not contrary to the principles, objectives and terms of this Framework Agreement.

3. Upon the signing of this Framework Agreement, Member States shall promptly notify the ASEAN Secretariat of any agreements pertaining to or affecting trade in services to which that Member is a signatory.

————————————————————————————————– 2. Existing Agreements are not affected as these have been notified in the MFN Exemption List of the GATS.

Article X : Modification of Schedules of Specific Commitments

1 . A Member State may modify or withdraw any commitment in its schedule of specific commitments, at any time after three years from the date on which that commitment entered into force provided:

a. that it notifies other Member States and the ASEAN Secretariat of the intent to modify or

withdraw a commitment three months before the intended date of implementation of the modification or withdrawal; and b. that it enters into negotiations with an affected Member State to agree to necessary

compensatory adjustment.

2. In achieving a compensatory adjustment, Member States shall ensure that the general level of mutually advantageous commitment is not less favourable to trade than that provided for in the schedules of specific commitments prior to such negotiations.

3. Compensatory adjustment shall be made on an MFN basis to all other Member States.

4. The SEOM with the endorsement of the AEM may draw up additional procedures to give effect to this Article.

Article XI : Institutional Arrangements

1 . The SEOM shall carry out such functions to facilitate the operation of this Framework Agreement and further its objectives, including the Organisation of the conduct of negotiations, review and supervision of the implementation of this Framework Agreement.

2. The ASEAN Secretariat shall assist SEOM in carrying out its functions, including providing the support for supervising, coordinating and reviewing the implementation of this Framework Agreement.

Article XII : Amendments

The provisions of this Framework Agreement may be amended through the consent of all the Member States and such amendments shall become effective upon acceptance by all Member States.

Article XIII : Accession of New Members

New Members of ASEAN shall accede to this Framework Agreement on terms and conditions agreed between them and signatories to this Framework Agreement.

Article XIV : Final Provision

1 . The terms and definitions and other provisions of the GATS shall be referred to and applied to matters arising under this Framework Agreement for which no specific provision has been made under it.

2. This Framework Agreement shall be deposited with the Secretary-General of ASEAN, who shall promptly furnish a certified copy thereof to each Member State.

3. This Framework Agreement shall enter into force upon the deposit of instruments of ratification or acceptance by all signatory governments with the Secretary-General of ASEAN.

IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed the ASEAN Framework Agreement on Services.

DONE at Bangkok, this 15th day of December 1995 in a single copy in the English Language.

ASEAN AGREEMENT ON THE MOVEMENT OF NATURAL PERSONS

The Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, Lao People’s Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Viet Nam, Member States of the Association of South East Asian Nations (“ASEAN”), hereinafter collectively referred to as “Member States” or singularly as “Member State”;

NOTING the mandate of the ASEAN Economic Community Blueprint adopted at the 13th ASEAN Summit held on 20 November 2007 in Singapore that free flow of skilled labour is one of the core elements of an ASEAN single market and production base; which allows for managed mobility or facilitated entry for the movement of natural persons engaged in trade in goods, trade in services and investment, according to the prevailing regulations of the receiving country;

RECALLING the ASEAN Framework Agreement on Services (“AFAS”) signed by ASEAN Economic Ministers (“AEM”) on 15 December 1995 in Bangkok, Thailand and its subsequent Implementing Protocols, which lays the foundation for elimination of restrictions to trade in services amongst Member States in all modes of supply, including mode 4 (Movement of Natural Persons);

DESIRING for an effective mechanism to further liberalise and facilitate movement of natural persons towards free flow of skilled labour in ASEAN through close cooperation among related ASEAN bodies in the areas, including and not limited

to trade in goods, trade in services, investment, immigration, and labour;

ALSO DESIRING to eliminate substantially all restrictions in the temporary cross-border movement of natural persons involved in the provision of trade in goods, trade in services and investment within the provisions of this Agreement;

HAVE AGREED as follows:

Article 1 Objectives

The objectives of this Agreement are to:

(a) provide within the scope of this Agreement the rights and obligations additional to those set out in the ASEAN Framework Agreement on Services and its Implementing Protocols in relation to the movement of natural persons between Member States;

(b) facilitate the movement of natural persons engaged in the conduct of trade: in goods, trade in services and investment between Member States;

(c) establish streamlined and transparent procedures for applications for immigration formalities for the temporary entry or temporary stay of natural persons to whom this Agreement applies; and

(d) protect the integrity of Member States’ borders and protect the domestic labour force and permanent employment in the territories of Member States.

Article 2 Scope

1. This Agreement shall apply to measures affecting the temporary entry or temporary stay of natural persons of a Member State into the territory of another Member State. Such natural persons may include:

(a) business visitors; (b) intra-corporate transferees;

(c) contractual service suppliers;

(d) other categories as may be specified in the Schedules of Commitments for the temporary entry and temporary stay of natural persons of the Member State.

2. This Agreement shall not apply to measures affecting natural persons seeking access to the employment market of another Member State, nor shall it apply to measures regarding citizenship, residence or employment on a permanent basis.

3. Nothing contained in this Agreement shall prevent a Member State from applying measures to regulate the entry into, or temporary stay, of natural persons of the other Member State in its territory, including those measures necessary to protect the integrity of its territory and to ensure the orderly movement of natural persons across its borders, provided that such measures are not applied in a manner so as to nullify or impair the benefits accruing to the other Member State under the terms of a specific commitment.

4. The sole fact of requiring natural persons to meet visa requirements prior to entry into the territory of a Member State shall not be regarded as nullifying or impairing benefits under this Agreement.

Article 3 Definitions

For the purposes of this Agreement, the following definitions shall apply:

(a) Business Visitor means a natural person seeking to enter or stay in the territory of another Member State temporarily, whose remuneration and financial support for the duration of the visit is derived from outside of that other Member State;

(i) as a representative of a goods seller/service supplier, for the purpose of negotiating the sale of goods or supply of services or entering into agreements to sell goods or supply services for that goods seller/service supplier, where such negotiations do not involve direct sale of goods or supply of services to the general public;

(ii) as an employee of a juridical person as defined in subparagraphs e(i), e(ii) and e(iii) of this Article only for the purpose of establishing an investment or setting up a commercial presence, for the juridical person in the territory of another Member State;

(iii) for the purpose of participating in business

negotiations or meetings; or

(iv) for the purpose of establishing an investment or setting up a commercial presence in the territory of another Member State;

(b) Contractual Service Supplier means a natural person who is an employee of a juridical person

established in the territory of a Member State which has no commercial presence in the territory of the other Member State where the services will be provided, who:

(i) enters the territory of that other Member State temporarily in order to supply a service pursuant to a contract(s) between his/her employer and service consumer(s) 1 in the territory of the other Member State;

(ii) is either an executive, manager, or specialist

as defined in subparagraph e(i), e(ii) and e(iii) of this Article, who receives remuneration from his/her employer;

(iii) must possess the appropriate educational and professional qualifications relevant to the service to be provided; and

(iv) as may be applicable, has been an employee of the juridical person for a period as may be specified in the Schedule of Commitments;

(c) Granting Member State means a Member State who receives an application for temporary entry or temporary stay from a natural person of another Member State who is covered by Article 2 (Scope);

(d) Immigration Formality means a visa, permit, pass or other documents or electronic authority granting a natural person of one Member State the right to temporarily enter, stay, work, or to

1

In the case of Indonesia and Thailand, the service consumer(s) have to be juridical person(s).

establish commercial presence in the territory of the granting Member State;

(e) Intra–Corporate Transferee (ICT) means a natural person who is an employee of a juridical person established in the territory of a Member State, who is transferred temporarily for the supply of a service through commercial presence (either through a representative office, branch, subsidiary or affiliate) in the territory of another Member State, and who has been an employee of the juridical person for a period as may be specified in the Schedule of Commitments , and who is:

(i) an Executive: a natural person within the organisation who primarily directs the management of the organisation and exercises wide latitude in decision making and receives only general supervision or direction from higher level executives, the board of directors, or stockholders of the business; an executive would not directly perform tasks related to the actual provision of the service or services of the organisation;

(ii) a Manager: a natural person within the organisation who primarily directs the organisation/department/subdivision and exercises supervisory and control functions over other supervisory, managerial or professional staff; does not include first line supervisors unless employees supervised are professionals; does not include employees who primarily perform tasks necessary for the provision of the service; or

(iii) a Specialist: a natural person within the organisation who possesses knowledge at   an advanced level of expertise essential to the establishment/provision of the service and/or possesses proprietary knowledge of the organisation’s service, research equipment, techniques or management; may include, but is not limited to, members of a licensed profession;

(f) Natural Person means a natural person who is a national of a Member State2, in accordance with its laws, regulations and national policies; and

(g) Temporary Entry or Temporary Stay means entry into or stay by a natural person covered by this Agreement, without the intent to establish permanent residence.

Article 4 Grant of Temporary Entry or Temporary Stay

1. Each Member State shall, in accordance with that Member State’s Schedule of Commitments in ANNEX 1, grant temporary entry or temporary stay in accordance with this Agreement to natural persons of another Member State provided those natural persons:

(a) follow prescribed application procedures for the

immigration formality sought; and

(b) meet all relevant eligibility requirements for temporary entry or temporary stay of the granting Member State.

2

In the case of Brunei Darussalam, Natural Persons also refer to those who have the rights of permanent residence in its country in accordance with its laws and regulations.

2. Any fees imposed in respect of the processing of an immigration formality shall be reasonable and in accordance with domestic law.

3. A Member State may deny temporary entry or temporary stay to natural persons of another Member State who do not comply with paragraphs 1(a) and 1(b) of this Article.

Article 5 Processing of Applications

1. Where an application for an immigration formality is required by a Member State, that Member State shall promptly process complete applications for immigration formalities or extensions received from natural persons of another Member State covered by Article 2 (Scope).

2. Each Member State shall, upon request and within a reasonable period after receiving a complete application for an immigration formality from a natural person of another Member State covered by Article 2 (Scope), notify the applicant of:

(a) the receipt of the application; (b) the status of the application; and (c) the decision concerning the application including, if approved, the period of stay and other conditions.

3. In the case of an incomplete application, at the request of the applicant, the Member State shall notify the applicant of all the additional information that is required to complete the application and provide the applicant with the opportunity to remedy deficiencies in his/her application.

 

Article 6 Schedules of Commitments for the Temporary Entry and Temporary Stay of Natural Persons

1. Each Member State shall set out in ANNEX 1 a schedule containing its commitments for the temporary entry or temporary stay in its territory of natural persons of other Member States covered in Article 2 (Scope). These Schedules shall specify the: general conditions and limitations governing those commitments, including the length of stay, for each category of natural persons included in each Member State’s Schedule of Commitments.

2. Upon entry into force of this Agreement, the Schedules of Commitments as referred to in paragraph 1 of this Article shall supersede commitments made under the AFAS in relation to mode 4 (Movement of Natural Persons).

Article 7 Further Liberalisation

1. Member States shall enter into discussion to review the Schedules of Commitments under this Agreement with a view to achieving further liberalisation on the movement of natural persons. The initial discussion to review the Schedules of Commitments shall take place one year from entry into force of the Agreement. Subsequent discussions shall take place at intervals to be agreed by Member States.

2. The revisions of the Schedules of Commitments as a result of the discussions referred to in paragraph 1 of this Article shall be incorporated into this Agreement, subject to paragraphs 2, 3, 4 and 5 of Article 15 (Revisions, Modifications and Amendments).

 

Article 8 Transparency

Each Member State shall:

(a) publish or otherwise make publicly available explanatory material on all relevant immigration formalities which pertain to or affect the operation of this Agreement;

(b) maintain or establish contact points or other mechanisms to respond to inquiries from interested persons regarding regulations affecting the temporary entry or temporary stay of natural persons;

(c) to the extent possible, allow reasonable time between publication of new regulations affecting the temporary entry or temporary stay of natural persons and their effective date. Such publication may be made electronically available;

(d) no later than six month after entry into force of this Agreement publish, such as on its immigration website, or otherwise make publicly available in its own territory and to persons in the territory of the other Member States, the general requirements for temporary entry or temporary stay under this Agreement, including explanatory material and relevant forms and documents that will enable natural persons of other Member States to become acquainted with those requirements; and

(e) upon modifying or amending any immigration measure that affects the temporary entry or temporary stay of natural persons, ensure that

the information published or otherwise made available pursuant to subparagraph (d) of this Article is updated as soon as possible within 90 days.

Article 9 General Exceptions

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail, or a disguised restriction on the movement of natural persons, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Member State of measures:

(a) necessary to protect public morals or to maintain

public order;3

(b) necessary to protect human, animal or plant life

or health;

(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:

(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on services contracts;

(ii) the protection of the privacy of individuals in relation to the processing and dissemination

3

The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.

of personal data and the protection of confidentiality of individual records and accounts;

(iii) safety.

Article 10 Security Exceptions

1. Nothing in this Agreement shall be construed:

(a) to require any Member State to furnish any information, the disclosure of which it considers contrary to its essential security interests; or

(b) to prevent any Member State from taking any action which it considers necessary for the protection of its essential security interests:

(i) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;

(ii) relating to fissionable and fusionable materials or the materials from which they are derived;

(iii) taken in time of war or other emergency in

international relations; or

(c) to prevent any Member State from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

2. The AEM shall be informed to the fullest extent possible of measures taken under paragraphs 1(b) and 1(c) of this Article and of their termination.

Article 11 Dispute Settlement

1. Member States shall endeavour to settle any differences arising out of the implementation of this Agreement through consultations.

2. A Member State shall not recourse to the ASEAN Protocol on Enhanced Dispute Settlement Mechanism, signed on 29 November 2004 in Vientiane, Lao PDR and amendments thereto, regarding a refusal to grant temporary entry or temporary stay under this Agreement unless:

(a) the matter involves a pattern of practice on the

part of the granting Member State; and (b) the natural persons affected have exhausted all available domestic remedies regarding this particular matter.

Article 12 Relation with ASEAN Comprehensive Investment Agreement

1. This Agreement does not apply to measures adopted or maintained by each Member State to the extent that they are covered by the ASEAN Comprehensive Investment Agreement (“ACIA”).

2. Notwithstanding paragraph 1 of this Article, this Agreement shall apply, mutatis mutandis, to measures adopted or maintained under Article 22 of the ACIA (Entry, Temporary Stay and Work of Investors and Key Personnel) affecting the movement of natural persons of a Member State in the territory of any one of the other Member States.

3. For greater certainty, Section B (Investment Dispute Between an Investor and a Member State) of the ACIA shall not apply to this Agreement.

Article 13 Recognition

1. A Member State, by agreement or arrangement with another Member State, may recognise the education or experience obtained, requirements met, licenses or certifications granted in the other Member State for the purposes of the fulfilment, in whole or in part, of its standards or criteria for authorisation, licensing and certification of service suppliers of the other Member State and subject to the requirements of paragraph 3 of this Article.

2. Where a Member State recognises, by agreement or arrangement with a non-Member State or unilaterally whether in favour of another Member State or a non- Member State, the education or experience obtained, requirements met, licenses or certifications granted in the other Member State or non-Member State, the Member State shall afford adequate opportunity for any other Member State to demonstrate that education, experience, licenses, or certifications obtained or requirements met in the territory of that Member State should be recognised.

3. A Member State shall not accord recognition in a manner which would constitute a means of discrimination against another Member State in the application of its standards or criteria for the authorisation, licensing or certification of service suppliers, or a disguised restriction on trade in services. Where appropriate, recognition should be based on multilaterally agreed criteria.

4. Each Member State shall encourage competent bodies in its territory to enter into cooperation, agreement or arrangement, multilaterally or bilaterally, on recognition of professional:

(a) qualification requirements; (b) qualification procedures; and (c) licensing, certification or registration

requirements and procedures.

Article 14 Institutional Mechanism

1. The AEM shall be responsible for the implementation of this Agreement.

2. The AEM shall coordinate and oversee the implementation of this Agreement across Member States and across related ASEAN bodies.

3. The ASEAN Coordinating Committee on Services (“CCS”) and, for the purposes of this Agreement, other relevant government officials shall assist the AEM in implementing this Agreement.

4. In the fulfilment of its functions, the AEM may establish subsidiary bodies and assign them to perform/ undertake/accomplish certain tasks or delegate its responsibilities to any subsidiary bodies.

Article 15 Revisions, Modifications and Amendments

1. Any Member State may request in writing a revision, modification, or amendment of all or any part of this Agreement.

2. The provisions of this Agreement may only be revised, modified or amended when mutually agreed upon in writing by the Governments of all Member States.

3. Any revision, modification, or amendment agreed to and in writing shall form an integral part of this Agreement.

4. Such revision, modification, or amendment shall come into force on such date as may be determined by all Member States.

5. Any revision, modification, or amendment shall not prejudice the rights and obligations arising from or based on this Agreement prior or up to the date of such revision, modification, or amendment.

Article 16 Entry into Force

1. This Agreement shall enter into force after all Member States have notified or, where necessary, deposited instruments of ratification with the Secretary-General of ASEAN , which shall not take more than 180 days after the signing of this Agreement.

2. The Secretary-General of ASEAN shall promptly notify all Member States of the notifications or deposit of each instrument of ratification referred to in paragraph 1 of this Article.

Article 17 Depositary

This Agreement shall be deposited with the ASEAN Secretary-General, who shall promptly furnish a certified copy thereof to each Member State.

IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed the ASEAN Agreement on Movement of Natural Persons.

DONE at Phnom Penh, Cambodia, this Nineteenth day of November in the Year Two Thousand and Twelve, in a single copy in the English Language.

For Brunei Darussalam:

LIM JOCK SENG Second Minister of Foreign Affairs and Trade

For the Kingdom of Cambodia:

CHAM PRASIDH Senior Minister and Minister of Commerce

For the Republic of Indonesia:

GITA IRAWAN WIRJAWAN Minister of Trade

For the Lao People’s Democratic Republic:

NAM VIYAKETH Minister of Industry and Commerce

For Malaysia:

MUSTAPA MOHAMED Minister of International Trade and Industry

For the Republic of the Union of Myanmar:

KAN ZAW Union Minister for National Planning and Economic Development

For the Republic of the Philippines:

GREGORY L. DOMINGO Secretary of Trade and Industry

For the Republic of Singapore:

LIM HNG KIANG Minister for Trade and Industry

For the Kingdom of Thailand:

BOONSONG TERIYAPIROM Minister of Commerce

For the Socialist Republic of Viet Nam:

VU HUY HOANG Minister of Industry and Trade

 

 


AGREEMENT ON TRADE IN SERVICES OF THE FRAMEWORK AGREEMENT ON COMPREHENSIVE ECONOMIC CO-OPERATION BETWEEN THE ASSOCATION OF SOUTHEAST ASIAN NATIONS AND THE PEOPLE'S REPUBLIC OF CHINA

The Governments of Brunei Darussalam ("Brunei Darussalam"), the Kingdom of Cambodia ("Cambodia"), the Republic of Indonesia ("Indonesia"), the Lao People's Democratic Republic ("Lao PDR"), Malaysia, the Union of Myanmar ("Myanmar"), the Republic of the Philippines ("Philippines"), the Republic of Singapore ("Singapore"), the Kingdom of Thailand ("Thailand") and the Socialist Republic of Viet Nam ("Viet Nam"), Member Countries of the Association of Southeast Asian Nations (collectively, "ASEAN" or "ASEAN Member Countries", or individually, "ASEAN Member Country"), and the People's Republic of China ("China"),

RECALLING the Framework Agreement on Comprehensive Economic Co-operation ("the Framework Agreement") between ASEAN and China (collectively, "the Parties", or individually referring to an ASEAN Member Country or to China as a "Party") signed by the Heads of Government/State of ASEAN Member Countries and China in Phnom Penh on the 4th day of November 2002;

RECALLING Articles 4 and 8(3) of the Framework Agreement on conclusion as expeditiously as possible of the negotiations of the agreement on trade in services so as to progressively liberalise and eliminate substantially all discrimination and/or prohibition of new or more discriminatory measures with respect to trade in services between the Parties, and to expand the depth and scope of

such trade with substantial sectoral coverage beyond those undertaken by the ASEAN Member Countries and China under the World Trade Organisation (“WTO”) General Agreement on Trade in Services,

STRIVING to enhance co-operation in services between the Parties in order to improve efficiency and competitiveness, as well as to diversify the supply and distribution of services of the respective service suppliers of the Parties, for implementation in accordance with the timeframes to be mutually agreed by the Parties to the Framework Agreement taking into account the sensitive sectors of the Parties, and with special and differential treatment and flexibility for the newer ASEAN Member Countries of Cambodia, Lao PDR, Myanmar and Viet Nam;

RECOGNISING the right of the Parties to regulate, and to introduce new regulations, on the supply of services in the territories of the Parties in order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulation within the Parties, the particular need of the Parties to exercise this right,

HAVE AGREED AS FOLLOWS:

PART I: DEFINITIONS AND SCOPE

Article 1 Definitions

For the purposes of this Agreement:

(a) "a service supplied in the exercise of governmental authority" means any service which is supplied neither

on a commercial basis, nor in competition with one or more service suppliers;

(b) "commercial presence" means any type of business or professional establishment, including through

(i) the constitution, acquisition or maintenance of a

juridical person, or

(ii) the creation or maintenance of a branch or a

representative office,

within the territory of a Party for the purpose of supplying a service;

(c) "direct taxes" comprise all taxes on total income, on total capital or om elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation;

(d) "GATS" means the General Agreement on Trade in Services;

(e) "juridical person” means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(f) "juridical person of another Party" means a juridical person which is either:

(i) constituted or otherwise organised under the law of that other Party, and is engaged in substantive

business operations in the territory of that Party or any other Party; or

(ii) in the case of the supply of a service through

commercial presence, owned or controlled by:

1. natural persons of that Party; or

2. juridical persons of that other Party

identified under subparagraph (i);

(g) a juridical person is:

(i) "owned" by persons of a Party if more than 50 per cent of the equity interest in it is beneficially owned by persons of that Party;

(ii) "controlled" by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions,

(iii) "affiliated" with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;

(h) "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

(i) "measures by Parties" means measures taken by

(i) central, regional or local governments and

authorities, and

 (ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

(j) "measures by Parties affecting trade in services" include measures in respect of

(i) the purchase, payment or use of a service;

(ii) the access to and use of, in connection with the supply of a service, services which are required by the Parties to be offered to the public generally,

(iii) the presence, including commercial presence, of persons of a Party for the supply of a service in the territory of another Party;

(k) "monopoly supplier of a service" means any person, public or private, which in the relevant market of the territory of a Party is authorized or established formally or in effect by that Party as the sole supplier of that Service,

(I) "natural person of another Party" means a natural person who resides in the territory of that other Party or elsewhere, and who under the law of that other Party:

(i) is a national of that other Party; or

(ii) has the right of permanent residence in that other Party, in the case of a Party which accords Substantially the same treatment to its permanent residents as it does to its nationals in respect of measures affecting trade in services, as notified after the entry into force of this Agreement provided that no Party is obliged to accord to such permanent residents treatment more favourable than would be accorded by that other Party to such permanent residents. Such notification shall include the assurance to assume, with respect to the permanent residents, in accordance with its laws and regulations, the same responsibilities that other Party bears with respect to its nationals;

(m) “person" means either a natural person or a juridical

person;

(n) "sector" of a service means,

(i) with reference to a specific commitment, one or more, or all, subsectors of that service, as specified in a Party's Schedule,

(ii) otherwise, the whole of that service sector,

including all of its subsectors;

(o) "services" includes any service in any sector except

services supplied in the exercise of governmental authority;

In the case of Indonesia, Lao PDR, Thailand, VietNam and China, natural person of another

Party shall be limited to a natural person who resides in the territory of that other Party or elsewhere and who under the law of that other Party is a national of that other Party. Therefore, in line with the principle of reciprocity, this Agreement shali not apply to the permanent residents of Indonesia, Lao PDR, Thailand, Viet Nam, and China. Once any of these Parties enacts its domestic law on the treatment of permanent residents of another Party or non-party, there shall be negotiations on the issue of whether to include permanent residents in the coverage of natural person under this Agreement in respect of that Party,

(p) "service consumer" means any person that receives or uses a Service,

(q) "service of another Party" means a service which is Supplied,

(i) from or in the territory of that other Party, or in the case of maritime transport, by a vessel registered under the laws of that other Party, or by a person of that other Party which supplies the service through the operation of a vessel and/or its use in whole or in part; or

(ii) in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service Supplier of that other Party;

(r) "service Supplier" means any person that supplies a service;’

(s) "supply of a service" includes the production, distribution, marketing, sale and delivery of a service;

"trade in services" is defined as the supply of a service

(i) from the territory of a Party into the territory of

any other Party ("cross-border");

(ii) in the territory of a Party to the service consumer

of any other Party ("consumption abroad");

Where the service is not supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall, nonetheless, through such presence be accorded the treatment provided for service suppliers under this Agreement. Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the territory where the service is supplied.

(iii) by a service supplier of a Party, through commercial presence in the territory of any other Party ("commercial presence");

(iv) by a service supplier of a Party, through presence of natural persons of a Party in the territory of any other Party ("presence of natural persons");

(u) "qualification procedures" means administrative procedures relating to the administration of qualification requirements; and

(v) "qualification requirements" means substantive requirements which a service supplier is required to fulfil in order to obtain certification or a license.

Article 2

Scope

1.This Agreement applies to measures by the Parties affecting trade in services.

2.This Agreement shall not apply to:

(a) services supplied in the exercise of governmental

authority within the territory of each Party,

(b) regulations or requirements governing the procurement by governmental agencies of services purchased for governmental purposes and not with a view to Commercial resale or with

The exclusion of taxation measures by the Philippines from the scope of this Agreement shall be further discussed by all Parties before the entry into force of the Agreement.

a view to use in the supply of services for Commercial sale.

PART II: OBLIGATIONS AND DISCIPLINES

Article 3

 Transparency

Article || of the GATS is, mutatis mutandis, incorporated into and shall form an integral part of this Agreement.

Article 4

Disclosure of Confidential information

Article III bis of the GATS is, mutatis mutandis, incorporated into and shall form an integral part of this Agreement.

Article 5 Domestic Regulation

1. In sectors where specific commitments are undertaken under Part III, each Party shall ensure that all

measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.

2. (a)Each Party shall maintain or institute as soon as practicable judicial, arbitral or administrative tribunals or procedures which provide, at the request of an affected service supplier, for the prompt review of, and where justified, appropriate remedies for, administrative decisions affecting trade in services. Where such procedures are not independent of the agency entrusted with the

administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.

(b) The provisions of subparagraph (a) shall not be construed to require a Party to institute such tribunals or procedures where this would be inconsistent with its Constitutional structure or the nature of its legal system.

3. Where authorisation is required for the supply of a service on which a specific commitment under this Agreement has been made, the competent authorities of each Party shall:

(a)in the case of an incomplete application, at the request of the applicant, identify all the additional information that is required to complete the application and provide the opportunity to remedy deficiencies within a reasonable timeframe;

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

(c) if an application is terminated or denied, to the maximum extent possible, inform the applicant in writing and without delay the reasons for such action. The applicant will have the possibility of resubmitting, at its discretion, a new application.

4. With the objective of ensuring that measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the Parties shall jointly review the results of the negotiations on disciplines on these measures, pursuant to Article VI.4

of GATS, with a view to their incorporation into this Agreement. The Parties note that such disciplines aim to ensure that such requirements are, inter alia:

(a)based on objective and transparent Criteria, such as competence and the ability to supply the Service,

not more burdensome than necessary to ensure the quality of the service,

in the case of licensing procedures, not in themselves a restriction on the supply of the service.

In sectors in which a Party has undertaken specific commitments under Part II, pending the incorporation of the disciplines referred to in paragraph 4 of this Article, that Party shall not apply licensing and qualification requirements and technical standards that nullify or impair its obligation under this Agreement in a manner which:

(i) does not comply with the criteria outlined in subparagraphs 4(a), (b) or (c) of this Article; and

(ii) could not reasonably have been expected of that Party at the time the specific Commitments in those sectors were made.

(b) In determining whether a Party is in conformity with the obligation under paragraph 5(a) of this Article, account shall be taken of international standards of relevant international organizations’ applied by that Party.

6. In sectors where specific commitments regarding professional services are undertaken, each Party shall provide for adequate procedures to verify the Competence of professionals of any other Party.

Article 6

Recognition

1. For the purposes of fulfillment of their respective standards or criteria for the authorization, licensing or certification of service suppliers, each Party may recognize the education or experience obtained, requirements met, or licenses or certifications granted in another Party. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement between the Parties or the relevant competent bodies or may be accorded autonomously.

2. Two or more Parties may enter into, or encourage their relevant competent bodies to enter into, negotiations on recognition of qualification requirements, qualification procedures, licensing and/or registration procedures for the purposes of fulfillment of their respective standards or criteria for the authorization, licensing or certification of service suppliers.

3. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1 of this Article, whether existing or future, shall afford adequate opportunity for other interested Parties to negotiate

The term "relevant international organizations" refers to international bodies whose membership is open to the relevant bodies of at least all Parties of this Agreement,

their accession to such an agreement or arrangement or to negotiate comparable ones with it. Where a Party accords recognition autonomously, it shall afford adequate opportunity for any other Party to demonstrate that education, experience, licenses, or certifications obtained or requirements met in that other Party's territory should be recognised.

4. A Party shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorisation, licensing or certification of services suppliers, or a disguised restriction on trade in Services.

Article 7

 Monopolies and Exclusive Service Suppliers

  1. Each Party shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Party's obligations under specific commitments.
  2. Where a Party's monopoly supplier competes, either directly or through an affiliated company, in the supply of a service outside the scope of its monopoly rights and which is subject to that Party's specific commitments, the Party shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such Commitments.
  3. If any Party has reason to believe that a monopoly supplier of a service of any other Party is acting in a manner inconsistent with paragraph 1 or 2 of this

Article, that Party may request the Party establishing, maintaining or authorising such supplier to provide specific information concerning the relevant operations.

4. The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Party, formally or in effect,

(a) authorises or establishes a small number of service suppliers, and

(b) substantially prevents competition among those suppliers in its territory.

Article 8

Business Practices

  1. The Parties recognise that certain business practices of services suppliers, other than those falling under Article 7, may restrain competition and thereby restrict trade in Services.
  2. Each Party shall, at the request of any other Party (the "Requesting Party"), enter into consultations with a view to eliminating practices referred to in paragraph 1 of this Article. The Party addressed (the "Requested Party") shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Requested Party shall also provide other information available to the Requesting Party, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the Requesting Party.

Article 9

Safeguards

  1. The Parties note the multilateral negotiations pursuant to Article X of the GATS on the question of emergency safeguard measures based on the principle of nondiscrimination. Upon the conclusion of such multilateral negotiations, the Parties shall conduct a review for the purpose of discussing appropriate amendments to this Agreement so as to incorporate the results of such multilateral negotiations.
  2. In the event that the implementation of this Agreement causes substantial adverse impact to a service sector of a Party before the conclusion of the multilateral negotiations referred to in paragraph 1 of this Article, the affected Party may request for consultations with the other Party for the purposes of discussing any measure with respect to the affected service sector. Any measure taken pursuant to this paragraph shall be mutually agreed by the Parties concerned. The Parties Concerned shall take into account the circumstances of the particular case and give sympathetic consideration to the Party seeking to take a measure.

Article 1 0

Payments and Transfers

  1. Except under the circumstances envisaged in Article 11, a Party shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
  2. Nothing in this Agreement shall affect the rights and obligations of any Party who is a member of the International Monetary Fund under the Articles of

Agreement of the Fund, including the use of exchange actions which are in conformity with the Articles of Agreement of the Fund, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article 11 or at the request of the Fund.

Article 1 1

Restrictions to Safeguard the Balance of Payments

Where a Party is in serious balance of payments and external financial difficulties or threat thereof, it may adopt or maintain restrictions on trade in services in accordance with Article XII of the GATS.

Article 12

 General Exceptions

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between Parties where like conditions prevail, or a disguised restriction on trade in services, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any Party of measures:

(a) necessary to protect public morals or to maintain public order:

(b) necessary to protect human, animal or plant life or health; The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society,

(c) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:

(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on Services Contracts,

(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidentiality of individual records and accounts;

(iii) safety;

(d) inconsistent with Article 19, provided that the difference in treatment is aimed at ensuring the equitable or effective imposition or collection of direct taxes in respect of services or service suppliers of other Parties;

" Measures that are aimed at ensuring the equitable or effective imposition or collection of

direct taxes include measures taken by a Party under its taxation system which:

  1. apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Party's territory, or
  2. apply to non-residents in order to ensure the imposition or Collection of taxes in the Party's territory; or
  3.  apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or
  4.  apply to consumers of services supplied in or from the territory of another Party in order to ensure the imposition or collection of taxes on such consumers derived from sources in the Party's territory; or
  5. distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or
  6. determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Party's tax base,

Tax terms or concepts in subparagraph (d) of Article 12 and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Party taking the measure.

 

(e) provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Party is bound.

Article 13

 Security Exceptions

Nothing in this Agreement shall be construed:

(a)to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or

(b) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests, including but not limited to:

(i) action relating to fissionable and fissionable materials or the materials from which they are derived;

(ii) action relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of Supplying a military establish mint;

(iii) action taken so as to protect critical Communications infrastructure from deliberate attempts intended to disable or degrade such infrastructure;

 (iv) action taken in time of war or other emergency in domestic or international relations; Or

(c) to prevent any Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

Article 14

 Subsidies

1. Except where provided in this Article, this Agreement shall not apply to subsidies or grants provided by a Party, or to any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service Consumers or Service suppliers. If such subsidies or grants significantly affect trade in Services Committed under this Agreement, any Party may request for consultations with a view to an amicable resolution of this matter.

2. Pursuant to this Agreement, the Parties shall:

(a) on request, provide information on subsidies related to trade in services Committed under this

Agreement to any requesting Party, and

(b) review the treatment of subsidies when relevant

disciplines are developed by the WTO.

Article 1 5

 WTO Disciplines

Subject to any future agreements as may be agreed pursuant to reviews of this Agreement by the Parties under Article 27, the Parties hereby agree and reaffirm their commitments to abide by the provisions of the WTO agreements as are relevant and applicable to trade in Services.

Article 1 6

 Cooperation

The Parties shall strengthen cooperation efforts in services sectors, including sectors which are not covered by existing cooperation arrangements. The Parties shall discuss and mutually agree on the sectors for cooperation and develop cooperation programmers in these sectors in order to improve their domestic capacities, efficiencies and competitiveness.

Article 17

 Increasing Participation of Cambodia, Lao PDR, Myanmar and Viet Nam

The increasing participation of Cambodia, Lao PDR, Myanmar, and Vietnam in this Agreement shall be facilitated through negotiated specific commitments, relating to:

(a) the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis,

(b) the improvement of their access to distribution

channels and information networks,

 (c) the liberalization of market access in sectors and

modes of supply of export interest to them; and

(d) appropriate flexibility for Cambodia, Lao PDR, Myanmar, and Viet Nam for opening fewer sectors, liberalizing fewer types of transactions and progressively extending market access in line with their respective development situation.

PART III: SPECIFIC COMMITMENTS

Article 18

 Market. Access

  1. With respect to market access through the modes of supply identified in Article 1(t)(i)-(iv), a Party shall accord services and service suppliers of any other Party treatment no less favorable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule.

2. In Sectors where market-access Commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule, are defined as:

(a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;

" If a Party undertakes a market-access Commitment in relation to the supply of a service through the mode of supply referred to in Article 1(t )(i) and if the Cross-border movement of capital is an essential part of the service itself, that Party is thereby Cormitted to allow such movement of Capital. If a Party undertakes a market-access Committent in relation to the supply of a service through the mode of supply referred to in Article 1 (t(iii), it is thereby committed to allow related transfers of capital into its territory.

(b) limitations on the total value of Service transactions or assets in the form of numerical quotas or the requirement of an economic needs test,

(c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test;

(d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test;

(e) measures which restrict or require specific types of legal entity or joint venture through which a Service supplier may supply a service; and

(f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.

Article 19

National Treatment

1. In the sectors inscribed in its Schedule, and subject to O any conditions and qualifications set out therein, each

8 Subparagraph 2(c) of this Article does not cover measures of a Party which limit inputs for

the supply of Services.

Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favorable than that it accords to its own like services and service suppliers.

2. A Party may meet the requirement of paragraph 1 of this Article by according to services and service suppliers of any other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.

3. Formally identical or formally different treatment shall be considered to be less favorable if it modifies the Conditions of competition in favors of services or service suppliers of the Party compared to like services or service suppliers of any other Party.

Article 20

 Additional Commitments

The Parties may negotiate commitments with respect to measures affecting trade in services not subject to scheduling under Articles 18 and 19 including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule.

Article 21

Schedule of Specific Commitments

1. The Parties shall enter into negotiations to conclude the packages of specific commitments under this

Specific Commitments assumed under this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

Agreement pursuant to Article 23. The Parties shall endeavour to achieve Commitments which are beyond those undertaken under the GATS.

2.Each Party shall set out in a schedule the specific Commitments it undertakes under Articles 18, 19 and 20. With respect to sectors where such commitments are undertaken, each Schedule shall specify:

(a) the sectors in which such commitments are undertaken;

(b) terms, limitations and conditions on market

access,

(c) conditions and qualifications on national treatment;

(d) undertakings relating to additional commitments;and

(e) where appropriate the time-frame for implementation of such commitments.

3.Measures inconsistent with both Articles 18 and 19 shall be inscribed in both the columns relating to Articles 18 and 19.

4.The schedules of specific commitments of a Party shall apply only to those Parties who have completed their respective schedule of specific commitments through negotiations.

5.The Parties' schedules of specific commitments shall mbe annexed to this Agreement upon completion of the negotiations and shall form an integral part thereof.

Article 22

 Application and Extension of Commitments

  1. China shall make a single schedule of specific commitments under Article 21 and shall apply this Schedule to all ASEAN Member Countries.
  2. Each ASEAN Member Country shall make its individual schedule of specific commitments under Article 21 and shall apply this Schedule to China and the rest of the ASEAN Member Countries.

Article 23

 Progressive Liberalisation

  1. The first package of specific commitments of each Party is hereby annexed to this Agreement.
  2. The Parties shall, with the aim of substantially improving on the first package of specific commitments, conclude the second package of specific commitments within a year from the date of entry into force of this Agreement.

. 3. At subsequent reviews pursuant to Article 27, the Parties shall enter into successive rounds of negotiations to negotiate further packages of specific commitments under Part III of this Agreement so as to progressively liberalise trade in services between the Parties.

Article 24

Modification of Schedules

1. A Party may modify or withdraw any commitment in its Schedule, at any time after three years from the date on which that Commitment has entered into force provided that:

(a) it notifies the Parties as well as the ASEAN Secretariat of its intention to modify or withdraw a Commitment no later than three months before the intended date of implementation of the modification or withdrawal; and

(b) it enters into negotiations with any affected Party to agree to the necessary compensatory adjustment.

2. In achieving a compensatory adjustment, Parties shall ensure that the general level of mutually advantageous Commitment is not less favourable to trade than provided for in the Schedules prior to such negotiations.

3. Any compensatory adjustment pursuant to this Article shall be accorded on a non-discriminatory basis to all Parties.

4. If the Parties Concerned are unable to reach an agreement on the compensatory adjustment, the matter shall be resolved by arbitration under the Agreement on Dispute Settlement Mechanism of the Framework Agreement. The modifying Party may not modify or withdraw its commitment until it has made compensatory adjustments in conformity with the findings of the arbitration.

5. If the modifying party implements its proposed modification or withdrawal and does not comply with the findings of the arbitration, any Party that participated in the arbitration may modify or withdraw substantially equivalent benefits in conformity with those findings. Notwithstanding Article 22, such a modification or withdrawal may be implemented solely with respect to the modifying Party.

PART IV: OTHER PROVISIONS

Article 25

 State, Regional and Local Government

in fulfilling its obligations and commitments under this Agreement, each Party shall ensure their observance by regional and local governments and authorities in its territory as well as their observance by non-governmental bodies (in the exercise of powers delegated by central, state, regional or local governments or authorities) within its territory.

Article 26

 Contact Point

1. Each Party shall designate a contact point to facilitate communications between the Parties on any matter covered by this Agreement, including the exchange of information relevant to the implementation and operation of this Agreement.

2. At the request of any Party, the contact point of the requested Party shall identify the office or official responsible for the matter and assist in facilitating communication with the requesting Party.

Article 27

 Review

The ASEAN Economic Ministers and the Minister of the Ministry of Commerce of China or their designated representatives shall meet within a year from the date of entry into force of this Agreement and then biennially or otherwise as appropriate to review this Agreement for the purpose of considering further measures to liberalize trade in services as well as to develop disciplines and negotiate agreements on matters referred to in Article 15 or any other relevant matters as may be agreed.

Article 28

Miscellaneous Provisions

1. The GATS Annexes, namely: Annex on Movement of Natural Persons Supplying Services, Annex on Air Transport Services, Annex on Financial Services, and Annex on Telecommunications shall apply to this Agreement, mutatis mutandis.

2. This Agreement shall include (a) the Annexes and the contents therein which shall form an integral part of this Agreement, and (b) all future legal instruments agreed pursuant to this Agreement.

3. Except as otherwise provided in this Agreement, this Agreement or any action taken under it shall not affect or nullify the rights and obligations of a Party under existing agreements to which it is a party.

 

Article 29

 Amendments

This Agreement may be amended by agreement in writing by the Parties and such amendments shall enter into force on such date or dates as may be agreed by the Parties.

Article 30

 Dispute Settlement

The Agreement on Dispute Settlement Mechanism of the Framework Agreement shall apply to this Agreement.

Article 31

 Denial of Benefits

A Party may deny the benefits of this Agreement:

(a) to the supply of a service, if it establishes that the service is supplied from or in the territory of a non-Party;

(b) in the case of the supply of a maritime transport service, if it establishes that the service is Supplied:

(i) by a vessel registered under the laws of a non-Party; and

(ii) by a person of a non-Party which operates

and/or uses the vessel in whole or in part.

(c) to a service supplier that is a juridical person, if it establishes that it is not a service supplier of another Party.

Article 32

Entry into Force

1. This Agreement shall enter into force on 1 July 2007.

2. The Parties undertake to complete their internal procedures for the entry into force of this Agreement prior to 1 July 2007.

3. Where a Party is unable to complete its internal procedures for the entry into force of this Agreement by 1 July 2007, the rights and obligations of that Party under this Agreement shall commence on the date of the completion of such internal procedures.

4. A Party shall upon the completion of its internal procedures for the entry into force of this Agreement notify all the other Parties in writing.

Article 33

 Depositary

For the ASEAN Member Countries, this Agreement shall be deposited with the Secretary-General of ASEAN, who shall promptly furnish a certified copy thereof, to each ASEAN Member Country.

IN WITNESS WHEREOF, the undersigned being duly authorized by their respective Governments, have signed the Agreement on Trade in Services of the Framework Agreement on the Comprehensive Economic Co-operation between the Association of the Southeast Asian Nations and the People's Republic of China.

Done at Cebu, the Philippines, this Fourteenth Day of January in the Year Two Thousand and Seven, in duplicate Copies in the English Language.

For Brunei Darussalam:                                For the People's Republic of China

MOHAMED BOLKIAH LI ZHAOXIN

Minister of Foreign Affairs Minister of Foreign Affairs

and Trade

For the Kingdom Of Cambodia

CHAM PRASIDH Senior Minister and Minister of Commerce

For the Republic Of Indonesia:

MARIELKA PANGESTU u- Minister of Trade

For the Lao People's Democratic Republic:

NAM VYAKETH Minister of Industry and Commerce

For Malaysia:

Trade and Industry

For the Union of Myanmar.

U SO E THA Minister for National Planning and Economic Development

For the Republic of the Philippines:

PETER B. FAVILA

Secretary of Trade and industry

For the Republic of Singapore:

LM HNG KIANG Minister for Trade and Industry

For the Kingdom of Thailand:

KRIRK-KRAI JIRAPAET Minister of Commerce

pcialist Republic of

TRUONG DINH TUYEN Minister of Trade

 

 

 

 

 

AGREEMENT ON TRADE IN SERVICES UNDER THE FRAMEWORK AGREEMENT ON COMPREHENSIVE  ECONOMIC  COOPERATION

BETWEEN THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS AND THE REPUBLIC OF INDIA  

PREAMBLE

The Governments of Brunei Darussalam (Brunei Darussalam}, ·the Kingdom of Cambodia (Cambodia), the Republic of Indonesia (Indonesia), the Lao People's Democratic Republic (Lao PDR), Malaysia, the Republic of the Union of Myanmar (Myanmar), the Republic of the Philippines (Philippines), the Republic of Singapore (Singapore}, the Kingdom of Thailand (Thailand) and the Socialist Republic of Viet Nam (Viet Nam), Member States of the Association of Southeast Asian Nations (collectively, "ASEAN" or "ASEAN Member States", or individually, "ASEAN Member State"), and the Republic of India (India);

RECALLING the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India ("the Framework Agreement")  signed by the Heads of Government/State of ASEAN Member States and India in Bali, Indonesia on the ath day of October 2003 and the Protocol to Amend the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India, signed in Bangkok, Thailand on the 13th day of August 2009;

RECALLING that Article 4 of the Framework  Agreement calls on ASEAN and India to progressively liberalise and eliminate substantially all discrimination and/or prohibition of new or more discriminatory measures with respect to trade in services between the Parties, and to expand the depth and scope of such trade with substantial coverage beyond those undertaken by the Parties under the General Agreement on Trade in Services of the World Trade Organization (WTO);

STRIVING to enhance cooperation in services between the Parties in order to improve  efficiency  and  competitiveness , as well as to diversify the supply and distribution  of services of      the respective service suppliers of the Parties, for implementation     in accordance with the timeframes to be mutually agreed by the Parties to the Framework Agreement;

RECALLING the instruction from the ASEAN Economic Ministers (AEM) - India Consultations held on the 28th day of August 2008 in Singapore for officials to commence, as soon as possible, negotiations on trade in services and investment as a single undertaking, and to work towards the conclusion of substantive discussions on these two agreements by 2009 to bring about a complete ASEAN-lndia Comprehensive Economic Cooperation Agreement ;

REAFFIRMING that Article 2 of the Framework Agreement has provisions for special and differential treatment to Cambodia , Lao PDR, Myanmar, and Viet Nam; and for flexibility to the Parties to address their sensitive areas with such flexibilities to be negotiated and mutually agreed based on the principle of reciprocity and mutual benefits;

RECOGNISING the right of the Parties to regulate, and to introduce new regulations, on the supply of services in their respective territories in order to meet national policy objectives and, given asymmetries existing with respect to the degree of development of services regulation withi

Parties, the particular need of the Parties to exercise this right;

 

HAVE AGREED AS FOLLOWS:

 

 

PART I: SCOPE AND DEFINITIONS ARTICLE 1

Scope

 

1.This Agreement  applies to  measures  by the Partiesaffecting trade in services.

2. This Agreement shall not apply to:

  1. services supplied in the exercise of governmental authority within the territory of each Party;
  2. laws, regulations, or requirements governing the procurement     by governmental agencies of services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of services for commercial sale; and
  3. cabotage in maritime transport services.

 

ARTICLE 2

Definitions

For the purposes of this Agreement:

  1. a s.ervice supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis, nor in competition with one or more service supp
  1. commercial presence means any type of business or professional establishment , including through:

 

  1. the constitution , acquisition or maintenance  of a juridical  person, or
  2. the  creation  or  maintenance  of  a  branch  or  arepresentative office,with in  the  territory    of   a   Party  for  the   purpose  of

supplying a service;

  1. direct taxes comprise all taxes on total  income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property , taxes on estates, inheritances and gifts, and taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation;
  2. GATS means the General Agreement on Trade in Services;
  3. juridical   person   means   any   legal   entity    duly constituted or otherwise organised under applicable law,          whether for profit  or  otherwise,  and  whether privately-owned     or governmentally-owned , including any  corporation, trust , partnership, joint venture, sole proprietorship , or association ;
  4. juridical  person of another  Party means a juridica l person which is either:

 

  1. constituted or otherwise organised under the law of that other Party, and is engaged in substantive business operations in the territory of that  Party or any other Party; 
  1. in the case of the supply  of a service through commercial presence, owned or controlled by:

(AA) natural persons of that Party; or

(BB) juridical     persons    of    that  other         Partyidentified under subparagraph (i);

  1. a juridical person is:

 

  1. "owned" by persons of a Party  if more than  50 per cent of the equity interest in it is beneficially owned by persons of that Party;
  2. "controlled" by persons of a Party if such persons have the power to name a majority of its directors or otherwise to legally direct its actions;
  3. "affiliated" with another person when it controls, or is controlled by, that other person; or when it and the other person are both controlled by the same person;

 

  1. licensing procedures means administrative or procedural rules that a natural or a juridical person, seeking authorisation to supply a service, including the amendment or renewal of a license, must adhere to in order       to demonstrate compliance with licensing requirements ;
  2. licensing requirements means substantive requirements , other than  qualification  requirements, with which a natural or a juridical person is required to comply in order to obtain, amend, or renew authorisation to supply a service;

U)  measure means any measure by a Party, whether  in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

 

  1. measures by Parties means measures taken by:

 

  1. central, regional, or local governments and authorities; and
  2. non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities;

In fulfilling its obligations and commitments under the Agreement, each Party shall take such reasonable measures as may be available to it to ensure their observa nce by regional and local governments and authorities and non-governmental bodies within its territory;

  1. measures  by  Parties  affecting  trade     in  services

include measures in respect of:

  1. the purchase, payment, or use of a service;
  2. the access to and use of, in connection with the supply of a service, services which are required by   the   Parties  to   be  offered   to  the   public generally;
  3. the presence, including commercia l presence, of persons of a Party for the supply of a service in the territory of another Party;

 

  1. monopoly supplier of a service means any person, public or private, which in the relevant market of the territory of a Party is authorised or established formally or in effect by that Party as the sole supplier of that service;
  2. natural person of another Party means a natural person who resides in the territory of that other Party or elsewhere, and who under the law of that other Party:
  1. is a national of that other Party; or
  2. has the right of permanent residence 1 in that other Party, in the case of a Party which accords substantially the same treatment to its permanent residents as it does to its nationals in respect of measures affecting trade in services , as notified after    the entry into force of this Agreement provided that no Party is obliged to accord  to such           permanent residents treatment more favourable than would be accorded by that other Party     to such permanent residents. Such notification     shall include the assurance to assume, with respect to the permanent residents, in accordance with its laws and regulations, the same responsibilities that other Party bears with respect to its nationals;

      O.Parties means the ASEAN Member States and India, collectively;

  1. Party means an ASEAN Member State or India;
  2. person means either a natural person or a juridica l perso

1 In the case of Cambodia , Indonesia, Lao PDR, Myanmar, Thailand,Viet Nam, and India, natural person of another Party shall be limited to a natural person who resides in the territory of that other Party or elsewhere and who under the law of that other Party is a national of that other Party. Therefore,  in line with the principle of reciprocity , this Agreement shall not apply to the permanent residents of Cambodia , Indonesia, Lao PDR, Myanmar, Thailand , Viet Nam, and India. Once any of these Parties enacts its domestic law on the treatment of permanent residents of another Party or non-party, there shall be negotiations on the issue of whether to include permanent residents in the coverage of natural person under this Agreement in respect of that Party.

 

 

  1. qualification procedures means administrative or procedural rules that a natural person must adhere to in order to demonstrate compliance with qualification requirements,      for the purpose of obtaining authorisation to supply a service;
  2. qualification requirements means substantive requirements relating to the competence of a natural person to supply a service, and which are required to be    demonstrated for the purpose of obtaining authorisation to supply a service;
  3. sector of a service means ,

 

  1. with reference to a specific commitment , one or more, or all, subsectors  of  that  service,  as specified in a Party's Schedule,
  2. otherwise,  the    whole   of   that   service   sector,including all of its subsectors ;

 

  1. services includes any service in any sector except services   supplied in the exercise of governmental authority;

 

  1. service consumer means any person that receives or uses a service;

 

  1. service of another Party means a service which 1s supplied ,

 

  1. from or in the territory of that other Party, or in the case of maritime transport , by a vessel registered under the laws of that other Party, or by a person of that other  Party which  supplies  the  service through the operation of a vessel and/or its use in whole or in part; or
  1. in the case of the supply of a service through commercial presence or through the presence of natural persons, by a service supplier of that other Party;

 

  1. service  supplier  means any  person that supplies a service·,2

 

  1. supply  of  a  service  includes  the   production, distribution , marketing, sale and delivery of a service ;

 

  1. technical standards means measures that lay down the characteristics of a service or the manner in which it is supplied . Technical standards also include the procedures   relating to the enforcement of such standards;

(aa)  trade in services is defined as the supply of a service:

  1. from the territory of a Party into the territory of any other Party ("cross-border");
  2. in the territory of a Party to the service consumer of any other Party ("consumption abroad");
  3. by a service supplier of a Party, through commercial presence in the territory of any other Party ("commercial presence");
  4. by a service supplier of a Party, through presence of natural persons of a Party in the territory of any other Party ("presence of natural persons").

 

 

  1. Where the service is not supplied directly by a juridica l person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall, nonetheless , through such presence be accorded the treatment provided for service suppliers under this Agreement. Such treatment shall be extended to the presence through which the service is supplied and need not be extended to any other parts of the supplier located outside the territory where the service is supplied.

 

 

 

PART II: OBLIGATIONS AND DISCIPLINES

ARTICLE 3

Transparency

 

  1. Each Party shall publish promptly and, except in emergency situations, at the latest by the time of their entry into force, all relevant measures of general application which pertain to or affect the operation of this Agreement. International agreements pertaining to or affecting trade in services to which a Party is a signatory shall also be published.
  2. Where publication as referred to in paragraph 1 of this Article is not practicable, such information shall be made otherwise publicly available.
  3. Each Party shall respond promptly to all requests by any other Party for specific information on any of its measures of general application or international agreements within the meaning of paragraph 1 of this Article. Each Party shall also establish one or more enquiry points to provide specific information to any other Party, upon request, on all such matters.

 

 

ARTICLE 4

Disclosure of Confidential Information

Article 111 bis of the GATS is, mutatis mutandis, incorporated into and shall form an integral part of this Agreement.

 

 

ARTICLE 5

Domestic Regulation

 

  1. In sectors where specific commitments are undertaken under Part Ill of this Agreement, each Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective, and impartial manner.
  2. (a) Each Party shall maintain or institute as soon as practicable   judicial,  arbitral  or  administrative tribunals   or procedures which  provide,  at  the request of an affected service supplier, for the prompt review of, and where justified, appropriate remedies for, administrative  decisions  affecting trade in services. Where such procedures are not independent of the agency entrusted with the administrative decision concerned, the Party shall ensure that the procedures in fact provide for an objective and impartial review.

(b) The provisions of paragraph 2(a) of this  Article shall  not  be  construed  to require  a Party  to institute such tribunals or procedures where this would    be    inconsistent with its  constitutional structure or  the  nature   of   its    legal  system provided,  however,  that  in the  event  separate tribunals or procedures cannot be constituted, the relevant  Party  shall  ensure  that adequate remedies are available for the  affected services supplier referred  to  in  paragraph  2(a)    of  this Article  through  the ordinary  judicial  or  quasi­ judicial procedure of that Party 3

  1. Where  authorisation  is required for  the  supply  of  a service    on    which    a    specific    commitment     under          this

 

---------------------------------------

3. For greater certainty, the application of this paragraph shall be governed by the respective laws and regulations of the Parties. Agreement  has been  made, the competent  authorities  of

each Party shall:

  1. within a reasonable period of time after the submission   of   an   application   considered complete under domestic laws and regulations, inform the applicant of the decision concerning the application;

 

  1. at the request of the applicant , without undue delay, provide information concerning the status of      the application, including incomplete application.       In the case of an incomplete application, identify all the additional information that is required to complete the application and provide an opportunity to the applicant to remedy deficiencies within a reasonable timeframe ;

 

  1. if an application is terminated or denied, to the maximum extent possible, inform the applicant in writing , without undue delay, the reasons for such action.   The applicant will have the possibility of resubmitting, at its discretion, a new application.

 

  1. With the objective of ensuring that measures relating to qualification requirements and procedures , technical standards and licensing requirements do not constitute unnecessary barriers to trade in services, the Parties shall jointly review the results of the negotiations on disciplines on these measures , pursuant to paragraph 4 of Article VI of the GATS, with a view to their incorporation into this Agreement. The Parties note that such disciplines aim to ensure that such requirements are, inter alia:

 

  1. based on objective and transparent criteria, such as competence and the ability to supply the service;
  1. not more burdensome than necessary to ensure the quality of the service ;
  2. in the case of licensing procedures , not in themselves   a restriction on the supply of the service.

 

  1. (a)  In  sectors  in  which  a  Party  has  undertaken specific   commitments under Part 111 of this Agreement,    pending the incorporation of the disciplines   referred to  in  paragraph  4  of  this Article, that Party shall not apply licensing and qualification    requirements    and     technical standards   that  nullify  or  impair  its  obligation under this Agreement in a manner which:

 

  1. does not comply with the criteria outlined in paragraphs 4(a), (b) or (c) of this Article; and
  2. could not reasonably have been expected of   that Party at the time the specific commitments in those sectors were made.

 

(b) In determining whether a Party is in conformity with the obligation under paragraph S(a) of this Article,  account  shall  be taken  of international

standards of relevant international organisations4 applied by that Party

 

  1. In sectors where specific commitments regarding professional   services are undertaken , each Party shall provide for adequate procedures to verify the competence of professionals   of any other Party in accordance with provisions in paragraph 5 of this Article.

 

---------------------------------------------------------------------------------

4 The term "relevant international organisations" refers to international bodies whose membership is open to the relevant bodies of all Parties to this Agreement.

 

ARTICLE 6

Recognition

 

  1. For the purposes of fulfilment of their respective standards or criteria for the authorisation , licensing or certification of service suppliers , each Party may recognise the education or experience obtained, requirements met, or licenses or certifications granted in another Party. Such recognition, which may be achieved through harmonisation or otherwise, may be based upon an agreement or arrangement between the Parties or the relevant competent bodies or may be accorded autonomously .
  2. A Party that is a party to an agreement or arrangement of the type referred to in paragraph 1 of this Article, whether existing or future, shall afford adequate opportunity for other interested Parties to negotiate their accession to such an agreement or arrangement or to negotiate comparable ones with it. Where a Party accords recognition autonomously , it shall afford adequate opportunity for any other Party to demonstrate that education , experience , licenses, or certifications obtained or requirements met in that other Party's territory should be recognised.
  3. Upon request being made in writing by a Party to the other Party, the Parties shall encourage their respective professional bodies or professional regulatory authorities , in any regulated services sector of mutual interest to negotiate and conclude within 12 months or a reasonable timeframe to be mutually agreed between the professional bodies of both Parties, any arrangement for mutual recognition of education, or experience obtained , requirements met, or licenses or certifications granted in that service sector, with a view to the achievement of early outcomes. Any delay or failure by these professional bodies to reach and conclude agreement on the details of .such agreements or arrangements  shall  not be regarded as a breach of a Party's obligations under this paragraph and shall not be subject to the Agreement on Dispute   Settlement   Mechanism   under   the   Framework

Agreement (ASEAN-lndia DSM Agreement). Progress in this regard will be reviewed by the Parties in the course of the review of this Agreement pursuant to Article 27 (Review).

  1. Where harmonisation, agreement or arrangement as provided in paragraphs 1, 2 and 3 of this Article does  not exist , each Party shall leave any consideration on mutual recognition or licensing to relevant professional bodies or professional regulatory authorities in its territory  in accordance with domestic laws and regulations of the host country.
  2. A Party shall not accord recognition in a manner which would constitute a means of discrimination between countries in the application of its standards or criteria for the authorisation, licensing or certification of services suppliers, or a disguised restriction on trade in services .
  3. The Parties agree that they shall not be responsible in any way for the settlement of disputes arising out of or under the agreements or arrangements for mutual recognition concluded by their respective professional bodies or professional regulatory authorities under the  provisions  of this Article  and that the provisions of the ASEAN-lndia DSM Agreement shall not apply to disputes arising out of, or under, the provisions of such agreements or arrangements .

 

 

 

ARTICLE 7

Monopolies and Exclusive Service Suppliers

  1. Each Party shall ensure that any monopoly supplier of a service in its territory does not, in the supply of the monopoly service in the relevant market, act in a manner inconsistent with that Party's obligations under specific commitments.
  2. Where a Party's monopoly supplier competes , either directly  or through an affiliated company,  in the supply  of aservice outside the scope of its monopoly rights and which is subject to that Party's specific commitments, the Party shall ensure that such a supplier does not abuse its monopoly position to act in its territory in a manner inconsistent with such  commitments .

 

  1. If any Party has reason to believe that a monopoly supplier of a service of any other Party is acting in a manner inconsistent with paragraphs 1 or 2 of this Article, that Party may request the Party establishing , maintaining or authorising such supplier to provide specific information concerning the relevant operations.
  2. The provisions of this Article shall also apply to cases of exclusive service suppliers, where a Party, formally or in effect,

 

  1. authorises   or   establishes   a  small  number of service suppliers; and
  2. substantially prevents competition among those suppliers in its territory.

 

 

 

ARTICLE 8

Business Practices

  1. The Parties recognise that certain business practices of services suppliers, other than those falling under Article 7 (Monopolies and Exclusive Service Suppliers), may restrain competition and thereby restrict trade in services.
  2. Each Party shall, at the request of any other Party, enter into consultations with a view to eliminating practices referred   to in   paragraph 1 of this Article.The Party addressed shall accord full and sympathetic consideration to such a request and shall cooperate through the supply of publicly available non-confidential information of relevance to the matter in question. The Party addressed shall  also provide other information available to the requesting Party, subject to its domestic law and to the conclusion of satisfactory agreement concerning the safeguarding of its confidentiality by the requesting Party.

 

 

 

ARTICLE 9

Safeguards

  1. The Parties note the multilateral negotiations pursuant to Article X of the GATS on the question of emergency safeguard measures based on the principle of non­ discrimination. Upon the conclusion of such multilateral negotiations, the Parties shall conduct a review for the purpose of discussing appropriate amendments to this Agreement so as to incorporate the results of such multilateral negotiations. Until such a time, no Party shall take safeguard actions against services and service suppliers of the other Party or Parties, except in accordance with the procedure as detailed in paragraph 2 of this Article .
  2. In the event that the implementation of this Agreement causes substantial adverse impact to a service sector of a Party before the conclusion of the multilateral negotiations referred to in paragraph 1 of this Article , the affected Party may request for consultations with the other Party or Parties for the purposes of discussing any safeguard measures with respect to the affected service sector. Any measure taken pursuant to this paragraph, including the duration for which the measure shall apply , shall be mutually agreed by the Parties concerned, shall be applicable based on the principle of non-discrimination , and shall be limited to the specific service sector. The Parties concerned shall take into account the circumstances of the particular case and give sympathetic consideration to the Party seeking to take a measure.

 

 

 

ARTICLE 10

Payments and Transfers

  1. Except under the circumstances envisaged in Article 11 (Restrictions to Safeguard the Balance of Payments), a Party shall not apply restrictions on international transfers and payments for current transactions relating to its specific commitments.
  2. Nothing in this  Agreement shall affect the rights and obligations of any Party who is a member of the International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange actions which are  in conformity with the Articles of Agreement of the Fund, provided that a Party shall not impose restrictions on any capital transactions inconsistently with its  specific commitments regarding such transactions , except  under Article 11 (Restrictions to Safeguard the Balance of Payments) or at the request of the Fund.

 

ARTICLE 11

Restrictions to Safeguard the Balance of Payments

Where   a Party is in serious balance of payments and external financial difficulties or threat thereof , it may adopt or maintain restrictions on trade in services in accordance with paragraphs 1, 2, and 3 of Article XII of the GATS.

ARTICLE 12

General Exceptions

Subject  to  the requirement  that  such measures  are  not applied  in a  manner which  would  constitute  a  means  of arbitrary  or unjustifiable  discrimination between  Parties where like· conditions prevail, or a disguised restriction on trade  in services,nothing   in  this Agreement shall be construed  to  prevent  the  adoption  or  enforcement  by  any Party of measures:

  1. necessary to protect public morals or to maintain  public order;5
  2. necessary to protect human, animal or plant life or health;
  3. necessary to secure compliance with laws or regulations which are not inconsistent with the provisions   of this Agreement including those relating to:

 

  1. the prevention of deceptive and fraudulent practices or to deal with the  effects of a default on services contracts ;
  2. the protection of the privacy of individuals in relation  to the processing  and dissemination of personal data and the protection of confidentiality  of  individual records and accounts;
  3. safety;

 

  1. inconsistent with Article 18 (National Treatment) , provided that the difference in treatment is aimed at ensuring the equitable or effective6 imposition

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  1. The public order exception may be invoked only where a genuine and sufficient ly serious threat is posed to one of the fundamental interests of society .
  2. Measures that are aimed at ensuring the equitable or effective imposition or collection of

direct taxes include measures taken by a Party under its taxation system which:

  1. apply to non-resident service suppliers in recognition of the fact that the tax obligation of non-residents is determined with respect to taxable items sourced or located in the Party's territory; or
  2. apply to non-residents in order to ensure the imposition or collection of taxes in the Party's territory; or
  3. apply to non-residents or residents in order to prevent the avoidance or evasion of taxes, including compliance measures; or
  4. apply to consumers of services supplied in or from the territory of another Party in order to ensure the imposition or collection of taxes on such consum ers derived from sources in the Party's territory; or collection of direct taxes in respect of services or service suppliers of other Parties;

 

  1. resulting in difference in treatment provided that the difference in treatment is the result of an agreement on the avoidance of double taxation or provisions on the avoidance of double taxation in any other international agreement or arrangement by which the Party is bound.

 

 

 

ARTICLE 13

Security Exceptions

  1. Nothing in this Agreement shall be construed :

 

  1. to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or
  2. to prevent any Party from taking any action which it  considers  necessary  for  the  protection  of  its essential  ·security   interests ,  including   but   not limited to:

 

  1. action relating to fissionable and fusionable materials or the materials from which they are derived;
  2. action relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as

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  1. distinguish service suppliers subject to tax on worldwide taxable items from other service suppliers, in recognition of the difference in the nature of the tax base between them; or

  2. determine, allocate or apportion income, profit, gain, loss, deduction or credit of resident persons or branches, or between related persons or branches of the same person, in order to safeguard the Party's tax base. Tax terms or concepts in subparagraph (d) of this Article and in this footnote are determined according to tax definitions and concepts, or equivalent or similar definitions and concepts, under the domestic law of the Party taking the measure.

is carried  on directly or indirectly for the purpose of supply ing a military establishment;

 

  1. action taken so as to protect critical public infrastructures    including communication, power    and water infrastructures from deliberate attempts intended to disable or degrade such infrastructure;
  2. action taken in time of war or other emergency in domestic or international relations; or

 

  1. to prevent any Party from taking any action in pursuance of its  obligations  under  the  United Nations     Charter for  the  maintenance  of international peace and security.

 

  1. Each Party shall inform the other Parties to the fullest extent possible of measures taken  under paragraphs 1(b) and 1(c) of this Article and of their termination.
  2. Nothing in this Agreement shall be construed to require a Party to accord the benefits of this Agreement to a service supplier of another Party where a Party adopts or maintains measures in any legislation or regulation which it considers necessary for the protection of its essential security interest with respect to a non-Party or a service supplier of a non­ Party that would be violated or circumvented if the benefits of this Agreement were accorded to such service supplier.

 

ARTICLE 14

Subsidies

  1. Except where provided in this Article, this Agreement shall not apply to subsidies or grants provided by a Party, or to any conditions attached to the receipt or continued receipt of such subsidies or grants, whether or not such subsidies or grants are offered exclusively to domestic services, service consumers, or service suppliers. If such subsidies or grants significantly affect trade in services committed under this Agreement , any Party may request for consultations with a view to an amicable resolution of this matter.
  1. Pursuant to this Agreement, the Parties shall:

 

  1. on request, provide information on subsidies related to trade in services committed under this Agreement to any requesting Party; and
  2. review the treatment of subsidies when relevant disciplines are developed by the WTO .

 

  1. The provisions of the ASEAN-lndia DSM Agreement shall not apply to any request made or consultation held under the provisions of this Article or to any dispute that may arise between the Parties under the provisions of this Article.

 

ARTICLE 15

Cooperation

The Parties shall strengthen cooperation efforts in services sectors, including sectors which are not covered by existing cooperation arrangements . The Parties shall discuss and mutually agree on the sectors for cooperation and develop cooperation programmes in these sectors in order to improve their domestic capacities, efficiencies and competitiveness .

 

ARTICLE 16

Increasing Participation of Cambodia, Lao PDR, Myanmar and Viet Nam

  1. The increasing participation of Cambodia, Lao PDR, Myanmar, and Viet Nam in this Agreement shall be facilitated through negotiated specific commitments , relating to:

 

  1. the  strengthening  of  their  domestic  services capacity and its efficiency and competitiveness, inter   a/ia,  through  access  to  technology  on  a commercial basis;
  2. the improvement of their access to distribution channels     and information  networks  on  a commercial basis; and
  3. the liberalisation of market access in sectors and modes of supply of export interest to them.

 

  1. Appropriate flexibility shall be accorded to Cambodia, Lao   PDR, Myanmar, and Viet Nam for progressive liberalisation in terms of specific commitments undertaken in line with their respective stage of development.

 

PART Ill:

SPECIFIC COMMITMENTS

ARTICLE 17

Market Access

 

1. With respect to market access through the modes of supply identified in paragraph (aa) of Article 2 (Definitions) of this Agreement, a Party shall accord services and service suppliers of any other Party treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule.7

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  1. If a Party undertakes a market-access commitment in relation to the supply of a service  through  the  mode of supply  referred to  in paragraph  (aa)(i)  of Article  
  1. In sectors where market access commitments are undertaken, the measures which a Party shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule, are defined as:

 

  1. limitations on the number of service suppliers whether    in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test;
  2. limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test;
  3. limitations on the total number of service operations   or on the total quantity of service output     expressed in terms of designated numerical   units in the form of quotas or the requirement of an economic needs test;8
  4. limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply   of a specific service in the form of numerical    quotas or the requirement of an economic needs test;

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(Definitions) of this Agreement and if the cross-border movement of capital is an essential part of the service itself, that Party is thereby committed to allow such movement of capital. If a Party undertakes a market-access commitment in relation to the supply of a service through the mode of supply referred to in paragraph (aa)(iii) of Article 2 (Definitions)  of this Agreement,  it is thereby  committed to  allow  related transfers of capital into its territory.

Paragraph 2(c) of this Article does not cover measures of a Party which limit inputs for the supply of services.

  1. measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and
  2. limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.

 

ART ICLE 18

National Treatment

  1. In the sectors inscribed in its Schedule, and subject to any conditions and qualifications set out therein, each Party shall accord to services and service suppliers of any other Party, in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers9.
  2. A Party may meet the requirement of paragraph 1 of this Article by according to services and service suppliers of any other Party, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers.
  3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of competition in favour of services or service suppliers of the Party compared to like services or service suppliers of any other Party.

 

ARTICLE 19

Additional  Com

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  1. Specific commitments assumed under this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers.

The Parties may negotiate commitments with respect to measures    affecting trade in services not subject to scheduling under Article 17 (Market Access) and Article 18 (National Treatment), including those regarding qualifications, standards or licensing matters. Such commitments shall be inscribed in a Party's Schedule.

 

ART ICLE 20

Schedules of Specific Commitments

  1. Each Party shall set out in a schedule the  specific commitments it undertakes under Article 17 (Market Access), Article 18 (National Treatment), and Article 19 (Additional Commitments). With respect to sectors where such commitments are undertaken, each Schedule shall specify:

 

  1. the sectors in whichsuch commitments are undertaken;
  2. terms,limitations and conditions  on  market  access;
  3. conditions and qualifications on national treatment;
  4. undertakings relating to additional commitments;and
  5. where approp riate the timeframe for  implementation of such commitments.

 

  1. Measures inconsistent with both Articles 17 (Market Access) and 18 (National Treatment) shall be inscribed in the column relating to Article 17 (Market Access). In this case the inscription will be considered to provide a condition or qualification to Article 18 (National Treatment) as well.
  2. Where commitments are undertaken on the movement of natural persons, they shall include any one or more of the categorie·s of natural persons as defined in Annex on Movement of Natural Persons subject to paragraph 1 of this Article.
  1. The Parties' schedules of specific commitments shall be annexed to this Agreement upon completion of the negotiations and shall form an integral part thereof.

 

ARTICLE 21

Application and Extension of Commitments

  1. India shall make a single schedule of specific commitments under Article 20 (Schedules of Specific Commitments) and shall apply this Schedule to Brunei Darussalam, Cambodia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand and Viet Nam, and separate individual schedules of specific commitments to Indonesia and the Philippines,  respectively.
  2. Each ASEAN Member State shall make its individual schedule of specific commitments under Article 20 (Schedules of Specific Commitments) and shall apply this Schedule to India and the rest of the ASEAN Member States.

ARTICLE 22

Modification of Schedules

  1. A Party may modify or withdraw any commitment in its Schedule, at any time after three years from the date on which that commitment has entered into force provided that:

 

  1. it notifies the Joint Committee on Services of its intention to modify or withdraw a commitment no later than three months before the intended date of     implementation of the modification or withdrawal; and

  2. it enters into negotiations with any affected Party to agree to the necessary compensatory adjustment.

  1. In achieving a compensatory adjustment , Parties shall ensure that the general level of mutually advantageous commitment is not less favourable to trade than provided for in the Schedules prior to such negotiations .
  2. Any compensatory adjustment pursuant to this Article shall be accorded on a non-discriminatory basis to all Parties.
  3. If the Parties concerned are unable to reach an agreement on the compensatory adjustment , the matter shall be resolved under the ASEAN-lndia DSM Agreement. The modifying Party may not modify or withdraw its commitment until it has made compensatory  adjustments  in  conformity with the findings of the arbitration .
  4. If   the    modifying    Party    implements  its proposed modification or withdrawal and does not comply with the findings of the arbitration, any Party that participated in the . arbitration may modify or withdraw substantially equivalent benefits in conformity with those findings.          Notwithstanding Article 21 (Application and Extension of Commitments), such a modification or withdrawal may be implemented solely with respect to the modifying Party.

 

 

PART IV: OTHER PROVISIONS ARTICLE 23

Relation to Other Agreements

  1. Each Party reaffirms its rights and obligations vis-a-vis another Party under the WTO Agreement and other agreements to which these Parties are party.
  2. Nothing in this Agreement shall be construed to derogate ·from any right or obligation of a Party under the WTO Agreement and other agreements to which these Parties are party.
  1. In the event of any inconsistency between this Agreement and any other agreement to which two or more Parties are party, such Parties shall immediately consult with a view to finding a mutually satisfactory solution.
  2. Nothing in this Agreement shall prevent any individual ASEAN Member State from entering into any agreement with any one or more ASEAN Member State and/or India.
  3. This Agreement shall not apply to any agreement among ASEAN Member States or to any agreement between any ASEAN Member State  and India unless  otherwise agreed by the parties to that agreement.

 

ARTICLE 24

Annexes and Future Legal Instruments

  1. The Annexes shall form an integral part of this Agreement.
  2. The Parties may adopt legal instruments in the future pursuant to the provisions of this Agreement, including those proposed to them by the Joint Committee on Services. Upon their respective entry into force, such instruments shall form an integral part of this Agreement.

 

ARTICLE 25

Contact Point

1. Each Party shall designate a contact point to facilitate communications between the Parties on any matter covered by this Agreement , including the exchange of information relevant to the implementation and operation of this Agreement.

2. At the request of any  Party, the contact point of the requested Party shall identify the office or official responsible for the matter and assist in facilitating communication with the requesting Party.

 

ARTICLE  26

Joint Committee on Services

  1. A Joint Committee on Services shall be established under this Agreement within one year upon entry into force of this Agreement.
  2. The functions of the Joint Committee on Services shall be to:

 

  1. review the implementation and operation of this Agreement ;
  2. submit a report to the Parties on the implementation and operation of this Agreement;
  3. consider and recommend to the Parties any amendments to this Agreement;
  4. · supervise and coordinate the work of all Sub­ committees  established  under  this  Agreement; and
  5. carry out other functions as may  be agreed by the Parties.

 

  1. The Joint Committee on Services :

 

  1. shall be composed  of  representatives  of  the Parties; and
  2. may establish Sub-Committees and delegate its responsibilities thereto.

 

ARTICLE 27

Review

The Joint Committee on Services shall meet within one year from the date of entry into force of this Agreement to review the implementation and operation of this Agreement or' as mutually agreed by the Parties. Thereafter, biennially or otherwise as appropriate the Joint Committee on Services shall review this Agreement, including for the purpose of progressively liberalising trade in services as well as developing disciplines and negotiating subsequent packages of commitments as may be agreed, with a view to facilitate the elimination of substantially all remaining discriminations between the Parties with regard to trade in services covered under this Agreement , including the Annex on Movement of Natural Persons.

 

ARTICLE 28

Miscellaneous  Provisions

  1. The GATS Annexes, namely : Annex on Movement of Natural Persons Supplying Services, Annex on Air Transport Services, Annex on Financial Services , and Annex on Telecommunications shall apply to this Agreement , mutatis mutandis.
  2. This Agreement shall include (a) the Annexes including the Annex on Movement of Natural Persons agreed under this Agreement and the contents therein which shall form an integral part of this Agreement , and (b) all future legal instruments agreed pursuant to this Agreement.
  3. Except as otherwise provided in this Agreement , this Agreement or any action taken under it shall not affect or nullify the rights and obligations of a Party under existing agreements to which it is a party.

 

ARTICLE 29

Amendments

This Agreement may be amended by agreement in writing by the Parties and such amendments shall enter into force on such date or dates as may be agreed by the Parties.

ARTICLE 30

Dispute Settlement

Unless otherwise provided in this Agreement, any dispute concerning the interpretation , implementation,  or application of this Agreement shall be resolved through the procedures and mechanisms as set out in the ASEAN-lndia DSM Agreement.

 

ARTICLE 31

Denial of Benefits

A Party may deny the benefits of this Agreement:

  1. to the supply of a service , if it establishes that the service is supplied from or in the territory of a non-Party;
  2. in the case of the supply of a maritime transport service , if it establishes that the service  is supplied:

 

  1. by a vessel  registered  under the laws of a non-Party ; and
  2. by a person of a non-Party which operates and/or uses the vessel in whole or in part;
  1. to  a  service  supplier  of  another  Party  where  a Party establishes that:

 

  1. where such service supplier  is a  natural person,   such  natural  person  is   not  a "natural person of another Party" as defined under this Agreement; and
  2. where such service supplier is a juridica l person, such person is not a "juridical person of another Party" as defined under this Agreement.

 

ARTICLE 32

Entry into Force

  1. Each Party shall notify the other Party in writing upon completion of its internal requirements10 necessary for entry into force of this Agreement. This Agreement shall enter into force  on  1 July  2015  for any  Party that  has made such notifications provided that India and at least four (4) ASEANMember States have made such notifications by that date.
  2. If this Agreement does not enter into force on 1 July 2015 it shall enter into force, for any Party that has made the notification referred to in Paragraph 1 of this Article, sixty(60) days after the date by which India and at least four (4) ASEAN Member States have made the notifications  referred to in Paragraph 1 of this Article.
  3. After the entry into force of this Agreement pursuant to Paragraph 1 or 2 of this Article , this Agreement shall enter into force for any Party sixty (60) days after the date of its notification referred to in Paragraph 1 of this Article .

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1° For greater certainty, the term "internal requirements" may include obtaining governmental approval or parliamentary approval in accordance with domestic law.

 

ARTICLE 33

Depositary

For the ASEAN Member States, this Agreement shall be deposited with the Secretary-General of ASEAN, who shall promptly furnish a certified copy thereof , to each ASEAN Member State.

 

ARTICLE 34

Withdrawal and Termination

  1. Any Party may withdraw from this Agreement by giving 12 months advance notice in writing to the other Parties.
  2.     This Agreement shall terminate if,pursuant to paragraph 1:
  1. India withdraws; or
  2. this  Agreement is  in  force  for  less  than  fourASEAN Member States.

 

  1. The other Parties may request in writing consultations concerning any matter that would arise from the withdrawal within 60 days after the date of receipt of the notice in paragraph 1 of this Article . The requested Party shall enter into consultations in good faith upon receipt of the request.

IN WITNESS WHEREOF , the undersigned being duly authorised by their respective Governments , have signed the Agreement on Trade in Services under the Framework Agreement on Comprehensive Economic Cooperation between the Association of the Southeast Asian Nations and the Republic of India.

 

Annex on Movement of Natural Persons

 

For the purposes of this Agreement:

  1. Business Visitor means a  natural  person seeking to enter the territory of another Party temporarily, whose remuneration is derived outside that other Party:

 

  1. for negotiating sale of goods or supply of services on behalf of a service supplier of a Party   where  such  negotiations  do  not involve  making direct sales to the general public and the representative of the service supplier    is not    involved   in   supplying services directly ; or
  2. as an employee of a juridical person who is a manager , an executive or a specialist (as defined in paragraphs (c)(i), (c)(ii) and (c)(iii) of    this Annex)       for    the    purpose of establishing an investment or setting up a commercial presence   for    the    juridical person in the territory of another Party; or
  3. for  the  purpose  of   establishing   an investment   or setting up a commercial presence; or
  4. for the purpose of participating in business negotiations or business meetings.

 

  1. Contractual Service Supplier 11 means an employee of a juridical person of a Party which

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11 For greater certainty , in the case of the Philippines, Contractual Service Supplier covers this definition , and also (a) is either an executive, manager, or specialist as may be specified in the schedule of commitments, and (b) has been an employee of does not have commercial presence in another Party where the services will be provided, who:

 
  1. enters the territory of that other Party temporarily in order to perform a service pursuant to  a  contract(s) between  the employer  and a service consumer(s) 12 in

the territory of that other Party;

  1. receives remuneration from his or her employer; and
  2. must possess the appropriate educational and other qualifications relevant to the service to be provided and has obtained, wherever necessary, registration with the relevant professional body.

 

  1. Intra-Corporate Transferee (ICT) refers to an employee of a juridical person of a Party as defined in this Agreement who is transferred temporarily for the supply of a service through commercial presence in the territory of another Party, and has been an employee of that juridical person for a period as may be specified in the schedule of commitments, and who is:

 

  1. an Executive: a natural person within the organisation  who primarily directs the management of the organisation and exercises wide latitude in decision making and receives only general supervision or direction from higher level executives, the board of directors, or stockholders of the business.Executives  would  not  directly

the jurid ical person for a period as specified in the schedule of commitments of each Party preceding the date of the application for entry or temporary stay.

12 In the case of Indonesia, Thailand and Viet Nam, the service consumer(s) have to be juridical person(s) .

 

perform tasks necessary for the prov1s1on of the service to the extent that this does not prevent the Executive, in the course of executing his duties as described above, from performing such tasks as may be necessary for the provision of the service

  1. a Manager: a natural person within the organisation who primarily directs the organisation/department/subdivision and exercises supervisory and control funct ion over    other supervisory , managerial or professional staff; does not include first line supervisors unless employees supervised are    professionals , nor does it include employees    who directly perform tasks necessary for the provision of the service provided that this does not prevent the Manager , in the course of executing his duties as described above, from performing tasks  as may be necessary for the provision of the service; or
  2. a Specialist: a natural person within the organisation who possesses knowledge  at an advanced level of expertise essential to the establishment/provision of the service and/or possesses relevant  knowledge  of the organisation 's service, research equipment , techniques or management. A specialist may include, but is not limited to, members of a licensed profession.