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Provisions on Trade in Services in Trade and Integration Agreements
 in the Western Hemisphere


Part III: Sectoral Coverage
Financial Services

WTO/GATS
Annex on Financial Services
Scope and Definition: this annex applies to measures affecting the supply of financial services, which shall mean the supply of a service as defined in Article I of the Agreement.
Domestic Regulation: 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.
Recognition: 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.
A Member that is a party to such an agreement or arrangement referred to above, whether future or existing, shall afford adequate opportunity for other interested Members to negotiate the accession to such agreements or arrangements, or to negotiate comparable ones with it.
Dispute Settlement: panels for disputes on prudential issues and other financial matters shall have necessary expertise relevant to the specific financial service under dispute.
Definitions: See list in Annex.

Second Annex on Financial Services
A Member may, during a period of 60 days beginning four months after the date of entry into force of the Agreement Establishing the WTO:
(a) list in that Annex measures relating to Financial Services which are inconsistent with paragraph 1 of Article II (MFN Treatment) of the Agreement;
(b) improve, modify or withdraw all or part of the commitments on Financial Services inscribed in its schedule.

NAFTA
Chapter Fourteen: Financial Services
Article 1401 : Scope and Definition

This Chapter applies to measures adopted or maintained by a Party relating to: (a) financial institutions of another Party; (b) investors of another Party, and investments of such investors, in financial institutions in the Party's territory; and (c) cross-border trade in financial services.

Future Liberalization: Article 1404 (4)
The Parties shall consult on future liberalization of cross-border trade in financial services as set out in Annex 1404.4

Article 1405: National Treatment
Each Party shall accord to investors, financial institutions, and investments of investors of another Party treatment no less favorable than that it accords to its own investors, financial institutions and investment of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.

Article 1406: Most-Favored-Nation Treatment
Each Party shall accord to investors of another Party, financial institutions of another Party, investments of investors in financial institutions and cross-border financial service providers of another Party treatment no less favorable than that it accords to the investors, financial institutions, investments of investors in financial institutions and cross-border financial service providers of any other Party or of a non-Party, in like circumstances.
Recognition ( in Article 1406: MFN Treatment)
A Party may recognize prudential measures of another Party or of a non-Party in the application of measures covered by this Chapter. Such recognition may be: (a) accorded unilaterally; (b) achieved through harmonization or other means; or (c) based upon an agreement or arrangement with the other Party or non-Party.

A Party according recognition of prudential measures under above paragraph shall provide adequate opportunity to another party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation, and, if appropriate, procedures concerning the sharing of information between the Parties.

Where a Party accords recognition of prudential measures under paragraph 1(c) and the circumstances set out in the second paragraph above exist, the Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.

Article 1410: Exceptions
Nothing in this Part shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:(a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service provider; (b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers; and (c) ensuring the integrity and stability of a Party's financial system.
Article 1411: Transparency
Each Party shall, to the extent practicable, provide in advance to all interested persons any measure of general application that the Party proposes to adopt in order to allow an opportunity for such persons to comment on the measure. Such measure shall be provided: (a) by means of official publication; (b) in other written form; or (c) in such other form as permits an interested person to make informed comments on the proposed measure.

Article 1412: Financial Services Committee
The Parties hereby establish the Financial Services Committee.

Article 1413: Consultations
A Party may request consultations with another Party regarding any matter arising under this Agreement that affects financial services.

Article 1414: Dispute Settlement
The Parties shall establish by Jan.1, 1994 and maintain a roster up to 15 individuals who are willing and able to serve as financial services panelists.

Article 1416: Definitions
Annex VII: Reservations, Specific Commitments and Other Items (Chapter 14)

Group of Three
Chapter XII; Financial Services
Article 12-02: Scope of Application
This Chapter applies to measures of a Party relating to: (a) financial institutions of another Party; (b) investors of another Party, and investments of such investors, in financial institutions in the Party's territory; and (c) cross-border trade in financial services.

Article 12-06: National Treatment
Each Party shall accord to investors, financial institutions, and investments of investors of another Party treatment no less favorable than that it accords to its own investors, financial institutions and investment of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.

Article 12-07: Most-Favored-Nation Treatment
Each Party shall accord to investors of another Party, financial institutions of another Party, investments of investors in financial institutions and cross-border financial service providers of another Party treatment no less favorable than that it accords to the investors, financial institutions, investments of investors in financial institutions and cross-border financial service providers of any other Party or of a non-Party, in like circumstances.

Article 12-08: Recognition and Harmonization
A Party may recognize prudential measures of another Party or of a non-Party in the application of measures covered by this Chapter. Such recognition may be: accorded unilaterally; achieved through harmonization or other means; or based upon an agreement or arrangement with the other Party or non-Party.

A Party according recognition of prudential measures under above paragraph shall provide adequate opportunity to another party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation, and, if appropriate, procedures concerning the sharing of information between the Parties.

Where a Party accords recognition of prudential measures under paragraph 1 and the circumstances set out in the second paragraph above exist, the Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.

Article 12-09: Exceptions
Nothing in this Part shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:(a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service provider; (b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers; and (c) ensuring the integrity and stability of a Party's financial system.

Article 12-10: Transparency
Each Party shall make sure that any measure it proposes to adopt regarding issues related to this chapter will be officially published or provided in other written form to all interested persons.

Article 12-11: Financial Services Committee
The Parties hereby establish the Financial Services Committee.

Article 12-12: Consultations A Party may request consultations with another Party regarding any matter arising under this Treaty that affects financial services.

Article 12-19: Dispute Settlement
The Committee of Financial Services shall establish and maintain a roster up to 15 individuals who are willing and able to serve as arbitrators in controversies related to this chapter.

Article 12-01: Definitions
Article 12-18: Balance of Payments and Safeguard

A Party can suspend benefits contained in this chapter in the event of serious balance-of-payments difficulties.

Article 12-15: Reservations
The parties shall elaborate a Protocol in which each Party will include the reservations to Articles 12-04 to 12-0 and 12-14.

CACM
Not Specified.

CARICOM
Not Specified.

Andean Community
Transitory provisions
Fourth: No later than two months following the entry into force of this Decision, the General Secretariat of the Andean Community shall elaborate a Project of Decision containing the standards that regulate the process of liberalization of trade in financial services between the Member Countries. Such Project will contemplate the conditions for the application of the principles, commitments and standards contained in the present General Framework.

Central America/Dominican Republic
Not Specified.

Mercosur
Sectoral Annexes to the Protocol of Montevideo Annex on Financial Services

1. Scope of Application

a) This annex applies to all measures of a State Party that affect the provision of financial services. When reference is made in this annex to the provision of a financial service, it means the provision of a financial service according to the definition given in paragraph 2 of Article II of the Protocol.

b) For the purposes of paragraph 3(b) of Article II the Protocol, "services provided in the exercise of governmental authority of the States Parties" shall be understood to be the following activities:
(i) activities carried out by a central bank or monetary authority or by any other public entity of the States Parties in pursuit of monetary or exchange policies;
(ii) activities that are part of a legal system of social security or of public retirement plans; and
(iii) other activities conducted by a public entity for account of or with the backing of the States Parties or using their financial resources.

c) For the purposes of paragraph 3(b) of Article II of the Protocol, if a State Party authorizes its providers of financial services to carry out any of the activities mentioned in subsections (ii) and (iii) of section (b) of this paragraph, in competition with a public entity or with a provider of financial services, the term "services" shall include those activities.

d) The definition in paragraph 3(c) of Article II of the Protocol shall not apply in the case of this annex.

2. Transparency and disclosure of confidential information

For the purposes of Articles VIII and IX of the Protocol and for the sake of greater clarity, it is understood that no provision of the Protocol shall be interpreted as requiring a State Party to reveal information related to the businesses and finances of individual clients nor any confidential or private information in possession of public entities.

3. Prudential measures

a) Nothing in the provisions of this Protocol shall be interpreted as preventing the States Parties, for prudential reasons, from adopting or maintaining reasonable measures to:
i. protect investors, depositors, participants in the financial market, holders of policies or persons with whom a provider of financial services may have contracted a fiduciary obligation;
ii. guarantee the solvency and liquidity of the financial system. When those measures do not conform with the provisions of the Protocol, they shall not be used as a means of evading the commitments or obligations contracted by the States Parties within the framework of the Protocol.
b) In applying its own measures related to financial services, a State Party may recognize the prudential measures of another State Party. Such recognition may be:
i. granted unilaterally,
ii. carried out through harmonization or otherwise,
iii. based on an agreement or arrangement with the state party in question.

c) The State Party that grants to another State Party recognition of prudential measures in accordance with section (b) shall provide appropriate opportunities to the other States Parties to demonstrate that there is equivalence in the regulations, oversight and implementing of said regulations, and if appropriate, in the procedures for the exchange of information between the parties.

d) When a State Party grants another State Party recognition of prudential measures in accordance with section (b) (iii), and the conditions stipulated in section (c) exist, it shall provide appropriate opportunities to other interested States Parties to negotiate to join such agreements or arrangements, or to negotiate with it other similar agreements or arrangements.

e) Agreements and arrangements based on the principle of recognition shall be reported promptly, and at least once a year, to the Common Market Group and to the MERCOSUR Trade Council, in order to fulfill the provisions of the Protocol (Article VIII and Article XXII).

4. Commitment on harmonization

The States Parties commit themselves to continue advancing the process of harmonization of prudential regulations and consolidated oversight regimes, as well as in the area of exchange of information on financial services, in accordance with the guidelines approved and to be approved by the Common Market Group.

5. Definitions

For the purposes of this annex:

a) Financial service is understood to be any service of a financial nature offered by a supplier of financial services of a state party. Financial services include all insurance and related services and all banking services and all other financial services.

The States Parties nevertheless commit themselves to harmonizing the definitions of the activities of the various financial services, based on paragraph 5 of the Annex on Financial Services of the General Agreement on Trade in Services (G.A.T.S.) of the World Trade Organization (WTO).

b) Provider of financial services is understood to be any natural or juridical person of a State Party that wishes to provide or that supplies financial services, but the phrase "provider of financial services" does not include public entities.

c) "Public entity" is understood to be:

i) a government, central bank or monetary authority of a State Party, or an entity owned or controlled by a State Party, dedicated primarily to carrying out governmental functions or conducting activities whose purpose is governmental, with the exception of entities involved primarily in providing financial services under commercial conditions, or

ii) a private entity that carries out functions normally carried out by a central bank or a monetary authority, in the exercise of those functions.

Bolivia/Mercosur
Not Specified.

Chile/Mercosur
Not Specified.

Chile/Mexico
Chapter X, Article 10-02 Scope of Application
This Chapter does not apply to:
(a) cross-border trade in financial services

Chile/Canada
Chapter H, Article H-01 Scope of Application
This Chapter does not apply to:
(a) cross-border trade in financial services

Mexico/Nicaragua
Chapter XIII: Financial Services
Article 13-02: Scope of Application
This Chapter applies to measures adopted and maintained by a Party relating to: (a) financial institutions of the other Party; (b) investors of a Party, and investments of such investors, in financial institutions in the other Party's territory; and (c) cross-border trade in financial services.

Article 13-06: National Treatment
Each Party shall accord to investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.

Article 13-07: Most-Favored-Nation Treatment
Each Party shall accord to investors of the other Party, financial institutions of the other Party, investments of investors in financial institutions and cross-border financial service providers of the other Party treatment no less favorable than that it accords to the investors, financial institutions, investments of investors in financial institutions and cross-border financial service providers of the other Party or of a non-Party, in like circumstances.

Article 13-08: Recognition and Harmonization
Each Party may recognize prudential measures of the other Party or of a non-Party in the application of measures covered by this Chapter. Such recognition may be: (a) accorded unilaterally; (b) achieved through harmonization or other means; or (c) based upon an agreement with the other Party or non-Party.

The Party according recognition of prudential measures under the above paragraph shall provide adequate opportunity to the other Party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation, and, if appropriate, procedures concerning the sharing of information between the Parties.

Where a Party accords recognition of prudential measures under paragraph 1 and the circumstances set out in the second paragraph above exist, the Party shall provide adequate opportunity to the other Party to negotiate accession to the agreement, or to negotiate a comparable agreement.

Article 13-09: Exceptions
Nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:(a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service provider; (b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers; and (c) ensuring the integrity and stability of a Party's financial system.

Article 13-10: Transparency
Each Party shall ensure that any measure it proposes to adopt regarding issues related to this chapter will be officially published or provided in other written form to all interested persons to comment on the measure.

Article 13-11: Financial Services Committee
The Parties hereby establish the Financial Services Committee.

Article 13-12: Consultations
Any Party may request consultations with the other Party regarding any matter arising under this Treaty that affects financial services.

Article 13-19: Dispute Settlement Among the Parties
The Committee of Financial Services shall establish a roster up to 10 individuals who are willing and able to serve as arbitrators in controversies related to this chapter.

Article 13-01: Definitions

Article 13-18: Balance of Payments and Safeguard
A Party can adopt or maintain a measure to suspend, for a reasonable period, all or any of the benefits contained in this chapter and in article 16-08, when: (a) the application of any provision of this chapter or of article 16-08 results in serious economic and financial difficulty in the territory of the Party and it is not possible to suitably redress the situation by any other alternative measure; or (b) the balance-of-payments of a Party, including the state of its monetary reserves, is seen as being seriously threatened.

Article 13-15: Reservations and specific commitments
In the period of no later than a year from the entry into force of this Treaty, the Parties shall negotiate and elaborate in its list of annex to this article, the reservations to the articles 13-04, 13-05, 13-06, 13-07, 13-13, and 13-14.

Mexico/Bolivia
Chapter XII: Financial Services in Mexico/Bolivia Agreement
Article 12-01: Definitions

Article 12-02: Scope of Application
This Chapter applies to measures of a Party relating to: (a) financial institutions of another Party; (b) investors of another Party, and investments of such investors, in financial institutions in the Party's territory; and (c) cross-border trade in financial services.

Article 12-06: National Treatment
Each Party shall accord to investors, financial institutions, and investments of investors of another Party treatment no less favorable than that it accords to its own investors, financial institutions and investment of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments in financial institutions in its territory.

Article 12-07: Most-Favored-Nation Treatment
Each Party shall accord to investors of another Party, financial institutions of another Party, investments of investors in financial institutions and cross-border financial service providers of another Party treatment no less favorable than that it accords to the investors, financial institutions, investments of investors in financial institutions and cross-border financial service providers of any other Party or of a non-Party, in like circumstances.

Article 12-08: Recognition and Harmonization
A Party may recognize prudential measures of another Party or of a non-Party in the application of measures covered by this Chapter. Such recognition may be: accorded unilaterally; achieved through harmonization or other means; or based upon an agreement or arrangement with the other Party or non-Party.
A Party according recognition of prudential measures under above paragraph shall provide adequate opportunity to another party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation, and, if appropriate, procedures concerning the sharing of information between the Parties. Where a Party accords recognition of prudential measures under paragraph 1 and the circumstances set out in the second paragraph above exist, the Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.

Chapter XII: Financial Services
Article 12-09: Exceptions
Nothing in this Part shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:(a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service provider; (b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers; and (c) ensuring the integrity and stability of a Party?s financial system.

Article 12-10: Transparency
Each Party shall make sure that any measure it proposes to adopt regarding issues related to this chapter will be officially published or provided in other written form to all interested persons.

Article 12-11: Working Group on Financial Services
The Parties establish a Working Group on Financial Services formed by representatives from the competent authorities which are listed in the annex to this article (for Bolivia: the Superintendencia de Bancos e Instituciones Financieras) is temporarily listed, until Bolivia notifies a different authority; for Mexico: the Secretaría de Hacienda y Crédito Público).

The Working Group will: a) supervise the application of this chapter and its subsequent development; b) consider aspects relative to financial services supplied by a Party; c) participate in the dispute settlement's procedures in conformity to article 12-19; and d) facilitate the exchange of information between supervision authorities and cooperate in terms of prudential regulation, seeking to harmonize the normative landmarks of regulation as well as of other policies, when convenient.

Article 12-12: Consultations
A Party may request consultations with another Party regarding any matter arising under this Treaty that affects financial services.

Article 12-15: Reservations and Specific Commitments
Reservations to Articles 12-04 to 12-07, 12-13 and 12-14.

Article 12-18: Balance of Payments and Safeguard
A Party can suspend benefits contained in this chapter in the event of serious balance-of-payments difficulties.

Article 12-19: Dispute Settlement
The Working Group on Financial Services shall establish and maintain a roster up to ten individuals who are willing and able to serve as arbitrators in controversies related to this chapter.

Mexico/Costa Rica

 
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