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GENERAL AGREEMENT ON TRADE IN SERVICES
PREAMBLE
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 bisDisclosure of Confidential Information
Article IV Increasing Participation of
Developing Countries
Article V Economic Integration
Article V bisLabour Markets Integration Agreements
Article VI Domestic Regulation
Article VII Recognition
Article VIIIMonopolies 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 XIIIGovernment Procurement
Article XIV General Exceptions
Article XIV bisSecurity Exceptions
Article XV Subsidies
PART III SPECIFIC COMMITMENTS
Article XVI Market Access
Article XVIINational Treatment
Article XVIIIAdditional 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 XXIIConsultation
Article XXIIIDispute Settlement and Enforcement
Article XXIVCouncil for Trade in Services
Article XXV Technical Cooperation
Article XXVIRelationship with Other International
Organizations
PART VI FINAL PROVISIONS
Article XXVIIDenial of Benefits
Article XXVIIIDefinitions
Article XXIXAnnexes
Annex on Article II Exemptions
Annex on Movement of Natural Persons supplying Services under the Agreement
Annex on Financial Services
Annex on Telecommunications
Annex on Air Transport Services
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 for specific
information, by any other Member, 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 entry into
force of the Agreement Establishing the MTO. Appropriate flexibility with
respect to the time-limit within which such enquiry points are to be
established may be agreed upon for individual developing countries. 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 countries 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 entry into force of
the Agreement Establishing the MTO to facilitate the access of developing
countries' 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 countries in
the implementation of paragraphs 1 and 2 above. 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 coverage[1], 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 sub-paragraph (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. In 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, in
particular sub-paragraph (b), in accordance with the level of
development of the countries concerned, both overall and in
individual sectors and sub-sectors.
(b) Notwithstanding paragraph 6 below, 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.
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
sub-sectors 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 2-4 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 thereto 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 thereto 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 it necessary.
(c) Based on the reports of the working parties referred to in
paragraphs (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 integration[2] of the labour markets
between or among the parties to such an agreement, provided that such an
agreement:
(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 they do in fact provide for an objective
and impartial review.
(b) The provisions of sub-paragraph (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.
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
sub-paragraphs 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) above, account shall be taken of
international standards of relevant international
organizations[3] 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 below, 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.
2. A Member that is a party to an agreement or arrangement 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 its 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 Agreement
Establishing the MTO 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 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 referred to in paragraph 1.
5. Wherever appropriate, recognition should be based on multilaterally
agreed criteria. In appropriate cases, Members shall work in co-operation
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 above,
request the Member establishing, maintaining or authorizing such supplier to
provide specific information concerning the relevant operations.
4. If, after the entry into force of the Agreement Establishing the MTO,
a Member grants monopoly rights regarding the supply of a service covered by
its specific commitments, that Member shall make such notification to 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 Safeguards 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 entry into force of the Agreement Establishing the
MTO.
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 entry into force of the Agreement Establishing the MTO.
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 above:
(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 of this
Article, 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 procedures[4] 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
phase out 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.
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 review 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 entry into force of
the Agreement Establishing the MTO.
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;
(d) inconsistent with Article XVII, provided that the difference in
treatment is aimed at ensuring the equitable or effective[6]
imposition or collection of direct taxes[7] 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
(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.[8] 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
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.[9]
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;[10]
(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 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.[11]
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
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 Agreement Establishing the MTO 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 countries 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 it
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
the 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 of the least-developed
countries 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) 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 form an integral part thereof.
Article XXI
Modification of Schedules
1. (a) A Member (hereafter in this Article referred to 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 whose benefits under this Agreement
may be affected (hereafter "an affected Member") by a proposed
modification or withdrawal notified under paragraph 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 of commitments. 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 Understanding on Rules and Procedures
Governing the Settlement of Disputes 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.[12] The Council shall refer the matter to
arbitration. The decision of the arbitrator shall be final and binding on
the Members.
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 Understanding on Rules and Procedures Governing the
Settlement of Disputes.
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 such obligations and specific
commitments in accordance with Section 22 (Compensation and the Suspension
of Concessions) of the Understanding on Rules and Procedures Governing the
Settlement of Disputes.
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 Understanding on Rules and
Procedures Governing the Settlement of Disputes. 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, Section 22 (Compensation and the Suspension
of Concessions) of the Understanding on Rules and Procedures Governing the
Settlement of Disputes 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. The
Council shall establish its own rules of procedure.
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 MTO 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 the territory of a non-Member, or in the territory
of a Member to which the denying Member does not apply this
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
this 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 this 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 this 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, sub-sectors of that service, as specified in a
Member's schedule,
(ii) otherwise, the whole of that service sector, including all
of its sub-sectors;
(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;[13]
(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 or accession to this
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 sub-paragraph (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.
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 entry into force of the
Agreement Establishing the MTO 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 Agreement
Establishing the MTO.
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 the 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.
ANNEX ON MOVEMENT OF NATURAL PERSONS
SUPPLYING SERVICES UNDER THE AGREEMENT
1. The Annex applies to measures affecting natural persons who are
service suppliers of a Member, and to natural persons of a Member who are
employed by a service supplier of a Member, in respect of the supply of a
service for which specific commitments relating to entry and temporary stay
of such natural persons have been undertaken.
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 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.[14]
ANNEX ON FINANCIAL SERVICES
1. Scope and Definition
1.1 This annex applies to measures affecting the supply of financial
services. Reference to the supply of a financial service in the Annex shall
mean the supply of a service as defined in paragraph 2 of Article I of the
Agreement.
1.2 For the purposes of paragraph 3(b) of Article I of the Agreement,
"services supplied in the exercise of governmental authority" means the
following:
1.2.1activities conducted by a central bank or monetary authority or
by any other public entity in pursuit of monetary or exchange
rate policies;
1.2.2activities forming part of a statutory system of social security
or public retirement plans; and
1.2.3other activities conducted by a public entity for the account or
with the guarantee or using the financial resources of the
Government.
1.3 For the purposes of paragraph 3(b) Article I of the Agreement, if a
Member allows any of the activities referred to in paragraph 1.2.2 or 1.2.3
to be conducted by its financial service suppliers in competition with a
public entity or a financial service supplier, "services" shall include such
activities.
1.4 Article I:3(c) of the Agreement shall not apply to services covered by
this Annex.
2. Domestic Regulation
2.1 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.
2.2 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
3.1 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.
3.2 A Member that is a party to such an agreement or arrangement referred
to in paragraph 3.1, 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.
3.3 Where a Member is contemplating according recognition to prudential
measures of any other country, paragraph 4(b) of Article VII of the
Agreement shall not apply.
4. Dispute Settlement
4.1 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:
5.1 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
(a) Direct insurance (including co-insurance):
(i) life
(ii) non-life
(b) Reinsurance and retrocession;
(c) Insurance intermediation, such as brokerage and agency;
(d) Services auxiliary to insurance, such as consultancy, actuarial,
risk assessment and claim settlement services.
Banking and other financial services (excluding insurance)
(e) Acceptance of deposits and other repayable funds from the public;
(f) Lending of all types, including consumer credit, mortgage,
credit, factoring and financing of commercial transaction;
(g) Financial leasing;
(h) All payment and money transmission services, including credit,
charge and debit cards, travellers cheques and bankers drafts;
(i) Guarantees and commitments;
(j) Trading for own account or for account of customers, whether on
an exchange, in an over-the-counter market or otherwise, the
following:
(i) money market instruments (including cheques, bills,
certificates of deposits);
(ii) foreign exchange;
(iii) derivative products including, but not limited to, futures
and options;
(iv) exchange rate and interest rate instruments, including
products such as swaps, forward rate agreements;
(v) transferable securities;
(vi) other negotiable instruments and financial assets,
including bullion.
(k) 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;
(l) Money broking;
(m) Asset management, such as cash or portfolio management, all forms
of collective investment management, pension fund management,
custodial, depository and trust services;
(n) Settlement and clearing services for financial assets, including
securities, derivative products, and other negotiable
instruments;
(o) Provision and transfer of financial information, and financial
data processing and related software by suppliers of other
financial services;
(p) Advisory, intermediation and other auxiliary financial services
on all the activities listed in sub-paragraphs (e) to (o),
including credit reference and analysis, investment and portfolio
research and advice, advice on acquisitions and on corporate
restructuring and strategy.
5.2 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.
5.3 "Public entity" means:
5.3.1a 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
5.3.2a private entity, performing functions normally performed by a
central bank or monetary authority, when exercising those
functions.
5.4 "Agreement" means the Articles of the General Agreement on Trade in
Services, this Sectoral Annex on Financial Services and the schedule of each
Party with respect to financial services.
SECOND ANNEX ON FINANCIAL SERVICES
1. Notwithstanding Article II of the General Agreement on Trade in
Services 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 Agreement Establishing the MTO, 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 General Agreement on Trade in
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 MTO,
improve, modify or withdraw all or part of the 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 TELECOMMUNICATIONS
1. Objectives
1.1 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
2.1 This Annex shall apply to all measures of a Member that affect access
to and use of public telecommunications transport networks and services.[15]
2.2 This Annex shall not apply to measures affecting the cable or
broadcast distribution of radio or television programming.
2.3 Nothing in this Annex shall be construed:
2.3.1to 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
2.3.2to 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:
3.1 Telecommunications means the transmission and reception of signals by
any electromagnetic means.
3.2 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.
3.3 Public telecommunications transport network means the public
telecommunications infrastructure which permits telecommunications between
and among defined network termination points.
3.4 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 Party 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.
3.5 Any reference to a paragraph or subparagraph of this Annex includes
all subdivisions thereof.
4. Transparency
4.1 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
5.1 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 5.2 through 5.6
below.[16]
5.2 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
5.5 and 5.6, that such suppliers are permitted:
5.2.1to purchase or lease and attach terminal or other equipment which
interfaces with the network and which is necessary to supply a
supplier's services;
5.2.2to interconnect private leased or owned circuits with public
telecommunications transport networks and services or with
circuits leased or owned by another service supplier; and
5.2.3to 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.
5.3 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.
5.4 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.
5.5 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:
5.5.1to 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;
5.5.2to protect the technical integrity of public telecommunications
transport networks or services; or
5.5.3to ensure that service suppliers of any other Member do not
supply services unless permitted pursuant to commitments in a
Member's schedule.
5.6 Provided that they satisfy the criteria set out in paragraph 5.5,
conditions for access to and use of public telecommunications transport
networks and services may include:
5.6.1restrictions on resale or shared use of such services;
5.6.2a requirement to use specified technical interfaces, including
interface protocols, for inter-connection with such networks and
services;
5.6.3requirements, where necessary, for the inter-operability of such
services and to encourage the achievement of the goals set out in
paragraph 7.1;
5.6.4type approval of terminal or other equipment which interfaces
with the network and technical requirements relating to the
attachment of such equipment to such networks;
5.6.5restrictions 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
5.6.6notification, registration and licensing.
5.7 Notwithstanding the preceding paragraphs of this section, a developing
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 Co-operation
6.1 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.
6.2 Members shall encourage and support telecommunications co-operation
among developing countries at the international, regional and sub-regional
levels.
6.3 In co-operation 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.
6.4 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
7.1 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.
7.2 Members recognize the role played by intergovernmental and
non-governmental organizations and agreements in ensuring the efficient
operation of domestic and global telecommunications 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 AIR TRANSPORT SERVICES
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 made or obligation assumed under this
Agreement shall not reduce or affect a Member's obligations under bilateral
or multilateral agreements that are in effect at the entry into force of the
Agreement Establishing the MTO.
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 commitments have been assumed by the concerned Members
and where dispute settlement procedures in bilateral and other multilateral
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 NEGOTIATIONS ON BASIC TELECOMMUNICATIONS
1. Notwithstanding paragraph 1 of Article II of the GATS and paragraph 2
of the Annex on Article II Exemptions, 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 date of implementation of the results of the negotiations
mandated by the Ministerial Decision on Negotiations on Basic
Telecommunications; or,
(b) should the negotiations not succeed, on the date of the final
report of the Negotiating Group on Basic Telecommunications.
2. Paragraph 1 above shall not apply to any specific commitment on basic
telecommunications which is inscribed in a Member's schedule.
3. References to the dates cited under paragraphs 1(a) and (b) above are
contained in paragraph 5 of the Ministerial Decision on Negotiations on
Basic Telecommunications.
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 MTO.
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:
- 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
- apply to non-residents in order to ensure the imposition or
collection of taxes in the Member's territory; or
- apply to non-residents or residents in order to prevent the
avoidance or evasion of taxes, including compliance measures; or
- 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
- 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
- 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 Article XIV(d) 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. For the purpose of this Agreement "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.
8. A future work programme shall determine how and in what time-frame
negotiations on the multilateral disciplines will be conducted.
9. If a Member undertakes a market access commitment in relation to the
supply of a service through the mode of supply referred to in paragraph 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 paragraph 2(c) of Article I, it is thereby committed to allow related
transfers of capital into its territory.
10. Sub-paragraph 2(c) does not cover measures of a Member which limit
inputs for the supply of services.
11. 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.
12. With respect to agreements on the avoidance of double taxation which
exist at the time of entry into force of the Agreement Establishing the MTO,
such a matter may be brought before the Council for Trade in Services only
with the consent of both parties to the agreement.
13. 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.
14. Interpretative Note: 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.
15. 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.
16. 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".