Annex 7 referred to in Chapter 6 Financial Services Section 1 Scope ...

Annex 7 referred to in Chapter 6Financial ServicesSection 1Scope and Definitions1. This Annex applies to measures affecting the supply offinancial services. Reference to the supply of a financialservice in this Annex shall mean the supply of a service asdefined in paragraph (u) of Article 77.2. (a) For the purposes of this Annex:(i)the term “financial service” means anyservice of a financial nature. Financialservices include all insurance andinsurance-related services, and all bankingand other financial services (excludinginsurance). Financial services include thefollowing activities:(A)Insurance and Insurance-RelatedServices(AA) direct insurance (including coinsurance):(aa)(bb)life; andnon-life;(BB) reinsurance and retrocession;(CC) insurance intermediation, such asbrokerage and agency; and(DD) services auxiliary to insurance,such as consultancy, actuarial,risk assessment and claimsettlement services; and(B)Banking and Other Financial Services(Excluding Insurance)(AA) acceptance of deposits and otherrepayable funds from the public;(BB) lending of all types, includingconsumer credit, mortgage credit,factoring and financing ofcommercial transaction;(CC) financial leasing;40

(JJ) settlement and clearing servicesfor financial assets, includingsecurities, derivative products,and other negotiable instruments;(KK) provision and transfer offinancial information, andfinancial data processing andrelated software by suppliers ofother financial services; and(LL) advisory, intermediation andother auxiliary financialservices on all the activitieslisted in subparagraphs (AA)through (KK), including creditreference and analysis,investment and portfolio researchand advice, advice onacquisitions and on corporaterestructuring and strategy;(ii)(iii)the term “financial service supplier” meansany natural person or juridical person of aParty that seeks to supply or supplies afinancial service, but does not include apublic entity; andthe term “public entity” means:(A)(B)the Government, central bank ormonetary authority of a Party, or anentity owned or controlled by a Party,that is principally engaged in carryingout governmental functions oractivities for governmental purposes,not including an entity principallyengaged in supplying financial serviceson commercial terms; ora private entity, performing functionsnormally performed by the central bankor monetary authority of a Party, whenexercising those functions.(b) For the purposes of paragraph (m) of Article 77,the term “service supplied in the exercise ofgovernmental authority” means:(i)activities conducted by the central bank ormonetary authority of a Party or by anyother public entity in pursuit of monetaryor exchange rate policies;42

(ii)(iii)activities forming part of a statutorysystem of social security or publicretirement plans; andother activities conducted by a publicentity for the account or with the guaranteeor using the financial resources of theGovernment of a Party.(c) For the purposes of paragraph (m) of Article 77,if a Party allows any of the activities referredto in subparagraph (b)(ii) or (iii) to beconducted by its financial service suppliers incompetition with a public entity or a financialservice supplier, the term “service” shallinclude such activities.(d)Paragraph (p) of Article 77 shall not apply toservices covered by this Annex.Section 2Domestic Regulation1. Notwithstanding any provisions of Chapter 6, a Partyshall not be prevented from taking measures for prudentialreasons, including measures for the protection ofinvestors, depositors, policy holders or persons to whom afiduciary duty is owed by a financial service supplier, orto ensure the integrity and stability of the financialsystem. Where such measures do not conform with theprovisions of Chapter 6, they shall not be used as a meansof avoiding the Party’s commitments or obligations underChapter 6.2. Nothing in Chapter 6 shall be construed to require aParty to disclose information relating to the affairs andaccounts of individual customers or any confidential orproprietary information in the possession of publicentities.Section 3Recognition1. A Party may recognize the prudential measures of anyinternational regulatory body or non-Party in determininghow the Party’s measures relating to financial servicesshall be applied. Such recognition, which may be achievedthrough harmonization or otherwise, may be based upon anagreement or arrangement with the international regulatorybody or non-Party concerned or may be accordedautonomously.43

2. A Party that is a party to such an agreement orarrangement referred to in paragraph 1, whether future orexisting, shall afford adequate opportunity for the otherParty to negotiate its accession to such an agreement orarrangement, or to negotiate comparable ones with it, undercircumstances in which there would be equivalentregulation, oversight, implementation of such regulation,and if appropriate, procedures concerning the sharing ofinformation between the parties to the agreement orarrangement. Where a Party accords recognitionautonomously, it shall afford adequate opportunity for theother Party to demonstrate that such circumstances exist.Section 4Dispute SettlementArbitral tribunals established under Article 142 fordisputes on prudential issues and other financial mattersshall have the necessary expertise relevant to the specificfinancial service under dispute.44