North American Free Trade Agreement, 1992 Oct. 7 Tariff Phasing Descriptions

NAFTA PART ONE GENERAL PART (continued 5)

Reading edition

3. All services purchased in support of military forces overseas.

4. Management and operation contracts awarded to - federally-funded research and development centers (FFRDCs) or related to carrying out government-sponsored research programs (classification to be clarified) M181-184 - by DOD, DOE, and NASA M

5. Public utilities and telecommunications services: - Utilities S1 - ADP Telecommunications and Transmission Services D304 - ADP Teleprocessing and Timesharing Services D305 - Telecommunications Network Management Services D316 - Automated News Services, Data Services, or other information D317 - Other ADP and Telecommunications services D399

6. Research and Development services A

Note: The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

Appendix to ANNEX 1002.4 Universal List of Services

ANNEX 1002.5

Construction Services

I. General Provisions

1. Except for the construction services listed in Part II of this Annex, all construction services as specified in the Appendix to this Annex, which are procured by the entities listed in Annex 1002.1 (Federal Government Entities) and Annex 1002.3 (Government Enterprises) are subject to this Chapter.

2. The Parties will update, as appropriate, the list of construction services included in the Appendix at such time as they mutually agree.

II. Construction Services Excluded from Coverage

The following services contracts are excluded in their entirety by the Parties:

Schedule of Canada

1. Dredging.

2. Construction contracts tendered by or on behalf of Department of Transport.

Note: The General Notes for Canada as set out in Annex 1002.7 apply to this Annex.

Schedule of Mexico

All risk-sharing contracts by Pemex.

Notes:

The General Notes for Mexico as set out in Annex 1002.7 apply to this Annex.

Schedule of the United States

Dredging.

Notes:

1. In accordance with the obligations of this Chapter, buy national requirements on articles, supplies, and materials acquired for use in construction contracts subject to the obligations of this Chapter will not apply to products of Canada or Mexico.

2. The General Notes for the United States as set out in Annex 1002.7 apply to this Annex.

Appendix to ANNEX 1002.5

List of Construction Services

List of contracts for construction services which are subject to the obligations of this Chapter, except as otherwise provided:

(Based on the United Nations Central Product Classification, CPC)

Division 51 Construction work

511 Pre-erection work at construction sites 5111 Site investigation work 5112 Demolition work 5113 Site formation and clearance work 5114 Excavating and earthmoving work 5115 Site preparation work for mining 5116 Scaffolding work

512 Construction works for buildings 5121 For one and two dwelling buildings 5122 For multi-dwelling buildings 5123 For warehouses and industrial buildings 5124 For commercial buildings 5125 For public entertainment buildings 5126 For hotel, restaurant and similar buildings 5127 For educational buildings 5128 For health buildings 5129 For other buildings

513 Construction work for civil engineering 5131 For highways (except elevated highways), streets, roads, railways and airfield runways 5132 For bridges, elevated highways, tunnels and subways 5133 For waterways, harbours, dams and other water works 5134 For long distance pipelines, communication and power lines (cables) 5135 For local pipelines and cables; ancillary works 5136 For constructions for mining and manufacturing 5137 For constructions for sport and recreation 5139 For engineering works n.e.c.

514 5140 Assembly and erection of prefabricated constructions

515 Special trade construction work 5151 Foundation work, including pile driving 5152 Water well drilling 5153 Roofing and water proofing 5154 Concrete work 5155 Steel bending and erection, including welding) 5156 Masonry work 5159 Other special trade construction work

516 Installation work 5161 Heating, ventilation and air conditioning work 5162 Water plumbing and drain laying work 5163 Gas fitting construction work 5164 Electrical work 5165 Insulation work (electrical wiring, water, heat, sound) 5166 Fencing and railing construction work 5169 Other installation work

517 Building completion and finishing work 5171 Glating work and window glass installation work 5172 Plastering work 5173 Painting work 5174 Floor and wall tilling work 5175 Other floor laying, wall covering and wall papering work 5176 Wood and metal joinery and carpentry work 5177 Interior fitting decoration work 5178 Ornamentation fitting work 5179 Other building completion and finishing work

518 5180 Renting services related to equipment for construction or demolition of buildings or civil engineering works, with operator

============================================================================= ANNEX 1002.6

Transition Provisions for Mexico

Notwithstanding any other provision of this Chapter, Annexes 1002.1 through 1002.5 are subject to the following:

Pemex, CFE and Non-Energy Construction

1. The obligations of this Chapter shall not apply to:

(a) 50 percent of the total annual procurement above thresholds of goods, services and construction services by Pemex;

(b) 50 percent of the total annual procurement above thresholds of goods, services and construction services by CFE; and

(c) 50 percent of the total annual procurement above thresholds of construction services, excluding construction services procured by Pemex and CFE.

2. Loans from regional and multilateral financial institutions will not be included for purposes of calculating the reservations specified in paragraph 1 or subject to other restrictions.

3. As of January 1st, 1994, the reservation specified in paragraph 1 will decrease according to the following schedule:

1994 1995 1996 1997 1998 50% 45% 45% 40% 40%

1999 2000 2001 2002 2003 and thereafter 35% 35% 30% 30% 0%

4. For Pemex and CFE, no more than 10 percent of their respective reserved procurement under paragraphs 1 and 3 shall be applied within a single Federal Supply Classification (FSC) class (or other classification system as agreed by all Parties) in a single year.

5. After December 31, 1998, Pemex and CFE each will make all reasonable efforts to assure that their respective total reservation in each FSC class (or other classification system as agreed by all Parties) shall not exceed 50 percent in a single year.

Pharmaceuticals

6. The provisions of this Chapter shall not apply to drugs whose patents have expired or are not currently patented (FSC class 6505) procured by the Secretar¡a de Salud, IMSS, ISSSTE, Secretar¡a de Defensa and the Secretar¡a de Marina. This exception shall be eliminated after 8 years from the date of entry into force of this Agreement. Procurement of biologicals and patented drugs shall not be exempted under any other provision of the Annexes of this Chapter. Nothing in this Chapter shall be interpreted in a way which will impair the protection provided by Chapter 17 (Intellectual Property) of this Agreement.

Time Limits for Tendering and Delivery

7. Upon the date of entry into force of this Agreement in January 1, 1994, Mexico will make best efforts to comply with the provisions of Article 1012 (Time Limits for Tendering and Delivery) with respect to the 40 day time limits. However, Mexico will fully comply with such obligations as from January 1, 1995.

Provision of Information

8. The Parties recognize that Mexico may be required to undertake extensive retraining of personnel, introduce new data maintenance and reporting systems and make major adjustments to the procurement systems of certain entities in order to comply with the obligations of this Chapter. The Parties also recognize that Mexico may encounter difficulties in making the transition to procurement systems that facilitate full compliance with the obligations of this Chapter.

9. The Parties shall, therefore, consult on an annual basis for the first five years that the Agreement is in effect to review transitional problems and to develop mutually agreed solutions. Such solutions may include, when appropriate, temporary adjustment to the obligations of Mexico under this Chapter, such as those related to reporting requirements.

10. In addition, the United States and Canada shall cooperate with Mexico to provide technical assistance, as appropriate and mutually agreed pursuant to Article 1020 (Technical Cooperation) of this Chapter, to aid Mexico's transition.

11. Notwithstanding any other provision of this Annex, each Party shall assume all of its obligations specified in this Chapter upon the date of entry into force of this Agreement.

Note: The General Notes for Mexico as set out in Annex 1002.7 apply to this Annex.

============================================================================= ANNEX 1002.7

General Notes

Schedule of Canada

1. Notwithstanding any other provision of this Chapter, this Chapter does not apply to procurements in respect of:

(a) shipbuilding and repair;

(b) urban rail and urban transportation equipment, systems, components and materials incorporated there in as well as all project related materials of iron or steel;

(d) set-asides for small and minority businesses;

(e) pursuant to Article 1018 national security exemptions include oil purchases related to any strategic reserve requirements; and

(f) national security exceptions include procurements made in support of safeguarding nuclear materials or technology.

2. Procurement in terms of Canadian coverage is defined as contractual transactions to acquire property or services for the direct benefit or use of the government. It does not include non-contractual agreements or any form of government assistance, including but not limited to, cooperative agreements, grants, loans, equity infusions, guarantees, fiscal incentives, and government provision of goods and services, given to individuals, firms, private institutions, and sub-central governments.

Schedule of Mexico

1. Notwithstanding any other provision of this Chapter, this Chapter does not apply to procurements made:

(a) with a view to commercial resale by government-owned retail stores;

(b) pursuant to loans from regional or multilateral financial institutions to the extent that different procedures are imposed by such institutions (except for national content requirements); and

2. Notwithstanding any other provision in this Chapter, Mexico may allocate a non-specific sector set-aside as follows:

(a) upon the date of entry into force of this Agreement, up to the equivalent in real terms of $1.0 billion USD of 1994 shall annually be available to all procurements of entities subject to this Chapter, except Pemex and CFE and construction services procured by other entities subject to this Chapter as well as those procurements of goods in FSC class 6505;

(b) after December 31, 2002, up to the equivalent in real terms of $1.2 billion USD of 1994 shall annually be available to all procurement of entities subject to this Chapter, except Pemex and CFE and construction services procured by other entities subject to this Chapter as well as those procurements of goods of FSC class 6505;

(c) after December 31, 2002, up to the equivalent in real terms of $300 million USD of 1994 shall annually be availble to Pemex and CFE combined; and

(d) for purposes of this paragraph

(i) no more than 10 percent of the total procurement reserved shall be applied within a single FSC category (or other classification system as agreed by all Parties) in a single year, and

(ii) no more than 20 percent may be used by a single entity.

These values shall remain constant in real terms.

3. Notwithstanding any other provision of this Chapter, the entities subject to this Chapter may impose a local content requirement of no more than:

(a) 40 percent, for labor intensive turnkey or major integrated projects; and

(b) 25 percent, for capital intensive turnkey or major integrated projects.

For purposes of these provisions, a turnkey or major integrated project means, in general, a construction, supply or installation project undertaken by a person pursuant to a right granted by an entity subject to this Chapter with respect to which:

(d) Mexico does not fund the project itself;

(e) the person bears the risk of performance; and

(f) the facility will be operated by an entity subject to this Chapter or through a procurement contract of that entity.

4. Regardless of the thresholds, Pemex shall apply the disciplines of Article 1004 regarding national treatment and non-discrimination to:

(a) procurements of oil and gas field supplies and equipment, when such supplies and equipment are procured at the location where works pursued by Pemex are being performed; and

(b) the selection of suppliers, when such suppliers are established at the location where works pursued by Pemex are being performed.

5. If the obligations of the procurements covered by this Chapter are not met, the Parties may seek compensation in the form of more market opportunities during the following year, or through reliance of Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures).

6. Procurement in terms of the Mexican coverage is defined as contractual transactions to acquire property or services for the direct benefit or use of the government. It does not include non-contractual agreements or any form of government assistance, including, but not limited to, cooperative agreements, grants, loans, equity infusions, guarantees, fiscal incentives, and governmental provisions of goods and services, given to individuals, firms, private institutions and state governments.

Schedule of the United States

1. Notwithstanding any other provision of this Chapter, this Chapter does not apply to set asides on behalf of small and minority businesses.

2. Procurement in terms of U.S. coverage is defined as contractual transactions to acquire property or services for the direct benefit or use of the government. It does not include non-contractual agreements or any form of government assistance, including, but not limited to, cooperative agreements, grants, loans, equity infusions, guarantees, fiscal incentives, and governmental provision of goods and services, given to individuals, firms, private institutions, and subcentral governments.

============================================================================= ANNEX 1002.8

Indexation and Conversion of Thresholds

1. The calculations described in Article 1002(4) (Scope and Coverage) shall be made in accordance with the following:

(a) the United States inflation rate shall be measured by the the Producer Price Index for Finished Goods published by the United States Department of Commerce; and

(b) the inflationary adjustment shall be estimated according to the following formula

T0 x (1+ pi) = T1

T0= threshold value at base period pi= accumulated U.S. inflation rate for the ith two year-period T1= new threshold value.

2. Mexico and Canada shall calculate and convert the value of the thresholds specified in paragraph 3 into their national currencies using the conversion formulas set out in paragraph 3 or 4, as appropriate. Mexico and Canada shall notify each other and the United States of the value, in their respective currencies, of the newly calculated thresholds not less than one month before the respective thresholds take effect.

3. Canada shall base the calculation on the official conversion rates of the Bank of Canada. From January 1, 1994 through December 31, 1995, the conversion rate shall be the average of the weekly values of the Canadian dollars in terms of the U.S. dollars over the period October 1, 1992 through September 30, 1993. For each subsequent two-year period, beginning January 1, 1996, the conversion rate shall be the average of the weekly values of the Canadian dollar in terms of the U.S. dollar over the two-year period ending September 30 of the year preceding the beginning of each two-year period.

4. Mexico shall use the conversion rate of the Banco de Mxico. The conversion rate shall be the existing value of the Mexican peso in terms of the US dollar as of December 1 and June 1 of each year, or the 1st working day after. The conversion rate as of December 1 shall apply from January 1 to June 30 of the following year, and as of June 1 shall apply from July 1 to December 31 of that year.

============================================================================= ANNEX 1002-A

Country-Specific Thresholds

As between Canada and the United States,

a) for covered federal entities, thresholds on procurement between Canada and the United States are as follows:

i) goods and services: goods — US$25,000; services — US$50,000. Canada and the United States shall consult regarding these threshold values, and

ii) Construction: US$6,500,000; and

b) for covered government enterprises, thresholds on procurement between Canada and the United States are as follows

i) goods and services: US$250,000, and

ii) construction: US$8,000,000.

============================================================================= ANNEX 1010.1

Publications

I. Publications for Notices of Procurement in Accordance with Article 1010 (Invitation to Participate)

Schedule of Canada

1. Government Business Opportunities (GBO).

2. Open Bidding Service, ISM Publishing.

Schedule of Mexico

1. Major daily newspapers of national circulation.

2. Mexico will endeavor to establish a specialized publication for purposes of notices of procurement. When such publication is ready, it will substitute those referred to in paragraph 1.

Schedule of United States

Commerce Business Daily (CBD).

II. Publications for Measures in Accordance with Article 1019 (Provision of Information)

Schedule of Canada

1. Precedential judicial decisions regarding government procurement: (a) Dominion Law Reports; (b) Supreme Court Reports; (c) Federal Court Reports; (d) National Reporter.

2. Administrative rulings and procedures regarding government procurement: (a) Government Business Opportunities; and (b) Canada Gazette.

3. Laws and regulations: (a) Revised Statutes of Canada; (b) Canada Gazette.

Schedule of Mexico

1. Diario Oficial de la Federaci¢n.

2. Semanario Judicial de la Federaci¢n (for precedential judicial decisions only).

3. Mexico will endeavor to establish a specialized publication for administrative rulings of general application and any procedure, including standard contract clauses.

Schedule of United States

1. All United States laws, regulations, judicial decisions, administrative rulings and procedures regarding government procurement covered by this Chapter are codified in the Defense Federal Acquisition Regulation Supplement (DFARS) and the Federal Acquisition Regulation (FAR), both of which are published as a part of the United States Code of Federal Regulations (CFR). The DFARS and the FAR are published in title 48 of CFR. Copies may be purchased from the Government Printing Office. These regulations are also published in loose-leaf versions that are available by subscription from the Government Printing Office. Changes are provided to subscribers as they are issued.

2. For those who wish to consult original sources, the following published sources are provided:

Material Publication Name

United States Laws U.S. Statutes at Large

Decisions: - United States Supreme Court U.S. Reports - Circuit Court of Appeals Federal Reporter - 2nd Series - District Courts Federal Supplement Reporter - Court of Claims Court of Claims Reports

Decisions: - Boards of Contract Appeals Unofficial publication by Commerce Clearing House

Decisions: -Comptroller General of the Those not officially United States published as decisions of the Comptroller General are published unofficially by Federal Publications, Inc.

NAFTA Chapter Eleven Subchapter A - Investment

Article 1101: Scope

1. This Chapter applies to measures adopted or maintained by a Party relating to:

(a) investors of another Party;

(b) investments of investors of another Party in the territory of the Party existing at the date of entry into force of this Agreement as well as to investments made or acquired thereafter by such investors; and

(c) with respect to Article 1106, all investments in the territory of the Party existing at the date of entry into force of this Agreement as well as to investments made or acquired thereafter.

2. A Party has the right to perform exclusively the economic activities set out in Annex III and to refuse to permit the establishment of investment in such activities.

3. This Chapter does not apply to Chapter Fourteen (Financial Services) except to the extent specifically provided therein.

4. Nothing in this Chapter shall be construed to prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care, in a manner that is not inconsistent with this Chapter.

Article 1102: National Treatment

1. Each Party shall accord to investors of another 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 investments.

2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.

3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by such state or province to investors, and to investments of investors, of the Party of which it forms a part.

4. For greater certainty, no Party shall:

(a) impose on an investor of another Party a requirement that a minimum level of equity in an enterprise in the territory of the Party be held by its nationals, other than nominal qualifying shares for directors or incorporators of corporations; or

(b) require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment in the territory of the Party.

Article 1103: Most-Favored-Nation Treatment

1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to investors of another Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.

2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of investors of another Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.

Article 1104: Non-discriminatory Treatment

Each Party shall accord to investors of another Party and to investments of investors of another Party the better of the treatment required by Articles 1102 and 1103 ("non-discriminatory treatment").

Article 1105: Minimum Standard of Treatment

1. Each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.

2. Without prejudice to paragraph 1 and notwithstanding Article 1108 (8) (b), each Party shall accord to investors of another Party, and to investments of investors of another Party, non-discriminatory treatment with respect to measures it maintains or adopts relating to losses suffered by investments in its territory owing to armed conflict or civil strife.

3. Paragraph 2 shall not apply to existing measures related to subsidies or grants that are inconsistent with Article 1102.

Article 1106: Performance Requirements

1. A Party shall not impose the following requirements, or enforce any commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory:

(a) to export a given level or percentage of goods or services;

(b) to achieve a given level or percentage of domestic content;

(c) to purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from persons in its territory;

(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment;

(e) to restrict sales of goods or services in its territory that such investment produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;

(f) to transfer technology, a production process or other proprietary knowledge to a person in its territory, except when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority to remedy an alleged violation of competition laws; or

(g) to act as the exclusive supplier of the goods it produces or services it provides to a specific region or world market.

2. A requirement that an investment use a technology to meet generally applicable health, safety or environmental standards-related measures, as defined in Article 915, shall not be construed to be inconsistent with paragraph 1(f). For greater certainty, Articles 1102, 1103 and 1104 shall apply to such requirements.

3. A Party shall not condition the receipt or continued receipt of an advantage, in connection with investments in its territory of investors of a Party or of a non-Party, on compliance with any of the following requirements:

(a) to purchase, use or accord a preference to goods produced in its territory, or to purchase goods from producers in its territory;

(b) to achieve a given level or percentage of domestic content;

(c) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or

(d) to restrict sales of goods or services in its territory that such investment produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.

4. Nothing in paragraph 3 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with investments in its territory of investors of a Party or of a non-Party, on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.

5. Paragraphs 1 and 3 do not apply to any requirements other than the requirements listed in those paragraphs.

Article 1107: Senior Management and Boards of Directors

1. A Party shall not require that an enterprise of the Party that is an investment of an investor of another Party appoint to senior management positions individuals of any particular nationality.

2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of the Party that is an investment of an investor of another Party, be of a particular nationality, or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.

Article 1108: Reservations and Exceptions

1. Articles 1102, 1103, 1106 and 1107 do not apply to:

(a) any existing non-conforming measure that is maintained by:

(i) a Party at the federal level, as described in its Schedule to Annex I or III,

(ii) a state or province, for two years after the date of entry into force of this Agreement, and thereafter as described by a Party in its Schedule to Annex I, or

(iii) a local government;

(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or

(c) an amendment to any non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with Articles 1102, 1103, 1106 and 1107.

2. A Party shall have two years from the date of entry into force of this Agreement to describe in its Schedule to Annex I any existing non-conforming measure maintained by a state or province.

3. A Party shall not be required to describe in its Schedule to Annex I any existing non-conforming measure that is maintained by a local government.

4. To the extent indicated by a Party in its Schedule to Annex II, Articles 1102, 1103, 1106 and 1107 do not apply to any measure adopted or maintained by a Party with respect to the sectors, subsectors or activities as described therein.

5. Any measure adopted by a Party in a manner consistent with paragraph 4 shall not require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.

6. Articles 1102 and 1103 do not apply to any measure that is an exception to, or derogation from, the obligations under Article 1703 (National Treatment) as specifically provided for in that Article.

7. Article 1103 does not apply to treatment accorded by a Party pursuant to agreements or with respect to sectors described in Annex IV.

8. Articles 1102, 1103 and 1107 do not apply to:

(a) procurement of goods or services by a Party or a state enterprise; or

(b) subsidies and grants provided by a Party or a state enterprise, including government-supported loans, guarantees and insurance.

9. The provisions of:

(a) Article 1106(1)(a), (b) and (c), and (3)(a) and (b) do not apply to qualification requirements for goods or services with respect to export promotion and foreign aid programs;

(b) Article 1106(1)(b), (c), (f) and (g), and (3)(a) and (b) do not apply to procurement of goods or services by a Party or a state enterprise; and

(c) Article 1106(3)(a) and (b) do not apply to requirements imposed by an importing Party related to the content of goods necessary to qualify for preferential tariffs or preferential quotas.

Article 1109: Transfers

1. Each Party shall permit all transfers and international payments ("transfers") relating to an investment of an investor of another Party in the territory of the Party to be made freely and without delay. Such transfers include:

(a) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other fees, returns in kind, and other amounts derived from the investment;

(b) proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;

(c) payments made under a contract entered into by the investor, or its investment, including payments made pursuant to a loan agreement;

(d) payments made pursuant to Article 1110; and

(e) payments arising under Subchapter B.

2. Each Party shall permit transfers to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer with respect to spot transactions in the currency to be transferred.

3. No Party shall require its investors to transfer, or penalize its investors who fail to transfer, the income, earnings, profits or other amounts derived from, or attributable to, an investment in the territory of another Party.

4. Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:

(a) bankruptcy, insolvency or the protection of the rights of creditors;

(b) issuing, trading or dealing in securities;

(d) reports of transfers of currency or other monetary instruments; or

(e) ensuring the satisfaction of judgments in adjudicatory proceedings.

5. Paragraph 3 shall not be construed to prevent a Party from imposing any measure through the equitable, non-discriminatory and good faith application of its laws relating to the matters set out in subparagraphs (a) through (e) of paragraph 4.

6. A Party may restrict transfers of returns in kind only in circumstances in which it could otherwise restrict such transfers under this Agreement.

Article 1110: Expropriation and Compensation

1. No Party shall directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment ("expropriation"), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(d) upon payment of compensation in accordance with paragraphs 2 to 6.

2. Compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and shall not reflect any change in value occurring because the intended expropriation had become known earlier. Valuation criteria shall include going concern value, asset value (including declared tax value of tangible property) and other criteria, as appropriate to determine fair market value.

3. Compensation shall be paid without delay and be fully realizable.

4. If payment is made in a G7 currency, compensation shall include interest at a commercially reasonable rate for that currency from the date of expropriation until the date of actual payment thereof.

5. If a Party elects to pay in a currency other than a G7 currency, the amount paid on the date of payment, if converted into a G7 currency at the market rate of exchange prevailing on that date, shall be no less than if the amount of compensation owed on the date of expropriation had been converted into that G7 currency at the market rate of exchange prevailing on that date, and interest had accrued at a commercially reasonable rate for that G7 currency from the date of expropriation until the date of payment.

6. Upon payment, compensation shall be freely transferable as provided in Article 1109.

7. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or the revocation, limitation or creation of intellectual property rights to the extent that such issuance, revocation, limitation or creation is consistent with Chapter Seventeen (Intellectual Property).

8. For purposes of this Article and for greater clarity, a non- discriminatory measure of general application shall not be considered a measure tantamount to an expropriation of a debt security or loan covered by this Chapter solely on the ground that the measure imposes costs on the debtor that cause it to default on the debt.

Article 1111: Special Formalities and Information Requirements

1. Nothing in Article 1102 shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of investments by investors of another Party, such as a requirement that investors be residents of the Party or that investments be legally constituted under the laws and regulations of the Party, provided that such formalities do not impair the substance of the benefits of any of the provisions in this Chapter.

2. Notwithstanding Articles 1102 and 1103, a Party may require, from an investor of another Party or its investment, routine business information, to be used solely for informational or statistical purposes, concerning that investment in its territory. The Party shall protect such business information as is confidential from disclosure that would prejudice the investor's or the investment's competitive position. Nothing in this paragraph shall preclude a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its laws.

Article 1112: Relationship to Other Chapters

1. In the event of any inconsistency between a provision of this Chapter and a provision of another Chapter, the provision of the other Chapter shall prevail to the extent of the inconsistency.

2. A requirement by a Party that a service provider of another Party post a bond or other form of financial security as a condition of providing a service into its territory does not of itself make this Chapter applicable to the provision of that cross-border service. This Chapter shall apply to that Party's treatment of the posted bond or financial security.

Article 1113: Denial of Benefits

1. Each Party reserves the right to deny to an investor of another Party that is an enterprise of such Party and to investments of such investor the benefits of this Chapter if investors of a non-Party own or control the enterprise and:

(a) the denying Party does not maintain diplomatic relations with the non-Party; or (b) the denying Party adopts or maintains measures with respect to the non-Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Chapter were accorded to the enterprise or to its investments.

2. Subject to prior notification and consultation in accordance with Articles 1803 (Notification and Provision of Information) and 2006 (Consultations), respectively, each Party reserves the right to deny to an investor of another Party that is an enterprise of such Party and to investments of such investors the benefits of this Chapter if investors of a non-Party own or control the enterprise and the enterprise has no substantial business activities in the territory of the Party under whose laws it is constituted or organized.

Article 1114: Environmental Measures

1. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure, otherwise consistent with this Chapter, that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.

2. The Parties recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. Accordingly, a Party should not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion, or retention in its territory of an investment of an investor. If a Party considers that another Party has offered such an encouragement, it may request consultations with the other Party and the two Parties shall consult with a view to avoiding any such encouragement.

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Subchapter B - SETTLEMENT OF DISPUTES BETWEEN A PARTY AND AN INVESTOR OF ANOTHER PARTY

Article 1115: Purpose

This Subchapter establishes a mechanism for the settlement of investment disputes that assures both equal treatment among investors of the Parties in accordance with the principle of international reciprocity and due process before an impartial tribunal.

Article 1116: Claim by an Investor of a Party on Behalf of Itself

1. An investor of a Party may submit to arbitration under this Subchapter a claim that another Party has breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises) where the alleged breach pertains to the obligations of Subchapter A,

and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

2. An investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.

Article 1117: Claim by an Investor of a Party on Behalf of an Enterprise

1. An investor of a Party, on behalf of an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly, may submit to arbitration under this Subchapter a claim that the other Party has breached:

(a) a provision of Subchapter A; or

(b) Article 1502 (3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises) where the alleged breach pertains to the obligations of Subchapter A;

and that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.

2. An investor may not make a claim on behalf of an enterprise described in paragraph 1 if more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the enterprise has incurred loss or damage.

3. Where an investor makes a claim under this Article and the investor or a non-controlling investor in the enterprise makes a claim under Article 1116 arising out of the same events which gave rise to the claim under this Article, and two or more of the claims are submitted to arbitration under Article 1120, the claims should be heard together by a Tribunal established pursuant to Article 1125, unless the Tribunal finds that the interests of a disputing party would be prejudiced thereby.

4. An investment may not make a claim under this Subchapter.

Article 1118: Settlement of a Claim Through Consultation and Negotiation

The disputing parties should first attempt to settle a claim through consultation or negotiation.

Article 1119: Notice of Intent to Submit a Claim to Arbitration

The disputing investor shall give to the disputing Party written notice of its intention to submit a claim to arbitration at least 90 days before the claim is submitted, which notice shall specify:

(a) the name and address of the disputing investor;

(b) the provisions of this Agreement alleged to have been breached and any other relevant provisions;

(d) the relief sought and the approximate amount of damages claimed.

Article 1120: Submission of a Claim to Arbitration

1. Except as provided in Annex 1120.1, and provided that six months have elapsed since the events giving rise to a claim, a disputing investor may submit the claim to arbitration under:

(a) the ICSID Convention, provided that both the disputing Party and the Party of the investor are parties to the Convention;

(b) the Additional Facility Rules of ICSID, provided that either the disputing Party or the Party of the investor, but not both, is a party to the ICSID Convention; or

2. The applicable arbitration rules shall govern the arbitration except to the extent modified by this Subchapter.

Article 1121: Conditions Precedent to Submission of a Claim to Arbitration

1. A disputing investor may submit a claim under Article 1116 to arbitration only if:

(a) the investor consents to arbitration in accordance with the provisions of this Subchapter; and

(b) both the investor and an enterprise of another Party that is a juridical person that the investor owns or controls directly or indirectly, waive their right to initiate or continue before any administrative tribunal or court under the domestic law of any Party any proceedings with respect to the measure of the disputing Party that is alleged to be a breach of Subchapter A of this Chapter, Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises), except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the domestic law of the disputing Party.

2. A disputing investor may submit a claim under Article 1117 to arbitration only if both the investor and the enterprise:

(a) consent to arbitration in accordance with the provisions of this Subchapter; and

(b) waive their right to initiate or continue before any administrative tribunal or court under the domestic law of any Party any proceedings with respect to the measure of the disputing Party that is alleged to be a breach of Subchapter A of this Chapter, Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises), except for proceedings for injunctive, declaratory or other extraordinary relief, not involving the payment of damages, before an administrative tribunal or court under the domestic law of the disputing Party.

3. A consent and waiver required by this Article shall be in writing, shall be given to the disputing Party, and shall be included in the submission of a claim to arbitration.

Article 1122: Consent to Arbitration

1. Each Party consents to the submission of a claim to arbitration in accordance with the provisions of this Subchapter.

2. The consent given by paragraph 1 and the submission by a disputing investor of a claim to arbitration in accordance with the provisions of this Subchapter shall satisfy the requirement of:

(a) Chapter II of the ICSID Convention (Jurisdiction of the Center) and the Additional Facility Rules for written consent of the parties;

(b) Article II of the New York Convention for an agreement in writing; and

Article 1123: Number of Arbitrators and Method of Appointment

Subject to Article 1125, and unless the disputing parties agree otherwise, the Tribunal shall consist of three arbitrators. One arbitrator shall be appointed by each of the disputing parties. The third, who shall be the presiding arbitrator, shall be appointed by agreement of the disputing parties.

Article 1124: Constitution of Tribunal When a Party Fails to Appoint an Arbitrator or the Disputing Parties Are Unable to Agree on a Presiding Arbitrator

1. The Secretary-General of ICSID shall serve as appointing authority for an arbitration under this Subchapter.

2. If a Tribunal has not been constituted within 90 days from the date that a claim is submitted to arbitration, the Secretary- General, at the request of either disputing party:

(a) shall appoint the arbitrator or arbitrators not yet appointed in his discretion, except for the presiding arbitrator; and

(b) shall appoint the presiding arbitrator in accordance with paragraph 3.

3. The Secretary-General shall appoint the presiding arbitrator from the list of presiding arbitrators described in paragraph 4. In the event that no such presiding arbitrator is available to serve, the Secretary-General shall appoint a presiding arbitrator who is not a national of any of the Parties from the ICSID Panel of Arbitrators.

4. As of the date of entry into force of this Agreement, the Parties shall have jointly designated, without regard to nationality, 45 presiding arbitrators meeting the qualifications of the rules referred to in Article 1120 and experienced in international law and investment.

5. Subject to paragraph 8, where a disputing investor submits a claim to arbitration under the ICSID Convention or the Additional Facility Rules, each Party agrees:

(a) to the appointment by the investor of a national of the Party of the investor as an arbitrator; and

(b) to the appointment by the Secretary-General of a national of the Party of the investor as an arbitrator or as a presiding arbitrator.

6. Subject to paragraph 8, a disputing investor described in Article 1116 may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the Additional Facility Rules, only on the following conditions:

(a) where the disputing Party appoints a national of the disputing Party as an arbitrator, the investor agrees in writing to the appointment; and

(b) where the Secretary-General appoints a national of the disputing Party as an arbitrator or as a presiding arbitrator, the investor agrees in writing to the appointment.

7. Subject to paragraph 8, a disputing investor described in Article 1117(1) may submit a claim to arbitration, or continue a claim, under the ICSID Convention or the Additional Facility Rules, only on the following conditions:

(a) where the disputing Party appoints a national of the disputing Party as an arbitrator, the investor and the enterprise agree in writing to the appointment; and

(b) where the Secretary-General appoints a national of the disputing Party as an arbitrator or as a presiding arbitrator, the investor and the enterprise agree in writing to the appointment.

8. A disputing party:

(a) in the case of a claim submitted to arbitration under the ICSID Convention, may propose, under Article 57 of the Convention, the disqualification of a member of the Tribunal on account of any fact indicating a manifest lack of the qualities required by paragraph 1 of Article 14 of the Convention; and

(b) in the case of a claim submitted to arbitration under the Additional Facility Rules, may propose, under Article 14 of the Rules, the disqualification of a member of the Tribunal on account of any fact indicating a manifest lack of the qualities required by Article 9 of the Rules.

Article 1125: Consolidation

1. A Tribunal established under this Article shall be established under the UNCITRAL Arbitration Rules, and shall conduct its proceedings in accordance with those Rules, except as modified by this Subchapter.

2. Where a Tribunal established under this Article is satisfied that claims have been submitted to arbitration under Article 1120 that have a question of law or fact in common, the Tribunal may, in the interests of fair and efficient resolution of the claims, and after hearing the disputing parties, order that the Tribunal:

(a) shall assume jurisdiction over, and hear and determine together, all or part of the claims; or

(b) shall assume jurisdiction over, and hear and determine one or more of the claims, the determination of which it believes would assist in the resolution of the others.

3. A disputing party that seeks an order under paragraph 2 shall request the Secretary-General of ICSID to establish a Tribunal and shall specify in the request:

(a) the name of the disputing Party or disputing parties against which the order is sought;

(b) the nature of the order sought; and

4. The disputing party shall give to the disputing Party or disputing parties against which the order is sought a copy of the request.

5. Within 60 days of receipt of the request, the Secretary- General of ICSID shall establish a Tribunal consisting of three arbitrators. The Secretary-General shall appoint the presiding arbitrator from the roster described in paragraph 4 of Article 1124. In the event that no such presiding arbitrator is available to serve, the Secretary-General shall appoint a presiding arbitrator, who is not a national of any of the Parties, from the ICSID Panel of Arbitrators. The Secretary- General shall appoint the two other members from the roster described in paragraph 4 of Article 1124, and to the extent not available from that roster, from the ICSID Panel of Arbitrators, and to the extent not available from that panel, in the discretion of the Secretary-General. One member shall be a national of the disputing Party and one member shall be a national of the Party of the disputing investors.

6. Where a Tribunal has been established under this Article, a disputing party that has not been named in a request made under paragraph 3 may make a written request to the Tribunal that it be included in an order made under paragraph 2, and shall specify in the request:

(a) the party's name and address;

(b) the nature of the order sought; and

7. A disputing party described in paragraph 6 shall give a copy of its request to the parties named in a request made under paragraph 3.

8. A Tribunal established under Article 1120 shall not have jurisdiction to decide a claim, or a part of a claim, over which a Tribunal established under this Article has assumed jurisdiction.

9. A disputing Party shall give to the Secretariat of the Commission, within 15 days of receipt by the disputing Party, a copy of:

(a) a request for arbitration made under paragraph 1 of Article 36 of the ICSID Convention;

(b) a notice for arbitration made under Article 2 of the Additional Facility Rules; or

10. A disputing Party shall give to the Secretariat of the Commission a copy of a request made under paragraph 3 of this Article:

(a) within 15 days of receipt of the request, in the case of a request made by a disputing investor;

(b) within 15 days of making the request, in the case of a request made by the disputing Party.

11. A disputing Party shall give to the Secretariat of the Commission a copy of a request made under paragraph 6 of this Article within 15 days of receipt of the request.

12. The Secretariat of the Commission shall maintain a public register consisting of the documents referred to in paragraphs 9, 10 and 11.

Article 1126: Notice

A disputing Party shall deliver to the other Parties:

(a) written notice of a claim that has been submitted to arbitration within 30 days from the date that the claim is submitted; and

(b) copies of all pleading filed in the arbitration.

Article 1127: Participation by a Party

On written notice to the disputing parties, a Party may make submissions to a Tribunal on a question of interpretation of this Agreement.

Article 1128: Documents

A Party shall be entitled to receive from the disputing Party at the cost of the requesting Party:

(a) a copy of the evidence that has been tendered to the Tribunal; and

(b) a copy of the written argument of the disputing parties.

Article 1129: Place of Arbitration

Unless the disputing parties agree otherwise, a Tribunal shall hold an arbitration in the territory of a Party which is a party to the New York Convention, selected in accordance with:

(a) the Additional Facility Rules if the arbitration is under those rules or the ICSID Arbitration Rules; or

(b) the UNCITRAL Arbitration Rules if the arbitration is under those rules.

Article 1130: Governing Law

A Tribunal established under this Subchapter shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.

Article 1131: Interpretation of Annexes

1. Where a disputing Party asserts as a defense that the measure alleged to be a breach of this Chapter is within the scope of an exception set forth in Annex I, Annex II, Annex III or Annex IV, on request of the disputing Party, the Tribunal shall request the interpretation of the Commission on this question. The Commission shall have 60 days to submit its interpretation in writing to the Tribunal.

2. If the Commission submits to the Tribunal an agreed interpretation, the interpretation shall be binding on the Tribunal. If the Commission fails to submit an agreed interpretation or fails to submit an agreed interpretation within such 60 day period, the Tribunal shall decide the issue of interpretation of the exception.

Article 1132: Report from an Expert

Without prejudice to the appointment of other kinds of experts where authorized by the applicable arbitration rules, a Tribunal, at the request of a disputing party or, unless the disputing parties disapprove, on its own initiative, may appoint one or more experts to report to it in writing on any factual issue concerning environmental, health, safety or other scientific matters raised by a disputing party in a proceeding, subject to such terms and conditions as the disputing parties may agree.

Article 1133: Interim Measures of Protection

A Tribunal may take such measures as it deems necessary to preserve the respective rights of the disputing parties, or to ensure that the Tribunal's jurisdiction is made fully effective. Such measures may include, but are not limited to, orders to preserve evidence in the possession or control of a disputing party, or to protect the Tribunal's jurisdiction. An interim measure of protection may not include an order of attachment or an order to enjoin the application of the measure alleged to be the breach of Subchapter A of this Chapter, Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises). For purposes of this paragraph, an order includes a recommendation.

Article 1134: Final Award

1. Where a Tribunal makes a final award against a Party, the Tribunal may award only:

(a) monetary damages, and any applicable interest; or

(b) restitution of property, in which case the award shall provide that the disputing Party may pay monetary damages, and any applicable interest, in lieu of restitution.

2. Subject to paragraph 1, where a claim is made under paragraph 1 of Article 1117:

(a) an award of restitution of property shall provide that restitution be made to the enterprise;

(b) an award of monetary damages, and any applicable interest, shall provide that the sum be paid to the enterprise; and

(c) the award shall provide that it is made without prejudice to any right that any person may have in the relief under applicable domestic law.

3. A Tribunal may not order a Party to pay punitive damages.

Article 1135: Finality and Enforcement of Award

1. An award made by a Tribunal is binding on the disputing parties but shall have no binding force except between the disputing parties and in respect of the particular case.

2. Subject to paragraph 3, a disputing party shall abide by and comply with an award without delay.

3. A disputing party may not seek enforcement of a final award until:

(a) in the case of a final award made under the ICSID Convention:

(i) 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award, or

(ii) revision or annulment proceedings have been completed, and

(b) in the case of a final award under the Additional Facility Rules of ICSID or the UNCITRAL Arbitration Rules:

(i) 3 months have elapsed from the date the award was rendered and no disputing party has commenced a proceeding to revise, set aside or annul the award, or

(ii) a court has dismissed or allowed an application to revise, set aside or annul the award and there is no further appeal.

5. Each Party undertakes to provide for the enforcement in its territory of an award.

6. If a Party fails to abide by or comply with the terms of a final award under this Subchapter, the Commission provided for in Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures) shall, upon delivery of a request by any other Party whose investor was party to the investment dispute, establish a panel under Article 2008(1). The requesting Party may seek in such proceedings:

(a) a determination that the failure to abide by and comply with the terms of the final award is inconsistent with the obligations of this Agreement; and

(b) a recommendation that the defaulting Party abide by or comply with the terms of the final award.

7. A disputing investor may seek enforcement of an arbitration award under the ICSID Convention, the New York Convention or the Inter-American Convention regardless of whether proceedings have been taken under paragraph 6.

8. A claim that is submitted to arbitration shall be considered to arise out of a commercial relationship or transaction for purposes of Article I of the New York Convention and Article I of the Inter-American Convention.

Article 1136: General

1. Time when a Claim is Submitted to Arbitration: A claim is submitted to arbitration under this Subchapter when:

(a) the notice of registration of the request to institute arbitration proceedings has been dispatched by the Secretary-General of ICSID in accordance with paragraph 3 of Article 36 of the ICSID Convention;

(b) the certificate of registration of the notice for arbitration has been dispatched by the Secretary- General of ICSID in accordance with Article 4 of Schedule C of the Additional Facility Rules; or

2. Receipts under Insurance or Guarantee Contracts: In an arbitration under this Subchapter, a Party shall not assert, as a defense, counterclaim, right of set off or otherwise, that the investor concerned has received or will receive, pursuant to an insurance or guarantee contract, indemnification or other compensation for all or part of its alleged damages.

Article 1137: Exclusions

1. Without prejudice to the applicability or non-applicability of the dispute settlement provisions of this Subchapter or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures) to other actions taken by a Party pursuant to Article 2102 (National Security), a decision by a Party to prohibit or restrict the acquisition of an investment in its territory by an investor of another Party, or its investment, pursuant to that Article shall not be subject to such provisions.

2. The dispute settlement provisions of this Subchapter and of Chapter Twenty shall not apply to the matters described in Annex 1137.2.

Article 1138: Definitions

For purposes of this Chapter:

disputing Party means a Party against which a claim is made under Subchapter B;

disputing party means the disputing investor or the disputing Party;

disputing parties means the disputing investor and the disputing Party;

enterprise means an "enterprise" as defined in Article 201, except that it shall also include a branch;

enterprise of a Party means an enterprise constituted or organized under the laws and regulations of a Party, and a branch;

equity or debt securities includes voting and non-voting shares, bonds, convertible debentures, stock options and warrants;

G7 Currency means the currency of Canada, Germany, France, Italy, Japan, the United States or the United Kingdom of Great Britain and Northern Ireland;

ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of other States done at Washington, March 18, 1965;

ICSID means the International Centre for Settlement of Investment Disputes;

Inter-American Convention means the Inter-American Convention on International Commercial Arbitration, done at Panama, January 30, 1975;

investment means:

(a) an enterprise;

(b) an equity security of an enterprise;

(i) that is an affiliate of the investor, or

(ii) where the original maturity of the debt security is at least three years,

but does not include a debt security, regardless of original maturity, of a state enterprise;

(d) a loan to an enterprise,

(i) that is an affiliate of the investor, or

(ii) where the original maturity of the loan is at least three years,

but does not include a loan, regardless of original maturity, to a state enterprise;

(e) an interest in an enterprise that entitles the owner to share in the income or profits;

(f) an interest in an enterprise that entitles the owner to share in the assets on dissolution, other than a debt security or a loan excluded from sub-paragraph (c) or (d);

(g) real estate or other property (tangible and intangible) acquired in the expectation or used for the purpose of economic benefit or other business purposes;

(h) interests arising from the commitment of capital or other resources in the territory of a Party to economic activity in such territory, such as under:

(i) contracts involving the presence of an investor's property in the territory of the Party (including turnkey or construction contracts, or concessions), or

(ii) contracts where the remuneration depends substantially on the production, revenues or profits of an enterprise.

But investment does not mean,

(i) claims to money that arise solely from:

(i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of one Party to an enterprise in the territory of another Party, or

(ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by sub-paragraph (d), or

(j) any other claims to money,

which do not involve the kinds of interests set out in sub- paragraphs (a) through (h);

investment of an investor of a Party means an investment owned or controlled directly or indirectly by an investor of such Party;

investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of such Party, that seeks to make, makes or has made an investment;

investor of a non-Party means an investor other than an investor of a Party, that makes, seeks to make or has made an investment;

New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958;

Tribunal means an arbitration tribunal established under Article 1120 or 1125; and

UNCITRAL Arbitration rules means the arbitration rules of the United Nations \Commission on International Trade Law, approved by the United Nations General Assembly on December 15, 1976.

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ANNEX 1120.1

Submission of Claims to Arbitration

1. An investor of another Party may not allege that Mexico has breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises) where the alleged breach pertains to the obligations of Subchapter A,

both in an arbitration under this Subchapter and in proceedings before a Mexican court or administrative tribunal.

2. Where an enterprise of Mexico that is a juridical person that an investor of another Party owns or controls directly or indirectly alleges in proceedings before a Mexican court or administrative tribunal that Mexico has breached:

(a) a provision of Subchapter A; or

(b) Article 1502(3)(a) (Monopolies and State Enterprises) or Article 1503(2) (State Enterprises) where the alleged breach pertains to the obligations of Subchapter A,

the investor may not allege the breach in an arbitration under this Subchapter.

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Exclusions from Dispute Settlement

CANADA

A decision by Canada following a review under the Investment Canada Act, with respect to whether or not to permit an acquisition that is subject to review, shall not be subject to the dispute settlement provisions of Subchapter B or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

MEXICO

A decision by the National Commission on Foreign Investment ("Comisi¢n Nacional de Inversiones Extranjeras") following a review pursuant to Annex I, page I-M-7, with respect to whether or not to permit an acquisition that is subject to review, shall not be subject to the dispute settlement provisions of Subchapter B or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures).

NAFTA Chapter Twelve Cross-Border Trade in Services

Article 1201: Scope and Coverage

1. This Chapter applies to measures adopted or maintained by a Party relating to cross-border trade in services by service providers of another Party, including measures respecting:

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

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

(d) the presence in its territory of a service provider of another Party; and

(e) the provision of a bond or other form of financial security as a condition for the provision of a service.

2. This Chapter does not apply to:

(a) financial services, as defined in Chapter Fourteen (Financial Services);

(b) services associated with energy and basic petrochemical goods to the extent provided in Chapter Six (Energy and Basic Petrochemicals); and

(c) air services, including domestic and international air transportation, whether scheduled or non-scheduled, and related activities in support of air services, other than:

(i) aircraft repair and maintenance services during which an aircraft is withdrawn from service, and

(ii) specialty air services.

3. Nothing in this Chapter shall be construed to:

(a) impose any obligation on a Party with respect to a national of another Party seeking access to its employment market, or employed on a permanent basis in its territory, or to confer any right on that national with respect to such access or employment;

(b) impose any obligation or confer any right on a Party with respect to any procurement by a Party or a state enterprise;

(c) impose any obligation or confer any right on a Party with respect to subsidies and grants, including government- supported loans, guarantees and insurance provided by a Party or a state enterprise; or

(d) prevent a Party from providing a service or performing a function, such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care, in a manner that is not inconsistent with this Chapter.

Article 1202: National Treatment

1. Each Party shall accord to service providers of another Party treatment no less favorable than that it accords, in like circumstances, to its own service providers.

2. The treatment accorded by a Party under paragraph 1 means, with respect to a state or province treatment no less favorable than the most favorable treatment accorded, in like circumstances, by such state or province to service providers of the Party of it forms a part.

Article 1203: Most-Favored-Nation Treatment

Each Party shall accord to service providers of another Party treatment no less favorable than that it accords, in like circumstances, to service providers of another Party or of a non- Party.

Article 1204: Non-Discriminatory Treatment

Each Party shall accord to service providers of another Party the better of the treatment required by Articles 1202 and 1203.

Article 1205: Local Presence

A Party shall not require a service provider of another Party to establish or maintain a representative office, branch or any form of enterprise, or to be resident, in its territory as a condition for the cross-border provision of a service.

Article 1206: Reservations

1. Articles 1202, 1203 and 1205 do not apply to:

(a) any existing non-conforming measure that is maintained by:

(i) a Party at the federal level, as described in its Schedule to Annex I,

(ii) a state or province, for two years after the date of entry into force of this Agreement, and thereafter as described by a Party in its Schedule to Annex I, or

(iii) a local government;

(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or

2. A Party shall have two years from the date of entry into force of this Agreement to describe in its Schedule to Annex I any existing non-conforming measure maintained by a state or province.

3. A Party shall not be required to describe in its Schedule to Annex I any existing non-conforming measure that is maintained by a local government.

4. To the extent indicated by a Party in its Schedule to Annex II, Articles 1202, 1203 and 1205 do not apply to any measure adopted or maintained by a Party with respect to the sectors, subsectors or activities described therein.

Article 1207: Quantitative Restrictions

1. The Parties shall periodically, but in any event at least every two years, endeavor to negotiate the liberalization or removal of:

(a) any existing quantitative restrictions maintained by

(i) a Party at the federal level, as described in its Schedule to Annex V, or

(ii) a state or province, as described by a Party in its Schedule to Annex V; and

(b) any quantitative restriction adopted by a Party after the date of entry into force of this Agreement.

2. Each Party shall have one year from the date of entry into force of this Agreement to describe in its Schedule to Annex V any quantitative restriction maintained by a state or province.

3. Each Party shall notify the other Parties of any quantitative restriction that it adopts or amends after the date of entry into force of this Agreement and shall describe any such quantitative restriction in its Schedule to Annex V.

4. A Party shall not be required to describe in its Schedule to Annex V, or to notify, any quantitative restriction adopted or maintained by a local government.

Article 1208: Liberalization of Non-Discriminatory Measures

Each Party shall describe in its Schedule to Annex VI commitments to liberalize quantitative restrictions, licensing requirements, performance requirements or other non-discriminatory measures relating to the cross-border provision of a service.

Article 1209: Procedures

The Commission shall establish procedures for:

(a) the notification and description by a Party of

(i) state or provincial measures that it intends to describe in its Schedule to Annex I pursuant to Article 1206(2),

(ii) quantitative restrictions that it intends to describe in it Schedule to Annex V pursuant to Article 1207(2),

(iii) commitments that it intends to describe in its Schedule to Annex VI pursuant to Article 1208, and

(iv) amendments of measures in accordance with Article 1206(1)(c); and

(b) consultations between Parties with a view to removing any state or provincial measure described by a Party in its Schedule to Annex I after the date of entry into force of this Agreement.

Article 1210: Licensing and Certification

1. With a view to ensuring that any measure adopted or maintained by a Party relating to the licensing and certification of nationals of another Party does not constitute an unnecessary barrier to trade, each Party shall endeavor to ensure that any such measure:

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

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

2. Notwithstanding Article 1203, a Party shall not be required to extend to a service provider of another Party the benefits of recognition of education, experience, licenses or certifications obtained in another country, whether such recognition was accorded unilaterally or by arrangement or agreement with that other country. The Party according such recognition shall afford any interested Party an adequate opportunity to demonstrate that education, experience, licenses or certifications obtained in that other Party's territory should also be recognized or to negotiate and enter into an agreement or arrangement of comparable effect.

3. Two years after the date of entry into force of this Agreement, a Party shall eliminate any citizenship or permanent residency requirement for the licensing and certification of professional service providers in its territory. Where a Party does not comply with this provision with respect to a particular sector, any other Party may maintain an equivalent requirement or reinstate any such requirement eliminated pursuant to this Article, only in the affected sector, for such period as the non-complying Party retains the requirement.

4. The Parties shall consult periodically with a view to determining the feasibility of removing any remaining citizenship or permanent residency requirement for the licensing and certification of nationals of the other Parties.

5. Each Party shall implement the provisions of Annex 1210.

Article 1211: Denial of Benefits

1. A Party may deny the benefits of this Chapter to a service provider of another Party where the Party establishes that:

(a) such service is being provided by an enterprise owned or controlled by nationals of a non-Party, and

(i) the denying Party does not maintain diplomatic relations with the non-Party, or

(ii) the denying Party has imposed measures against the non-Party that prohibit transactions with such enterprise or that would be violated or circumvented by the activities of such enterprise; and

(b) with respect to the cross-border provision of a transportation service covered by this Chapter, the service is provided using equipment not registered by any Party.

2. Subject to prior notification and consultation in accordance with Articles 1803 (Notification and Provision of Information) and 2006 (Consultations), respectively, a Party may deny the benefits of this Chapter to a service provider of another Party where the Party establishes that such service is being provided by an enterprise of another Party that is owned or controlled by persons of a non-Party and that has no substantial business activities in the territory of any Party.

3. The Party denying benefits pursuant to paragraph 1 or 2 shall have the burden of establishing that such action is in accordance with such paragraph.

Article 1212: Sectoral Annex

Each Party shall comply with Annex 1212.

Article 1213: Definitions

1. For purposes of this Chapter, a reference to a federal, state or provincial government includes any non-governmental body in the exercise of any regulatory, administrative or other governmental authority delegated to it by such government.

2. For purposes of this Chapter:

cross-border trade in services or cross-border provision of a service means the provision of a service:

(a) from the territory of a Party into the territory of another Party;

(b) in the territory of a Party by a person of that Party to a person of another Party; or

but does not include the provision of a service in the territory of a Party by an investment, as defined in Article 1138 (Investment - Definitions), in that territory;

enterprise means "enterprise" as defined in Article 201, except that it shall also include a branch;

enterprise of a Party means an enterprise constituted or organized under the laws and regulations of a Party, including a branch;

professional services means services, the provision of which requires specialized post-secondary education, or equivalent training or experience, and for which the right to practice is granted or restricted by measures adopted or maintained by a Party, but does not include services provided by trades-persons and vessel and aircraft crew members;

quantitative restriction means a non-discriminatory measure that imposes limitations on:

(a) the number of service providers, whether in the form of a numerical quota, monopoly or a requirement for an economic needs test or by any other quantitative means; or

(b) the operations of any service provider, whether in the form of a quota or the requirement of an economic needs test or by any other quantitative means;

service provider of a Party means a person of a Party that provides a service; and

specialty air services means aerial mapping, aerial surveying, aerial photography, forest fire management, fire fighting, aerial advertising, glider towing, parachute jumping, aerial construction, heli-logging, aerial sightseeing, flight training, aerial inspection and surveillance and aerial spraying services.

============================================================================= ANNEX 1210

Professional Services

Section A - General Provisions

Scope and Coverage

1. This Annex applies to measures adopted or maintained by a Party relating to the licensing and certification of professional service providers.

Processing of Applications for Licenses and Certification

2. Each Party shall ensure that its competent authorities, within a reasonable period after the submission of an application for licensing or certifications by a national of another Party:

(a) where the application is complete, make a determination on the application, and inform the applicant of that determination; or

(b) where the application is not complete, inform the applicant without undue delay of the status of the application and the additional information that is required under its domestic law.

Development of Mutually Acceptable Professional Standards and Criteria

3. The Parties shall encourage the relevant bodies in their respective territories to develop mutually acceptable professional standards and criteria for licensing and certification of professional service providers and to provide recommendations on mutual recognition to the Commission.

4. Such standards and criteria may be developed with regard to the following matters:

(a) education - accreditation of schools or academic programs where professional service providers obtain formal education;

(b) examinations - qualifying examinations for the purpose of licensing professional service providers, including alternative methods of assessment such as oral examinations and interviews;

(d) conduct and ethics - standards of professional conduct and the nature of disciplinary action for non-conformity with those standards by professional service providers;

(e) professional development and re-certification - continuing education for professional service providers, and ongoing requirements to maintain professional certification;

(f) scope of practice - extent of, or limitations on, field of permissible activities of professional services providers;

(g) territory-specific knowledge - requirements for knowledge by professional service providers of such matters as local laws, regulations, language, geography or climate; and

(h) consumer protection - alternatives to residency, including bonding, professional liability insurance and client restitution funds to provide for the protection of consumers of professional services.

5. Upon receipt of the recommendations of the relevant bodies, the Commission shall review the recommendations within a reasonable period to determine whether they are consistent with this Agreement.

6. Based upon the Commission's review, the Parties shall encourage their respective competent authorities, where appropriate, to adopt those recommendations within a mutually agreed period.

Temporary Licensing

7. Where the Parties agree, each Party shall encourage the relevant bodies in its territory to develop procedures for temporary licensing of professional service providers of another Party.

Review

8. The Commission shall periodically, and at least once every three years, review progress in the implementation of this Annex.

Section B - Foreign Legal Consultants

1. In implementing its commitments regarding foreign legal consultants, set out in its Schedules to Annexes I and VI in accordance with Article 1206 and 1208, each Party shall ensure, subject to its reservations set out in its Schedules to Annexes I and II in accordance with Article 1206, that a foreign legal consultant is permitted to practice or advise on the law of the country in which such consultant is authorized to practice as a lawyer.

Consultations With Relevant Professional Bodies

2. Each Party shall undertake consultations with its relevant professional bodies for the purpose of obtaining their recommendations on:

(a) the forms of association and partnership between lawyers authorized to practice in its territory and foreign legal consultants;

(b) the development of standards and criteria for the authorization of foreign legal consultants in conformity with Article 1210; and

3. Each Party shall encourage its relevant professional bodies to meet with the relevant professional bodies designated by each of the other Parties to exchange views regarding the development of joint recommendations on the issues described in paragraph 2 prior to initiation of consultations under that paragraph.

Future Liberalization

4. Each Party shall establish a work program aimed at developing common procedures throughout its territory for the licensing and certification of lawyers licensed in the territory of another Party as foreign legal consultants.

5. With a view to meeting this objective, each Party shall, upon receipt of the recommendations of the relevant professional bodies, encourage its competent authorities to bring applicable measures into conformity with such recommendations.

6. Each Party shall report to the Commission within one year after the date of entry into force of this Agreement, and each year thereafter, on progress achieved in implementing the work program.

7. The Parties shall meet within one year from the date of entry into force of the this Agreement with a view to:

(a) assessing the work that has been done under paragraphs 2 through 6;

(b) as appropriate, amending or removing the remaining reservations on foreign legal consultancy services; and

Section C - Temporary Licensing of Engineers

1. The Parties shall meet within one year after the date of entry into force of this Agreement to establish a work program to be undertaken by each Party, in conjunction with relevant professional bodies specified by that Party, to provide for the temporary licensing in its territory of engineers licensed in the territory of another Party.

2. With a view to meeting this objective, each Party shall undertake consultations with its relevant professional bodies for the purpose of obtaining their recommendations on:

(a) the development of procedures for the temporary licensing of engineers licensed in the territory of another Party to permit them to practice their engineering specialties in each jurisdiction in its territory that regulates engineers;

(b) the development of model procedures, in conformity with Article 1210 and Section A of this Annex, for adoption by the competent authorities throughout its territory to facilitate the temporary licensing of engineers;

(d) any other issues relating to the temporary licensing of engineers identified by the Party through its consultations with the relevant professional bodies.

3. The relevant professional bodies shall be requested to make recommendations on the matters specified in paragraph 2 to their respective Parties within two years after the date of date of entry into force of this Agreement.

4. Each Party shall encourage its relevant professional bodies to meet at the earliest opportunity with the relevant professional bodies of the other Parties with a view to cooperating in the expeditious development of joint recommendations on matters specified in paragraph 2. The relevant professional bodies shall be encouraged to develop such recommendations within two years after the date of entry into force of this Agreement. Each Party shall request an annual report from its relevant professional bodies on the progress achieved in developing such recommendations.

5. Upon receipt of the recommendations described in paragraphs 3 and 4, the Parties shall review them to ensure their consistency with the provisions of the Agreement and, if consistent, encourage their respective competent authorities to implement such recommendations within one year.

6. Pursuant to paragraph 5 of Section A, within two years after the date of entry into force of this Agreement, the Commission shall review progress made in implementing the objectives set out in this Section.

7. Appendix 1210-C shall apply to engineering specialties.

============================================================================= ANNEX 1212

Land Transportation

Contact Points for Land Transportation Services

1. Further to Article 1801 (Contact Points), each Party shall designate contact points to provide information relating to land transportation services published by that Party on operating authority, safety requirements, taxation, data and studies and technology, as well as assistance in contacting its relevant government agencies.

Review Process for Land Transportation Services

2. The Commission shall, during the fifth year after the date of entry into force of this Agreement and thereafter during every second year of the period of liberalization for bus and truck transportation set out in the Schedule of each Party to Annex I of this Chapter, receive and consider a report from the Parties that assesses progress respecting such liberalization, including:

(a) the effectiveness of such liberalization;

(b) specific problems for, or unanticipated effects on, each Party's bus and truck transportation industry arising from such liberalization; and

The Commission shall endeavor to resolve in a mutually satisfactory manner any matter arising from its consideration of such reports.

3. The Parties shall consult, no later than seven years after the date of entry into force of this Agreement, to determine the possibilities for further liberalization commitments.

============================================================================= Appendix 1210 - C

Civil Engineers

Mexico will undertake the commitments of this Section only with respect to civil engineers ("ingenieros civiles").

NAFTA Chapter Thirteen Telecommunications

Article 1301: Scope and Coverage

1. This Chapter applies to:

(a) measures adopted or maintained by a Party relating to access to and use of public telecommunications transport networks or services by persons of another Party, including access and use by such persons operating private networks;

(b) measures adopted or maintained by a Party relating to the provision of enhanced or value-added services by persons of another Party in the territory, or across the borders, of a Party; and

(c) standards-related measures relating to attachment of terminal or other equipment to public telecommunications transport networks.

2. Except to ensure that persons operating broadcast stations and cable systems have continued access to and use of public telecommunications transport networks and services, this Chapter does not apply to any measure adopted or maintained by a Party relating to cable or broadcast distribution of radio or television programming.

3. Nothing in this Chapter shall be construed to:

(a) require a Party to authorize a person of another Party to establish, construct, acquire, lease, operate or provide telecommunications transport networks or telecommunications transport services;

(b) require a Party, or require a Party to compel any person, to establish, construct, acquire, lease, operate or provide telecommunications transport networks or telecommunications transport services not offered to the public generally;

(c) prevent a Party from prohibiting persons operating private networks from using such networks to provide public telecommunications transport networks or services to third persons; or

(d) require a Party to compel any person engaged in the cable or broadcast distribution of radio or television programming to make available its cable or broadcast facilities as a public telecommunications transport network.

Article 1302: Access to and Use of Public Telecommunications Transport Networks and Services

1. Each Party shall ensure that persons of another Party have access to and use of any public telecommunications transport network or service, including private leased circuits, offered in its territory or across its borders for the conduct of their business, on reasonable and non-discriminatory terms and conditions, including as set out in paragraphs 2 through 8.

2. Subject to paragraphs 6 and 7, each Party shall ensure that such persons are permitted to:

(a) purchase or lease, and attach terminal or other equipment that interfaces with the public telecommunications transport network;

(b) interconnect private leased or owned circuits with public telecommunications transport networks in the territory, or across the borders, of that Party, including for use in providing dial-up access to and from their customers or users, or with circuits leased or owned by another person on terms and conditions mutually agreed by such persons;

(d) use operating protocols of their choice.

3. Each Party shall ensure that:

(a) the pricing of public telecommunications transport services reflects economic costs directly related to providing such services; and

(b) private leased circuits are available on a flat-rate pricing basis.

Nothing in this paragraph shall be construed to prevent cross-subsidization between public telecommunications transport services.

4. Each Party shall ensure that persons of another Party may use public telecommunications transport networks or services for the movement of information in its territory or across its borders, including for intracorporate communications, and for access to information contained in data bases or otherwise stored in machine-readable form in the territory of any Party.

5. Further to Article 2101 (General Exceptions), nothing in this Chapter shall be construed to prevent a Party from adopting or enforcing any measure necessary to:

(a) ensure the security and confidentiality of messages; or

(b) protect the privacy of subscribers to public telecommunications transport networks or services.

6. Each Party shall ensure that no condition is imposed on access to and use of public telecommunications transport networks or services, other than that necessary to:

(a) safeguard the public service responsibilities of providers of public telecommunications transport networks or services, in particular their ability to make their networks or services available to the public generally; or

(b) protect the technical integrity of public telecommunications transport networks or services.

7. Provided that conditions for access to and use of public telecommunications transport networks or services satisfy the criteria set out in paragraph 6, such conditions may include:

(a) a restriction on resale or shared use of such services;

(b) a requirement to use specified technical interfaces, including interface protocols, for interconnection with such networks or services;

(c) a restriction on interconnection of private leased or owned circuits with such networks or services or with circuits leased or owned by another person, where such circuits are used in the provision of public telecommunications transport networks or services; and

(d) a licensing, permit, registration or notification procedure which, if adopted or maintained, is transparent and applications filed thereunder are processed expeditiously.

8. For purposes of this Article, "non-discriminatory" means on terms and conditions no less favorable than those accorded to any other customer or user of like public telecommunications transport networks or services in like circumstances.

Article 1303: Conditions for the Provision of Enhanced or Value-Added Services

1. Each Party shall ensure that:

(a) any licensing, permit, registration or notification procedure that it adopts or maintains relating to the provision of enhanced or value-added services is transparent and non-discriminatory, and that applications filed thereunder are processed expeditiously; and

(b) information required under such procedures is limited to that necessary to demonstrate that the applicant has the financial solvency to begin providing services or to assess conformity of the applicant's terminal or other equipment with the Party's applicable standards or technical regulations.

2. A Party shall not require a person providing enhanced or value-added services to:

(a) provide those services to the public generally;

(b) cost-justify its rates;

(d) interconnect its networks with any particular customer or network; or

(e) conform with any particular standard or technical regulation for interconnection other than for interconnection to a public telecommunications transport network.

3. Notwithstanding paragraph 2(c), a Party may require the filing of a tariff by:

(a) such provider to remedy a practice of that provider that the Party has found in a particular case to be anticompetitive under its law; or

(b) a monopoly to which Article 1305 applies.

Article 1304: Standards-Related Measures

1. Further to Article 904(4) (Unnecessary Obstacles), each Party shall ensure that its standards-related measures relating to the attachment of terminal or other equipment to the public telecommunications transport networks, including such measures relating to the use of testing and measuring equipment for conformity assessment procedures, are adopted or maintained only to the extent necessary to:

(a) prevent technical damage to public telecommunications transport networks;

(b) prevent technical interference with, or degradation of, public telecommunications transport services;

(d) prevent billing equipment malfunction; or

(e) ensure users' safety and access to public telecommunications transport networks or services.

2. A Party may require approval for the attachment to the public telecommunications transport network of terminal or other equipment that is not authorized, provided that the criteria for such approval are consistent with paragraph 1.

3. Each Party shall ensure that the network termination points for its public telecommunications transport networks are defined on a reasonable and transparent basis.

4. A Party shall not require separate authorization for equipment that is connected on the customer's side of authorized equipment that serves as a protective device fulfilling the criteria of paragraph 1.

5. Further to Article 904(3) (Non-Discriminatory Treatment), each Party shall:

(a) ensure that its conformity assessment procedures are transparent and non-discriminatory and that applications filed thereunder are processed expeditiously;

(b) permit any technically qualified entity to perform the testing required under the Party's conformity assessment procedures for terminal or other equipment to be attached to the public telecommunications transport network, subject to the Party's right to review the accuracy and completeness of the test results; and

(c) ensure that any measure that it adopts or maintains requiring persons to be authorized to act as agents for suppliers of telecommunications equipment before the Party's relevant conformity assessment bodies is non- discriminatory.

6. No later than one year after the date of entry into force of this Agreement, each Party shall adopt, as part of its conformity assessment procedures, provisions necessary to accept the test results from laboratories or testing facilities in the territory of another Party for tests performed in accordance with the accepting Party's standards-related measures and procedures.

7. The Telecommunications Standards Subcommittee established under Article 913(5) (Committee on Standards-Related Measures) shall perform the functions set out in Annex 913-B.

Article 1305: Monopolies

1. Where a Party maintains or designates a monopoly to provide public telecommunications transport networks or services, and the monopoly, directly or through an affiliate, competes in the provision of enhanced or value-added services or other telecommunications-related services or telecommunications-related goods, the Party shall ensure that the monopoly does not use its monopoly position to engage in anticompetitive conduct in those markets, either directly or through its dealings with its affiliates, in such a manner as to affect adversely a person of another Party. Such conduct may include cross-subsidization, predatory conduct and the discriminatory provision of access to public telecommunications transport networks or services.

2. To prevent such anticompetitive conduct, each Party shall adopt or maintain effective measures such as:

(a) accounting requirements;

(b) requirements for structural separation;

(c) rules to ensure that the monopoly accords its competitors access to and use of its public telecommunications transport networks or services on terms and conditions no less favorable than those it accords to itself or its affiliates; or

(d) rules to ensure the timely disclosure of technical changes to public telecommunications transport networks and their interfaces.

Article 1306: Transparency

Further to Article 1802, each Party shall make publicly available its measures relating to access to and use of public telecommunications transport networks or services, including measures relating to:

(a) tariffs and other terms and conditions of service;

(b) specifications of technical interfaces with such networks or services;

(c) information on bodies responsible for the preparation and adoption of standards-related measures affecting such access and use;

(d) conditions applying to attachment of terminal or other equipment to the public telecommunications transport network; and

(e) notification, permit, registration or licensing requirements.

Article 1307: Relationship to other Chapters

In the event of any inconsistency between a provision of this Chapter and the provision of another Chapter, the provision of this Chapter shall prevail to the extent of such inconsistency.

Article 1308: Relation to International Organizations and Agreements

The Parties recognize the importance of international standards for global compatibility and interoperability of telecommunication networks or services and undertake to promote such standards through the work of relevant international bodies, including the International Telecommunications Union and the International Organization for Standardization.

Article 1309: Technical Cooperation and Other Consultations

1. To encourage the development of interoperable telecommunications transport services infrastructure, the Parties shall cooperate in the exchange of technical information, the development of government-to-government training programs and other related activities. In implementing this obligation, the Parties shall give special emphasis to existing exchange programs.

2. The Parties shall consult with a view to determining the feasibility of further liberalizing trade in all telecommunications services, including public telecommunications transport networks and services.