Article 1101: Scope and Coverage
1. This Chapter applies to measures adopted or maintained by a Party relating to:
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(a) investors of another Party;
(b) investments of investors of another Party in the territory of the Party; and
(c) with respect to Articles 1106 and 1114, all investments in the territory of the Party.
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 measures adopted or maintained by a Party to the extent that they are covered by Chapter Fourteen (Financial Services).
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.
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 that 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 may:
(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.
1. Each Party shall accord to investors of another Party treatment
no less favorable than that it accords, in like circumstances,
to investors of any other 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 any other Party
or of a non-Party with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other disposition
of investments.
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.
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(7)(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 adopts or maintains relating
to losses suffered by investments in its territory owing to armed
conflict or civil strife.
3. Paragraph 2 does not apply to existing measures relating to
subsidies or grants that would be inconsistent with Article 1102
but for Article 1108(7)(b).
1. No Party may impose or enforce any of 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:
(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 to act in a manner not
inconsistent with other provisions of this Agreement; 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 measure that requires an investment to use a technology to
meet generally applicable health, safety or environmental requirements
shall not be construed to be inconsistent with paragraph 1(f).
For greater certainty, Articles 1102 and 1103 apply to the measure.
3. No Party may condition the receipt or continued receipt of
an advantage, in connection with an investment in its territory
of an investor of a Party or of a non-Party, on compliance with
any of the following requirements:
(b) to purchase, use or accord a preference to goods produced
in its territory, or to purchase goods from producers in its territory;
(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 an investment in its territory of an investor
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 requirement other than
the requirements set out in those paragraphs.
6. Provided that such measures are not applied in an arbitrary
or unjustifiable manner, or do not constitute a disguised restriction
on international trade or investment, nothing in paragraph 1(b)
or (c) or 3(a) or (b) shall be construed to prevent any Party
from adopting or maintaining measures, including environmental
measures:
(b) necessary to protect human, animal or plant life or health;
or
(c) necessary for the conservation of living or non-living exhaustible
natural resources.
1. No Party may require that an enterprise of that 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 that 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.
1. Articles 1102, 1103, 1106 and 1107 do not apply to:
(ii) a state or province, for two years after the date of entry
into force of this Agreement, and thereafter as set out by a Party
in its Schedule to Annex I in accordance with paragraph 2, 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. Each Party may set out in its Schedule to Annex I, within two
years of the date of entry into force of this Agreement, any existing
nonconforming measure maintained by a state or province, not including
a local government.
3. Articles 1102, 1103, 1106 and 1107 do not apply to any measure
that a Party adopts or maintains with respect to sectors, subsectors
or activities, as set out in its Schedule to Annex II.
4. No Party may, under any measure adopted after the date of entry
into force of this Agreement and covered by its Schedule to Annex
II, 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.
5. Articles 1102 and 1103 do not apply to any measure that is
an exception to, or derogation from, the obligations under Article
1703 (Intellectual Property National Treatment) as specifically
provided for in that Article.
6. Article 1103 does not apply to treatment accorded by a Party
pursuant to agreements, or with respect to sectors, set out in
its Schedule to Annex IV.
7. Articles 1102, 1103 and 1107 do not apply to:
(b) subsidies or grants provided by a Party or a state enterprise,
including government supported loans, guarantees and insurance.
8. The provisions of:
(b) Article 1106(1)(b), (c), (f) and (g), and (3)(a) and (b)
do not apply to procurement 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 relating to the content of goods necessary
to qualify for preferential tariffs or preferential quotas.
1. Each Party shall permit all 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:
(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 Section 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 may require its investors to transfer, or penalize
its investors that fail to transfer, the income, earnings, profits
or other amounts derived from, or attributable to, investments
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:
(b) issuing, trading or dealing in securities;
(c) criminal or penal offenses;
(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. Notwithstanding paragraph 1, a Party may restrict transfers
of returns in kind in circumstances where it could otherwise restrict
such transfers under this Agreement, including as set out in paragraph
4.
1. No Party may 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:
(b) on a non-discriminatory basis;
(c) in accordance with due process of law and Article 1105(1);
and
(d) on payment of compensation in accordance with paragraphs 2
through 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.
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. On 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 to 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 certainty, 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.
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 or regulations of the Party, provided that such
formalities do not materially impair the protections afforded
by a Party to investors of another Party and investments of investors
of another Party pursuant to this Chapter.
2. Notwithstanding Articles 1102 or 1103, a Party may require
an investor of another Party, or its investment in its territory,
to provide routine information concerning that investment solely
for informational or statistical purposes. The Party shall protect
such business information that is confidential from any disclosure
that would prejudice the competitive position of the investor
or the investment. Nothing in this paragraph shall be construed
to prevent a Party from otherwise obtaining or disclosing information
in connection with the equitable and good faith application of
its law.
1. In the event of any inconsistency between this Chapter and
another Chapter, 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 crossborder service.
This Chapter applies to that Party's treatment of the posted bond
or financial security.
1. A Party may deny the benefits of this Chapter to an investor
of another Party that is an enterprise of such Party and to investments
of such investor if investors of a non-Party own or control the
enterprise and the denying Party:
(b) 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), a Party may deny the benefits of this
Chapter to an investor of another Party that is an enterprise
of such Party and to investments of such investors 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 law it is constituted or organized.
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.
Without prejudice to the rights and obligations of the Parties
under Chapter Twenty (Institutional Arrangements and Dispute Settlement
Procedures), this Section 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.
1. An investor of a Party may submit to arbitration under this
Section a claim that another Party has breached an obligation
under:
(b) Article 1502(3)(a) (Monopolies and State Enterprises) where
the monopoly has acted in a manner inconsistent with the Party's
obligations under Section A,
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.
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 Section
a claim that the other Party has breached an obligation under:
(b) Article 1502(3)(a) (Monopolies and State Enterprises) where
the monopoly has acted in a manner inconsistent with the Party's
obligations under Section 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 that
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 under
Article 1126, 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 Section.
The disputing parties should first attempt to settle a claim through
consultation or negotiation.
Article 1102: National Treatment
(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
Article 1103: Most-Favored-Nation Treatment
Article 1104: Standard of Treatment
Article 1105: Minimum Standard of Treatment
Article 1106: Performance Requirements
(a) to export a given level or percentage of goods or services;
(a) to achieve a given level or percentage of domestic content;
(a) necessary to secure compliance with laws and regulations that
are not inconsistent with the provisions of this Agreement;
Article 1107: Senior Management and Boards of Directors
Article 1108: Reservations and Exceptions
(a) any existing non-conforming measure that is maintained by
(i) a Party at the federal level, as set out in its Schedule to
Annex I or III,
(a) procurement by a Party or a state enterprise; or
(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;
Article 1109: Transfers
(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;
(a) bankruptcy, insolvency or the protection of the rights of
creditors;
Article 1110: Expropriation and Compensation
(a) for a public purpose;
Article 1111: Special Formalities and Information Requirements
Article 1112: Relation to Other Chapters
Article 1113: Denial of Benefits
(a) does not maintain diplomatic relations with the non-Party;
or
Article 1114: Environmental Measures
an Investor of Another Party Article 1115: Purpose
Article 1116: Claim by an Investor of a Party on Its Own Behalf
(a) Section A or Article 1503(2) (State Enterprises), or
and that the investor has incurred
loss or damage by reason of, or arising out of, that breach.
Article 1117: Claim by an Investor of a Party on Behalf of
an Enterprise
(a) Section A or Article 1503(2) (State Enterprises), or
Article 1118: Settlement of a Claim through Consultation and
Negotiation
