Article 1101: Scope and Coverage 1. This Chapter applies to measures adopted or maintained by aParty relating to:
- (a) investors of another Party;
(b) investments of investors of another Party in the territoryof the Party; and
(c) with respect to Articles 1106 and 1114, all investments inthe territory of the Party.
2. A Party has the right to perform exclusively the economic activitiesset out in Annex III and to refuse to permit the establishmentof investment in such activities.
3. This Chapter does not apply to measures adopted or maintainedby 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 Partyfrom providing a service or performing a function such as lawenforcement, 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 notinconsistent with this Chapter.
1. Each Party shall accord to investors of another Party treatmentno 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 dispositionof investments. 2. Each Party shall accord to investments of investors of anotherParty treatment no less favorable than that it accords, in likecircumstances, to investments of its own investors with respectto 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 2means, with respect to a state or province, treatment no lessfavorable than the most favorable treatment accorded, in likecircumstances, by that state or province to investors, and toinvestments 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 territoryof the Party. 1. Each Party shall accord to investors of another Party treatmentno less favorable than that it accords, in like circumstances,to investors of any other Party or of a non-Party with respectto the establishment, acquisition, expansion, management, conduct,operation, and sale or other disposition of investments. 2. Each Party shall accord to investments of investors of anotherParty treatment no less favorable than that it accords, in likecircumstances, to investments of investors of any other Partyor of a non-Party with respect to the establishment, acquisition,expansion, management, conduct, operation, and sale or other dispositionof investments. Each Party shall accord to investors of another Party and to investmentsof investors of another Party the better of the treatment requiredby Articles 1102 and 1103. 1. Each Party shall accord to investments of investors of anotherParty treatment in accordance with international law, includingfair and equitable treatment and full protection and security. 2. Without prejudice to paragraph 1 and notwithstanding Article1108(7)(b), each Party shall accord to investors of another Party,and to investments of investors of another Party, non-discriminatorytreatment with respect to measures it adopts or maintains relatingto losses suffered by investments in its territory owing to armedconflict or civil strife. 3. Paragraph 2 does not apply to existing measures relating tosubsidies or grants that would be inconsistent with Article 1102but 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 theestablishment, acquisition, expansion, management, conduct oroperation of an investment of an investor of a Party or of a non-Partyin its territory: (b) to achieve a given level or percentage of domestic content; (c) to purchase, use or accord a preference to goods producedor services provided in its territory, or to purchase goods orservices from persons in its territory; (d) to relate in any way the volume or value of imports to thevolume or value of exports or to the amount of foreign exchangeinflows associated with such investment; (e) to restrict sales of goods or services in its territory thatsuch investment produces or provides by relating such sales inany way to the volume or value of its exports or foreign exchangeearnings; (f) to transfer technology, a production process or other proprietaryknowledge to a person in its territory, except when the requirementis imposed or the commitment or undertaking is enforced by a court,administrative tribunal or competition authority to remedy analleged violation of competition laws or to act in a manner notinconsistent with other provisions of this Agreement; or (g) to act as the exclusive supplier of the goods it producesor services it provides to a specific region or world market. 2. A measure that requires an investment to use a technology tomeet generally applicable health, safety or environmental requirementsshall 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 ofan advantage, in connection with an investment in its territoryof an investor of a Party or of a non-Party, on compliance withany of the following requirements: (b) to purchase, use or accord a preference to goods producedin its territory, or to purchase goods from producers in its territory; (c) to relate in any way the volume or value of imports to thevolume or value of exports or to the amount of foreign exchangeinflows associated with such investment; or (d) to restrict sales of goods or services in its territory thatsuch investment produces or provides by relating such sales inany way to the volume or value of its exports or foreign exchangeearnings. 4. Nothing in paragraph 3 shall be construed to prevent a Partyfrom conditioning the receipt or continued receipt of an advantage,in connection with an investment in its territory of an investorof a Party or of a non-Party, on compliance with a requirementto locate production, provide a service, train or employ workers,construct or expand particular facilities, or carry out researchand development, in its territory. 5. Paragraphs 1 and 3 do not apply to any requirement other thanthe requirements set out in those paragraphs. 6. Provided that such measures are not applied in an arbitraryor unjustifiable manner, or do not constitute a disguised restrictionon international trade or investment, nothing in paragraph 1(b)or (c) or 3(a) or (b) shall be construed to prevent any Partyfrom adopting or maintaining measures, including environmentalmeasures: (b) necessary to protect human, animal or plant life or health;or (c) necessary for the conservation of living or non-living exhaustiblenatural resources. 1. No Party may require that an enterprise of that Party thatis an investment of an investor of another Party appoint to seniormanagement 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 thatis an investment of an investor of another Party, be of a particularnationality, or resident in the territory of the Party, providedthat the requirement does not materially impair the ability ofthe 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 entryinto force of this Agreement, and thereafter as set out by a Partyin 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 measurereferred 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 conformityof 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 twoyears of the date of entry into force of this Agreement, any existingnonconforming measure maintained by a state or province, not includinga local government. 3. Articles 1102, 1103, 1106 and 1107 do not apply to any measurethat a Party adopts or maintains with respect to sectors, subsectorsor activities, as set out in its Schedule to Annex II. 4. No Party may, under any measure adopted after the date of entryinto force of this Agreement and covered by its Schedule to AnnexII, require an investor of another Party, by reason of its nationality,to sell or otherwise dispose of an investment existing at thetime the measure becomes effective. 5. Articles 1102 and 1103 do not apply to any measure that isan exception to, or derogation from, the obligations under Article1703 (Intellectual Property National Treatment) as specificallyprovided for in that Article. 6. Article 1103 does not apply to treatment accorded by a Partypursuant to agreements, or with respect to sectors, set out inits 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 imposedby an importing Party relating to the content of goods necessaryto qualify for preferential tariffs or preferential quotas. 1. Each Party shall permit all transfers relating to an investmentof an investor of another Party in the territory of the Partyto be made freely and without delay. Such transfers include: (b) proceeds from the sale of all or any part of the investmentor 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 loanagreement; (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 usablecurrency at the market rate of exchange prevailing on the dateof transfer with respect to spot transactions in the currencyto be transferred. 3. No Party may require its investors to transfer, or penalizeits investors that fail to transfer, the income, earnings, profitsor other amounts derived from, or attributable to, investmentsin the territory of another Party. 4. Notwithstanding paragraphs 1 and 2, a Party may prevent a transferthrough the equitable, non-discriminatory and good faith applicationof 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 fromimposing any measure through the equitable, non-discriminatoryand good faith application of its laws relating to the mattersset out in subparagraphs (a) through (e) of paragraph 4. 6. Notwithstanding paragraph 1, a Party may restrict transfersof returns in kind in circumstances where it could otherwise restrictsuch transfers under this Agreement, including as set out in paragraph4. 1. No Party may directly or indirectly nationalize or expropriatean investment of an investor of another Party in its territoryor take a measure tantamount to nationalization or expropriationof 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 2through 6. 2. Compensation shall be equivalent to the fair market value ofthe expropriated investment immediately before the expropriationtook place ("date of expropriation"), and shall notreflect any change in value occurring because the intended expropriationhad become known earlier. Valuation criteria shall include goingconcern value, asset value including declared tax value of tangibleproperty, and other criteria, as appropriate, to determine fairmarket value. 3. Compensation shall be paid without delay and be fully realizable. 4. If payment is made in a G7 currency, compensation shall includeinterest at a commercially reasonable rate for that currency fromthe 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 G7currency at the market rate of exchange prevailing on that date,shall be no less than if the amount of compensation owed on thedate of expropriation had been converted into that G7 currencyat the market rate of exchange prevailing on that date, and interesthad accrued at a commercially reasonable rate for that G7 currencyfrom the date of expropriation until the date of payment. 6. On payment, compensation shall be freely transferable as providedin Article 1109. 7. This Article does not apply to the issuance of compulsory licensesgranted in relation to intellectual property rights, or to therevocation, limitation or creation of intellectual property rights,to the extent that such issuance, revocation, limitation or creationis consistent with Chapter Seventeen (Intellectual Property). 8. For purposes of this Article and for greater certainty, a non-discriminatorymeasure of general application shall not be considered a measuretantamount to an expropriation of a debt security or loan coveredby this Chapter solely on the ground that the measure imposescosts on the debtor that cause it to default on the debt. 1. Nothing in Article 1102 shall be construed to prevent a Partyfrom adopting or maintaining a measure that prescribes specialformalities in connection with the establishment of investmentsby investors of another Party, such as a requirement that investorsbe residents of the Party or that investments be legally constitutedunder the laws or regulations of the Party, provided that suchformalities do not materially impair the protections affordedby a Party to investors of another Party and investments of investorsof another Party pursuant to this Chapter. 2. Notwithstanding Articles 1102 or 1103, a Party may requirean investor of another Party, or its investment in its territory,to provide routine information concerning that investment solelyfor informational or statistical purposes. The Party shall protectsuch business information that is confidential from any disclosurethat would prejudice the competitive position of the investoror the investment. Nothing in this paragraph shall be construedto prevent a Party from otherwise obtaining or disclosing informationin connection with the equitable and good faith application ofits law. 1. In the event of any inconsistency between this Chapter andanother Chapter, the other Chapter shall prevail to the extentof the inconsistency. 2. A requirement by a Party that a service provider of anotherParty post a bond or other form of financial security as a conditionof providing a service into its territory does not of itself makethis Chapter applicable to the provision of that crossborder service.This Chapter applies to that Party's treatment of the posted bondor financial security. 1. A Party may deny the benefits of this Chapter to an investorof another Party that is an enterprise of such Party and to investmentsof such investor if investors of a non-Party own or control theenterprise and the denying Party: (b) adopts or maintains measures with respect to the non-Partythat prohibit transactions with the enterprise or that would beviolated or circumvented if the benefits of this Chapter wereaccorded to the enterprise or to its investments. 2. Subject to prior notification and consultation in accordancewith Articles 1803 (Notification and Provision of Information)and 2006 (Consultations), a Party may deny the benefits of thisChapter to an investor of another Party that is an enterpriseof such Party and to investments of such investors if investorsof a non-Party own or control the enterprise and the enterprisehas no substantial business activities in the territory of theParty under whose law it is constituted or organized. 1. Nothing in this Chapter shall be construed to prevent a Partyfrom adopting, maintaining or enforcing any measure otherwiseconsistent with this Chapter that it considers appropriate toensure that investment activity in its territory is undertakenin a manner sensitive to environmental concerns. 2. The Parties recognize that it is inappropriate to encourageinvestment by relaxing domestic health, safety or environmentalmeasures. Accordingly, a Party should not waive or otherwise derogatefrom, or offer to waive or otherwise derogate from, such measuresas an encouragement for the establishment, acquisition, expansionor 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 twoParties shall consult with a view to avoiding any such encouragement. Without prejudice to the rights and obligations of the Partiesunder Chapter Twenty (Institutional Arrangements and Dispute SettlementProcedures), this Section establishes a mechanism for the settlementof investment disputes that assures both equal treatment amonginvestors of the Parties in accordance with the principle of internationalreciprocity and due process before an impartial tribunal. 1. An investor of a Party may submit to arbitration under thisSection a claim that another Party has breached an obligationunder: (b) Article 1502(3)(a) (Monopolies and State Enterprises) wherethe monopoly has acted in a manner inconsistent with the Party'sobligations under Section A, 2. An investor may not make a claim if more than three years haveelapsed from the date on which the investor first acquired, orshould have first acquired, knowledge of the alleged breach andknowledge that the investor has incurred loss or damage. 1. An investor of a Party, on behalf of an enterprise of anotherParty that is a juridical person that the investor owns or controlsdirectly or indirectly, may submit to arbitration under this Sectiona claim that the other Party has breached an obligation under: (b) Article 1502(3)(a) (Monopolies and State Enterprises) wherethe monopoly has acted in a manner inconsistent with the Party'sobligations under Section A, and that the enterprise has incurredloss or damage by reason of, or arising out of, that breach. 2. An investor may not make a claim on behalf of an enterprisedescribed in paragraph 1 if more than three years have elapsedfrom the date on which the enterprise first acquired, or shouldhave first acquired, knowledge of the alleged breach and knowledgethat the enterprise has incurred loss or damage. 3. Where an investor makes a claim under this Article and theinvestor or a non-controlling investor in the enterprise makesa claim under Article 1116 arising out of the same events thatgave rise to the claim under this Article, and two or more ofthe claims are submitted to arbitration under Article 1120, theclaims should be heard together by a Tribunal established underArticle 1126, unless the Tribunal finds that the interests ofa 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 throughconsultation or negotiation.Article 1102: National Treatment (a) impose on an investor of another Party a requirement thata minimum level of equity in an enterprise in the territory ofthe Party be held by its nationals, other than nominal qualifyingshares 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 thatare 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 toAnnex 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) donot apply to qualification requirements for goods or serviceswith 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, returnsin kind and other amounts derived from the investment;
(a) bankruptcy, insolvency or the protection of the rights ofcreditors;
Article 1110: Expropriation and Compensation (a) for a public purpose;
Article 1111: Special Formalities and Information RequirementsArticle 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 incurredloss or damage by reason of, or arising out of, that breach.Article 1117: Claim by an Investor of a Party on Behalf ofan Enterprise (a) Section A or Article 1503(2) (State Enterprises), or
Article 1118: Settlement of a Claim through Consultation andNegotiation
