Copyright 1995 NLCIFT
Title:UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES
UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES
Participants in the Uruguay Round have been enabled to take
on specific commitments with respect to Financial Services under
the General Agreement on Trade in Services on the basis of an
alternative approach to that covered by the provisions of
Part III of the Agreement. It was agreed that this approach
could be applied subject to the following understanding:
- it does not conflict with the provisions of the
Agreement;
- it does not prejudice the right of any Member to
schedule its specific commitments in accordance with
the approach under Part III of the Agreement;
- resulting specific commitments shall apply on a most-
favoured-nation basis;
- no presumption has been created as to the degree of
liberalization to which a Member is committing itself
under the Agreement.
Interested Members, on the basis of negotiations, and
subject to conditions and qualifications where specified, have
inscribed in their schedule specific commitments conforming to
the approach set out below.
Standstill
Any conditions, limitations and qualifications to the
commitments noted below shall be limited to existing non-
conforming measures.
Market Access
Monopoly Rights
1. In addition to Article VIII of the Agreement, the following
shall apply:
Each Member shall list in its schedule pertaining to
financial services existing monopoly rights and shall
endeavour to eliminate them or reduce their scope.
Notwithstanding paragraph 1.2 of the Annex on Financial
Services, this paragraph applies to the activities referred
to in sub-paragraph 1.2.3 of the Annex.
Financial Services purchased by Public Entities
2. Notwithstanding Article XIII of the Agreement, each Member
shall ensure that financial service suppliers of any other Member
established in its territory are accorded most-favoured-nation
treatment and national treatment as regards the purchase or
acquisition of financial services by public entities of the
Member in its territory.
Cross-border Trade
3. Each Member shall permit non-resident suppliers of financial
services to supply, as a principal, through an intermediary or as
an intermediary, and under terms and conditions that accord
national treatment, the following services:
(a) insurance of risks relating to:
(i) maritime shipping and commercial aviation and
space launching and freight (including
satellites), with such insurance to cover any or
all of the following: the goods being
transported, the vehicle transporting the goods
and any liability arising therefrom; and
(ii) goods in international transit;
(b) reinsurance and retrocession and the services auxiliary
to insurance as referred to in sub-paragraph 5.1(d) of
the Annex;
(c) provision and transfer of financial information and
financial data processing as referred to in sub-
paragraph 5.1(o) of the Annex and advisory and other
auxiliary services, excluding intermediation, relating
to banking and other financial services as referred to
in sub-paragraph 5.1(p) of the Annex.
4. Each Member shall permit its residents to purchase in the
territory of any other Member the financial services indicated
in:
(a) sub-paragraph 3(a);
(b) sub-paragraph 3(b); and
(c) sub-paragraphs 5.1(e) to (p) of the Annex.
Commercial Presence
5. Each Member shall grant financial service suppliers of any
other Member the right to establish or expand within its
territory, including through the acquisition of existing
enterprises, a commercial presence.
6. A Member may impose terms, conditions and procedures for
authorization of the establishment and expansion of a commercial
presence in so far as they do not circumvent the Member's
obligation under paragraph 5 and they are consistent with the
other obligations of this Agreement.
New Financial Services
7. A Member shall permit financial service suppliers of any
other Member established in its territory to offer in its
territory any new financial service.
Transfers of Information and Processing of Information
8. No Member shall take measures that prevent transfers of
information or the processing of financial information, including
transfers of data by electronic means, or that, subject to
importation rules consistent with international agreements,
prevent transfers of equipment, where such transfers of
information, processing of financial information or transfers of
equipment are necessary for the conduct of the ordinary business
of a financial service supplier. Nothing in this paragraph
restricts the right of a Member to protect personal data,
personal privacy and the confidentiality of individual records
and accounts so long as such right is not used to circumvent the
provisions of the Agreement.
Temporary Entry of Personnel
9. (a) Each Member shall permit temporary entry into its
territory of the following personnel of a financial
service supplier of any other Member that is
establishing or has established a commercial presence
in the territory of the Member:
(i) senior managerial personnel possessing proprietary
information essential to the establishment,
control and operation of the services of the
financial service supplier; and
(ii) specialists in the operation of the financial
service supplier.
(b) Each Member shall permit, subject to the availability
of qualified personnel in its territory, temporary
entry into its territory of the following personnel
associated with a commercial presence of a financial
service supplier of any other Member:
(i) specialists in computer services,
telecommunication services and accounts of the
financial service supplier; and
(ii) actuarial and legal specialists.
Non-discriminatory Measures
10. Each Member shall endeavour to remove or to limit any
significant adverse effects on financial service suppliers of any
other Member of:
(a) non-discriminatory measures that prevent financial
service suppliers from offering in the Member's
territory, in the form determined by the Member, all
the financial services permitted by the Member;
(b) non-discriminatory measures that limit the expansion of
the activities of financial service suppliers into the
entire territory of the Member;
(c) measures of a Member, when such a Member applies the
same measures to the supply of both banking and
securities services, and a financial service supplier
of any other Member concentrates its activities in the
provision of securities services; and
(d) other measures that, although respecting the provisions
of this Agreement, affect adversely the ability of
financial service suppliers of any other Member to
operate, compete or enter the Member's market;
provided that any action taken under this paragraph would
not unfairly discriminate against financial service
suppliers of the Member taking such action.
11. With respect to the non-discriminatory measures referred to
in sub-paragraphs 10(a) and (b), a Member shall endeavour not to
limit or restrict the present degree of market opportunities nor
the benefits already enjoyed by financial service suppliers of
all other Members as a class in the territory of the Member,
provided that this commitment does not result in unfair
discrimination against financial service suppliers of the Member
applying such measures.
National Treatment
1. Under terms and conditions that accord national treatment,
each Member shall grant to financial service suppliers of any
other Member established in its territory access to payment and
clearing systems operated by public entities, and to official
funding and refinancing facilities available in the normal course
of ordinary business. This paragraph is not intended to confer
access to the Member's lender of last resort facilities.
2. When membership or participation in, or access to, any self-
regulatory body, securities or futures exchange or market,
clearing agency, or any other organization or association, is
required by a Member in order for financial service suppliers of
any other Member to supply financial services on an equal basis
with financial service suppliers of the Member, or when the
Member provides directly or indirectly such entities, privileges
or advantages in supplying financial services, the Member shall
ensure that such entities accord national treatment to financial
service suppliers of any other Member resident in the territory
of the Member.
Definitions
For the purposes of this approach:
1. A non-resident supplier of financial services is a financial
service supplier of a Member which supplies a financial service
into the territory of another Member from an establishment
located in the territory of another Member, regardless of whether
such a financial service supplier has or has not a commercial
presence in the territory of the Member in which the financial
service is supplied.
2. "Commercial presence" means an enterprise within a Member's
territory for the supply of financial services and includes
wholly- or partly-owned subsidiaries, joint ventures,
partnerships, sole proprietorships, franchising operations,
branches, agencies, representative offices or other
organizations.
3. A new financial service is a service of a financial nature,
including services related to existing and new products or the
manner in which a product is delivered, that is not supplied by
any financial service supplier in the territory of a particular
Member but which is supplied in the territory of another Member.