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

## Chapter Twelve (Cross-Border Trade in Services) shall apply to

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this Chapter. Article 1802(2) (Publication) shall not apply to this Chapter.

3. In the event of any inconsistency between a provision of this Chapter and any other provision of this Agreement, the former shall prevail to the extent of the inconsistency. This paragraph does not apply to Article 2103 (Taxation).

4. Nothing in this Chapter shall prevent a Party from being the exclusive service provider in its territory with respect to the following:

(a) activities forming part of a public retirement plan or statutory system of social security; and

(b) activities conducted by a public entity for the account or with the guarantee or using the financial resources of the government or of any other public entity.

5. Article 1407 shall not apply to the granting by a Party to a financial service provider of an exclusive right to provide a financial service referred to in paragraph 4(a).

6. Each Party shall comply with Annex 1401.6.

Article 1402: Self-Regulatory Organizations

Where a Party requires financial service providers of another Party to be members of, participate in, or have access to, a self-regulatory organization to provide a financial service in the territory of that Party, the Party shall ensure observance by such organization of this Chapter.

Article 1403: Regulatory Measures

1. Nothing in this Part shall be construed to prevent a Party from adopting or maintaining reasonable measures for prudential reasons, such as:

(a) the protection of investors, depositors, financial market participants, policy-holders, policy-claimants or persons to whom a fiduciary duty is owed by a financial service provider or financial institution;

(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial service providers or financial institutions; and

(c) ensuring the integrity and stability of a Party's financial system.

2. Nothing in this Part applies to non-discriminatory measures of general application taken by any public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph shall not affect a Party's obligations under Article 1106 (Performance Requirements), Article 1109 (Transfers) and Article 2104 (Balance of Payments).

Article 1404: Establishment

1. The Parties recognize the principle that financial service providers of a Party should be permitted to establish financial institutions in the territory of another Party in the juridical form determined by the provider.

2. The Parties also recognize the principle that financial service providers of a Party should be permitted to participate widely in the market of another Party through the ability:

(a) to provide in that other Party's territory a range of financial services through separate financial institutions as may be required by that Party;

(b) to expand geographically within that territory; and

(c) to own financial institutions without the application of ownership requirements specific to foreign financial institutions.

3. Each Party shall permit financial service providers of another Party that are not already established in its territory to establish financial institutions in the Party's territory. A Party may:

(a) require such financial service providers to incorporate such financial institutions under its laws; or

(b) impose other terms, conditions and procedures on establishment that are consistent with Article 1407.

4. At such time as the United States liberalizes its existing measures to permit commercial banks of another Party located in its territory to expand throughout significantly all the United States market either through subsidiaries or direct branches, the Parties shall review and assess market access in each Party, subject to Annex 1404.4, with respect to the principles in paragraphs 1 and 2 with a view to adopting arrangements permitting investor choice as to juridical form of establishment by commercial banks.

5. Each Party shall permit financial institutions of another Party to transfer and process information outside the territory of the Party in electronic or other form as is necessary for the conduct of ordinary business of such institutions.

Article 1405: Cross-Border Trade

1. No Party may adopt any measure restricting any type of cross-border trade in financial services by financial service providers of another Party that is permitted on the date of entry into force of this Agreement, except to the extent set out in Part B of the Party's Schedule to Annex VII.

2. Each Party shall permit persons located in its territory, and its nationals wherever located, to purchase financial services from financial service providers of another Party located in the territory of that other Party or another Party, provided that the Party is not required, in order to fulfill this obligation, to permit such providers to do business or solicit in its territory. Subject to paragraph 1, each Party may, for this purpose, define "doing business" and "solicitation."

3. Without prejudice to prudential regulation by other means, a Party may require registration of financial service providers of another Party and financial instruments.

4. The Parties shall consult on future liberalization of cross- border trade in financial services, as set out in Annex 1405.4.

Article 1406: New Financial Services

1. Each Party shall permit a financial institution of another Party to provide any new financial service of a type similar to those that the Party permits its financial institutions, in like circumstances, to provide under its domestic law. A Party may determine the institutional and juridical form through which such service may be provided.

2. A Party may require authorization for the provision in its territory of a financial service referred to in paragraph 1. Where such authorization is required, a decision shall be made within a reasonable period of time and may only be refused for prudential reasons.

Article 1407: National Treatment

1. Each Party shall accord to investors of another Party and financial service providers of another Party national treatment with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments in financial institutions in its territory.

2. Each Party shall accord to the financial institutions of another Party national treatment.

3. Where a Party permits the cross-border provision of a financial service, it shall accord national treatment to financial service providers of another Party in the provision of such cross-border service.

4. "National treatment" means treatment no less favorable than that accorded by a Party to its own investors, financial service providers and financial institutions in like circumstances.

5. A measure of a Party, whether it accords to financial service providers or financial institutions of another Party different or identical treatment compared to that it accords to its own providers or institutions in like circumstances, shall be deemed to be consistent with paragraph 4, if it accords equal competitive opportunities.

6. A measure accords equal competitive opportunities if it does not disadvantage financial service providers of another Party in their ability to provide financial services as compared with the ability of domestic financial service providers in like circumstances to provide financial services.

7. Differences in market share, profitability or size shall not by themselves constitute denial of equal competitive opportunities, but shall not be precluded from being used as evidence regarding the issue of whether a Party's measure accords equal competitive opportunities.

8. With respect to measures of a province or state, paragraph 4 means:

(a) treatment no less favorable than the most favorable treatment accorded in like circumstances by such province or state to financial service providers of the Party of which it forms a part, including that province or state; or

(b) in the case of a financial service provider of another Party established in another province or state of the Party, treatment no less favorable than it accords in like circumstances to a financial service provider of the Party established in such other province or state.

Article 1408: Most-Favored-Nation Treatment

1. Each Party shall accord to investors of another Party, investments of such investors and financial service providers of another Party treatment no less favorable than that it accords to investors, investments of investors and financial service providers of any other Party or non-Party in like circumstances.

2. Each Party may recognize prudential measures of another Party or non-Party in determining how the Party's measures relating to financial services shall be applied. Such recognition, which may be achieved through harmonization or otherwise, may be based upon an agreement or arrangement with the Party concerned or may be accorded unilaterally.

3. A Party recognizing measures by means of an agreement or arrangement referred to in paragraph 2 shall afford adequate opportunity for another Party to negotiate its accession to such an agreement or arrangement, or to negotiate a comparable one under circumstances in which there would be equivalent regulation, oversight, implementation of such regulation, and, if appropriate, procedures concerning the sharing of information between the Parties. Where a Party accords recognition unilaterally, it shall afford adequate opportunity for another Party to demonstrate that such circumstances exist.

Article 1409: Staffing

1. No Party may require financial institutions of another Party to engage, as top managerial or other essential personnel, individuals of any particular nationality.

2. No Party may require that more than a simple majority of the board of directors of a financial institution of another Party be composed of nationals of the Party, persons residing in the territory of the Party, or a combination thereof.

Article 1410: Transparency

1. Each Party shall, to the extent practicable, provide in advance to all interested persons any measure of general application that the Party proposes to adopt in order to allow an opportunity for such persons to comment upon the measure. Such measure shall be provided:

(a) by means of official publication;

(b) in other written form; or

(c) in such other form as permits an interested person to make informed comments on the proposed measure.

2. Each Party shall make available to interested persons the information that applications affecting the provision of financial services must contain.

3. At the request of an applicant, the competent regulatory authority shall provide information concerning the status of an application. If such authority requires additional information from the applicant, it shall notify the applicant without undue delay.

4. Each Party shall make an administrative decision on a completed application of a financial service provider of another Party within 120 days, and shall promptly notify the applicant of the decision. An application shall not be considered complete until all relevant hearings are held and all necessary information is received. Where it is not practicable for a decision to be made within 120 days, the competent authority shall notify the applicant without undue delay and shall endeavor to make the decision within a reasonable time thereafter.

5. Nothing in this Agreement requires a Party to disclose information related to the affairs and accounts of individual customers or any confidential or proprietary information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest, or prejudice legitimate commercial interests.

6. Each Party shall ensure that inquiry points exist, at the latest 180 days after the date of entry into force of this Agreement, to which all reasonable inquiries from interested persons may be directed regarding any measures of general application taken by that Party with respect to this Chapter. Responses shall be provided in writing as soon as practicable.

Article 1411: Transfers

Without prejudice to other provisions of this Agreement that would permit such actions to be taken, a Party may prevent or limit transfers by a financial service provider or a financial institution to, or for the benefit of, an affiliate of or person related to such provider or institution, through the equitable, non-discriminatory and good faith application of its measures relating to maintenance of the safety and soundness of its financial institutions.

Article 1412: Schedules

1. Articles 1404 through 1409 do not apply to:

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

(i) a Party at the federal level, as set out in Part A of its Schedule to Annex VII;

(ii) a state or province, as set out by a Party in Part A of its Schedule to Annex VII within the period referred to in that Part; 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 1404 through 1409.

2. A Party shall set out any non-conforming measure maintained at the state or provincial level in Part A of its Schedule to Annex VII within the periods provided therein.

3. Articles 1404 through 1409 do not apply to any measure adopted or maintained by a Party that is consistent with the terms set out by the Party in Part B of its Schedule to Annex VII.

4. A Party shall describe in Part C of its Schedule to Annex VII any specific commitment it is making to any other Party.

5. For the purposes of Article 1413(2), each Party shall specify in Part D of its Schedule to Annex VII its governmental agency responsible for financial services.

6. A Party shall describe in Part E of its Schedule to Annex VII any terms and conditions that an enterprise of another Party must meet to be considered an enterprise of such other Party for the purposes of restrictions specified in that Part.

7. Any reservation or exception set out by a Party in Annexes I through VI under this Part shall be deemed to constitute reservations or exceptions for purposes of Articles 1404 through 1409.

Article 1413: Consultations

1. Any Party may request consultations with another Party at any time regarding any matter arising under this Agreement that affects financial services. The other Party shall give sympathetic consideration to such a request. The results of consultations under this Article shall be reported during the annual meeting of the Committee provided for in Article 1414.

2. Consultations under this Article shall be conducted by officials of the governmental agencies responsible for financial services specified in Part D of each Party's Schedule to Annex VII.

3. A Party may request that regulatory authorities of another Party participate in consultations under this Article to discuss that other Party's measures of general application that may affect the operations of financial service providers in the requesting Party's territory.

4. Such regulatory authorities shall not be required to disclose information or take any action that would interfere with individual regulatory, supervisory, administrative or enforcement matters.

5. Where a Party requires information for supervisory purposes concerning a financial service provider in another Party's territory, it may approach the competent regulatory authority in the other Party's territory to seek the information.

6. Each Party shall comply with Annex 1413.6.

Article 1414: Financial Services Committee

1. The Parties hereby establish the Financial Services Committee. The principal representative of each Party shall be the officials referred to in Article 1413(2).

2. Subject to Article 2001(2)(d) (The Free Trade Commission), the Committee shall:

(a) supervise the implementation of this Chapter and its further elaboration;

(b) consider issues regarding financial services that are referred to it by a Party;

(c) participate in the dispute settlement procedure pursuant to Article 1416; and

(d) examine technical issues under this Chapter, including interpretation of this Chapter.

3. The Committee shall meet annually to assess the functioning of this Agreement as it applies to financial services. The Committee shall inform the Commission of the results of each annual meeting.

Article 1415: Dispute Settlement

1. Disputes arising under this Chapter shall be resolved in accordance with the procedures of Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures) and this Article.

2. In addition to the roster established under Article 2009 (Roster), the Parties shall establish and maintain a roster of up to 15 individuals who are willing and able to serve as financial services panelists. Financial services roster members shall be appointed by consensus for terms of three years and may be reappointed.

3. Financial services roster members shall have expertise or experience in financial services law or practice, which may include the regulation of financial institutions, and shall be chosen strictly on the basis of objectivity, reliability and sound judgment. Such members shall also meet the qualifications set out in Article 2009(2)(b) and (c).

4. Where a Party alleges that a dispute arises under this Chapter, Article 2011 (Panel Selection) applies to the selection of panelists, except that:

(a) the panel shall be composed entirely of panelists meeting the qualifications in paragraph 3, where the disputing Parties agree;

(b) in any case other than that set out in subparagraph (a)

(i) each disputing Party may select panelists meeting the qualifications of Article 2010(1) (Qualifications of Panelists) or paragraph 3 of this Article, as the Party deems appropriate, and

(ii) if the Party complained against alleges Article 1403 as a defense in the dispute, the chair of the panel must meet the qualifications of paragraph 3 of this Article.

5. Notwithstanding Article 2019(2) (Non-Implementation - Suspension of Benefits), in any dispute where a panel finds a measure to be inconsistent with the obligations of this Agreement and the measure affects:

(a) only the financial services sector, the complaining Party may suspend benefits only in the financial services sector;

(b) the financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector that have an equivalent effect as the measure or matter complained of has in the financial services sector; or

(c) only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector.

Article 1416: Investment Disputes in Financial Services

1. Where an investor of another Party submits a claim under Articles 1116 or 1117 to arbitration under Section B of Chapter Eleven (Settlement of Disputes Between a Party and an Investor of Another Party) against a Party and the disputing Party alleges Article 1403 as a defense, on request of the disputing Party, the Tribunal shall refer the matter to the Committee for a decision. The Tribunal may not proceed pending receipt of a decision or report under this Article.

2. The Committee shall decide the issue of whether and to what extent Article 1403 is a valid defense to the claim of the investor. The Committee shall transmit a copy of its decision to the Tribunal and to the Commission. The decision shall be binding on the Tribunal.

3. If the Committee has not decided the issue within 60 days of the receipt of the referral under paragraph 1, the disputing Party or the Party of the disputing investor may request the establishment of a panel pursuant to Article 2008(1) to decide the issue. The matter shall proceed as a dispute under Article 1415. The panel shall transmit its final report to the Committee and to the Tribunal. The report shall be binding on the Tribunal.

4. If no request for the establishment of a panel pursuant to paragraph 3 has been made within 10 days following the expiration of the 60-day period referred to in paragraph 3, the Tribunal may proceed to decide the matter.

Article 1417: Definitions

For purposes of this Chapter:

cross-border trade in services and cross-border provision of a service means "cross-border trade in services" and "cross-border provision of a service" as defined in Article 1213 (Definitions);

financial institution means any financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the laws of the Party in whose territory it is located;

financial institution of another Party means a financial institution in the territory of a Party that is controlled by nationals or enterprises of another Party;

financial service means any service of a financial nature, including insurance, and any service incidental or auxiliary to a service of a financial nature;

financial service provider of another Party means any national or enterprise of a Party that is engaged in the business of providing financial services in the territory of a Party and that is providing or intends to provide financial services through an investment in the territory of another Party or through cross- border provision into the territory of another Party;

investment means "investment" as defined in Article 1138 (Definitions), except that:

(a) where the loan is extended to a financial institution, regardless of the original maturity of the loan, it shall only be an investment to the extent it is treated as regulatory capital; or

(b) where the loan is granted by a financial service provider or a financial institution, the loan shall only be an investment if it is made on a cross-border basis and it has an original maturity of at least three years (other than a loan to a Party or state enterprise thereof);

new financial service means a service of a financial nature, including a service related to an existing service or the manner in which a product is delivered, that is not provided by any financial service provider in the territory of a Party but which is provided a financial service provider in the territory of another Party;

public entity means a Party, a central bank or monetary authority of a Party, or any financial institution owned or controlled by a Party;

service provider of a Party means "service provider of a Party" as defined in Chapter 12 (Cross-Border Trade in Services); and

self-regulatory organization means any non-governmental body including any securities or futures exchange or market, clearing agency, or other organization or association, that exercises regulatory or supervisory authority over financial service providers or financial institutions that are members or participants thereof, or that have access thereto.

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ANNEX 1401.6 Country Specific Commitments

Articles 1702(1) and (2) of the Canada - United States Free Trade Agreement are incorporated into this Agreement and Canada and the United States agree to act in accordance with and be governed by those Articles.

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ANNEX 1404.4 Review of Market Access

The review of market access referred to in Article 1404(4) shall not include the market access limitations specified in Part B of the Schedule of Mexico to Annex VII.

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ANNEX 1405.4 Consultations on Liberalization of Cross-Border Trade

By January 1, 2000, the Parties shall consult on further liberalization of cross-border trade in financial services. Such consultations shall include the possibility of allowing a wider range of insurance services to be provided on a cross-border basis in the territory of each Party. With respect to Mexico, such consultations on cross-border insurance services shall determine whether the limitations on cross-border insurance services specified in Part A of the Schedule of Mexico to Annex VII shall be maintained, modified, or eliminated.

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ANNEX 1413.6 Future Consultations and Arrangements

Section A - Limited Scope Financial Institutions

Three years after the date of entry into force of this Agreement, the Parties shall consult on the aggregate limit on limited scope financial institutions described in paragraph 8 of Part B of the Schedule of Mexico to Annex VII.

Section B - Payments System Protection

1. If the sum of the authorized capital of Foreign Commercial Bank Affiliates (as such term is defined in Part B of the Schedule of Mexico to Annex VII), measured as a percentage of the aggregate capital of all commercial banks in Mexico, reaches 25 percent, then Mexico may request consultations with the other Parties on the potential adverse effects arising from the presence of commercial banks of the other Parties in the Mexican market and the possible need for remedial action, including further temporary limitations on market participation.

2. In considering the potential adverse effects, the Parties shall take into account:

(a) the threat that the Mexican payments system may be controlled by non-Mexican persons;

(b) the effects foreign commercial banks established in Mexico may have on Mexico's ability to conduct monetary and exchange-rate policy effectively; and (c) the adequacy of various provisions agreed under this Chapter to protect the Mexican payments system.

3. If no consensus is achieved through consultations, which shall be completed in an expeditious time frame, a panel shall be convened under the procedures of Article 2008 (Request for an Arbitral Panel) of the Agreement to render a non-binding recommendation to the Parties no later than 60 days after the panel is convened.

NAFTA Chapter Fifteen Competition Policy, Monopolies and State Enterprises

Article 1501: Competition Law

1. Each Party shall adopt or maintain measures to proscribe anti-competitive business conduct, and shall take appropriate action with respect thereto, recognizing that such measures will enhance the fulfillment of the objectives of this Agreement. To this end the Parties shall consult from time to time about the effectiveness of measures undertaken by each Party.

2. Each Party recognizes the importance of cooperation and coordination among their authorities to further effective competition law enforcement in the free trade area. The Parties shall cooperate on issues of competition law enforcement policy, including mutual legal assistance, notification, consultation and exchange of information relating to the enforcement of competition laws and policies in the free trade area.

3. No Party may have recourse to dispute settlement under this Agreement for any matter regarding this Article.

Article 1502: Monopolies and State Enterprises

1. Nothing in this Agreement shall prevent a Party from designating a monopoly.

2. Where a Party intends to designate a monopoly, and the designation may affect the interests of persons of another Party, the Party shall:

(a) wherever possible, provide prior written notification to the other Party of the designation; and

(b) endeavor to introduce at the time of designation such conditions on the operation of the monopoly as will minimize or eliminate any nullification or impairment of benefits under this Agreement, in the sense of Annex 2004.

3. Each Party shall ensure, through regulatory control, administrative supervision or the application of other measures, that any privately-owned monopoly that it designates and any government monopoly that it maintains or designates:

(a) acts in a manner that is not inconsistent with the Party's obligations under this Agreement whenever such monopoly exercises any regulatory, administrative, or other governmental authority that the Party has delegated to it in connection with the monopoly good or service, such as the power to grant import or export licenses, approve commercial transactions or impose quotas, fees or other charges;

(b) except to comply with any terms of its designation that are not inconsistent with subparagraph (c) or (d), acts solely in accordance with commercial considerations in its purchase or sale of the monopoly good or service in the relevant market, including with regard to price, quality, availability, marketability, transportation and other terms and conditions of purchase or sale;

(c) provides non-discriminatory treatment to investments of investors, to goods, and to service providers of another Party in its purchase or sale of the monopoly good or service in the relevant market; and

(d) does not use its monopoly position to engage, either directly or indirectly, including through its dealings with its parent, subsidiary, or other enterprise with common ownership, in anticompetitive practices in a non-monopolized market in its territory that adversely affect an investment of an investor of another Party, including through the discriminatory provision of the monopoly good or service, cross-subsidization or predatory conduct.

4. Paragraph 3 shall not apply to the procurement by governmental agencies of a good or service for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods or provisions of services for commercial sale.

Article 1503: State Enterprises

1. Nothing in this Agreement shall prevent a Party from maintaining or establishing a state enterprise.

2. Each Party, shall ensure, through regulatory control, administrative supervision or the application of other measures, that any state enterprise that it maintains or establishes acts in a manner that is not inconsistent with the Party's obligations under Chapter Eleven (Investment) wherever such enterprise exercises any regulatory, administrative or other governmental authority that the Party has delegated to it, such as the power to expropriate, grant licenses, approve commercial transactions or impose quotas, fees or other charges.

3. Each Party shall ensure that any state enterprise that it maintains or establishes accords nondiscriminatory treatment in the sale of its goods or services to investments in the Party's territory of investors of another Party.

Article 1504: Working Group on Trade and Competition

The Commission shall establish a Working Group on Trade and Competition, comprising representatives of each Party, to report, and to make recommendations on further work as appropriate, to the Commission within five years after the date of entry into force of the Agreement on relevant issues concerning the relationship between competition laws and policies and trade in the free trade area.

Article 1505: Definitions

For purposes of this Chapter:

in accordance with commercial considerations means consistent with normal business practices of privately-held enterprises in the relevant business or industry;

designate means to establish, designate or authorize, or to expand the scope of, a monopoly to cover an additional good or service, after the date of entry into force of this Agreement;

discriminatory provision includes treating a parent, subsidiary, or other enterprise with common ownership more favorably than an unaffiliated enterprise, or treating one class of enterprises more favorably than another, in like circumstances;

government monopoly means a monopoly that is owned, or controlled through ownership interests, by the federal government of a Party or by another such monopoly;

market means the geographic and commercial market for a good or service;

monopoly means an entity, including any consortium or government agency that in any relevant market in the territory of a Party is designated as the sole provider or purchaser of a good or service, but does not include any entity that has been granted an exclusive intellectual property right solely by reason of such grant;

non-discriminatory treatment means the better of national or most-favored-nation treatment, and

state enterprise means, except as set out in Annex 1505.1, an enterprise owned, or controlled through ownership interests, by a Party.

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ANNEX 1505.1

State Enterprises

For purposes of Article 1503(3), "state enterprise" means, with respect to Canada, a Crown Corporation within the meaning of the Financial Administration Act (Canada) or a Crown corporation within the meaning of any comparable provincial legislation or that is incorporated under other applicable provincial legislation.

NAFTA Chapter Sixteen Temporary Entry for Business Persons

Article 1601: General Principles

Further to Article 102 (Objectives), the provisions of this Chapter reflect the preferential trading relationship between the Parties, the desirability of facilitating temporary entry on a reciprocal basis and of establishing transparent criteria and procedures for temporary entry, and the need to ensure border security and to protect the domestic labor force and permanent employment in their respective territories.

Article 1602: General Obligations

1. Each Party shall apply its measures relating to the provisions of this Chapter in accordance with Article 1601, and in particular, shall apply expeditiously such measures so as to avoid unduly impairing or delaying trade in goods or services or conduct of investment activities under this Agreement.

2. The Parties shall endeavor to develop and adopt common criteria, definitions and interpretations for the implementation of this Chapter.

Article 1603: Grant of Temporary Entry

1. Each Party shall grant, in accordance with this Chapter, including Annex 1603, temporary entry to business persons who are otherwise qualified for entry under applicable measures relating to public health and safety and national security.

2. A Party may refuse to issue an immigration document authorizing employment to a business person where the temporary entry of that person might affect adversely:

(a) the settlement of any labor dispute that is in progress at the place or intended place of employment; or

(b) the employment of any person who is involved in such dispute.

3. When a Party refuses pursuant to paragraph 2 to issue an immigration document authorizing employment, it shall:

(a) inform in writing the business person of the reasons for the refusal; and

(b) promptly notify in writing the Party whose business person has been refused entry of the reasons for the refusal.

4. Each Party shall limit any fees for processing applications for temporary entry of business persons to the approximate cost of services rendered.

Article 1604: Provision of Information

1. Further to Article 1802 (Publication), each Party shall:

(a) provide to the other Parties such materials as will enable them to become acquainted with its measures relating to the provisions of this Chapter; and

(b) not later than one year after the date of entry into force of this Agreement, prepare, publish and make available in its own territory, and in the territories of the other Parties, explanatory material in a consolidated document regarding the requirements for temporary entry under this Chapter in such a manner as to enable business persons of the other Parties to become acquainted with them.

2. Subject to Annex 1604.2, each Party shall collect and maintain, and make available to the other Parties in accordance with its domestic law, data respecting the granting of temporary entry under this Chapter to business persons of the other Parties who have been issued immigration documentation, including that specific to each occupation, profession or activity.

Article 1605: Working Group

1. The Parties hereby establish a Temporary Entry Working Group, comprising representatives of each Party, including immigration officials.

2. The Working Group shall meet at least once a year to consider:

(a) the implementation and administration of this Chapter;

(b) the development of measures to further facilitate temporary entry of business persons on a reciprocal basis;

(c) the waiving of labor certification tests or procedures of similar effect for spouses of business persons who have been granted temporary entry for more than one year under Sections B, C, or D of Annex 1603; and

(d) proposed modifications of or additions to this Chapter.

Article 1606: Dispute Settlement

A Party may not initiate proceedings under Article 2007 regarding a refusal to grant temporary entry under this Chapter or a particular case arising under Article 1602(1) unless:

(a) the matter involves a pattern of practice; and

(b) the business person has exhausted available administrative remedies regarding the particular matter, provided that such remedies shall be deemed to be exhausted if a final determination in the matter has not been issued by the competent authority within one year of the institution of an administrative proceeding, and the failure to issue a determination is not attributable to delay caused by the business person.

Article 1607: Relation to Other Chapters

Except for Chapter One (Objectives), Chapter Two (General Definitions), Chapter Twenty (Institutional Arrangements and Dispute Settlement), Chapter Twenty-Two (Final Provisions) and Articles 1801 through 1804, no provision of any other Chapter shall impose any obligation upon a Party regarding its immigration measures.

Article 1608: Definitions

For purposes of this Chapter:

business person means a citizen of a Party who is engaged in the trade in goods, the provision of services or the conduct of investment activities;

citizen means "citizen" as defined in Annex 1608;

existing means "existing" as defined in Annex 1608; and

temporary entry means entry into the territory of a Party by a business person of another Party without the intent to establish permanent residence.

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Temporary Entry for Business Persons

Section A - Business Visitors

1. Each Party shall grant temporary entry to a business person seeking to engage in a business activity set out in Schedule I, without requiring that person to obtain an employment authorization, provided that the business person otherwise complies with existing immigration measures applicable to temporary entry, upon presentation of:

(a) proof of citizenship of a Party;

(b) documentation demonstrating that the business person will be so engaged and describing the purpose of entry; and

(c) evidence demonstrating that the proposed business activity is international in scope and that the business person is not seeking to enter the local labor market.

2. Each Party shall provide that a business person may satisfy the requirements of paragraph 1(c) by demonstrating that:

(a) the primary source of remuneration for the proposed business activity is outside the territory of the Party granting temporary entry; and

(b) the business person's principal place of business and the actual place of accrual of profits, at least predominantly, remain outside such territory. A Party shall normally accept an oral declaration as to the principal place of business and the actual place of accrual of profits. If the Party requires further proof, it shall normally consider a letter from the employer attesting to these matters as sufficient proof.

3. Each Party shall grant temporary entry to a business person seeking to engage in a business activity other than those set out in Schedule I, without requiring that person to obtain an employment authorization, on a basis no less favorable than that provided under the existing provisions of the measure set out in Appendix 1603.A, provided that the business person otherwise complies with existing immigration measures applicable to temporary entry.

4. No Party shall:

(a) as a condition for temporary entry under paragraphs 1 or 3, require prior approval procedures, petitions, labor certification tests, or other procedures of similar effect; or

(b) impose or maintain any numerical restriction relating to temporary entry under paragraphs 1 or 3.

5. Notwithstanding paragraph 4, a Party may require a business person seeking temporary entry under this Part to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement, such Party shall consult with a Party whose business persons would be affected with a view to avoiding the imposition of the requirement. With respect to an existing visa requirement, a Party shall, at the request of a Party whose business persons are subject to the requirement, consult with that Party with a view to its removal.

Section B - Traders and Investors

1. Each Party shall grant temporary entry and provide confirming documentation to a business person seeking to:

(a) carry on substantial trade in goods or services principally between the territory of the Party of which the business person is a citizen and the territory of the Party into which entry is sought; or

(b) establish, develop, administer or provide advice or key technical services to the operation of an investment to which the business person or the business person's enterprise has committed, or is in the process of committing, a substantial amount of capital, in a capacity that is supervisory, executive or involves essential skills,

provided that the business person otherwise complies with existing immigration measures applicable to temporary entry.

2. No Party shall:

(a) as a condition for temporary entry under paragraph 1, require labor certification tests or other procedures of similar effect; or

(b) impose or maintain any numerical restriction relating to temporary entry under paragraph 1.

3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry under this Part to obtain a visa or its equivalent prior to entry.

Section C - Intra-Company Transferees

1. Each Party shall grant temporary entry and provide confirming documentation to a business person employed by an enterprise who seeks to render services to that enterprise or a subsidiary or affiliate thereof, in a capacity that is managerial, executive, or involves specialized knowledge, provided that the business person otherwise complies with existing immigration measures applicable to temporary entry. A Party may require that such business person shall have been employed continuously by such enterprise for one year within the three-year period immediately preceding the date of the application for admission.

2. No Party shall:

(a) as a condition for temporary entry under paragraph 1, require labor certification tests or other procedures of similar effect; or

(b) impose or maintain any numerical restriction relating to temporary entry under paragraph 1.

3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry under this Part to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement, such Party shall consult with a Party whose business persons would be affected with a view to avoiding the imposition of the requirement. With respect to an existing visa requirement, a Party shall, at the request of a Party whose business persons are subject to the requirement, consult with that Party with a view to its removal.

Section D - Professionals

1. Each Party shall grant temporary entry and provide confirming documentation to a business person seeking to engage in a business activity at a professional level in a profession set out in Schedule II, if the business person otherwise complies with existing immigration measures applicable to temporary entry, upon presentation of:

(a) proof of citizenship of a Party; and

(b) documentation demonstrating that the business person will be so engaged and describing the purpose of entry.

2. No Party shall:

(a) as a condition for temporary entry under paragraph 1, require prior approval procedures, petitions, labor certification tests, or other procedures of similar effect; or

(b) impose or maintain any numerical restriction relating to temporary entry under paragraph 1.

3. Notwithstanding paragraph 2, a Party may require a business person seeking temporary entry under this Part to obtain a visa or its equivalent prior to entry. Before imposing a visa requirement, such Party shall consult with a Party whose business persons would be affected with a view to avoiding the imposition of the requirement. With respect to an existing visa requirement, a Party shall, upon the request of a Party whose business persons are subject to the requirement, consult with that Party with a view to its removal.

4. Notwithstanding paragraphs 1 and 2, a Party may establish an annual numerical limit, which shall be set out in Schedule III, regarding temporary entry of business persons of another Party seeking to engage in business activities at a professional level in a profession set out in Schedule II, if the Parties concerned have not agreed otherwise prior to the entry into force of this Agreement for such Parties. In establishing such a limit, such Party shall consult with the other Party concerned.

5. A Party establishing a numerical limit pursuant to paragraph 4, unless the Parties concerned agree otherwise:

(a) shall, for each year after the first year after the date of entry into force of this Agreement, consider increasing the numerical limit set out in Schedule III by an amount to be established in consultation with the other Party concerned, taking into account the demand for temporary entry under this Part;

(b) shall not apply its procedures established pursuant to paragraph 1 to the temporary entry of a business person subject to the numerical limit, but may require such business person to comply with its other procedures applicable to the temporary entry of professionals; and

(c) may, in consultation with the other Party concerned, grant temporary entry under paragraph 1 to a business person who practices in a profession where accreditation, licensing, and certification requirements are mutually recognized by such Parties.

6. Nothing in paragraphs 4 or 5 shall be construed so as to limit the ability of a business person to seek temporary entry under a Party's applicable immigration measures relating to the entry of professionals other than those adopted or maintained pursuant to paragraph 1.

7. Three years after a Party establishes a numerical limit pursuant to paragraph 4, it shall consult with the other Party concerned with a view to determining a date after which the limit shall cease to apply. ============================================================================= ANNEX 1604.2

Provision of Information

The obligations under Article 1604(2) shall take effect with respect to Mexico one year after the date of entry into force of this Agreement. ============================================================================= ANNEX 1608

Country - Specific Definitions

For purposes of this Chapter:

citizen means, with respect to Mexico, a national or a citizen according to the existing provisions of Articles 30 and 34, respectively, of the Mexican Constitution; and

existing means, as between:

(a) Canada and Mexico, and the United States and Mexico, in effect upon the date of entry into force of this Agreement; and

(b) Canada and the United States, in effect on January 1, 1989. ============================================================================= Appendix 1603.A

Existing Immigration Measures

1. In the case of Canada, the Immigration Act, R.S.C. 1985 c.I- 2, as amended, and subsection 19(1) of the Immigration Regulations, 1978, as amended.

2. In the case of the United States, Section 101(a)(15)(B) of the Immigration and Nationality Act, 1952, as amended.

3. In the case of Mexico, Chapter III of the Ley General de Poblacion, 1974, as amended.

============================================================================= Schedule I

Research and Design

- Technical, scientific, and statistical researchers conducting independent research, or research for an enterprise located in the territory of another Party.

Growth, Manufacture and Production

- Harvester owner supervising a harvesting crew admitted under applicable law.

- Purchasing and production management personnel conducting commercial transactions for an enterprise located in the territory of another Party.

Marketing

- Market researchers and analysts conducting independent research or analysis, or research or analysis for an enterprise located in the territory of another Party.

- Trade fair and promotional personnel attending a trade convention.

Sales

- Sales representatives and agents taking orders or negotiating contracts for goods or services for an enterprise located in the territory of another Party but not delivering goods or providing services.

- Buyers purchasing for an enterprise located in the territory of another Party.

Distribution

- Transportation operators transporting goods or passengers to the territory of a Party from the territory of another Party or loading and transporting goods or passengers from the territory of a Party to the territory of another Party, with no loading and delivery within the territory of the Party into which entry is sought of goods located in or passengers boarding in that territory.

- With respect to temporary entry into the territory of the United States, Canadian customs brokers performing brokerage duties relating to the export of goods from the territory of the United States to or through the territory of Canada; with respect to temporary entry into the territory of Canada, United States customs brokers performing brokerage duties relating to the export of goods from the territory of Canada to or through the territory of the United States.

- Customs brokers consulting regarding the facilitation of the import or export of goods.

After-Sales Service

- Installers, repair and maintenance personnel, and supervisors, possessing specialized knowledge essential to a seller's contractual obligation, performing services or training workers to perform such services, pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software, purchased from an enterprise located outside the territory of the Party into which temporary entry is sought, during the life of the warranty or service agreement.

General Service

- Professionals engaging in a business activity at a professional level in a profession set out in Schedule II.

- Management and supervisory personnel engaging in a commercial transaction for an enterprise located in the territory of another Party.

- Financial services personnel (insurers, bankers or investment brokers) engaging in commercial transactions for an enterprise located in the territory of another Party.

- Public relations and advertising personnel consulting with business associates, and attending or participating in conventions.

- Tourism personnel (tour and travel agents, tour guides or tour operators) attending or participating in conventions or conducting a tour that has begun in the territory of another Party.

- Tour bus operators entering the territory of a Party:

(a) with a group of passengers on a bus tour that has begun in, and will return to, the territory of another Party;

(b) to meet a group of passengers on a bus tour that will end, and the predominant portion of which will take place, in the territory of another Party; or

(c) with a group of passengers on a bus tour to be unloaded in the territory of the Party into which temporary entry is sought, and returning with no passengers or reloading with such group for transportation to the territory of another Party.

- Translators or interpreters performing services as employees of an enterprise located in the territory of another Party.

Definitions

For purposes of this Schedule:

territory of another Party means the territory of a Party other than the territory of the Party into which temporary entry is sought;

tour bus operator means a natural person, including relief personnel accompanying or following to join, necessary for the operation of a tour bus for the duration of a trip; and

transportation operator means a natural person, other than a tour bus operator, including relief personnel accompanying or following to join, necessary for the operation of a vehicle for the duration of a trip. ============================================================================= Schedule II

PROFESSION

Accountant

Architect

Computer Systems Analyst

MINIMUM EDUCATION REQUIREMENTS AND ALTERNATIVE CREDENTIALS

Baccalaureate or Licenciatura Degree; or C.P.A., C.A., C.G.A., C.M.A.

Baccalaureate or Licenciatura Degree; or state/provincial license

Baccalaureate or Licenciatura Degree; or Post-Secondary Diploma or Post-Secondary Certificate, and three years experience

Disaster Relief Insurance Claims Adjuster (claims adjuster employed by an insurance company located in the territory of a Party, or an independent claims adjuster)

Economist

Engineer

Forester

Graphic Designer

Hotel Manager

Industrial Designer

Interior Designer

Land Surveyor Baccalaureate or Licenciatura Degree, and successful completion of training in the appropriate areas of insurance adjustment pertaining to disaster relief claims; or three years of experience in claims adjustment, and successful completion of training in the appropriate areas of insurance adjustment pertaining to disaster relief claims

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree; or state/provincial license

Baccalaureate or Licenciatura Degree; or state/provincial license

Baccalaureate or Licenciatura Degree; or Post-Secondary Diploma or Post-Secondary Certificate, and three years experience

Baccalaureate or Licenciatura Degree in hotel/restaurant management; or Post-Secondary Diploma or Post-Secondary Certificate in hotel/restaurant management, and three years experience in hotel/restaurant management

Baccalaureate or Licenciatura Degree; or Post-Secondary Diploma or Post-Secondary Certificate, and three years experience

Landscape Architect

Lawyer (including Notary in the Province of Quebec)

Librarian

Management Consultant

Mathematician (including Statistician)

MEDICAL/ALLIED PROFESSIONAL

Dentist

Dietitian Baccalaureate or Licenciatura Degree

LL.B., J.D., LL.L., B.C.L., or Licenciatura Degree (five years); or membership in a state/provincial bar

M.L.S. or B.L.S. (for which another Baccalaureate or Licenciatura Degree was a prerequisite)

Baccalaureate or Licenciatura Degree; or equivalent professional experience as established by statement, or professional credential, attesting to five years experience as a management consultant, or five years experience in a field of specialty related to the consulting agreement

Baccalaureate or Licenciatura Degree

D.D.S., D.M.D., Doctor en Odontologia, or Doctor en Cirugia Dental; or state/provincial license

Baccalaureate or Licenciatura Degree; or state/provincial license

=============================================================================

Medical Laboratory Technologist (Canada)/Medical Technologist (United States and Mexico)

Nutritionist

Occupational Therapist

Pharmacist

Physician (teaching or research only)

Physiotherapist/Physical Therapist

Psychologist

Recreational Therapist

Registered Nurse

Veterinarian

Research Assistant (Working in a post-secondary

Baccalaureate or Licenciatura Degree; or Post-Secondary Diploma or Post-Secondary Certificate, and three years experience

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree; or state/provincial license

Baccalaureate or Licenciatura Degree; or state/provincial license

M.D. or Doctor en Medicina; or state/provincial license

Baccalaureate or Licenciatura Degree; or state/provincial license

State/provincial license or Licenciatura Degree

Baccalaureate or Licenciatura Degree

State/provincial license or Licenciatura Degree

D.V.M., D.M.V., or Doctor en Veterinaria; or state/provincial license

Range Manager/ Range Conservationalist

Research Assistant (Working in a post-secondary educational institution)

Scientific Technician/Technologist

SCIENTIST

Agriculturist (including Agronomist)

Animal Breeder

Animal Scientist

Apiculturist

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Possession of: (a) theoretical knowledge of any of the following disciplines: agricultural sciences, astronomy, biology, chemistry, engineering, forestry, geology, geophysics, meteorology or physics; and (b) the ability to solve practical problems in any of such disciplines, or the ability to apply principles of any of such disciplines to basic or applied research

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Astronomer

Biochemist

Biologist

Chemist

Dairy Scientist

Entomologist

Epidemiologist

Geneticist

Geologist

Geochemist

Geophysicist (including Oceanographer in Mexico and the United States)

Horticulturist

Meteorologist

Pharmacologist Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Pharmacologist

Physicist (including Oceanographer in Canada)

Plant Breeder

Poultry Scientist

Soil Scientist

Zoologist

Social Worker

Sylviculturist (including Forestry Specialist)

TEACHER

College

Seminary

University

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

=============================================================================

Technical Publications Writer

Urban Planner (including Geographer)

Vocational Counsellor

Baccalaureate or Licenciatura Degree; or Post-Secondary Diploma or Post-Secondary Certificate, and three years experience

Baccalaureate or Licenciatura Degree

Baccalaureate or Licenciatura Degree

=============================================================================

Schedule III

United States of America

1. Commencing on the date of entry into force of this Agreement as between the United States and Mexico, the United States shall annually approve as many as 5,500 initial petitions of business persons of Mexico seeking temporary entry under Section D of Annex 1603 to engage in a business activity at a professional level in a profession set out in Schedule II.

2. For purposes of paragraph 1, the United States shall not take into account:

(a) the renewal of a period of temporary entry;

(b) the entry of a spouse or children accompanying or following to join the principal business person;

(c) an admission under Section 101(a)(15)(H)(i)(b) of the Immigration and Nationality Act, 1952, as amended, including the worldwide numerical limit established by Section 214(g)(1)(A) of such Act; or

(d) an admission under any other provision of Section 101(a)(15) of such Act relating to the entry of professionals.

3. Paragraphs 4 and 5 of Section D of Annex 1603 shall apply as between the United States and Mexico for no longer than:

(a) the period that such paragraphs or similar provisions may apply as between the United States and any other Party or non-Party; or

(b) 10 years after the date of entry into force of this Agreement as between such Parties,

whichever period is shorter.

NAFTA PART SIX INTELLECTUAL PROPERTY