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 (hereinafter referred to as
the "Agreement") 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:
(i) it does not conflict with the
provisions of the Agreement;
(ii) 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;
(iii) resulting specific commitments
shall apply on a most-favoured-nation basis;
(iv) 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.
A. Standstill
Any conditions, limitations and
qualifications to the commitments noted below shall
be limited to existing non-conforming
measures.
B. 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 subparagraph 1(b) of
the Annex on Financial Services, this
paragraph applies to the activities
referred to in subparagraph 1(b)(iii) 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:
Page 422
(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 subparagraph 5(a)(iv) of
the Annex;
(c) provision and transfer of financial
information and financial data processing
as referred to in subparagraph 5(a)(xv)
of the Annex and advisory and other
auxiliary services, excluding
intermediation, relating to banking and other
financial services as referred to in
subparagraph 5(a)(xvi) 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) subparagraph 3(a);
(b) subparagraph 3(b); and
(c) subparagraphs 5(a)(v) to (xvi) 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 the 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.
Page 423
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 the 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 subparagraphs 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.
Page 424
C. 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.
D. 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.