Community Market Of The South Forest Protocol - Approval - Full Text Of The Norm

Original Language Title: MERCADO COMUN DEL SUR PROTOCOLO DE MONTEVIDEO - APROBACION - Texto completo de la norma

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MERCATE COMUN DEL SUR Ley 25.623 Approve the Montevideo Protocol on Trade in Mercosur Services. Sanctioned: July 17, 2002. Enacted: August 9, 2002.

The Senate and Chamber of Deputies of the Argentine Nation assembled in Congress, etc. sanction with force of Law:

ARTICLE 1 Approved the MONTEVIDEO PROTOCOL ON MERCOSUR SERVICE TRADE, signed in Montevideo .REPUBLICA ORIENTAL DEL URUGUAY el on December 15, 1997, which consists of TREINTA (30) articles and DOS (2) appendices, whose authenticated photocopy is part of this law. ARTICLE 2 Contact the national executive branch.

IN THE SESSION OF THE ARGENTINE CONGRESS, IN GOOD AIRES, THE 17 JUL. 2002

EDUARDO O. CHANGE. . JUAN C. MAQUEDA. . Eduardo D. Rollano. . Juan C. OyarzĂșn.

# 25,623

PROTOCOL OF MONTEVIDEO ON TRADE

MERCOSUR SERVICES

PREAMBULO

The Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, States Parties to the Common Market of the South (MERCOSUR);

Reaffirming that, in accordance with the Treaty of Asuncion, the Common Market implies, among other commitments, the free movement of services in the expanded market;

Recognizing the importance of the liberalization of trade in services for the development of the economies of MERCOSUR States Parties, for the deepening of the Customs Union and the progressive formation of the Common Market;

Considering the need for the least developed countries and regions of MERCOSUR to have increased participation in the service market and to promote trade in services on the basis of reciprocity of rights and obligations;

Wishing to enshrine in a common instrument the rules and principles for trade in services among MERCOSUR States Parties, with a view to expanding trade in conditions of transparency, balance and progressive liberalization;

Taking into account the General Agreement on Trade in Services (GACS) of the World Trade Organization (WTO), in particular its Article V, and the commitments made by the States Parties to the GATS;

They agree as follows:

PART I

OBJECT AND APPLICATION

Article I

Object

1. This Protocol aims to promote free trade in services in MERCOSUR.

Article II

Scope of application

1. This Protocol applies to measures taken by States parties that affect trade in services in MERCOSUR, including those relating to:

(i) the provision of a service;

(ii) the purchase, payment or use of a service;

(iii) Access to and use of services to the general public on a statute of limitations of those States Parties on the basis of service;

(iv) the presence, including the commercial presence, of persons of a State party in the territory of another State Party for the provision of a service;

2. For the purposes of this Protocol, trade in services is defined as the provision of a service:

(a) of the territory of a State Party to the territory of any other State Party;

(b) in the territory of a State party to a consumer of services of any other State Party;

(c) by a service provider of a State party through the commercial presence in the territory of any other State Party;

(d) by a service provider of a State party through the presence of individuals of a State party in the territory of any other State Party.

3. For the purposes of this Protocol:

(a) "measures taken by States Parties" means the measures taken by:

(i) Governments and central, state, provincial, departmental, municipal or local authorities; and

(ii) Non-governmental institutions in exercise of powers delegated by Governments or authorities mentioned in paragraph (i).

Pursuant to its obligations and commitments under this Protocol, each State Party shall take the necessary measures within its scope to ensure compliance by Governments and State, provincial, departmental, municipal or local authorities and by non-governmental institutions within its territory;

(b) The term "services" includes any service of any sector, except services provided in the exercise of governmental powers;

c) a "service provided in the exercise of government powers" means any service that is not provided in commercial conditions or in competition with one or more service providers.

PART II

GENERAL OBLIGATIONS AND DISCIPLINES

Article III

Most-favoured-nation treatment

1. With regard to the measures covered by this Protocol, each State Party shall immediately and unconditionally accord to the services and service providers of any other State Party treatment no less favourable than that accorded to similar services and similar service providers of any other State Party or third country.

2. The provisions of this Protocol shall not be construed to prevent a State Party from entrusting or granting advantages to neighbouring countries, whether or not they are States Parties, in order to facilitate limited exchanges to contiguous border areas of locally produced and consummated services.

Article IV

Access to the plows

1. With regard to market access through the modes of delivery identified in Article II, each State Party shall accord to the services and service providers of other States Parties treatment no less favourable than that provided in accordance with the provisions of its Schedule of Specific Commitments. States Parties undertake to allow the cross-border movement of capital that is an essential part of a commitment to market access contained in their List of Specific Commitments on Transboundary Trade, as well as transfers of capital to their territory when it comes to commitments on market access to the trade presence.

2. States Parties may not maintain or adopt, either on the basis of a regional branch or on the whole of their territory, measures in respect of:

(a) The number of service providers, whether in the form of numerical contingents, monopolies or exclusive service providers or by requiring proof of economic needs;

(b) the total value of assets or service transactions in the form of numerical contingents or by requiring proof of economic requirements;

(c) the total number of service operations or the total level of service production, expressed in designated numerical units, in the form of contingents or through the requirement of proof of economic needs, excluding measures limiting inputs for service delivery.

(d) To the total number of individuals who may be employed in a particular service sector or that a service provider may employ and are necessary for the provision of a specific service and are directly related to it, in the form of numerical contingents or through the requirement of proof of economic needs;

(e) to specific types of legal person or joint venture through which a service provider can provide; and

(f) To the participation of foreign capital expressed as a maximum percentage limit to the possession of shares by foreigners or as a total value of individual or aggregate foreign investments.

Article V

National treatment

1. Each State Party shall accord to the services and service providers of any other State Party, with respect to all measures affecting the provision of services, treatment no less favourable than that available to its own similar services or similar service providers.

2. Specific commitments under this Article do not require States parties to compensate for intrinsic competitive disadvantages resulting from the foreign character of relevant services or service providers.

3. Any State Party may comply with the provisions of paragraph 1 by providing services and service providers of other States Parties with formal treatment identical or formally different from that of its own similar services and similar service providers.

4. A formally identical or formally different treatment shall be deemed to be less favourable if it modifies the conditions of competition for the services or service providers of the State party in comparison with similar services or similar service providers of another State Party.

Article VI

Additional commitments

States Parties may negotiate commitments in respect of measures affecting trade in services, but not subject to appropriation in lists, under Articles IV and V, including those relating to qualifications, rules or issues relating to licences. Such commitments shall be reflected in the Lists of Specific Commitments of States Parties.

Article VII

Lists of specific commitments

1. Each State Party shall specify in a list of specific commitments the sectors, subsectors and activities for which it shall undertake commitments and, for each corresponding mode of delivery, shall indicate the terms, limitations and conditions for market access and national treatment. Each State Party may also specify additional commitments under Article VI. Where relevant, each State Party shall specify deadlines for the implementation of commitments and the date of entry into force of such commitments.

2. Articles IV and V shall not apply to:

(a) sectors, sub-sectors, activities, or measures that are not specified in the List of Specific Commitments; (b) the measures specified in the List of Specific Commitments that are inconsistent with Article IV or Article V.

3. Measures that are dissenting at the same time with Article IV and Article V must be listed in the Article IV column. In this case, registration shall be considered as a condition or restriction also to Article V.

4. The lists of specific commitments shall be annexed to this Protocol and shall be an integral part of it.

Article VIII

Transparency

1. Each State Party shall promptly publish before the date of its entry into force, except for situations of force majeure, all relevant measures of general application relating to this Protocol or affecting its operation. Each State Party shall also publish international agreements that it subscribes to any country and which refer, or affect, to trade in services.

2. Where the publication of the information referred to in the preceding paragraph is not feasible, it shall be made available to the public otherwise.

3. Each State Party shall promptly, and at least annually, inform the MERCOSUR Trade Commission, the establishment of new laws, regulations or administrative directives, or the introduction of changes to existing ones that it considers to have a significant impact on trade in services.

4. Each State Party shall promptly respond to all requests for specific information from other States Parties concerning any of its general implementation measures or international agreements referred to in paragraph 1. Each State Party shall also provide specific information to States Parties upon request, through established service or services, in accordance with Article III:4 of the GATS, on all these matters or on which they are subject to notification under paragraph 3.

5. Each State Party may notify the MERCOSUR Trade Commission of any action taken by another State Party which, in its view, affects the operation of this Protocol.

Article IX

Disclosure of confidential information

No provision of this Protocol shall impose upon any State Party the obligation to provide confidential information whose disclosure may constitute an obstacle to the enforcement of laws or otherwise contrary to the public interest, or may injure the legitimate business interests of public or private enterprises.

Article X

National regulation

1. Each State Party shall ensure that all measures of general application affecting trade in services are administered in a reasonable, objective and impartial manner.

2. Each State Party shall maintain or establish judicial, arbitral or administrative tribunals or procedures that permit, at the request of an affected service provider, the prompt review of administrative decisions affecting trade in services and, where justified, the implementation of appropriate solutions. Where such procedures are not independent of the agency responsible for the administrative decision concerned, the State party shall ensure that they permit in fact an objective and impartial review.

The provisions of this paragraph shall not be construed as imposing on any State party the obligation to establish such courts or procedures where this is incompatible with its constitutional structure or the nature of its legal system.

3. Where a licence, registration, certificate or other authorization is required for the provision of a service, the competent authorities of the State party concerned, within a reasonable period of time following the submission of a request:

(i) When the request is complete, they shall decide on the application by informing the person concerned; or

(ii) When the request is not complete, the person concerned shall be informed without unnecessary delay of the status of the application, as well as of additional information required under the law of the State party.

4. To ensure that measures relating to technical standards, qualification requirements and procedures and licensing requirements do not constitute unnecessary barriers to trade in services, States Parties shall ensure that such requirements and procedures, inter alia:

(i) are based on objective and transparent criteria, such as competition and capacity to provide the service;

(ii) are not more burdensome than necessary to ensure the quality of service; and

(iii) In the case of licensing procedures, they do not constitute a restriction on the provision of the service.

5. Each State Party may establish appropriate procedures to verify the competence of the professionals of the other States Parties.

Article XI

Recognition

1. Where a State Party recognizes, unilaterally or through an agreement, education, experience, licences, registrations or certificates obtained in the territory of another State Party or of any country other than MERCOSUR:

(a) Nothing in this Protocol shall be construed as requiring that State party to recognize education, experience, licences, registrations or certificates obtained in the territory of another State Party; and

(b) The State party shall accord to any other State Party adequate opportunity to (i) demonstrate that education, experience, licences, registrations and certificates obtained in its territory should also be recognized; or (ii) so that it may conclude an equivalent agreement or agreement.

2. Each State Party undertakes to encourage relevant entities in their respective territories, including those of a governmental nature, as well as professional associations and colleges, in cooperation with relevant entities of the other States Parties, to develop mutually acceptable standards and criteria for the exercise of relevant activities and professions in the area of services, through the granting of licences, registrations and certificates to service providers and to propose recommendations to the Common Market Group on Mutual Recognition.

3. The standards and criteria referred to in paragraph 2 may be developed, inter alia, on the basis of: education, examinations, experience, conduct and ethics, professional development and renewal of certification, scope of action, local knowledge, consumer protection and nationality, residence or domicile requirements.

4. Once the recommendation referred to in paragraph 2, the Common Market Group will consider it within a reasonable time to determine its consistency with this Protocol. Based on this review, each State Party undertakes to entrust its respective competent authorities, where necessary, to implement the provisions of the competent MERCOSUR bodies within a mutually agreed period.

5. The Common Market Group will periodically review, and at least once every three years, the implementation of this Article.

Article XII

Competition defence

With regard to acts in the provision of services by providers of public or private law services or other entities, which are intended to produce or have effects on competition within MERCOSUR and which affect trade in services between States Parties, the provisions of the MERCOSUR Competition Protocol shall apply.

Article XIII

General exceptions

Subject to the fact that the measures listed below are not applied in a manner that constitutes an arbitrary or unjustifiable means of discrimination where similar conditions prevail among countries, or a disguised restriction on trade in services, no provision of this Protocol shall be construed to prevent a State Party from taking or implementing measures:

(a) necessary to protect morals or to maintain public order, the exception of public order may be invoked only when an imminent and sufficiently serious threat is posed to one of the fundamental interests of society;

(b) necessary to protect the life and health of individuals and animals or to preserve vegetables;

(c) necessary for the enforcement of laws and regulations that are not inconsistent with the provisions of this Protocol, including those relating to:

(i) Preventing practices that induce error and fraudulent practices, or ways of dealing with the effects of non-compliance with service contracts;

(ii) Protection of privacy of individuals in relation to the processing and dissemination of personal data and the protection of the confidentiality of individual records and accounts;

(iii) Security;

(d) incompatible with Article V, as expressed in this Protocol, provided that the difference in treatment is intended to ensure the taxation or fair and effective collection of direct taxes on the services or service providers of other States Parties, including measures taken by a State party under its fiscal regime, as stipulated in Article XIV Verbatim (d) of the GATS.

(e) incompatible with Article III, as expressed in this Protocol, provided that the difference in treatment results from an agreement aimed at avoiding double taxation or of the provisions aimed at avoiding the double imposition contained in any other international agreement or agreement binding on the State party applying the measure.

Article XIV

Security exceptions

1. No provision of this Protocol shall be construed as:

(a) imposes on a State party the obligation to provide information which it considers to be contrary to the essential interests of its security; or

(b) Prevents a State party from taking measures that it considers necessary for the protection of the essential interests of its security:

(i) concerning the provision of services intended directly or indirectly to ensure the supply of the armed forces;

(ii) relating to fissile or mergeable materials or to those used for their manufacture;

(iii) applied in times of war or in case of serious international tension; or

(c) Prevents a State party from taking measures in compliance with its obligations under the Charter of the United Nations for the maintenance of international peace and security.

2. The MERCOSUR Trade Commission will be informed of the measures taken under paragraph 1 (b) and (c) and their termination.

Article XV

Procurement

1. Articles III, IV and V shall not apply to laws, regulations or requirements governing the recruitment by government agencies of services for official purposes rather than commercial resale or use in the provision of services for commercial sale.

2. Without prejudice to paragraph 1, and recognizing that such laws, regulations or prescriptions may have distortion effects on trade in services, States parties agree that common procurement disciplines in general will be applied in MERCOSUR.

Article XVI

Grants

1. States parties recognize that under certain circumstances subsidies may have a distortion of trade in services. The States Parties agree that the common disciplines to be established in MERCOSUR will be applied.

2. The mechanism provided for in Article XV, paragraph 2, of the GATS shall be applied.

Article XVII

Denial of benefits

A State Party may deny the benefits derived from this Protocol to a service provider of another State Party, upon notification and conduct of consultations, when that State Party demonstrates that the service is being provided by a person from a country that is not a State Party to MERCOSUR.

Article XVIII

Definitions

1. For the purposes of this Protocol:

(a) "measure" means any action taken by a State Party, whether in the form of law, regulation, rule, procedure, decision or administrative provision, or in any other way;

(b) "service provision" covers the production, distribution, marketing, sale and provision of a service;

(c) "commercial presence", means any type of commercial or professional establishment, through, inter alia, the establishment, acquisition or maintenance of a legal person, as well as of branches and representative offices located in the territory of a State party in order to provide a service.

d) "sector" of a service means:

(i) with reference to a specific commitment, one or more sub-sectors of that service, or all of them, as specified in the list of specific commitments of a State party.

(ii) In another case, the entire service sector, including all subsectors;

e) "service of another State Party" means a service rendered:

(i) from or in the territory of that other State Party;

(ii) in the case of the provision of a service by commercial presence or by the presence of natural persons by a service provider of that other State Party;

f) "service manager" means anyone who provides a service. Where the service is not provided by a legal person directly, but through other forms of commercial presence, such as a branch or representative office, the service provider (i.e. the legal person) will be granted, through this presence, the treatment accorded to service providers under the Protocol. Such treatment shall be granted to the presence through which the service is provided, without the need to be granted to any other part of the provider outside the territory in which the service is provided.

(g) "Service Consumer" means any person who receives or uses a service;

(h) "person" means a natural person or a legal person;

(i) "physical person of another State Party" means a natural person who resides in the territory of that other State Party or any other State Party and who, under the law of that other State Party, is a national of that other State Party or has the right of permanent residence in that other State Party;

(j) "legal person" means any legal entity duly constituted and organized under the law applicable to it, whether for profit or not, whether for public, private or mixed property and is organized under any corporate or association type.

(k) "legal person of another State Party" means a legal person who is constituted or organized in accordance with the law of that other State Party, which has its headquarters and develops or schedules to develop substantive business operations in the territory of that State Party or any other State Party.

PART III

PROGRAMME OF LIBERALIZATION

Article XIX

Negotiation of specific commitments

1. Pursuant to the objectives of this Protocol, States Parties shall maintain successive rounds of negotiations for the purpose of completing within a maximum of 10 years from the entry into force of this Protocol, the MERCOSUR Programme for the Liberalization of Trade in Services. The rounds of negotiations will take place annually and will aim primarily at the progressive incorporation of sectors, subsectors, activities and modes of service delivery to the Protocol Liberalization Programme, as well as the reduction or elimination of the adverse effects of trade in services measures, as a means of ensuring effective market access. This process will aim to promote the interests of all participants, on the basis of mutual advantages, and to achieve a global balance of rights and obligations.

2. The progressive liberalization process will be conducted in each round through negotiations aimed at increasing the level of specific commitments undertaken by States parties on their specific schedules of commitments.

3. In the development of the Liberalization Programme, differences in the level of commitments made in line with the specificities of the different sectors and respecting the objectives set out in the following paragraph will be accepted.

4. The liberalization process will respect the right of each State party to regulate and introduce new regulations within its territories to achieve national policy objectives relating to the services sector. Such regulations may regulate, inter alia, national treatment and market access, since they do not nullify or impair the emerging obligations of this Protocol and specific commitments.

Article XX

Modification or suspension of commitments

1. Each State Party may, during the implementation of the Liberalization Programme referred to in Part III of this Protocol, modify or suspend specific commitments included in its Schedule of Specific Commitments.

This modification or suspension shall apply only from the date on which it is established and respects the principle of non-retroactivity to preserve the acquired rights.

2. Each State Party shall resort to this regime only in exceptional cases, provided that when it does, it notify the Common Market Group and submit to it the facts, reasons and justifications for such modification or suspension of commitments. In such cases, the State Party in question shall consult with the State Party that is deemed to be affected, in order to achieve a consensual understanding of the specific measure to be applied and the time to which it will take effect.

PART IV

INSTITUTIONAL PROVISIONS

Article XXI

Council of the Common Market

The Common Market Council will approve the results of the negotiations on specific commitments as well as any modification and/or suspension thereof.

Article XXII

Common Market Group

1. The service negotiation in MERCOSUR is the responsibility of the Common Market Group. With regard to this Protocol, the Common Market Group will have the following functions:

(a) To convene and monitor the negotiations under Article XIX of this Protocol. To this end, the Common Market Group will establish the scope, criteria and instruments for negotiations on specific commitments;

(b) To receive notifications and results of consultations concerning modification and/or suspension of specific commitments as provided for in Article XX;

(c) To fulfil the functions mandated by Article XI;

(d) regularly assess the evolution of trade in services in MERCOSUR; and

(e) To carry out the other tasks entrusted to it by the Common Market Council in the area of trade in services.

2. For the purposes of the functions set out above, the Common Market Group will constitute an auxiliary body and regulate its composition and operating modalities.

Article XXIII

MERCOSUR Trade Commission

1. Without prejudice to the functions referred to in the previous articles, the implementation of this Protocol shall be carried out by the MERCOSUR Trade Commission, which shall have the following functions:

(a) To receive information which, in accordance with Article VIII of this Protocol, is notified by States Parties;

(b) To receive information from States parties regarding the exceptions provided for in Article XIV;

(c) To receive information from States parties regarding actions that may set up abuses of dominant position or practices that distort competition and bring it to the attention of national enforcement bodies of the Competition Protocol;

(d) To understand in the consultations and claims submitted by States parties regarding the implementation, interpretation or non-compliance of this Protocol and the commitments they undertake in the Lists of Specific Commitments, applying the existing mechanisms and procedures in MERCOSUR; and

(e) To carry out the other tasks entrusted to it by the Common Market Group on Services.

Article XXIV

Dispute settlement

Disputes that may arise between States parties in respect of the implementation, interpretation or non-compliance with the commitments set out in this Protocol shall be resolved in accordance with the procedures and mechanisms of settlement in force in MERCOSUR.

PART V

FINAL PROVISIONS

Article XXV

Annexes

The Annexes to this Protocol form an integral part of this Protocol.

Article XXVI

Review

1. In order to achieve the object and purpose of this Protocol, it may be revised, taking into account the evolution and regulation of trade in services in MERCOSUR as well as the progress made in services in the World Trade Organization and other Specialized Forums.

2. In particular, on the basis of the evolving functioning of the institutional provisions of this Protocol and of the institutional structure of MERCOSUR, Part IV may be modified with a view to its further development.

Article XXVII

Vigilance

1. This Protocol, an integral part of the Treaty of Assumption, shall last indefinitely and enter into force thirty days after the date of deposit of the third instrument of ratification.

2. This Protocol and its instruments of ratification shall be deposited with the Government of the Republic of Paraguay, which shall send an authenticated copy of this Protocol to the Governments of other States Parties.

3. Lists of specific commitments shall be incorporated into national legal systems in accordance with the procedures provided for in each State Party.

Article XXVIII

Notifications

The Government of the Republic of Paraguay shall notify the Governments of other States Parties of the date of deposit of instruments of ratification and of the entry into force of this Protocol.

Article XXIX

Accession or complaint

In respect of accession or denunciation, they shall as a whole, for this Protocol, govern the rules established by the Treaty of Assumption. The accession or denunciation to the Treaty of Asuncion or to this Protocol means, ipso jure, accession or denunciation to this Protocol and the Treaty of Asuncion.

Article XXX

Denomination

This Protocol shall be called the Protocol of Montevideo on Trade in Services of the Common Market of the South.

Made in the city of Montevideo, Eastern Republic of Uruguay, on the fifteenth day of the month of December of the year thousand nine hundred ninety-seven, in an original in the Spanish and Portuguese languages, being both equally authentic texts.

APPENDIX I

SECTORIAL ANNEXES

ANNEX ON LAND AND WATER TRANSPORT SERVICES

1. This Annex applies to measures affecting the trade in terrestrial transport services (road and rail) and water.

2. The implementation of this Protocol will not initially affect the rights and obligations arising from the implementation of the multilateral agreements signed between the States Parties of MERCOSUR prior to the entry into force of this Protocol, to the extent that such agreements tend to harmonize and control the conditions of competition between transport companies, noting as a basic priority the intra-MERCOSUR liberalization of the sector.

3. The provisions of this Protocol shall not apply temporarily to each of the existing or signed bilateral transport agreements prior to the entry into force of this Protocol.

4. Each of the multilateral and bilateral agreements mentioned in paragraphs 2 and 3 will remain in force and will be supplemented by the corresponding Emerging Specific Commitments of the Liberalization Programme.

5. The Common Market Group during the third year after the entry into force of this Protocol, and once a year thereafter, will review and ponder the progress made towards the implementation of the instruments referred to above with the objectives and principles of this Protocol.

ANNEX ON THE MOVEMENT OF FISIC PERSONS PROVEEDOR OF SERVICES

1. This Annex applies to measures affecting natural persons who are service providers of a State party, and to individuals of a State party who are employed by a service provider of a State party in connection with the provision of a service.

2. The Protocol shall not apply to measures affecting individuals seeking access to a State party ' s labour market or to measures relating to citizenship, residence or employment on a permanent basis.

3. In accordance with Parties II and III of the Protocol, States Parties may negotiate specific commitments applicable to the movement of all categories of natural service providers under the Protocol. Physical persons covered by a specific commitment shall be allowed to provide the service in question in accordance with the terms of that commitment.

4. The Protocol shall not prevent a State party from implementing measures to regulate the entry or temporary stay of physical personnel in its territory, including measures necessary to protect the integrity of its borders and to ensure the orderly movement of natural persons through them, provided that such measures are not implemented in a manner that nullifies or impairs the resulting advantages for a State party of the terms of a specific commitment.

5. In order to regulate a particular situation of a labour nature affecting natural persons who are service providers of a State Party or natural persons of a State Party who are employed by a service provider of a State Party, the right of the place of execution of the service contract shall apply.

ANNEX ON EREO TRANSPORT SERVICES

1. This Annex applies to measures affecting trade in air transport services, whether regular or non-regular.

It is also applicable to the Air Transport Assistants; it is understood by those included in the General Agreement on Trade in Services (A.G.C.S.) and those that may be appropriately reviewed in this Annex.

2. The implementation of the present Protocol shall not affect the rights and obligations arising from the implementation of bilateral, plurilateral or multilateral agreements signed by the States Parties of Mercosur, which are in force at the time of entry into force of the Montevideo Protocol.

3. The Protocol shall not apply to measures that affect the rights relating to aerocommercial traffic established for routes agreed upon in the terms of the Bilateral Air Services Agreements subscribed among States Parties by maintaining the exclusion of traffic of cabotage.

4. With regard to regular and exploratory Subregional Air Services on routes other than regional routes effectively operated in the terms of the Agreements on Bilateral Air Services signed between the States Parties, the provisions of the Agreement on Subregional Air Services signed in Fortaleza, Brazil, on 17 December 1996 and supplementing the lists of emerging commitments of the Liberalization Programme will apply.

5. The dispute settlement procedures and mechanisms in force in MERCOSUR may be invoked when another specific settlement mechanism is not contemplated between the States Parties involved.

6. The Common Market Group, within the first three years of the entry into force of this protocol, will review this Annex on the basis of the proposals made by the Air Transport Technicians by representatives of the four States Parties, in order to decide on the necessary modifications, including the areas of application, in line with the principles and objectives of this Protocol.

7. In the event that a Multilateral Convention includes in its provisions the treatment of Air Transport, the Aeronautical Authorities of the States Parties shall consult with the objective of determining the extent to which this Protocol may be affected by the provisions of the Convention and decide on any modifications required in this Annex.

ANNEX ON FINANCIAL SERVICES

1. Scope or scope of application

(a) The present Annex applies to all measures of a State party affecting the provision of financial services. Where this Annex refers to the provision of a financial service, this will mean the provision of a financial service as defined in Article II, paragraph 2, of the Protocol.

(b) For the purposes of Article II, paragraph 3 (b), of the Protocol, the following activities shall be defined as "services provided in the exercise of governmental powers of the States Parties":

(i) the activities carried out by a central bank or monetary authority or by any other public entity of States Parties in the pursuit of monetary or exchange policies;

(ii) activities that form part of a legal system of social security or public retirement plans; and

(iii) Other activities carried out by a public entity on behalf of or with the guarantee of States Parties or with the use of financial resources.

(c) For the purposes of Article II, paragraph 3 (b), of the Protocol, if a State Party authorizes its financial service providers to develop any activities referred to in subparagraphs (b) (ii) or (iii) of this paragraph in competition with a public entity or with a financial service provider, the term "services" shall include such activities.

(d) The definition of Article II.3(c) of the Protocol shall not apply in the case of this Annex.

2. Transparency and Dissemination of Confidential Information

For the purposes of articles VIII and IX of the Protocol and for greater clarity, it is understood that no provision of the Protocol shall be construed to oblige a State party to disclose information concerning business and accounting of private clients or any confidential or private information held by public entities.

3. Prudential measures

(a) Nothing in this Protocol shall be construed as an impediment for States Parties to take or maintain reasonable measures on reasonable grounds, for:

i. protect investors, depositors, financial market participants, policy holders or persons with whom a financial service provider has contracted a fiduciary obligation;

ii. ensure the solvency and liquidity of the financial system.

Where such measures are not in conformity with the provisions of the Protocol, they shall not be used as a means of circumventing the commitments or obligations of States parties under the Protocol.

(b) In implementing its own measures relating to financial services, a State Party may recognize the prudential measures of another State Party. Such recognition may be:

i. unilaterally granted,

ii. can be done through harmonization or otherwise,

iiii. or may be based on an agreement or agreement with the State party concerned.

(c) The State party granting another State party recognition of prudential measures in accordance with subparagraph (b) shall provide appropriate opportunities for other States Parties to demonstrate that there is equivalence in the regulations, in the monitoring and implementation of those regulations, and, if appropriate, in the procedures for the exchange of information between the parties.

(d) Where a State Party grants another State Party recognition of prudential measures in accordance with subparagraph (b) (iii) and the conditions set out in subparagraph (c) exist, it shall provide appropriate opportunities for other States Parties concerned to deny their accession to such agreements or conventions, or to negotiate with it other similar agreements or conventions.

(e) Agreements or agreements based on the principle of recognition shall be reported promptly, at least annually, to the Common Market Group and the MERCOSUR Trade Commission in order to comply with the provisions of the Protocol (Art. VIII and Art. XXII).

Harmonization Commitment

States Parties undertake to continue to make progress in the harmonization process, in accordance with the approved guidelines and to be approved by the Common Market Group, prudential regulations and consolidated monitoring regimes, and in the exchange of information on financial services.

5. Definitions

For the purposes of this Annex:

(a) Financial service means any financial service offered by a financial service provider of a State party. Financial services include all insurance and insurance services and all banking and other financial services.

However, States parties undertake to harmonize the definitions of the activities of the various financial services, based on paragraph 5 of the Financial Services Annex of the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO).

(b) A financial service provider means any natural or legal person of a State Party wishing to provide or to provide financial services, but the term "financial service provider" does not include public entities.

(c) "Public entity" means:

(i) a government, central bank or monetary authority of a State party, or an entity that is owned or controlled by a State party, which is primarily devoted to the performance of governmental functions or activities for governmental purposes, excluding entities primarily engaged in the provision of financial services on business or

(ii) a private entity that performs functions normally performed by a central bank or monetary authority, while exercising such functions.

List of SPECIFIC COMMITMENTS

ORIENTAL REPUBLIC OF URUGUAY

MODOS DE SUMINISTER: 1. Transboundary supply, 2. Consumption abroad, 3. Commercial presence, 4. Presence of physical persons 4.

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APPENDIX II LISTS OF INITIAL SPECIFIC COMMITMENTS List of specific commitments

Under the Montevideo Protocol on Trade in Services, the Argentine Republic submits the following list of specific commitments.

The Argentine Republic reserves the right to introduce any technical changes it deems relevant, as well as to correct errors and omissions.

The present list contains commitments consistent with the current normative and legal framework in the Argentine Republic.

It should be noted that the full validity of the total or partial content of the Ele offer is subject to a process of approval by the National Congress and ratification by the Executive Branch, in accordance with the constitutional provisions in force in the country.

Basic Telecommunications Sector

Regarding commitments Basic communications, included in point 2.C), it is noted that the offer is conditioned upon the prior approval by the National Congress and ratification by the Executive Power of the Fourth Protocol Annex to the GATS.

The Argentine Republic considers that it is beyond the scope of this offer, and reserves the right to expressly indicate it to direct television services to the home, direct broadcasting services for television, digital audio services for free reception broadcasting.

With regard to regulatory principles, the Argentine Republic undertakes as additional commitments the principles contained in the annex as part of the present offer.

The services included in the sector column may be provided through any technological medium (e.g. optical fiber, radioelectric links, satellites, cables), with the exception of the limitations identified in the market access column.

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Annex

REFERENCE DOCUMENT

Scope

The following are definitions and principles relating to the regulatory framework for basic telecommunications services.

Definitions

Users understand services consumers and service providers.

Essential facilities include the functions and elements of a public telecommunications network that: (a) are provided exclusively or predominantly by a single supplier or by a limited number of suppliers; and (b) whose replacement with a view to the provision of a service is not feasible in the economic or technical sphere.

A dominant provider is the one that has the ability to significantly affect the conditions of participation (from the point of view of prices and supply) in a given market of basic telecommunications services as a result of: (a) control of essential facilities; or (b) use of its market position.

1. Competition safeguards

1.1 Prevention of anti-competitive practices in the field of telecommunications

Appropriate measures will be maintained to prevent suppliers who, individually or jointly, are a dominant supplier from employing or continuing to employ anti-competitive practices.

1.2 Safeguards

The anti-competitive practices referred to include, in particular, the following:

(a) To undertake cross-subvention anti-competitive activities;

(b) Use information obtained from competitors with anticompetitive results; and

(c) Failure to make available to other service providers in a timely manner technical information on essential facilities and commercially relevant information that they need to provide services.

2. Interconnection

2.1 This article refers to the access provided between lenders to enable access to customers, users, services or network elements.

2.2 Interconnection to be ensured

Interconnection with a dominant provider will be secured at any technically feasible point in the network. Interconnection agreements shall be made:

(a) in terms and conditions (including technical standards and specifications) and non-discriminatory prices, and shall be of a quality no less favourable than that available for their own similar services or for similar services of non-linked service providers or for their affiliates or other related companies;

(b) in a timely manner, in terms and conditions (including technical standards and specifications) and with cost-based prices that are transparent, reasonable, and sufficiently disaggregated so that the provider should not pay for components or facilities of the network that it does not need to provide the service.

2.3 Public availability of interconnected negotiating procedures

Procedures applicable to interconnection with a dominant provider will be made available to the public.

2.4 Transparency of interconnection agreements

It is guaranteed that any dominant supplier will make available to the public their interconnection agreements or a reference interconnection offer.

2.5 Interconnection: Differential Solution

Any service provider requesting interconnection with a dominant provider may request:

(a) at any time; or

(b) After a reasonable period of time that has been publicly disclosed that an independent national body resolves within a reasonable time the differences with respect to the terms, conditions and prices of interconnection, provided that they have not been established previously.

3. Universal service

Each Member has the right to define the type of universal service obligation it wishes to maintain. Such obligations shall not be deemed to be anti-competitive on the condition that they are administered in a transparent and non-discriminatory manner and with competition neutrality and are no more burdensome than necessary for the type of universal service defined by the Member.

4. Public availability of licensing criteria

When a license is required, they will be made available to the public:

(a) All licensing criteria and time limits normally required for a decision on a licence application; and

(b) the terms and conditions of the licences.

At the request of the interested party, the reasons for the denial of the license will be communicated.

5. Independence of the regulator

The regulator will be independent of any basic telecommunications service provider, and will not respond to it. The decisions of the regulator and the procedures applied will be impartial with respect to all market participants.

6. Allocation and utilization of scarce resources

Any procedure for the allocation and use of scarce resources, such as frequencies, numbers and rights of passage, will be implemented objectively, transparently and non-discriminatoryly. The current status of the assigned frequency bands will be made available to the public, but it is not necessary to identify in detail the frequencies assigned to specific official uses.

- No.

NOTE: The list of specific commitments of the Federal Republic of Brazil is not published because it is written in Portuguese. Unpublished documentation can be consulted at the Central Headquarters of this National Directorate (Suipacha 767 - Capital Federal).