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Agreement establishing the Free Trade Area Between
the Caribbean Community and the Dominican Republic
ANNEX
II: AGREEMENT ON TRADE IN SERVICES
ARTICLE I - OBJECTIVE
The objective of this Agreement is to establish a framework
for the liberalisation of trade in services among the Parties consistent with
the General Agreement on Trade in Services (GATS) of the World Trade
Organisation (WTO). Such a framework will promote the interests of the
Parties, on the basis of mutual advantages and the achievement of a
global balance of rights and obligations among the Parties.
ARTICLE II - DEFINITION
For the purposes of the present Agreement:
(i) commercial presence: means any type of business
or professional establishment, including through the
constitution, acquisition or maintenance of a juridical
person, or creation or maintenance of a branch or a
representative office located in the territory of any of
the Parties, for the purpose of supplying a service;
(ii) juridical person of another Party: means any
juridical person:
(a) constituted or otherwise organised under the
law of that other Party, and is engaged in
substantive business operations in the territory
of that Party or the other Party; or
(b) in the case of the supply of a service through
commercial presence owned or controlled by:
(i) natural persons of that
Party; or
(ii) juridical persons of that other Party
identified under sub-paragraph (a);
(iii) natural person of another Party: means a national
of that other Party;
(iv) service consumer: means any person that receives
or uses a service;
(v) service of another Party: means a service
provided:
(a) from or in the territory of such Party; or
(b) by a service supplier of that other Party by
means of commercial presence or through the
presence of natural persons;
(vi) service supplier: means any person that supplies a
service;
(vii) services:
includes any service in any sector except
services supplied in the exercise of governmental authority;
(viii) services supplied in the exercise of governmental
authority: means any service which is supplied
neither on a commercial basis nor in competition with
one or more service suppliers;
(ix) speciality air services: means aerial mapping,
aerial surveying, aerial photography, forest fire
management, fire fighting, aerial advertising, glider
towing, parachute jumping, aerial construction, heli- logging, aerial
sightseeing, flight training, aerial
inspection and surveillance, and aerial spraying
services;
(x) supply of a service: includes the
production, distribution, marketing, sale and delivery of a service;
(xi) trade In services: means the supply of a service:
(a) from the territory of one Party into the territory
of the other Party;
(b) in the territory of one Party to the service
consumer of the other Party;
(c) by a service supplier of any Party, through
commercial presence in the territory of the
other Party; by a service supplier of one Party,
through the presence of natural persons of a
Party in the territory of the other Party.
Any other term not defined in paragraph 1 of this Article
shall have the meaning agreed to in the GATS and its Annexes.
ARTICLE III - SCOPE
This Agreement applies to measures by the Parties
affecting trade in services, including those relating to:
(i) the production, distribution, marketing, sale and
delivery of a service;
(ii) the purchase, use or payment of a service;
(iii) access to and use of, in connection with the supply of
a service, services which are required to be offered
to the public generally;
(iv) the presence, including the commercial presence of a
service supplier in the territory of another Party; and
(v) the provision of a bond or other form of financial
security, as a condition for the provision of a service.
2. This Agreement will not apply to:
(i) promotion and support measures provided by a Party
or a state enterprise, including government-supported loans, guarantees, Insurance, grants and
fiscal incentives provided by the Governments of the
Parties;
(ii) air services, including domestic and international air
transportation services, whether scheduled or non-scheduled, and related services in support of air
services, other than:
(a)
aircraft repair and maintenance services
during which an aircraft is withdrawn from service;
(b) specialty air services; and
(c) computerised reservation systems;
(iii) services or government functions such as, but not
limited to, the enforcement of laws, social welfare
services, income security or insurance, social security, public education, public training, health, and
child care.
3. Nothing in this Agreement shall be construed to:
(i) impose any obligation on a Party with respect to a
national of the other Party seeking access to its
employment market, or employed on a permanent
basis in its territory, or to confer any right on that
national with respect to that access or employment;
or,
(ii) impose any obligation nor confer any right to a Party,
with respect to government procurement by the other
Party, except for any provisions which may be agreed
to on Government Procurement.
4. For the purposes of this Agreement, "measures adopted by
the Parties" means any measure by a Party, whether in the form of a law,
regulation, rule, procedure, decision, administrative action, or any other
form taken by:
(i) central, regional, provincial, municipal or local
government and authorities; and
(ii) non-governmental bodies in the exercise of powers
delegated by government and authorities mentioned
in sub-paragraph (i) above.
5. In fulfilling its obligations and commitments under this
Agreement, each Party shall take such reasonable measures as may be
available to it to ensure its observance by regional and local governments
and authorities mentioned in paragraph 4 (a) above, and non-
governmental bodies within its territory.
6. The provisions of this Agreement will not apply to those
measures related to professional services, except as may be agreed to by
the Parties.
ARTICLE IV - MOST FAVOURED NATION TREATMENT
Each Party shall accord immediately and unconditionally to
services and service suppliers of the other Party treatment no less
favourable than that which it accords to like services and service suppliers
of any third country.
2. The provisions of this Agreement shall not be construed to
prevent any Party from conferring or according advantages to adjacent
countries in order to facilitate exchanges limited to contiguous frontier
zones of services that are both locally produced and consumed.
ARTICLE V - TRANSPARENCY
Each Party shall publish promptly and, except in emergency
situations, at the latest by the time of their entry into force, all relevant
measures of general application which pertain to/or affect the operation of
this Agreement. International agreements pertaining to or affecting trade
in services to which a Party is signatory shall also be published.
2. Where publication as referred to in paragraph 1 is not
feasible or practicable, the Parties shall make them otherwise publicly
available.
3. Each Party shall promptly and at least annually inform the
other Party of the introduction of any new or any changes to existing laws,
regulations or administrative guidelines which significantly affect trade in
services covered by this Agreement.
4. Each Party shall respond promptly to all requests by the
other Party for specific information on any of its measures of general
application or international agreements within the meaning of
paragraph 1.
5. For the purposes of complying with this Article, the Parties
shall utilise the enquiry points established under Article III:4 of the GATS.
ARTICLE VI - DISCLOSURE OF CONFIDENTIAL INFORMATION
Nothing in this Agreement shall require any Party
to provide
confidential information, the disclosure of which would impede law
enforcement or otherwise be contrary to the public interest, or which
would prejudice Iegitimate commercial interests of particular enterprises,
public or private.
ARTICLE VII - LICENSING AND CERTIFICATION
With a view to ensuring that any measure adopted or
maintained by a Party relating to domestic regulation of services sectors within the context of Article VI of the GATS or the licensing or certification
of nationals of the other Party does not constitute an unnecessary barrier
to trade, each Party shall endeavour to ensure that any such measure:
(i) is based on objective and transparent criteria, such
as competence and the ability to supply a service;
(ii) is not more burdensome than necessary to ensure
the quality of a service; and
(iii) does not constitute a disguised restriction on the
supply of a service.
ARTICLE VIII - GENERAL EXCEPTIONS
Notwithstanding the provisions of this Agreement, the
Parties may adopt or enforce measures:
(i) necessary to protect public morals or to maintain
public order;
(ii) necessary to Protect human life, animal or plant life
or health, and to preserve the environment;
(iii) necessary to protect essential security interests;
(iv) necessary to secure compliance with laws or
regulations which are not inconsistent with the
provisions of this Agreement including those relating
to:
(a) the prevention of deception and fraudulent
practices or to deal with the effects of a default
on services contracts by natural or juridical
persons of any of the Parties;
(b) the protection of the privacy of individuals in
relation to the processing and dissemination of
personal data and the protection of
confidentiality of individual records and
accounts; or
(c) safety;
(v) necessary to protect national artistic, historical or
archeological treasures:
(vi) for prudential reasons, such as to:
(a) protect investors, depositors, financial market
participants, policy holders, policy claimants
or persons to whom a fiduciary duty is owed
by a financial institution; and
(b) maintain the safety, soundness, integrity or
financial responsibility of financial institutions;
(vii) inconsistent with the provisions of the Attachment
mentioned in Article XII, provided that the difference
in treatment is aimed at ensuring the equitable or
effective imposition or collection of direct taxes in
respect of services or service suppliers of the other
Party; and
(viii) inconsistent with Article IV, provided that the
difference in treatment is the result of an agreement
on the avoidance of double taxation or provisions on
the avoidance of double taxation in any other
international agreement or arrangement by which the
Party is bound.
2. Such measures can be applied subject to the requirement
that they do not constitute a means of arbitrary or unjustifiable
discrimination between countries where like conditions prevail, or a
disguised restriction on trade in services.
ARTICLE IX - RESTRICTIONS TO SAFEGUARD
THE BALANCE OF PAYMENTS
In the event of serious balance of payments and external
financial difficulties or threat thereof, a Party may adopt or maintain
restrictions on trade in services with respect to the measures covered by
the provisions in Articles IV, X and XIII and paragraph 1 of Article XIV,
including payment or transfers for transactions related to sectors covered by
such measures. It is recognised that particular pressures on the balance of
payments of a Party in the process of economic development or economic
transition may necessitate the use of restrictions to ensure, inter alia,
the maintenance of a level of financial reserves adequate for the implementation
or its programme of economic development or economic transition.
2. The restrictions referred to in
paragraph 1:
(i) shall not discriminate among the
Parties;
(ii) shall be consistent with the
Articles of Agreement of the International Monetary Fund (IMF);
(iii) shall avoid unnecessary damage
to the commercial, economic and financial interests of the other Party;
(iv) shall not exceed those necessary
to deal with the circumstances described in paragraph 1; and
(v) shall be temporary and be phased
out progressively as the situation specified in paragraph 1 improves.
3. In determining the incidence of such
restrictions, the Parties may give priority to the supply of services which
are more essential to their economic or development programmes. However, such
restrictions shall not be adopted or maintained for the purpose of protecting
a particular service sector.
4. Any restrictions adopted or
maintained under paragraph 1, or any changes therein, shall be promptly
notified to the other Party.
5.
(i) A Party applying the provisions of
this Article shall consult promptly on the restrictions adopted under this
Article.
(ii) The Committee on Trade in Services
shall establish
procedures for periodic consultations with the
objective of enabling such recommendations to be
made to the other Party as it may deem appropriate.
(iii) Such consultations shall assess the balance-of-
payments situation of the Party concerned and the
restrictions adopted or maintained under this Article, taking into account, inter
alia, such factors as:
(a) the nature and extent of the balance-of-payments and the external financial difficulties;
(b) the external economic and trading
environment of the consulting Party; and,
(c) alternative corrective measures which may be
available.
(iv) The consultations shall address the compliance of
any restrictions with paragraph 2, in particular the
progressive phase-out of restrictions in accordance
with paragraph 2 (v); and,
(v) In such consultations, all statistical findings and other
facts presented by the IMF relating to foreign
exchange, monetary reserves and balance of
payments, shall be accepted and conclusions shall
be based on the assessment by the IMF of the
balance of payments and the external financial
situation of the consulting Party.
ARTICLE X - LOCAL PRESENCE
No Party may require a service supplier of the
other Party to establish or maintain a representative office of any form of
enterprise, or to be resident, in its territory as a condition for the provision
of a service.
ARTICLE XI - NON-DISCRIMINATORY QUANTITATIVE
RESTRICTIONS
No later than six (6) months after the date of
entry into force of this Agreement, each Party shall set out in Appendix to this
Agreement, a list of existing non-discriminatory quantitative restrictions.
2. The Parties shall periodically, but
in any event at least every two (2) years, endeavour to negotiate the
liberalisation or removal of:
(i) existing non-discriminatory
quantitative restrictions maintained by each Party, as listed pursuant to
paragraph 1; and
(ii) new non-discriminatory
quantitative restrictions that the Parties adopted after the entry into
force of this Agreement.
3. Each Party shall notify the other
Party of any new non-discriminatory quantitative restriction that it adopts
after the date of entry into force of this Agreement.
ARTICLE XII - MARKET ACCESS
The terms on which each Party will grant market
access to service providers of the other Party shall be set out in an Attachment
to this Agreement.
ARTICLE XIII - NATIONAL TREATMENT
With respect to services covered by this
Agreement, the Parties will grant each other national treatment subject to the
terms and conditions in the Attachment provided for in Article XII.
ARTICLE XIV - NON-CONFORMING MEASURES
After the date of entry into force this
Agreement, no Party shall increase the level of non-conformity of its existing
measures with respect to the provisions of Articles IV, X and XIII. Any new
measures and reform to existing measures shall not decrease the degree of
conformity of the measure with respect to its level immediately before its
introduction or reform.
2. Articles IV, X and XIII do not apply
to any existing non-conforming measure maintained by a Party as set out in an
Appendix to this Agreement no later than six (6) months after the date of
entry into force of this Agreement.
3. The LDCs shall list existing
non-conforming measures within one (1) year of the entry into force of this
Agreement.
ARTICLE XV - DENIAL OF BENEFITS
A Party may deny the benefits of this Agreement to a
service provider of the other Party, with prior notification and consultation,
where the first Party establishes that the service is being provided by an
enterprise that is owned by persons of a third country and that conducts
no substantial business activities in the territory of the second Party.
2. Such notification shall also be made to the Committee on
Trade in Services. The resulting consultations shall be conducted within
the Committee and shall be concluded within fourteen (14) days of the
notification.
3. In the event that the consultations do not result in an
agreement acceptable to the Parties, the benefits may be denied
provisionally and the affected Party may seek to resolve the matter in
accordance with the provisions of Article XV of the Agreement
establishing the Free Trade Area between the Caribbean Community and
the Dominican Republic (Agreement on Free Trade).
ARTICLE XVI - MONOPOLY AND EXCLUSIVE SERVICE SUPPLIERS
Each Party shall ensure that any monopoly supplier of a
service in its territory does not in the supply of the monopoly service in the
relevant market act in a manner inconsistent with that Party's obligations
under Articles IV, X and XIII.
2. Where a Party's monopoly supplier competes, either directly
or through an affiliated company, in the supply of a service outside the
scope of its monopoly rights and which is related to those sectors covered
under this Agreement, the Party shall ensure that such a supplier does
not abuse its monopoly position to act in its territory in a manner
inconsistent with such commitments.
3. The Committee on Trade in Services
may, at the request of a Party which has a reason to believe that a monopoly
supplier of a service of the other Party is acting in a manner inconsistent
with the provisions on paragraphs 1 or 2, request the Party establishing,
maintaining or authorising such supplier to provide specific information
concerning the relevant operations.
4. The provisions of this Article shall
also apply to cases of exclusive service suppliers where a Party formally or
in effect:
(i) authorises or establishes a small
number of service suppliers; and
(ii) substantially prevents
competition among those suppliers in its territory.
ARTICLE XVII - ANTI-COMPETITIVE BUSINESS
PRACTICES
The Parties recognise that certain business
practices of service suppliers other than those falling under Article XVI, may
restrain competition and thereby restrict trade in services.
2. With respect to these business
practices, in particular those anti-competitive business practices that may
unfavourably affect competition and/or trade between and within Parties, the
Parties shall apply the provisions on competition policy that may be in force
or enter into force at the national level after the entry into force of this
Agreement, as well as provisions that may be established in international
agreements on competition policy.
3. Either Party shall, at the request of
the other Party, enter into consultations with a view to eliminating practices
referred to in paragraph 1. The Party addressed shall accord full and
sympathetic consideration to such a request and shall cooperate through the
supply of publicly available information on the application of domestic law
relating to the matter in question.
ARTICLE XVIII - FUTURE LIBERALISATION
The Parties shall deepen the degree of liberalisation
reached for trade in services, through future negotiations to be convened
by the Council, with a view to eliminating any remaining restrictions set
out in the Appendices, pursuant to Article XI and paragraph 2 of
Article XIV.
ARTICLE XIX - DISPUTE SETTLEMENT
Any dispute that may arise under this Agreement shall be
resolved pursuant to Article XV of the Agreement on Free Trade.
ARTICLE XX - RELATIONSHIP WITH THE GENERAL AGREEMENT
ON TRADE IN SERVICES (GATS)
Regarding matters not covered in this Agreement, the
Parties agree to apply between themselves the provisions contained in
the GATS.
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