           UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES


      Participants in the Uruguay Round have been enabled to take on 
specific commitments with respect to Financial Services under the General 
Agreement on Trade in Services on the basis of an alternative approach to 
that covered by the provisions of Part III of the Agreement.  It was agreed 
that this approach could be applied subject to the following understanding:

      -    it does not conflict with the provisions of the Agreement;

      -    it does not prejudice the right of any Member to schedule its 
           specific commitments in accordance with the approach under Part 
           III of the Agreement;

      -    resulting specific commitments shall apply on a 
           most-favoured-nation basis;

      -    no presumption has been created as to the degree of 
           liberalization to which a Member is committing itself under the 
           Agreement.

      Interested Members, on the basis of negotiations, and subject to 
conditions and qualifications where specified, have inscribed in their 
schedule specific commitments conforming to the approach set out below.

Standstill

      Any conditions, limitations and qualifications to the commitments 
noted below shall be limited to existing non-conforming measures.

Market Access

      Monopoly Rights

1.    In addition to Article VIII of the Agreement, the following shall 
apply:

      Each Member shall list in its schedule pertaining to financial 
      services existing monopoly rights and shall endeavour to eliminate 
      them or reduce their scope.  Notwithstanding paragraph 1.2 of the 
      Annex on Financial Services, this paragraph applies to the activities 
      referred to in sub-paragraph 1.2.3 of the Annex.

      Financial Services purchased by Public Entities

2.    Notwithstanding Article XIII of the Agreement, each Member shall 
ensure that financial service suppliers of any other Member established in 
its territory are accorded most-favoured-nation treatment and national 
treatment as regards the purchase or acquisition of financial services by 
public entities of the Member in its territory.

      Cross-border Trade

3.    Each Member shall permit non-resident suppliers of financial services 
to supply, as a principal, through an intermediary or as an intermediary, 
and under terms and conditions that accord national treatment, the following 
services:

      (a)  insurance of risks relating to:

           (i)   maritime shipping and commercial aviation and space 
                 launching and freight (including satellites), with such 
                 insurance to cover any or all of the following:  the goods 
                 being transported, the vehicle transporting the goods and 
                 any liability arising therefrom;  and

           (ii)  goods in international transit;

      (b)  reinsurance and retrocession and the services auxiliary to 
           insurance as referred to in sub-paragraph 5.1(d) of the Annex;

      (c)  provision and transfer of financial information and financial 
           data processing as referred to in sub-paragraph 5.1(o) of the 
           Annex and advisory and other auxiliary services, excluding 
           intermediation, relating to banking and other financial services 
           as referred to in sub-paragraph 5.1(p) of the Annex.

4.    Each Member shall permit its residents to purchase in the territory of 
any other Member the financial services indicated in:

      (a)  sub-paragraph 3(a);

      (b)  sub-paragraph 3(b);  and

      (c)  sub-paragraphs 5.1(e) to (p) of the Annex.

      Commercial Presence

5.    Each Member shall grant financial service suppliers of any other 
Member the right to establish or expand within its territory, including 
through the acquisition of existing enterprises, a commercial presence.

6.    A Member may impose terms, conditions and procedures for authorization 
of the establishment and expansion of a commercial presence in so far as 
they do not circumvent the Member's obligation under paragraph 5 and they 
are consistent with the other obligations of this Agreement.

      New Financial Services

7.    A Member shall permit financial service suppliers of any other Member 
established in its territory to offer in its territory any new financial 
service.
      
      Transfers of Information and Processing of Information

8.    No Member shall take measures that prevent transfers of information or 
the processing of financial information, including transfers of data by 
electronic means, or that, subject to importation rules consistent with 
international agreements, prevent transfers of equipment, where such 
transfers of information, processing of financial information or transfers 
of equipment are necessary for the conduct of the ordinary business of a 
financial service supplier.  Nothing in this paragraph restricts the right 
of a Member to protect personal data, personal privacy and the 
confidentiality of individual records and accounts so long as such right is 
not used to circumvent the provisions of the Agreement.


      Temporary Entry of Personnel

9.    (a)  Each Member shall permit temporary entry into its territory of 
           the following personnel of a financial service supplier of any 
           other Member that is establishing or has established a commercial 
           presence in the territory of the Member:

           (i)   senior managerial personnel possessing proprietary 
                 information essential to the establishment, control and 
                 operation of the services of the financial service 
                 supplier;  and

           (ii)  specialists in the operation of the financial service 
                 supplier.

      (b)  Each Member shall permit, subject to the availability of 
           qualified personnel in its territory, temporary entry into its 
           territory of the following personnel associated with a commercial 
           presence of a financial service supplier of any other Member:

           (i)   specialists in computer services, telecommunication 
                 services and accounts of the financial service supplier;  
                 and

           (ii)  actuarial and legal specialists.

      Non-discriminatory Measures

10.   Each Member shall endeavour to remove or to limit any significant 
adverse effects on financial service suppliers of any other Member of:

      (a)  non-discriminatory measures that prevent financial service 
           suppliers from offering in the Member's territory, in the form 
           determined by the Member, all the financial services permitted by 
           the Member;

      (b)  non-discriminatory measures that limit the expansion of the 
           activities of financial service suppliers into the entire 
           territory of the Member;

      (c)  measures of a Member, when such a Member applies the same 
           measures to the supply of both banking and securities services, 
           and a financial service supplier of any other Member concentrates 
           its activities in the provision of securities services;  and

      (d)  other measures that, although respecting the provisions of this 
           Agreement, affect adversely the ability of financial service 
           suppliers of any other Member to operate, compete or enter the 
           Member's market;

      provided that any action taken under this paragraph would not unfairly 
      discriminate against financial service suppliers of the  Member taking 
      such action.

11.   With respect to the non-discriminatory measures referred to in 
sub-paragraphs 10(a) and (b), a Member shall endeavour not to limit or 
restrict the present degree of market opportunities nor the benefits already 
enjoyed by financial service suppliers of all other  Members as a class in 
the territory of the Member, provided that this commitment does not result 
in unfair discrimination against financial service suppliers of the Member 
applying such measures.



National Treatment

1.    Under terms and conditions that accord national treatment, each Member 
shall grant to financial service suppliers of any other Member established 
in its territory access to payment and clearing systems operated by public 
entities, and to official funding and refinancing facilities available in 
the normal course of ordinary business.  This paragraph is not intended to 
confer access to the Member's lender of last resort facilities.

2.    When membership or participation in, or access to, any self-regulatory 
body, securities or futures exchange or market, clearing agency, or any 
other organization or association, is required by a Member in order for 
financial service suppliers of any other Member to supply financial services 
on an equal basis with financial service suppliers of the Member, or when 
the Member provides directly or indirectly such entities, privileges or 
advantages in supplying financial services, the Member shall ensure that 
such entities accord national treatment to financial service suppliers of 
any other Member resident in the territory of the Member.

Definitions

      For the purposes of this approach:

1.    A non-resident supplier of financial services is a financial service 
supplier of a Member which supplies a financial service into the territory 
of another Member from an establishment located in the territory of another 
Member, regardless of whether such a financial service supplier has or has 
not a commercial presence in the territory of the Member in which the 
financial service is supplied.

2.    "Commercial presence" means an enterprise within a Member's territory 
for the supply of financial services and includes wholly- or partly-owned 
subsidiaries, joint ventures, partnerships, sole proprietorships, 
franchising operations, branches, agencies, representative offices or other 
organizations.

3.    A new financial service is a service of a financial nature, including 
services related to existing and new products or the manner in which a 
product is delivered, that is not supplied by any financial service supplier 
in the territory of a particular Member but which is supplied in the 
territory of another Member.
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