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This consolidation is for information purposes only, and should not be relied upon as authoritative.  For authoritative texts, please refer to the CUSMA and the Protocol of Amendment.

Canada-United States-Mexico Agreement (CUSMA) - Chapter 17 - Financial Services

Article 17.1: Definitions

For the purposes of this Chapter:

computing facility means a computer server or storage device for the processing or storage of information for the conduct of business within the scope of the license, authorization, or registration of a covered person, but does not include a computer server or storage device of or those used to access:

covered person means

cross-border financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of the Party and that seeks to supply or supplies a financial service through the cross-border supply of that service;

cross-border trade in financial services or cross-border supply of financial services means the supply of a financial service:

but does not include the supply of a financial service in the territory of a Party by a covered investment;

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

financial institution of another Party means a financial institution, including a branch, located in the territory of a Party that is controlled by a person of another Party;

financial market infrastructure means a multi-participant system in which a covered person participates with other financial service suppliers, including the operator of the system, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions;

financial service means a service of a financial nature. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance), as well as services incidental or auxiliary to a service of a financial nature. Financial services include the following activities:

Insurance and insurance-related services

Banking and other financial services (excluding insurance)

financial service supplier of a Party means a person of a Party that is engaged in the business of supplying a financial service within the territory of that Party;

investment means “investment” as defined in Article 14.1 (Definitions), except that with respect to “loans” and “debt instruments” referred to in that Article:

for greater certainty, a loan granted, or debt instrument owned, by a cross-border financial service supplier, other than a loan to or debt instrument issued by a financial institution, is an investment for the purposes of Chapter 14 (Investment), if that loan or debt instrument meets the criteria for investments set out in Article 14.1 (Definitions);

investor of a Party means a Party, or a person of a Party, that attempts to make,Footnote 2 is making, or has made an investment in the territory of another Party;

new financial service means a financial service not supplied in the Party’s territory that is supplied within the territory of another Party, and includes any new form of delivery of a financial service or the sale of a financial product that is not sold in the Party’s territory;

person of a Party means “person of a Party” as defined in Article 1.5 (General Definitions) and, for greater certainty, does not include a branch of an enterprise of a non-Party;

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

self-regulatory organization means a non-governmental body, including a securities or futures exchange or market, clearing agency, or other organization or association, that exercises regulatory or supervisory authority over financial service suppliers or financial institutions by statute or delegation from a central or regional government.

Article 17.2: Scope

1. This Chapter applies to a measure adopted or maintained by a Party relating to:

2. Chapter 14 (Investment) and Chapter 15 (Cross-Border Trade in Services) apply to a measure described in paragraph 1 only to the extent that those Chapters are incorporated into this Chapter.

3. This Chapter does not apply to a measure adopted or maintained by a Party relating to:

except that this Chapter applies to the extent that a Party allows an activity or service referred to in subparagraph (a) or (b) to be conducted by its financial institutions in competition with a public entity or a financial institution.

4. This Chapter does not apply to government procurement of financial services.

5. This Chapter does not apply to a subsidy or a grant provided by a Party, including a government supported loan, guarantee, and insurance, with respect to the cross-border supply of financial services by a cross-border supplier of another Party.

Article 17.3: National Treatment

1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords to its own investors, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions, and investments in financial institutions in its territory.

2. Each Party shall accord to financial institutions of another Party, and to investments of investors of another Party in financial institutions, treatment no less favorable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.

3. Each Party shall accord to:

treatment no less favorable than that it accords to its own financial services and financial service suppliers, in like circumstances.

4. Subparagraph 3(b) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party’s territory. A Party may define “doing business” and “solicitation” in its law for the purposes of this paragraph.

5. The treatment to be accorded by a Party under paragraphs 1, 2, and 3 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to financial institutions of the Party, investors of the Party, and investments of those investors, in financial institutions; or financial services or financial service suppliers, of the Party.

6. For greater certainty, whether treatment is accorded in “like circumstances” under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.

Article 17.4: Most-Favored-Nation Treatment

1. Each Party shall accord to:

2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to financial institutions of another Party or a non-Party; investors of another Party or a non-Party, and investments of those investors, in financial institutions; or financial services or cross-border financial service suppliers of another Party or non-Party.

3. For greater certainty, whether treatment is accorded in “like circumstances” under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.

Article 17.5: Market Access

1. No Party shall adopt or maintain with respect to:

2. Subparagraph 1(c) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party’s territory. A Party may define “doing business” and “solicitation” in its law for the purposes of this paragraph.

3. No Party shall require a cross-border financial service supplier of another Party to establish or maintain a representative office or an enterprise, or to be resident, in its territory as a condition for the cross-border supply of a financial service, with respect to the financial services referred to in Article 17.6 (Cross-Border Trade Standstill) and the financial services as specified by the Party in Annex 17-A (Cross-Border Trade).

4. For greater certainty, a Party may require the registration or authorization of a cross-border financial service supplier of another Party or of a financial instrument.

Article 17.6: Cross-Border Trade Standstill

No Party shall adopt a measure restricting any type of cross-border trade in financial services by cross-border financial service suppliers of another Party that the Party permitted on January 1, 1994, or that is inconsistent with Article 17.3.3 (National Treatment), with respect to the supply of those services.

Article 17.7: New Financial ServicesFootnote 4

Each Party shall permit a financial institution of another Party to supply a new financial service that the Party would permit its own financial institutions, in like circumstances, to supply without adopting a law or modifying an existing law.Footnote 5 Notwithstanding Article 17.5.1(a) and(e) (Market Access), a Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorization for the supply of the service. If a Party requires a financial institution to obtain authorization to supply a new financial service, the Party shall decide within a reasonable period of time whether to issue the authorization and may refuse the authorization only for prudential reasons.

Article 17.8: Treatment of Customer Information

This Chapter does not require a Party to disclose information related to the financial affairs or accounts of individual customers of financial institutions or cross-border financial service suppliers.

Article 17.9: Senior Management and Boards of Directors

1. No Party shall require a financial institution of another Party to engage a natural person of a particular nationality as senior managerial or other essential personnel.

2. No Party shall 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 17.10: Non-Conforming Measures

1. Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5 (Market Access), and Article 17.9 (Senior Management and Boards of Directors) do not apply to:

2. Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5 (Market Access), Article 17.6 (Cross-Border Trade Standstill), and Article 17.9 (Senior Management and Boards of Directors) do not apply to a measure that a Party adopts or maintains with respect to a sector, subsector, or an activity, as set out by that Party in Section B of its Schedule to Annex III.

3. A non-conforming measure, set out in a Party’s Schedule to Annex I or II as not subject to Article 14.4 (National Treatment), Article 14.5 (Most-Favored-Nation Treatment), Article 14.11 (Senior Management and Boards of Directors), Article 15.3 (National Treatment) or Article 15.4 (Most-Favored-Nation Treatment), shall be treated as a non-conforming measure not subject to Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment) or Article 17.9 (Senior Management and Boards of Directors), as the case may be, to the extent that the measure, sector, subsector or activity set out in the Party’s schedule to Annex I or II is covered by this Chapter.

4.

Article 17.11: Exceptions

1. Notwithstanding the other provisions of this Agreement except for Chapter 2 (National Treatment and Market Access for Goods), Chapter 3 (Agriculture), Chapter 4(Rules of Origin), Chapter 5 (Origin Procedures), Chapter 6 (Textiles and Apparel), Chapter 7 (Customs Administration and Trade Facilitation), Chapter 9 (Sanitary and Phytosanitary Measures), Chapter 10 (Trade Remedies), and Chapter 11 (Technical Barriers to Trade), a Party is not prevented from adopting or maintaining a measure for prudential reasons,Footnote 6 including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service supplier, or to ensure the integrity and stability of the financial system. If the measure does not conform with the provisions of this Agreement to which this exception applies, the measure must not be used as a means of avoiding the Party’s commitments or obligations under those provisions.

2. Nothing in this Chapter, Chapter 14 (Investment), Chapter 15 (Cross- Border Trade in Services), Chapter 18 (Telecommunications) including specifically Article 18.26 (Relation to Other Chapters), or Chapter 19 (Digital Trade), applies to a non-discriminatory measure of general application taken by a public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph does not affect a Party’s obligations under Article 14.10 (Performance Requirements) with respect to a measure covered by Chapter 14 (Investment), under Article 14.9 (Transfers) or Article 15.12 (Cross Border Trade in Services, Payments and Transfers).

3. Notwithstanding Article 14.9 (Transfers) and Article 15.12 (Payments and Transfers), as incorporated into this Chapter, a Party may prevent or limit a transfer by a financial institution or a cross-border financial service supplier to, or for the benefit of, an affiliate of or person related to that institution or supplier, through the equitable, non-discriminatory and good faith application of a measure relating to maintenance of the safety, soundness, integrity, or financial responsibility of financial institutions or cross-border financial service suppliers. This paragraph does not prejudice any other provision of this Agreement that permits a Party to restrict transfers.

4. For greater certainty, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining a measure necessary to secure compliance with laws or regulations that are not inconsistent with this Chapter, including those relating to the prevention of deceptive and fraudulent practices or to deal with the effects of a default on financial services contracts, subject to the requirement that the measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties or between Parties and non-Parties where like conditions prevail, or a disguised restriction on investment in financial institutions or cross-border trade in financial services as covered by this Chapter.

Article 17.12: Recognition

1. A Party may recognize prudential measures of another Party or a non-Party in the application of a measure covered by this Chapter. That recognition may be:

2. A Party that accords recognition of prudential measures under paragraph 1 shall provide adequate opportunity to another Party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation and, if appropriate, procedures concerning the sharing of information between the relevant Parties.

3. If a Party accords recognition of prudential measures under paragraph 1(c) and the circumstances set out in paragraph 2 exist, that Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.

4. For greater certainty, nothing in Article 17.4 (Most-Favored-Nation Treatment) requires a Party to accord recognition to prudential measures of any other Party.

Article 17.13: Transparency and Administration of Certain Measures

1. Chapter 28 (Good Regulatory Practices) and Chapter 29 (Publication and Administration) do not apply to a measure relating to this Chapter.

2. Each Party shall ensure that all measures of general application to which this Chapter applies are administered in a reasonable, objective and impartial manner.

3. Each Party shall, to the extent practicable:

4. At the time that it adopts a final regulation, a Party should, to the extent practicable, address in writing the substantive comments received from interested persons and other Parties with respect to the proposed regulation. For greater certainty, a Party may address those comments collectively on an official government website.

5. To the extent practicable, each Party should allow a reasonable period of time between publication of a final regulation of general application and the date when it enters into effect.

6. Each Party shall establish or maintain appropriate mechanisms for responding to inquiries from interested persons and other Parties regarding measures of general application covered by this Chapter.

7. If a Party requires authorization for the supply of a financial service, it shall ensure that its financial regulatory authorities:

Article 17.14: Self-Regulatory Organizations

If a Party requires a financial institution or a cross-border financial service supplier of another Party to be a member of, participate in, or have access to, a self-regulatory organization in order to provide a financial service in or into its territory, it shall ensure that the self-regulatory organization observes the obligations contained in this Chapter.

Article 17.15: Payment and Clearing Systems

Under terms and conditions that accord national treatment, each Party shall grant financial institutions of another Party 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 Article does not confer or require access to the Party’s lender of last resort facilities.

Article 17.16: Expedited Availability of Insurance Services

The Parties recognize the importance of maintaining and developing regulatory procedures to expedite the offering of insurance services by licensed suppliers. These procedures may include: allowing introduction of products unless those products are disapproved within a reasonable period of time; not requiring product approval or authorization of insurance lines for insurance other than insurance sold to individuals or compulsory insurance; or not imposing limitations on the number or frequency of product introductions. If a Party maintains regulatory product approval procedures, that Party shall endeavor to maintain or improve those procedures, as appropriate, to expedite availability of insurance services by licensed suppliers.

Article 17.17: Transfer of Information

No Party shall prevent a covered person from transferring information, including personal information, into and out of the Party’s territory by electronic or other means when this activity is for the conduct of business within the scope of the license, authorization, or registration of that covered person. Nothing in this Article restricts the right of a Party to adopt or maintain measures to protect personal data, personal privacy and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent this Article.

Article 17.18: Location of Computing Facilities

1. The Parties recognize that immediate, direct, complete, and ongoing access by a Party’s financial regulatory authorities to information of covered persons, including information underlying the transactions and operations of such persons, is critical to financial regulation and supervision, and recognize the need to eliminate any potential limitations on that access.

2. No Party shall require a covered person to use or locate computing facilities in the Party’s territory as a condition for conducting business in that territory, so long as the Party’s financial regulatory authorities, for regulatory and supervisory purposes, have immediate, direct, complete, and ongoing access to information processed or stored on computing facilities that the covered person uses or locates outside the Party’s territory.Footnote 9

3. Each Party shall, to the extent practicable, provide a covered person with a reasonable opportunity to remediate a lack of access to information as described in paragraph 2 before the Party requires the covered person to use or locate computing facilities in the Party’s territory or the territory of another jurisdiction.Footnote 10

4. Nothing in this Article restricts the right of a Party to adopt or maintain measures to protect personal data, personal privacy and the confidentiality of individual records and accounts, provided that these measures are not used to circumvent the commitments or obligations of this Article.

Article 17.19: Committee on Financial Services

1. The Parties hereby establish a Committee on Financial Services (Financial Services Committee). The principal representative of each Party must be an official of the Party’s authority responsible for financial services set out in Annex 17-B (Authorities Responsible for Financial Services).

2. The Financial Services Committee shall supervise the implementation of this Chapter and its further elaboration, including by considering issues regarding financial services that are referred to it by a Party.

3. The Financial Services Committee shall meet as the Parties decide to assess the functioning of this Agreement as it applies to financial services. The Financial Services Committee shall inform the Commission of the results of any meeting. The Parties may invite, as appropriate, representatives of their domestic financial regulatory authorities to attend meetings of the Committee.

Article 17.20: Consultations

1. A Party may request, in writing, consultations with another Party regarding any matter arising under this Agreement that affects financial services. The other Party shall give sympathetic consideration to this request. The consulting Parties shall report the results of their consultations to the Financial Services Committee.

2. A Party may request information on an existing non-conforming measure of another Party as referred to in Article 17.10.1 (Non-Conforming Measures). Each Party’s financial authorities specified in Annex 17-B (Authorities Responsible for Financial Services) shall be the contact point to respond to those requests and to facilitate the exchange of information regarding the operation of measures covered by those requests.

3. For greater certainty, nothing in this Article shall be construed to require a Party to derogate from its law regarding sharing of information between financial regulatory authorities or the requirements of an agreement or arrangement between financial regulatory authorities of the Parties, or to require a financial regulatory authority to take any action that would interfere with specific regulatory, supervisory, administrative or enforcement matters.

Article 17.21: Dispute Settlement

1. Chapter 31 (Dispute Settlement) applies as modified by this Article to the settlement of disputes arising under this Chapter.

2. For disputes arising under this Chapter or a dispute in which a Party invokes Article 17.11 (Exceptions), when selecting panelists to compose a panel under Article 31.9 (Panel Composition), each disputing Party shall select panelists so that:

3. If a Party seeks to suspend benefits in the financial services sector, a panel that reconvenes to make a determination on the proposed suspension of benefits, in accordance with Article 31.19 (Non-Implementation – Suspension of Benefits), shall seek the views of financial services experts, as necessary.

4. Notwithstanding Article 31.19 (Non-Implementation – Suspension of Benefits), when a panel’s determination is that a Party’s measure is inconsistent with this Agreement and the measure affects:

ANNEX 17-A

CROSS-BORDER TRADE

CanadaFootnote 11

Insurance and Insurance-Related Services

1. Articles 17.3.3 (National Treatment) and 17.5.1 (Market Access) apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

Banking and Other Financial Services (excluding insurance)

2. Articles 17.3.3 (National Treatment) and 17.5.1 (Market Access) apply to the cross-border supply of or trade in financial services, as defined in subparagraphs (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

3. For the purposes of paragraph 3, in Canada:

Mexico

Insurance and insurance-related services

1. Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

Banking and other financial services (excluding insurance)

2. Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

3. For the purposes of paragraph 2(b) and 2(c), in Mexico a collective investment scheme means the “Managing Companies of Investment Funds (Sociedades Operadoras de Fondos de Inversión)” established under the Investment Funds Law (Ley de Fondos de Inversión). A financial institution organized in the territory of another Party will only be authorized to provide portfolio management services to a collective investment scheme located in Mexico if it provides the same services in the territory of the Party where it is established.

United States

Insurance and insurance-related services

1. Article 17.3.3 (National Treatment) and Article 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

Banking and other financial services (excluding insurance)

2. Article 17.3.3 (National Treatment) and 17.5.1 (Market Access) shall apply to the cross-border supply of or trade in financial services, as defined in subparagraph (a) of the definition of “cross-border supply of financial services” in Article 17.1 (Definitions), with respect to:

3. For the purposes of subparagraphs 2(c) and 2(d), for the United States, a collective investment scheme means an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940.Footnote 17

ANNEX 17-B

AUTHORITIES RESPONSIBLE FOR FINANCIAL SERVICES

The authorities for each Party responsible for financial services are:

ANNEX 17-C

MEXICO-UNITED STATES

INVESTMENT DISPUTES IN FINANCIAL SERVICES

1. Annex 14-D (Mexico-United States Investment Disputes) applies as modified by this Annex to the settlement of a qualifying investment dispute under this Chapter.

2. In the event that a disputing party considers that a qualifying investment dispute under this Chapter cannot be settled by consultation and negotiation:

3. If an investor of an Annex Party submits a claim to arbitration under Annex 14-D (Mexico-United States Investment Disputes) as modified by this Annex:

4. No claim shall be submitted to arbitration under Annex 14-D (Mexico-United States Investment Disputes) as modified by this Annex unless the conditions in Article 14.D.5.1 (Conditions and Limitations on Consent) of Annex 14-D (Mexico-United States Investment Disputes) are satisfied, except the relevant time period in subparagraph (b) is 18 months.

5. If an investor of an Annex Party submits a claim to arbitration under Annex 14-D (Mexico-United States Investment Disputes) as modified by this Annex, and the respondent invokes Article 17.11 (Exceptions) as a defense, the following provisions of this Article apply:

6. If a respondent asserts that the measure alleged to be a breach is within the scope of a non-conforming measure set out in the responding Party’s Schedule to Annex III, Article 10 of Annex 14-D (Mexico-United States Investment Disputes) shall apply to any request of the respondent for an interpretation of the Commission on the issue.

ANNEX 17-D

LOCATION OF COMPUTING FACILITIES

Article 17.18 (Location of Computing Facilities) does not apply to existing measures of Canada for one year after the entry into force of this Agreement.

Date Modified: