RESTRICTED
WORLD TRADE S/FIN/W/12/Add.17
15September 1997
ORGANIZATION(97-3712)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM THE CZECH REPUBLIC
Initial Offer onFinancial Services
Addendum
Thefollowing communication iscirculated attherequest oftheCzech Republic toMembers
oftheCommittee onTrade inFinancial Services.
_______________
TheCzech Republic hereby submits itsinitial offer ofSpecific Commitments onFinancial
Services under theGeneral Agreement onTrade inServices.
Thisinitial offer reflects recent internal legislation changes inthefinancial services sector.
Iteliminates anumber ofrestrictions which haveexisted sofarandinthiswayfurther improves present
commitments.
Thisinitial offerisconditional. Inaccordance withtheSecond Decision onFinancial Services
of21July1995, theCzech Republic reserves therighttomodify orwithdraw allorpartofthespecific
commitments onfinancial services andtolistMFN exemptions, atanytimethrough 12December 1997.S/FIN/W/12/Add.17
Page2CZECH REPUBLIC
INITIAL OFFER -SPECIFIC COMMITMENTS ONFINANCIAL SERVICES
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
II. SECTOR-SPECIFIC COMMITMENTS
7. FINANCIAL SERVICES
Measures applicable toallsectors infinancial services:
1. Commitments inthisChapter arebased ontheAgreement onTrade inServices, theAnnex onFinancial Services andtheUnderstanding onCommitments in
Financial Services.
2. Notwithstanding note1.above, thepurchase andacquisition offinancial services bypublic entities oftheCzech Republic aregoverned inthisschedule by
Article XIIIoftheAgreement.
3. Commitments aresubject tothelimitations onmarket access andnational treatment inthe"allsector" section ofthisschedule andtothose relating tothe
subsectors listed below.
4. Themarket access commitments inrespect ofmodes (1)and(2)apply onlytothetransaction indicated inparagraphs B.3andB.4ofthemarket access section
oftheUnderstanding respectively.
5. Theadmission tothemarket ofnewfinancial services andinstruments maybesubject totheexistence of,andconsistency withthedomestic regulatory
framework aimed atachieving theobjectives indicated inArticle 2(a)oftheAnnex onFinancial Services.
6. Asageneral ruleandinanon-discriminatory manner, financial institutions incorporated intheCzech Republic must adopt aspecific legal form.S/FIN/W/12/Add.17
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Insurance andInsurance-Related
ServicesMonopoly rights asindicated inparagraph
B.1oftheUnderstanding: compulsory motor
third party liability insurance andcompulsory
airtransport insurance areisprovided byan
exclusive supplier. Compulsory health
insurance isprovided bylicensed nationally
owned suppliers only.
(a)Lifeinsurance
(CPC 81211)
(b)Non-life insurance
(CPC 8129)
(c)Reinsurance and
retrocession
(d)Services auxiliary to
insurance
(CPC 8140, excluding
pension funding: 81402,
81409)(1)None other than:
Commercial presence isrequired for
supply of:
-thelifeinsurance ofpersons with
permanent residence intheCzech
Republic,
-theinsurance ofproperty onthe
territory oftheCzech Republic,
-theinsurance ofliability forlossor
damage caused bytheactivity of
natural andlegal persons onthe
territory oftheCzech Republic.(1)None
(2)None other than:
Insurance services covered bymode (1)
above maynotbepurchased abroad.(2)NoneS/FIN/W/12/Add.17
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(3)None other than:
Authorization isrequired forprovision of
insurance services. Foreign nationals may
establish aninsurance company withthe
seatintheCzech Republic intheform ofa
joint stock company ormayconduct
insurance business through their
subsidiaries orbranches withregistered
office intheCzech Republic under the
general conditions established intheLaw
onInsurance. Insurance business means
insurance activity including brokerage and
reinsurance activity.(3)None
Intermediation activity aimed atthe
conclusion ofinsurance contract between
third party andinsurance company maybe
provided onlybynatural orlegal person
domiciled intheCzech Republic onbehalf
ofinsurance company having the
authorization oftheInsurance Supervisory
Authority.
Intermediation contract aimed atconclusion
ofinsurance contract bythird party with
insurance company maybeconcluded by
domestic orforeign insurance company
onlyonthebasis ofauthorization granted
bytheInsurance Supervisory Authority.
(4)Unbound except asindicated inhorizontal
section(4)Unbound except asindicated inhorizontal
sectionS/FIN/W/12/Add.17
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
B.Banking andOther Financial
Services
(a)Acceptance ofdeposits and
other repayable funds from
thepublic
(CPC 81115, 81116, 81119)(1)Unbound forservices described in
subsectors (g),(i)and(j)andfor:
-transferable securities (CPC 81321),
-other negotiable instruments and
financial assets (excl. bullion)
(2)Unbound forservices described in
subsector (i).(1)None
(2)None
(b)Lending ofalltypes
(CPC 8113)
(c)Financial leasing
(CPC 81120)
(d)Allpayments andmoney
transmission services, incl.
credit, charge anddebit
cards, travellers cheques and
bankers drafts(1),(2)None other than:
Deposit services areconfined todomestic
banks andbranches offoreign banks onthe
territory oftheCzech Republic.
Only domestic banks, branches orforeign
banks ontheterritory oftheCzech
Republic andpersons possessing aforeign
exchange license maytrade inforeign
exchange assets.S/FIN/W/12/Add.17
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(e)Guarantees andcommitments
(f)Trading forownaccount or
foraccount ofcustomers,
whether onanexchange, in
anover-the-counter market
orotherwise asfollows:
-money market
instruments (cheques,
bills, certificates of
deposits)
-foreign exchange
(CPC 81333)
-exchange rateand
interest rateinstruments,
incl. products such as
swaps, forward rate
agreements
-transferable securities
(CPC 81321)
-other negotiable
instruments andfinancial
assets (excl. bullion)Non-cash cross-border payments maybe
effected onlybydomestic banks and
branches offoreign banks having a
corresponding license .
Foreign exchange licence permit issued by
theCzech National Bank orMinistry of
Finance isrequired incaseofCzech non-
bank residents for:
(a)opening andfunding ofanaccount
abroad byaCzech non-bank resident,
(b)capital payments abroad (except FDI),
(c)obtaining financial credit from a
non-resident andgranting financial
credit andguarantees,
(d)export andimport oftheCzech
currency (applied alsotonon-
residents),
(d)operations infinancial derivates
(e)purchase offoreign securities, except
forthecases asdescribed bythe
Foreign Exchange Act,
(f)issuing allkinds ofsecurities
denominated inaforeign currency.
issue offoreign securities forpublic
andnon-public trade intheCzech
Republic ortheir introduction onthe
domestic market.S/FIN/W/12/Add.17
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(g)Participation inissues ofall
kinds ofsecurities, incl.
underwriting andplacement
asagent (whether publicly or
privately) andprovision of
services related tosuch
issues
(i)Asset management such as
cashorportfolio
management, allforms of
collective investment
management, pension fund
management, custodial,
depository andtrust services
(j)Settlement andclearing
services forfinancial assets,
excl. derivative products
(k)Provisions andtransfer of
financial information and
financial dataprocessing and
related software bysuppliers
ofother financial servicesForeign exchange assets ofCzech residents
arerequired tobedeposited withdomestic
banks orbranches offoreign banks onthe
territory oftheCzech banks.
(3)None other than:
Banking services maybeprovided onlyby
domestic banks orbranches offoreign
banks authorized bytheCzech National
Bank inagreement withtheMinistry of
Finance.
Thegranting oftheauthorization isbased
ontheconsideration ofcriteria relating, in
particular, tothecapital endowment,
professional qualifications, integrity and
competence ofthemanagement and
economic usefulness oftheprojected bank
activities. Thecriteria which areapplied
consistently withGATS. Mortgage loan
services maybeprovided onlybydomestic
banks.
Private Banks maybeestablished asjoint
stock companies only. Thepurchase of
shares ofexisting banks issubject toprior
approval oftheCzech National Bank.(3)NoneS/FIN/W/12/Add.17
Page8Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
(l)Advisory, intermediation and
other auxiliary financial
services onallactivities
listed insubparagraphs
above, incl. credit reference
andanalysis, investment and
portfolio research and
advice, advice onacquisition
andoncorporate
restructuring andstrategySecurities maybetraded publicly onlyif
relevant authorization hasbeen granted and
prospectus covering thesecurity hasbeen
approved bytheMinistry ofFinance.
Theauthorization mayshall notbegranted
ifpublic trading insecurities isinconflict
withtheinterests ofinvestors, is
inconsistent withthegovernment financial
policy orifitdoes notconform withthe
financial market requirements.
Thebusiness activities ofsecurities dealer,
stockbroker, stock exchange ororganizer
ofanover-the-counter market issubject to
authorization oftheMinistry ofFinance the
granting ofwhich isrelated tothefinancial
market requirements andqualifications,
personal integrity, management and
technical requirements.
Settlement andclearing services forall
kinds ofpayments aremonitored and
reviewed bytheCzech National Bank to
ensure their smooth andeconomical
operation.
(4)Unbound except asindicated inthe
horizontal section.(4)Unbound except asindicated inthe
horizontal section.