RESTRICTED
WORLD TRADE S/FIN/W/12/Add.34
25November 1997
ORGANIZATION(97-5253)
Original: Spanish Committee onTrade inFinancial Services
COMMUNICATION FROM CHILE
Conditional Offer onFinancial Services
Addendum
Thefollowing communication iscirculated attherequest ofChile toMembers oftheCommittee
onTrade inFinancial Services.
_______________
Chile attaches hereto itsconditional offerinconnection withthecurrent negotiations ontrade
infinancial services. Thisofferisintended tomake asubstantive contribution towards thesuccessful
outcome ofthenegotiations inthissector andtopromote thegradual liberalization oftradeinfinancial
services.
Thisconditional offeristheresult ofthebilateral negotiations heldbyChile sofarandclarifies
aspects included intheSchedule ofCommitments contained indocument GATS/SC/18/Suppl.1.
During thecurrent negotiations, Chile hasnoted thatthere aredifferences ofinterpretation
concerning thedefinitions andscope oftheGATS, theAnnex onFinancial Services anditsrelationship
tocommitments onmarket access andnational treatment. These hadalready beenraised byChile
inJune(S/FIN/M/14). Unfortunately, ithasnotbeenpossible toreach acommon understanding on
these andother issues, andtheGovernment ofChile hastherefore deemed itnecessary toclarify the
context andscope ofthemarket access andnational treatment commitments relating totradeinfinancial
services which itwould beprepared toassume.
Itshould benoted inthisconnection thatthisofferisnotbound, thatistosay,nocommitments
areassumed inrespect ofmeasures adopted bytheCentral Bank ofChile forthepurpose ofensuring
thestability ofthecurrency. Suchmeasures include interaliarestrictions orlimitations ontransfers
toorfrom Chile, forexample therequirement thatdeposits, investment orcredits coming from or
going toaforeign country besubject toareserve requirement.
Thisoffer isconditional upon theterms oftheoffers made byother participants inthese
negotiations andtheextent towhich they fully respect themost-favoured-nation clause and
non-discrimination principles. Itisalsoconditional uponacceptance bytheotherMembers oftheWTO
oftherequests made byChile inthebilateral negotiations.
Chile reserves theright tomaintain, modify orreduce thisconditional offer atanytimein
accordance withtheconditions mentioned. Italsoreserves theright tointroduce thetechnical
modifications which itdeems relevant atanytime.S/FIN/W/12/Add.34
Page2CHILE
CONDITIONAL OFFER OFSPECIFIC COMMITMENTS
Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Financial services sector:
1. TheChilean financial services sector ispartially compartmentalized, thatistosaytheinstitutions, domestic andforeign, authorized tooperate
asbanks maynotencroach ontheinsurance andsecurities business andviceversa. However, subject toauthorization from theBanking and
Financial Institutions Supervision Department, domestic andforeign banks operating inChile maysetupsubsidiaries, withtheirowncapital,
tosupply other financial services inaddition totheirmain lineofbusiness. Themain business ofbanks isaccepting orreceiving money
from thepublic onaregular basis andgranting money credits represented bysecurities ornegotiable instruments oranyother credit
instrument.
FINANCIAL SERVICES (1),(2),(3)and(4)Unbound inrespect of
measures adopted ortobeadopted
bytheCentral Bank ofChile under
itsconstitutive laworother
legislation inorder toensure the
stability ofthecurrency andthe
normal operation ofdomestic and
foreign payments. Forthispurpose
theBank isempowered toregulate
thesupply ofmoney andcredit,
international credit andexchange
operations, andtoissue regulations
governing money, credit, finance
andinternational exchange.S/FIN/W/12/Add.34
Page3Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(3) Inaddition tothehorizontal
measures inSection IofChile's
Schedule ofCommitments which
affect allsectors, asupplier of
financial services operating through
acommercial presence maybe
subject toevidence ofeconomic
need. Thatis,hemust obtain prior
authorization tostartup,suspend or
terminate operations from the
Banking andFinancial Institutions
Supervision Department, inthecase
ofbanking services, orfrom the
Securities andInsurance Supervision
Department, inthecaseofsecurities
andinsurance services.(3) Foreign investors whoparticipate
inthefinancial services sector
maytransfer theircapital abroad
two(2)years afterbringing itin.
Authorization tosupply financial
services through acommercial
presence willbegiven insofaras
theapplicant undertakes toensure
theproper functioning, integrity and
stability ofthemarket, fulfils the
requirements ofthelawandserves
thenational interest.
Inaddition, there maybenon-
discriminatory restrictions or
provisions regarding thetypeof
commercial presence thatmust be
adopted byfirms operating inthe
securities orinsurance sectors in
Chile.S/FIN/W/12/Add.34
Page4Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(a) Banking services:
Acceptance of
deposits (includes
onlycurrent bank
accounts, sight
acceptances, term
acceptances, savings
accounts, financial
instruments with
repurchase
undertaking, and
deposits forissue of
bankguarantee
vouchers)(1) Unbound
(2) Unbound
(3) Foreign banking institutions must be
companies legally constituted intheir
country oforigin andmust putupthe
capital required byChilean law.(1) Unbound
(2) Unbound
(3) NoneS/FIN/W/12/Add.34
Page5Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Credit granting
(includes onlycurrent
loans, loans inletters
ofcredit, endorsable
mortgage loans,
purchase offinancial
instruments with
resale undertaking,
credit forissue of
bankguarantee
vouchers orother
types offinancing,
issue andnegotiation
ofletters ofcredit for
imports andexports,
issue and
confirmation of
stand-by letters of
credit)Foreign banking institutions mayonly
operate:
(i) Through shareholdings in
Chilean banks established as
corporations;
(ii) bybecoming established asa
corporation inChile;
(iii) asbranches offoreign
corporations, inwhich casethe
legalpersonality inthecountry
oforigin isrecognized. Forthe
purposes offoreign bankbranch
operations inChile, thecapital
effectively invested inChile is
considered, andnotthatofthe
parent house.
Prior authorization from theBanking
andFinancial Institutions Supervision
Department isrequired forthe
modification ortransformation ofthe
typeofcommercial presence ofa
foreign bankoperating inChile.S/FIN/W/12/Add.34
Page6Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Purchase ofpublicly-
offered securities
(includes onlypurchase
ofbonds andpurchase
ofletters ofcredit,
subscription and
placement asagents,
underwriting)
Issue andoperation of
credit cards (81133)
(only includes credit
cards issued inChile)
Discounting or
acquisition ofbillsof
exchange and
promissory notesNonational orforeign natural orlegal
person mayacquire directly orthrough
thirdparties shares inabankwhich,
alone oradded totheshares sucha
person already possesses, represent
more than10percentofthebank's
capital without having firstobtained the
authorization oftheBanking and
Financial Institutions Supervision
Department. Inaddition, thepartners
orshareholders ofafinancial institution
maynottransfer apercentage ofrights
orshares inthecompany inexcess of
10percentwithout having obtained
authorization from theSupervision
Department.
(4)Unbound, except asindicated inthe
horizontal section.(4)Unbound, except asindicated inthe
horizontal section.
Endorsement and
guarantee ofthirdparty
liabilities inChilean
currency
Securities custodyS/FIN/W/12/Add.34
Page7Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Complementary banking
services
Financial leasing
(81120)
(these companies may
offer leasing contracts
forgoods acquired at
theclient'srequest, i.e.
theycannot acquire
goods inorder tostock
them andoffer them
forleasing)(1)Unbound
(2)Unbound
(3)Inaddition totheconditions specified
above, onlydomestic andforeign
banking enterprises established inChile
canprovide financial leasing services.
Inorder tosupply financial leasing
services, theymust establish
subsidiaries withtheirownseparate
legalpersonality, theirowncapital and
exclusive lineofbusiness, subject to
prior authorization from theBanking
andFinancial Institutions Supervision
Department.(1)Unbound
(2)Unbound
(3)None
Financial leasing services areregarded
ascomplementary banking services and,
consequently, theBanking andFinancial
Institutions Supervision Department is
empowered toextend orrestrict the
operation ofthefinancial leasing
services which theinstitutions may
offer, andthelatter mayonlyoffer the
services expressly authorized bythe
Supervision Department.
(4)Unbound, except asindicated inthe
horizontal section.(4)Unbound, except asindicated inthe
horizontal section.S/FIN/W/12/Add.34
Page8Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Advisory andother
auxiliary financial
services
(8133)
(includes onlyservices
indicated inthe
banking sector inthis
schedule)(1)Unbound
(2)Unbound
(3)Inaddition totheconditions specified
above, inChile advisory andother
auxiliary financial services areregarded
ascomplementary totheservices which
theestablished banks canprovide.
Consequently, domestic andforeign
banks must setupsubsidiaries with
theirowncapital inorder tobeableto
provide these services andmust obtain
theappropriate authorization from the
Banking andFinancial Institutions
Supervision Department.
(4)Unbound, except asindicated inthe
horizontal section.(1)Unbound
(2)Unbound
(3)None
(4)Unbound, except asindicated inthe
horizontal section.S/FIN/W/12/Add.34
Page9Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(b)Insurance andreinsurance services
1.InChile, theinsurance business isdivided intotwogroups: thefirstgroup comprises companies thatensure goods andproperty against therisk
oflossordamage, while thesecond comprises those thatprovide personal insurance orguarantee, within orattheendofacertain term, a
capital sum, apaid-up policy oranincome fortheinsured orhisbeneficiaries. Thesame insurance company maynotbeconstituted insucha
wayastocover bothcategories ofrisk.
2.Credit insurance companies, eventhough classified inthefirstgroup, must beestablished ascorporations withthesolepurpose ofcovering this
typeofrisk,i.e.lossofordamage totheproperty oftheinsured asaresult ofthenon-payment ofamoney debtorloan, being alsopermitted
tocover guarantee andfidelity risks.
3.TheChilean Insurance Schedule doesnotinclude insurance related tothesocial security system.
Insurance:
Saleofdirect life
insurance (does not
include insurance
related tothesocial
security system)
(81211)(1)Unbound
(2)Unbound(1)Unbound
(2)UnboundS/FIN/W/12/Add.34
Page10Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Saleofdirect general
insurance (8129) (excluding
social security institutions
(ISAPREs) i.e.legal
persons setupforthe
purpose ofproviding health
benefits topersons whoopt
tobecome members and
financed through the
statutory contribution ofa
percentage oftaxable
income fixed bylawora
higher amount, asthecase
maybe.Italsoexcludes
theNational Health Fund
(FONASA), apublic
service financed bythe
government andthe
statutory contribution ofa
percentage oftaxable
income fixed bylaw,which
isjointly responsible for
paying benefits under the
optional health scheme
which persons notmembers
ofanISAPRE mayjoin)
Saleofdirect general
insurance
Credit insurance (81296)(3) Insurance services canbeprovided
onlybyinsurance corporations
established inChile fortheexclusive
purpose ofdeveloping thislineof
business. Insurance corporations can
belegally constituted onlyin
accordance withtheprovisions ofthe
lawoncorporations. Insurance may
betaken outdirectly orthrough
insurance brokers who, toengage in
thatactivity, must beenrolled inthe
Register maintained bytheSecurities
andInsurance Supervision Department
(SVS) andmust satisfy the
requirements ofthelaw.
(4) Unbound, except asindicated inthe
horizontal section.(3) None
(4) Unbound, except asindicated in
thehorizontal section.S/FIN/W/12/Add.34
Page11Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Insurance brokers (81401) (1) Unbound
(2) Unbound
(3) Must beenrolled intheRegister
maintained bytheSecurities and
Insurance Supervision Department and
fulfil therequirements laiddown by
theDepartment. Only legalpersons
legally constituted inChile forthis
specific purpose mayprovide this
service.
(4) Unbound, except asindicated inthe
horizontal section.(1) Unbound
(2) Unbound
(3) None
(4) Unbound, except asindicated in
thehorizontal section.S/FIN/W/12/Add.34
Page12Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Reinsurance and
retrocession (including
reinsurance brokers)(1) Foreign reinsurance companies and
foreign reinsurance brokers must be
enrolled intheRegister ofForeign
Reinsurers maintained bythe
Securities andInsurance Supervision
Department andfulfil the
requirements laiddown bythe
Department.
(2) Unbound
(3) Reinsurance services areprovided by
reinsurance corporations established
inChile inaccordance withthe
provisions ofthelawoncorporations
andauthorized bytheSecurities and
Insurance Supervision Department.
Insurance corporations mayalso
provide reinsurance services asa
complement totheirinsurance
business iftheirarticles ofassociation
soallow.(1) Premiums ceded under thisheading
aresubject toataxof6percent
(2) Unbound
(3) None
Reinsurance services mayalsobe
provided byforeign reinsurers and
foreign reinsurance brokers enrolled
intheRegister maintained bythe
Securities andInsurance Supervision
Department.
(4) Unbound, except asindicated inthe
horizontal section.(4) Unbound, except asindicated in
thehorizontal section.S/FIN/W/12/Add.34
Page13Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Securities services:
1. Publicly offered securities maybetraded bylegalpersons whose specific purpose issecurities brokerage, either asmembers ofastock
exchange (stockbrokers) oroutside theexchange (securities agents), andthese institutions must beregistered withtheSecurities andInsurance
Supervision Department. However, onlystockbrokers maytrade shares orderivatives (subscription options) onthestock exchange.
Non-share securities maybetraded bystockbrokers orsecurities agents registered withtheSecurities andInsurance Supervision Department.
2. Thepurpose offinancial portfolio management istodiversify investments, onbehalf ofthirdparties, overarange ofinstruments andmaybe
provided bysecurities traders (stockbrokers andsecurities agents) asacomplementary activity fortheirclients.
3. Publicly offered securities riskrating services areprovided byrating agencies constituted forthesolepurpose ofrating publicly offered
securities, andtheymust beenrolled intheRegister ofRiskRating Agencies maintained bytheSecurities andInsurance Supervision
Department. They areinspected andcontrolled bytheabove-mentioned Supervision Department. Ontheother hand, theinspection ofrating
agencies withrespect totherating ofsecurities issued bybanks andfinance companies istheresponsibility oftheBanks andFinancial
Institutions Supervision Department.
4. Securities custody consists ofthephysical safe-keeping ofstocks andshares andmaybeundertaken bysecurities intermediaries (stockbrokers
andsecurities agents) asanactivity complementary totheirsolepurpose. TheChilean Schedule inthesecurities sector doesnotinclude the
services offered byfirms which simultaneously undertake thecustody, clearance andsettlement ofsecurities (centralized securities
depositories).
5. Financial advisory services, which involve giving financial advice onfinancing alternatives, investment appraisal, investment possibilities, and
debtrescheduling strategies maybeundertaken bysecurities intermediaries (stockbrokers andsecurities agents) asanactivity complementary to
theirsolepurpose.
6. Securities services thatmaybeprovided bybanking institutions either directly orthrough subsidiaries arelisted inthebanking services sector
ofthisconditional offer andareexcluded from thesecurities services section ofthisSchedule.S/FIN/W/12/Add.34
Page14Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Intermediation ofpublicly
offered securities, except
shares (81321)
(includes subscription and
placement asagents,
underwriting)(1) Unbound
(2) Unbound
(3) Brokerage activities must beprovided
through acorporation established in
Chile andrequire prior enrolment in
theRegister ofstockbrokers and
securities agents keptbytheSecurities
andInsurance Supervision
Department. Inaddition tothelegal
requirement concerning assets, the
Securities andInsurance Supervision
Department mayimpose more
stringent non-discriminatory
provisions regarding economic
solvency onintermediaries, taking
intoaccount thenature oftheir
operations, theamounts involved, the
typeofinstrument negotiated, andthe
category ofintermediaries towhich
theyapply.
(4) Unbound, except asindicated inthe
horizontal section.(1) Unbound
(2) Unbound
(3) None
(4) Unbound, except asindicated in
thehorizontal section.S/FIN/W/12/Add.34
Page15Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Intermediation ofpublicly
offered shares in
corporations (81321)
(includes subscription and
placement asagents,
underwriting)(1) Unbound
(2) Unbound
(3) Inorder totrade onthestock
exchange, intermediaries (brokers)
must beconstituted ascorporations in
Chile. They must acquire ashare in
theirrespective stock exchange andbe
accepted asmembers ofthis
exchange. Prior enrolment inthe
Register ofstockbrokers and
securities agents maintained bythe
Insurance andSecurities Supervision
Department isrequired forbrokerage
activities. Inaddition tothelegal
requirement concerning assets, the
Supervision Department mayimpose
more stringent non-discriminatory
requirements regarding economic
solvency onintermediaries, taking
intoaccount thenature oftheir
operations, theamounts involved, the
typeofinstrument negotiated, andthe
category ofintermediaries towhich
theyapply.(1) Unbound
(2) Unbound
(3) None
(4) Unbound, except asindicated inthe
horizontal section.(4) Unbound, except asindicated in
thehorizontal section.S/FIN/W/12/Add.34
Page16Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Securities riskrating
(relates solely torating or
giving anopinion on
publicly offered securities)
(1)Unbound (1)Unbound
(2)Unbound (2)Unbound
(3)They must beestablished inChile asa
company ofpersons. Oneofthe
specific requirements tobefulfilled is
thatnotlessthan60percentofthe
company 'scapital must beheldbythe
principal partners (natural orlegal
persons inthislineofbusiness holding
aminimum of5percentofthe
membership rights intherating
agency). They must beenrolled inthe
Register ofRiskRating Agencies ofthe
Securities andInsurance Supervision
Department, andtherating board must
consist ofprofessionals witha
university degree orequivalent higher
education andanunblemished business
record, themajority ofwhom must
havehadatleastthree years'work
experience intheeconomic and
financial field.(3)None
(4)Unbound, except asindicated inthe
horizontal section(4)Unbound, except asindicated inthe
horizontal sectionS/FIN/W/12/Add.34
Page17Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Securities custody
undertaken bysecurities
intermediaries (81319)
(does notinclude the
services offered by
suppliers whocombine
custody withsecurities
clearance andsettlement
(custodial accounts)).(1)Unbound
(2)Unbound
(3)Inorder toundertake securities custody,
theintermediaries (brokers) must be
constituted ascorporations inChile. In
addition tothelegalrequirement
concerning assets, theSecurities and
Insurance Supervision Department may
impose more stringent
non-discriminatory provisions regarding
economic solvency onthe
intermediaries, taking intoaccount the
nature oftheiroperations, theamounts
involved, thetypeofinstrument
negotiated, andthecategory of
intermediaries towhich theyapply.
(4)Unbound, except asindicated inthe
horizontal section.(1)Unbound
(2)Unbound
(3)None
(4)Unbound, except asindicated inthe
horizontal section.S/FIN/W/12/Add.34
Page18Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
Financial advisory services
provided bysecurities
intermediaries (81332)
(thefinancial advice refers
onlytothesecurities
services included inthis
Schedule)(1)Unbound
(2)Unbound
(3)Financial advisory services provided by
securities intermediaries established as
corporations inChile require prior
enrolment intheRegister of
stockbrokers andsecurities agents
maintained bytheSecurities and
Insurance Supervision Department. In
addition tothelegalrequirement
concerning assets, theSecurities and
Insurance Supervision Department may
impose more stringent non-
discriminatory provisions regarding
economic solvency onthe
intermediaries, taking intoaccount the
nature oftheiroperations, theamounts
involved, thetypeofinstrument
negotiated, andthecategory of
intermediaries towhich theyapply.(1)Unbound
(2)Unbound
(3)None
(4)Unbound, except asindicated inthe
horizontal section.(4)Unbound, except asindicated inthe
horizontal section.
Financial portfolio
management bysecurity
intermediaries(1)Unbound
(2)Unbound(1)Unbound
(2)UnboundS/FIN/W/12/Add.34
Page19Modes ofsupply: (1)Cross-border supply (2)Consumption abroad (3)Commercial presence (4)Presence ofnatural persons
Sector orsubsector Limitations onmarket access Limitations onnational treatment Additional commitments
(thisdoesnotunder any
circumstances include the
following: management of
mutual funds, foreign
capital investment funds,
investment funds orpension
funds)(3)Portfolio management services provided
bysecurity intermediaries established as
corporations inChile require prior
enrolment intheRegister of
stockbrokers andsecurities agents kept
bytheSecurities andInsurance
Supervision Department. Inaddition to
thelegalrequirement concerning assets,
theSecurities andInsurance Supervision
Department mayimpose more stringent
non-discriminatory provisions regarding
economic solvency onintermediaries,
taking intoaccount thenature oftheir
operations, theamounts involved, the
typeofinstrument negotiated, andthe
category ofintermediaries towhich they
apply.(3)None
(4)Unbound, except asindicated inthe
horizontal section.(4)Unbound, except asindicated inthe
horizontal section.
General deposit warehouses
(warrants)(1)Unbound*
(2)Unbound(1)Unbound*
(2)Unbound
(corresponds to
merchandise warehousing
services accompanied by
theissue ofadeposit
certificate andachattel
mortgage receipt)(3)Only natural orlegalpersons legally
established inChile whohavethe
provision ofwarrant services astheir
solebusiness.
(4)Unbound, except asindicated inthe
horizontal section.(3)None
(4)Unbound, except asindicated inthe
horizontal section.