WT/REG361/2  
 
30 March 2016  
(16-1784)  Page: 1/11  
Committee on Regional Trade Agreements  Original: English/Spanish  
 
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND AUSTRALIA 
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 24 March 2016, is being circulated at the request of the 
delegations of Japan and Australia.  
_______________ 
   This document reproduces the questions addressed to the Parties and the responses 
submitted. 
  
Question from the delegation of Canada 
 
1.1.  Article 14.15, page 163 , and Article 17.20, page 2021: Did Japan and Australia 
consider including environmental provisions in  this EPA (in addition to those found in 
exceptions articles), for example in the form  of an Environment Chapter or Article along 
the lines of what both countries have negoti ated in the past with other FTA partners? 
 The non-inclusion of Chapter in the Agreement on the environment was agreed between the 
Parties. 
  Still, Japan and Australia stipulated provisions on protection of the environment such as the 
Note to Articles 14.15(b) and 17.20.3. We consider that these provisions appropriately address the 
sustainable development objectives. 
Article 14.15: General Exceptions  
 Subject to the requirement that such measur es are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discrimination between covered investments or investors of the other Party and other investments or investors, where like conditions prevail, or a disguised restriction on investment, nothing in Articles 14.3, 14.4, and 14.9 shall prevent the 
adoption or enforcement by either Party of measures: 
(a) necessary to protect public morals or to maintain public order; 
(b) necessary to protect human, animal or plant life or health; 
Note: This exception includes environmental me asures necessary to protect human, animal or 
plant life or health. 
(c) necessary to secure compliance with laws or regulations which are not inconsistent with the 
provisions of this Chapter, including those relating to: 
                                               
1 As environmental provisions are not discussed in the Report by the Secretariat , the article 
and page numbers refer to the text of the agreement itself. WT/REG361/2 
 
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  (i) the prevention of deceptive and fraudulent pr actices or to deal with the effects of a 
default on a contract; 
(ii) 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  
(iii) safety: 
(d) imposed for the protection of national treasures of artistic, historic or archaeological value; or 
(e) relating to the conservation of living or non-living exhaustible natural resources if such 
measures are made effective in conjunction with restrictions on domestic production or consumption. 
Article 17.20: Exceptions 
1. Further to Article 1.10 (General Provisions-Security Exceptions), nothing in this Chapter shall 
be construed to prevent a Party from taking any action which it considers necessary for the protection of its essential security interests relating to government procurement indispensable 
for national security or for national defence purposes. 
2. Subject to the requirement that such measures are not applied in a manger that would 
constitute a means of arbitrary or unjustifiable discrimination between the Parties where the 
same conditions prevail, or a disguised restriction on trade between the Parties, nothing in 
this Chapter shall be construed to prevent a Party from imposing, enforcing or maintaining measures: 
(a) necessary to protect public morals, order or safety; 
(b) necessary to protect human, animal or plant life or health; 
(c) necessary to protect intellectual property; or  
(d) relating to goods or services of handicapped persons, of philanthropic or not-for-profit 
institutions or of prison labour. 
3. The Parties understand that subparagraph 2(b) includes environmental measures necessary 
to protect human, animal, or plant life or health. 
 
Questions from the delegation of Colombia 
 Chapter 4 – Provisions on Services and Investment 
 1.2.  Paragraph 4.8. What were the reasons for not including an Investor-State Dispute 
Settlement Mechanism (ISDSM)? If the conditio n for including an ISDSM is participation 
in a plurilateral agreement that has such a mechanism, will the conclusion of the 
Trans-Pacific Partnership Agreement (TPP) tri gger negotiations? Is the intention to use 
the same mechanism as that provided in th e TPP, or to negotiate a specific one? 
Which procedural aspects do you consider it important to include in a possible ISDSM for 
this Agreement? 
 As JAEPA did not include ISDS mechanism, Japan and Australia agreed to provide for a 
review process of ISDS (Article 14.19.). 
 
 The trigger for a review of the JAEPA Investment Chapter was met by the entry into force of the China-Australia FTA on 20 December 2015. Japan and Australia are considering the 
obligations set out in Article 14.19 and the time-frame for a review. 
  Japan and Australia cannot comment on review discussions at this time. 
 WT/REG361/2 
 
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  Article 14.19.2: Review 
2 Parties shall also conduct such a review if, following the entry into force of this Agreement, 
Australia enters into any multilateral or bilateral international agreement providing for a mechanism for the settlement of an investment  dispute between Australia and an investor 
of another or the other party to that agreement, with a view to establishing an equivalent 
mechanism under this Agreement. The Parties shall commence such review within three months following the date on which that international agreement entered into force and will conduct the 
review with the aim of concluding it wi thin six months following the same date. 
 1.3.  Paragraph 4.9. What is the intended procedure for the denial of benefits? How would a services chapter denial of benefi ts (Article 9.14) operate where the denied 
benefits were consistent with the GATS? Wo uld the denial of benefits automatically 
apply to all three chapters (Trade in Services, Telecommunications Services and 
Financial Services)? Would denying telecomm unications chapter benefits to a service 
supplier involve denying it access to public telecommunications services 
(i.e. Article 10.3: "Access and Use")? 
 Article 9.14 does not stipulate any specific process for the denial of benefits. The benefit of 
three chapters, namely Trade in Services, Telecommunication Services and Financial Services 
may be denied in accordance with Article 9.14. In the event of any inconsistency between this Agreement and GATS, Japan and Australia would immediately consult with each other with a view to finding a mutually satisfactory solution in ac cordance with para. 2 of Article 1.11. Such an 
approach would be applied if inconsistencies arose with respect to denying benefits under the 
Telecom Chapter and GATS. 
 The Sub-Committee on Trade in Services is charged with reviewing and monitoring the 
implementation and operation of this Trade in Service Chapter, including denial of benefits article 
in accordance with 2(a) of Article 9.15. The Sub-Committee on Telecommunication is in charge with reviewing and monitoring the implementation and operation of Telecommunication Service 
Chapter in accordance with 2(a) of Article 10.22. 
 Article 9.14: Denial of Benefit 
1. A Party may deny the benefits of this Chapter and Chapters 10 (Telecommunications 
Services) and 11 (Financial Services) to a service supplier of the other Party that is an 
enterprise of the other Party, where the deny ing Party establishes that the enterprise is 
owned or controlled by persons of a no n-Party, and that the denying Party: 
(a) Does not maintain diplomatic relations with the non-Party; or 
(b) Adopts or maintains measures with respect to the non-Party that prohibit transactions 
with the enterprise or that would be violated or circumvented if the benefits of this 
Chapter and Chapters 10 (Telecommunications Services) and 11 (Financial Services) 
were accorded to the enterprise. 
2. A Party may deny the benefits of this Chapter and Chapters 10 (Telecommunications 
Services) and 11 (Financial Services) to a service supplier of the other Party that is an 
enterprise of the other Party, where the deny ing Party establishes that the enterprise is 
owned or controlled by persons of a non-Party or of the denying Party and has no substantial 
business activities in the Area of the other Party. 
Note: For the purposes of this Article, an enterprise is: 
(a) "owned" by persons if more than 50% of the eq uity interests in it is beneficially owned 
by such persons; and 
(b) "controlled" by persons if such persons ha ve the power to name a majority of its 
directors or otherwise to legally direct its actions. WT/REG361/2 
 
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  1.4.  Paragraph 4.26. Would Australia plea se explain the conditions for contractual 
service providers (not included in the document). Does Australia not have any 
commitments with regard to independent professionals? 
Australia's commitments related to contractual service providers are outlined in Annex 10 
of the Agreement. Entry and temporary stay sha ll be granted to a contractual service supplier 
of Japan for a period of up to one year, with the possibility of further stay. This is subject to employer sponsorship. Australia has not made specific commitments with regard to independent 
professionals. 
 1.5.  Paragraph 4.30.  Would Japan please explain the co nditions for contractual service 
providers (not included in the document). Does Japan not have any commitments with 
regard to independent professionals? 
The commitments of Japan in relation to so-cal led "independent professionals" are listed in 
Section 5 of Annex 10. Conditions for service providers under such contracts are also described in 
that section. 
Section 5 of Annex 10 
 
 Natural Persons of Australia who Engage in Business Activities, Which Require Technology or 
K n o w l e d g e  a t  a n  A d v a n c e d  L e v e l ,  o n  t h e  B a s i s  o f  a  P e r s o n a l  C o n t r a c t  w i t h  P u b l i c  o r  P r i v a t e  Organisations in Japan.  
1. Entry and temporary stay for a period of one or  three years, which may be extended, shall be 
granted to a natural person of Australia who will engage in one of the following business 
activities, during his or her temporary stay in Japan on the basis of a personal contract with 
a public or private organization in Japan: 
(a) Activities which require technology or knowledge at an advanced level pertinent to 
physical sciences, engineering or other natural sciences under the status of residence of 
"Engineer" provided for in the Immigration Control and Refugee Recognition Act; or 
(b) Activities which require knowledge at an advanced level pertinent to human science, 
including jurisprudence, economics, business management and accounting, or which require ideas and sensitivity based on culture of a country other than Japan, under the 
status of residence of "Specialist in Humaniti es/International Services" provided for in the 
Immigration Control and Refugee Recognition Act. 
2. Activities which require technology or knowledge at an advanced level pertinent to natural or 
human sciences referred to in paragraph 1 mean activities in which the natural person may 
not be able to engage without the applicat ion of specialized technology or knowledge 
of natural or human sciences acquired by him or her, by, in principle, completing college 
education (i.e. bachelor's degree) or higher education. 
Note: Activities that meet the requirement specified in subparagraph 1 (a) include those related to 
architectural services, civil engineering services  and urban planning and landscape architectural 
services. Activities that meet the requirement sp ecified in subparagraph 1 (b) include those related 
to accounting, auditing and bookkeeping services, specialty design services, trade fair and 
exhibition organization services, travel agencies  and tour operator services, and tourist guide 
services. 
 
Questions from the delegation of the European Union 
 
Liberalization schedule 
1.6.  Australia has remained committed to 100% elimination of it s tariffs accepting 
a very long tariff phase-out period for Ja pan and less than 100% coverage even after 
these periods (88.7%). WT/REG361/2 
 
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   The EU notes the asymmetric tariff libera lization agreed by the Parties. Could the 
Parties present the rational for this result?   JAEPA is a comprehensive agreement that reflects negotiations on various issues of common 
interest between trading partners of very long standing. 
  Japan and Australia sincerely negotiated tariffs  on goods with the objective of advancing free 
trade with lower tariffs. At the same time, both sides took into account possible impacts on 
domestic industries and reached an agreement on various issues of common interest including tariffs.  
1.7.  Extensive carve outs and long phase in  periods: Australia accepted the carving out 
of two sectors in AUSFTA (dairy and sugar), while the list of carve outs is much more 
extensive for Japan, reflecting the polit ical sensitivities around agriculture. 
 As the Parties of the Agreement are developed economies, how could they justify 
such an extensive carve-outs from scope of the agreement?  
 JAEPA is a comprehensive agreement that reflects negotiations on various issues of common 
interest between trading partners of very long standing.   Japan and Australia sincerely negotiated tariffs  on goods with the objective of advancing free 
trade with lower tariffs. At the same time, both sides took into account possible impacts on 
domestic industries and reached an agreement on various issues of common interest including tariffs. 
 
Provisions on Trade in Services and Investment 
Investment screening 
 1.8.  The Agreement reserved policy space to screen Japanese proposals for foreign investment in agricultural land at $A15 m illion and in agribusiness at $A53 million, 
a policy which was subsequently introduc ed by the Australian Government in 
December 2015. While JAEPA, in line with most  of Australia's earlier FTA's, raised the 
screening threshold at which Japanese inve stments in other non-sensitive sectors are 
considered by the Foreign Investment  Review Board from $A248 million to 
$A1,078 million, the new thresholds for agri cultural land and agribusiness investments 
do not apply to earlier FTA partners (such as the US and New Zealand) and therefore 
create a tiered system of investment revi ew procedures, complicating the process for 
potential investors. 
Investment dispute resolution 
 The Agreement does not include a mechanism for the settlement of investment 
disputes between one of the Parties and an investor of the othe r Party whereas other 
recent free trade agreements concluded by Australia do (e.g. Korea-Australia FTA, 
China-Australia FTA, Trans-Pacific Partnership). The Agreement includes a review clause (Art. 14.19) that sets out that review would be conducted "if, following the entry into 
force of this Agreement, Australia enters in to any multilateral or bilateral international 
agreement providing for a mechanism for the settlement of an investment dispute between Australia and an investor of another or the other party to that agreement, with 
a view to establishing an equivale nt mechanism under this Agreement." 
a. The investment chapter of this agreement introduces specific screening 
thresholds dependent on the sector an d the nationality of the investor, and 
some investors able to utilize investor -state dispute settlement procedures 
while others can't. Will Australia consid er standardizing its investment policies 
in order to create a level playin g field for all foreign investors? WT/REG361/2 
 
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  Response from the delegation of Australia 
 
 Australia has reserved the right to implement lower screening thresholds for foreign investment in agricultural land and agribusiness in its recent FTAs, including JAEPA, as well as the 
Korea-Australia Free Trade Agreement (KAFTA), the China-Australia Free Trade Agreement 
(ChAFTA) and the TPP. This is consistent with recent changes to Australia's foreign investment policy. In March 2015 the screening threshold for foreig n investment in agricultural land was set at 
AUD15 million, and in December 2015 a AUD55 million screening threshold was introduced for 
agribusiness. Further detail is available at: https://firb.gov.au/resources/policy-documents. 
  The higher thresholds for screening of private foreign investment in some sectors under 
Australia's FTAs, including JAEPA, are the result of negotiated outcomes in those agreements. 
  JAEPA does not contain investor-state dispute settlement procedures. Australia considers 
inclusion of ISDS mechanisms in trade agreements on a case-by-case basis. 
 
b. Do the Parties of this Agreement consider that the review trigger for an 
Investor-State Dispute Settlement mechan ism has been reached already? If so, 
what steps are foreseen for this review? 
 As JAEPA did not include ISDS mechanism, Japan and Australia agreed to provide for a 
review process of ISDS (Article 14.19.). 
 The trigger for a review of the JAEPA Investment Chapter was met by the entry into force 
of the China-Australia FTA on 20 December 2015. Australia and Japan are considering the obligations set out in Article 14.19 and the time-frame for a review. 
Article 14.19.2: Review 
2 Parties shall also conduct such a review if, following the entry into force of this Agreement, 
Australia enters into any multilateral or bilateral international agreement providing for a 
mechanism for the settlement of an investment dispute between Australia and an investor of 
another or the other party to that agreement, with  a view to establishing an equivalent mechanism 
under this Agreement. The Parties shall commence such review within three months following the date on which that international agreement entered into force and will conduct the review with the 
aim of concluding it within six months following the same date. 
 General Provisions of the Agreement 
Relationship with other agreements concluded by the Parties 
 1.9.  Given that Japan and Australia are al so parties to the Trans-Pacific Partnership 
(TPP) could Japan and Australia provide an ov erview of the elements of their bilateral 
Agreement that goes beyond that of the TPP? 
 It is difficult to compare the TPP with JAEPA since they are separate agreements and TPP is 
a plurilateral agreement, while JAEPA is a bilateral agreement. 
 
 When the TPP enters into force, Japanese an d Australian exporters will be able to have 
access both to JAEPA and TPP – choosing whichever provides the best access in the particular 
circumstances. 
 Intellectual Property Rights 
 1.10.  The Agreement (Art. 16.18) provides for procedures concerning the suspension at the border by its customs administration, ex officio , of the release of goods suspected of 
infringing rights to trade marks, or copyri ght or related rights, which are destined for 
importation into and exportation from the Pa rty. Australia, in its last Trade Policy 
Review of April 2015 stated (in reply to EU Question 53) "Australian Customs still require a Notice of Objection from the IP ow ner or authorized user to seize goods that 
infringe IP rights (in contrast to the EU situ ation, where authorities are able to initially 
act ex officio )." WT/REG361/2 
 
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   Could Australia provide information how ex officio  at the border action provided 
for in the Japan-Australia agreement is  compatible with its legislation? 
 Response from the delegation of Australia 
  Australian legislation provides for both a Notice of Objection Scheme and ex officio  action by 
Australian customs authorities. Ex officio  action can be initiated by the Department of Immigration 
and Border Protection through provisions within the Commerce (Trade Descriptions) Act 1905 . 
The action is to be based on the goods having a false trade description. Ex officio  action is 
progressed as a customs matter and not under IP legislation. The rights holder is not involved in this process. 
 
 In addition, a rights holder can request the courts to order suspension of the release of other types of IP. (This would require a court order directing customs authorities to intervene.)  
 
Trade and Sustainable Development, Environment and Labour 
 
1.11.  The Agreement, contrary to other agreements such as the Korea-Australia FTA 
does not include provisions on environment and labour. 
a. Given that the Parties of the Agreement include provisions on environment and 
labour in their other FTAs (e.g. Korea-Australia FTA, Trans-Pacific Partnership), 
could the Parties provide some insight for the reasons not to include such 
provisions in the Agreement under discussions?  
b. Could the Parties provide clarifications how sustainable development objectives 
are reflected in this Agreement? 
 The non-inclusion of Chapter in the Agreement on the environment and labour was agreed 
between the Parties. 
 
 Still, Japan and Australia stipulated provisions on protection of the environment such as the Note to Articles 14.15(b) and 17.20.3, as well as prov isions on labour such as Articles 9.3.1(d) and 
12.1.2. We consider that these provisions appropriately address the sustainable development 
objectives. 
Article 14.15: General Exceptions  
 Subject to the requirement that such measur es are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discrimination between covered investments or 
investors of the other Party and other investments or investors, where like conditions prevail, or a disguised restriction on investment, nothing in Articles 14.3, 14.4, and 14.9 shall prevent the 
adoption or enforcement by either Party of measures: 
(a) necessary to protect public morals or to maintain public order; 
(b) necessary to protect human, animal or plant life or health; 
Note: This exception includes environmental me asures necessary to protect human, animal or 
plant life or health. 
(c) necessary to secure compliance with laws or regulations which are not inconsistent with the 
provisions of this Chapter, including those relating to: 
(i) the prevention of deceptive and fraudulent pr actices or to deal with the effects of a 
default on a contract; 
(ii) 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  WT/REG361/2 
 
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  (iii) safety: 
(d) imposed for the protection of national treasures of artistic, historic or archaeological value; or 
(e) relating to the conservation of living or non-living exhaustible natural resources if such 
measures are made effective in conjunction with restrictions on domestic production or 
consumption. 
Article 17.20: Exceptions 
1. Further to Article 1.10 (General Provisions-Security Exceptions), nothing in this Chapter shall 
be construed to prevent a Party from taking any action which it considers necessary for the 
protection of its essential security interests relating to government procurement indispensable for national security or for national defence purposes. 
2. Subject to the requirement that such measures are not applied in a manger that would 
constitute a means of arbitrary or unjustifiable discrimination between the Parties where the 
same conditions prevail, or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from imposing, enforcing or maintaining 
measures: 
(a) necessary to protect public morals, order or safety; 
(b) necessary to protect human, animal or plant life or health; 
(c) necessary to protect intellectual property; or  
(d) relating to goods or services of handicapped persons, of philanthropic or not-for-profit 
institutions or of prison labour. 
3. The Parties understand that subparagraph 2(b) includes environmental measures necessary 
to protect human, animal, or plant life or health. 
Article 9.3: Market Access  
1. With respect to market access through the modes of supply defined in subparagraph (n) of 
Article 9.2, a Party shall not adopt or maintain, ei ther on the basis of a regional subdivision or 
on the basis of its entire Area, measures that are defined as: 
(a) limitations on the total value of service transactions or assets in the form of numerical 
quotas or the requirements of an economic needs test; 
Article 12.1: Scope 
1. This Chapter shall not apply to measures affecting natural persons of a Party seeking access to 
the employment market of the other Party, nor to measures regarding nationality or 
citizenship, or residence or employment on a permanent basis. 
Questions from the delegation of Mexico 
 
Provisions on Trade in Services and Investment 
Recognition 
 1.12.  Chapter 9 on cross-border trade in serv ices has as an aim the mutual recognition 
of education or experience obtained, requir ements met, or licences or certifications 
granted in one of the Parties for the licensing  or certification of professional services 
suppliers in the territory of the other Party. The chapter does not, however, set 
a time-frame or a specific plan or schedule to achieve such an objective. Mexico would 
like to know whether the countries have entere d into negotiations on  an agreement or a 
convention on mutual recognition in this area. WT/REG361/2 
 
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   The Parties are yet to enter into negotiations on an agreement or convention on mutual 
recognition under the auspices of Chapter 9 in JAEPA.  1.13.  With regard to Article 14.19.1 (Review) , the chapter on investment provides for 
the possibility of creating an investor-Sta te dispute settlement mechanism. Mexico 
would like to know whether such a mechanism is one of the priorities for negotiation 
within the next five years or whether discu ssions on this issue are even already under 
way. 
 Mexico would also like to know how the Trans-Pacific Partnership (TPP) will apply 
in relation to services and investment, in  particular to the investor-State dispute 
settlement mechanism, if this economic pa rtnership agreement is in force between 
these member states. 
  As outlined in Article 14.19, Parties shall commence a review of the JAEPA investment 
chapter within three months of the entry into force of any agreement by Australia that contains an 
ISDS mechanism. This trigger was met by the entry-into-force of the China-Australia FTA on 20 December 2015. Australia and Japan are considering the obligations set out in Article 14.19 and 
the time-frame for a review. 
  When the TPP enters into force, the ISDS me chanism in the TPP will become available to 
Japanese investors in Australia and Australian investors in Japan; the obligation to review the 
JAEPA Investment Chapter is independent of the entry into force of the TPP. 
Article 14.19.2: Review 
2. Parties shall also conduct such a review if, fo llowing the entry into force of this Agreement, 
Australia enters into any multilateral or bilateral international agreement providing for 
a mechanism for the settlement of an investment  dispute between Australia and an investor 
of another or the other party to that agreement, with a view to establishing an equivalent 
mechanism under this Agreement. The Parties shall commence such review within three months 
following the date on which that international agreement entered into force and will conduct the review with the aim of concluding it wi thin six months following the same date. 
 
Institutional framework 
 
1.14.  Section 5.5: Could the institutional framework be considered a workable trade 
facilitation mechanism? 
JAEPA's institutional framework – including the committees noted in the report - should be 
seen as a mechanism to further facilitate trade between Australia and Japan. The institutional 
framework encourages cooperation between the Parties on issues such as technical barriers to 
trade and trade in services. It provides for exch anges between experts on the implementation of 
the agreement. The Sub-Committee on Promotion of a Closer Economic Relationship, established under Chapter 18, also allows representatives of the business sector to present their views to the 
governments of Australia and Japan on how trade can be further facilitated. 
 Questions from the delegation of the Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu 
 Provisions on Trade in Goods 
Energy and mineral resources 
 1.15.  According to Article 8.7 of this FT A, the parties shall promote cooperation for 
strengthening stable and mutually beneficial  relationships in the energy and mineral 
resources sector. 
 What have the cooperative activities in  the energy resources sector encompassed 
since the Japan and Australia FTA entered into force? 
 
 The Parties have promoted cooperation for strengthening stable and mutually beneficial relationships in the energy and mineral resources sector as part of their efforts to promote the WT/REG361/2 
 
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  closer development of their economic relation ship. For example, the Parties have promoted 
opportunities in the energy and mineral resources sectors to their business communities, including through the Japan-Australia High Level Group on Energy and Minerals, which was launched in 1985. 
 
 Both countries continue such cooperation in light of Article 8.7.  
Article 8.7: Cooperation 
 
 The Parties shall, in accordance with their respective laws and regulations and subject to their available resources, promote cooperation for strengthening stable and mutually beneficial 
relationships in the energy and mineral resources sector. 
 General Provisions of the Agreement 
Current payment and capital movements 
 1.16.  Section 5.2: Except in Articles 9.12,  9.13, 11.9 and 14.13, the Agreement contains 
no specific provisions on current  payments and capital movements. 
We would like to confirm whether Arti cle 14.16 (Temporary Safeguard Measures) 
is also relevant to the current payments and capital movements mentioned in the Factual Presentation, paragraph 5.2.? 
 
 The following is the partial content of Article 14.16: 
1. A Party may adopt or maintain restrict ive measures with regard to cross-border 
capital transactions as well as payments or transfer for transactions related to covered 
investments: 
a. in the event of serious balance-of-payme nts and external financial difficulties 
or threat thereof; or 
b. in exceptional cases where movements of  capital cause or threaten to cause 
serious difficulties for macroeconomic ma nagement, in particular monetary and 
exchange rate policies.  
 Yes, Article 14.16 (Temporary Safeguard Measures) is also relevant to the current payments 
and capital movements mentioned in Section 5.2 of the Factual Presentation.  
Article 14.16: Temporary Safeguard Measures 
 
1. A Party may adopt or maintain restrictive measures with regard to cross-border capital 
transactions as well as payments or transfers for transactions related to covered investments: 
 
(a) In the event of serious balance-of-payments an d external financial difficulties or threat 
thereof; or 
 
(b) in exceptional cases where movements of capital cause or threaten to cause serious 
difficulties for macroeconomic management, in  particular monetary and exchange rate 
policies. 
 2. Restrictive measures referred to in paragraph 1 shall: 
 
(a) be applied such that the other Party is trea ted no less favourably than any non-Party; 
(b) be consistent with the Articles of Agreement of the International Monetary Fund; 
(c) not exceed those necessary to deal with the circumstances set out in paragraph 1; 
(d) be temporary and be phased out progressively as the situation specified in paragraph 1 
improves; 
(e) be promptly notified to the other Party; and  
(f) avoid unnecessary damages to the commercial, economic and financial interests of the 
other Party. 
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  3. The Party which has adopted any measures under paragraph 1 shall, on request, commence 
consultations with the other Party in order to review the restrictions adopted by it. 
 
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