RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/330 
3 February 2011 
 (11-0529) 
Council for Trade in Services Original:   English 
 
 
 
COMMUNICATION FROM SWITZERLAND 
 
Review of Article II (MFN) Exemptions  
 
Questions from Switzerland 
 
 
 The following communication, dated 2 February  2011, from the delegation of Switzerland is 
being circulated to the Members of the Council for Trade in Services. 
 
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1. For the purpose of the third review of the MFN exemptions by the Council for Trade in 
Services in accordance with the Annex on Article II Exemptions of the GATS, we would request the 
Members concerned to provide answers to the following questions in respect of their MFN 
exemptions taken in the financial services sector. 
I. GENERAL QUESTIONS  
2. For each of the financial services MFN exempti ons listed in the Informal Note by the 
Secretariat referenced JOB/SERV/29 (pages 72 to  86), dated 11 October 2010, would concerned 
Members:  
- Please confirm that the measure - which is inconsistent with Article II - has a legal 
 basis and explicitly name the latter and specify its relevant provisions;  and 
- Please explain the circumstances justifying - or continuing to justify - discrimination 
between countries? 
II. SPECIFIC QUESTIONS  
3. Austria :  Could you please indicate the countries for which the requirement of an economic 
interest test with respect to licensing of branches or  subsidiaries of foreign financial services suppliers 
has actually been waived since the last review? If you did not make use of the MFN exemption, could 
you consider eliminating it?  W ould you want to maintain it, c ould you please explain the effective 
conditions - besides the self-granted political room for manoeuvre - that may justify the need for the 
exemption and provide its legal basis? 
4. Brunei Darussalam :  Could you please indicate whether the ASEAN Reinsurance 
Corporation has currently reached a level of paid-u p capital that would not necessitate a preferential 
treatment in its favour any more?  Would the cond itions creating the need for the MFN exemption no 
longer prevail, could you consider  eliminating this exemption? S/C/W/330 
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  5. Canada :  During the last review of the MFN exemptions, your representative explained that 
the exemption on insurance inte rmediation agency services, which provides for a preferential access 
to the Ontario insurance services market to US insurance intermed iation agents, was maintained as 
part of a reciprocal arrangement with the United Stat es and that this arrangement applied to US agents 
because insurance laws and licensing requirements in  the United States were similar to those in 
Ontario.  She further stated that it was important fo r Ontario to have reciprocal arrangements with the 
US State Insurance Regulators regarding licensing and qualifications require ments.  Could you please 
elaborate on those arrangements, in particular, we would be interested to know if they contain 
provisions that go beyond licensing and qualifications requirements?  Could you please also provide a 
list of those arrangements? 
6. Hungary :  We note and appreciate the high level of liberalisation of the supply of financial 
services through commercial presence of foreign supplie rs as reflected in your Schedule of Specific 
Commitments.  Given this high level, we wonder to what extent you could in practice apply your 
MFN exemption in full respect of your binding comm itments.  Would you come to the conclusion that 
your exemption is practically inapplicable, could you  consider eliminating it?  In case you could not 
immediately eliminate it, could you in the meanti me reduce your exemption to the strict minimum 
that leaves room for manoeuvre?  
7. Indonesia :  We appreciate that the legal basis and the scope of your MFN exemption are 
explicitly and clearly mentioned in your List, but note that the intended duration of the exemption is 
not specified.  Despite of that, according to yo ur Conditional Initial Offer, it seems that you are 
inclined to delete the whole exemption and we would like to thank you.  Could you please confirm 
that your intention still remains? 
8. Israel :  During the last review of MFN exemptions, we were pleased to hear that you had not 
applied your exemption since its introduction and that  your competent authorities were reviewing it.   
Could you please provide information on the latest de velopments in this respect?  Depending on the 
outcome, could Israel consider eliminating this exemption? 
9. Mauritius :  The intended duration of your MFN exemp tion is defined and has since elapsed.  
Could you please confirm that the ex emption no longer prevails?  
10. Peru :  In the description element of your first financial services MFN exemption it is stated 
that "Peru reserves the right not to apply the mo st-favoured-nation clause to countries which do not 
apply it automatically and unconditionally to Peru ".  Could you please indicate whether you have 
identified countries which did not apply the MFN clau se to Peru since the last review and whether you 
have made use of your exemption?  In the affirmative, could you please elaborate on the facts that led 
you to take action?  Could you also please confirm that you did not take measures where you undertook binding commitments?  
11. With regard to your second financial services MFN exemption, it is stated that "if a Member 
adopts protectionist or discriminatory measures, Peru reserves the right to do likewise".  Could you also please indicate whether you have ever made use of  this exemption?  In the affirmative, could you 
please specify whether you took protectionist or discriminatory measures toward the Member that 
adopted such measures or whether such measures were  applied to the whole Membership?  As for the 
first exemption, could you please confirm that  you did not take measures where you undertook 
binding commitments? 
12. United Arab Emirates :  According to your MFN exemption, the authorisation for the 
entry/establishment/operation of foreign financial ser vices suppliers and the opening of new branches 
will be subject to the decision of competent author ities and preferential treatme nt may be accorded on 
a case-by-case basis.  Could you please indicate wh ether your competent authorities have already  S/C/W/330 
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  made use of this exemption since its introduction?  In the affirmative, could you please indicate which 
country or countries benefitted from the preferential treatment? 
13. United States :  Regarding insurance services, coul d you please indicate whether you have 
made use of your MFN exemption since the last review?  In the affirmative, we would be interested to 
know how you accorded differential treatment as described in your List of MFN exemptions.  In 
particular, as you undertook market access and natio nal treatment commitments in this sector, did you 
introduce measures according differential treatment in  a legally bound sector or subsector or, as the 
exemption concerns the whole sector, did you apply them on a cross-subsectoral manner and only in a 
subsector where you inscribed limitations on market access and national treatment?  
14. Concerning banking and other financial service s (excluding insurance), could you please 
indicate whether the US or a specific US State ha ve taken any measure under the MFN exemptions 
listed in order to protect existing activities of US financial service suppliers out side the US as well as 
to ensure market access and national treatment for th em since the last review?  In the affirmative, 
could you please elaborate on the circumstances? 
 
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