ARRANGEMENT BETWEENTHE TAIPEI ECONOMIC AND CULTURAL OFFICE IN CANADAAND THE CANADIAN TRADE OFFICE IN TAIPEIFOR THE PROMOTION AND PROTECTION OF INVESTMENTS

THE TAIPEI ECONOMIC AND CULTURAL OFFICE IN CANADA (TECO) AND THE
CANADIAN TRADE OFFICE IN TAIPEI (CTOT), hereinafter referred to as the“Participants”,
RECOGNIZING that the promotion and the protection of investments of investorsof the territory of one Participant in the territory of the other Participant will be
conducive to the stimulation of mutually beneficial business activity, to the developmentof economic co-operation between them, and to the promotion of sustainable
development;
REAFFIRMING the importance of encouraging investment promotion activities
and to make these activities more accessible to underrepresented groups, including byencouraging investments by women, Indigenous Peoples, and micro, small, or
medium-sized enterprises;
REAFFIRMING the importance of promoting responsible business conduct, cultural
identity and diversity, environmental protection and conservation, gender equality, therights of Indigenous Peoples, labour rights, inclusive trade, sustainable development, andtraditional knowledge;
REAFFIRMING the right of the authorities of the territory of each Participant toregulate within the territory of that Participant to achieve legitimate public policy
objectives, such as with respect to the protection of the environment and addressing
climate change; social or consumer protection; or the promotion and protection of health,safety, rights of Indigenous Peoples, gender equality, and cultural diversity,
HAVE COME to this Arrangement:

PART A: DEFINITIONSPARAGRAPH 1:

DEFINITIONS

For the purpose of this Arrangement:“algorithm” means a defined sequence of steps taken to solve a problem or
obtain a result;“authorization” means the granting of permission by a competent authority to aperson with respect to the establishment, acquisition, expansion, management,
conduct, operation, and sale or other disposition of an investment in the territory ofa Participant;“authorization procedures” means administrative or procedural rules that must
be adhered to in order to obtain, amend, or renew an authorization;

“competent authority” means:(a)

any authority of the territory of a Participant, or(b)

any person, including a publicly-owned enterprise or any other body, inthe exercise of powers delegated by any authority of the territory of a
Participant,that grants an authorization;“confidential information” means confidential business information or
information that is privileged or otherwise protected from disclosure under thedomestic law of the territory of a Participant;“covered investment” means, with respect to a Participant, an investment:(a)in the territory of the Participant;(b)made in accordance with the applicable domestic law of the territory of theParticipant at the time the investment is made;(c)

directly or indirectly owned or controlled by an investor of the territory of
the other Participant; and(d)existing on the date this Arrangement comes into effect, or made or
acquired thereafter;“enterprise” means an entity constituted or organized under applicable law,whether or not for profit, whether privately or publicly-owned, including a
corporation, trust, partnership, sole proprietorship, joint venture, or otherassociation, and a branch of any such entity;“existing” means in effect on the date this Arrangement comes into effect;“financial institution” means a financial intermediary or other enterprise that is
located in the territory of a Participant, and that is authorized to do business andregulated or supervised as a financial institution under the law of that territory;“financial service” means a service of a financial nature, including insurance,
and a service incidental or auxiliary to a service of a financial nature;“intellectual property rights” means copyright and related rights, trademark
rights, rights in geographical indications, rights in industrial designs, patentrights, rights in layout designs of integrated circuits, rights in relation toprotection of undisclosed information, and plant breeders’ rights;“investment” means:(a)any of the following:(i)an enterprise,(ii)

a share, stock, or other form of equity participation in anenterprise,(iii)

a bond, debenture, or other debt instrument of an enterprise,(iv)

a loan to an enterprise,

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(v)

an interest in an enterprise that entitles the owner to share inincome or profits of the enterprise,(vi)

an interest in an enterprise that entitles the owner to share in theassets of that enterprise on dissolution,(vii)

an interest arising from the commitment of capital or otherresources in the territory of a Participant to economic activity inthat territory, such as under:(A)

a contract involving the presence of an investor’s property
in the territory of the Participant, including a turnkey orconstruction contract, or a concession, or(B)

a contract under which remuneration depends substantiallyon the production, revenues, or profits of an enterprise;(viii)

intellectual property rights, and(ix)

any other tangible or intangible, moveable or immovable, property
and related property rights acquired in the expectation of, or used
for the purpose of, economic benefit or other business purpose; and(b)in each case involves the commitment of capital or other resources, theexpectation of gain or profit, or the assumption of risk;(c)for the purpose of this definition, “investment” does not mean:(i)a claim to money that arises solely from:(A)

a commercial contract for the sale of a good or service by anatural person or enterprise in the territory of a Participant
to an enterprise in the territory of the other Participant, or(B)the extension of credit in connection with a commercial
transaction, such as trade financing;(ii)

an order or judgment in a judicial or administrative action, or(iii)

any other claim to money that does not involve the kinds ofinterests set out in subparagraphs (a)(i) to (ix);“investor of the territory of a Participant” means an authority of the territoryof a Participant, a natural person of the territory of a Participant, or an enterpriseof the territory of a Participant, that seeks to make, is making, or has made aninvestment. For the purpose of this definition, “enterprise of the territory of a
Participant” means:(a)an enterprise that is constituted or organized under the law of the territoryof that Participant and that has substantial business activities in the
territory of that Participant. Whether an enterprise has substantial businessactivities in the territory of a Participant will entail a case-by-case,fact-based analysis; or(b)an enterprise that is constituted or organised under the law of the territoryof that Participant, and is directly or indirectly owned or controlled by anatural person of that territory or by an enterprise mentioned undersubparagraph (a);3“measure” includes a law, regulation, procedure, requirement, or practice;“natural person of a territory” means:(a)for the CTOT, a person who holds a passport of Canada or is a permanent
resident of Canada; and(b)for the TECO, a person who holds a passport of Taiwan with an
identification number or is a permanent resident of Taiwan;

except that:(c)a natural person of both territories will be deemed to be exclusively anatural person of the territory where that person has his or her dominantand effective connection; and(d)a passport-holder of the territory of one Participant and a permanent
resident of the territory of the other Participant will be deemed to be
exclusively a natural person of the territory of its passport;“person” means a natural person or an enterprise;“publicly-owned enterprise” means an enterprise that is owned, or controlled
through ownership interests, by an authority of the territory of a Participant;“tax convention or arrangement” means a convention for the avoidance of
double taxation or other international taxation agreement or arrangement.
“territory” or “territory of a Participant” means:(a)for the CTOT:(i)the land territory, air space, internal waters, and territorial sea of
Canada,(ii)

the exclusive economic zone of Canada, and(iii)

the continental shelf of Canada,

as determined by Canada’s domestic law and consistent with international
law; and(b)

for the TECO: the Separate Customs Territory of Taiwan, Penghu,
Kinmen and Matsu;“third territory” means any territory other than the territory of a Participant;4

“TRIPS Agreement” means the Agreement on Trade-Related Aspects ofIntellectual Property Rights, Annex 1C of the WTO Agreement; and“WTO Agreement” means the Marrakesh Agreement Establishing the World
Trade Organization, done at Marrakesh on April 15, 1994.

PART B: INVESTMENT PROTECTIONSPARAGRAPH 2:
1.

2.

3.

SCOPE

This Arrangement will apply to measures adopted or maintained by authorities of
the territory of a Participant relating to:(a)an investor of the territory of the other Participant;(b)a covered investment; and(c)with respect to Paragraph 3, Paragraph 11, and Paragraph 15, aninvestment in the territory of the Participant.

A Participant’s commitments under this Arrangement will apply to measures
adopted or maintained by:(a)authorities of the territory of that Participant; and(b)

any person, including a publicly-owned enterprise or any other body,when it exercises any public authority delegated to it by an authority of theterritory of that Participant.

This Arrangement will not apply in relation to an act or fact that took place or asituation that ceased to exist before the date when this Arrangement comes into
effect.

PARAGRAPH 3:

NON-DEROGATIONThe Participants recognize that it would not be appropriate to encourage
investment by relaxing domestic measures relating to health, safety, theenvironment, other regulatory objectives or the rights of Indigenous Peoples.
Accordingly, within the territory of a Participant, there will be no relaxation,
waiving or other derogation from, or offer to relax, waive or otherwise derogate
from, such measures in order to encourage the establishment, acquisition,
expansion, or management of the investments of an investor. If a Participant
considers that such an encouragement has been offered in the territory of the otherParticipant, the Participant may request consultations with the other Participant andthe two Participants will consult with a view to avoiding the encouragement.

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PARAGRAPH 4:

NATIONAL TREATMENT

1.

An investor of the territory of a Participant will be accorded treatment by anauthority of the territory of the other Participant no less favourable than thetreatment accorded by the authority, in like circumstances, to investors of theterritory of the other Participant, with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or other disposition of
investments in the territory of the other Participant.

2.

A covered investment will be accorded treatment by an authority of the territory ofa Participant no less favourable than the treatment accorded by the authority, inlike circumstances, to investments of investors of the territory of that Participant
with respect to the establishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of investments in the territory of that
Participant.

3.

The “treatment” accorded under subparagraphs 1 and 2 means, with respect to an
authority of the territory of a Participant, treatment accorded, in likecircumstances, by that authority to investors, and to investments of investors, ofthe territory of that Participant.

4.

Whether treatment is accorded in like circumstances will depend on the totality of
the circumstances, including whether the relevant treatment distinguishes between
investors or investments on the basis of legitimate public policy objectives.

5.

Subparagraphs 1 and 2 relate to discrimination based on whether the investor is of
the territory of the other Participant, or whether the covered investment is aninvestment of an investor of the territory of the other Participant, respectively.
A difference in treatment accorded to an investor or covered investment, and to theinvestors or investments of investors of that Participant, would not, in and of itself,
establish discrimination based on these grounds.

PARAGRAPH 5:

MOST-FAVOURED-NATION TREATMENT

1.

An investor of the territory of a Participant will be accorded treatment by anauthority of the territory of the other Participant no less favourable than thetreatment accorded by the authority, in like circumstances, to investors of a third
territory with respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition of investmentsin the territory of the other Participant.

2.

A covered investment will be accorded treatment by an authority of the territory ofa Participant no less favourable than the treatment accorded by the authority, inlike circumstances, to investments of investors of a third territory with respect tothe establishment, acquisition, expansion, management, conduct, operation, andsale or other disposition of investments in the territory of the Participant.

3.

The “treatment” accorded under subparagraphs 1 and 2 means, with respect to an
authority of the territory of a Participant, treatment accorded, in likecircumstances, by that authority to investors, and to investments of investors, of athird territory.

4.

Whether treatment is accorded in like circumstances will depend on the totality of
the circumstances, including whether the relevant treatment distinguishes between
investors or investments on the basis of legitimate public policy objectives.

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5.

Subparagraphs 1 and 2 relate to discrimination based on whether the investor is of
the territory of the other Participant, or whether the covered investment is aninvestment of an investor of the territory of the other Participant, respectively. A
difference in treatment accorded to an investor or covered investment and toinvestors or investments of investors of a third territory would not, in and of itself,
establish discrimination based on these grounds.

6.

The “treatment” referred to in subparagraphs 1 and 2 will not include proceduresfor the resolution of investment disputes or differences provided for ininternational investment treaties or arrangements and in trade agreements.

7.

Substantive obligations in international investment treaties and in trade
agreements, or commitments in investment arrangements, do not in themselves
constitute “treatment”, and thus would not be inconsistent with this Paragraph,absent measures adopted or maintained by an authority of the territory of a
Participant pursuant to those obligations or commitments.

PARAGRAPH 6:

TREATMENT IN CASE OF ARMED CONFLICT, CIVIL STRIFE,
OR NATURAL DISASTER

1.

Notwithstanding Paragraph 20(6)(b), an investor of the territory of the otherParticipant and a covered investment will be accorded treatment no lessfavourable than an authority of the territory of a Participant accords to its own
investors or investments, or to the investors or investments of investors of a third
territory, whichever is more favourable to the investors or investments concerned,
with respect to measures adopted or maintained relating to restitution,indemnification, compensation, or other settlement for losses incurred byinvestments in the territory of a Participant as a result of armed conflict, civil
strife, or a natural disaster.

2.

Notwithstanding subparagraph 1, if an investor of the territory of a Participant, ina situation referred to in subparagraph 1, suffers a loss in the territory of the otherParticipant resulting from:(a)requisitioning of its covered investment or part thereof by the forces orauthorities of the territory of the latter Participant; or(b)destruction of its covered investment or part thereof by the forces orauthorities of the territory of the latter Participant, which was not requiredby the necessity of the situation;authorities of the territory of the latter Participant will provide the investor
restitution, compensation, or both, as appropriate, for that loss.
3.

Subparagraph 1 will not apply to an existing subsidy or grant provided by anauthority of the territory of a Participant, including an authority-supported loan, aguarantee, or insurance that would be inconsistent with Paragraph 4 but for
Paragraph 20(6)(b).

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PARAGRAPH 7:
1.

MINIMUM STANDARD OF TREATMENT

A covered investment and an investor with respect to their covered investment
will be accorded treatment by an authority of the territory of a Participant that
corresponds to the applicable customary international law minimum standard oftreatment of aliens. A measure is inconsistent with this Paragraph only if it
constitutes:(a)denial of justice in criminal, civil, or administrative proceedings;(b)fundamental breach of due process in judicial and administrative
proceedings;(c)manifest arbitrariness;1(d)targeted discrimination on manifestly wrongful grounds such as gender,
race, or religious beliefs;(e)abusive treatment of investors, such as physical coercion, duress, andharassment; or(f)a failure to provide full protection and security.2

2.

The fact that another commitment in this Arrangement or in a separate
arrangement has not been met, or that there has been a breach of an international
agreement, will not establish that a measure is inconsistent with this Paragraph.

3.

The fact that a measure breaches the domestic law of the territory of a Participant
will not establish that a measure is inconsistent with this Paragraph.

PARAGRAPH 8:
1.

2.

EXPROPRIATION

Expropriation of a covered investment either directly or indirectly by an authorityof the territory of a Participant, will not be done except:(a)for a public purpose;3(b)in accordance with due process of law;(c)in a non-discriminatory manner; and(d)on payment of compensation in accordance with subparagraph 5.

A direct expropriation under subparagraph 1 will occur only when a covered
investment is taken by an authority of the territory of a Participant through formaltransfer of title or outright seizure.

1 A measure is manifestly arbitrary when it is evident that the measure is not rationally connected to a legitimate policy

objective, such as when a measure is based on prejudice or bias rather than on reason or fact.
2 For greater certainty, full protection and security refers only to the physical security of an investor and their covered

investment.
3 The Participants recognize that the meaning of “public purpose” may apply differently for the purposes of an Indigenous

authority.

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3.

An indirect expropriation under subparagraph 1 may occur when a measure or aseries of measures of an authority of the territory of a Participant has an effectequivalent to direct expropriation without formal transfer of title or outrightseizure. A non-discriminatory measure of an authority of the territory of a
Participant that is adopted and maintained in good faith to protect legitimate
public welfare objectives, such as health, safety and the environment, will notconstitute indirect expropriation, even if it has an effect equivalent to direct
expropriation. Whether a measure or a series of measures has an effect equivalent
to direct expropriation will entail a case-by-case, fact-based analysis that willconsider the following:(a)the economic impact of the measure or the series of measures of an
authority of the territory of a Participant, although the sole fact that ameasure or a series of measures has an adverse effect on the economic
value of a covered investment will not establish that an indirect
expropriation has occurred;(b)

the duration of the measure or series of measures;(c)the extent to which the measure or the series of measures interferes with
distinct, reasonable investment-backed expectations; and(d)the character of the measure or the series of measures.

4.

A measure of an authority of the territory of a Participant will not be inconsistent
with this Paragraph unless it expropriates a covered investment that is a tangible
or intangible property right under the domestic law of the territory in which theinvestment was made. Relevant factors will include the nature and scope of thetangible or intangible property right under the applicable domestic law of theterritory in which the investment was made.

5.

The compensation referred to in subparagraph 1 will:

6.

(a)

be paid without delay in a freely convertible currency;(b)be equivalent to the fair market value of the expropriated investment
immediately before the expropriation took place (date of expropriation).
Appropriate valuation criteria include going concern value, asset value
including the declared tax value of tangible property, and other criteria,
which may be appropriate or relevant under the circumstances, todetermine fair market value;(c)

not reflect any change in value occurring because the intended
expropriation had become known earlier;(d)include interest at a commercially reasonable rate for that currency fromthe date of the expropriation until the date of payment; and(e)be freely transferable.

A measure of an authority of the territory of a Participant that would otherwise
constitute an expropriation of an intellectual property right under this Paragraph is
not inconsistent with this Paragraph if it is consistent with the TRIPS Agreement
and any waiver or amendment of that Agreement accepted by an authority of theterritory of that Participant.

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PARAGRAPH 9:
1.

TRANSFER OF FUNDS

All transfers of funds relating to a covered investment will be permitted by anauthority of the territory of a Participant to be made freely, and without delay, intoand out of its territory. Those transfers include:(a)contributions to capital;(b)profits, dividends, interest, capital gains, royalty payments, management
fees, and technical assistance and other fees;(c)

proceeds from the sale or liquidation of the whole or part of the covered
investment;(d)payments made under a contract entered into by the investor or thecovered investment, including payments made pursuant to a loan
agreement;(e)payments made under Paragraph 6 and Paragraph 8;(f)earnings and other remuneration of foreign personnel working inconnection with a covered investment; and(g)payments arising out of a dispute.

2.

Transfers of funds relating to a covered investment will be permitted in a freely
convertible currency at the market rate of exchange in effect at the time oftransfer.

3.

Transfers of returns in kind relating to a covered investment will be permitted as
authorized or specified in a written agreement between an authority of theterritory of a Participant and an investor of the territory of the other Participant ora covered investment.

4.

Investors of the territory of a Participant will not be required to transfer, or be
penalized for failing to transfer, the income, earnings, profits, or other amounts
derived from, or attributable to, an investment in the territory of the otherParticipant.

5.

Notwithstanding subparagraphs 1, 2, 3, and 4, a transfer may be prevented orlimited through the equitable, non-discriminatory, and good faith application of
the domestic law of the territory of a Participant relating to:(a)bankruptcy, insolvency, or the protection of the rights of a creditor;(b)

issuing, trading, or dealing in securities;(c)criminal or penal offences;(d)financial reporting or record keeping of transfers if necessary to assist law
enforcement or financial regulatory authorities;(e)ensuring compliance with an order or judgment in judicial oradministrative proceedings; or(f)social security, public retirement, or compulsory savings programmes.

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6.

Notwithstanding subparagraphs 1, 2, and 4, and without limiting the applicabilityof subparagraph 3, transfers by a financial institution to, or for the benefit of, anaffiliate of or person related to that institution, may be prevented or limited
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.

7.

Notwithstanding subparagraph 3, transfers of returns in kind may be restricted incircumstances in which an authority of the territory of a Participant could
otherwise restrict those transfers under the WTO Agreement and as set out in
subparagraph 5.

PARAGRAPH 10:

TAXATION MEASURES

1.

Except as set out in this Paragraph, this Arrangement will not apply to a taxation
measure.

2.

This Arrangement will not affect the rights and obligations of a party, or the
benefits and commitments of a participant, under a tax convention or
arrangement. In the event of any inconsistency between the dispositions of thisArrangement and any such tax convention or arrangement, the provisions or
dispositions of that tax convention or arrangement will prevail to the extent of theinconsistency.

3.

Subject to subparagraph 2, the dispositions of Paragraph 4 and Paragraph 5 will
apply to all taxation measures, other than those on income, capital gains, or on the
taxable capital of corporations, except that nothing in those Paragraphs will apply:(a)

to a non-conforming provision of an existing taxation measure;(b)

to the continuation or prompt renewal of a non-conforming provision of an
existing taxation measure;(c)to an amendment to a non-conforming provision of an existing taxation
measure to the extent that the amendment does not decrease its conformity
at the time of the amendment with those Paragraphs; or(d)to a new taxation measure that is aimed at ensuring the equitable andeffective imposition or collection of taxes (including, for greater certainty,
a measure that is taken by an authority of the territory of a Participant toensure compliance with the taxation system in its territory, or to preventthe avoidance or evasion of taxes) and that does not arbitrarily
discriminate between persons, goods, or services of the territories of theParticipants.

4.

The dispositions of Paragraph 8 will apply to taxation measures.

5.

Each Participant will publish and notify the other Participant of the identity andcontact information of the taxation authority of the territory of the Participant.

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PARAGRAPH 11:
1.

2.

PERFORMANCE REQUIREMENTS

No requirement will be imposed or enforced, and no commitment or undertaking
will be enforced, by an authority of the territory of a Participant in connection
with the establishment, acquisition, expansion, management, conduct, operation,or sale or other disposition of an investment in that territory:(a)to export a given level or percentage of a good or service;(b)

to achieve a given level or percentage of domestic content;(c)to purchase, use, or accord a preference to a good produced or service
provided in the territory of the Participant, or to purchase a good or service
from a person in the territory of the Participant;(d)to relate the volume or value of imports to the volume or value of exports
or to the amount of foreign exchange inflows associated with thatinvestment;(e)

to restrict sales of a good or service in the territory of the Participant thatthe investment produces or provides by relating those sales to the volume
or value of the investment’s exports or foreign exchange earnings;(f)to transfer technology, a production process, source code of software, orother proprietary knowledge to a person in the territory of the Participant;

(g)

(i)

to purchase, use, or accord a preference to, in the territory of theParticipant, technology of an authority or a person of the territoryof the Participant4, or(ii)

that prevents the purchase or use of, or the according of apreference to, in the territory of the Participant, a technology;(h)that prohibits or restricts the transfer of information by electronic means
into or out of the territory of the Participant, if this transfer is related to thebusiness of a covered investment or the business of an investor of theterritory of a Participant; or(i)to supply exclusively from the territory of the Participant a good that theinvestment produces or a service it provides to a specific regional market
or to the world market.

The receipt or continued receipt of an advantage, in connection with theestablishment, acquisition, expansion, management, conduct, operation, or sale orother disposition of an investment in the territory of a Participant, will not be
conditioned by an authority of the territory of a Participant on compliance with arequirement:(a)to achieve a given level or percentage of domestic content;

4 For the purposes of this Paragraph, the term “technology of an authority or a person of the territory of the Participant”

includes technology that is owned by an authority of the territory of the Participant or a person of the territory theParticipant, and technology for which an authority of the territory of the Participant or a person of the territory of theParticipant holds an exclusive license.

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3.

(b)

to purchase, use, or accord a preference to a good produced in the territoryof the Participant, or to purchase a good from a producer in the territory of
the Participant;(c)to relate the volume or value of imports to the volume or value of exports
or to the amount of foreign exchange inflows associated with thatinvestment; or(d)to restrict sales of a good or service in the territory of the Participant thatthe investment produces or provides by relating those sales to the volume
or value of the investment’s exports or foreign exchange earnings.

The Participants understand that:(a)subparagraph 2 will not prevent an authority of the territory of a
Participant from conditioning the receipt or continued receipt of anadvantage, in connection with any investments, on compliance with arequirement to locate production, provide a service, train or employ
workers, construct or expand particular facilities, or carry out research anddevelopment in its territory;(b)

subparagraphs 1(a), 1(b), 1(c), 2(a), and 2(b) will not apply to aqualification requirement for a good or service with respect to export
promotion and foreign aid programs;(c)subparagraphs 1(b), 1(c), 1(f), 1(g), 1(h), 1(i), 2(a), and 2(b) will not apply
to procurement by an authority of the territory of a Participant;(d)subparagraphs 2(a) and 2(b) will not apply to a requirement imposed by animporting authority of the territory of a Participant relating to the content
of a good necessary to qualify for a preferential tariff or preferential quota;(e)subparagraphs 1(f) and 1(g) will not apply:(i)if the use of an intellectual property right is authorized inaccordance with Article 315 of the TRIPS Agreement, or to ameasure requiring the disclosure of proprietary information that
falls within the scope of, and is consistent with, Article 39 of the
TRIPS Agreement, or(ii)

if the requirement is imposed or the requirement, commitment, or
undertaking is enforced by a court, administrative tribunal, orcompetition authority to remedy an alleged violation of domestic
competition law;

The reference to “Article 31” includes any waiver or amendment to the TRIPS Agreement implementing paragraph 6of the Doha Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2).
5

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(f)

subparagraphs 1(b), 1(c), 1(f), 1(g), 1(h), 2(a), and 2(b) will not prevent anauthority of the territory of a Participant from adopting or maintaining ameasure to achieve a legitimate public policy objective, provided that themeasure:(i)

is not applied in a manner which would constitute a means ofarbitrary or unjustifiable discrimination or a disguised restriction
on trade, and(ii)does not impose restrictions greater than are required to achieve
the objective;(g)subparagraph 1(f) will not preclude a regulatory body or judicial authorityof the territory of a Participant from requiring a person of the territory of
the other Participant to preserve and make available the source code ofsoftware, or an algorithm expressed in that source code, to the regulatory
body for a specific investigation, inspection, examination, enforcement
action, or judicial proceeding6, subject to safeguards against unauthorized
disclosure;(h)subparagraphs 1(g) and 1(h) will not apply to a measure adopted or
maintained by an authority of the territory of a Participant relating to afinancial institution; and(i)subparagraph 1(h) will not apply to information held or processed by or on
behalf of an authority of the territory of a Participant, or a measure related
to this information, including a measure related to its collection.

PARAGRAPH 12:

SENIOR MANAGEMENT, BOARDS OF DIRECTORS, AND ENTRY OFPERSONNEL

1.

An enterprise of the territory of a Participant that is a covered investment will not
be required by an authority of the territory of that Participant to appoint to asenior management position an individual who is from a particular territory.

2.

A majority of the board of directors, or a committee thereof, of an enterprise of
the territory of a Participant that is a covered investment may be required by anauthority of the territory of that Participant to hold a particular passport or be aresident in the territory of that Participant, provided that the requirement does notmaterially impair the ability of the investor to exercise control over its investment.

3.

Enterprises may be encouraged by an authority of the territory of a Participant toconsider greater diversity in senior management positions or on boards of
directors, which may include a requirement to nominate women.

6 This disclosure will not be construed to negatively affect the software source code’s status as a trade secret, if suchstatus is claimed by the trade secret owner.

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4.

Subject to the domestic law of the territory of a Participant relating to the entry ofnatural persons of other territories, temporary entry will be granted to natural
persons employed by an investor of the territory of the other Participant who seek
to render managerial or executive services, or services that require specialized
knowledge, to a covered investment of that investor.

PARAGRAPH 13:

SUBROGATION

If an authority or an agency of the territory of a Participant makes a payment to
one of the investors of the territory of that Participant under a guarantee or acontract of insurance, or other form of indemnity it has entered into in respect of acovered investment:(a)the validity of the subrogation or transfer of any benefits the investor
would have possessed with respect to the covered investment but for thesubrogation or transfer will be recognized by an authority of the territory
where the covered investment was made; and(b)

the investor will be precluded from pursuing these benefits to the extent of
the subrogation or transfer, unless authorized by an authority or an agencyof the territory of a Participant to act on its behalf.

PARAGRAPH 14:

TRANSPARENCY

1.

The laws, regulations, procedures, and administrative rulings of generalapplication in the territory of a Participant, respecting a matter covered by thisArrangement, will be promptly published or otherwise made available by anauthority of the territory of that Participant in such a manner as to enableinterested persons and authorities of the territory of the other Participant tobecome acquainted with them.

2.

To the extent possible:

3.

(a)

any measure referred to in subparagraph 1 that an authority of the territoryof a Participant proposes to adopt will be published in advance;(b)interested persons and authorities of the territory of the other Participant
will be provided a reasonable opportunity to comment on that proposed
measure; and(c)reasonable time will be allowed between publication of the measurereferred to in subparagraph 1 and the date on which investors of theterritory of a Participant must comply with the measure.

The laws, regulations, procedures, and administrative rulings of the territory of a
Participant with regards to the rights of Indigenous Peoples, including any
applicable consultation process, will be made available by an authority of theterritory of that Participant in such a manner as to enable an interested person to
duly comply with the domestic laws of the territory of that Participant.

15

4.

Appropriate mechanisms for responding to enquiries from interested persons
regarding the measures referred to in subparagraphs 1 and 3 will be maintained or
established by an authority of the territory of a Participant.

5.

On request by an authority of the territory of a Participant, information andresponses to questions pertaining to a proposed or actual measure that therequesting authority considers affects or may affect an investment will bepromptly provided by an authority of the territory of the other Participant. Such
requests or information may be conveyed through contact points designatedpursuant to subparagraph 6.

6.

Each Participant will designate a contact point to facilitate communications
between the Participants on any matter covered by this Arrangement. Each
Participant will notify the other Participant in writing of its designated contact
point no later than 60 days after the date when this Arrangement comes into
effect. Each Participant will promptly notify the other Participant in the event of
any change to its contact point.

PARAGRAPH 15:

RESPONSIBLE BUSINESS CONDUCT1.

The Participants reaffirm that investors and their investments will comply withdomestic laws and regulations of the territory within which the investment ismade, including laws and regulations on human rights, the rights of Indigenous
Peoples, gender equality, environmental protection, and labour.

2.

Each Participant reaffirms the importance of internationally recognized standards,
guidelines, and principles of responsible business conduct that have beenendorsed or are supported by the authorities of the territory of that Participant,including the OECD Guidelines for Multinational Enterprises and the United
Nations Guiding Principles on Business and Human Rights. Investors andenterprises operating within the territory of a Participant or subject to thejurisdiction of the authorities of the territory of a Participant will be encouraged tovoluntarily incorporate these standards, guidelines, and principles into theirbusiness practices and internal policies. These standards, guidelines, andprinciples address areas such as labour, environment, gender equality, humanrights, community relations, and anti-corruption.

3.

Investors or enterprises operating within the territory of a Participant will be
encouraged by an authority of the territory of that Participant to undertake andmaintain meaningful engagement and dialogue, in accordance with international
responsible business conduct standards, guidelines, and principles that have beenendorsed or are supported by the authorities of the territory of that Participant,with Indigenous Peoples and local communities.

4.

The Participants reaffirm the importance of cooperating on and facilitating joint
initiatives to promote responsible business conduct.

16

PARAGRAPH 16:

DENIAL OF BENEFITS

The benefits of this Arrangement may be denied by an authority of the territory ofa Participant to an investor of the territory of the other Participant that is anenterprise of the territory of the latter Participant and to investments of thatinvestor if:(a)an investor of a third territory owns or controls the enterprise; and(b)the denying authority of the territory of the Participant adopts or maintains
a measure with respect to the third territory or investors of the third
territory that:(i)relates to the maintenance of international peace and security, and(ii)

prohibits transactions with the enterprise or would be violated or
circumvented if the benefits of this Arrangement were accorded tothe enterprise or to its investments.

PART C: INVESTMENT PROMOTION AND FACILITATIONPARAGRAPH 17:

PROMOTION OF INVESTMENT

The creation of favourable conditions for investment in the territory of a
Participant by investors of the territory of the other Participant will be encouraged
by an authority of the territory of the former Participant and those investments
will be admitted in accordance with this Arrangement.

PARAGRAPH 18:

PROCESSING OF APPLICATIONS FOR AN AUTHORIZATION

1.

Authorization procedures adopted or maintained in the territory of a Participant
will not unduly complicate or delay the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition of an investment in
the territory of that Participant.

2.

A competent authority of the territory of a Participant will:

3.

(a)

accept applications for an authorization in electronic format under similar
conditions of authenticity as paper submissions; and(b)accept authenticated copies, if considered appropriate, in place of original
documents.

At the request of an applicant, a competent authority of the territory of a
Participant will provide, without undue delay, information concerning the statusof the application for an authorization.

17

4.

If a competent authority of the territory of a Participant considers an application
for an authorization to be incomplete, the competent authority will, within areasonable period of time, inform the applicant for an authorization, identify theadditional information required to complete the application for an authorization,and provide the applicant for an authorization an opportunity to correct
deficiencies.

5.

The processing of an application for an authorization, including reaching a final
decision, will be completed within a reasonable timeframe from the submission of
a complete application for an authorization.

6.

An authorization, once granted, will enter into effect without undue delay, in
accordance with the terms and conditions specified therein.

7.

If a competent authority of the territory of a Participant rejects an application foran authorization, the applicant will be:(a)informed in writing and without undue delay;(b)

informed, upon request, of the reasons the application for an authorization
was rejected and of the timeframe for an appeal or review against thedecision; and(c)permitted to resubmit an application for an authorization.

PARAGRAPH 19:

FEES AND CHARGES

1.

A fee that a competent authority of the territory of a Participant imposes on an
applicant in relation to its application for an authorization will be reasonable andcommensurate with the costs incurred to process the application, and will not in
itself restrict the establishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of an investment in the territory of theParticipant.

2.

Authorization fees do not include payments for auction, the use of natural
resources, royalties, tendering or other non-discriminatory means of awarding
concessions, or mandated contributions to provide a universal service.

3.

This Paragraph will not apply to a measure adopted or maintained in relation to afinancial institution.

PART D: RESERVATIONS, EXCEPTIONS, EXCLUSIONSPARAGRAPH 20:
1.

NON-CONFORMING MEASURESParagraph 4, Paragraph 5, Paragraph 11, Paragraph 12, and Part C (Investment
Promotion and Facilitation) will not apply to:(a)any existing non-conforming measure maintained in the territory of a
Participant;

18

(b)

any measure adopted or maintained after the date of coming into effect of
this Arrangement that, at the time of sale or other disposition of an
authority’s equity interests in, or the assets of, an existing publicly-owned
enterprise or an existing entity of the authority:(i)prohibits or imposes limitations on the ownership or control ofequity interests or assets, or(ii)

requires senior management or members of the board of directors
to be of a particular territory;(c)

the continuation or prompt renewal of any non-conforming measurereferred to in subparagraph (a) or (b); or(d)an amendment to any non-conforming measure referred to in
subparagraph (a) or (b) to the extent that the amendment does not decrease
the conformity of the measure, as it existed immediately before theamendment, with Paragraph 4, Paragraph 5, Paragraph 11, Paragraph 12,
and Part C (Investment Promotion and Facilitation).

2.

Paragraph 4, Paragraph 5, Paragraph 11, Paragraph 12, and Part C (Investment
Promotion and Facilitation) will not apply to a measure that an authority of theterritory of a Participant adopts or maintains with respect to sectors, subsectors, or
activities, as set out in its schedule to Annex I.

3.

No investor of the territory of the other Participant will be required, under any
measure adopted after the date of coming into effect of this Arrangement andcovered by its schedule to Annex I, by reason that the investor is a natural personof a specific territory, to sell or otherwise dispose of an investment existing at thetime the measure becomes effective.

4.

Paragraph 5 will not apply to treatment accorded pursuant to agreements or
arrangements set out in Annex II.

5.

In respect of intellectual property rights, an authority of the territory of a
Participant may derogate from Paragraph 4, Paragraph 5, and Paragraph 11 in amanner that is consistent with:

6.

(a)

the TRIPS Agreement;(b)an amendment to the TRIPS Agreement in force for the territories of both
Participants; and(c)a waiver to the TRIPS Agreement granted pursuant to Article IX of the
WTO Agreement.

Paragraph 4, Paragraph 5, and Paragraph 12 will not apply to:(a)procurement by an authority of the territory of a Participant; or(b)a subsidy or grant provided by an authority of the territory of a Participant,including an authority-supported loan, a guarantee, or insurance.

19

PARAGRAPH 21:

GENERAL EXCEPTIONS

1.

This Arrangement will not apply to a measure that an authority of the territory of
the CTOT adopts or maintains as necessary to fulfill Aboriginal or treaty rights asrecognized and affirmed by section 35 of the Constitution Act, 1982, including
land claims agreements, and those rights set out in self-government agreements
between the federal, provincial, or territorial authorities of the territory of the
CTOT and Aboriginal peoples.

2.

Notwithstanding the other dispositions of this Arrangement, this Arrangement
will not apply to measures that the authorities in the territory of a Participant
adopt or maintain for prudential reasons,7 including for the protection of
investors, depositors, policy holders, or persons to whom a fiduciary duty is owed
by a financial institution, or to ensure the integrity and stability of the financial
system. If the measure does not conform with the dispositions of thisArrangement to which this exception applies, the measure will not be used as ameans of avoiding the Participant’s commitments under those dispositions.

3.

This Arrangement will not apply to non-discriminatory measures of generalapplication taken by a central bank or monetary authority of the territory of a
Participant, or a financial institution that is owned or controlled by an authority ofthe territory of a Participant, in pursuit of monetary and related credit or exchange
rate policies. This subparagraph will not affect a Participant’s commitments underParagraph 9 or Paragraph 11.

4.

This Arrangement will not:(a)require an authority of the territory of a Participant to furnish or allow
access to information if an authority of the territory of that Participant
determines that the disclosure of this information would be contrary to theessential security interests of the territory of that Participant;(b)

prevent an authority of the territory of a Participant from taking an actionthat it considers necessary to protect the essential security interests of theterritory of the Participant:(i)relating to the traffic in arms, ammunition and implements of war
and to such traffic and transactions in other goods, materials,
services, and technology undertaken directly or indirectly for the
purpose of supplying a military or other security establishment,(ii)

taken in time of war or other emergency in international
relations, or(iii)

relating to the implementation of domestic policies or international
agreements respecting the non-proliferation of nuclear weapons orother nuclear explosive devices; or

7 The Participants understand that the term “prudential reasons” includes the maintenance of the safety, soundness,

integrity, or financial responsibility of individual financial institutions as well as the safety, and financial and operational
integrity of payment and clearing systems.

20

(c)

prevent an authority of the territory of a Participant from fulfilling any
obligations as applicable to it for the maintenance of international peaceand security, under the United Nations Charter as applicable to a territory.

5.

This Arrangement will not require an authority of the territory of a Participant tofurnish or allow access to information, the disclosure of which would be contrary
to the law of the territory of that Participant, or would impede law enforcement, orotherwise be contrary to the public interest, or which would prejudice thelegitimate commercial interests of particular enterprises, public or private.

6.

This Arrangement will not apply to a measure adopted or maintained by anauthority of the territory of a Participant with respect to a person engaged in a
cultural industry. “Person engaged in a cultural industry” means a person engaged
in the following activities:

7.

(a)

the publication, distribution or sale of books, magazines, periodicals, ornewspapers in print or machine-readable form, except when printing ortypesetting any of the foregoing is the only activity;(b)

the production, distribution, sale, or exhibition of film or video recordings;(c)the production, distribution, sale, or exhibition of audio or video music
recordings;(d)the publication, distribution, or sale of music in print or machine-readable
form; or(e)radio communications in which the transmissions are intended for direct
reception by the general public, and all radio, television, or cablebroadcasting undertakings and all satellite programming and broadcast
network services.

If a benefit or commitment in this Arrangement duplicates the substance of a rightor obligation under the WTO Agreement, a measure adopted or maintained by anauthority of the territory of a Participant in conformity with a waiver decision
granted by the WTO pursuant to Article IX of the WTO Agreement will bedeemed to be also consistent with the present Arrangement.

PARAGRAPH 22:
1.

EXCLUSIONSPart E (Differences between an Investor and a Participant) and Part F(Consultations between the Participants) of this Arrangement will not apply to ameasure adopted or maintained relating to a review under the Investment Canada
Act, R.S.C. 1985, c. 28, as amended, with respect to whether or not to permit aninvestment that is subject to review.

21

2.

Part E (Differences between an Investor and a Participant) and Part F(Consultations between the Participants) of this Arrangement will not apply to a
tobacco control measure adopted or maintained by an authority of the territory ofa Participant. A “tobacco control measure” means a measure of an authority of theterritory of a Participant related to the production or consumption of
manufactured tobacco products (including products made or derived fromtobacco), their distribution, labelling, packaging, advertising, marketing,promotion, sale, purchase, or use, as well as enforcement measures, such as
inspection, recordkeeping, and reporting requirements. A measure with respect totobacco leaf that is not in the possession of a manufacturer of tobacco products, orthat is not part of a manufactured tobacco product, is not a tobacco control
measure.

3.

Part E (Differences between an Investor and a Participant) and Part F(Consultations between the Participants) of this Arrangement will not apply to ameasure adopted or maintained relating to a review under the Statute forInvestment by Foreign Nationals (1997), as amended, with respect to whether or
not to permit an investment that is subject to review.

PART E: DIFFERENCES BETWEEN AN INVESTOR AND A PARTICIPANT

PARAGRAPH 23:

SCOPE AND PURPOSE

Without prejudice to Part F (Consultations between the Participants), an investorof the territory of a Participant may notify the other Participant of a difference of
application regarding a commitment under Part B (Investment Protections), otherthan Paragraph 3, Paragraph 11, Paragraph 12(3), Paragraph 12(4), Paragraph 14,
or Paragraph 15.

PARAGRAPH 24:

REQUEST FOR CONSULTATIONS

1.

In the event that an investor of the territory of a Participant considers that ameasure of an authority of the territory of the other Participant is inconsistent withthe dispositions of this Arrangement, that investor will seek to resolve thedifference through consultations, which may include the use of non-binding, third
party procedures, such as good offices, conciliation, or mediation.

2.

The investor will deliver to that Participant a written request for consultations,which will specify:(a)the name and address of the investor and material to establish that theinvestor is an investor of the territory of the other Participant;(b)

the investment at issue and material to establish that the investor owns orcontrols the investment, including, if the investment is an enterprise, thename, address, and place of incorporation of the enterprise;

22

(c)

(d)

for each difference of application of this Arrangement:(i)the disposition of this Arrangement with which a measure isalleged to be inconsistent, and(ii)

the factual basis for the alleged inconsistency, including themeasure at issue; andthe outcome sought.

3.

The investor may, when submitting a request for consultations, propose to holdthe consultations by videoconference, telephone, or similar means ofcommunication as appropriate. The other Participant will give sympathetic
consideration to that request, in particular if the investor is a micro, small, or
medium-sized enterprise.

4.

Unless the investor and the Participant decide otherwise, consultations will beheld within 90 days of the delivery of the request for consultations pursuant to
subparagraph 2.

5.

Unless the investor and the Participant decide otherwise, the place ofconsultations will be Taipei, if the Participant is the TECO, or Ottawa, if theParticipant is the CTOT.

PARAGRAPH 25:

MEDIATION

The investor and the Participant referred to in Paragraph 24(1) may at any time
decide to have recourse to mediation. Recourse to mediation will be without
prejudice to the positions of the investor and the Participant and will be governedby the rules decided by the investor and the Participant, including the appointmentof the mediator.

PARAGRAPH 26:

REQUEST TO CONSENT TO ARBITRATION

1.

If consultations under Paragraph 24 fail to resolve the difference of application ofcertain dispositions of this Arrangement, an investor of the territory of a
Participant may file a notice of claim with an authority of the territory of the otherParticipant requesting an authority of the territory of that Participant to consent tosubmit the difference to arbitration. Annex III (Model Arbitration Agreement)
contains a model arbitration agreement that an authority of the territory of a
Participant may, in the future, choose to enter with an investor of the territory of
the other Participant in order to resolve such a difference.

2.

Each Participant will promptly make publicly available, and notify the otherParticipant, the location for delivery of notice and other documents, including any
subsequent change to the location for delivery.

3.

If a dispute settlement mechanism, consisting of a first instance investment
tribunal or an appellate mechanism, is developed under other institutionalarrangements and is open to the authorities of the territories of the Participants for
acceptance, the investor and the authorities of the territory of the other Participant
may consider whether to submit the difference to that dispute settlement
mechanism pursuant to its rules.

23

4.

A Participant may request to review and amend the Arbitrator Code of Conduct
for Investment Dispute Settlement contained in Annex III (Model Arbitration
Agreement) in order to take into account, as appropriate, relevant developments inthat area.

PART F: CONSULTATIONS BETWEEN THE PARTICIPANTS

PARAGRAPH 27:

CONSULTATIONS BETWEEN THE PARTICIPANTS

The Participants will, whenever possible, settle amicably through consultations
any difference of interpretation or application of this Arrangement. A Participant
may request consultations on the interpretation or application of this Arrangement
by delivering a notice to the other Participant. Unless the Participants decide on alonger period, the Participants will, within 15 days of the notice, meet to consider
the matter with a view to reaching a mutually satisfactory resolution. During those
consultations, each Participant will endeavour to provide sufficient information to
enable a full examination of the matter, while maintaining the confidentiality of
the information provided by the other Participant in the course of consultations.

PART G: ADMINISTRATION OF THE ARRANGEMENTPARAGRAPH 28:

DISCUSSIONS AND OTHER ACTIONS

1.

A Participant may request in writing discussions with the other Participant
regarding an actual or proposed measure or any other matter that it considers
might affect the operation of this Arrangement, including its implementation,interpretation, or application.

2.

Further to discussions under this Paragraph, the Participants may take action as
they may decide, including on the proper interpretation of this Arrangement. If
concerns arise as regards matters of interpretation of this Arrangement, theParticipants may come to a joint interpretation of this Arrangement.

PARAGRAPH 29:

EXTENT OF COMMITMENTS

All necessary measures will be taken to give effect to this Arrangement, including
by the authorities of the territory of the Participants, except as otherwise provided
in this Arrangement.

PARAGRAPH 30:
1.

APPLICATION AND COMING INTO EFFECT

Each Participant will notify the other Participant, in writing, upon completion of
the internal procedures required for this Arrangement to come into effect. This
Arrangement will come into effect the day following the date of the last
notification.

24

2.

The Participants may amend this Arrangement upon mutual consent in writing,specifying the starting date of amendments. Any amendment may be attached tothis Arrangement as an annex.

3.

A Participant may terminate this Arrangement by giving written notice of at least
one year to the other Participant. In respect of investments or commitments toinvest made prior to the date of termination of this Arrangement, each Participant
will continue to apply subparagraph 1, as well as Paragraphs 1 through 29 of thisArrangement, for 15 years after the date on which this Arrangement ceases to bein effect.

SIGNED in duplicate aton thisday ofin the English, French, and Chinese languages, each version being equally valid.

__________________________________FOR THE TAIPEI ECONOMIC AND
CULTURAL OFFICE IN CANADA

202__,__________________________________FOR THE CANADIAN TRADE OFFICE IN
TAIPEI25

PART H: ANNEXESANNEX I: RESERVATIONS FOR FUTURE MEASURES

1.

In accordance with Paragraph 20, an authority of the territory of the CTOT may
adopt or maintain any measure that does not conform with the commitments inthis Arrangement that are set out below with respect to the following sectors or
matters:(a)social services (that is: public law enforcement; correctional services,income security, or insurance; social security or insurance; social welfare;public education; public training; and health and child care), if themeasure does not conform with the commitments provided in Paragraph 4,
Paragraph 5, Paragraph 12, or Part C (Investment Promotion andFacilitation) of this Arrangement;(b)

the rights or preferences provided to Aboriginal peoples, including thoserecognized and affirmed by section 35 of the Constitution Act, 1982 or
those set out in self-government agreements between the authorities at thefederal, provincial, or territorial level of the territory of the CTOT and
Indigenous Peoples8, if the measure does not conform with thecommitments provided in Paragraph 4, Paragraph 5, Paragraph 11,
Paragraph 12, or Part C (Investment Promotion and Facilitation) of thisArrangement;(c)the rights or preferences provided to socially or economicallydisadvantaged minorities, if the measure does not conform with thecommitments provided in Paragraph 4, Paragraph 11, Paragraph 12, orPart C (Investment Promotion and Facilitation) of this Arrangement;(d)residency requirements for ownership of oceanfront land, if the measuredoes not conform with the commitments provided in Paragraph 4 of thisArrangement;(e)securities issued by authorities (that is acquisition, sale, or otherdisposition by natural persons of the territory of other Participant of bonds,
treasury bills, or other kinds of debt securities issued by an authority of theterritory of the CTOT), if the measure does not conform with thecommitments provided in Paragraph 4 of this Arrangement;

8 For greater clarity, Indigenous Peoples in the territory of the CTOT are the First Nations, Inuit, and the Métis peoples.

26

(f)

maritime cabotage, which means:(i)the transportation of either goods or passengers by ship between
points in the territory of the CTOT or above the continental shelfof Canada, either directly or by way of a place outside the territoryof the CTOT; but, with respect to waters above the continental
shelf of Canada, the transportation of either goods or passengers
only in relation to the exploration, exploitation, or transportation of
the mineral or non-living natural resources of the continental shelfof Canada; and(ii)

the engaging by ship in any other marine activity of a commercial
nature in the territory of the CTOT and, with respect to waters
above the continental shelf, in such other marine activities of acommercial nature that are in relation to the exploration,
exploitation, or transportation of the mineral or non-living natural
resources of the continental shelf of Canada;

if the measure does not conform with the commitments provided in
Paragraph 4, Paragraph 5, Paragraph 11, or Paragraph 12 of thisArrangement;

2.

(g)

licensing or otherwise authorizing fishing or fishing-related activities,
including entry of foreign fishing vessels to the exclusive economic zone,
territorial sea, internal waters, or ports of the territory of the CTOT, anduse of any services therein, if the measure does not conform with thecommitments provided in Paragraph 4 or Paragraph 5 of thisArrangement;(h)the establishment or acquisition in the territory of the CTOT of aninvestment in the services sector, if the measure does not conform with thecommitments provided in Paragraph 4, Paragraph 11, or Paragraph 12 ofthis Arrangement, provided that the measure is consistent with Canada’s
obligations under Articles II, XVI, XVII, and XVIII of the WTO General
Agreement on Trade in Services; and(i)granting advantages to the Canada Mortgage and Housing Corporation,
Canada Housing Trust, and any new, reorganized, or transferee entities
having similar functions and objectives with respect to housing finance, if
the measure does not conform with the commitments provided in
Paragraph 4 of this Arrangement.

In accordance with Paragraph 20, an authority of the territory of the TECO may
adopt or maintain any measure that does not conform with the commitments inthis Arrangement that are set out below with respect to the following sectors or
matters:(a)the provision of law enforcement and correctional services, and thefollowing services to the extent they are social services established or
maintained for a public purpose: income security or insurance, social
security or insurance, social welfare, public education, public training,
health, child care, or public sewage services, if the measure does notconform with the commitments provided in Paragraph 4, Paragraph 5,
Paragraph 11, Paragraph 12, or Part C (Investment Promotion andFacilitation) of this Arrangement;

27

(b)

the rights or preferences granted to Indigenous Peoples of the territory of
the TECO9, including those recognized and affirmed by the Indigenous
Peoples Basic Law (2005), as amended, if the measure does not conformwith the commitments provided in Paragraph 4, Paragraph 5, Paragraph
11, Paragraph 12, or Part C (Investment Promotion and Facilitation) of
this Arrangement;(c)the operation of games of luck and chance, and of activities involving bets
including but not limited to the issuance and operation of lottery, if themeasure does not conform with the commitments provided in Paragraph 4,
Paragraph 11, or Part C (Investment Promotion and Facilitation) of thisArrangement;(d)broadcasting services in the territory of the TECO, international
broadcasting services originating from the territory of the TECO, and theallocation of spectrum in relation to broadcasting services, if the measuredoes not conform with the commitments provided in Paragraph 4,
Paragraph 5, Paragraph 11, Paragraph 12, or Part C (Investment
Promotion and Facilitation) of this Arrangement;(e)the rights or preferences granted to minorities with social or economic
disadvantages, if the measure does not conform with the commitments
provided in Paragraph 4, Paragraph 11, or Part C (Investment Promotion
and Facilitation) of this Arrangement;(f)the establishment or acquisition in the territory of the TECO of aninvestment in the services sector, if the measure does not conform with thecommitments provided in Paragraph 4, Paragraph 11, or Paragraph 12 ofthis Arrangement, provided that the measure is consistent with obligationsof the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu
under Articles II, XVI, XVII, and XVIII of the WTO General Agreement
on Trade in Services;(g)licensing or otherwise authorizing fishing or fishing-related activities,
including entry of foreign fishing vessels to the exclusive economic zone,
territorial sea, internal waters, or ports of the territory of the TECO, anduse of any services therein, if the measure does not conform with thecommitments provided in Paragraph 4 or Paragraph 5 of thisArrangement; and(h)museum services, if the measure does not conform with the commitments
provided in Paragraph 4, Paragraph 11, Paragraph 12, or Part C(Investment Promotion and Facilitation) of this Arrangement.

9 For greater clarity, Indigenous Peoples of the territory of the TECO refer to the traditional peoples as defined under

Article 2 of the Indigenous Peoples Basic Law (2005), as amended.

28

ANNEX II: EXCEPTIONS FROM MOST-FAVOURED-NATION TREATMENT

1.

Paragraph 5 will not apply to treatment accorded by an authority of the territory ofa Participant under an international agreement in force or investment arrangementin effect, or signed prior to the coming into effect of this Arrangement.

2.

Paragraph 5 will not apply to treatment accorded by an authority of the territory ofa Participant under an existing or future international agreement or arrangement:(a)establishing, strengthening or expanding a free trade area or customs
union; or(b)relating to:(i)aviation;(ii)

fisheries; or(iii)maritime matters, including salvage.

29

ANNEX III: MODEL ARBITRATION AGREEMENT

IN THE MATTER OF AN ARBITRATION-between[Investor of the territory of a Participant](the “Claimant”)-and[Authority of the territory of the other Participant](the “Respondent” and together with the Claimant, the “Disputing Parties”)

ARBITRATION AGREEMENT[Date]

WHEREAS:A.

The Arrangement Between the Taipei Economic and Cultural Office inCanada and the Canadian Trade Office in Taipei for the Promotion andProtection of Investments (the “Arrangement”) contains certain
dispositions regarding investment protection for covered investors andcovered investments of investors;

B.

A difference has arisen between the Claimant and the Respondent withrespect to a measure that the Claimant maintains is within the scope ofParagraph 2 of the Arrangement, and consultations between the Disputing
Parties pursuant to Paragraph 24 of the Arrangement have not resolved thedifference (the “Investment Dispute”);C.

The Claimant and the Respondent wish to resolve the Investment Dispute
through binding arbitration, and they have agreed to do so in accordancewith the terms of this Arbitration Agreement (the “Agreement”);

D.

Now, therefore, with consideration duly acknowledged, the Disputing
Parties agree as follows:

30

SECTION A: DEFINITIONSARTICLE 1:
1.

DEFINITIONS

For the purpose of this Agreement:“appointing authority” means the Secretary General of the Permanent Court of
Arbitration or any person as agreed by the Disputing Parties;“Disputing Party” means either the Claimant or the Respondent;“New York Convention” means the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, done at New York on
June 10, 1958;“non-disputing Participant” means the Participant to the Arrangement that is
not of the territory of the Respondent under this Agreement;“third-party funding” means any funding or other equivalent support provided
by a person who is not a Disputing Party in order to finance part or all of the costof the proceedings including through a donation or grant, or in return for
remuneration dependent on the outcome of the Investment Dispute;“Tribunal” means the arbitration tribunal established under this Agreement;“UNCITRAL Arbitration Rules” means the arbitration rules of the United
Nations Commission on International Trade Law, in their most recent form; and“UNCITRAL Transparency Rules” means the UNCITRAL Rules on
Transparency in Treaty-based Investor-State Arbitration, in their most recent
form.

2.

All other terms in this Agreement that are defined terms in the Arrangement havethe meaning set out in Paragraph 1 of the Arrangement.

31

SECTION B: OBJECTIVE AND RELATION WITH THE ARRANGEMENTARTICLE 2:

OBJECTIVE

This Agreement establishes a procedural mechanism for the resolution of theInvestment Dispute by arbitration.

ARTICLE 3:

RELATION WITH THE ARRANGEMENT

1.

The Disputing Parties have agreed to incorporate Part A (Definitions), Part B(Investment Protections), Part D (Reservations, Exceptions, Exclusions), Part E(Differences between an Investor and a Participant), Annex I (Reservations for
Future Measures), and Annex II (Exceptions from Most-Favoured-Nation
Treatment) of the Arrangement into this Agreement as binding rules of law under
this Agreement.

2.

This Agreement does not modify the Arrangement and has no bearing upon its
interpretation. This Agreement extends only to the Investment Dispute between
the Disputing Parties. Nothing in this Agreement is intended to have, nor shall it
have, the effect of creating any substantive rights or obligations under the
Arrangement.

3.

Any determination by the Tribunal of a breach concerns the investment
protections of the Arrangement as incorporated into this Agreement, rather than of
the Arrangement itself.

ARTICLE 4:

DENIAL OF BENEFITSThe Respondent may, within a reasonable time and no later than its principal
submission on the merits, such as the counter-memorial, in an arbitration under
this Agreement, deny the benefits of this Agreement to the Claimant if theClaimant fits within the conditions set out in Paragraph 16 of the Arrangement.

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SECTION C: CLAIMANT-RESPONDENT INVESTMENT DISPUTE SETTLEMENTARTICLE 5:SCOPE AND PURPOSE

1.

The Disputing Parties establish in this Section a mechanism for the settlement of
the Investment Dispute.

2.

Under this Section, the Disputing Parties authorize the Tribunal to determine if
the measure of the Respondent challenged by the Claimant is consistent with theinvestment protections under Part B (Investment Protections) of the Arrangement,
as incorporated into this Agreement, other than Paragraph 3, Paragraph 11,
Paragraph 12(3), Paragraph 12(4), Paragraph 14, or Paragraph 15 of the
Arrangement.

ARTICLE 6:

TAXATION MEASURES

1.

Provided that the conditions in paragraph 2 of this Article are met, a claim by aninvestor that a taxation measure of the Respondent is in breach of an agreement
between [Taiwan / the federal government of Canada] and the investor concerning
an investment shall be considered a claim for breach of the investment protectionsof the Arrangement as incorporated into this Agreement for resolution under thisAgreement.

2.

The Claimant may not make a claim under paragraph 1 of this Article or
Paragraph 10(4) of the Arrangement unless:(a)the Claimant provides a copy of the notice of claim to the taxation
authorities of the territory of each Participant, in which case, the taxation
authority of the territory of a Participant may submit in writing a request
to the taxation authority of the territory of the other Participant for a joint
determination that, in the case of paragraph 1 of this Article, the measuredoes not contravene an agreement between [Taiwan / the federal
government of Canada] and the Claimant concerning an investment, or, inthe case of Paragraph 10(4) of the Arrangement, the measure in question is
not an expropriation; and(b)

six months after receiving notification of the claim by the Claimant, thetaxation authorities of the territories of the Participants fail to reach a joint
determination that, in the case of paragraph 1 of this Article, the measuredoes not contravene an agreement between [Taiwan / the federal
government of Canada] and the Claimant concerning an investment, or in
the case of Paragraph 10(4) of the Arrangement, the measure in question is
not an expropriation.

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ARTICLE 7:

MEDIATION

The Disputing Parties may at any time decide to have recourse to mediation
pursuant to Paragraph 25 of the Arrangement. If the investor and the Participant
decide to have recourse to mediation, Article 8 of this Agreement will besuspended from the date on which the investor and the Participant decided to haverecourse to mediation, and will resume on the date on which either the investor or
the Participant decides to end the mediation. A decision by the investor or theParticipant to end the mediation will be transmitted by way of letter to themediator and the other side to the mediation.
ARTICLE 8:
1.

LIMITATION PERIODThe Claimant must have submitted a claim under Article 9 of this Agreement nolater than:(a)three years from the date on which the Claimant or, as applicable, theenterprise referred to in Article 9(2), first acquired or should have firstacquired knowledge of the alleged breach and knowledge that the
Claimant or, as applicable, the enterprise, has incurred loss or damage by
reason of, or arising out of, that breach; or(b)

if the Claimant or, as applicable, the enterprise, has initiated a claim orproceeding before an administrative tribunal or court under the law of the
Respondent with respect to the measure at issue in the Claimant’s claim
under Article 9, two years after:(i)the Claimant or, as applicable, the enterprise, ceases to pursue thatclaim; or(ii)when that proceeding has otherwise ended;

provided that it is no later than seven years after the date on which the
Claimant or, as applicable, the enterprise, first acquired or should havefirst acquired knowledge of the alleged breach and knowledge that the
Claimant or, as applicable, the enterprise, has incurred loss or damage by
reason of, or arising out of, that breach.
Neither a continuing breach nor the occurrence of similar or related acts oromissions will renew or interrupt the periods set out in subparagraphs (a) and (b).
2.

If the Claimant has not submitted a claim under Article 9 of this Agreement
within one year of the delivery of the request for consultations underParagraph 24 of the Arrangement, the Claimant is deemed to have withdrawn its
request for consultations and cannot advance a claim under this Section withrespect to the same measure. This period may be extended by agreement between
the Claimant and the Respondent.

3.

Following the Claimant’s submission of a claim under Article 9 of thisAgreement, the length of time the Disputing Parties took to negotiate the terms ofthis Agreement shall not affect the Tribunal’s determination of whether the
Claimant satisfied the time requirements in paragraphs 1 and 2 of this Article.

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ARTICLE 9:
1.

2.

SUBMISSION OF A CLAIM TO ARBITRATIONThe Claimant may submit a claim that the Respondent has adopted or maintained
a measure that breaches certain investment protections of the Arrangement as
incorporated into this Agreement in accordance with Article 5 of this Agreement,
and that the Claimant as an investor of the territory of a Participant has incurred
loss or damage by reason of, or arising out of, that breach, requesting the
Respondent to consent to submit the Investment Dispute to arbitration, only if:(a)the Claimant has fulfilled the requirements of Paragraph 24 of the
Arrangement as incorporated into this Agreement;(b)

180 days have elapsed since the receipt by the Respondent of a request for
consultations under Paragraph 24 of the Arrangement;(c)the claim relates to measures identified in the Claimant’s request for
consultations under Paragraph 24 of the Arrangement;(d)the Claimant consents to dispute settlement in accordance with theprocedures set out in this Agreement; and(e)

the Claimant and, if the claim is for loss or damage to an interest in anenterprise of the territory of the Respondent that is a juridical person that
the Claimant owns or controls directly or indirectly, the enterprise, waives
its right to initiate or continue before any administrative tribunal or court
under domestic law, or other dispute settlement procedure, any proceedingwith respect to the measure of the Respondent referred to in
Paragraph 24(2) of the Arrangement that is alleged to be a breach ofcertain investment protections of the Arrangement as incorporated into
this Agreement, except for a proceeding for injunctive, declaratory, orother extraordinary relief, not involving the payment of damages, before
an administrative tribunal or court under the law of the Respondent.

The Claimant as an investor of the territory of a Participant on behalf of anenterprise of the territory of the Respondent that is a juridical person that the
Claimant owns or controls directly or indirectly, may make a claim that the
Respondent has adopted or maintained a measure that breaches certain investment
protections of the Arrangement as incorporated into this Agreement in accordancewith Article 5 of this Agreement, and that the enterprise has incurred loss ordamage by reason of, or arising out of, that breach, only if:(a)the Claimant has fulfilled the requirements of Paragraph 24 of the
Arrangement as incorporated into this Agreement;(b)

180 days have elapsed since the receipt by the Respondent of a request for
consultations under Paragraph 24 of the Arrangement;(c)the claim relates to measures identified in the Claimant’s request for
consultations under Paragraph 24 of the Arrangement;

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(d)

the Claimant consents to dispute settlement in accordance with theprocedures set out in this Agreement; and(e)both the Claimant and the enterprise waive their right to initiate orcontinue before an administrative tribunal or court under domestic law, orother dispute settlement procedure, any proceeding with respect to themeasure of the Respondent referred to in Paragraph 24(2) of the
Arrangement that is alleged to be a breach of certain investment
protections of the Arrangement as incorporated into this Agreement,
except for a proceeding for injunctive, declaratory, or other extraordinary
relief, not involving the payment of damages, before an administrative
tribunal or court under the law of the Respondent.

3.

A consent and waiver required by this Article shall be in writing, shall bedelivered to the Respondent, and shall be included in the submission of a claim toarbitration.

4.

Notwithstanding paragraph 3 of this Article, a waiver from the enterprise underparagraph 1(e) or 2(e) of this Article is not required if the Respondent has
deprived the Claimant of control of the enterprise.

5.

If the Claimant makes a claim under paragraph 2 of this Article and the Claimant
or a non-controlling investor in the enterprise makes a claim under paragraph 1
arising out of the same events or circumstances, and two or more of the claims are
submitted to dispute settlement under this Article, the claims should be heard
together by a Tribunal constituted under Article 15 of this Agreement, unless the
Tribunal finds that the interests of a Disputing Party would be prejudiced thereby.

6.

The Claimant may submit a claim to dispute settlement under:(a)the UNCITRAL Arbitration Rules; or(b)

any other rules on agreement of the Disputing Parties.

7.

Except to the extent modified by this Agreement, the arbitration shall be governedby the most recent version of the arbitration rules applicable under paragraph 6 ofthis Article that are in effect on the date that the claim is submitted to disputesettlement under this Article.

8.

If the Claimant proposes rules pursuant to paragraph 6(b) of this Article, theRespondent shall reply to the Claimant’s proposal within 45 days of receipt of the
proposal. If the Disputing Parties have not agreed on those rules within 60 days ofreceipt, the Claimant may submit a claim under the UNCITRAL Arbitration
Rules.

9.

The Claimant may, when submitting a claim under this Article, propose that asole member of a Tribunal should hear the claim. The Respondent may give
sympathetic consideration to that request, in particular if the Claimant is a micro,
small, or medium-sized enterprise or the compensation or damages claimed are
relatively low.

36

10.

A claim is submitted to arbitration under this Article when the notice ofarbitration under the applicable arbitration rules is received by the Respondent.

ARTICLE 10: CONSENT TO ARBITRATION
1.

The Respondent consents to resolving the Investment Dispute through arbitration
upon signing this Agreement together with the Claimant and in accordance withthe provisions of this Agreement, including the requirements of Article 8 and
Article 9.

2.

The submission of the Investment Dispute to arbitration is without prejudice to
the Respondent’s right to object to the Tribunal’s competence over the Claimant’s
claims. Thus, despite entering this Agreement, the Respondent reserves the rightto challenge the Tribunal’s jurisdiction, and the admissibility of the Claimant’s
claims, in accordance with Article 14 of this Agreement, where the Claimant fails
to submit the claim in accordance with the provisions of this Agreement.

ARTICLE 11: DISCONTINUANCE
If the Claimant fails to take a step in the proceeding within 180 days of thesubmission of a claim to arbitration under Article 9 of this Agreement, or suchother time period as agreed to by the Disputing Parties, the Claimant is deemed tohave withdrawn its claim and to have discontinued the proceeding. The Tribunal,
if constituted, shall, at the request of the Respondent, and after notice to the
Disputing Parties, in an order take note of the discontinuance. After the order has
been rendered, the authority of the Tribunal shall cease.

ARTICLE 12: ARBITRATORS
1.

Except in respect of a Tribunal established under Article 15 of this Agreement,
and unless the Disputing Parties agree otherwise, the Tribunal shall be composedof three arbitrators. Each Disputing Party shall appoint one arbitrator, and thethird arbitrator, who will be the presiding arbitrator, shall be appointed byagreement of, or pursuant to an appointment process agreed to by, the Disputing
Parties. The Disputing Parties are encouraged to consider greater diversity inarbitrator appointments, including through the appointment of women.

2.

Arbitrators should have expertise or experience in public international law,international investment law, or international trade law, or dispute resolution
arising under international investment or international trade agreements.

3.

Arbitrators shall be independent of, and not be affiliated with or take instructions
from, the authorities of the territories of the Participants or the Claimant.

4.

If the Disputing Parties do not agree on the remuneration of the arbitrators before
the Tribunal is constituted, they shall apply the prevailing ICSID rate forarbitrators.

37

5.

If a Tribunal, other than a Tribunal established under Article 15 of thisAgreement, has not been constituted within 90 days of the submission of a claim
to arbitration, a Disputing Party may ask the appointing authority to appoint thearbitrator or arbitrators not yet appointed. In accordance with this Article, theappointing authority shall make the appointment at his or her own discretion and,to the extent practicable, shall make this appointment in consultation with the
Disputing Parties. The appointing authority shall not appoint as presiding
arbitrator a natural person of the territory of a Participant to the Arrangement.

6.

Arbitrators shall abide by the Arbitrator Code of Conduct for Investment Dispute
Settlement appended to this Agreement (the “Code of Conduct”).

ARTICLE 13: INTERPRETATION, DOMESTIC LAW, BURDEN
1.

An interpretation of the Arrangement come to jointly by the Taipei Economic andCultural Office in Canada and the Canadian Trade Office in Taipei underParagraph 28(2) of the Arrangement shall be binding on the Tribunal establishedunder this Section.

2.

The Tribunal has no jurisdiction to determine the legality of a measure, alleged toconstitute a breach of an investment protection of the Arrangement as
incorporated into this Agreement, under the domestic law of the Respondent. In
determining the consistency of a measure with an investment protection of the
Arrangement as incorporated into this Agreement, the Tribunal may consider, as
appropriate, the domestic law of the Respondent as a matter of fact. In doing so,
the Tribunal shall follow the prevailing interpretation given to the domestic law
by the courts or authorities of the Respondent. Any meaning given to domestic
law by the Tribunal is not binding on the courts or authorities of the Respondent.

3.

If the Claimant submits a claim to arbitration under Article 9 of this Agreement,
including a claim that a measure of the Respondent breaches Paragraph 7 of the
Arrangement as incorporated into this Agreement, the Claimant has the burden ofproving all elements of its claim.

ARTICLE 14: PRELIMINARY OBJECTIONS
1.

Without prejudice to the Tribunal’s authority to address other questions as apreliminary objection, the Tribunal shall address and decide as a preliminary
question an objection by the Respondent that, as a matter of law, a claim
submitted is not a claim for which an award in favour of the Claimant may bemade under this Agreement, including that a dispute is not within the competenceof the Tribunal, or that a claim is manifestly without legal merit.

38

2.

An objection under paragraph 1 of this Article shall be submitted to the Tribunal
within 60 days of constitution of the Tribunal. The Tribunal shall suspend any
proceeding on the merits and issue a decision or award on the objection, stating
the grounds therefor, within 180 days of the objection. However, if a Disputing
Party requests a hearing, the Tribunal may take an additional 30 days to issue thedecision or award. Regardless of whether a Disputing Party requests a hearing, aTribunal may, on a showing of extraordinary cause, delay issuing its decision oraward by an additional brief period, which may not exceed 30 days.

3.

When deciding an objection under paragraph 1 of this Article, the Tribunal shallassume to be true the factual allegations in the claim to arbitration under Article 9of this Agreement, or any amendment to that claim. The Tribunal may also
consider relevant facts not in dispute.

4.

Whether or not the Respondent raises an objection under paragraph 1 of this
Article concerning the competence of the Tribunal, the Respondent shall have theright to raise, and the Tribunal the authority to address and decide, a question
pertaining to its competence in the course of the proceedings.

5.

The provisions on costs in Article 21 of this Agreement shall apply to decisions orawards issued under this Article.

ARTICLE 15: CONSOLIDATION
1.

If two or more claims have been submitted separately to arbitration with aquestion of law or fact in common and arise out of the same events orcircumstances, a Disputing Party may seek a consolidation order in accordancewith the agreement of all the disputing parties sought to be covered by the order
or the terms of paragraphs 2 through 10 of this Article.

2.

A Disputing Party that seeks a consolidation order under this Article shall deliver,in writing, a request to the appointing authority to establish a tribunal and shallspecify in the request:(a)the name of the Respondent, or the investors, against which the order issought;(b)

the nature of the order sought; and(c)the grounds for the order sought.

3.

The Disputing Party shall deliver a copy of the request to the Respondent, or theinvestors, against which the order is sought.

4.

Unless the disputing parties sought to be covered by the order agree to a different
appointment process, the appointing authority shall, within 60 days of receiving
the request, establish a Tribunal composed of three arbitrators. The appointing
authority shall appoint one member who is a natural person of the territory of the
Respondent, one member who is a natural person of the territory of the nondisputing Participant, and a presiding arbitrator who is not a natural person of theterritory of either Participant.

39

5.

A Tribunal established under this Article shall be established under the
UNCITRAL Arbitration Rules and shall conduct its proceedings in accordancewith the UNCITRAL Arbitration Rules, except as modified by this Section.

6.

If a Tribunal established under this Article is satisfied that the claims submitted toarbitration have a question of law or fact in common, the Tribunal may, in theinterest of fair and efficient resolution of the claims and after hearing the
disputing parties, by order:

7.

(a)

assume jurisdiction over, and hear and determine together, all or part ofthe claims; or(b)assume jurisdiction over, and hear and determine one or more of theclaims, the determination of which it believes would assist in resolving theother claims.

If the Tribunal has been established under this Article, an investor that has
submitted a claim to arbitration and that has not been named in a request madeunder paragraph 2 of this Article may make a written request to the Tribunal thatit be included in an order made under paragraph 6 of this Article. The request
shall specify:(a)the name and address of the investor;(b)

the nature of the order sought; and(c)the grounds on which the order is sought.

8.

An investor referred to in paragraph 7 of this Article shall deliver a copy of its
request to the disputing parties named in a request under paragraph 1 of this
Article.

9.

The Tribunal established under Article 9 of this Agreement does not havejurisdiction to decide a claim, or a part of a claim, over which a Tribunal
established under this Article has assumed jurisdiction.

10.

On application of a disputing party, a Tribunal established under this Article,
pending its decision under paragraph 6 of this Article, may order that theproceedings of a Tribunal established under Article 9 of this Agreement be stayed
unless the latter Tribunal has already adjourned its proceedings.

ARTICLE 16: SEAT OF ARBITRATIONThe Disputing Parties may agree on the seat of arbitration under the arbitration
rules applicable under Article 9 or Article 15 of this Agreement. If the Disputing
Parties fail to agree, the Tribunal shall determine the seat of arbitration inaccordance with the applicable arbitration rules, provided that the seat ofarbitration shall be in the territory of either Participant or a State that is a party to
the New York Convention.

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ARTICLE 17: TRANSPARENCY OF PROCEEDINGS
1.

The UNCITRAL Transparency Rules, as modified by this Agreement, shall apply
in connection with proceedings under this Section.

2.

The agreement to mediate, the notice of intent to challenge a member of the
Tribunal, the decision on challenge to a member of the Tribunal, and the request
for consolidation shall be included in the list of documents to be made available tothe public under Article 3(1) of the UNCITRAL Transparency Rules.

3.

Exhibits shall be included in the list of documents to be made available to the
public under Article 3(2) of the UNCITRAL Transparency Rules.

4.

Prior to the constitution of the Tribunal, the Respondent shall make publicly
available in a timely manner relevant documents pursuant to paragraph 2 of this
Article, subject to the redaction of confidential or protected information. That
documentation may be made publicly available by communication to therepository referred to in paragraph 9 of this Article.

5.

A Disputing Party may disclose to other persons in connection with theproceedings, including witnesses and experts, unredacted documents that it
considers necessary to disclose in the course of proceedings under this Section.
However, the Disputing Party shall ensure that those persons protect theconfidential information in those documents as directed by the Tribunal.

6.

The Respondent may disclose to domestic authorities, if applicable, unredacted
documents that it considers necessary to disclose in the course of proceedings
under this Section. However, the Respondent shall ensure that those persons
protect the confidential information in those documents as directed by the
Tribunal.

7.

Hearings shall be open to the public. The Tribunal shall determine, in consultation
with the Disputing Parties, the appropriate logistical arrangements to facilitate
public access to the hearings. If the Tribunal determines that there is a need toprotect confidential or protected information, it shall make the appropriatearrangements to hold in private that part of the hearing requiring that protection.

8.

Nothing in this Agreement requires the Respondent to withhold from the public
information required to be disclosed by the Respondent’s law. To the extent that a
Tribunal’s confidentiality order designates information as confidential and the
Respondent’s law on access to information requires public access to that
information, the Respondent’s law on access to information shall prevail. The
Respondent should apply its law in a manner sensitive to protecting fromdisclosure information that has been designated as confidential or protected
information.

9.

The administering authority to which a claim is submitted under this Section shallbe the repository of information published pursuant to this Article.

41

ARTICLE 18: PARTICIPATION OF A NON-DISPUTING PARTICIPANT
1.

The UNCITRAL Transparency Rules shall apply with respect to the participationof a non-disputing Participant in proceedings under this Section, except as
modified by this Agreement.

2.

The Respondent shall deliver to the non-disputing Participant:(a)a claim submitted pursuant to Article 9 of this Agreement, a request for
consolidation, and any document that is appended to such documents;(b)on request:

(c)

(i)

a request for consultations;(ii)

pleadings, memorials, briefs, requests, and other submissions madeto the Tribunal by a Disputing Party;(iii)

written submissions made to the Tribunal pursuant to Article 4 of
the UNCITRAL Transparency Rules;(iv)

minutes or transcripts of hearings of the Tribunal, if available;(v)

orders, awards, and decisions of the Tribunal; andon request and at the cost of the non-disputing Participant, all or part ofthe evidence that has been tendered to the Tribunal, unless the requested
evidence is publicly available.

3.

The Tribunal shall instruct the non-disputing Participant receiving materials
pursuant to paragraph 2 of this Article to treat the information as if it were the
Respondent.

4.

The Tribunal shall accept or, after consultation with the Disputing Parties, may
invite, oral or written submissions from the non-disputing Participant regarding
the interpretation of this Agreement or the Arrangement. The non-disputing
Participant may attend a hearing held under this Section.

5.

The Tribunal shall not draw any inference from the absence of a submission
pursuant to paragraph 4 of this Article.

6.

The Tribunal shall ensure that the Disputing Parties are given a reasonable
opportunity to present their observations on a submission by the non-disputing
Participant.

ARTICLE 19: EXPERT REPORTS
Without prejudice to the appointment of other kinds of experts if authorized by
the applicable arbitration rules, the Tribunal may, at the request of a Disputing
Party or, unless the Disputing Parties disapprove, on its own initiative, appoint
one or more experts to report to it in writing on any factual issue, including therights of Indigenous Peoples or scientific matters raised by a Disputing Party in aproceeding, subject to any terms and conditions agreed on by the Disputing
Parties.

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ARTICLE 20: INTERIM MEASURES OF PROTECTION
1.

The Tribunal may order an interim measure of protection to preserve the rights ofa Disputing Party or to ensure that the Tribunal’s jurisdiction is made fully
effective, including an order to preserve evidence in the possession or control of a
Disputing Party or to protect the Tribunal’s jurisdiction. The Tribunal shall notorder attachment or enjoin the application of the measure alleged to constitute a
breach referred to in Article 9 of this Agreement. For the purposes of thisparagraph, an order includes a recommendation.

2.

At the request of a Disputing Party, the Tribunal may order the other Disputing
Party to provide security for all or part of the costs, if there are reasonablegrounds to believe that there is a risk the Disputing Party may not be able tohonour a potential costs award against it. In considering that request, the Tribunal
may take into account evidence of third-party funding. If the security for costs is
not posted in full within 30 days of the Tribunal’s order, or within any other time
period set by the Tribunal, the Tribunal shall so inform the Disputing Parties andmay order the suspension or termination of the proceedings.

ARTICLE 21: FINAL AWARD
1.

2.

3.

If the Tribunal makes a final award against the Respondent, in respect of its
finding of liability, the Tribunal may award, separately or in combination, only:(a)monetary damages and any applicable interest; and(b)restitution of property, in which case the award shall provide that the
Respondent may pay monetary damages and any applicable interest in lieu
of restitution.

Subject to paragraph 1 of this Article, if a claim is made under Article 9(2) of thisAgreement:(a)an award of monetary damages and any applicable interest shall providethat the sum be paid to the enterprise;(b)

an award of restitution of property shall provide that restitution be made to
the enterprise;(c)an award of costs in favour of the investor shall provide that the sum be
paid to the investor; and(d)the award shall provide that it is made without prejudice to a right that aperson, other than a person which has provided a waiver pursuant to
Article 9 of this Agreement, may have in monetary damages or property
awarded under the domestic law of the Respondent.

The Tribunal shall make an order with respect to the costs of the arbitration,
which shall in principle be borne by the unsuccessful Disputing Party or Parties.
In determining the appropriate apportionment of costs, the Tribunal shall consider
all relevant circumstances, including:(a)the outcome of any part of the proceeding, including the number or extent
of the successful parts of the claims or defences;

43

(b)

the Disputing Parties’ conduct during the proceeding, including the extent
to which they acted in an expeditious and cost-effective manner;(c)

the complexity of the issues; and(d)the reasonableness of the costs claimed.

4.

The Tribunal and the Disputing Parties shall make every effort to ensure thedispute settlement process is carried out in a timely manner. The Tribunal shallissue its final award within 12 months of the final date of the hearing on the
merits. The Tribunal may, with good cause and notice to the Disputing Parties,
delay issuing its final award by an additional brief period.

5.

Monetary damages in an award:

6.

(a)

shall not be greater than the loss or damage incurred by the investor, or, as
applicable, by the enterprise referred to in Article 9(2) of this Agreement,
as valued on the date of the breach;10(b)

shall only reflect loss or damage incurred by reason of, or arising out of,
the breach; and(c)shall be determined with reasonable certainty, and shall not be speculativeor hypothetical.

In making an award under paragraph 5 of this Article, the Tribunal shall calculatemonetary damages based only on the submissions of the Disputing Parties, andshall consider, as applicable:(a)contributory fault, whether deliberate or negligent;(b)

failure to mitigate damages;(c)prior damages or compensation received for the same loss; or(d)restitution of property, or repeal or modification of the measure.

7.

The Tribunal may award monetary damages for lost future profits only insofar as
such damages satisfy the requirements under paragraph 5 of this Article. Suchdetermination requires a case-by-case, fact-based inquiry that takes into
consideration, among other factors, whether a covered investment has been in
operation in the territory of the Respondent for a sufficient period of time toestablish a performance record of profitability.

8.

The Tribunal may award pre-award and post-award interest at a reasonable rate of
return compounded annually.

9.

The Tribunal shall not award punitive damages.

10.

The Tribunal shall not award monetary damages under Article 9(1) of thisAgreement for loss or damage incurred by the investment.

10 In the case of a breach of Paragraph 8 of the Arrangement as incorporated into this Agreement, the valuation of theloss or damage incurred by the investor, or, as applicable, by the enterprise referred to in Article 9(2) of this Agreement,
as valued on the date of the breach, shall be made in accordance with Paragraph 8(5) of the Arrangement.

44

ARTICLE 22: FINALITY AND ENFORCEMENT OF AN AWARD
1.

An award made by the Tribunal has no binding force except between the
Disputing Parties and in respect of that particular case.

2.

Subject to paragraph 3 of this Article and the applicable review procedure for aninterim award, a Disputing Party shall abide by and comply with an award
without delay.

3.

A Disputing Party shall not seek enforcement of a final award until, in the case ofa final award under the UNCITRAL Arbitration Rules:(a)

90 days have elapsed from the date the award was rendered and no
Disputing Party has commenced a proceeding to revise, set aside, or annul
the award, or(b)a court has dismissed or allowed an application to revise, set aside, or
annul the award, and there is no further appeal.

4.

The Respondent shall provide for the enforcement of an award in its territory.

5.

A claim submitted to arbitration under Article 9 of this Agreement shall beconsidered to arise out of a commercial relationship or transaction for the
purposes of Article I of the New York Convention.

ARTICLE 23: THIRD-PARTY FUNDING
1.

Where the Claimant benefits from a third-party funding arrangement, it shalldisclose to the Respondent and to the Tribunal the name and address of thethird-party funder.

2.

The Claimant shall make the disclosure under paragraph 1 of this Article at thetime of the submission of a claim to arbitration under Article 9 of this Agreement,or, if the third-party funding is arranged after the submission of a claim, withinten days of the date on which the third-party funding was arranged.

3.

The Claimant shall have a continuing obligation to disclose any changes to theinformation referred to in paragraph 1 of this Article occurring after its initial
disclosure, including termination of the third-party funding arrangement.

ARTICLE 24: SERVICE OF DOCUMENTS
The Claimant shall ensure that service of documents to the Respondent is made to
the appropriate location or e-mail address of the Respondent, underParagraph 26(2) of the Arrangement.

45

ARTICLE 25: RECEIPTS UNDER INSURANCE OR GUARANTEE CONTRACTS
In an arbitration under this Section, the Respondent may not assert as a defence,
counterclaim, right of set-off, or otherwise, that the Claimant has received or will
receive, under an insurance or guarantee contract, indemnification or othercompensation for all or part of its alleged damages.

ARTICLE 26: SPECIAL RULES REGARDING FINANCIAL SERVICES
1.

With respect to a measure adopted or maintained by the Respondent relating to:(a)a financial institution of the territory of the other Participant; or(b)an investor of the territory of the other Participant, or a covered
investment in a financial institution in the territory of the other Participant,this Section applies only in respect of a claim that the Respondent has adopted or
maintained a measure that breaches an investment protection of the Arrangement
under Paragraph 6, Paragraph 8, or Paragraph 9, as incorporated into thisAgreement.
2.

If a Disputing Party claims that a dispute involves measures referred to inparagraph 1 of this Article, the arbitrators shall be selected in accordance with
Article 12 of this Agreement, as modified in this Article, such that:(a)the presiding arbitrator shall meet the qualifications set out in Article 12 ofthis Agreement and have expertise or experience in financial services law
or practice, such as the regulation of financial institutions; and(b)each of the other arbitrators of the Tribunal shall:(i)meet the qualifications set out in Article 12 of this Agreement; or(ii)have expertise or experience in financial services law or practice,such as the regulation of financial institutions, and meet thequalifications set out in paragraphs 1, 3, and 6 of Article 12 of thisAgreement.

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3.

If the Claimant submits a claim to arbitration under Article 9 of this Agreement,
and the Respondent asserts a defence under Paragraph 9, Paragraph 21(2), orParagraph 21(3) of the Arrangement as incorporated into this Agreement, theRespondent shall, no later than the date the Tribunal fixes for the Respondent tosubmit its principal submission on the merits, such as the counter-memorial,
submit to the financial authority of the territory of the other Participant a written
request for a joint determination by the financial authorities of the territories of
the Participants on the issue of whether, and to what extent, the defence asserted
is a valid defence to the claim. The Respondent shall provide the Tribunal, if
constituted, a copy of its request. The Tribunal shall proceed to hear the claim
only as provided in paragraphs 5, 6, or 7 of this Article.

4.

With respect to the joint determination by the financial authorities of theterritories of the Participants referred to in paragraph 3 of this Article:(a)the financial authorities of the territories of the Participants shall have
60 days from the date of the receipt of the request to exchange positions;(b)the financial authorities of the territories of the Participants shall have
60 days from the exchange of positions under paragraph 4(a) of this
Article to make a joint determination; and(c)if the financial authorities of the territories of the Participants have made ajoint determination under paragraph 4(b) of this Article, the financial
authority of the territory of either Participant shall transmit their joint
determination to the Disputing Parties and the Tribunal, if constituted.

5.

If the financial authorities of the territories of the Participants in a joint
determination referred to in paragraph 4(b) of this Article decide that theparagraph asserted is a valid defence to all parts of the claim, the Claimant isdeemed to have withdrawn its claim and to have discontinued the proceeding,with prejudice. The Tribunal, if constituted, shall take note of the discontinuanceof the claim in an order, after which the authority of the Tribunal shall cease.

6.

If the financial authorities of the territories of the Participants in a joint
determination referred to in paragraph 4(b) of this Article decide that theparagraph asserted is only a valid defence to a part of the claim, the Claimant isdeemed to have withdrawn that part of the claim and to have discontinued thatpart of the proceeding, with prejudice. The Tribunal shall take note of the
discontinuance of that part of the claim in an order, and shall not proceed with thepart of the claim for which the paragraph asserted is determined to be a valid
defence.

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7.

If the financial authorities of the territories of the Participants do not make a joint
determination under paragraph 4(b) of this Article, the Tribunal may decide thematter, provided that:(a)in addition to the Disputing Parties, the non-disputing Participant may
make oral or written submissions to the Tribunal regarding the issue of
whether, and to what extent, the paragraph asserted is a valid defence tothe claim prior to the Tribunal deciding this issue. Unless it makes asubmission, the non-disputing Participant shall be presumed, for the
purposes of the arbitration, to take a position on the application of theparagraph asserted that is not inconsistent with the position of the
Respondent; and(b)

the Tribunal shall draw no inference regarding the application of theparagraph asserted from the fact that the financial authorities of theterritories of the Participants have not made a joint determination referred
to in paragraph 4(b) of this Article.

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SECTION D: EXPEDITED ARBITRATIONARTICLE 27: CONSENT TO EXPEDITED ARBITRATION
1.

The Disputing Parties to an arbitration under Section C (Claimant-Respondent
Investment Dispute Settlement) may decide to expedite the arbitration inaccordance with this Section, when the damages claimed do not exceed
CAD 10 million, by following the procedure in paragraph 2 of this Article.

2.

The Disputing Parties shall jointly notify the administering authority in writing of
their consent to an expedited arbitration in accordance with this Section. The
notice must be received within 20 days of the submission of a claim to arbitration
under Article 9(6) of this Agreement.

3.

Section C (Claimant-Respondent Investment Dispute Settlement), as modified bythis Section, applies to the Investment Dispute, except for Article 14 of thisAgreement, which does not apply.

ARTICLE 28: MEDIATION
1.

The Disputing Parties may consent to have recourse to mediation in accordancewith this Section. Recourse to mediation is without prejudice to the legal position
or rights of a Disputing Party under this Section.

2.

If the Disputing Parties jointly agree to have recourse to mediation, the Disputing
Parties shall appoint a mediator to facilitate the resolution of the dispute within
20 days of the notification provided under Article 27(2) of this Agreement.

3.

If the Disputing Parties do not select a mediator within the time period provided
for in paragraph 2 of this Article, the appointing authority shall select themediator within 20 days of the expiration of that time period.

4.

The Disputing Parties may hold mediation sessions by videoconference,
telephone, or similar means of communication as appropriate.

5.

If the Disputing Parties fail to reach a resolution of the dispute within 60 days of
the appointment of the mediator, the dispute shall proceed to arbitration inaccordance with this Section.

ARTICLE 29: CONSTITUTION OF THE TRIBUNALThe Tribunal in an expedited arbitration shall consist of a sole arbitrator appointed
pursuant to Article 30 of this Agreement.

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ARTICLE 30: METHOD OF APPOINTING THE SOLE ARBITRATOR
1.

The Disputing Parties shall jointly appoint the sole arbitrator within 30 days of thenotification delivered under Article 27(2) of this Agreement.

2.

If the Disputing Parties do not appoint the sole arbitrator within the time period
under paragraph 1 of this Article, the appointing authority shall appoint the sole
arbitrator in the following manner:(a)

the appointing authority shall transmit a list of five candidates forappointment as the sole arbitrator to the Disputing Parties within 30 daysof the expiration of the time period under paragraph 1 of this Article;(b)each Disputing Party may strike one candidate from the list, and shall rank
the remaining candidates in order of preference and transmit such ranking
to the appointing authority within 14 days of receipt of the list;(c)the appointing authority shall inform the Disputing Parties of the result of
the rankings on the next business day after receipt of the rankings, andshall appoint the candidate with the best ranking. If two or morecandidates share the best ranking, the appointing authority shall select oneof them;(d)the appointing authority shall immediately send the request for acceptanceof the appointment to the selected candidate, and shall request a reply
within 10 days of receipt; and(e)

if the selected candidate does not accept the appointment, the appointing
authority shall select the next highest-ranked candidate.

3.

The sole arbitrator shall have expertise or experience as an arbitrator ofinvestor-State disputes arising under international investment agreements. The
sole arbitrator shall not be a natural person of the territory of either Disputing
Party and shall otherwise be independent of, and not be affiliated with or take
instructions from, either Disputing Party or the non-disputing Participant.

4.

If the Investment Dispute involves a measure referred to in Article 26(1) of thisAgreement, the sole arbitrator shall also have expertise or experience in financial
services law or practice, such as the regulation of financial institutions.

5.

The sole arbitrator shall be prepared to meet the shorter timeframes provided forin this Section.

6.

The sole arbitrator’s fees shall be fixed according to the scales of administrative
expenses and arbitrator’s fees for the expedited procedure set out in Appendix III
of the Arbitration Rules of the International Chamber of Commerce.

7.

The sole arbitrator shall abide by the Code of Conduct.

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ARTICLE 31: FIRST SESSION IN EXPEDITED ARBITRATION
1.

The sole arbitrator shall hold a first session within 30 days of the constitution of
the Tribunal under Article 29 of this Agreement.

2.

The sole arbitrator shall hold the first session by videoconference, telephone, orsimilar means of communication, unless both Disputing Parties and the sole
arbitrator agree it shall be held in person.

ARTICLE 32: PROCEDURAL SCHEDULE FOR EXPEDITED ARBITRATION
1.

2.

The following schedule for written submissions and the hearing shall apply in the
expedited arbitration:(a)the Claimant shall file, within 90 days of the first session, a principal
submission on the merits, such as a memorial, of no more than 150 pages;(b)

the Respondent shall file, within 90 days of the Claimant’s filing of its
principal submission on the merits pursuant to paragraph 1(a) of this
Article, a principal submission on the merits, such as a counter-memorial,of no more than 150 pages;(c)the Claimant shall file, within 90 days of the Respondent’s filing of its
principal submission on the merits pursuant to paragraph 1(b) of this
Article, a reply of no more than 100 pages;(d)the Respondent shall file, within 90 days of the Claimant’s filing of the
reply pursuant to paragraph 1(c) of this Article, a rejoinder of no morethan 100 pages;(e)a non-disputing Participant may file, within 60 days of the Respondent’s
filing of the rejoinder pursuant to paragraph 1(d) of this Article, a written
submission regarding the interpretation of the Arrangement or thisAgreement pursuant to Article 18;(f)

the sole arbitrator shall hold the hearing within 120 days of the
Respondent’s filing of the rejoinder pursuant to paragraph 1(d) of this
Article;(g)each Disputing Party shall file a statement of costs within 30 days of thelast day of the hearing referred to in paragraph 1(f) of this Article; and(h)the sole arbitrator shall render the award as soon as possible, and in any
event within 180 days of the last day of the hearing referred to inparagraph 1(f) of this Article.

The sole arbitrator may grant the Claimant if in default a grace period notexceeding 30 days, otherwise the Claimant is deemed to have withdrawn its claim
and to have discontinued the proceedings. The sole arbitrator, if appointed, shall,at the request of the Respondent, and after notice to the Disputing Parties, in anorder take note of the discontinuance. After the order has been rendered, theauthority of the Tribunal shall cease.

51

3.

The sole arbitrator may grant the Respondent in default a grace period notexceeding 30 days, otherwise the Claimant may request that the sole arbitrator
address the questions submitted to it and render an award.

4.

At the request of a Disputing Party, the sole arbitrator may grant limited requests
for specifically identifiable documents that the requesting Disputing Party knows,
or has good cause to believe, exist and are in the possession, custody, or control of
the other Disputing Party, and shall adjust the schedule under paragraph 1 of this
Article as appropriate.

5.

The sole arbitrator may, after consulting the Disputing Parties, limit the number,
length, or scope of written submissions or written witness evidence (both fact
witnesses and experts).

6.

The sole arbitrator may, following a joint request by the Disputing Parties, decide
the Investment Dispute solely on the basis of the documents submitted by the
Disputing Parties, with no hearing and no or a limited examination of witnesses orexperts. If the sole arbitrator holds a hearing under paragraph 1(f) of this Article,
the sole arbitrator may conduct the hearing by videoconference, telephone, orsimilar means of communication.

7.

The sole arbitrator shall, following a joint request by the Disputing Parties, but nolater than the date of filing of the Respondent’s principal submission on the merits
referred to in paragraph 1(b) of this Article, decide that this Section shall nolonger apply to the case.

8.

The sole arbitrator may, at the request of a Disputing Party, but no later than thedate of filing of the Respondent’s principal submission on the merits referred to inparagraph 1(b) of this Article, decide that this Section shall no longer apply to thecase. The Disputing Party that has made the request shall bear the costs of the
expedited arbitration.

9.

If, pursuant to paragraphs 7 or 8 of this Article, the sole arbitrator decides that thisSection no longer applies to the case, and unless the Disputing Parties agree
otherwise, the sole arbitrator appointed pursuant to Article 29 and Article 30 ofthis Agreement shall be appointed as presiding arbitrator of the Tribunal
constituted under Section C (Claimant-Respondent Investment Dispute
Settlement).

10.

In all matters concerning an expedited arbitration procedure not expressly
provided for in this Agreement, the Disputing Parties shall endeavour to agree on
the applicable procedural rules. If the Disputing Parties do not agree on theapplicable procedural rules, the sole arbitrator, if appointed, may decide thematter.

ARTICLE 33: CONSOLIDATION
When two or more claims falling under Article 27 of this Agreement have aquestion of law or fact in common and arise out of the same events orcircumstances, Article 15 of this Agreement shall apply.

52

SECTION E: GENERAL

1.

The Disputing Parties have read this Agreement and agree to proceed with
arbitration on the terms herein contained, including the Code of Conduct
appended to this Agreement.

2.

This Agreement may be executed in counterparts, each of which, when so
executed and delivered, will be an original, but all such counterparts will together
constitute one and the same instrument.

[CLAIMANT]DATE: __________________

Signature: ______________________________

Printed name: ____________________________
Title: ___________________________________

DATE: __________________[TAIWAN [____] / HIS MAJESTY THE KINGIN RIGHT OF CANADA AS REPRESENTED
BY ___________]
Signature: ______________________________

Printed name: ____________________________
Title: ___________________________________

53

ARBITRATOR CODE OF CONDUCT FOR INVESTMENT DISPUTE SETTLEMENTARTICLE 1:

DEFINITIONS

For the purposes of this Code of Conduct:“arbitrator” means a member of a Tribunal constituted pursuant to Article 12 of
the Agreement;“assistant” means a person who, under the terms of appointment of an arbitrator,
conducts research or provides support for the arbitrator;“candidate” means a person who is under consideration for selection as anarbitrator pursuant to Article 12 or Article 30 of the Agreement;“expert” means a person appointed pursuant to Article 19 of the Agreement orapplicable arbitration rules;“family member” means the spouse or partner of an arbitrator or candidate; theparent, child, grandparent, grandchild, sister, brother, aunt, uncle, niece, or
nephew of the arbitrator or candidate or spouse or partner of the arbitrator or
candidate (including whole and half-blood relatives and step relatives), or the
spouse or partner of such a person; or a resident of the arbitrator’s or candidate’shousehold whom the arbitrator or candidate treats as a member of his or her
family;“Rules” means applicable rules pursuant to Article 9 of the Agreement; and“staff”, in respect of an arbitrator, means individuals under the direction andcontrol of the arbitrator other than assistants.

ARTICLE 2:RESPONSIBILITIES TO THE DISPUTE SETTLEMENT PROCESS

Each candidate, arbitrator, and former arbitrator shall avoid impropriety and theappearance of impropriety, and shall observe high standards of conduct so that the
integrity and impartiality of the dispute settlement process is preserved.

ARTICLE 3:

GOVERNING PRINCIPLES

1.

Each arbitrator shall be independent and impartial, and shall avoid direct orindirect conflicts of interest.

2.

Each arbitrator and former arbitrator shall respect the confidentiality of Tribunal
proceedings.

54

3.

Each candidate or arbitrator shall disclose the existence of any interest,
relationship, or matter that is likely to affect the candidate’s or arbitrator’s
independence or impartiality, or that might reasonably create an appearance ofimpropriety or an apprehension of bias. An appearance of impropriety or anapprehension of bias is created when a reasonable person, with knowledge of all
the relevant circumstances that a reasonable inquiry would disclose, would
conclude that a candidate’s or arbitrator’s ability to carry out the duties withintegrity, impartiality, and competence is impaired.

4.

Upon appointment, an arbitrator shall refrain, for the duration of the proceeding,from acting as counsel or party-appointed expert or witness in any pending or new
investment dispute relating to the Arrangement or any international investment
treaty or arrangement.

5.

This Code of Conduct shall be interpreted in a manner consistent with otherinternationally recognized standards or guidelines regarding direct or indirectconflicts of interest, such as the International Bar Association’s Guidelines on
Conflicts of Interest in International Arbitration.

6.

In the event of an alleged breach of this Code of Conduct, the Rules governing thearbitration shall apply to any challenge, disqualification, or replacement of anarbitrator.

ARTICLE 4:DISCLOSURE OBLIGATIONS

1.

Throughout the Tribunal proceeding, each candidate or arbitrator has a continuing
obligation to disclose any interest, relationship, or matter that may bear on the
integrity or impartiality of the dispute settlement process.

2.

The Disputing Parties or the appointing authority for a Tribunal referred to in
Article 12 of the Agreement shall provide a candidate a copy of this Code of
Conduct and the Initial Disclosure Statement set out in the Appendix to this Codeof Conduct.

3.

A candidate shall submit the Initial Disclosure Statement set out in the Appendix
to this Code of Conduct to the Disputing Parties or the appointing authority nolater than seven days of receipt of that Initial Disclosure Statement.

4.

A candidate shall disclose any interest, relationship, or matter that is likely toaffect his or her independence or impartiality or that might reasonably create an
appearance of impropriety or an apprehension of bias in the Tribunal proceeding.
To this end, a candidate shall make all reasonable efforts to become aware of any
such interest, relationship, or matter. Therefore, a candidate shall disclose, at aminimum, the following interests, relationships, and matters:(a)any financial or personal interest of the candidate in:(i)the Tribunal proceeding or its outcome; and(ii)

an administrative proceeding, a domestic judicial proceeding, or
any other international dispute settlement proceeding that involves
issues that may be decided in the Tribunal proceeding for which
the candidate is under consideration;

55

(b)

any financial interest of the candidate’s employer, business partner,
business associate, or family member in:(i)the Tribunal proceeding or its outcome; and(ii)

an administrative proceeding, a domestic judicial proceeding, or
any other international dispute settlement proceeding that involves
issues that may be decided in the Tribunal proceeding for which
the candidate is under consideration;(c)any past or current financial, business, professional, family, or social
relationship with any interested parties11 in the Tribunal proceeding or
their counsel, or any such relationship involving a candidate’s employer,business partner, business associate, or family member; and(d)any public advocacy or legal or other representation concerning an issue indispute in the Tribunal proceeding or involving the same investment.

5.

Once appointed, an arbitrator shall continue to make all reasonable efforts tobecome aware of any interest, relationship, or matter referred to in paragraph 4 ofthis Article, and shall disclose them. The obligation to disclose is a continuing
duty that requires an arbitrator to disclose any such interest, relationship, or matterthat may arise during any stage of the Tribunal proceeding.

6.

In the event of any uncertainty regarding whether an interest, relationship, or
matter must be disclosed under paragraph 4 or 5 of this Article, a candidate or
arbitrator should err in favour of disclosure. Disclosure of an interest, relationship,or matter is without prejudice as to whether the interest, relationship, or matter iscovered by paragraph 4 or 5 of this Article, or whether it warrants recusal,
amelioration, or disqualification.

7.

The disclosure obligations set out in paragraphs 1 through 6 of this Article should
not be interpreted so that the burden of detailed disclosure makes it impracticalfor individuals in the legal or business community to serve as arbitrators, thereby
depriving the Disputing Parties of the services of those who might be best
qualified to serve as arbitrators. Thus, a candidate or arbitrator should not becalled upon to disclose an interest, relationship, or matter whose bearing on thecandidate’s or arbitrator’s role in the Tribunal proceeding would be trivial.

ARTICLE 5:PERFORMANCE OF DUTIES BY CANDIDATES AND ARBITRATORS

1.

A candidate who accepts an appointment as an arbitrator shall be available toperform, and shall perform, once the arbitrator is appointed pursuant to Article 12of the Agreement, an arbitrator’s duties thoroughly, fairly, diligently, andexpeditiously throughout the course of the Tribunal proceeding.

2.

An arbitrator shall ensure that he or she is contactable, at all reasonable times, by
the appointing authority, Disputing Parties, arbitration institution in charge of theproceeding, and other arbitrators of the Tribunal in order to conduct Tribunal
work.

11 For greater certainty, “interested parties” includes the territory where the investors have their dominant and effective

connection.

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3.

An arbitrator shall comply with the provisions of Section C(Claimant-Respondent Investment Dispute Settlement) and Section D (Expedited
Arbitration), as applicable, and the Rules.

4.

An arbitrator shall not deny other arbitrators the opportunity to participate in all
aspects of the Tribunal proceeding.

5.

An arbitrator shall consider only those issues raised in the Tribunal proceeding
and necessary to make a decision, order, or award.

6.

An arbitrator shall not delegate the duty to make a decision, order, or award to
any other person.

7.

An arbitrator shall take all reasonable steps to ensure that his or her assistants andstaff comply with Article 2, paragraphs 1, 4, 5, 6, and 7 of Article 4, paragraphs 3,
8, and 9 of this Article, and Article 8 of this Code of Conduct.

8.

An arbitrator shall not engage in any ex parte contact concerning the Tribunal
proceeding.

9.

A candidate or arbitrator shall only communicate matters concerning actual or
potential violations of this Code of Conduct, or if necessary to ascertain whether
that candidate or arbitrator has violated or may violate this Code of Conduct, tothe appointing authority, the Disputing Parties, and arbitration institution in
charge of the proceedings.

10.

Each arbitrator shall keep a record and render a final account of the time devoted
to the Tribunal proceeding and of his or her expenses, as well as the time andexpenses of his or her staff and assistants.

ARTICLE 6:

INDEPENDENCE AND IMPARTIALITY OF ARBITRATORS

1.

An arbitrator shall be independent and impartial. An arbitrator shall act in a fairmanner and shall not create an appearance of impropriety or an apprehension of
bias.

2.

An arbitrator shall not be influenced by self-interest, outside pressure, politicalconsiderations, public clamour, loyalty to a Disputing Party or a non-disputing
Participant, or fear of criticism.

3.

An arbitrator shall not, directly or indirectly, incur any obligation or accept any
benefit that would in any way interfere, or appear to interfere, with the proper
performance of his or her duties.

4.

An arbitrator shall not use his or her position on the Tribunal to advance any
personal or private interests. An arbitrator shall avoid actions that may create theimpression that others are in a special position to influence the arbitrator. An
arbitrator shall make every effort to prevent or discourage others from
representing themselves as being in such a position.

5.

An arbitrator shall not allow past or ongoing financial, business, professional,
family, or social relationships or responsibilities to influence his or her conduct orjudgment.

57

6.

An arbitrator shall avoid entering into any relationship, or acquiring any financial
interest, that is likely to affect his or her impartiality or that might reasonably
create an appearance of impropriety or an apprehension of bias.

7.

If an interest, relationship, or matter of a candidate or arbitrator is inconsistent
with paragraphs 1 through 6 of this Article, the candidate may accept appointment
to a Tribunal, and an arbitrator may continue to serve on a Tribunal, if the
Disputing Parties waive the violation or if, after the candidate or arbitrator hastaken steps to ameliorate the violation, the Disputing Parties determine that theinconsistency has ceased.

ARTICLE 7:

DUTIES OF FORMER ARBITRATORS

A former arbitrator shall avoid actions that may create the appearance that thearbitrator was biased in carrying out his or her duties or would benefit from thedecision, order, or award of the Tribunal.

ARTICLE 8:

MAINTENANCE OF CONFIDENTIALITY

1.

An arbitrator or former arbitrator shall not at any time disclose or use any
non-public information concerning the Tribunal proceeding or acquired during the
Tribunal proceeding, except for the purposes of the Tribunal proceeding and shallnot, in any case, disclose or use any such information to gain a personaladvantage, or an advantage for another person, or to adversely affect the interestof another person.

2.

An arbitrator shall not disclose a decision, order, or award, or a part thereof, prior
to its publication in accordance with Section C (Claimant-Respondent Investment
Dispute Settlement).

3.

An arbitrator or former arbitrator shall not at any time disclose the deliberationsof the Tribunal, or any arbitrator’s view.12

4.

An arbitrator shall not make a public statement regarding the merits of a pending
Tribunal proceeding.

ARTICLE 9:RESPONSIBILITIES OF EXPERTS, ASSISTANTS, AND STAFF

Article 2, paragraphs 1, 4, 5, 6, and 7 of Article 4, paragraphs 3, 8, and 9 of
Article 5, Article 7, and Article 8 of this Code of Conduct shall also apply toexperts, assistants, and staff.

12 For greater certainty, this paragraph does not apply to the arbitrator’s view in a decision, order, award, or opinion.

58

APPENDIX TO THE ARBITRATOR CODE OF CONDUCT FOR INVESTMENT DISPUTESETTLEMENT: INITIAL DISCLOSURE STATEMENT FORM

1.

I acknowledge having received a copy of the Arbitrator Code of Conduct for
Investment Dispute Settlement (“Code of Conduct”).

2.

I acknowledge having read and understood the Code of Conduct.

3.

I understand that I have a continuing obligation, while participating in the
Tribunal proceeding, to disclose an interest, relationship, or matter that may bearon the integrity or impartiality of the dispute settlement process. As a part of thiscontinuing obligation, I am making the following initial disclosures:(a)

My financial interest in the Tribunal proceeding for which I am underconsideration or in its outcome is as follows:(b)

My financial interest in any administrative proceeding, domestic judicial
proceeding, or other international dispute settlement proceeding thatinvolves issues that may be decided in the Tribunal proceeding is asfollows:(c)

The financial interests that any employer, business partner, businessassociate, or family member of mine may have in the Tribunal proceedingor in its outcome are as follows:(d)

The financial interests that any employer, business partner, businessassociate, or family member of mine may have in any administrative
proceeding, domestic judicial proceeding, or other international disputesettlement proceeding that involves issues that may be decided in the
Tribunal proceeding are as follows:(e)

My past or current financial, business, professional, family, and social
relationships with any interested party in the Tribunal proceeding, or theircounsel, are as follows:(f)

The past or current financial, business, professional, family, and social
relationships with any interested party in the Tribunal proceeding, or theircounsel, involving any employer, business partner, business associate, orfamily member of mine are as follows:(g)

My public advocacy or legal or other representation concerning an issue indispute in the Tribunal proceeding or involving the same investment is asfollows:(h)

My other interests, relationships, and matters that may bear on the
integrity or impartiality of the dispute settlement process and that are notdisclosed in paragraphs 3(a) through (g) above are as follows:Signed on this __________ day of ____________, 20__.
By:

Signature_________________________________________
Name____________________________________________

59