FREE TRADE AGREEMENT BETWEEN JAPAN AND THE
MEMBER STATES OF THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN), SERVICES
Questions and Replies
The following communication, dated 3 April 2024, is being circulated
at the request of the delegations of the ASEAN Member
States and Japan.
_______________
Questions from Canada
1.1. With regards to Chapters 6 and 7 of the agreement:
a._
What is the rationale for including
two prudential carve out provisions in the agreement (i.e. in Chapter 6 – Trade
in Services – Financial Services Annex - A.4 Domestic Regulation and Chapter 7
– Investment - 51.20 Prudential Measures)?
Response from Japan
In the financial services sector, if
there is a need to take measures for prudential reasons, the measures might be
inconsistent with various provisions of those Chapters in some cases. Thus,
Article A.4 and Article 51.20 was designed to allow a Party to take prudential
measures.
[Reference]
Article A.4 Domestic Regulation
1. Notwithstanding any other provisions of
Chapter 6, including Annexes A and B to Chapter 6 and Annexes 6 through 8, a
Party shall not be prevented from taking measures for prudential reasons,
including for the protection of investors, depositors, policy holders or
persons to whom a fiduciary duty is owed by a financial service supplier, or to
ensure the integrity and stability of the Party's financial system. Where such
measures do not conform with the provisions of Chapter 6, they shall not be
used as a means of avoiding the commitments or obligations of the Party under
that Chapter.
2. Nothing in Chapter 6, including Annexes
A and B to Chapter 6 and Annexes 6 through 8, shall be construed to require a
Party to disclose information relating to the affairs and accounts of
individual customers or any confidential or proprietary information in the
possession of public entities.
Article 51.20 Prudential Measures
1. Notwithstanding any other provisions in
this Chapter, a Party shall not be prevented from taking measures relating to
financial services for prudential reasons, including measures for the
protection of investors, depositors, policy holders or persons to whom a
fiduciary duty is owed by an entity supplying financial services, or to ensure
the integrity and stability of its financial system.
2. Where the measures taken by a Party
pursuant to paragraph 1 do not conform with this Chapter, they shall not be
used as a means of avoiding the commitments or obligations of the Party under
this Chapter.
3. Nothing in this Chapter shall be
construed to require a Party to disclose information relating to the affairs
and accounts of individual customers or any confidential or proprietary
information in the possession of public entities.
b._ Do the parties take on any MFN
commitments in relation to Financial Services?
Response from Japan
As described in 3.3.2 National and MFN
treatment (paragraph 3.10) of the Secretariat's report, Japan takes on MFN
commitments in relation to Financial Services (In the list of Japan of Annex 7
(Lists of Most-Favored Nation Treatment Exemptions), measures related to
Financial Services are not listed), while all the ASEAN Member States are
exempted from MFN provisions (according to Annex 8) in accordance with
paragraph 3 of Article 50.3.
[Reference]
Article 50.3 Most-Favoured-Nation Treatment
1. Each Party shall accord to services and
service suppliers of another Party treatment no less favourable than that it
accords to like services and service suppliers of any other Party or a
non-Party.
2. Paragraph 1 shall not apply to any
measure by a Party with respect to sectors, subsectors or activities, as set
out in Annex 7.
3. Notwithstanding paragraphs 1 and 2,
the Parties listed in Annex 8 shall be exempted from paragraphs 1 and 2 and
shall endeavour to consider according to services and service suppliers of
another Party treatment no less favourable than that they accord to like
services and service suppliers of any other Party or a non-Party. Any decision
of a Party with regard to this paragraph shall not be subject to dispute
settlement procedures provided for in Chapter 9.
Annex 8 List of the Parties in relation to
paragraph 3 of Article 50.3
1. Brunei Darussalam
2. Kingdom of Cambodia
3. Republic of Indonesia
4. Lao People's Democratic Republic
5. Malaysia
6. Republic of the Union of Myanmar
7. Republic of the Philippines
8. Republic of Singapore
9. Kingdom of Thailand
10. Socialist Republic of Viet Nam