Article
12.1:
Definitions

For the purposes of this Chapter:

(a) cross-border financial service supplier of a Party means
a person of aParty that is engaged in the business of
supplying a financial service within the territory of the Party
and that seeks to supply or supplies a financial service
through the cross-border supply of such services;

(b) cross-border trade in financial services or cross-border supply of financial services means the
supply of a financial service:

(i) from the
territory of one Party into the territory of the other
Party;

(ii) in the
territory of a Party by a person of that Party to a person of
the other Party; or

(iii) by a
national of a Party in the territory of the other Party;

but does not include the supply of a service in the
territory of a Party by an investment in that territory;

(c) financial institution means any financial intermediary
or other enterprise that is authorised to do business and
regulated or supervised as a financial institution under the
law of the Party in whose territory it is located;

(d) financial institution of the other Party means a
financial institution, including a branch, located in the
territory of a Party that is controlled by persons of the other
Party;

(e) financial service means any service of a financial
nature. Financial services include all insurance and
insurance-related services, and all banking and other financial
services (excluding insurance), as well as services incidental
or auxiliary to a service of a financial nature.
Financial services include the following activities:

Insurance and insurance-related services

(i)
direct insurance (including co-insurance):

(A)
life;

(B)
non-life;

(ii)
reinsurance and retrocession;

(iii)
insurance intermediation, such as brokerage and agency;

(iv) service auxiliary
to insurance, such as consultancy, actuarial, risk assessment,
and claim settlement services;

Banking and other financial services (excluding
insurance)

(v)
acceptance of deposits and other repayable funds from the
public;

(vi) lending of all
types, including consumer credit, mortgage credit, factoring
and financing of commercial transactions;

(vii)
financial leasing;

(viii) all payment and money
transmission services, including credit, charge and debit
cards, travellers cheques, and bankers drafts;

(ix)
guarantees and commitments;

(x) trading for
own account or for account of customers, whether on an
exchange, in an over-the-counter market, or otherwise, the
following:

(A)
money market instruments (including cheques, bills,
certificates of deposits);

(B)
foreign exchange;

(C)
derivative products including, futures and options;

(D)
exchange rate and interest rate instruments, including products
such as swaps, forward rate agreements;

(E)
transferable securities;

(F)
other negotiable instruments and financial assets, including
bullion;

(xi) participation in
issues of all kinds of securities, including underwriting and
placement as agent (whether publicly or privately) and
provision of services related to such issues;

(xii)
money broking;

(xiii) asset management, such
as cash or portfolio management, all forms of collective
investment management, pension fund management, custodial,
depository, and trust services;

(xiv) settlement and clearing
services for financial assets, including securities, derivative
products, and other negotiable instruments;

(xv) provision and transfer of
financial information, and financial data processing and
related software by suppliers of other financial
services;

(xvi) advisory, intermediation, and
other auxiliary financial services on all the activities listed
in subparagraphs (v) to (xv), including credit reference and
analysis, investment and portfolio research and advice, advice
on acquisitions and on corporate restructuring and
strategy;

(f) financial service supplier of a Party means a
person of a Party that is engaged in the business of supplying
a financial service within the territory of that Party;

(g) investment means "investment" as defined in
Article 10.1(j) (Definitions – Investment Chapter),
except that, with respect to "loans" and
"debt instruments" referred to in that Article:

(i) a loan
to or debt instrument issued by a financial institution is an
investment only where it is treated as regulatory capital by
the Party in whose territory the financial institution is
located; and

(ii) a loan
granted by or debt instrument owned by a financial institution,
other than a loan to or debt instrument of a financial
institution referred to in subparagraph (i), is not an
investment;

for greater certainty:

(iii) a loan to, or debt
instrument issued by, a Party or a state enterprise is not an
investment; and

(iv) a loan granted by or
debt instrument owned by a cross-border financial service
supplier, other than a loan to or debt instrument issued by a
financial institution, is an investment if such loan or debt
instrument meets the criteria for investments set out in
Article 10.1(j) (Definitions – Investment Chapter);

(h) investor of a Party means an "investor of a
Party" as defined in Article 2.1(o) (Definitions of
General Application – General Definitions Chapter);

(i) new
financial service means a financial service not supplied in
the Party's territory that is supplied within the
territory of the other Party, and includes any new form of
delivery of a financial service or the sale of a financial
product that is not sold in the Party's territory;

(j) person of a Party means "person of a Party" as
defined in Article 2.1(t) (Definitions of General Application
– General Definitions Chapter)and, for greater certainty,
does not include a branch of an enterprise of a non-Party;

(k) public
entity means a central bank or monetary authority of a
Party, or any financial institution owned or controlled by a
Party; and

(l) self-regulatory organisation means any non-governmental
body, including any securities or futures exchange or market,
clearing agency, other organisation or association, that
exercises its own or delegated regulatory or supervisory
authority over financial service suppliers or financial
institutions.

Article
12.2:
Scope and Coverage

1. This
Chapter applies to measures adopted or maintained by a Party
relating to:

(a)
financial institutions of the other Party;

(b) investors of
the other Party, and investments of such investors, in
financial institutions in the Party's territory; and

(c)
cross-border trade in financial services.

2. Articles
9.10 (Denial of Benefits – Cross-Border Trade in Services
Chapter), 10.10 (Transfers – Investment Chapter), 10.11
(Expropriation and Compensation – Investment Chapter),
10.12 (Special Formalities and Information Requirements –
Investment Chapter) and 10.13 (Denial of Benefits –
Investment Chapter) are hereby incorporated into and made a
part of this Chapter mutatis
mutandis^12-[22]. Section B of Chapter 10 (Investment)
is hereby incorporated into and made a part of this Chapter
solely for breaches by a Party of Articles 10.10 to 10.13, as
incorporated in this Chapter. No other provision of
Chapter 10 (Investment) or Chapter 11 (Cross-Border Trade in
Services) shall apply to a measure described in paragraph
1.

3. This
Chapter does not apply to measures adopted or maintained by a
Party relating to:

(a) activities or
services forming part of a public retirement plan or statutory
system of social security; or

(b) activities or
services conducted for the account or with the guarantee or
using the financial resources of the Party, including its
public entities;

except that this Chapter shall apply if a Party allows any
of the activities or services referred to in subparagraphs (a)
or (b) to be conducted by its financial institutions in
competition with a public entity or a financial
institution.

Article
12.3:
National Treatment

1. Each
Party shall accord to investors of the other Party treatment no
less favourable than that it accords to its own investors, in
like circumstances, with respect to the establishment,
acquisition, expansion, management, conduct, operation, and
sale or other disposition of financial institutions and
investments in financial institutions in its territory.

2.
Each Party shall accord to financial institutions of the other
Party and to investments of investors of the other Party in
financial institutions treatment no less favourable than that
it accords to its own financial institutions, and to
investments of its own investors in financial institutions, in
like circumstances, with respect to the establishment,
acquisition, expansion, management, conduct, operation, and
sale or other disposition of financial institutions and
investments.

3. For
purposes of the national treatment obligations in Article
12.6.1, a Party shall accord to cross-border financial service
suppliers of the other Party treatment no less favourable than
that it accords to its own financial service suppliers, in like
circumstances, with respect to the supply of the relevant
service.

Article
12.4:
Most-Favoured-Nation Treatment

Each Party shall accord to investors of the other Party,
financial institutions of the other Party, investments of
investors in financial institutions, and cross-border financial
service suppliers of the other Party treatment no less
favourable than that it accords to the investors, financial
institutions, investments of investors in financial
institutions, and cross-border financial service suppliers of a
non-Party, in like circumstances.

Article
12.5:
Market Access for Financial Institutions

A Party shall not adopt or maintain, with respect to
investors of the other Party, either on the basis of a regional
subdivision or on the basis of its entire territory, measures
that:

(a)
impose limitations:

(i)
on the number of financial institutions, whether in the form of
numerical quotas, monopolies, exclusive service suppliers, or
the requirement of an economic needs test;

(ii)
on the total value of financial service transactions or assets
in the form of numerical quotas or the requirement of an
economic needs test;

(iii)
on the total number of financial service operations or on the
total quantity of financial services output expressed in terms
of designated numerical units in the form of quotas or the
requirement of an economic needs test;^12-[23] or

(iv)
on the total number of natural persons that may be employed in
a particular financial service sector or that a financial
institution may employ and who are necessary for, and directly
related to, the supply of a specific financial service in the
form of numerical quotas or the requirement of an economic
needs test; or

(b) restrict or
require specific types of legal entity or joint venture through
which a financial institution may supply a service.

Article
12.6:
Cross-Border Trade

1. Each
Party shall permit, under terms and conditions that accord
national treatment, cross-border financial service suppliers of
the other Party to supply the financial services specified in
Annex 12-A.

2. Each
Party shall permit persons located in its territory, and its
nationals wherever located, to purchase financial services from
cross-border financial service suppliers of the other Party
located in the territory of the other Party. This
obligation does not require a Party to permit such suppliers to
do business or solicit in its territory. Each Party may
define "doing business" and
"solicitation" for purposes of this Article as long
as such definitions are not inconsistent with the obligations
of paragraph 1.

3. Without
prejudice to other means of prudential regulation of
cross-border trade in financial services, a Party may require
the registration of cross-border financial service suppliers of
the other Party and of financial instruments.

Article
12.7:
New Financial Services^12-[24]

1. Each
Party shall permit a financial institution of the other Party,
on request or notification to the relevant regulator, where
required, to supply any new financial service that the first
Party would permit its own financial institutions, in like
circumstances, to supply under its domestic law, provided that
the introduction of the financial service does not require the
Party to adopt a new law or modify an existing law.

2.
Notwithstanding Article 12.5(b), a Party may determine the
institutional and juridical form through which the new
financial service may be supplied and may require authorisation
for the supply of the service. Where a Party requires
authorisation to supply a new financial service, the decision
shall be made within a reasonable time and authorisation may
only be refused for prudential reasons.

Article
12.8:
Treatment of Certain Information

Nothing in this Chapter requires a Party to furnish or allow
access to:

(a) information
related to the financial affairs and accounts of individual
customers of financial institutions or cross-border financial
service suppliers; or

(b) any
confidential information, the disclosure of which would impede
law enforcement or otherwise be contrary to the public interest
or prejudice legitimate commercial interests of particular
enterprises.

Article
12.9:
Senior Management and Boards of Directors

1. Neither
Party may require financial institutions of the other Party to
engage individuals of any particular nationality as senior
managerial or other essential personnel.

2. Neither
Party may require that more than a minority of the board of
directors of a financial institution of the other Party be
composed of nationals of the Party, persons residing in the
territory of the Party, or a combination thereof.

Article
12.10:
Non-Conforming Measures

1. Articles
12.3, 12.4, 12.5, 12.6 and 12.9 do not apply to:

(a)
any existing non-conforming measure that is maintained by a
Party at:

(i)
the central level of government, as set out by that Party in
Section 1 of its Schedule to Annex III of non-conforming
measures;

(ii)
a regional level of government, as set out by that Party in
Section 1 of its Schedule to Annex III of non-conforming
measures; or

(iii)
a local level of government.

(b) the
continuation or prompt renewal of any non-conforming measure
referred to in subparagraph (a); or

(c) an amendment
to any non-conforming measure referred to in subparagraph (a)
to the extent that the amendment does not decrease the
conformity of the measure, as it existed:

(i)
immediately before the amendment, with Articles 12.3, 12.4 and
12.9; or

(ii)
on the date of entry into force of the Agreement, with Articles
12.5 and 12.6.

2. Articles
12.3 to 12.6 and Article 12.9 do not apply to any
non-conforming measure that
a Party adopts or maintains with respect to sectors,
sub-sectors, or activities, in accordance with Section 2 of
its Schedule to Annex III of non-conforming measures.

3. Annex
12-B sets out certain specific commitments by each Party.

4. Where a Party
has set out a non-conforming measure to Articles 9.3 (National
Treatment – Cross-Border-Trade in Services Chapter), 9.4
(Most-Favoured-Nation Treatment – Cross-Border Trade in
Services Chapter), 9.5 (Market Access – Cross-Border
Trade in Services Chapter), 10.3 (National Treatment –
Investment Chapter), 10.4 (Most-Favoured-Nation Treatment
– Investment Chapter), or 10.8 (Senior Management and
Boards of Directors – Investment Chapter) in its Schedule
to Annex I or Annex II, the non-conforming measure shall be
deemed to constitute a non-conforming measure to Articles 12.3,
12.4, 12.5, 12.6 or 12.9, as the case may be, to the extent
that the measure, sector, sub-sector or activity set out in the
non-conforming measure is covered by this Chapter.

Article
12.11:
Exceptions

1. Nothing
in this Chapter or Chapter 9 (Cross-Border Trade in Services),
Chapter 10 (Investment), Chapter 11 (Telecommunications),
including specifically Article 11.2.2 (Scope and Coverage
– Telecommunications Chapter), Chapter 14 (Competition
Policy) or Chapter 16 (Electronic Commerce) of this Agreement
shall prevent a Party from adopting or maintaining measures for
prudential reasons ^12-[25], including for the protection of
investors, depositors, policy holders, or persons to whom a
fiduciary duty is owed by a financial institution or
cross-border financial service supplier, or to ensure the
integrity and stability of the financial system. Where such measures do not conform with the
provisions of this Agreement referred to in this paragraph,
they shall not be used as a means of avoiding the Party's
obligations under such provisions.^12-[26]

2. Nothing
in this Chapter or, Chapter 9 (Cross-Border Trade in Services),
Chapter 10 (Investment), Chapter 11 (Telecommunications),
including specifically Article 11.2.2 (Scope and Coverage
– Telecommunications Chapter), Chapter 14 (Competition
Policy) or Chapter 16 (Electronic Commerce) of this Agreement
applies to non-discriminatory measures of general application
taken by any public entity in pursuit of monetary and related
credit policies or exchange rate policies. This paragraph
shall not affect a Party's obligations under Article 10.7
(Performance Requirements – Investment Chapter) with
respect to measures covered by Chapter 10 (Investment), or
under Article 10.10 (Transfers – Investment Chapter).

3.
Notwithstanding Article 10.10 (Transfers – Investment
Chapter),as incorporated into this Chapter, a Party may prevent
or limit transfers by a financial institution or cross-border
financial service supplier to, or for the benefit of, an
affiliate of or person related to such institution or supplier,
through the equitable, non-discriminatory and good faith
application of measures relating to maintenance of the safety,
soundness, integrity, or financial responsibility of financial
institutions or cross-border financial service suppliers.
This paragraph does not prejudice any other provision of this
Agreement that permits a Party to restrict transfers.

4. For
greater certainty, nothing in this Chapter shall be construed
to prevent the adoption or enforcement by a Party of measures
necessary to secure compliance with laws or regulations that
are not inconsistent with this Chapter, including those
relating to the prevention of deceptive and fraudulent
practices or to deal with the effects of a default on financial
services contracts, subject to the requirement that such
measures are not applied in a manner which would constitute a
means of arbitrary or unjustifiable discrimination between
countries where like conditions prevail, or a disguised
restriction on investment in financial institutions or
cross-border trade in financial services as covered by this
Chapter.

Article
12.12:
Recognition

1. A Party
may recognise prudential measures of a non-Party in the
application of measures covered by this Chapter. Such
recognition may be:

(a)
accorded autonomously;

(b)
achieved through harmonisation or other means; or

(c)
based upon an agreement or arrangement with the non-Party.

2. A Party
according recognition of prudential measures under paragraph 1
shall provide adequate opportunity to the other Party to
demonstrate that circumstances exist in which there are or
would be equivalent regulation, oversight, implementation of
regulation and, if appropriate, procedures concerning the
sharing of information between the Parties.

3. Where a
Party accords recognition of prudential measures under
paragraph 1(c) and the circumstances set out in paragraph 2
exist, the Party shall provide adequate opportunity to the
other Party to negotiate accession to the agreement or
arrangement, or to negotiate a comparable agreement or
arrangement.

Article
12.13:
Transparency

1. The
Parties recognise that transparent regulations and policies and
reasonable, objective and impartial administration governing
the activities of financial institutions and financial service
suppliers are important in facilitating both access of
financial institutions and financial service suppliers to, and
their operations in, each other's markets.

2. Each Party shall ensure that all measures of general
application to which this Chapter applies are administered in a
reasonable, objective and impartial manner.

3. In lieu
of Article 19.3 (Publication – Transparency Chapter),
each Party shall,to the extent practicable:

(a) publish in
advance any regulations of general application relating to the
subject matter of this Chapter that it proposes to
adopt; and

(b) provide
interested persons and the other Party a reasonable opportunity
to comment on such proposed regulations.

4. Each
Party's regulatory authorities shall make publicly
available their requirements, including any documentation
required, for completing applications relating to the supply of
financial services.

5. On the
request of an applicant, a Party's regulatory authority
shall inform the applicant of the status of its
application. If such authority requires additional
information from the applicant, it shall notify the applicant
without undue delay.

6. A
regulatory authority shall make an administrative decision on a
completed application of an investor in a financial
institution, a financial institution, or a cross-border
financial service supplier of the other Party relating to the
supply of a financial service within 120 days, and shall
promptly notify the applicant of the decision. An
application shall not be considered complete until all relevant
hearings are held and all necessary information is
received. Where it is not practicable for a decision to
be made within 120 days, the regulatory authority shall notify
the applicant without undue delay and shall endeavour to make
the decision within a reasonable time thereafter.

7. On
the request of an unsuccessful applicant, a regulatory
authority that has denied an application shall, to the extent
practicable, inform the applicant of the reasons for denial of
the application in writing.

8. Each
Party shall maintain or establish appropriate mechanisms that
will respond to inquiries from interested persons regarding
measures of general application covered by this Chapter.

9. Each
Party shall ensure that the rules of general application
adopted or maintained by self-regulatory organisations of the
Party are promptly published or otherwise made available in
such a manner as to enable interested persons to become
acquainted with them.

10. To the extent
practicable, each Party should allow reasonable time between
publication of final regulations and their effective date.

11. At the time it
adopts final regulations, a Party should, to the extent
practicable, address in writing substantive comments received
from interested persons with respect to the proposed
regulations.

Article
12.14:
Self-Regulatory Organisations

Where a Party requires a financial institution or a
cross-border financial service supplier of the other Party to
be a member of, participate in, or have access to, a
self-regulatory organisation to provide a financial service in
or into the territory of that Party, the Party shall ensure
observance of the obligations of this Chapter by such
self-regulatory organisation.

Article
12.15:
Payment and Clearing Systems

Under terms and conditions that accord national treatment,
each Party shall grant to financial institutions of the other
Party established in its territory access to payment and
clearing systems operated by public entities, and to official
funding and refinancing facilities available in the normal
course of ordinary business. This Article is not intended
to confer access to the Party's lender of last resort
facilities.

Article
12.16:
Financial Services Committee

1. The
Parties hereby establish a Financial Services Committee.

2. The
Committee may meet at the request of either Party to discuss
any matter arising under this Agreement that affects financial
services.

3. The
Committee shall be headed by officials of the authorities
specified in Annex 12-C.

Article
12.17:
Dispute Settlement

1.
Chapter 21 (Dispute Settlement Chapter) applies as modified by
this Article to the settlement of disputes arising under this
Chapter.

2. A Party
may request in writing consultations with the other Party
regarding any matter on the implementation, interpretation,
application or operation of this Chapter.

3.
Consultations under this Article shall be headed by officials
of the authorities specified in Annex 12-C.

4. Upon
initiation of consultations, the Parties shall provide
information and give confidential treatment to the information
exchanged in accordance with Article 22.5 (Disclosure of
Information – General Provisions and Exceptions
Chapter).

5. Nothing
in this Article shall be construed to require regulatory
authorities participating in consultations to disclose
information or take any action that would interfere with
specific regulatory, supervisory, administrative or enforcement
matters.

6. Nothing
in this Article shall be construed to require a Party to
derogate from its relevant law regarding sharing of information
among financial regulators or the requirements of an agreement
or arrangement between financial authorities of the
Parties.

7.
Panelists on panels constituted for disputes arising under this
Chapter shall meet the requirements set out in Article 21.7
(Compositions of Arbitral Panels – Dispute Settlement
Chapter) and shall also have expertise or experience in
financial services law or practice, which may include the
regulation of financial institutions.

8.
Consistent with Article 21.12 (Non-Implementation –
Compensation and Suspension of Concessions or other Obligations
– Dispute Settlement Chapter), in any dispute where a
panel finds a measure to be inconsistent with the obligations
of this Agreement and the measure affects:

(a) only the
financial services sector, the complaining Party may suspend
benefits only in the financial services sector;

(b) the financial
services sector and any other sector, the complaining Party may
suspend benefits in the financial services sector that have an
effect equivalent to the effect of the measures in the
Party's financial services sector; or

(c) only a sector
other than the financial services sector, the complaining Party
may not suspend benefits in the financial services sector.

Article
12.18:
Investment Disputes in Financial Services

1. Where an
investor of one Party submits a claim under Article 10.16
(Submission of a Claim to Arbitration – Investment
Chapter) to arbitration under Section B of Chapter 10
(Investment) against the other Party and the respondent invokes
Article 12.11, on the request of the respondent, the tribunal
shall refer the matter in writing to the Parties for discussions
under Article 12.16. Subject to paragraph 4, the tribunal
may not proceed pending receipt of a decision or report under
this Article.

2. In a
referral pursuant to paragraph 1, the Parties shall decide
whether reliance on Article 12.11 is justified. The
Parties shall transmit a copy of their decision to the
tribunal. The decision shall be binding on the
tribunal.

3. Where the
Parties have not decided the issue within 60 days of the
receipt of the referral under paragraph 1, either Party may
institute dispute settlement proceedings under Article
12.17. The panel shall be constituted in accordance with
Article 12.17.

4. Where no
request for dispute settlement proceedings has been made within
10 days of the expiration of the 60 day period referred to in
paragraph 3, the tribunal may proceed to decide the matter.

5. Where the
parties resolve or seek resolution of the issues through
dispute settlement proceedings, the decision of the arbitral
panel shall be binding on the tribunal.

Annex
12-A

Cross-Border Trade

Insurance and insurance-related services

1. For
Australia, Article 12.6.1 applies to the cross-border supply of
or trade in financial services as defined in Article 12.1(b)(i)
with respect to:

(a) insurance of risks relating to:

(i) maritime shipping and
commercial aviation and space launching and freight (including
satellites), with such insurance to cover any or all of the
following: the goods being transported, the vehicle
transporting the goods and any liability arising there from;
and

(ii) goods in international
transit;

(b)
reinsurance and retrocession, and services auxiliary to
insurance as referred to in Article 12.1(e)(ii) and (iv);
and

(c)
insurance intermediation, such as brokerage and agency as
referred to in Article 12.1(e)(iii) in relation to the services
in subparagraphs (a) and (b).

2. For
Chile, Article 12.6.1 applies to the cross-border supply of or
trade in financial services as defined in Article 12.1(b)(i)
with respect to:

(a)
insurance of risk relating to:

(i) international maritime
transport and international commercial aviation, with such
insurance to cover any or all of the following: the goods being
transported, the vehicle transporting the goods, and any
liability deriving there from; and

(ii) goods in international transit;

(b)
brokerage of insurance of risks relating to subparagraph (a)(i)
and (a)(ii); and

(c)
reinsurance and retrocession; reinsurance brokerage; and
consultancy, actuarial, and risk assessment.

Banking and other financial services (excluding
insurance)

3. For
Australia, Article 12.6.1 applies with respect to the provision
and transfer of financial information and financial data
processing and related software as referred to in Article
12.1(e)(xv), and advisory and other auxiliary services,
excluding intermediation, relating to banking and other
financial services as referred to in Article 12.1(e)(xvi).

4. For
Chile, Article 12.6.1 applies with respect to:

(a)
provision and transfer of financial information as described in
Article 12.1(e)(xv);

(b)
financial data processing as described in Article
12.1(e)(xv),subject to prior authorisation from the relevant
regulator, as required;^12-[27] and

(c) advisory
and other auxiliary financial services, excluding
intermediation and credit reference and analysis, relating to
banking and other financial services as described in Article
12.1(e)(xvi).

5.
Notwithstanding subparagraph 4(c), in the event that after the
date of entry into force of this Agreement Chile allows credit
reference and analysis to be supplied by cross-border financial
service suppliers, it shall accord national treatment (as
specified in Article 12.3.3) to cross-border financial service
suppliers of Australia. Nothing in this commitment shall
be construed to prevent Chile from subsequently restricting or
prohibiting the supply of credit reference and analysis
services by cross-border financial service suppliers.

6. It is
understood that Chile's commitments on cross-border
investment advisory services shall not, in and of themselves,
be construed to require Chile to permit the public offering of
securities (as defined under its relevant law) in it's
territory by cross-border suppliers of Australia who supply or
seek to supply such investment advisory services. Chile
may subject the cross-border suppliers of investment advisory
services to regulatory and registration requirements.

Annex 12-B

Annex on Specific Commitments

Section
A
Pension Funds Management

1.
Notwithstanding the inclusion of the non-conforming measures of
Chile in Annex III, Section 2, referring to social services,
Chile, with respect to the establishment by an investor of
Australia:

(a) shall permit
such an investor that does not own or control an Administradora de Fondos de Pensiones under Decreto
Ley 3.500 to establish or acquire in Chile an Administradora de Fondos de Pensiones to supply the
financial services that such an institution may supply under
Chile's domestic law at the time of establishment,
without the imposition of numerical restrictions or of an
economic needs test; and

(b) as required by
its domestic law, shall not establish arbitrary differences
with respect to such an investor in Administradora de Fondos
de Pensiones under Decreto Ley 3.500.

2. No other
modification of the effect of the non-conforming measures
referring to social services is intended or shall be construed
under this paragraph.

3. The
specific commitments of Chile under paragraph 1 are subject to
the headnotes and non-conforming measures set forth in Annex
III of Chile with respect to financial services.

4. For the
purposes of this Annex:

(a) an
"investor of Australia" means an investor of
Australia engaged in the business of providing banking and
other financial services (excluding insurance) in Australia;
and

(b)
"numerical restrictions" means limitations imposed,
either on the basis of a regional subdivision or on the basis
of the entire territory, on the number of financial
institutions whether in the form of numerical quotas,
monopolies, exclusive service suppliers or the requirements of
an economic needs test.

Section
B:
Voluntary Savings Plans; Non-Discriminatory Treatment of
Australian Investors

1.
Notwithstanding the inclusion of the non-conforming measures of
Chile in Annex III, Section 2, referring to social services,
with respect to voluntary savings pension plans established
under Ley 19.768, Chile shall extend the obligations of
Article 12.3.1 and 12.3.2 and of Article 12.4 to financial
institutions of Australia, investors of Australia, and
investments of such investors in financial institutions
established in Chile.

2.
Notwithstanding the inclusion of the nonconforming measures of
Chile in Annex III, Section 2, referring to social services,
Chile, as required by its domestic law, shall not establish
arbitrary differences with respect to Australian investors in Administradoras de Fondos de Pensiones under Decreto
Ley 3.500.

Section
C:
Portfolio Management

1. A Party
shall allow a financial institution (other than a trust company
or insurance company) organised outside its territory to
provide investment advice and portfolio management services,
excluding (1) custodial services, (2) trustee services and (3)
execution services that are not related to managing a
collective investment scheme, to a collective investment scheme
located in its territory. This commitment is subject to
Article 12.2 and to Article 12.6.3, regarding the right to
require registration, without prejudice to other means of
prudential regulation.

2.
Notwithstanding paragraph 1, a Party may require the collective
investment scheme located in the Party's territory to
retain ultimate responsibility for the management of the
collective investment scheme or the funds it manages.

3. For the
purposes of paragraph 1 and 2, a collective investment scheme
means:

(a) in Australia, a managed
investment scheme as defined under section 9 of the Corporations Act 2001 (Cth), other than a managed
investment scheme operated in contravention of subsection 601ED
(5) of the Corporations Act 2001 (Cth), or an entity
that:

(i) carries on a business of
investment in securities, interests in land, or other
investments; and

(ii) in the course of carrying on
that business, invests funds subscribed, whether directly or
indirectly, after an offer or invitation to the public (within
the meaning of section 82 of the Corporations Act 2001 (Cth)) made on terms that the funds subscribed would be
invested; and

(b) in Chile, the following fund
management companies subject to supervision by the Superintendencia de Valores y Seguros:

(i) Compañías
Administradoras de Fondos Mutuos (Decreto Ley 1.328 de
1976);

(ii) Compañías
Administradoras de Fondos de Inversión (Ley 18.815
de 1989);

(iii) Compañías Administradoras de Fondos de
Inversión de Capital Extranjero (Ley 18.657
de 1987);

(iv) Compañías Administradoras de Fondos para la
Vivienda (Ley 18.281 de 1993); and

(v) Compañías Administradoras Generales de
Fondos (Ley 18.045 de 1981).

Annex 12-C

Authorities Responsible for Financial
Services

The authority of each Party responsible for financial
services shall be:

(a) for Australia, the Department of
the Treasury, or its successor.

(b) for Chile, the Ministerio de
Hacienda.

^12-[22]The Parties understand that the
provisions of Chapter 10 (Investment)hereby incorporated
include, are subject to and shall be interpreted in
conformity with Annexes 10-A to 10-F of that Chapter, as
applicable.
^12-[23]This subparagraph does not cover
measures of a Party which limit inputs for the supply of
financial services.
^12-[24]For greater certainty, a Party may,
consistent with Article 12.3, prohibit a particular new
financial service.
^12-[25]It is understood that the term
"prudential reasons" includes the maintenance of
the safety, soundness, integrity, or financial responsibility
of individual financial institutions or cross-border
financial service suppliers.
^12-[26]The Parties understand that a Party
may take measures for prudential reasons through regulatory
or administrative authorities, such as ministries or
departments of labour, in addition to those who have
regulatory responsibilities with respect to financial
institutions.
^12-[27]It is understood that where the
financial information or financial data processing referred
to in subparagraphs (a) and (b) involve personal data, the
treatment of such personal data shall be in accordance with
Chilean law regulating the protection of such data.