COMPREHENSIVE ECONOMIC

COOPERATION AGREEMENT

BETWEEN

THE GOVERNMENT OF MALAYSIA

AND

THE GOVERNMENT OF THE REPUBLIC OF

INDIA
 CONTENTS

PREAMBLE ............................................................................................................................. 1
CHAPTER 1 INITIAL PROVISIONS AND GENERAL DEFINITIONS .......................... 2
CHAPTER 2 TRADE IN GOODS ........................................................................................ 5
CHAPTER 3 RULES OF ORIGIN ....................................................................................... 8
CHAPTER 4 CUSTOMS COOPERATION ...................................................................... 16
CHAPTER 5 TRADE REMEDIES ..................................................................................... 22
CHAPTER 6 SANITARY AND PHYTOSANITARY MEASURES ............................... 29
CHAPTER 7 TECHNICAL BARRIERS TO TRADE ...................................................... 37
CHAPTER 8 TRADE IN SERVICES .............................................................................. 47
CHAPTER 9 MOVEMENT OF NATURAL PERSONS .................................................. 60
CHAPTER 10 INVESTMENT............................................................................................. 67
CHAPTER 11 ECONOMIC COOPERATION.................................................................. 81
CHAPTER 12 GENERAL EXCEPTIONS ........................................................................ 84
CHAPTER 13 TRANSPARENCY ..................................................................................... 87
CHAPTER 14 DISPUTE SETTLEMENT ......................................................................... 90
CHAPTER 15 INSTITUTIONAL PROVISIONS ............................................................... 99
CHAPTER 16 FINAL PROVISIONS............................................................................... 105

ii
List of Annexes
Annex 2-1 Schedules of Tariff Commitments
Annex 3-1 Product Specific Rules
Annex 3-2 Method of Calculation of FOB Value
Annex 3-3 Operational Certification Procedures
Attachment 3-3-1 Certificate of Origin
Annex 6-1 List of Products for Request of Equivalence
Annex 7-1 List of P roducts f or which E quivalence o f Te chnical R egulations
Has Been Accepted
Annex 7-2 Mutual Recognition Agreements
Annex 8-1 Schedules of Specific Commitments
Annex 8-2 Telecommunications
Annex 9-1 Movement of Natural Persons
Annex 10-1 Indirect Expropriation
Annex 10-2 Schedules of Reservations
Annex 10-3 Schedules of Reservations
Annex 12-1 Security Exceptions
Annex 12-2 Non-Justiciability of Security Exceptions

iii
 PREAMBLE

The Government of Malaysia and the Government of the Republic of India,

hereinafter referred to as “the Parties”:

RECOGNISING their long-standing friendship, strong economic ties and close

cultural links;

RECALLING the Joint Communiqué issued in 23 January 2010 in New Delhi, India
by the Prime Ministers of the Republic of India and Malaysia and the Agreement
Towards Implementing Comprehensive Economic Cooperation Agreement between
the Government of Malaysia and the Government of Republic of India signed on 27
October 2010 in Kuala Lumpur, Malaysia;

RECALLING FURTHER the recommendations in the Joint Study Group Report

which served as the framework for negotiations on the Comprehensive Economic
Cooperation Agreement (“the Agreement”) between the two countries;

CONSIDERING that the expansion of the domestic markets of the two countries,
through economic integration, is vital for accelerating their economic development;

AIMING to enhance economic and social benefits, improve living standards and
ensure high and steady growth in real incomes in their respective territories through
the expansion of trade and investment flows;

DESIRING to promote mutually beneficial economic relations;

BUILDING on their respective rights, obligations and undertakings as developing

country members of the World Trade Organization, and under other multilateral,
regional and bilateral agreements and arrangements;

REAFFIRMING their right to pursue economic philosophies suited to their respective

development goals and their right to regulate activities to realise their national policy
objectives;

CONSCIOUS that this Agreement would contribute to the promotion of closer links
with other economies in the Southeast Asian region;

DESIRING to promote greater regional economic integration and believing that their
cooperative framework could serve as a basis for future integration with other
countries in the Southeast Asian region;

HAVE AGREED AS FOLLOWS:

1
 CHAPTER 1
INITIAL PROVISIONS AND GENERAL DEFINITIONS

Article 1.1
Objectives

The objectives of this Agreement are:

(a) to strengthen and enhance the economic, trade and investment

cooperation between the Parties;

(b) to liberalise and promote trade in goods in accordance with Article

XXIV of the WTO General Agreement on Trade and Tariffs 1994;

(c) to liberalise and promote trade in services in accordance with Article V

of the WTO General Agreement on Trade in Services, including
promotion of mutual recognition of professions;

(d) to establish a transparent, predictable and facilitative investment

regime;

(e) to improve the efficiency and competitiveness of their manufacturing

and services sectors and to expand trade and investment between the
Parties;

(f) to explore new areas of economic cooperation and develop appropriate

measures for closer economic cooperation between the Parties;

(g) to facilitate and enhance regional economic cooperation and

integration; and

(h) to build upon their commitments at the World Trade Organization.

Article 1.2
General Application

For the purposes of Chapters 2 through 11 (Trade in Goods, Rules of Origin,

Customs Cooperation, Trade Remedies, Sanitary and Phytosanitary Measures,
Technical Barriers to Trade, Trade in Services, Movement of Natural Persons,
Investment and Economic Cooperation) and the Annexes thereto, all Chapters of
general application shall apply, unless otherwise provided.

Article 1.3
Non-Discrimination

Each Party shall ensure that any changes to domestic laws, procedures or
regulations, et cetera, undertaken as a result of that Party’s international agreement
or treaty with a non-Party in which the other Party is not a party to such international
agreement or treaty, do not adversely affect the exports of the other Party.

2
 Article 1.4
General Definitions

1. For the purposes of this Agreement, unless otherwise specified:

(a) days means calendar days, including weekends and holidays;

(b) GATT 1994 means the WTO General Agreement on Tariffs and Trade
1994;

(c) GATS means the WTO General Agreement on Trade in Services;

(d) goods means any merchandise, product, article or material;

(e) Harmonized S ystem (“HS”) means the Harmonized Commodity

Description and Coding System defined in the International Convention
on the Harmonized Commodity Description and Coding System,
including all legal notes thereto, as may be amended, adopted and
implemented by the Parties in their respective laws;

(f) measure means any measure by a Party, whether in the form of a law,
regulation, rule, procedure, decision, administrative action, or any other
form;

(g) measures by Parties means measures taken by:

(i) central, regional, or local governments and authorities; and

(ii) non-governmental bodies in the exercise of powers delegated

by central, regional or local governments or authorities;

(h) originating goods means goods that qualify as originating in

accordance with Article 3.2 (Origin Criteria);

(i) Parties means the Governments of the Republic of India and Malaysia
collectively;

(j) Party means the Governments of the Republic of India or Malaysia

respectively;

(k) territory means:

(i) in respect of Malaysia,

(AA) the territories of the Federation of Malaysia;

(BB) the territorial waters of Malaysia and the seabed and

subsoil of the territorial waters, and the air space above
such areas over which Malaysia has sovereignty; and

3
 (CC) any area extending beyond the limits of the territorial
waters of Malaysia, and the seabed and subsoil of any
such area, in accordance with the laws of Malaysia and
international law as an area over which Malaysia has
sovereign rights for the purposes of exploring and
exploiting the natural resources, whether living or non-
living, as well as jurisdiction with regard to the
establishment and use of artificial islands, installations
and structures, marine scientific research and the
protection and preservation of the marine environment;

(ii) in respect of India, the territory of the Republic of India including

its territorial waters and the airspace above it and other maritime
zones including the Exclusive Economic Zone and continental
shelf over which Republic of India has sovereignty, sovereign
rights or exclusive jurisdiction in accordance with its laws in
force, the United Nations Convention on the Law of the Sea,
1982 and international law;

(l) WTO means the World Trade Organization; and

(m) WTO Agreement means the Marrakesh Agreement Establishing the

World Trade Organization, done on 15 April 1994.

2. In this Agreement, all words in the singular shall include the plural and all
words in the plural shall include the singular, unless otherwise indicated in the
context.

4
 CHAPTER 2
TRADE IN GOODS

Article 2.1
Definition and Interpretation

For the purposes of this Chapter, applied MFN ta riff r ates shall include in-
quota rates, and shall refer to respective applied rate of the Republic of India and
Malaysia as of 1 July 2008, except for products identified as Special Products in the
Schedules of Tariff Commitments set out in Annex 2-1.

Article 2.2
Scope

Except as otherwise provided, this Chapter shall apply to trade in goods and
all other matters relating thereto between the Parties.

Article 2.3
Classification of Goods

For the purposes of this Agreement, the classification of goods in trade

between the countries of the Parties shall be in conformity with the Harmonized
System.

Article 2.4
National Treatment on Internal Taxation and Regulations

Each Party shall accord national treatment to the goods of the other Party in
accordance with Article III of GATT 1994, which shall apply, mutatis mutandis, to this
Chapter.

Article 2.5
Tariff Reduction and Elimination

1. Except as otherwise provided for in this Chapter, each Party shall gradually
liberalise, where applicable, applied MFN tariff rates on originating goods of the other
Party in accordance with its Schedule of Tariff Commitments as set out in Annex 2-1.

2. Nothing in this Chapter shall preclude any Party from unilaterally accelerating
the reduction and/or elimination of the applied MFN tariff rates on originating goods
of the other Party as set out in its Schedule of Tariff Commitments in Annex 2-1.

Article 2.6
Customs Valuation

For the purposes of determining the customs value of goods traded between
the countries of the Parties, provisions of Part I of the WTO Agreement on
Implementation of Article VII of GATT 1994, as may be amended shall apply, mutatis
mutandis, to this Agreement.

5
 Article 2.7
Administrative Fees and Formalities

Each Party reaffirms its commitments under Article VIII.1 of GATT 1994.

Article 2.8
Rules of Origin

The Rules of Origin and Operational Certification Procedures applicable to the

goods covered under this Chapter are set out in Chapter 3 (Rules of Origin) and its
Annexes.

Article 2.9
Non-Tariff Measures

1. The Parties shall not institute or maintain any non-tariff measure on the
importation of goods from the other Party or on the exportation or sale for export of
goods destined for the territory of the other Party, except in accordance with its WTO
rights and obligations or other provisions in this Agreement.

2. Each Party shall ensure the transparency of its non-tariff measures allowed
under paragraph 1 of this Article and their full compliance with its obligations under
the WTO Agreement with a view to minimising possible distortions to trade to the
maximum extent possible.

Article 2.10
Modification of Concessions

1. The Parties shall not nullify or impair any of the concessions made by them
under this Chapter, except as provided in the Agreement.

2. The Parties may, by negotiation and agreement, modify or withdraw any

concession made under this Chapter. In such negotiations and agreement, which
may include provision for compensatory adjustment with respect to other goods, the
Party concerned shall maintain a general level of reciprocal and mutually
advantageous concessions not less favourable to trade than that provided in this
Chapter prior to such agreement.

Article 2.11
Regional and Local Governments

In fulfilling its obligations and commitments under this Agreement, each Party
shall, in accordance with the provisions of Article XXIV.12 of GATT 1994 and the
Understanding on the Interpretation of Article XXIV of GATT 1994, take such
reasonable measures as may be available to it to ensure observance by regional
and local governments and authorities within its territory.

6
 Article 2.12
Implementation

The Sub-Committee on Trade in Goods established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

7
 CHAPTER 3
RULES OF ORIGIN

Article 3.1
Definitions

For the purposes of this Chapter:

(a) carrier means any vehicle for transportation by air, sea and land;

(b) CIF value means the price actually paid or payable to the exporter for
a good including the cost of the good, insurance, and freight necessary
to deliver the good to the named port of destination. The valuation shall
be made in accordance with the WTO Agreement on Implementation of
Article VII of GATT 1994;

(c) FOB value means the price actually paid or payable to the exporter for
a good when the good is loaded onto the carrier at the named port of
exportation, including the cost of the good and all costs necessary to
bring the good onto the carrier. The valuation shall be made in
accordance with the WTO Agreement on Implementation of Article VII
of GATT 1994;

(d) identical an d i nterchangeable m aterials means materials being of

the same kind and commercial quality, possessing the same technical
and physical characteristics, and which, once they are incorporated
into the finished good cannot be distinguished from one another for
origin purposes by virtue of any markings, et cetera;

(e) materials means ingredients, raw materials, parts, components, sub-

assemblies or goods that are used in the production of another good or
are physically incorporated into another good;

(f) originating goods means goods that qualify as originating in

accordance with the provisions of Article 3.2 (Origin Criteria);

(g) Product S pecific R ules are rules which specify that the materials
have undergone a change in tariff classification or a specific
manufacturing or processing operation, or satisfy qualifying value
content criterion, or a combination of any of these criteria, as provided
in Annex 3-1 (Product Specific Rules); and

(h) production means methods of obtaining goods including growing,

planting, mining, harvesting, raising, breeding, extracting, gathering,
collecting, capturing, fishing, trapping, hunting, manufacturing,
producing, processing, assembling or disassembling a good.

8
 Article 3.2
Origin Criteria

For the purposes of this Chapter, goods imported by a Party which are
consigned directly within the meaning of Article 3.8 (Direct Consignment), shall be
deemed to be originating and eligible for preferential tariff treatment if they conform
to the origin requirements under any one of the following:

(a) goods which are wholly obtained or produced in the territory of the
exporting Party as set out and defined in Article 3.3 (Wholly Obtained
or Produced Goods); or

(b) goods not wholly obtained or produced in the territory of the exporting
Party provided the said goods are eligible under Articles 3.4 (Not
Wholly Obtained or Produced Goods) or 3.5 (Cumulative Rule of
Origin).

Article 3.3
Wholly Obtained or Produced Goods

Within the meaning of paragraph (a) of Article 3.2 (Origin Criteria), the
following good shall be deemed as being wholly obtained or produced in the territory
of a Party:

(a) plant 1 and plant products grown, planted and harvested there;

(b) live animals 2 born and raised there;

(c) products 3 obtained from live animals referred to in paragraph (b);

(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering

or capturing conducted there;

(e) minerals and other naturally occurring substances, not included in

paragraphs (a) to (d), extracted or taken from its soil, waters, seabed or
beneath their seabed;

(f) goods taken from the waters, seabed or beneath the seabed outside
the territorial waters of that Party, provided that, the Party has the
rights to exploit such waters, seabed and beneath the seabed in
accordance with the United Nations Convention on the Law of the Sea,
1982;

1
“Plant” refers to all plant life, including forestry goods, fruit, flowers, vegetables, trees, seaweed,
fungi and live plants.
2
“Animals” referred to in paragraphs (b) and (c) of this Article covers all animal life, including
mammals, birds, fish, crustaceans, molluscs, reptiles, and living organisms.
3
“Products” refer to those obtained from live animals without further processing, including milk, eggs,
natural honey, hair, wool, semen and dung.

9
 (g) goods of sea-fishing and other marine goods taken from the high seas
by vessels registered with a Party and entitled to fly the flag of that
Party;

(h) goods processed or made on board factory ships registered with a

Party and entitled to fly the flag of that Party, exclusively from goods
referred to in paragraph (g) above;

(i) articles collected there which can no longer perform their original
purpose nor are capable of being restored or repaired and are fit only
for disposal or recovery of parts of raw materials, or for recycling
purposes 4; and

(j) goods obtained or produced in the territory of a Party solely from goods
referred to in paragraphs (a) to (i).

Article 3.4
Not Wholly Obtained or Produced Goods

1. For the purposes of paragraph (b) of Article 3.2 (Origin Criteria), a good shall
be deemed to be originating:

(a) when such goods satisfy the criteria under the Product Specific Rules
provided in Annex 3-1; or

(b) when:

(i) all non-originating materials used in the production of the goods

have undergone a change in tariff classification in a sub-heading
at the six digit level of the HS; and

(ii) qualifying value content of the goods is not less than thirty five
per cent of the FOB value,

provided that the final process of manufacturing is performed within the territory of
the exporting Party.

2. For the purposes of this Article, the formulae for calculating the qualifying
value content are as follows 5:

4
This would cover all scrap and waste including scrap and waste resulting from manufacturing or
processing operations or consumption in the same country, scrap machinery, discarded packaging
and all products that can no longer perform the purpose for which they were produced and are fit only
for disposal for the recovery of raw materials. Such manufacturing or processing operations shall
include all types of processing, not only industrial or chemical but also mining, agriculture,
construction, refining, incineration and sewage treatment operations.
5
The Parties shall be given the flexibility to adopt the method of calculating the qualifying value
content, whether it is the direct or indirect method. In order to promote transparency, consistency and
certainty, each Party shall adhere to one method. Any change in the method of calculation shall be
notified to all the other Parties at least six months prior to the adoption of the new method. It is
understood that any verification of the content by the importing Party shall be done on the basis of the
method used by the exporting Party.

10
 (a) Direct Method:

Originating Direct Direct Other

Material + Labour + Overhead + Cost + Profit
Cost Cost Cost
x 100 % ≥ 35%
FOB Price

(b) Indirect Method:

Value of imported non- Value of materials of

originating materials + undetermined origin
x 100 % ≤ 65%
FOB Price

3. The value of the non-originating materials shall be:

(a) the CIF value at the time of importation of the materials, parts or
produce; or

(b) the earliest ascertained price paid for the materials, parts or produce of
undetermined origin in the territory of the Party where the working or
processing takes place.

4. The method of calculating the FOB value is as set out in Annex 3-2 (Method
of Calculation of FOB Value).

Article 3.5
Cumulative Rule of Origin

Unless otherwise provided for, goods which comply with the origin
requirements provided for in Article 3.2 (Origin Criteria) and which are used in the
territory of a Party as materials for a finished good eligible for preferential tariff
treatment under this Agreement shall be considered to be originating in the territory
of the latter Party where working or processing of the finished goods has taken
place.

Article 3.6
De Minimis

1. A good that does not undergo a change in tariff classification pursuant to

Article 3.4 (Not Wholly Obtained or Produced Goods) and Annex 3-1 (Product
Specific Rules) in the final process of production shall be deemed as originating if:

(a) for goods except for those falling within Chapters 1 through 14 and
Chapters 50 through 63 of the HS, the value of all non-originating
materials used in its production, which do not undergo the required
change in tariff classification, does not exceed ten percent of the FOB
value of the good;

11
 (b) for goods falling within Chapters 50 through 63 of the HS, the total
weight of non-originating basic textile materials used in its production,
which do not undergo the required change in tariff classification, does
not exceed eight percent of the total weight of all the basic textile
materials used; and

(c) the good meets all other applicable criteria set forth in this Chapter for
qualifying as an originating good.

2. The value of such non-originating materials shall be included in the value of

non-originating materials for any applicable qualifying value content requirement for
the good.

Article 3.7
Minimal Operations and Processes

1. Notwithstanding any provisions in this Chapter, a good shall not be

considered originating in the territory of a Party if the following operations are
undertaken exclusively by itself or in combination in the territory of that Party:

(a) operations to ensure the preservation of goods in good condition during

transport and storage including, but not limited to, drying, freezing,
keeping in brine, ventilation, spreading out, chilling, placing in salt,
sulphur dioxide or other aqueous solutions, removal of damaged parts,
and like operations;

(b) simple 6 operations consisting of removal of dust, sifting or screening,

sorting, classifying, matching including the making-up of sets of
articles, washing, painting, cutting;

(c) changes of packing and breaking up and assembly of consignments;

(d) simple 7 cutting, slicing and repacking or placing in bottles, flasks, bags,
boxes, fixing on cards or boards, and all other simple packing
operations;

(e) affixing of marks, labels or other like distinguishing signs on goods or

their packaging;

(f) simple 8 mixing of goods whether or not of different kinds, where one or
more components of the mixture do not meet the conditions laid down
in this Chapter to enable them to be considered as originating goods;

(g) simple 9 assembly of parts of goods to constitute a complete good;

6
“Simple” generally describes activities which need neither special skills nor machines, apparatus or
equipment especially produced or installed for carrying out the activity.
7
Refer to footnote 6 of this Chapter.
8
Refer to footnote 6 of this Chapter.
9
Refer to footnote 6 of this Chapter.

12
 (h) disassembly;

(i) slaughter which means the mere killing of animals; and

(j) mere dilution with water or another substance that does not materially
alter the characteristics of the goods.

2. For textiles and textile goods, an article or material shall not be considered to
be originating in the territory of a Party by virtue of merely having undergone any of
the following:

(a) simple 10 combining operations, labelling, pressing, cleaning or dry

cleaning or packaging operations, or any combination thereof;

(b) cutting to length or width and hemming, stitching or overlocking fabrics

which are readily identifiable as being intended for a particular
commercial use;

(c) trimming and/or joining together by sewing, looping, linking, attaching

of accessory articles such as straps, bands, beads, cords, rings and
eyelets;

(d) one or more finishing operations on yarns, fabrics or other textile

articles, such as bleaching, waterproofing, decanting, shrinking,
mercerizing, or similar operations; or

(e) dyeing or printing of fabrics or yarns.

Article 3.8
Direct Consignment

An originating good shall be deemed as directly consigned from the territory of

the exporting Party to the territory of the importing Party:

(a) if the goods are transported without passing through the territory of any
non-Party; or

(b) if the goods are transported through the territory of any non-Party
provided that:

(i) the transit entry is justified for geographical reasons or transport

requirements;

(ii) the goods have not entered into trade or consumption in the
territory of such non-Party;

10
Refer to footnote 6 of this Chapter.

13
 (iii) the goods have not undergone any operation in the territory of
such non-Party other than unloading and reloading or any
operation required to keep the goods in good condition; and

(iv) the goods have remained under the control of the customs
authority of such non-Party.

Article 3.9
Treatment of Packing Materials and Containers

1. If a good is subject to the change in tariff classification criterion as provided in

paragraph 1(b)(i) of Article 3.4 (Not Wholly Obtained or Produced Goods), packing
materials and containers classified together with the packaged good, shall not be
taken into account in determining origin.

2. If a good is subject to qualifying value content requirement as provided in

paragraph 1(b)(ii) of Article 3.4 (Not Wholly Obtained or Produced Goods), the value
of the packing materials and containers, shall be taken into account in determining
the origin of that good, provided that the packing materials and containers are
considered as forming a whole with the good and the good is packaged in such
packaging materials and containers for the purposes of retail sale. Packing materials
and containers in which a good is packed for the purposes of shipment and used
exclusively for the transportation of a good shall not be taken into account in
determining the origin of such good.

Article 3.10
Accessories, Spare Parts, Tools and Instructional or Other Information
Material

1. Any accessories, spare parts, tools, instructional or other information material

delivered with a good that form part of the standard accessories, spare parts, tools or
instructional or other information material of the good, shall be treated as originating
goods if the good is an originating good, and shall not be taken into account in
determining whether all the non-originating materials used in the production of the
good undergo the applicable change in tariff classification, provided that:

(a) the accessories, spare parts, tools or the instructional and other
information material are not invoiced separately from the good; and

(b) the quantities and value of the accessories, spare parts, tools or the
instructional and other information material are standard trade practice
for the good in the domestic market of the exporting Party.

2. If the good is subject to a qualifying value content requirement, the value of

the accessories, spare parts, tools or the instructional and other information material
shall be taken into account as originating or non-originating materials, as the case
may be, in calculating the qualifying value content of the good.

14
 Article 3.11
Indirect Materials

In order to determine whether a good originates in the territory of a Party, any

indirect material, including power, fuel, plant and equipment, machines, tools or
consumables used to obtain such good shall be treated as originating irrespective of
the origin of the material and its value shall be the cost registered in the accounting
records of the producer of such good.

Article 3.12
Identical and Interchangeable Materials

For the purposes of establishing if a good is originating when it is

manufactured utilising both originating and non-originating materials, mixed or
physically combined, the origin of such materials can be determined on the basis of
generally accepted accounting principles of stock control applicable or in accordance
with the methods of inventory management practised in the exporting Party.

Explanation: For the purposes of this Article, “generally accepted accounting

principles” means recognised consensus or substantial authoritative
support given in the territory of a Party with respect to the recording of
revenues, expenses, costs, assets, and liabilities, the disclosure of
information, and the preparation of financial statements and may
encompass broad guidelines for general application, as well as detailed
standards, practices, and procedures.

Article 3.13
Certificate of Origin

A claim that an imported good shall be accepted as eligible for preferential

tariff treatment shall be supported by a Certificate of Origin issued by an authority or
authorities designated by the Government of the exporting Party and notified to the
other Party in accordance with Annex 3-3 (Operational Certification Procedures).

Article 3.14
Implementation

The Sub-Committee on Trade in Goods established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

15
 CHAPTER 4
CUSTOMS COOPERATION

Article 4.1
Objectives

1. The objectives of this Chapter are to:

(a) simplify and harmonize customs procedures of the Parties on the basis
of international standards and best practices to which the Parties have
agreed;

(b) ensure consistency, predictability and transparency in the application of

customs laws and regulations of the Parties;

(c) ensure efficient and expeditious clearance of goods;

(d) facilitate trade in goods between the Parties;

(e) promote cooperation between the customs authorities; and

(f) exchange information relating to all customs matters to the extent

possible.

2. All measures to facilitate trade shall be without prejudice to the fulfillment of

legitimate statutory and policy objectives, including revenue and the protection of
national security, health and the environment.

Article 4.2
Definitions

For the purposes of this Chapter:

(a) customs a uthority means the authority that according to the

legislation of each Party is responsible for the administration and
enforcement of its customs laws:

(i) in the case of Malaysia, the Royal Malaysian Customs

Department; and

(ii) in the case of India, the Central Board of Excise & Customs;

(b) customs l aws means such laws and regulations administered and
enforced by the customs authority of each Party concerning the
importation, exportation, and transit of goods, relating to customs
duties, charges, and other taxes, or to prohibitions, restrictions, and
other similar controls with respect to the movement of controlled items
across the boundary of the customs territory of each Party;

16
 (c) clearance means the accomplishment of the customs formalities
necessary to allow goods to enter home use, to be exported or to be
placed under another customs procedure;

(d) information means any data, documents, reports and certified or

authenticated copies thereof or other communications which are
maintained by the customs authority of a Party in the course of
administering its customs laws; and

(e) persons means both natural and legal persons.

Article 4.3
Scope and Coverage

1. This Chapter shall apply to customs procedures required for the clearance of
goods traded between the Parties.

2. This Chapter shall be implemented by each Party in accordance with the

laws, regulations, national policies and administrative measures in force of each
Party and within the competence and available resources of the customs authority of
each Party.

Article 4.4
Publication and Enquiry Points

For the purposes of this Chapter, each Party shall:

(a) make available on the internet or in print form all statutory and
regulatory provisions and general administrative procedures applicable
or enforced by its customs authority; and

(b) designate or maintain one or more inquiry points to address inquiries

by interested persons concerning customs matters and shall make
available on the Internet information concerning the procedures for
making such inquiries.

Article 4.5
Clearance of Goods

1. Each Party shall, to the extent possible, adopt or maintain simplified customs
procedures for the efficient clearance of goods in order to facilitate trade between the
Parties.

2. For prompt clearance of goods traded between the Parties, to the extent
possible, the Parties shall:

(a) provide for the clearance of goods within a period no more than that
required to ensure compliance with its customs laws;

17
 (b) provide for advance electronic submission and processing of
information before physical arrival of goods to facilitate the expeditious
clearance of goods on arrival;

(c) allow traders to interact with the customs authority without the
mandatory use of brokers or customs agents; and

(d) harmonize its customs procedures, with relevant international

standards and best practices, such as those recommended by the
World Customs Organization.

Article 4.6
Information and Communications Technology

The customs authorities of the Parties shall cooperate to promote the use of
information and communications technology including sharing best practices, for the
purpose of improving their customs procedures.

Article 4.7
Risk Management

1. In order to facilitate clearance of goods traded between the Parties, the

customs authority of each Party shall use risk management methodology.

2. The customs authority of each Party shall exchange information regarding

best practices on risk management techniques.

Article 4.8
Cooperation and Capacity Building

1. Each Party shall cooperate and exchange information with each other on
customs matters.

2. Bilateral cooperation shall include capacity building, such as training,

technical assistance, exchange of experts and any other forms of cooperation, as
may be mutually agreed upon by the Parties, for trade facilitation and effective
administration of customs laws.

3. The Parties, shall in accordance with their national legal and administrative
provisions in force, adopt procedures to enable a right holder, who has valid reason
for suspecting that the importation of goods infringing an intellectual property may
take place, to lodge an application in writing with competent authorities, for the
suspension by customs authorities of the clearance of such goods.

4. To the extent permitted by their national laws and regulations, the customs
authority of each Party shall assist each other in relation to:

(a) the implementation and operation of the provisions of this Agreement

governing importation or exportation, including claims for preferential

18
 tariff treatment and the procedures for making claims for preferential
tariff treatment;

(b) the implementation and operation of the WTO Agreement on

Implementation of Article VII of GATT 1994;

(c) enforcement of prohibitions and restrictions on exports to and imports

from their respective territories;

(d) joint efforts to combat customs fraud; and

(e) promote cooperation in any other areas as may be mutually agreed

upon by the Parties.

Article 4.9
Mutual Assistance

1. The customs authority of each Party shall, to the extent possible, provide the
customs authority of the other Party, upon request or on its own initiative, with
information which helps to ensure proper application of customs laws and the
prevention of violation or attempted violation of customs laws.

2. To the extent permitted by their laws, regulations and national policies the
customs authorities may provide each other with mutual assistance in order to
prevent or investigate violations of customs law.

3. The request pursuant to paragraph 1 shall, wherever appropriate, specify:

(a) the verification procedures that the requesting authority has undertaken
or attempted to undertake; and

(b) the specific information that the requesting authority requires, which
may include:

(i) subject and reason for the request;

(ii) a brief description of the matter and the action requested; and

(iii) the names and addresses of the parties concerned with the
proceedings, if known.

Article 4.10
Information Relating to Import and Export

Subject to each Party’s laws, regulations and national policies, the requested
authority shall, on request by the requesting authority, provide the requesting
authority with information relating to:

19
 (a) whether goods imported into the territory of the requesting authority
have been lawfully exported from the territory of the requested
authority; and

(b) whether goods exported from the territory of the requesting authority
have been lawfully imported into the territory of the requested authority
and whether the goods have been placed under any customs
procedures.

Article 4.11
Review and Appeal

1. Subject to domestic laws and regulations in each Party, any affected person
shall have the right to appeal against the decisions taken by the customs authority of
the Party.

2. Each Party shall provide easily accessible process for administrative and
judicial review or appeal of decision taken by its customs authority.

Article 4.12
Advance Rulings

In accordance with its domestic laws and regulations, each Party shall
endeavour to provide, through its customs or other competent authority, for the
expeditious issuance of written advance rulings, prior to the importation of goods into
its territory, in the territory of the other Party.

Article 4.13
Temporary Admission

1. For the purposes of this Article, temporary ad mission means customs

procedures under which certain goods may be brought into a customs territory
conditionally, relieved totally or partially from the payment of customs duties. Such
goods shall be imported for a specific purpose, and shall be intended for re-
exportation within a specified period and without having undergone any charge
except normal depreciation due to the use made of them.

2. Each Party shall facilitate the procedures for the temporary admission of
goods traded between the countries in accordance with the Customs Convention on
the A.T.A. Carnet for the Temporary Admission of Goods, as may be amended (“the
A.T.A. Convention”).

3. Each Party shall facilitate customs clearance of good in transit from or to the
territory of the other Party in accordance with paragraph 3 of Article V of the GATT
1994.

4. The Parties shall endeavour to promote, through seminars and courses, the
use of A.T.A. Carnet pursuant to the A.T.A. Convention for the temporary admission
of goods and the facilitation of customs clearance of goods in transit in the territories
of the Parties or non-Parties.

20
 Article 4.14
Customs Contact Points

All communications under this Chapter shall be between the official contact
points designated by each customs authority.

Article 4.15
Implementation

The Sub-Committee on Customs Cooperation established under Article 15.2

(Sub-Committees) shall consider matters relating to the implementation of this
Chapter.

21
 CHAPTER 5
TRADE REMEDIES

Section A
Bilateral Safeguards

Article 5.1
Definitions

For the purposes of this Section:

(a) domestic i ndustry means, with respect to an imported product, the

producers as a whole of the like or directly competitive product or those
producers whose collective production of the like or directly competitive
product constitutes a major proportion of the total domestic production
of such product;

(b) provisional measure means a provisional bilateral safeguard measure

described in Article 5.5 (Provisional Measures);

(c) serious injury means a significant overall impairment in the position of

a domestic industry; and

(d) threat of s erious injury means serious injury that is clearly imminent
and shall be determined on the basis of facts and not merely on
allegation, conjecture or remote possibility.

Article 5.2
Application of Bilateral Safeguard Measures

During the transition period, if as a result of the reduction or elimination of a

customs duty pursuant to this Agreement, an originating product of a Party is being
imported into the other Party’s territory in such increased quantities, in absolute
terms or relative to domestic production, and under such conditions as to cause or
threaten to cause serious injury to a domestic industry producing like or directly
competitive products, the other Party may, to the extent necessary to prevent or
remedy serious injury and facilitate adjustment, apply a safeguard measure
consisting of:

(a) the suspension of the further reduction of any rate of customs duty
provided for under this Agreement on the originating product from the
date on which the action to apply the safeguard measure is taken; or

(b) an increase of the rate of customs duty on the originating product to a

level not to exceed the lesser of:

(i) the most-favoured-nation applied rate of customs duty in effect

on the date on which the action to apply the safeguard measure
is taken; or

22
 (ii) the most-favoured-nation applied rate of customs duty in effect
on the day immediately preceding the date of the start of the
period of investigation.

Article 5.3
Scope and Duration of Bilateral Safeguard Measures

1. A Party shall apply a bilateral safeguard measure for such period of time as
may be necessary to prevent or remedy serious injury and to facilitate adjustment. A
Party may apply a bilateral safeguard measure for an initial period of no longer than
two years. The period of a safeguard measure may be extended by up to two years
provided that the conditions of this Chapter are met and that the bilateral safeguard
measure continues to be applied to the extent necessary to prevent or remedy
serious injury and that there is evidence that the industry is adjusting. The total
period of a bilateral safeguard measure, including any extensions thereof, shall not
exceed four years.

2. Regardless of its duration or whether it has been subject to extension, a

safeguard measure on a product shall terminate at the end of the transition period for
such product.

3. In order to facilitate adjustment in a situation where the proposed duration of a

safeguard measure is over one year, the Party applying the safeguard measure shall
progressively liberalise it at regular intervals during the application of the safeguard
measure, including at the time of any extension.

4. No bilateral safeguard measure shall be applied to the import of a product that

has previously been subject to such a measure, for a period of at least one year
since the expiry of the measure.

5. In case a Party has to apply a safeguard or provisional measure again on the

same originating product, the duration of the bilateral safeguard measure shall be
less than the duration of the previous safeguard measure.

6. An investigation shall be promptly terminated without any bilateral safeguard

measure being applied if imports of the originating product represent less than three
per cent of total imports.

7. A Party shall not apply a bilateral safeguard or provisional measure on an

originating product that is subject to a measure that the Party has applied pursuant
to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO
Agreement on Agriculture.

8. When a Party intends to apply, pursuant to Article XIX of GATT 1994 and the
WTO Agreement on Safeguards, or the WTO Agreement on Agriculture, a measure
on a product to which a bilateral safeguard measure is being applied, it shall
terminate the bilateral safeguard measure prior to the imposition of the action to be
applied pursuant to Article XIX of GATT 1994 and the WTO Agreement on
Safeguards, or the WTO Agreement on Agriculture.

23
9. On the termination of a bilateral safeguard measure, the Party that applied the
measure shall apply the rate of customs duty in effect as set out in its Schedule of
Tariff Commitments as specified in Annex 2-1 on the date of termination as if the
safeguard measure had never been applied.

10. No bilateral safeguard measure shall be taken beyond the expiration of the
transition period that shall be defined as a period from the date of entry into force of
this Agreement until seven years from the date of completion of tariff elimination or
completion of tariff reduction, as the case may be for each good.

Article 5.4
Investigation

1. A Party may apply or extend a bilateral safeguard measure only following an

investigation by the Party’s competent authorities in accordance with the same
procedures as those provided for in Articles 3 and 4.2 of the WTO Agreement on
Safeguards.

2. The investigation shall include reasonable public notice to all interested

parties and public hearings or other appropriate means in which importers, exporters
and other interested parties could present evidence and their views, including the
opportunity to respond to the presentations of other parties and to submit their views,
inter alia, as to whether or not the application of a bilateral safeguard measure would
be in the public interest.

3. An investigation shall be completed within one year from the date of initiation.
Upon completion of an investigation, the competent authorities shall promptly publish
a report setting forth their findings and reasoned conclusions reached on all pertinent
issues of fact and law.

4. Each Party shall ensure the consistent, transparent, impartial and reasonable
administration of its laws, regulations, decisions and rulings relating to all bilateral
safeguard investigation proceedings.

Article 5.5
Provisional Measures

1. In critical circumstances where delay would cause damage which would be

difficult to repair, a Party may apply a provisional measure, which shall take the form
of the measure set out in paragraphs (a) or (b) of Article 5.2 (Application of Bilateral
Safeguard Measures), pursuant to a preliminary determination that there is clear
evidence that increased imports of an originating product of the other Party as a
result of the reduction or elimination of a duty pursuant to this Agreement have
caused or are threatening to cause serious injury.

2. The duration of such a provisional measure shall not exceed two hundred
days during which period the pertinent requirements of Articles 5.1 (Definitions) to
5.4 (Investigation) shall be met. The duration of any such provisional measure shall
be counted as part of the total period referred to in Article 5.3 (Scope and Duration of
Bilateral Safeguard Measures).

24
3. Any additional customs duties collected as a result of such a provisional
measure shall be promptly refunded if the subsequent investigation referred to in
Article 5.4 (Investigation) does not determine that increased imports of an originating
product of the other Party have caused or threatened to cause serious injury to a
domestic industry. In such a case, the Party that applied the provisional measure
shall apply the rate of customs duty set out in its Schedule of Tariff Commitments in
Annex 2-1 as if the provisional measure had never applied.

Article 5.6
Notification and Consultation

1. A Party shall promptly notify the other Party, in writing, upon:

(a) initiating an investigation under Article 5.4 (Investigation);

(b) making a finding of serious injury or threat thereof caused by increased

imports of an originating product of the other Party as a result of the
reduction or elimination of a customs duty on the product pursuant to
this Agreement;

(c) taking a decision to apply or extend a safeguard measure, or to apply a

provisional measure; and

(d) taking a decision to progressively liberalise a safeguard measure

previously applied.

2. A Party shall provide to the other Party a copy of the public version of the
report of its competent authorities required under paragraph 1 of Article 5.4
(Investigation) immediately after it is available.

3. In the written notice referred to in paragraph 1(a), the reason for the initiation
of the investigation, a precise description of an originating product subject to the
investigation and its subheading or more detailed level of the HS, the period subject
to the investigation and the date of initiation of the investigation shall be included.

4. In notifying under paragraphs 1(b) and (c), the Party applying or extending a
safeguard measure shall also provide evidence of serious injury or threat thereof
caused by increased imports of an originating product of the other Party as a result
of the reduction or elimination of a customs duty pursuant to this Agreement; a
precise description of the product involved and its subheading or more detailed level
of the HS; the details of the proposed safeguard measure; and the date of
introduction, duration and timetable for progressive liberalisation of the measure, if
such timetable is applicable. In the case of an extension of a safeguard measure,
evidence that the domestic industry concerned is adjusting shall also be provided.
Upon request, the Party applying or extending a safeguard measure shall to the
extent possible provide additional information as the other Party may consider
necessary.

25
5. A Party proposing to apply or extend a bilateral safeguard measure shall
provide adequate opportunity for prior consultations with the other Party as far in
advance of taking any such measure as practicable but not less than thirty days
before applying such measures, with a view to reviewing the information arising from
the investigation and exchanging views on the measure for meeting the objective set
out in Article 5.7 (Compensation).

6. Where a Party applies a provisional measure referred to in Article 5.5

(Provisional Measures), on request of the other Party, consultations shall be initiated
immediately after such application.

7. The provisions on notification in this Article shall not require a Party to

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

Article 5.7
Compensation

1. A Party proposing to apply a bilateral safeguard measure shall consult with

the Party whose products are subject to the measure in order to mutually agree on
appropriate trade liberalizing compensation in the form of concessions having
substantially equivalent trade effects.

2. The Party shall provide an opportunity for such consultations no later than
thirty days after the application of definitive bilateral safeguard measure. If these
consultations do not result in an agreement on trade liberalizing compensation within
thirty days, the Party whose products are subject to the safeguard measure may
suspend the application of substantially equivalent concessions to the trade of the
Party applying the safeguard measure.

3. A Party shall notify the other Party in writing at least thirty days before
suspending concessions under paragraph 2.

4. The right of suspension provided for in this Article shall not be exercised for
the first two years that the bilateral safeguard measure is in effect, provided that the
bilateral safeguard measure has been applied as the result of an absolute increase
in imports.

Section B
Anti-Dumping Measures

Article 5.8
Recommendations of the WTO Committee on Anti-Dumping Practices

Each Party may keep in view, in all investigations conducted against goods
from the other Party, the recommendations of the WTO Committee on Anti-Dumping
Practices.

26
 Article 5.9
Lesser Duty Rule

If a Party takes a decision to impose an anti-dumping duty pursuant to Article

9.1 of the WTO Agreement on Implementation of Article VI of GATT 1994 (“Anti-
Dumping Agreement”), it shall apply a duty less than the margin of dumping where
such lesser duty would be adequate to remove the injury to the domestic industry.

Article 5.10
Prohibition of Zeroing

When anti-dumping margins are established, assessed or reviewed under

Articles 2, 9.3, 9.5, and 11 of the Anti-Dumping Agreement regardless of the
comparison bases under Article 2.4.2 of the Anti-Dumping Agreement, all individual
margins, whether positive or negative, shall be counted while calculating the
dumping margin.

Article 5.11
Exemption from Investigation after Termination

1. In case where the investigating authority of the importing Party determines

that the anti-dumping measures against imports from the other Party be terminated
as a result of the review under Articles 11.2 and 11.3 of the Anti-Dumping
Agreement, no investigation shall be initiated on the same goods during one year
after the termination of the anti-dumping duties.

2. Notwithstanding paragraph 1, the investigating authority of the importing Party

may initiate an investigation in an exceptional case, provided that the authority is
satisfied, on the basis of evidence available with it, that dumping or injury has
recurred as a result of withdrawal of the duties and that initiation of such an
investigation is necessary to prevent material injury or threat thereof to the domestic
industry as a consequence of such dumped imports from the exporting Party.

Article 5.12
Cooperation

The Parties may discuss issues related to the implementation of this Chapter
in the Joint Committee established under Article 15.1 (Joint Committee), including on
the following:

(a) exchange information and views on laws and regulations relating to

trade remedy measures; and

(b) enhance technical cooperation on trade remedies such as holding

seminars and training on human resources as mutually agreed by both
Parties.

27
 Section C
General Provisions

Article 5.13
Contact Points

Each Party shall designate a contact point for the purposes of this Chapter
and provide details of such contact point to the other Party. The Parties shall notify
each other promptly of any amendments to the contact details of their contact point.

28
 CHAPTER 6
SANITARY AND PHYTOSANITARY MEASURES

Article 6.1
Objectives

The objectives of this Chapter are to:

(a) uphold and enhance the implementation of the WTO Agreement on

Sanitary and Phytosanitary Agreement (“SPS Agreement”);

(b) ensure transparency as regards sanitary and phytosanitary (“SPS”)

measures applicable to trade, and that SPS measures do not create
unjustified barriers to trade;

(c) establish a mechanism for a decision on recognition of equivalence of

such measures maintained by a Party consistent with the protection of
human, animal and plant life or health in an agreed time-frame;

(d) recognize the health status of plants and animals of the Parties and
apply the principle of compartmentalization; and

(e) enhance communication, consultation and cooperation between the

Parties on SPS measures.

Article 6.2
Scope and Coverage

This Chapter applies to all SPS measures that may, directly or indirectly,
affect trade between the Parties.

Article 6.3
Definitions

For purposes of this Chapter, the definitions in Annex A to the SPS

Agreement shall apply.

Article 6.4
Affirmation of the SPS Agreement

The Parties reaffirm their existing rights and obligations with respect to each
other under the SPS Agreement.

Article 6.5
International Standards and Harmonization

1. Each Party shall use international standards, guidelines or recommendations

as the basis for its SPS measures, in order to harmonize them.

29
2. Notwithstanding paragraph 1, the Parties may adopt SPS measures that offer
a level of protection higher than that which would be achieved by measures based
on an international standard, guideline or recommendation, if there is scientific
justification. Provided that, in the event a Party adopts a level of protection different
from that which would be achieved by measures based on an international standard,
guideline or recommendation, it shall, when requested provide the other Party within
thirty working days of such request and explanation of its scientific justification,
except confidential data for the reasons for such higher standards.

Article 6.6
Equivalence

1. Parties recognise that the application of equivalence is an important tool for

trade facilitation, and shall put in place systems for ensuring determination of
equivalence in relation to partial or full equivalence of SPS measures.

2. Both Parties agree that an initial list of products or sectors in respect of which
each Party would take a decision on equivalence is attached as Annex 6-1 (List of
Products for Request for Equivalence). Consultations shall commence within three
months from the entry into force of this Agreement and shall be carried out in
accordance with the principles and procedures as set out in paragraphs 4 and 5.

3. For other products or sectors not listed in Annex 6-1 (List of Products for
Request for Equivalence), either Party may request for equivalence in respect of
such products or sectors. Consultations shall commence within three months from
the receipt of such request from the other Party and shall be carried out in
accordance with the principles and procedures as set out in paragraphs 4 and 5.

4. All consultations carried out pursuant to paragraphs 2 and 3 shall be guided

by the following principles and procedures:

(a) equivalence can be determined for an individual measure or groups of

measures related to a certain commodity or categories of commodities;

(b) the consideration of equivalence by the importing Party of a request by

the exporting Party for recognition of its measures with regards to a
specific commodity shall not be a reason to disrupt trade or suspend
on-going imports from the exporting Party of the commodity in question;

(c) the exporting Party shall objectively demonstrate to the importing Party
that its measures achieve the importing Party’s appropriate level of
SPS protection. Objective demonstration and assessment in this
context shall be based on international standards, guidelines or
recommendations; and

(d) the final recognition of equivalence of the relevant measures of the

exporting Party rests solely with the importing Party. In each case, the
importing Party shall provide to the exporting Party, upon request,
explanation excluding confidential data for its determination and
decision.

30
5. Unless otherwise mutually agreed, the importing Party shall, within one
hundred and eighty working days from the date of receipt of complete application 1 of
the exporting Party’s demonstration of equivalence, finalise the assessment of
equivalence, except for seasonal crops when it is justifiable to delay the assessment
to permit verification of phytosanitary measures during a suitable period of growth of
a crop.

6. The importing Party may withdraw or suspend equivalence on the basis of

any amendment by one of the Parties of measures affecting equivalence, in
accordance with the following provisions:

(a) the exporting Party shall inform the importing Party of any proposal for
amendment of its measures for which equivalence of measures is
recognised and the likely effect of the proposed measures on the
equivalence which has been recognised. Within sixty working days of
receipt of this information, the importing Party shall inform the exporting
Party whether or not equivalence would continue to be recognized on
basis of the proposed measures;

(b) the importing Party shall inform the exporting Party of any proposal for
amendment of its measures on which recognition of equivalence has
been based and the likely effect of the proposed measures on the
equivalence which has been recognized; and

(c) in case of non recognition or withdrawal or suspension of equivalence,

the importing Party shall indicate to the exporting Party the required
conditions on which the process referred to in paragraph 5 may be
reinitiated, provided that the timelines of paragraph 6 shall be adhered
to in any process for re-assessment of equivalence.

7. The withdrawal or suspension of equivalence rests solely with the importing

Party acting in accordance with its administrative and legislative framework, which
shall adhere to the international guidelines, standards and recommendations. The
importing Party shall provide to the exporting Party, upon request explanation except
confidential data for its determinations and decisions.

Article 6.7
Regionalisation

1. The Parties recognise the concept of regionalisation, zoning and

compartmentalisation, as set down in Article 6 of the SPS Agreement, and as
elaborated in International Office of Epizootics (“OIE”) and International Plant
Protection Convention (“IPPC”) Standards, which provide, inter alia, for the
recognition of pest- or disease-free areas or areas of low pest or disease prevalence
where the exporting Party objectively demonstrates to the importing Party that such

1
If application from the exporting Party is incomplete, the importing Party shall request for the balance
information within ninety working days of the submission of the application by the exporting Party.

31
areas are, and are likely to remain, pest- or disease-free areas or areas of low pest
or disease prevalence, respectively.

2. Within this framework, the Parties may mutually recognise regionalisation,

zoning and compartmentalisation at various levels, including farms and processing
establishments, as having appropriate biosecurity measures, as mutually agreed.

3. The Parties may mutually decide on the principles, procedures or certification

provisions applicable to regionalization, zoning and compartmentalization decision.

Article 6.8
Certification

1. The Parties shall ensure compliance with Annex C of the SPS Agreement, as
well as the following principles and criteria in relation to certification procedures:

(a) certificates shall be drawn up as to ensure a link between the certificate

and the consignment;

(b) both importing and exporting Parties shall introduce such checks and
have such control measures taken as are necessary to prevent the
issuing of false or misleading certification and the fraudulent production
or use of certificates;

(c) the certificates shall be drawn up in the English language.

2. The Sub-Committee constituted under paragraph (c) of Article 15.2 (Sub-

Committees) may through decisions by the competent authority adopt model
certificates for specific sectors that shall be used as the basis for certification by the
Parties. The Sub-Committee may also agree on rules to be followed in case of online
certification, withdrawal or replacement of certificates.

Article 6.9
Verification

1. In order to maintain confidence in the effective implementation of the

provisions of this Chapter, each Party shall have the right to carry out audit and
verification of the procedures of the other Party, which may include an assessment
of all or part of the competent authorities' total control programme.

2. The procedures referred to in paragraph 1 shall be carried out in accordance

with the following principles:

(a) verifications should be made in co-operation between the auditor and

the auditee, where “auditee” is the Party subject to the verification and
“auditor” is the Party carrying on the verification;

(b) verifications shall be designed for the purpose of checking the auditee’s
regulatory control system;

32
 (c) the auditor should prepare a plan that covers the following points:

(i) the subject, depth and scope of the verification;

(ii) the date and place of the verification, along with a timetable up
to and including the issue of the final report;

(iii) the language or languages in which the verification will be

conducted and the report written, with a provision relating to
English translation in the event the report is written in a language
other than English; and

(iv) a schedule of meetings with officials and visits to establishments

or facilities, as appropriate.

This plan shall be reviewed together with the auditee before

commencement of verifications;

(d) the frequency of verifications shall be decided by the importing Party

subject to assessment of risk as stipulated under Article 5 of the SPS
Agreement and shall be risk-based and reflect performance.
Verifications, and the decisions based on them, shall be made in a
simple, transparent and consistent manner, and the results and
conclusions shall be made available to the other Party; and

(e) the Party carrying out the verification may share the results and
conclusions of its verification with non-Parties only with the prior written
consent of the other Party.

3. The Sub-Committee under paragraph (c) of Article 15.2 (Sub-Committees)

may specify procedures and documentation requirements for verification, taking into
account the work of international organizations in this regard.

Article 6.10
Import Checks

1. The Parties shall ensure that their control, inspection and approval
procedures are in accordance with Annex C of the SPS Agreement.

2. The import checks applied to imported animals, animal products, plants and
plant products traded between the Parties shall be based on the risk associated with
such importations. They shall be carried out in a manner that is least trade-restrictive
and without undue delay, and shall be based on the following principles:

(a) in carrying out the checks for plant health purposes, the importing Party
shall ensure that the plants, plant products and other goods and their
packaging are inspected, either in their entirety or by representative
sample;

33
 (b) in the event that the checks reveal non-conformity with the relevant
standards or requirements, the importing Party shall take measures
appropriate to the risk involved;

(c) wherever possible, the importer or his representative shall be given

access to the consignment and the opportunity to contribute any
relevant information to assist the importing Party in taking a final
decision concerning the consignment. Such decision shall be
appropriate to the risk. Depending upon the gravity of the SPS risks,
the importing Party may return, seize or destroy the consignment;

(d) at the request of the exporting Party, the importing Party shall to the
maximum extent ensure that officials of the exporting Party or their
representatives are given the opportunity to contribute any relevant
information to assist the importing Party in taking a final decision; and

(e) unless there is a clearly identified risk in holding that consignment, the
consignments shall not be destroyed without affording an opportunity to
the exporter or his representative to take back the consignment.

3. The frequencies of import checks on importations shall be made available on

request. The importing Party shall notify the other Party in a timely manner of any
amendment to the frequency of import checks in the event of change in the import
risk. On request, an explanation regarding amendments shall be given or
consultations shall be undertaken.

Article 6.11
Goods in Transit

The Parties reaffirm Article V of GATT 1994 and agree that there shall be
freedom of transit for goods in transit. The inspection of goods may be carried out in
the event of identifiable SPS risks.

Article 6.12
Transparency

1. Upon the entry into force of this Agreement, the importing Party, upon
request, shall inform the exporting Party of its SPS import requirements. This
information shall include, as appropriate, the models for the official certificates or
attestations, as prescribed by the importing Party.

2. Each Party shall ensure translation of all measures, certificates, reports of any
control checks or inspection procedures, or import checks or verification, or any
records or other document relevant for the implementation of this Chapter, in
English.

34
 Article 6.13
Implementation

The Sub-Committee on Sanitary and Phytosanitary Measures established

under Article 15.2 (Sub-Committees) shall consider matters relating to the
implementation of this Chapter.

Article 6.14
Technical Consultations

1. Either Party may request technical consultations on issues relating to this

Chapter. Unless the Parties mutually determine otherwise, the Parties shall hold
technical consultations within thirty days from the request for technical consultations
by e-mail, by teleconference, by video-conference, or through any other means, as
mutually determined by the Parties.

2. Where a Party has requested technical consultations on any SPS issues, the
Parties may mutually agree to establish a technical working group with a view to
identify a workable and practical solution. The Parties may, subject to mutual
agreement, establish any mechanisms as deemed necessary to resolve any such
issues.

3. Technical consultations held pursuant to this Article are without prejudice to

the rights and obligations of the Parties under Chapter 14 (Dispute Settlement).

Article 6.15
Cooperation

1. Consistent with the objectives of this Chapter, the Parties shall explore
opportunities for further cooperation, collaboration and information exchange of SPS
measures of mutual interest. This may include:

(a) improvement of monitoring, implementation and enforcement of SPS

measures including training and information events for regulatory
personnel. Public and private sector partnerships may be supported for
the achievement of these objectives;

(b) establishment of the appropriate arrangements for the sharing of

expertise, to address issues of human, animal and plant life or health,
as well as training and information events for regulatory personnel and
possible exchange of officials;

(c) carry out joint research and share the results of such research in
important areas, such as animal and plant disease surveillance, animal
and plant pest and disease prevention and control, detection methods
for pathogenic micro-organisms in food, surveillance and control of
harmful substances and agri-chemical and veterinary medicine
residues and other food safety issues, and any other food safety,
phytosanitary and zoosanitary issues of mutual interest.

35
 Article 6.16
Exchange of Information and Consultations

1. Each Party shall give prompt and positive consideration to any request from
the other Party for consultations on issues relating to the implementation of this
Chapter.

2. The Parties agree to enhance their communication and exchange of

information on issues within the scope of this Chapter and in particular on ways to
facilitate compliance with each other's SPS measures and to eliminate unnecessary
obstacles to trade in goods between them.

3. Each Party shall respond to any requests for information from the other Party
regarding any SPS measures within thirty days of request for such information.

36
 CHAPTER 7
TECHNICAL BARRIERS TO TRADE

Article 7.1
Objectives

The objectives of this Chapter are to:

(a) provide a framework and supporting mechanisms to facilitate and

increase trade in goods by eliminating and preventing unnecessary
barriers to trade while taking into account the legitimate objectives of
the Parties, in accordance with Article 2.2 of the WTO Agreement on
Technical Barriers to Trade (“TBT Agreement”), and the principle of
non-discrimination, within the TBT Agreement;

(b) ensure transparency in standards, technical regulations, and conformity

assessment procedures, and also ensure that these do not create
unnecessary obstacles to trade and are not more trade restrictive than
necessary to fulfill a legitimate objective;

(c) enhance joint cooperation between the Parties, and between regulatory
authorities and conformity assessment bodies in the Parties, in order to
resolve specific issues related to the development and application of
standards, technical regulations and conformity assessment
procedures, and establish a mechanism for expeditious recognition of
equivalence and mutual recognition and that positive consideration is
given to the requests of the exporting Party in this regard by the
importing Party, thereby facilitating the conduct of trade in goods;

(d) improve the capacity of the Parties to identify, prevent and eliminate
unnecessary obstacles to trade between the Parties as a result of
technical regulations, standards and conformity assessment
procedures applied by either Party;

(e) increase the capacity of the Parties to ensure compliance with

international standards and with each other’s technical regulations,
conformity assessment procedures and standards; and

(f) provide a mechanism for expeditious resolution of issues, including

disputes relating to standards, technical regulations and conformity
assessment procedures.

Article 7.2
Scope

1. This Chapter applies to the preparation, adoption and application of

standards, technical regulations, and conformity assessment procedures.

2. Notwithstanding paragraph 1, this Chapter does not apply to:

37
 (a) technical specifications prepared by governmental bodies for
production or consumption requirements of such bodies; or

(b) sanitary and phytosanitary measures as defined in Annex 1A of the

WTO Agreement on the application of Sanitary and Phytosanitary
Measures.

Article 7.3
Definitions

For purposes of this Chapter, the definitions of Annex 1 to the TBT Agreement
shall apply.

Article 7.4
Affirmation of the TBT Agreement

1. The Parties reaffirm their existing rights and obligations with respect to each
other under the TBT Agreement.

2. Each Party shall ensure compliance in the implementation of this Chapter by

central government bodies within its territory that are responsible for the preparation,
adoption and application of standards, technical regulations and conformity
assessment procedures. Each Party shall also take such reasonable measures as
may be available to ensure compliance in the implementation of this Chapter, by
local government and non-governmental bodies within its territory that are
responsible for the preparation, adoption and application of standards, technical
regulations and conformity assessment procedures. On request from the other Party,
each Party shall make available the details of any measures taken by it in this
direction.

Article 7.5
Joint Cooperation

1. The Parties shall strengthen their cooperation in the field of standards,

technical regulations, and conformity assessment procedures with a view to
increasing the mutual understanding of their respective systems and facilitating
access to their respective markets. To this end, the Parties shall establish dialogue
at both the horizontal and sectoral levels, as necessary, between the competent
authorities and other regulators from their territories.

2. In their bilateral cooperation, the Parties shall work to identify, develop and
promote trade facilitating measures which may include, but are not limited to:

(a) promoting regulatory cooperation through measures and steps such as

the exchange of information, experience and data, and scientific and
technical cooperation with a view to creating technical regulations,
standards and conformity assessment procedures that are not more
trade restrictive than necessary and making efficient use of regulatory
resources;

38
 (b) promoting good regulatory practices on risk management to improve
the quality and effectiveness of regulations;

(c) promoting and encouraging participation in international standard

setting bodies, and reinforcing the role of international standards as a
basis for technical regulations;

(d) promoting and encouraging cooperation between their respective

organisations, public or private, responsible for standardisation, testing,
certification, inspection, accreditation and other related issues, both
bilaterally and in international fora;

(e) exchange information on regulatory concerns, including implementation

issues, of the other Party in areas such as:

(i) transparency in the preparation, adoption and application of

technical regulations, conformity assessment procedures and
standards;

(ii) necessity and proportionality of regulatory measures and related

conformity assessment procedures, including the use of
suppliers declaration of conformity;

(iii) enforcement of technical regulations and market surveillance

activities;

(iv) the necessary technical infrastructure, standardisation, testing,

certification and accreditation, to support technical regulations;
and

(v) mechanisms and methods for reviewing technical regulations

and conformity assessment procedures; and

(f) giving favourable consideration to any sector-specific proposal by the

other Party for further cooperation under this Chapter.

Article 7.6
Standards

1. Each Party shall use relevant international standards as a basis for its
technical regulations and relevant guides and recommendations issued by an
international standardizing body as a basis for its conformity assessment procedures
in accordance with Articles 2.4 and 5.4 of the TBT Agreement. Where relevant
international standards or relevant international guides and recommendations have
not been used as a basis, to explain on request to the other Party, in writing, the
reasons why these have been judged inappropriate or ineffective for the aim pursued
and, whenever possible, to identify the parts which in substance deviate from
relevant international standards.

39
2. The Parties shall cooperate with each other, where appropriate, in the context
of their participation in regional and international standardizing bodies, to ensure that
standards developed within such organizations, are trade facilitating and do not
create unnecessary obstacles to international trade.

3. The Parties shall strengthen communications and coordination with each

other, where appropriate, in the context of discussions on international standards
and related issues in other international fora, such as the WTO Committee on
Technical Barriers to Trade ("WTO TBT Committee").

4. The Parties shall exchange information on:

(a) the Parties’ use of standards in connection with technical regulation;

(b) the Parties' standardisation processes and the extent of usage of

international standards as a base for their national or local standards;
and

(c) cooperation agreements used by either Party in standardisation, for

example on standardisation issues in free trade agreements with third
parties.

5. At the request of a Party that has an interest in developing a standard similar

to that of the other Party, the other Party shall provide, to the extent practicable,
relevant information, studies, or other documents, except for confidential information,
on which it or its standardizing bodies has relied in the development of such
standards.

Article 7.7
Technical Regulations

1. Each Party shall give positive consideration for accepting as equivalent,

technical regulations of the other Party, even if these regulations differ from its own,
provided that those technical regulations produce outcomes that are equivalent to
those produced by its own technical regulations in meeting its legitimate objectives
and achieving the same level of protection.

2. Each Party shall, within thirty working days of a request from the other Party
for acceptance of equivalence of technical regulations, commence consideration.
Each Party shall conclude decisions regarding equivalence within six months of the
request from the other Party. Where a Party declines a request from the other Party
to engage in consideration of equivalence, it shall, on request of that other Party,
explain the reasons for its decision, and explain the requirements under which
consideration of equivalence can be commenced.

3. The list of products for which the technical regulations of the exporting Party is
accepted by the importing Party as equivalent shall be recorded and attached as
Annex 7-1 (List of Products for which Equivalence of Technical Regulations Has
Been Accepted).

40
4. At the request of a Party that has an interest in developing a technical
regulation similar to that of the other Party, the other Party shall provide, to the
extent practicable, relevant information, studies, or other documents, except for
confidential information, which it has relied on for the development of the technical
regulations.

5. As a general rule, the Parties shall not base their technical regulations on
non-product-related process and production methods based standards. In
exceptional cases, if such a regulation is required by either Party, the Party requiring
such technical regulations shall, upon request by the other Party, provide justification
for the same and consult the other Party before promulgating such a regulation.

Article 7.8
Conformity Assessment Procedures

1. The Parties agree to seek to increase efficiency, avoid duplication and ensure
cost effectiveness through an appropriate range of mechanisms in order to facilitate
the acceptance of the results of conformity assessment procedures conducted in the
other Party. In this regard, the Parties recognise that a broad range of mechanisms
exist to facilitate the acceptance in a Party’s territory of the results of conformity
assessment procedures conducted in the other Party’s territory, including any or all
of the following:

(a) adoption of accreditation procedures for qualifying conformity

assessment bodies located in the territory of the other Party;

(b) recognizing the results of certain conformity assessment procedures

conducted in the territory of the other Party;

(c) agreement with the other Party to accept the results of conformity
assessment procedures that bodies located in the other Party’s territory
conduct with respect to specific technical regulations;

(d) designation or recognition of conformity assessment bodies located in

the territory of the other Party;

(e) facilitation of acceptance of results of each other’s assessment

procedures through agreements between conformity assessment
bodies in their territories;

(f) adoption of procedures for accepting supplier’s declaration of

conformity or any registration scheme based on the same; and

(g) utilising the existing regional and international mutual recognition

agreements (“MRA”) of which both Parties are parties.

2. The Parties shall exchange information on mechanisms in paragraphs 1(a) to

(g) and other similar mechanisms with a view to facilitating acceptance of conformity
assessment results.

41
3. The Parties shall seek to ensure that conformity assessment procedures
applied between them facilitate trade by ensuring that they are no more restrictive
than is necessary to provide an importing Party with confidence that products
conform with the applicable technical regulations, taking into account the risk that
non-conformity would create.

4. Upon the request of a Party, Parties shall enter into negotiations for accepting
results of conformity assessment procedures of the other Party, even if these
procedures differ from its own, provided that those procedures offer an assurance of
conformity with applicable technical regulations or standards equivalent to their own
conformity assessment procedures. The Parties may conclude agreements or
arrangements on mutual recognition in accordance with Article 7.9 (Mutual
Recognition Agreements).

5. The Parties shall cooperate by:

(a) exchanging information on the range of mechanisms that exist to

facilitate the acceptance in a Party’s territory of the results of conformity
assessment procedures conducted in the other Party’s territory;

(b) promoting the accreditation of conformity assessment bodies on the

basis of relevant international standards and guides;

(c) promoting the acceptance of results of conformity assessment bodies

that have been recognized under a relevant multilateral agreement or
an arrangement between their respective accreditation systems or
bodies; and

(d) encouraging their conformity assessment bodies, including

accreditation bodies, to participate in cooperation arrangements,
including mutual recognition agreements, that promote the acceptance
of conformity assessment results.

6. Each Party shall accredit, approve, or otherwise recognise conformity

assessment bodies in the territory of the other Party on terms no less favourable
than those it accords to conformity assessment bodies in its territory. Where a Party
accredits, approves, or otherwise recognises a body assessing conformity with a
specific technical regulation or standard in its territory and refuses to accredit,
approve, or otherwise recognise a body assessing conformity with that technical
regulation or standard in the territory of the other Party, it shall, on request of that
other Party, explain the reasons for its decision, and the basis on which such
accreditation, approval, or recognition may be achieved.

7. Each Party shall, within thirty working days of a request from the other Party
for acceptance in its territory of results of conformity assessment procedures
conducted by bodies in the other Party’s territory, commence such negotiations.
Each Party shall take a decision regarding acceptance of conformity assessment
procedures within six months of the request from the other Party. Where a Party
declines a request from the other Party to engage in negotiations or conclude an
agreement on facilitating acceptance in its territory of the results of conformity

42
assessment procedures conducted by bodies in the other Party’s territory, it shall, on
request of that other Party, explain the reasons for its decision.

8. The Parties agree to exchange information on accreditation policy and

promote the use of accreditation to facilitate acceptance of conformity assessment
results and consider how to make best use of international standards for
accreditation and international agreements involving the Parties’ accreditation
bodies, for example, through the International Laboratory Accreditation Cooperation
Mutual Recognition Arrangement (“ILAC MRA”) or the International Accreditation
Forum Multilateral Arrangement (“IAF MLA”). For the purpose of complying with the
requirements of the importing Party, the Parties shall consider accepting results of
conformity assessment procedures by conformity assessment bodies accredited by
the national accreditation body of the other Party, which is a member of the ILAC
MRA or IAF MLA.

9. At the request of a Party that has an interest in developing conformity

assessment procedures similar to that of the other Party, the other Party shall
provide, to the extent practicable, relevant information, studies, or other documents,
except for confidential information, on which it or its conformity assessment bodies
has relied in the development of such procedures.

10. Where a Party does not accept the results of a conformity assessment
procedure conducted in the territory of the other Party, it shall, on request of the
other Party, explain the reasons for its decision so that necessary corrective actions
may be taken, by the requesting Party to secure such acceptance.

Article 7.9
Mutual Recognition Agreements

1. The Parties shall, within sixty days upon the request of the other Party, enter
into negotiations for possible MRAs on the results of conformity assessment
procedures, conducted by conformity assessment bodies of the exporting Party to
assess conformity to importing Party’s requirements, in the sectors which both
Parties agree upon. Both Parties shall take a decision on the conclusion of such
agreements within twelve months of commencement of negotiations.

2. With a view to facilitating the negotiation for possible MRA referred to in

paragraph 1:

(a) the Parties shall take into consideration that a broad range of
mechanisms exist to facilitate the acceptance of the results of
conformity assessment procedures;

(b) the Parties shall, recognizing the existence of differences in the

structure and operation of conformity assessment procedures in their
respective territories, endeavour to make compatible the conformity
assessment procedures to the greatest extent practicable; and

(c) in order to build confidence in the reliability of results of conformity

assessment procedures conducted by conformity assessment bodies of

43
 the other Party, a Party may consult with the other Party, as
appropriate, on such matters as the technical competence of the
conformity assessment bodies of the other Party.

3. Any MRAs concluded between the Parties shall be attached as Annex 7-2
(Mutual Recognition Agreements).

Article 7.10
Fees and Processing Periods

1. In regard to fees charged and processing periods for assessing the conformity
of products, both Parties reaffirm their obligations under Article 5.2 of the TBT
Agreement. Each Party shall also ensure that any fees imposed for assessing the
conformity of products originating in the territory of the other Party are proportionate
to the costs of the authorities conducting such assessment, taking into account
communication, transportation and the costs arising from differences between
location of facilities of the applicant and the conformity assessment body.

2. The Parties shall mutually discuss and resolve issues relating to the quantum
of fees and ensure that fees and processing times reflect the actual costs incurred
and processing activities required.

3. The Parties, on request, shall notify each other of:

(a) any fees imposed for mandatory conformity assessments; and

(b) the processing period for any mandatory conformity assessments.

Article 7.11
Trade Facilitation

1. The Parties reaffirm Article V of GATT 1994 and agree that there shall be
freedom of transit for goods in transit. The inspection of goods may be carried out
only in the event of identifiable risks.

2. Wherever appropriate, the importer or his representative should be given the

opportunity to contribute any relevant information to assist the importing Party in
taking a decision concerning the consignment that are subject to technical
regulations and conformity assessment procedures.

3. The importing Party may return, seize or destroy any consignment not in
compliance with its technical regulations and conformity assessment procedures.
The destruction shall take place only in cases of clearly identifiable risk to human,
animal or plant life or health or of environment.

44
 Article 7.12
Labelling

1. The Parties recognize that labelling requirements may be necessary to inform

consumers of certain essential characteristics of products, and consistent with the
TBT Agreement, shall not be used to create unnecessary obstacles to trade.

2. The Parties agree that where a Party requires mandatory labelling of

products:

(a) the Party shall endeavour to minimise its requirement for labelling
relevant to consumers or users of the product. Where labelling for other
purposes is required, such requirement shall be formulated in a manner
that is not more trade restrictive than necessary to fulfil the legitimate
objective;

(b) where a Party requires the use of a unique identification number by

economic operators, the Party shall issue such a number to the other
Party’s economic operators without undue delay and under conditions
no less favourable than those applied to domestic operators;

(c) the Party shall accept that labelling and corrections to labelling takes
place in customs warehouses at the point of import and prior to
distribution and sales, subject to the responsibility of the exporter or of
the importer, as an alternative to labelling in the country of origin; and

(d) where permanent labels are required, Parties shall ensure that such
labelling requirements are consistent with the legitimate objectives of
the Parties in accordance with Article 2.2 of the TBT Agreement.

Article 7.13
Implementation

The Sub-Committee on Technical Barriers to Trade established under Article

15.2 (Sub-Committees) shall consider matters relating to the implementation of this
Chapter.

Article 7.14
Transparency

In addition to the Parties’ affirmation in Article 7.4 (Affirmation of the TBT

Agreement), the Parties shall endeavour to inform each other at an early stage of
proposals to modify or introduce technical regulations, conformity assessment
procedures or standards that are especially relevant to trade between the Parties.

Article 7.15
Technical Consultations

1. Either Party may request technical consultations on issues relating to this

Chapter. Unless the Parties mutually determine otherwise, the Parties shall hold

45
technical consultations within thirty days from the request for technical consultations
by e-mail, by teleconference, by video-conference, or through any other means, as
mutually determined by the Parties.

2. Where a Party has requested technical consultations on the application of any

technical regulations or conformity assessment procedures, the Parties may, with
mutual consent agree to establish a technical working group with a view to identify a
workable and practical solution. The Parties may, subject to mutual agreement,
establish any mechanisms as deemed necessary to resolve any issues that arise.

3. Technical consultations held pursuant to this Article are without prejudice to

the rights and obligations of the Parties under Chapter 14 (Dispute Settlement).

46
 CHAPTER 8
TRADE IN SERVICES

Article 8.1
Scope and Coverage

1. This Chapter applies to measures by a Party affecting trade in services.

2. This Chapter shall not apply to:

(a) a service supplied in the exercise of governmental authority;

(b) a juridical person which is not a juridical person of the other Party, and
a natural person who is not a natural person of the other Party;

(c) any measures by a Party with respect to government procurement;

(d) subsidies or grants provided by a Party, including government-

supported loans, guarantees, and insurance, or to any conditions
attached to the receipt or continued receipt of such subsidies or grants,
whether or not such subsidies or grants are offered exclusively to
domestic services, service consumers or service suppliers, except as
provided for in Article 8.14 (Subsidies);

(e) cabotage in maritime transport services; and

(f) measures affecting natural person seeking access to the employment

market of a Party, nor shall it apply to measures regarding citizenship,
residence or employment on a permanent basis.

3. This Chapter shall not apply to measures affecting air traffic rights, however
granted, or services directly related to the exercise of air traffic rights, except
measures affecting:

(a) aircraft repair and maintenance services;

(b) the selling and marketing of air transport services; and

(c) computer reservation system services.

Paragraph 1 and the definitions of paragraph 6 of the GATS Annex on Air Transport
Services are hereby incorporated mutatis mutandis and made part of this Chapter.

4. Nothing in this Chapter shall prevent a Party from applying measures to

regulate the entry of natural persons of the other Party into, or their temporary stay
in, its territory, including those measures necessary to protect the integrity of, and to
ensure the orderly movement of natural persons across its borders, provided that
such measures are not applied in such a manner as to nullify or impair the benefits
accruing to the other Party under the terms of this Chapter as well as the terms of
specific commitments undertaken.

47
5. New services shall be considered for possible incorporation into this Chapter
at future reviews held in accordance with Article 8.8 (Review), or at the request of
either Party immediately. The supply of services which are not technically or not
technologically feasible when this Agreement comes into force shall, when they
become feasible, also be considered for possible incorporation at future reviews or at
the request of either Party immediately.

Article 8.2
Definitions

For the purposes of this Chapter:

(a) a ser vice su pplied i n t he exer cise o f g overnmental au thority

means any service which is supplied neither on a commercial basis nor
in competition with one or more service suppliers;

(b) commercial p resence means any type of business or professional

establishment, including through:

(i) the constitution, acquisition or maintenance of a juridical person;

or

(ii) the creation or maintenance of a branch or a representative

office, within the territory of a Party for the purpose of supplying
a service;

(c) direct taxes comprise all taxes on total income, on total capital or on
elements of income or of capital, including taxes on gains from the
alienation of property, taxes on estates, inheritances and gifts, and
taxes on the total amounts of wages or salaries paid by enterprises,
as well as taxes on capital appreciation;

(d) juridical pe rson means any legal entity duly constituted or

otherwise organised under applicable law, whether for profit or
otherwise, and whether privately-owned or governmentally-owned,
including any corporation, trust, partnership, joint venture, sole
proprietorship, association, or cooperative 1;

(e) juridical person of the other Party means a juridical person which is
either:

(i) constituted or otherwise organised under the law of the other

Party, and is engaged in substantive business operations in the
territory of that Party; or

(ii) in the case of the supply of a service through commercial

presence, owned or controlled by:

1
A cooperative is a legal entity constituted under the relevant applicable laws in India and Malaysia.

48
 (AA) natural persons of that other Party; or

(BB) juridical persons of that other Party as identified under

subparagraph (e)(i);

(f) a juridical person is:

(i) owned by persons of a Party if more than fifty per cent of the
equity interest in it is beneficially owned by persons of that
Party;

(ii) controlled by persons of a Party if such persons have the

power to name a majority of its directors or otherwise to legally
direct its actions;

(iii) affiliated with another person when it controls, or is controlled

by, that other person, or when it and the other person are both
controlled by the same person;

(g) licensing r equirements means substantive requirements, other than

qualification requirements, with which a natural or a juridical person is
required to comply in order to obtain, amend or renew authorisation to
supply a service;

(h) licensing procedures means administrative or procedural rules that a

natural or a juridical person, seeking authorisation to supply a service,
including amendment or renewal of a license, must adhere to in order
to demonstrate compliance with licensing requirements;

(i) measures b y P arties af fecting t rade i n ser vices include measures

in respect of:

(i) the purchase, payment or use of a service;

(ii) the access to and use of, in connection with the supply of a
service, services which are required by a Party to be offered to
the public generally;

(iii) the presence, including commercial presence, of persons of a

Party for the supply of a service in the territory of the other Party;

(j) monopoly supplier of a service means any person, public or private,

which in the relevant market of the territory of a Party is authorised or
established formally or in effect by that Party as the sole supplier of
that service;

(k) natural pe rson of t he ot her P arty means a natural person who

resides in the territory of that other Party or elsewhere, and who under
the law of that other Party:

49
 (i) is a citizen of that other Party; or

(ii) has the right of permanent residence in that other Party,

provided that such other Party accords substantially the same
treatment to its permanent residents as it does to its citizens in
respect of measures affecting trade in services, provided that
the Party is not obligated to accord to such permanent
residents treatment more favourable than would be accorded
by that other Party to such permanent residents;

(l) person means either a natural person or a juridical person;

(m) qualification r equirements means substantive requirements relating

to the competence of a natural person to supply a service, and which
are required to be demonstrated for the purpose of obtaining
authorization to supply a service;

(n) qualification pr ocedures means administrative or procedural rules

that a natural person must adhere to in order to demonstrate
compliance with qualification requirements, for the purpose of obtaining
authorization to supply a service;

(o) services includes any service in any sector except services supplied in
the exercise of governmental authority;

(p) service consumer means any person that receives or uses a service;

(q) service of the other Party means a service which is supplied:

(i) from or in the territory of the other Party, or in the case of

maritime transport, by a vessel registered under the laws of the
other Party, or by a person of the other Party which supplies
the service through the operation of a vessel and/or its use in
whole or in part; or

(ii) in the case of the supply of a service through commercial

presence or through the presence of natural persons, by a
service supplier of the other Party;

(r) service supplier means any person that supplies a service 2;

(s) supply o f a ser vice includes the production, distribution, marketing,

sale and delivery of a service;

2
Where the service is not supplied directly by a juridical person but through other forms of
commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical
person) shall, nonetheless, through such presence be accorded the treatment provided for service
suppliers under this Chapter. Such treatment shall be extended to the presence through which the
service is supplied and need not be extended to any other parts of the supplier located outside the
territory where the service is supplied.

50
 (t) technical standards means measures that lay down characteristics of
a service or the manner in which it is supplied. Technical standards
also include the procedures relating to the enforcement of such
standards; and

(u) trade in services is defined as the supply of a service:

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

(ii) in the territory of a Party to the service consumer of the other

Party;

(iii) by a service supplier of a Party, through commercial presence in

the territory of the other Party;

(iv) by a service supplier of a Party, through presence of natural

persons of a Party in the territory of the other Party.

Article 8.3
Market Access

1. With respect to market access through the modes of supply defined in

paragraph (u) of Article 8.2 (Definitions), each Party shall accord services and
service suppliers of the other Party treatment no less favourable than that provided
for under the terms, limitations and conditions agreed and specified in its Schedule
of Specific Commitments. 3

2. In sectors where market access commitments are undertaken, the measures

which a Party shall not maintain or adopt either on the basis of a regional subdivision
or on the basis of its entire territory, unless otherwise specified in its Schedule of
Specific Commitments, are defined as:

(a) limitations on the number of service suppliers whether in the form of

numerical quotas, monopolies, exclusive service suppliers or the
requirements of an economic needs test;

(b) limitations on the total value of service transactions or assets in the

form of numerical quotas or the requirement of an economic needs
test;

(c) limitations on the total number of service operations or on the total

quantity of service output expressed in terms of designated

3
If a Party undertakes a market-access commitment in relation to the supply of a service through the
mode of supply referred to in Article 8.2(u)(i) and if the cross-border movement of capital is an
essential part of the service itself, that Party is thereby committed to allow such movement of capital.
If a Party undertakes a market-access commitment in relation to the supply of a service through the
mode of supply referred to in Article 8.2(u)(iii), it is thereby committed to allow related transfers of
capital into its territory.

51
 numerical units in the form of quotas or the requirement of an
economic needs test; 4

(d) limitations on the total number of natural persons that may be

employed in a particular service sector or that a service supplier may
employ and who are necessary for, and directly related to, the supply
of a specific service in the form of numerical quotas or the requirement
of an economic needs test;

(e) measures which restrict or require specific types of legal entity or joint
venture through which a service supplier may supply a service; and

(f) limitations on the participation of foreign capital in terms of maximum

percentage limit on foreign shareholding or the total value of individual
or aggregate foreign investment.

Article 8.4
National Treatment

1. In the sectors inscribed in its Schedule of Specific Commitments, and subject

to any conditions and qualifications set out therein, each Party shall accord to
services and service suppliers of the other Party, in respect of all measures affecting
the supply of services, treatment no less favourable than that it accords to its own
like services and service suppliers. 5

2. A Party may meet the requirement of paragraph 1 by according to services

and service suppliers of the other Party, either formally identical treatment or formally
different treatment to that it accords to its own like services and service suppliers.

3. Formally identical or formally different treatment shall be considered to be less

favourable if it modifies the conditions of competition in favour of services or service
suppliers of a Party compared to like services or service suppliers of the other Party.

Article 8.5
Additional Commitments

The Parties may negotiate commitments with respect to measures affecting

trade in services not subject to scheduling under Articles 8.3 (Market Access) or 8.4
(National Treatment), including those regarding qualifications, standards or licensing
matters. Such commitments shall be inscribed in a Party's Schedule of Specific
Commitments.

4
Subparagraph 2(c) does not cover measures of a Party which limit inputs for the supply of services.
5
Specific commitments assumed under this Article shall not be construed to require any Party to
compensate for any inherent competitive disadvantages which result from the foreign character of the
relevant services or service suppliers.

52
 Article 8.6
Schedule of Specific Commitments

1. Each Party shall set out in a schedule the specific commitments it undertakes
under Articles 8.3 (Market Access), 8.4 (National Treatment) and 8.5 (Additional
Commitments). With respect to sectors where such commitments are undertaken,
each Schedule of Specific Commitments shall specify:

(a) terms, limitations and conditions on market access;

(b) conditions and qualifications on national treatment;

(c) undertakings relating to additional commitments;

(d) where appropriate the time frame for implementation of such

commitments; and

(e) the date of entry into force of such commitments.

2. Measures inconsistent with both Articles 8.3 (Market Access) and 8.4
(National Treatment) shall be inscribed in both the columns relating to Articles 8.3
(Market Access) and 8.4 (National Treatment).

3. Schedules of Specific Commitments shall be annexed to this Chapter as

Annex 8-1 and shall form an integral part of this Agreement.

Article 8.7
Modification of Schedules

1. A Party may modify or withdraw any commitment in its Schedule of Specific

Commitments in Annex 8-1, at any time after three year has elapsed from the date
on which that commitment entered into force, in accordance with the provisions of
this Article. It shall notify the other Party of its intent to so modify or withdraw a
commitment no later than three months before the intended date of implementation
of the modification or withdrawal.

2. At the request of the other Party, the modifying Party shall enter into
negotiations with a view to reaching agreement on any necessary compensatory
adjustment. In such negotiations and agreement, the Party shall endeavour to
maintain a general level of mutually advantageous commitments not less favourable
to trade than that provided for in Schedules of Specific Commitments prior to such
negotiations.

3. If agreement on paragraph 2 is not reached between the modifying Party and

the affected Party within six months, the affected Party may refer the matter in
accordance with the procedures set out in Chapter 14 (Dispute Settlement).

53
 Article 8.8
Review

The Parties shall review commitments on trade in services with the first review
within five years from the date of entry into force of this Agreement. In this process,
there shall be due respect for the national policy objectives and the level of
development of the Parties, both overall and in individual sectors.

Article 8.9
Domestic Regulation

1. In sectors where specific commitments are undertaken, each Party shall

ensure that all measures of general application affecting trade in services are
administered in a reasonable, objective and impartial manner.

2. Each Party shall maintain or institute practicable judicial, arbitral or

administrative tribunals or procedures which provide, at the request of an affected
service supplier of the other Party, for the prompt review of, and where justified,
appropriate remedies for, administrative decisions affecting trade in services. Where
such procedures are not independent of the agency entrusted with the administrative
decision concerned, the Party shall ensure that the procedures in fact provide for an
objective and impartial review.

3. The provisions of paragraph 2 shall not be construed to require a Party to

institute such tribunals or procedures where this would be inconsistent with its
constitutional structure or the nature of its legal system.

4. Where authorisation is required for the supply of a service on which a specific

commitment has been made, the competent authorities of that Party shall:

(a) within a reasonable period of time after the submission of an

application considered complete under domestic laws and regulations,
inform the applicant of the decision concerning the application;

(b) at the request of the applicant, without undue delay provide information
concerning the status of the application, including incomplete
application. In the case of an incomplete application, identify all the
additional information that is required to complete the application and
provide an opportunity to the applicant to remedy deficiencies within a
reasonable timeframe;

(c) if an application is terminated or denied, to the maximum extent

possible, inform the applicant in writing and without delay the reasons
for such action. The applicant shall have the possibility of resubmitting,
at its discretion, a new application.

5. With a view to ensuring that domestic regulation, including measures relating

to qualification requirements and procedures, technical standards and licensing
requirements, do not constitute unnecessary barriers to trade in services, the Parties
shall jointly review the results of the negotiations on disciplines on these measures,

54
pursuant to Article VI.4 of GATS, with a view to their incorporation into this Chapter.
The Parties note that such disciplines aim to ensure that such requirements are inter
alia:

(a) based on objective and transparent criteria, such as competence and

the ability to supply the service;

(b) not more burdensome than necessary to ensure the quality of the
service;

(c) in the case of licensing procedures, not in themselves a restriction on

the supply of the service.

6. Pending the incorporation of disciplines pursuant to paragraph 5, for sectors

where a Party has undertaken specific commitments and subject to any terms,
limitations, conditions or qualifications set out therein, a Party shall not apply
licensing and qualification requirements and procedures and technical standards that
nullify or impair such specific commitments in a manner which:

(a) does not comply with the criteria outlined in paragraphs 5(a), 5(b) or
5(c);

(b) could not reasonably have been expected of that Party at the time the
specific commitments in those sectors were made; and

(c) in determining whether the Party is in conformity with the obligation

under paragraph 6, account shall be taken of international standards of
relevant international organizations 6 applied by that Party.

7. In sectors where specific commitments regarding professional services are

undertaken, each Party shall provide for adequate procedures to verify the
competence of professionals of the other Party in accordance with the provisions in
paragraph 6.

Article 8.10
Recognition

1. For the purposes of the fulfilment of its standards or criteria for the
authorisation, licensing or certification of services suppliers, each Party shall give
due consideration to any requests by the other Party to recognise the education or
experience obtained, requirements met, or licenses or certifications granted in the
other Party. Such recognition may be based upon an agreement or arrangement with
the other Party, or otherwise be accorded autonomously.

2. Where a Party is a party to an agreement or arrangement of the type referred

to in paragraph 1, whether existing or future, that Party shall afford the other Party
adequate opportunity, upon request to negotiate its accession to such an agreement

6
The term "relevant international organisations" refers to international bodies whose membership is
open to the relevant bodies of both Parties.

55
or arrangement, or to negotiate a comparable agreement or arrangement with it.
Where Party accords recognition autonomously, it shall afford adequate opportunity
for the other Party to demonstrate that the education or experience obtained,
requirements met, or licences or certifications granted in the territory of that other
Party should also be recognised.

3. After the entry into force of this Agreement, the Parties shall encourage their
relevant authorities or professional bodies in the service sectors such as accounting
and auditing, architecture, medical (doctors), dental and nursing to negotiate and
conclude, within twelve months or a reasonable period of time from the date of entry
into force of this Agreement, any such agreements or arrangements providing mutual
recognition of the education or experience obtained, qualification requirements and
procedures and licensing requirements and procedures. Any delay or failure by
these professional bodies to reach and conclude agreement on details of such
agreement or arrangements shall not be regarded as a breach of a Party’s obligation
under this paragraph and shall not be subject to Chapter 14 (Dispute Settlement).
Progress in this regard will be continuously reviewed by the Parties.

4. In respect of regulated service sectors, other than those mentioned in

paragraph 3 above, upon a request being made in writing by a Party to the other
Party in such sector, the Parties shall encourage that their respective professional
bodies negotiate, in that service sector, agreements for mutual recognition of
education, or experience obtained, qualifications requirements and procedures, and
licensing requirements and procedures in that service sector, with a view to the
achievement of early outcomes. The Parties shall report periodically to the Joint
Committee on progress and on impediments experienced.

Article 8.11
Monopolies and Exclusive Service Suppliers

1. Each Party shall ensure that any monopoly supplier of a service in its territory
does not, in the supply of the monopoly service in the relevant market, act in a
manner inconsistent with that Party's Schedule of Specific Commitments.

2. Where a Party's monopoly supplier competes, either directly or through an

affiliated company, in the supply of a service outside the scope of its monopoly rights
and which is subject to that Party's Schedule of Specific Commitments, the Party
shall ensure that such a supplier does not abuse its monopoly position to act in its
territory in a manner inconsistent with such commitments.

3. If a Party has reason to believe that a monopoly supplier of a service of the

other Party is acting in a manner inconsistent with paragraphs 1 or 2 above, it may
request that Party establishing, maintaining or authorising such supplier to provide
specific information concerning the relevant operations.

4. The provisions of this Article shall also apply to cases of exclusive service
suppliers, where a Party, formally or in effect:

(a) authorises or establishes a small number of service suppliers; and

56
 (b) substantially prevents competition among those suppliers in its territory.

Article 8.12
Business Practices

1. The Parties recognise that certain business practices of service suppliers,

other than those falling under Article 8.11 (Monopolies and Exclusive Service
Suppliers), may restrain competition and thereby restrict trade in services.

2. A Party shall, at the request of the other Party, enter into consultations with a
view to eliminating practices referred to in paragraph 1. The Party addressed shall
accord full and sympathetic consideration to such a request and shall cooperate
through the supply of publicly available non-confidential information of relevance to
the matter in question. The Party addressed shall also provide other information
available to the requesting Party, subject to its domestic law and to the conclusion of
satisfactory agreement concerning the safeguarding of its confidentiality by the
requesting Party.

Article 8.13
Safeguard Measures

1. The Parties note that multilateral negotiations pursuant to Article X of GATS

on the question of emergency safeguard measures are based on the principles of
non-discrimination. Upon the conclusion of such multilateral negotiations, the
Parties shall conduct a review for the purpose of discussing appropriate
amendments to this Agreement so as to incorporate the results of the multilateral
negotiations.

2. In the event that the implementation of this Agreement causes substantial

adverse impact to a service sector of a Party before the conclusion of the multilateral
negotiations referred to in paragraph 1, the affected Party may request for
consultations with the other Party for the purposes of discussing any measure with
respect to the affected service sector. Any measure taken pursuant to this
paragraph, including the duration for which the measure shall apply, shall be
mutually agreed by the Parties concerned. The Parties concerned shall take into
account the circumstances of the particular case and give sympathetic consideration
to the Party seeking to take a measure.

Article 8.14
Subsidies

1. Notwithstanding Article 8.1 (Scope and Coverage), the Parties shall review
the issue of disciplines on subsidies related to trade in services in the light of any
disciplines agreed under Article XV of GATS, with a view to their incorporation into
this Chapter.

2. The Parties recognise that, in certain circumstances, subsidies or grants may

have distortive effects on trade in services. Any Party which considers that it is
adversely affected by a subsidy or grants of the other Party may request

57
consultations with that Party on such matters. Such request shall be accorded
sympathetic consideration.

3. The provisions of Chapter 14 (Dispute Settlement) shall not apply to any

requests made or consultations held under the provisions of this Article or to any
disputes that may arise between the Parties out of, or under, the provisions of this
Article.

Article 8.15
Payments and Transfers

1. Except under the circumstances envisaged in Article 12.4 (Measures to

Safeguard the Balance of Payments) a Party shall not apply restrictions on
international transfers and payments for current transactions relating to its specific
commitments.

2. Nothing in this Chapter shall affect the rights and obligations of the Parties as
members of the International Monetary Fund under the Articles of Agreement of the
Fund, including the use of exchange actions which are in conformity with the Articles
of Agreement, provided that a Party shall not impose restrictions on any capital
transactions inconsistently with its specific commitments regarding such
transactions, except under Article 12.4 (Measures to Safeguard the Balance of
Payments) or at the request of the Fund.

Article 8.16
Denial of Benefits

1. Subject to prior notification and consultation, a Party may deny the benefits of
this Chapter:

(a) to the supply of a service, if it establishes that the service is supplied

from or in the territory of a country that is not a Party to this Agreement;

(b) in the case of the supply of a maritime transport service, if it establishes

that the service is supplied:

(i) by a vessel registered under the laws of a non-Party; and

(ii) by a person which operates and/or uses the vessel in whole or in

part but which is of a non-Party;

(c) to the supply of a service from or in the territory of the other Party, if the
Party establishes that the service is supplied by a service supplier that
is owned or controlled by a person of a non-Party and the denying
Party:

(i) does not maintain diplomatic relations with the non-Party; or

(ii) adopts or maintains measures with respect to the non-Party that

prohibit transactions with the juridical person, or through other

58
 forms of commercial presence such as a branch or
representative office that would be violated or circumvented if
the benefits of this Chapter were accorded to the juridical person
or through other forms of commercial presence such as a branch
or representative office.

Article 8.17
Affirmation of GATS Annex on Financial Services

The Parties reaffirm their rights and obligations with respect to each other
under the GATS Annex on Financial Services.

Article 8.18
Implementation

The Sub-Committee on Trade in Services established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

59
 CHAPTER 9
MOVEMENT OF NATURAL PERSONS

Article 9.1
Objectives

The objectives of this Chapter are:

(a) to provide for rights and obligations additional to those set out in
Chapters 8 (Trade in Services) and 10 (Investment) in relation to the
movement of natural persons between the Parties while recognizing the
need to ensure border security;

(b) to enhance and facilitate the movement of natural persons engaged in

the conduct of trade in services, goods and investment between the
Parties; and

(c) to establish simplified streamlined and transparent procedures for

immigration formalities for the temporary entry of natural persons to
whom this Chapter applies.

Article 9.2
Scope

1. This Chapter applies to measures affecting the temporary movement of

natural persons of a Party into the territory of the other Party, where such natural
persons are:

(a) business visitor;

(b) intra-corporate transferee;

(c) installer and servicer;

(d) contractual service supplier;

(e) independent professional.

2. This Chapter shall not apply to measures pertaining to citizenship, permanent

residence, or employment on a permanent basis.

3. Nothing contained in this Chapter shall prevent a Party from applying

measures to regulate the temporary entry or stay of natural persons of the other
Party in its territory, including measures necessary to protect the integrity of its
territory and to ensure the orderly movement of natural persons across its borders
provided such measures are not applied in a manner so as to unduly impair the
benefits accruing to the other Party or delay trade in goods, services or conduct of
investment activities under this Agreement. The sole fact of requiring a visa or other
relevant document authorizing employment to a natural person, shall not be

60
regarded as unduly impairing or delaying trade in goods or service or conduct of
investment activities under this Agreement.

Article 9.3
Definitions

For the purposes of this Chapter, the following definitions shall apply:

(a) natural person of a Party means a natural person who resides in the
territory of a Party or elsewhere, and who under the law of that Party:

(i) is a citizen of that Party; or

(ii) has the right of permanent residence in that Party, provided that
such Party accords substantially the same treatment to its
permanent residents as it does to its citizens in respect of
measures affecting trade in services. The other Party is not
obligated to accord to such permanent residents treatment more
favourable than would be accorded by a Party to such
permanent residents;

(b) immigration formality or visa:

(i) in respect of Malaysia means a visa, permit, pass or other

document or electronic authority granting natural person of one
Party the right to enter, reside or work or establish commercial
presence in the territory of the other Party;

(ii) in respect of India, immigration visa or visa refers to an

employment visa or business visa or other document issued by a
Party granting a natural person of the other Party the right to
enter, reside or work or remain or establish commercial presence
in the territory of the granting party, without the intent to reside
permanently;

(c) temporary entry means entry by a business visitor, an intra-corporate

transferee, or a professional, installer and servicer, contractual service
supplier and spouses or dependants covered by this Chapter without
the intent to establish permanent residence;

(d) business visitor means a natural person of either Party who is:

(i) a service seller being a natural person who is a representative

of a service supplier of that Party and is seeking temporary entry
into the other Party, for the purpose of negotiating the sale of
services for that service supplier where such representative will
not be engaged in direct sales to the general public or in
supplying services directly;

61
 (ii) a goods seller, being a natural person who is seeking temporary
entry into the territory of the other Party to negotiate for the sale
of goods, or to enter into a distribution or retailing arrangement
where such negotiations do not involve direct sales to the
general public; or

(iii) an investor of a Party, as defined in Chapter 10 (Investment),

seeking temporary entry into the territory of the other Party to
establish an investment and a natural person employed or
otherwise engaged by an investor of the first mentioned Party in
respect of an investment of that investor in the territory of the
other Party;

(e) intra-corporate transferee means:

(i) in respect of Malaysia:

(AA) senior manager being person within an organization that

provides services within Malaysia:

(1) having proprietary information of the organization;

(2) exercise wide latitude in decision making relating to

the establishment, control and operation of the
organization;

(3) primarily direct the management of the

organization; and

(4) receive only general supervision or direction from

the board of directors or partners of the
organization;

(BB) specialists or experts being person within the

organization who possess knowledge at an advanced
level of continued expertise and who possess proprietary
knowledge of the organization’s new service products
and technology, research equipment and techniques or
management,

provided that such persons are employees of the foreign service

supplier and have been in the employment of that foreign
service supplier for a period of not less than one year
immediately preceding the date of their application for a work
permit and he is to serve in at least a similar capacity.

(ii) in respect of India:

an employee of a juridical person of a Party as defined in

Chapter 8 (Trade in Services), or of an investor of a Party or

62
 enterprise of a Party as defined in the Chapter 10 (Investment)
established in the territory of the other Party (such juridical
person or investor or enterprise, as the case may be referred to
below as an organization), who is being transferred temporarily
to a branch or a representative office or an affiliate or subsidiary
of the said juridical person or investor or enterprise in the other
Party, and who has been so employed by the relevant
organization for the period of not less than one year immediately
preceding the date of the application for the temporary entry and
who is a manager, executive or specialist as defined below:

(AA) manager means a natural person within an organization

who primarily directs the organization or a department or
sub-division of the organization, supervises and controls
the work of other supervisory, professional or managerial
employees, has the authority to hire and fire or take other
personnel actions (such as promotion or leave
authorization), and exercises discretionary authority over
day-to-day operations;

(BB) executive means a natural person within an organization

who primarily directs the management of the organization,
exercises wide latitude in decision-making, and receives
only general supervision or direction from higher level
executives, the board of directors, or stockholders of the
business;

(CC) specialist means a natural person within an organization

who possesses knowledge at an advanced level of
expertise and who possesses relevant knowledge of the
organization’s service, research, equipment, techniques
or management. (A specialist may include, but is not
limited to, members of a licensed profession);

(f) installer o r servicer means persons who are installer or servicer of

machinery and/or equipment who is employed or appointed by a
supplying company, where such installation and/or servicing by the
supplying company is a condition of purchase of the said machinery
and/or equipment, and are not performing activities which are not
related to the installing or servicing activities which is the subject of the
contract, and receives his or her remuneration from the supplying
company;

(g) contractual service supplier means natural persons of a Party who:

(i) is an employee of a juridical person of the Party, who enters the

territory of the other Party temporarily in order to perform a
service pursuant to a contract between his or her employer and
a person in the territory of the other Party;

63
 (ii) is employed by a juridical person, of the Party, which has no
commercial presence in the territory of the other Party where the
service is to be provided;

(iii) receives his or her remuneration from that juridical person;

(iv) possesses appropriate educational and professional

qualifications relevant to the service to be provided and has
obtained, wherever necessary registration with the relevant
professional body or regulator; and

(v) may not engage in other employment in the territory of the other
Party where the service is being provided.

The service contract pursuant to which the natural person seeks to

travel as a contractual service supplier has to be obtained in any one of
the sectors or professions listed in the Horizontal Section of the
Schedule of Specific Commitments;

(h) independent pr ofessional means a self-employed natural person of

one Party who seeks to travel to the other Party temporarily, in order to
perform a service pursuant to a contract with a person of the other
Party, for which that natural person possesses appropriate educational
and other qualifications relevant to the service to be provided, and has
obtained wherever required, registration or license from the relevant
professional body or regulator. The service contract pursuant to which
the natural person seeks to travel as an independent professional has
to be obtained in any one of the sectors or professions listed in the
Horizontal Section of the Schedule of Specific Commitments and
remuneration under such service contract should be payable directly to
such natural person.

Article 9.4
Grant of Temporary Entry

1. Each Party shall, in accordance with this Chapter, grant temporary entry or
extension of temporary stay to natural persons of the other Party, provided such
persons are otherwise qualified for entry under applicable measures relating to
public health and safety and national security. The conditions governing the
temporary entry of natural persons including the duration of stay is inscribed in
Annex 9-1.

2. Any fees imposed in respect of the processing of such applications for

temporary stay or extension of temporary entry shall be reasonable and in
accordance with domestic laws and regulations.

64
 Article 9.5
Spouses and Dependents

For natural persons of a Party who have been granted the right to long term
temporary entry and have been allowed to bring in their spouses and dependents, a
Party shall, upon application and in accordance with that Party’s domestic laws and
regulation, and relevant licensing, administrative and registration requirements grant
the accompanying spouses and dependents of such natural persons of the other
Party, the right to work. The Parties agree that a natural person shall not be barred
from working solely on the ground that he or she is a spouse or dependent of a
natural person already employed in the other Party.

Article 9.6
Regulatory Transparency

1. Each Party shall publish or otherwise make publicly available explanatory

material on all relevant visa formalities which pertain to or affect the operation of this
Chapter.

2. Each Party shall maintain or establish contact points to respond to inquiries

from interested persons regarding regulations affecting the temporary entry of
natural persons. These contact points shall also be the authorized points allowing
business persons to report and seek clarifications, if any, on instances where they
have encountered special difficulties in the process of seeking temporary entry in the
other Party.

3. To the extent possible, each Party shall allow reasonable time between
publication of final regulations affecting the temporary entry of natural persons and
their effective date, and such notification to the other Party can be made
electronically available.

Article 9.7
Procedures and Notification of Outcome

1. Each Party shall process expeditiously completed applications for temporary

entry of natural persons of the other Party including requests for further extension of
visas and permits, as applicable.

2. Each Party shall, at the request of the applicant, provide without undue delay,
information concerning the status of the application. Each Party shall notify the
applicant for temporary entry, either directly or through his or her prospective
employers, of the outcome of the final determination, including period of stay and
other conditions. In the case of an incomplete application, the Party shall notify the
applicant of all the additional information that is required to complete the application
and provide the opportunity to remedy deficiencies.

3. If an application is terminated or denied, each Party shall, to the maximum

extent possible, inform the applicant in writing and without delay the reasons for such
action. The applicant will have the possibility of resubmitting, at its discretion, a new
application.

65
4. Each Party shall maintain or institute as soon as practicable procedures which
provide, at the request of an affected applicant for temporary entry, for the prompt
review of, and where justified, appropriate remedies for, administrative decisions
affecting such temporary entry.

Article 9.8
Consultations

A Party may request a consultation with the other Party regarding any matter
arising under this Chapter. The other Party shall give sympathetic consideration to
the request and shall endeavour to favourably resolve any specific or general
problems which may arise from the implementation and administration of this
Chapter.

Article 9.9
Dispute Settlement

1. A Party may not initiate proceedings under Chapter 14 (Dispute Settlement)

regarding a refusal to grant temporary entry under this chapter unless:

(a) the matter involves a breach of any of the provisions relating to the
grant of temporary entry accruing under this Chapter;

(b) the matter involves a pattern of practice; and

(c) that Party’s natural persons affected by the pattern of practice have
exhausted the available domestic administrative remedies.

Article 9.10
Reservations

The commitments made by each Party under this Chapter shall be subject to
any terms, conditions, reservations or limitations it has scheduled in its Schedule of
Specific Commitments under Chapter 8 (Trade in Services).

Article 9.11
Implementation

The Sub-Committee on Trade in Services established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

66
 CHAPTER 10
INVESTMENT

Article 10.1
Scope of Application

1. This Chapter shall apply to measures adopted or maintained by a Party

relating to:

(a) investors of the other Party; and

(b) investments of investors of the other Party in the territory of the former
Party.

2. This Chapter shall not apply to:

(a) any taxation measure, except under Article 10.8 (Transfers), unless
otherwise provided;

(b) government procurement;

(c) subsidies or grants provided by a Party; and

(d) services supplied in the exercise of governmental authority by the

relevant body or authority of a Party. For the purposes of this Chapter,
a service supplied in the exercise of governmental authority means any
service, which is supplied neither on a commercial basis nor in
competition with one or more service suppliers.

3. This Chapter shall apply to existing investments as at the date of entry into
force of this Agreement, as well as to investments made after the entry into force of
this Agreement.

4. This Chapter shall not apply to claims or disputes arising out of events which
have occurred prior to its entry into force.

Article 10.2
Definition

For the purposes of this Chapter:

(a) an enterprise is:

(i) owned by an investor if more than fifty percent of the equity

interests in it is beneficially owned by the investor; and

(ii) controlled by an investor if the investor has the power to name

a majority of its directors or otherwise to legally direct its actions;

67
(b) enterprise o f a P arty means any entity duly constituted or otherwise
organised under applicable laws of the country of a Party, whether for
profit or otherwise and whether privately-owned or governmentally-
owned, including any corporation, partnership, trust, joint venture, sole
proprietorship, organisation or association;

(c) freely usable currency means a freely usable currency as determined

by the International Monetary Fund under its Articles of Agreement and
any amendments thereto;

(d) investments means every kind of asset owned or controlled, directly or

indirectly, by an investor of a Party in the territory of the other Party,
and invested in accordance with the latter Party’s laws, regulations and
national policies, and has the characteristics of an investment, such as
the commitment of capital, the expectation of gain or profit, or the
assumption of risk, and includes:

(i) shares, stocks and other forms of equity participation in an

enterprise and rights derived therefrom;

(ii) bonds, debentures, loans, and other debt instruments of an

enterprise and rights derived therefrom;

(iii) a claim to money or to any performance having financial value

associated with the investment;

(iv) rights under contract, including turnkey, construction,

management, production, concessions or revenue-sharing
contracts;

(v) business concessions required to conduct economic activity and

having financial value conferred by law or under a contract
including any concession to search for, extract or exploit natural
resources;

(vi) intellectual property rights recognised pursuant to the laws and

regulations of each Party; and

(vii) movable and immovable property and any other property rights
such as mortgages, liens or pledges.

The term investment also includes returns that are invested and any
alteration in the form in which assets are invested or reinvested shall
not affect their character as investments.

The term returns means an amount yielded by or derived from an

investment of the investors of the other Party, including profits,
dividends, interest, capital gains, technical fees, royalties and all other
current income;

68
 (e) investor of a Party means a natural person or an enterprise of a Party,
that is making, or has made an investment in the territory of another
Party; and

(f) natural pe rson of a P arty means any person possessing the

citizenship of a Party, or right of permanent residence in that Party and
not having the citizenship of the other Party, in accordance with its
laws, regulations and national policies.

Article 10.3
Relation to other Chapters

1. This Chapter does not apply to measures adopted or maintained by a Party to

the extent that they are covered by Chapters 8 (Trade in Services) or 9 (Movement
of Natural Persons).

2. Notwithstanding paragraph 1 of this Article, Article 10.5 (Minimum Standard of

Treatment), Article 10.6 (Compensation for Losses), Article 10.7 (Expropriation and
Compensation), Article 10.8 (Transfers), Article 10.9 (Subrogation) and Article 10.14
(The Settlement of Investment Disputes between a Party and an Investor of the
Other Party) of this Chapter shall apply, mutatis mutandis, to any measure affecting
the supply of service by a service supplier of a Party through commercial presence in
the territory of the other Party pursuant to the provisions of Chapter 8 (Trade in
Services), but only to the extent that they relate to an investment and an obligation
under this Chapter, regardless of whether or not such a service sector is scheduled
in a Party's Schedule of Specific Commitments pursuant to Article 8.6 (Schedule of
Specific Commitments).

Article 10.4
National Treatment

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

2. The treatment to be accorded by a Party under paragraph 1 means, with

respect to a regional or local government, treatment no less favourable than the
most favoured treatment accorded, in like circumstances, at that regional or local
government, to investors and investments of the Party to which it forms a part.

3. The provisions of paragraphs 1 and 2 above shall not be construed so as to

oblige one Party to extend to the investors of the other Party the benefits of any
treatment, preference or privilege resulting from any arrangement or international
agreement relating wholly or mainly to taxation.

69
 Article 10.5
Minimum Standard of Treatment

1. Each Party shall accord to investments fair and equitable treatment and full
protection and security.

2. The concepts of fair and equitable treatment and full protection and security
do not require treatment in addition to or beyond that which is required by the
customary international law minimum standard of treatment of aliens.

3. A breach of another provision of this Agreement, or of a separate international

agreement, does not establish that there has been a breach of this Article.

Article 10.6
Compensation for Losses

Each Party shall accord to investors of the other Party that have suffered loss
or damage relating to their investments in the territory of the former Party due to
armed conflict or state of emergency such as revolution, insurrection, civil
disturbance or any other similar event in the former Party, treatment, as regards
restitution, indemnification, compensation or any other settlement, that is no less
favourable than that which it accords to its own investors or to investors of a non-
Party, whichever is more favourable to the investors of the other Party.

Article 10.7
Expropriation and Compensation

1. A Party shall not expropriate or nationalise an investment either directly or

through measures equivalent to expropriation or nationalisation (expropriation),
except:

(a) for a public purpose;

(b) in a non-discriminatory manner;

(c) on payment of prompt, adequate, and effective compensation; and

(d) in accordance with due process of law.

2. The compensation referred to in paragraph 1(c) shall:

(a) be paid without delay;

(b) be equivalent to the fair market value of the expropriated investment at

the time when or immediately before the expropriation was publicly
announced, or when the expropriation occurred, whichever is the
earlier;

(c) not reflect any change in value because the intended expropriation had
become known earlier; and

70
 (d) be effectively realisable and freely transferable in freely usable
currency.

3. In the event of delay, the compensation shall include an interest at prevailing

commercial rate. The compensation, including any accrued interest, shall be payable
either in the currency in which the investment was originally made or, if requested by
the investor, in a freely usable currency.

4. If an investor requests payment in a freely usable currency, the compensation

referred to in paragraph 1(c), including any accrued interest, shall be converted into
the currency of payment at the market rate of exchange prevailing on the date of
payment.

5. In accordance with the laws and regulations of the Party making the
expropriation, the investor whose investment is expropriated shall have a right of
access to the courts of justice or the administrative tribunals or agencies of the Party
making the expropriation to seek review of the expropriation measure or valuation of
the compensation that has been assessed.

6. This Article does not apply to the issuance of compulsory licences granted in
relation to intellectual property rights in accordance with the WTO Agreement on
Trade Related Aspects of Intellectual Property Rights.

7. Notwithstanding paragraphs 1, 2 and 3, any measure of expropriation relating

to land shall be as defined in the expropriating Party’s existing domestic laws and
regulations and any amendments thereto, and shall be for the purposes of and upon
payment of compensation in accordance with the aforesaid laws and regulations.

8. This Article shall be interpreted in accordance with Annex 10-1 (Indirect

Expropriation).

Article 10.8
Transfers

1. Each Party shall allow all transfers relating to an investment to be made freely
and without delay. Such transfers include:

(a) initial capital and additional amounts to maintain or increase

investment;

(b) returns;

(c) proceeds from the total or partial sale or liquidation of any investment;

(d) payments made under a contract, including a loan agreement;

(e) payments made pursuant to Article 10.6 (Compensation for Losses)

and Article 10.7 (Expropriation and Compensation);

71
 (f) payments arising out of the settlement of a dispute under Article 10.14
(The Settlement of Investment Disputes between a Party and an
Investor of the Other Party); and

(g) earnings and other remuneration of personnel from the other Party
employed and allowed to work in connection with that investment.

2. Each Party shall allow such transfers relating to an investment to be made in

a freely usable currency at the market rate of exchange prevailing at the time of
transfer.

3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer

through the equitable, non-discriminatory, and good faith application of its laws and
regulations relating to:

(a) bankruptcy, insolvency, or the protection of the rights of creditors;

(b) issuing, trading, or dealing in securities, futures, options, or derivatives;

(c) criminal or penal offences and the recovery of the proceeds of crime;

(d) financial reporting or record keeping of transfers when necessary to

assist law enforcement or financial regulatory authorities;

(e) ensuring compliance with orders or judgments in judicial or

administrative proceedings or rulings;

(f) taxation; and

(g) social security, public retirement or statutory savings schemes,

including provident funds, retirement gratuity programmes and
employees insurance programmes.

4. Nothing in this Chapter shall be regarded as altering the rights enjoyed and
obligations undertaken by a Party as a party to the Articles of Agreement of the
International Monetary Fund, as may be amended.

Article 10.9
Subrogation

1. If a Party or an agency of a Party makes a payment to an investor of that

Party under a guarantee, a contract of insurance or other form of indemnity it has
granted on non-commercial risk in respect of an investment, the other Party shall
recognise the subrogation or transfer of any right or title in respect of such
investment. The subrogated or transferred right or claim shall not be greater than
the original right or claim of the investor.

2. Where a Party or an agency of a Party has made a payment to an investor of

that Party and has taken over rights and claims of the investor, that investor shall

72
not, unless authorised to act on behalf of the Party or the agency making the
payment, pursue those rights and claims against the other Party.

3. In any proceeding involving an investment dispute, a Party shall not assert, as

a defence, counter-claim, right of set-off or otherwise, that the investor or the
investment has received or will receive, pursuant to an insurance or guarantee
contract, indemnification or other compensation for all or part of any alleged loss.

Article 10.10
Denial of Benefits

1. A Party may deny the benefits of this Chapter to an investor of the other Party
that is an enterprise of the other Party and to an investment of such investor if
investor of a non-Party own or control the enterprise, and the denying Party:

(a) does not maintain diplomatic relations with the non-Party; or

(b) adopts or maintains measures with respect to the non-Party that

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

2. Subject to prior notification and consultation with the other Party, a Party may
also deny the benefits of this Chapter to an investor of the other Party that is an
enterprise of the other Party and to investments of that enterprise, and where the
denying Party establishes that:

(a) the enterprise has no substantial business activities in the territory of

the other Party; or

(b) the enterprise is owned or controlled by investors of a non-Party or of

the denying Party.

Article 10.11
Special Formalities and Information Requirements

1. Nothing in Article 10.4 (National Treatment) shall be construed to prevent a

Party from adopting or maintaining a measure that prescribes special formalities in
connection with investments, including a requirement that the investments be legally
constituted under the laws or regulations of the Party, provided that such formalities
do not substantially impair the benefits of any of the provisions in this Chapter.

2. Notwithstanding Article 10.4 (National Treatment), a Party may require an

investor of the other Party, or its investment, to provide information concerning that
investment solely for informational or statistical purposes. The Party shall protect to
the extent possible such information as confidential from any disclosure that would
prejudice legitimate commercial interests of the investor or the investment. Nothing
in this paragraph shall be construed to prevent a Party from otherwise obtaining or
disclosing information in connection with the equitable and good faith application of
its laws.

73
 Article 10.12
Reservations

1. Article 10.4 (National Treatment) shall not apply to:

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

(i) the central and regional level of government, as set out by that
Party in its Schedule to Annex 10-2; or

(ii) 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 measures referred to in

subparagraph (a), provided that the amendment does not decrease the
level of conformity of the measure as it existed at the date of entry into
force of the Party’s Schedule to Annex 10-2 with Article 10.4 (National
Treatment).

2. Article 10.4 (National Treatment) do not apply to any measure that a Party
adopts or maintains with respect to sectors, sub-sectors, or activities, as set out in its
Schedule to Annex 10-3.

3. Neither Party may, under any measure adopted after the date of entry into
force of the Schedules referred to in Article 10.17 (Work Programme) and covered
by its Schedule to Annex 10-3, require an investor of the other Party, by reason of its
nationality, to sell or otherwise dispose of an investment existing at the time the
measure becomes effective.

4. Each Party reserves the right to make future reservations on measures that
do not conform to Article 10.4 (National Treatment) on new and emerging sectors,
sub-sectors, industries, products, or activities.

Article 10.13
Review of Reservations

1. If, after the date of entry into force of this Agreement, a Party enters into any
agreement on investment with a non-Party, it shall give consideration to a request by
the other Party for the incorporation herein of treatment no less favourable than that
provided under the aforesaid agreement.

2. As part of review of this Agreement pursuant to Article 16.9 (General Review),

the Parties undertake to review their respective Schedule of Reservations in
Annexes 10-2 and 10-3 with a view to decreasing its reservations and reducing the
terms, limitations, conditions and qualifications on national treatment.

74
3. In any other case, a Party may, upon reasonable notice, request the other
Party for a review of its reservations.

4. Any incorporation or review under this Article should maintain the overall
balance of commitments undertaken by each Party under this Agreement.

Article 10.14
The Settlement of Investment Disputes between
a Party and an Investor of the Other Party

Scope

1. Any dispute between a Party (“disputing Party”) and an investor of the other
Party (“disputing investor”) that has incurred loss or damage arising out of an alleged
breach of any rights conferred by this Agreement with respect to the investment of
the disputing investor shall, as far as possible, be settled by the parties to the dispute
in an amicable way.

2. A natural person possessing the nationality or citizenship of a Party shall not

pursue a claim against that Party under this Article.

3. This Article shall not apply to claims arising out of events which occurred, or
claims which have been raised prior to the entry into force of this Agreement.

4. Nothing in this Article shall be construed so as to prevent a disputing investor

from seeking administrative or judicial settlement available within the country of a
disputing Party.

Consultation and Negotiation

5. In the event of an investment dispute referred to in paragraph 1, the disputing

parties shall as far as possible resolve the dispute through consultation and
negotiation, with a view towards reaching an amicable settlement. Such
consultations and negotiations, which may include the use of non-binding, third party
procedures, shall be initiated by a written request for consultations and negotiations
by the disputing investor to the disputing Party.

6. With the objective of resolving an investment dispute through consultations

and negotiations, a disputing investor shall provide the disputing Party, prior to the
commencement of consultations and negotiations, with information regarding the
legal and factual basis for the dispute.

Basis of Claim

7. If an investment dispute has not been resolved within 180 days of the receipt
by a disputing Party of a request for consultations and negotiations, the disputing
investor may submit to conciliation or arbitration a claim:

(a) that the disputing Party has breached an obligation arising under Article
10.4 (National Treatment), Article 10.5 (Minimum Standard of

75
 Treatment), Article 10.6 (Compensation for Losses), Article 10.7
(Expropriation and Compensation) and Article 10.8 (Transfers), relating
to the management, conduct, operation or sale or other disposition of an
investment; and

(b) that the disputing investor or the investment has incurred substantial loss
or damage arising out of that breach.

Choice of Forum

8. A disputing investor may submit a claim referred to in paragraph 7:

(a) to arbitration in accordance with the Convention on the Settlement of

Investment Disputes between States and Nationals of Other States
(“ICSID Convention”) done at Washington on 18 March, 1965 provided
both Parties are party to the ICSID Convention;

(b) to arbitration under the ICSID Additional Facility Rules, provided that
either the disputing Party or the Party of the disputing investor, but not
both, is a party to the ICSID Convention;

(c) to an international ad hoc arbitral tribunal established under the

Arbitration Rules of the United Nations Commission on International
Trade Law (“UNCITRAL”); or

(d) any other arbitral institution or in accordance with any other arbitral
rules, if the parties to the dispute so agree.

Each Party hereby gives its consent to the submission of disputes to conciliation or
arbitration set out in subparagraphs (a), (b), (c) or (d). Such consent is conditional
upon the submission of the disputing investor’s written waiver of its right to initiate or
continue any proceedings before the courts or administrative tribunals of either
Party, or other dispute settlement procedures, any proceedings with respect to any
measure alleged to constitute a breach of any rights conferred by this Agreement
with respect to the investment of the disputing investor.

Conditions and Limitations on Submission of Claim

9. An investor shall not be entitled to make a claim, if more than three years
have elapsed from the date on which the investor first acquired, or should have first
acquired knowledge of the alleged breach and knowledge that the investor has
incurred substantial loss or damage.

10. The disputing investor who intends to submit the dispute pursuant to
paragraph 8 shall give to the disputing Party a written notice of intent to do so at
least ninety days before the claim is submitted. The notice of intent shall specify:

(a) the name and address of the disputing investor and its legal
representative;

76
 (b) the specific measures of the disputing Party at issue and a brief
summary of the factual and legal basis of the dispute sufficient to
present the problem clearly, including the provisions of this Agreement
alleged to have been breached;

(c) the relief sought, and where appropriate, the approximate amount of
damages claimed; and

(d) the dispute settlement procedures set forth in paragraph 8 which the
disputing investor will seek.

11. The applicable arbitration rules shall govern the arbitration referred to in this
Article except to the extent modified by the Parties in this Article.

Selection of Arbitrators

12. Unless the disputing investor and the disputing Party (“the disputing parties”)
agree otherwise, an arbitral tribunal established under subparagraphs 8 (a), (b), (c)
and (d) shall comprise three arbitrators, one arbitrator appointed by each of the
disputing parties and the third, who shall be the presiding arbitrator, appointed by the
two arbitrators. If the disputing investor or the disputing Party fails to appoint an
arbitrator within sixty (60) days from the date on which the investment dispute was
submitted to arbitration, the Secretary-General of International Centre for Settlement
of Investment Disputes (“ICSID”) in the case of arbitration referred to in
subparagraphs 8(a) or 8(b), or the Secretary-General of the Permanent Court of
Arbitration (“PCA”) in the case of arbitration referred to in subparagraphs 8(c) or 8(d),
on the request of either of the disputing parties, shall appoint, in his or her discretion,
the arbitrator or arbitrators not yet appointed from the ICSID or PCA Panel of
Arbitrators respectively subject to the requirements of paragraph 13.

13. Unless the disputing parties agree otherwise, the third arbitrator shall not be
of the same nationality as the disputing investor, nor be a national of the disputing
Party, nor have his or her usual place of residence in the territory of either Party, nor
be employed by either of the disputing parties, nor have dealt with the investment
dispute in any capacity.

Conduct of the Arbitration

14. Where issues relating to jurisdiction or admissibility are raised as preliminary

objections, the tribunal shall decide the matter without making reference to the merits
of the claim.

15. A disputing Party may, no later than three months after the constitution of the
tribunal, file an objection that a claim is not admissible. A disputing Party may also
file an objection that a claim is otherwise outside the jurisdiction or competence of
the tribunal. The disputing Party shall specify as precisely as possible the basis for
the objection.

16. The tribunal shall address any such objection as a preliminary question apart
from the merits of the claim. The disputing parties shall be given a reasonable

77
opportunity to present their views and observations to the tribunal. If the tribunal
decides that the claim is not within the jurisdiction or competence of the tribunal, it
shall render an award to that effect.

17. The tribunal may, if warranted, award the prevailing party reasonable costs
and fees incurred in submitting or opposing the objection. In determining whether
such an award is warranted, the tribunal shall consider whether either the claim or
the objection was frivolous or manifestly without merit, and shall provide the
disputing parties a reasonable opportunity to submit their views.

18. The place of arbitration shall be determined in accordance with the applicable
arbitration rules, provided that the place shall be in the territory of a State that is a
party to the United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York on 10 June 1958.

Transparency

19. Subject to paragraph 20, the disputing Party may make publicly available all
awards and decisions made by the tribunal.

20. Any information specifically designated as confidential that is submitted to the

tribunal or the disputing parties shall be protected from disclosure to the public.

Joint Interpretation

21. The tribunal shall, on its own account or at the request of a disputing party,
request a joint interpretation of any provision of this Agreement that is in issue in a
dispute. The Parties shall submit in writing any joint decision declaring their
interpretation to the tribunal within sixty days of the request. Without prejudice to
paragraph 22, if the Parties fail to submit such a decision within sixty days, any
interpretation submitted by a Party individually shall be forwarded to the disputing
parties and the tribunal, which shall decide the issue on its own account.

22. A joint decision of the Parties, declaring their interpretation of a provision of

this Agreement shall be binding on the tribunal, and any decision or award issued by
the tribunal must be consistent with that joint decision.

Awards

23. The award shall include:

(a) a judgment as to whether or not there has been a breach by the

disputing Party of any rights conferred by this Agreement in respect of
the disputing investor and its investments; and

(b) a remedy if there has been such breach. The remedy shall be limited
to one or both of the following:

(i) payment of monetary damages and applicable interest; and

78
 (ii) restitution of property, in which case the award shall provide that
the disputing Party may pay monetary damages and any
applicable interest in lieu of restitution.

24. The award rendered in accordance with paragraph 23 shall be final and
binding upon the disputing parties. The disputing Party shall execute without delay
any such award and provide in the disputing Party for the enforcement of such award
in accordance with its relevant laws and regulations.

Costs

25. Costs may also be awarded in accordance with the applicable arbitration
rules.

26. Neither Party shall, in respect of a dispute which one of its investors shall
have submitted to arbitration in accordance with paragraph 8, give diplomatic
protection, or bring an international claim before another forum, unless the other
party shall have failed to abide by and comply with the award in such dispute.
Diplomatic protection, for the purposes of this paragraph, shall not include informal
diplomatic exchanges for the sole purpose of facilitating a settlement of the dispute.

Article 10.15
Other Obligations

If the legislation of either Party or international obligations existing at present

or established hereafter between the Parties in addition to this Agreement, result in a
position entitling investments by investors of the other Party to treatment more
favourable than is provided for by this Agreement, such position shall not be affected
by this Agreement.

Article 10.16
Duration and Termination

In the event that this Agreement is terminated, the provisions of this Chapter,
the provisions in Chapter 14 (Dispute Settlement), and other provisions in the
Agreement necessary for or consequential to the application of this Chapter, except
Articles 10.4 (National Treatment), and 10.12 (Reservations), shall continue in effect
with respect to investments made or acquired before the date of termination of this
Agreement for a further period of ten years after the date of termination and without
prejudice to the application thereafter of the rules of general international law.

Article 10.17
Work Programme

1. The Parties shall enter into negotiations on Schedules of Reservations in

Annexes 10-2 and 10-3 within three months of entry into force of this Agreement,
unless the Parties otherwise agree.

2. The Parties shall conclude the negotiations referred to in paragraph 1, no later

than six months from the date of entry into force of this Agreement, unless the

79
Parties otherwise agree. These discussions shall be overseen by the Sub-
Committee on Investment established under Article 15.2 (Sub-Committees).

3. Schedules of Reservations referred to in paragraph 1 shall enter into force by

exchange of notes on a date agreed to by the Parties.

4. Articles 10.4 (National Treatment) and 10.12 (Reservations) shall not apply
until the Parties’ Schedules of Reservations have entered into force in accordance
with paragraph 3.

Article 10.18
Implementation

The Sub-Committee on Investment established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

Article 10.19
Access to Courts of Justice

Each Party shall within its territory accord to investors of the other Party
treatment no less favourable than the treatment, which it accords in like
circumstances to its own investors, with respect to access to its courts of justice and
administrative tribunals and agencies in all degrees of jurisdiction both in pursuit and
in defence of such investors’ rights.

Article 10.20
Measures in Public Interest

Nothing in this Chapter shall be construed to prevent:

(a) a Party or its regulatory bodies from adopting, maintaining or enforcing

any measure, on a non-discriminatory basis; or

(b) the judicial bodies of a Party from taking any measures,

consistent with this Chapter that is in the public interest, including measures to meet
health, safety or environmental concerns.

80
 CHAPTER 11
ECONOMIC COOPERATION

Article 11.1
Objectives

1. The Parties agree to establish a framework for cooperation as a means to

expand and enhance the benefits of this Agreement and to promote capacity building
activities in areas of mutual interest taking into account existing economic
cooperation between them.

2. The Parties shall establish close cooperation aimed inter alia at:

(a) promoting and enhancing economic cooperation between them to

further development objectives in accordance with the applicable laws
and regulations of each Party;

(b) complementing existing, and building new, cooperative relationships

between the Parties;

(c) creating new opportunities for trade and investment and promoting
competitiveness and innovation including through the involvement,
where appropriate, of the private sector;

(d) contributing to the important role of the private sector in promoting and
building strategic alliances to encourage mutual economic growth and
development;

(e) encouraging through this cooperative process the presence of the

Parties and their goods and services in each others’ respective
markets; and

(f) increasing and deepening the level of cooperation activities between

the Parties in areas of mutual interest.

Article 11.2
Scope

1. The Parties affirm the importance of all forms of co-operation to be identified

and discussed by the Sub-Committee on Economic Cooperation. The areas of
cooperation include, but not limited to:

(a) Infrastructure Development;

(b) Human Resource Development;

(c) Science and Technology, including Health;

(d) Creative Industries;

81
 (e) Tourism;

(f) Small and Medium Enterprises;

(g) Business Facilitation;

(h) Finance; and

(i) Other related areas of cooperation to be mutually agreed upon by the

Parties in accordance with the objectives as set out in Article 1.1
(Objectives) of this Agreement.

Notwithstanding ongoing cooperation activities, cooperation in the areas identified

shall commence upon the entry into force of this Agreement, in which some of the
identified projects could be implemented as soon as possible thereafter.

2. Cooperation between the Parties should contribute to achieving the objectives

of this Agreement and in particular the objectives in Article 1.1 (Objectives).

3. Cooperation between the Parties under this Chapter will supplement the
cooperation and cooperative activities between the Parties set out in this Agreement.

Article 11.3
Resources

Cooperation shall be undertaken subject to the availability of resources of

each Party and the applicable laws and regulations of each Party.

Article 11.4
Implementation

The Sub-Committee on Economic Cooperation established under Article 15.2 (Sub-

Committees) shall consider matters relating to the implementation of this Chapter.

Article 11.5
Mechanisms for Implementation of Cooperation

1. The Parties agree that the mechanisms for cooperation shall take the form of:

(a) meetings of the Sub-Committee on Economic Cooperation;

(b) meetings, as required between the relevant institutions of the Parties

(including, but not limited to, relevant government agencies and
universities), to further the implementation of cooperation activities with
a view to ensuring the successful implementation of economic
cooperation under this Chapter; and

(c) use of diplomatic channels to promote dialogue and cooperation

consistent with this Agreement.

82
2. In accordance with Article 15.1 (Joint Committee), in the area of economic
cooperation the Joint Committee shall:

(a) receive and deliberate on the reports of the Sub-Committee on

Economic Cooperation;

(b) make decisions on issues referred to it by the Sub-Committee on

Economic Cooperation;

(c) encourage undertaking of cooperation activities under the framework

as well as new initiatives as agreed by the Parties; and

(d) make recommendations on the cooperation activities under this

Chapter for implementation through the Sub-Committee on Economic
Cooperation, in accordance with the strategic priorities of the Parties.

Article 11.6
Non-Application of Dispute Settlement

Neither Party shall have recourse to the dispute settlement procedures under
Chapter 14 (Dispute Settlement) in respect of this Chapter.

83
 CHAPTER 12
GENERAL EXCEPTIONS

Article 12.1
General Exceptions

1. For the purposes of Chapters 2 through 10 (Trade in Goods, Rules of Origin,

Customs Cooperation, Trade Remedies, Sanitary and Phytosanitary Measures,
Technical Barriers to Trade, Trade in Services, Movement of Natural Persons, and
Investment) of this Agreement, Article XX of GATT 1994 and its interpretive notes
and Article XIV of GATS (including its footnotes) shall apply to this Agreement,
mutatis mutandis.

2. For the purposes of Chapters 2 through 10 (Trade in Goods, Rules of Origin,

Customs Cooperation, Trade Remedies, Sanitary and Phytosanitary Measures,
Technical Barriers to Trade, Trade in Services, Movement of Natural Persons, and
Investment) of this Agreement, subject to the requirement that such measures are
not applied in a manner which would constitute a means of arbitrary or unjustifiable
discrimination between the Parties where like conditions prevail, or a disguised
restriction on trade in goods and services or investment, nothing in this Agreement
shall be construed to prevent the adoption or enforcement by a Party of measures
necessary to protect national treasures of artistic, historic or archaeological value.

Article 12.2
Security Exceptions

1. Nothing in this Agreement shall be construed:

(a) to require a Party to furnish or allow access to any information the

disclosure of which it determines to be contrary to its essential security
interests; or

(b) to prevent a Party from taking any actions which it considers necessary
for the protection of its essential security interests:

(i) relating to the traffic in arms, ammunition and implements of war

and to such traffic in other goods and materials or relating to the
supply of services as carried on, directly or indirectly, for the
purpose of supplying or provisioning a military establishment;

(ii) taken in time of war or other emergency in international relations;

(iii) relating to fissionable and fusionable materials or the materials

from which they are derived; or

(iv) relating to protection of critical public infrastructure, including

communications, power and water infrastructure from deliberate
attempts intended to disable or degrade such infrastructure;

84
 (c) to prevent a Party from taking any action in pursuance of its obligations
under the United Nations Charter for the maintenance of international
peace and security.

2. The Joint Commission shall be informed to the fullest extent possible of

measures taken under paragraphs 1(b) and (c) and of their termination.

3. For the purposes of Chapters 8 (Trade in Services), 9 (Movement of Natural

Persons) and 10 (Investment), nothing shall be construed to require a Party to
accord the benefits of these Chapters to a service supplier or an investor that is an
enterprise of the other Party where a Party adopts or maintains measures in any
legislation or regulations which it considers necessary for the protection of its
essential security interests with respect to a non-Party or a service supplier or an
investor of a non-Party that would be violated or circumvented if the benefits of these
Chapters were accorded to such a service supplier, an enterprise or to its
investments, as the case may be.

4. Paragraph 3 shall be interpreted in accordance with the understanding of the

Parties on security exceptions as set out in Annex 12-1 (Security Exceptions).

5. For purposes of Chapter 10 (Investment), this Article shall be interpreted in

accordance with the understanding of the Parties on non-justiciability of security
exceptions as set out in Annex 12-2 (Non-Justiciability of Security Exceptions).

Article 12.3
Taxation Measures

1. Unless otherwise provided for in this Agreement, the provisions of this

Agreement shall not apply to any taxation measures.

2. Nothing in this Agreement shall affect the rights and obligations of either Party
under any other agreement on taxation measures. In the event of any inconsistency
between this Agreement and any such agreement on taxation measures, that
agreement shall prevail to the extent of the inconsistency.

Article 12.4
Measures to Safeguard the Balance of Payments

1. Where a Party is in serious balance of payments and external financial

difficulties or under threat thereof, it may:

(a) in the case of trade in goods, in accordance with GATT 1994 and the
WTO Understanding on the Balance-of-Payments Provisions of the
GATT 1994, adopt restrictive import measures;

(b) in the case of services, adopt or maintain restrictions on trade in

services on which it has undertaken specific commitments, including on
payments or transfers for transactions related to such commitments. It
is recognized that particular pressures on the balance of payments of a
Party in the process of economic development may necessitate the use

85
 of restrictions to ensure, inter alia, the maintenance of a level of
financial reserves adequate for the implementation of its programme of
economic development.

(c) in the case of investments, adopt or maintain restrictions with regard to

payments or transfers relating to investment. It is recognized that
particular pressures on the balance of payments of a Party in the
process of economic development may necessitate the use of
restrictions to ensure, inter alia, the maintenance of a level of financial
reserves adequate for the implementation of its programme of
economic development.

2. Restrictions adopted or maintained under paragraph 1(b) or (c) shall:

(a) be consistent with the Articles of Agreement of the International

Monetary Fund;

(b) avoid unnecessary damage to the commercial, economic and financial

interests of the other Party;

(c) not exceed those necessary to deal with the circumstances described
in paragraph 1;

(d) be temporary and be phased out progressively as the situation

specified in paragraph 1 improves; and

(e) be applied in such a manner that the other Party is treated no less
favourably than any country that is not a party to this Agreement.

3. In determining the incidence of such restrictions, the Parties may give priority
to economic sectors which are more essential to their economic development.
However, such restrictions shall not be adopted or maintained for the purpose of
protecting a particular sector.

4. Any restrictions adopted or maintained by a Party under paragraph 1, or any

changes therein, shall be notified promptly to the other Party from the date such
measures are taken.

5. To the extent that it does not duplicate the process under WTO and
International Monetary Fund (“IMF”), the Party adopting or maintaining any
restrictions under paragraph 1 shall promptly commence consultations with the other
Party from the date of notification in order to review the measures adopted or
maintained by it.

86
 CHAPTER 13
TRANSPARENCY

Article 13.1
Definitions

For the purposes of this Chapter, administrative r uling of ge neral

application means an administrative ruling or interpretation that applies to all
persons and fact situations and that is relevant to the implementation of this
Agreement but does not include:

(a) a determination or ruling made in administrative or quasi-judicial

proceedings that applies to a particular person, good, or service of the
other Party in a specific case; or

(b) a ruling that adjudicates with respect to a particular act or practice.

Article 13.2
Publication

1. Each Party shall ensure, wherever possible, that its laws, regulations,
procedures, and administrative rulings of general application with respect to any
matter covered by this Agreement are promptly published, and made available in the
public domain including in the official website in such a manner as to enable
interested persons of the other Party to become acquainted with them.

2. To the extent possible, each Party shall:

(a) publish in advance any measure referred to in paragraph 1 that it

proposes to adopt; and

(b) provide, where appropriate, interested persons and parties with a

reasonable opportunity to comment on such proposed measures.

Article 13.3
Administrative Proceedings

With a view to administering in a consistent, impartial, and reasonable manner

all measures concerning matters covered by this Agreement, each Party shall
ensure in its administrative proceedings applying measures referred to in paragraph
1 of Article 13.2 (Publication) to particular persons, goods, or services of the other
Party in specific cases that:

(a) wherever possible, persons of the other Party that are directly affected
by a proceeding are provided reasonable notice, in accordance with
domestic procedures, when a proceeding is initiated, including a
description of the nature of the proceeding, a statement of the legal
authority under which the proceeding is initiated, and a general
description of any issues in question;

87
 (b) such persons are afforded a reasonable opportunity to present facts
and arguments in support of their positions prior to any final
administrative action, when time, nature of the proceeding, and public
interest permit; and

(c) its procedures are in accordance with domestic law.

Article 13.4
Review and Appeal

1. Each Party shall, where warranted, establish or maintain judicial, quasi-

judicial, or administrative tribunals, or procedures for the purpose of the prompt
review and correction of final administrative actions regarding matters covered by
this Agreement, other than those taken for prudential reasons. Such tribunals shall
be independent of the office or authority entrusted with administrative enforcement
and shall not have any substantial interest in the outcome of the matter.

2. Each Party shall ensure that, in any such tribunals or procedures, the parties
to the proceedings are provided with the right to:

(a) a reasonable opportunity to support or defend their respective

positions; and

(b) a decision based on the evidence and submissions of record.

3. Each Party shall ensure, subject to appeal or further review as provided in its
domestic law, that such decision shall be implemented by, and shall govern the
practice of, the offices or authorities with respect to the administrative action at issue.

Article 13.5
Notification and Provision of Information

1. To the extent possible, each Party shall notify the other Party of any measure
that the Party considers might materially affect the operation of this Agreement or
otherwise substantially affect the other Party’s interests under this Agreement. Such
notification shall be issued in English and made available in the public domain, which
may include in the official website.

2. Any such notification, documentation or other communication between the

Parties shall be done in the English language.

3. On request of the other Party, a Party shall, where possible provide

information and respond to questions pertaining to any measure, whether or not that
other Party has been previously notified of that measure.

4. Any notification, request, or information under this Article shall be conveyed to

the other Party through its contact point as established under Article 15.4 (Nodal
Points) of this Agreement.

88
5. Any notification or information provided under this Article shall be without
prejudice as to whether the measure is consistent with this Agreement.

89
 CHAPTER 14
DISPUTE SETTLEMENT

Article 14.1
Scope and Coverage

1. Except as otherwise provided in this Agreement, this Chapter shall apply to

the avoidance or settlement of disputes between the Parties concerning the
interpretation, implementation or application of this Agreement, wherever a Party
considers that:

(a) a measure of the other Party is inconsistent with its obligations under
this Agreement; or

(b) the other Party has failed to carry out its obligations under this
Agreement.

2. The provisions of this Chapter may be invoked in respect of measures

affecting the observance of this Agreement taken by state or local governments or
authorities within the territory of a Party. When an arbitral tribunal has ruled that a
provision of this Agreement has not been observed, the responsible Party shall take
such measures as may be required to ensure its observance within its territory.

3. For the avoidance of doubt, the Parties agree that the provisions of this
Agreement shall be interpreted in accordance with the customary rules of treaty
interpretation of public international law.

4. The rules and procedures set out in this Chapter may be waived, varied or
modified by mutual agreement of both Parties.

Article 14.2
Definition

For the purposes of this Chapter, award shall, unless the context otherwise
requires, mean findings, recommendations or rulings, as the case may be, and shall
exclude payment of monetary compensation by the Party concerned.

Article 14.3
Choice of Forum

1. Where a dispute regarding any matter arises under this Agreement and under
another agreement to which the Parties are party, the complaining Party may select
the forum in which to settle that matter from among the forums prescribed under the
relevant agreements.

2. The complaining Party shall notify the other Party in writing of its intention to
select a particular forum before doing so.

90
3. Once the complaining Party has selected a particular forum for settling a
matter, that forum shall be used to the exclusion of other fora in respect of that
matter.

4. For the purposes of this Article, the complaining Party shall be deemed to
have selected a forum when it has requested the establishment of, or referred a
matter to, a dispute settlement panel or arbitral tribunal.

Article 14.4
Consultations

1. Either Party may request for consultations with the other Party concerning the
interpretation, implementation or application of this Agreement in accordance with
paragraph 1 of Article 14.1 (Scope and Coverage).

2. A request for consultations shall be in writing setting out the reasons for the
request including identification of the measure at issue and an indication of the legal
basis for the complaint. The Party to which the request is made shall reply to the
request in writing within ten days after the date of its receipt, and shall enter into
consultations within a period of no more than thirty days after the receipt of the
request.

3. The Parties shall make every effort to reach a mutually satisfactory resolution
of any matter through consultations. To this end, the Parties shall:

(a) provide sufficient information as may be reasonably available at the stage of

consultations to enable a full examination of how the measure might affect the
operation of the Agreement; and

(b) treat as confidential any information exchanged in the consultations which the
other Party has designated as confidential.

Article 14.5
Referral to the Joint Committee

1. If the Parties fail to resolve a matter within sixty days of the delivery of a
request for consultations under Article 14.4 (Consultations), either Party may refer
the matter to the Joint Committee by delivering written notification to the other Party.

2. The Joint Committee shall promptly meet and endeavour to reach a mutually
satisfactory resolution of the dispute.

Article 14.6
Good Offices, Conciliation and Mediation

1. The Parties may at any time agree to good offices, conciliation or mediation.
They may begin at any time and be terminated at any time.

91
2. If the Parties agree, good offices, conciliation or mediation may continue while
the dispute proceeds for resolution before an arbitral tribunal established under
Article 14.7 (Establishment of Arbitral Tribunals).

3. All proceedings involving good offices, mediation and conciliation and

positions taken by the Parties during these proceedings, shall be confidential and
without prejudice to the rights of either Parties in any further proceedings under the
provisions of this Chapter.

Article 14.7
Request for Establishment of Arbitral Tribunal

1. The complaining Party may request in writing for the establishment of an

arbitral tribunal if:

(a) the Party complained against does not enter into consultations within
thirty days after the date of its receipt of the request for consultations
under Article 14.4 (Consultations) or there is no referral to the Joint
Committee under Article 14.5 (Referral to the Joint Committee); or

(b) the Parties fail to resolve a dispute sixty days after the date of receipt
of the request for consultations.

2. The request to establish an arbitral tribunal shall identify:

(a) the specific measures at issue; and

(b) the legal and factual basis of the complaint including the provisions of
this Agreement alleged to have been breached.

Article 14.8
Terms of Reference

Unless the Parties otherwise agree within twenty days from the date of receipt
of the request for the establishment of the arbitral tribunal, the terms of reference of
the arbitral tribunal shall be:

“To examine, in the light of the relevant provisions of this Agreement, the
matter referred to in the request for the establishment of an arbitral tribunal pursuant
to Article 14.7 (Request for Establishment of Arbitral Tribunal), to make findings of
law and fact and determinations on whether the measure is not in conformity with the
Agreement and to issue a written report for the resolution of the dispute. If the
Parties agree, the arbitral tribunal may make recommendations for resolution of the
dispute.”

92
 Article 14.9
Establishment and Composition of Arbitral Tribunals

1. Unless the Parties otherwise agree, an arbitral tribunal shall consist of three
arbitrators. The complaining Party and the Party complained against shall each
appoint one arbitrator within thirty days of the receipt of the request to establish an
arbitral tribunal.

2. The parties to the dispute shall endeavour to agree on the third arbitrator
within thirty days after the date of appointment of the second arbitrator. The third
arbitrator shall serve as the chair. If the parties to the dispute are unable to agree on
the chair within the aforesaid thirty days, the chair shall be jointly appointed, by the
arbitrators who have been appointed under paragraph 1, within a further period of
thirty days. If the third arbitrator has not been appointed within thirty days by the
arbitrators appointed under paragraph 1, the parties to the dispute shall consult each
other in order to jointly appoint the chair within a further period of thirty days.

3. The date of establishment of the arbitral tribunal shall be the date on which
the chair of the Arbitral Tribunal is appointed.

4. All arbitrators shall:

(a) have expertise or experience in law, international trade, other matters

covered by this Agreement or the resolution of disputes arising under
international trade agreements;

(b) be chosen strictly on the basis of objectivity, reliability and sound

judgment; and

(c) be independent of, and not be affiliated with or take instructions from,
any Party to the dispute.

5. The chair of the Arbitral Tribunal shall:

(a) not be a national of a Party;

(b) not have his or her usual place of residence in the territory of a Party;

(c) not be employed by either Party; and

(d) not have dealt with the matter in any capacity.

6. If an arbitrator appointed under this Article resigns or becomes unable to act,

a successor arbitrator shall be appointed in accordance with the appointment
procedure provided for in this Article, which shall be applied, respectively, mutatis
mutandis. The successor shall have all the powers and duties of the original
arbitrator. The work of the arbitral panel shall be suspended until the successor
arbitrator is appointed.

93
 Article 14.10
Proceedings of Arbitral Tribunal

1. The Arbitral Tribunal shall meet in closed sessions. The Parties shall be
present at the meetings only when invited by the arbitral tribunal to appear before it.

2. The venue for the proceedings of the arbitral tribunal shall be decided by
mutual agreement between the Parties. If there is no agreement, the venue shall
alternate between the capitals of the two countries with the venue of the first sitting
to be decided by a draw of lot in the presence of the Parties.

3. The Parties shall be given the opportunity to provide at least one written
submission and to attend any of the presentations, statements or rebuttals in the
proceedings. All information or written submissions submitted by a Party to the
arbitral tribunal, including any comments on the draft report and responses to
questions put by the arbitral tribunal, shall be made available to the other Party.

4. The arbitral tribunal should consult with the Parties as appropriate and provide
adequate opportunities for the development of a mutually satisfactory resolution.

5. The arbitral tribunal shall aim to make its decisions, including its report, by
consensus, provided that where an arbitral tribunal is unable to reach consensus it
may take its decision by majority vote.

6. At the request of a Party to the arbitral proceeding or on its own initiative ,

and subject to such terms and conditions as the Parties may agree, the arbitral
tribunal may seek information and technical advice from any expert to obtain their
opinion or advice on certain aspects of the matter. The arbitral tribunal shall provide
the Parties with a copy of the information or technical advice received and an
opportunity to provide comments. Where the arbitral tribunal takes the information or
technical advice into account in the preparation of its report, it shall also take into
account any comments by the Parties on the information or technical advice.

7. The deliberations of the arbitral tribunal and the documents submitted to it

shall be kept confidential.

8. Before the first substantive meeting of the arbitral tribunal with the Parties, the
Parties shall transmit to the arbitral tribunal written submissions in which they
present the facts of their case and their arguments.

9. At its first substantive meeting with the Parties, the arbitral tribunal shall ask
the Party which has brought the complaint to present its submission, followed by the
Party against which the complaint has been brought.

10. Formal rebuttals shall be made at the second substantive meeting of the
arbitral tribunal. The Party complained against shall have the right to present its
submission first, and shall be followed by the complaining Party. The Parties shall
submit, prior to the meeting, written rebuttals to the arbitral tribunal.

94
11. The arbitral tribunal may at any time put questions to the Parties and ask
them for explanations either in the course of a meeting with the Parties or in writing.

12. The Parties shall make available to the arbitral tribunal a written version of
their oral statements.

13. In the interests of full transparency, the presentations, submissions, rebuttals

and statements referred to in this Article shall be made in the presence of the
Parties. Each Party’s written submissions, including any comments on the report,
written versions of oral statements and responses to questions put by the arbitral
tribunal, shall be made available to the other Party. There shall be no ex parte
communications with the arbitral tribunal concerning matters under consideration by
it.

Article 14.11
Functions of Arbitral Tribunals

1. The function of an arbitral tribunal established pursuant to Article 14.9

(Establishment and Composition of Arbitral Tribunals) is to make an objective
assessment of the dispute before it, including an examination of the facts of the case
and the applicability of and conformity with this Agreement. Where the arbitral
tribunal concludes that a measure is inconsistent with a provision of this Agreement,
it shall recommend that the Party in default bring the measure into conformity with
that provision.

2. The award of the arbitral tribunal shall be set out in a report released to the
Parties, including the reasons for the award. An arbitral tribunal may make its award
upon the default of a Party.

3. Apart from the matters set out in Article 14.10 (Proceedings of Arbitral
Tribunal), the arbitral tribunal shall regulate its own procedures in relation to the
rights of the Parties to be heard and its deliberations, unless the Parties agree
otherwise in writing.

Article 14.12
Suspension or Termination of Proceedings

1. The Parties may agree that the arbitral tribunal suspend its work at any time
for a period not exceeding twelve months from the date of such agreement. If the
work of the arbitral tribunal has been suspended for more than twelve months, the
authority for establishment of the arbitral tribunal shall lapse unless the Parties agree
otherwise.

2. The Parties may agree to terminate the proceedings of an arbitral tribunal in

the event that a mutually satisfactory solution to the dispute has been found.

3. Before the arbitral tribunal presents its final report, it may at any stage of the
proceedings propose to the Parties that the dispute be settled amicably.

95
 Article 14.13
Time Frame

All time frames stipulated in this Chapter may be reduced, waived or extended
by mutual agreement of the Parties, or by application by either Party to the arbitral
tribunal which is seized of the matter.

Article 14.14
Initial Report

1. The reports of the arbitral tribunal shall be drafted without the presence of the
Parties and shall be based on the submissions and statements made. The arbitral
tribunal shall accord adequate opportunity to the Parties to review the entirety of its
draft report prior to its finalisation and shall include a discussion of any comments by
the Parties in its final report.

2. Unless the disputing Parties otherwise agree, the arbitral tribunal shall, within
ninety days after the last arbitrator is selected, issue to the disputing Parties an initial
report.

3. The initial report shall contain:

(a) findings of fact; and

(b) the determination as to whether a disputing Party has not conformed

with its obligations under this Agreement.

4. In exceptional cases, if the arbitral tribunal considers it cannot issue its initial
report within ninety days, it shall inform the disputing Parties in writing of the reasons
for the delay together with an estimate of the period within which it will issue its
report. Any delay shall not exceed a further period of thirty days unless the disputing
Parties otherwise agree.

5. A disputing Party may submit written comments to the arbitral tribunal on its
initial report within fifteen days of issuance of the report or within such other period
as the disputing Parties may agree.

Article 14.15
Final Report

1. The arbitral tribunal shall issue its final report, within sixty days after the date
of issuance of the initial report. When the arbitral tribunal considers that it cannot
issue its final report within sixty days, it shall inform the Parties in writing of the
reasons for the delay together with an estimate of the period within which it will issue
its final report.

2. The final report of the arbitral tribunal shall be available to the public within
fifteen days after the date of issuance, subject to the requirement to protect
confidential information.

96
3. The final report of the arbitral tribunal shall be final and binding on the Parties.

Article 14.16
Implementation

1. The Party complained against shall promptly comply with the award of the
arbitral tribunal. Where it is not practicable to comply immediately, the Party
complained against shall comply with the award within a reasonable period of time.
The reasonable period of time shall be mutually determined by the Parties, or where
the Parties fail to agree on the reasonable period of time within forty five days of the
release of the arbitral tribunal’s final report, either Party to the dispute may refer the
matter to the arbitral tribunal, which shall determine the reasonable period of time
following consultation with the Parties.

2. Where there is disagreement as to the existence or consistency with this

Agreement of measures taken within the reasonable period of time to comply with
the award of the arbitral tribunal, such dispute shall be decided through recourse to
the dispute settlement procedures in this Chapter, including wherever possible
resorting to the original arbitral tribunal 1. The arbitral tribunal shall provide its report
to the Parties within sixty days after the date of the referral of the matter to it. When
the arbitral tribunal considers that it cannot provide its report within this timeframe, it
shall inform the Parties in writing of the reasons for the delay together with an
estimate of the period within which it will submit its report.

Article 14.17
Non-Implementation: Compensation and Suspension of Benefits

1. If the Party complained against fails to bring the measure found to be

inconsistent with the Agreement into compliance with the award of the arbitral
tribunal within the reasonable period of time that Party shall, if so requested, enter
into negotiations with the complaining Party with a view to reaching a mutually
satisfactory compensation.

2. If there is no satisfactory agreement on compensation within twenty days after

the date of receipt of the request mentioned in paragraph 1, the complaining Party
may give thirty days advance notice of its intention to suspend the benefits or other
obligations under this Agreement. Such notification may only be given twenty days
after the date of receipt of the request mentioned in paragraph 1.

3. The suspension of benefits shall only be applied until such time as the non-
conformity is fully eliminated or a mutually satisfactory solution is reached.

4. In considering what benefits to suspend under paragraph 2:

(a) the complaining Party should first seek to suspend benefits or other
obligations in the same sector or sectors as that affected by the
measure or other matter that the arbitral tribunal has found to be
inconsistent with this Agreement; and

1 Consultations under Article 14.4 (Consultations) are not required for these procedures.

97
 (b) the complaining Party may suspend benefits or other obligations in
other sectors if it considers that it is not practicable or effective to
suspend in the same sector.

5. Any suspension of benefits shall be restricted to benefits accruing to the other

Party under this Agreement.

6. Upon request of the Party complained against, Parties shall enter into
consultation to discuss matters relating to:

(a) elimination of the non-conformity in accordance with the findings of the

arbitral tribunal; or

(b) the level of concessions or other obligations suspended by the

complaining Party pursuant to this Article.

Article 14.18
Expenses

Each Party shall bear the costs of its appointed arbitrator and its own
expenses and legal costs. Unless the Parties otherwise agree, the costs of the chair
of the arbitral tribunal and other expenses associated with the conduct of its
proceedings shall be borne in equal parts by both Parties.

98
 CHAPTER 15
INSTITUTIONAL PROVISIONS

Article 15.1
Joint Committee

1. A Joint Committee shall be established under this Agreement which may meet
at the level of Ministers or senior officials, as mutually determined by the Parties. The
Joint Committee shall be co-chaired by senior government officials of the Parties,
unless the Parties agree to convene the meeting at ministerial level. Each Party shall
be responsible for the composition of its delegation.

2. The functions of the Joint Committee shall be to:

(a) review the implementation and operation of this Agreement;

(b) consider any matters relating to the implementation of this Agreement;

(c) supervise and coordinate the work of all Sub-Committees established

under this Agreement;

(d) adopt any decisions and recommendations of the Sub-Committees if

necessary; and

(e) carry out any other functions as the Parties may agree.

3. The Joint Committee may:

(a) refer matters to a Sub-Committee for advice, and consider matters

raised by any Sub-Committee established under this Agreement;

(b) establish ad hoc Working Groups to address specific issues where

these are not more appropriately dealt with by an existing Sub-
Committee;

(c) further the implementation of the Agreement’s objectives through

implementing arrangements;

(d) explore measures for the further expansion of trade and investment
among the Parties and identify appropriate areas of commercial,
industrial and technical cooperation between relevant enterprises and
organisations of the Parties;

(e) seek to resolve differences or disputes that may arise regarding the
interpretation or application of this Agreement including matters
referred to it pursuant to Chapter 14 (Dispute Settlement Mechanism);
and

99
 (f) consult third parties on any matter falling within the responsibilities of
the Joint Committee where this would help the Joint Committee make
an informed decision.

4. The Joint Committee may establish its rules and procedures and financial
arrangements, if necessary.

5. The Joint Committee shall convene its inaugural meeting within one year after
this Agreement enters into force. Its subsequent meetings shall be held at such
frequency as the Parties may agree upon. Upon request by a Party, special
meetings of the Joint Committee may be convened at a mutually convenient date.
The Joint Committee shall convene alternately in Malaysia and India, unless the
Parties agree otherwise.

Article 15.2
Sub-Committees

1. The following Sub-Committees shall be established on the date of entry into

force of this Agreement:

(a) Sub-Committee on Trade in Goods;

(b) Sub-Committee on Customs Cooperation;

(c) Sub-Committee on Sanitary and Phytosanitary Measures;

(d) Sub-Committee on Technical Barriers to Trade;

(e) Sub-Committee on Trade in Services;

(f) Sub-Committee on Investment; and

(g) Sub-Committee on Economic Cooperation.

2. The Sub-Committee on Trade in Goods shall undertake the following

functions:

(a) review the implementation and operation of the Chapters 2 (Trade in

Goods) and 3 (Rules of Origin);

(b) submit a report to the Parties on the implementation and operation of

the Chapters 2 (Trade in Goods) and 3 (Rules of Origin);

(c) consider and recommend to the Parties any amendments to the

Chapters 2 (Trade in Goods) and 3 (Rules of Origin);

(d) supervise and coordinate the work of all Sub-Committees established

under the Chapters 2 (Trade in Goods) and 3 (Rules of Origin); and

(e) carry out other functions as may be agreed to by the Parties.

100
3. The Sub-Committee on Customs Cooperation shall:

(a) comprise representatives of customs and other competent authorities

from each Party and shall draw up its own rules of procedure at its first
meeting. The Sub-Committee may, by mutual consent of the Parties,
invite representatives of relevant entities other than the Parties with the
necessary expertise relevant to the issues to be discussed;

(b) undertake the following functions:

(i) the uniform interpretation, application and administration of

Chapter 4 (Customs Cooperation);

(ii) reviewing the implementation and operation of Chapter 4

(Customs Cooperation);

(iii) identifying areas, relating to Chapter 4 (Customs Cooperation),

to be improved for facilitating trade between the Parties;

(iv) reporting the findings of the customs authorities of both the

Parties to the Joint Committee formed for coordination purposes
in this Agreement; and

(v) considering any other customs matter referred to it by the

customs authorities of both the Parties or by the Joint
Committee formed for coordination purposes in this Agreement.

(c) hold its first meeting within a period of one year from the date of entry
of the Agreement and shall meet thereafter once a year or as often as
required, alternating between the Parties.

4. The Sub-Committee on Sanitary and Phytosanitary Measures shall undertake

the following functions:

(a) review and monitor the implementation of Chapter 6 (Sanitary and

Phytosanitary Measures) and consider any matter incidental thereto;

(b) design, implement and review technical and institutional cooperation

programs to further the objectives of Chapter 6 (Sanitary and
Phytosanitary Measures);

(c) enhance mutual understanding of each Party’s SPS measures and the
regulatory processes that relate to those measures;

(d) address bilateral SPS matters with a view to facilitate trade between
the Parties;

(e) establish definitions for those terms that are not available in the SPS
Agreement;

101
 (f) develop conditions and provisions for approval of establishments; and

(g) carry out other functions as may be agreed to by the Parties.

5. The Sub-Committee on Technical Barriers to Trade shall undertake the

following functions:

(a) exchange information on and discuss issues related to Chapter 7

(Technical Barriers to Trade);

(b) review and monitor the implementation and operation of Chapter 7

(Technical Barriers to Trade);

(c) establish definitions for those terms that are not available in the TBT
Agreement;

(d) strengthen cooperation at relevant international and regional fora on

standards, technical regulations and conformity assessment
procedures;

(e) encourage, promote and otherwise facilitate cooperation between the

public and private organizations on standards, technical regulations
and conformity assessment procedures;

(f) report the findings and the outcome of discussions to the Joint
Committee; and

(g) carry out other functions as may be agreed to by the Parties.

6. The Sub-Committee on Trade in Services shall undertake the following

functions:

(a) review the implementation and operation of the Chapters 8 (Trade in

Services) and 9 (Movement of Natural Persons);

(b) submit a report to the Joint Committee on the implementation and

operation of Chapters 8 (Trade in Services) and 9 (Movement of
Natural Persons);

(c) consider and recommend to the Joint Committee any amendments to

the Chapters 8 (Trade in Services) and 9 (Movement of Natural
Persons) and modification or review of the Schedules of Specific
Commitments;

(d) exchanging information on domestic laws and regulations; and

(e) carry out other functions as may be agreed to by the Parties.

7. The Sub-Committee on Investment shall undertake the following functions:

102
 (a) exchange information on and discuss issues related to Chapter 10
(Investment);

(b) review and monitor the implementation and operation of Chapter 10

(Investment);

(c) oversee the negotiations referred to in Article 10.17 (Work

Programme);

(d) report the findings and the outcome of discussions to the Joint
Committee; and

(e) carry out other functions as may be agreed to by the Parties.

8. The Sub-Committee on Economic Cooperation shall undertake the following

functions:

(a) establish an agreed work programme of cooperative activities;

(b) exchange information in the field of cooperation;

(c) identify new areas of cooperation and new ways to further cooperation
between the Parties;

(d) serve as a channel for dialogue on matters of mutual interest;

(e) oversee the implementation and coordination of the economic

cooperation framework and activities as agreed by the Parties; and

(f) report the findings and the outcome of discussions to the Joint
Committee; and

(g) carry out other functions as may be agreed to by the Parties.

9. The Sub-Committees shall be co-chaired by officials of the Governments of

the Parties and shall have the necessary and relevant expertise related to the
issues, and decisions shall be taken by consensus between the Parties. The Sub-
Committees shall meet at such venues and times as may be agreed by the Parties.

10. To the extent possible, the work of the Sub-Committees shall be conducted
using electronic means, including e-mail, teleconference and video-conference.
Where a physical meeting is required, it shall, unless otherwise agreed by the
Parties, take place contiguous to a meeting of the Joint Committee.

Article 15.3
Contact Points and Exchange of Information

1. Each Party shall designate contact points to facilitate communication on work

undertaken by the Sub-Committees.

103
2. Each Party shall provide to the other Party the names of the designated
contact points, contact details of the contact points including telephone, facsimile,
email and any other relevant details. Each Party shall notify the other Party promptly
of any change of their contact points or any amendments to the contact details.

3. The contact points shall work with their respective government agencies,
private sector representatives and educational and research institutions in the
operation of this Agreement.

4. The contact points shall ensure communication and exchange of information

to facilitate better implementation of this Agreement.

Article 15.4
Nodal Points

The overall coordination for this Agreement shall be undertaken by the

following nodal points:

(a) in the case of Malaysia, the Ministry of International Trade and

Industry; and

(b) in the case of India, the Ministry of Commerce and Industry.

104
 CHAPTER 16
FINAL PROVISIONS

Article 16.1
Annexes and Footnotes

The Annexes and footnotes to this Agreement shall constitute an integral part
of this Agreement.

Article 16.2
Relation to Other Agreements

1. The Parties affirm their rights and obligations with respect to each other under
bilateral and multilateral agreements to which both Parties are parties, including the
WTO Agreement.

2. In the event of any inconsistency between this Agreement and any other
agreements to which the Parties are party, the Parties shall immediately consult with
each other with a view to finding a mutually satisfactory solution.

Article 16.3
Succession of Treaties or International Agreements

Any reference in this Agreement to any other treaty or international agreement

shall be made in the same terms to its successor treaty or international agreement to
which a Party is party.

Article 16.4
Application

Each Party is fully responsible for the observance of all provisions in this
Agreement and shall take such reasonable measures as may be available to it to
ensure their observance by local government and authorities.

Article 16.5
Disclosure of Information

1. Nothing in this Agreement shall be construed to require either Party to furnish

or allow access to information the disclosure of which it considers:

(a) would be contrary to the public interest as determined by its legislation;

(b) is contrary to any of its legislation, including but not limited to those
protecting personal privacy or the financial affairs and accounts of
individual customers of financial institutions;

(c) would impede law enforcement; or

(d) would prejudice legitimate commercial interests of particular

enterprises, public or private.

105
 Article 16.6
Confidentiality

Where a Party provides information to another Party in accordance with this

Agreement and designates the information as confidential, the other Party shall
maintain the confidentiality of the information. Such information shall be used only
for the purposes specified, and shall not be otherwise disclosed without the specific
permission of the Party providing the information, except to the extent that it may be
required to be disclosed in the context of judicial proceedings.

Article 16.7
Financial Provisions

Any cooperative activities envisaged or undertaken under this Agreement

shall be subject to the availability of resources and to the laws, regulations and
policies of the Parties. Costs of cooperative activities shall be borne in such manner
as may be mutually determined from time to time between the Parties.

Article 16.8
Amendments

1. This Agreement may be amended by agreement in writing by the Parties and

such amendments shall enter into force on such a date as may be agreed between
the Parties.

2. Amendments shall not affect the rights and obligations of the Parties provided
for under this Agreement until the amendments enter into force.

Article 16.9
General Reviews

The Parties shall undertake a general review of the Agreement, with a view to
furthering its objectives, at ministerial level, within one year of the entry into force of
this Agreement and thereafter biennially or otherwise as considered mutually
appropriate.

Article 16.10
Duration and Termination

1. This Agreement shall remain in force until one Party gives written notice of its
intention to terminate it.

2. Either Party may terminate this Agreement by giving one year’s advance
notice in writing to the other Party.

3. The other Party may request in writing consultations concerning any matter
that would arise from the termination within forty five days after the date of receipt of
the notice referred to in paragraph 2.

106
4. The requested Party shall enter into consultations in good faith with a view to
reaching a mutually satisfactory solution within thirty days after the date of receipt of
the request referred to in paragraph 3.

Article 16.11
Entry into Force

1. This Agreement shall enter into force on 1 July 2011, and shall remain in force
unless terminated as provided for in Article 16.10 (Termination).

2. The Parties undertake to complete their internal procedures for the entry into
force of this Agreement prior to 1 July 2011.

3. The Parties shall notify each other in writing upon the completion of its internal
procedures for the entry into force of this Agreement.

IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective

Governments, have signed this Agreement.

DONE at Kuala Lumpur, this 18th day of February, 2011 in duplicate copies in the
English language.

FOR THE GOVERNMENT FOR THE GOVERNMENT

OF OF THE REPUBLIC OF
MALAYSIA INDIA

(Dato’ Sri Mustapa Mohamed) (Anand Sharma)

Minister of International Trade Minister of Commerce
and Industry and Industry

107
 Annex 2-1
Schedules of Tariff Commitments

Explanatory Notes

1. The t ariff l ines subject t o t ariff r eduction a nd/or el imination und er t his Annex
are categorised as follows:

(a) Normal Track

(i) Applied MFN tariff rates for tariff lines placed in the Normal Track
will be r educed and s ubsequently eliminated in accordance with
the following tariff reduction and elimination schedule:

(AA) Normal Track 1: 1 July 2011 to 30 September 2013;

(BB) Normal Track 2: 1 July 2011 to 30 June 2016

(ii) Where the a pplied MFN tariff rates are at 0 per cent, they shall
remain at 0 per ce nt. Where t hey hav e bee n r educed t o 0 per
cent, they shall remain at 0 per cent. No Party shall be permitted
to increase the tariff rates for any tariff line, except as otherwise
provided in this Agreement.

(b) Sensitive Track

Applied M FN t ariff r ates above f ive per ce nt for t ariff l ines in t he

Sensitive Track will be reduced to five per cent by 30 June 2016.

(c) Special Products

(i) Special P roducts refer t o I ndia’s crude pal m oi l (CPO), refined

palm oil (RPO), palm kernel oil, palm kernel oil and i ts fractions,
margarine o f v egetable or igin ( edible g rade), co ffee, bl ack tea
and pepper.
 (ii) Applied MFN tariff rates for the Special Products will be r educed
in accordance with the following tariff reduction schedules:

MICECA Preferential Tariffs

Tariff Base Not Later than
Line Rate EIF* 1.1. 1.1. 1.1. 1.1. 1.1. 1.1. 1.1. 31.12. 31.12.
2012 2013 2014 2015 2016 2017 2018 2018 2019
CPO 80 72 68 64 60 56 52 48 44 40 37.5
RPO 90 82 78 74 70 66 62 58 54 45 45
Coffee 100 90 85 80 75 70 65 60 55 50 45
Black Tea 100 90 85 80 75 70 65 60 55 50 45
Pepper 70 66 64 62 60 58 56 54 52 51 50
palm kernel 100 94 88 82 76 70 64 58 52 45 45
oil
palm kernel 100 94 88 82 76 70 64 58 52 45 45
oil and its
fractions
margarine 80 76 72 68 64 60 56 52 48 45 45
of
vegetable
origin
(edible
grade)

*EIF: Entry Into Force of this Agreement

(iii) Any bet ter offers made by I ndia t o ot her co mpeting oi ls or fats
shall also be duly offered to palm products.

(iv) If the applied MFN tariff rate for CPO and RPO is lower than the
preferential t ariff under t his Agreement, t he l ower appl ied r ate
shall prevail.

(d) Highly Sensitive Lists

Tariff l ines placed by t he P arties in t he Highly S ensitive Li st a re

classified into three categories, i.e.:
 (i) Category 1: reduction of applied MFN tariff rates to 50 per cent;

(ii) Category 2: reduction of applied MFN tariff rates by 50 per cent;

and

(iii) Category 3: reduction of applied MFN tariff rates by 25 per cent,

and such tariff reduction shall be achieved by 31 December 2018.

(e) Special Track

Malaysia

(i) The t ariff w ill be r educed for t he f ollowing i tems as per t he

Schedule indicated in the table below:

Products Base 1.7. 1.1. 1.1. 1.1. 1.1. 31.12. 1.1. 31.12.
Rate 2011 2012 2013 2014 2015 2015 2016 2016
Basmati 40 30 28 26 24 22 20 20 20
Rice
Motorcycle 30 27 24 21 18 15 15 12 10
CBU n ew
(8711 2 0
921)

(ii) The in-quota and out -quota tariff rate for the items set out in the
table below will be as follows:

SPECIFIC IN- OUT-

ANNUAL* QUOTA QUOTA
QUOTA RATE RATE
NO HS 9 (HS2007) DESCRIPTION MFN RATES FOR
INDIA
(EIF)**
(UNIT)
In-quota rate – 10% 1,000,000 0% 10%
1 040700111 hens’ eggs
Out-quota rate – 50%
In-quota rate – 10% 500,000 0% 10%
2 040700112 ducks' eggs
Out-quota rate – 50%
In-quota rate – 10% 1,000,000 0% 10%
3 040700910 hens' eggs
Out-quota rate – 50%
 In-quota rate – 10% 500,000 0% 10%
4 040700920 ducks' eggs
Out-quota rate – 50%

* Note; Annual means one calendar year (1 January – 31 December)

**Note: Entry into force

India

The t ariff w ill be r educed for t he following i tems as per t he Schedule

indicated in the table below:

Products Base 1.7. 1.1. 1.1. 1.1. 1.1. 31.12. 1.1. 30.6. 31.12.
Rate 2011 2012 2013 2014 2015 2015 2016 2016 2016
Pineapples
30 27 24 21 18 15 15 12 12 10
(0804.30.00)
Of the
species
gallus
domesticus 30 15 10 10 10 10 10 10 5 5
and ducks for
hatching
(0407.00.10)
Of the
species
gallus
domesticus 30 15 10 10 10 10 10 10 5 5
and ducks for
hatching
(0407.00.20)
Other
30 15 10 10 10 10 10 10 5 5
(0407.00.90)

(f) Exclusion List

Exclusion Li sts shall be su bject t o an a nnual t ariff r eview with a view t o

improving market access.

2. No ap plied t ariff a mong t he P arties shall ex ceed the r ates sch eduled i n t his
Agreement. However, if the applied MFN tariff rate is lower than the scheduled rate, it
shall be applied to the other Party.
3. For tariff lines subject to specific tariff rates, tariff reduction and/or elimination
are in accordance with the modality and timeframes of the category within which such
tariff lines are placed. The proportion of tariff reduction for these tariff lines is equal to
the average margin of tariff reduction of the tariff lines with ad-valorem tariff rates that
are subject to tariff reduction in the same year.

4. Notwithstanding the Schedules in this Annex, nothing in this Agreement shall

prevent any Party from unilaterally transferring any of the products or tariff lines in the
Highly Sensitive or Special Product Lists to the Sensitive Track or Normal Track, or
tariff lines in the Sensitive Track to the Normal Track.

5. The tariff rates specified in the Schedules in this Annex set out only the level
of the preferential tariff rates to be applied by each Party for the tariff lines concerned
in the specified year of implementation and do not prevent any Party from unilaterally
accelerating its tariff reduction or elimination at any time.
Schedule of Tariff Commitments India
Schedule of Tariff Commitments Malaysia

Back to List of Annexes

 Annex 3-1
Product Specific Rules

Part 1
Headnote

1. For the purpose of interpreting the Product Specific Rules set forth in this
Annex:

(a) Chapter means the first two digits of the tariff classification number
under the HS Code;

(b) Heading means the first four digits of the tariff classification number
under the HS Code; and

(c) Sub-Heading means the first six digits of the tariff classification
number under the HS Code.

2. This Annex is set out as follows:

(a) Column 1 – Tariff Heading (4-digit)

(b) Column 2 – Tariff Sub-Heading (6-digit)

(c) Column 3 – Product Description

(d) Column 4 – Applicable Product-Specific Rule(s) of Origin (Origin

Conferring Criteria).

3. Where a tariff heading or sub-heading is subject to alternative Product

Specific Rules, it shall be sufficient to comply with one of the rules.

4. Where the Product Specific Rule requires only a regional value content, the
final process of production must be performed within a Party.

5. A requirement of a change in tariff classification applies only to non-originating

materials.

6. Where the change in tariff classification rule expressly excludes a change

from other tariff classifications, the exclusion applies only to non-originating
materials.

7. For the purposes of column 4 of this Annex:

“WO” means that the good must be wholly produced or obtained in

accordance with Article 3.3 (Wholly Obtained or Produced Goods) of Chapter
3 (Rules of Origin);
 “RVC(XX)” means that the good must have a regional value content of not
less than XX per cent as calculated under paragraph 2 of Article 3.4 (Not
Wholly Obtained or Produced Goods) of Chapter 3 (Rules of Origin);

“CC” means that all non-originating materials used in the production of the
good have undergone a change in tariff classification at the 2-digit level;

“CTH” means that all non-originating materials used in the production of

the good have undergone a change in tariff classification at the 4-digit
level;

“CTSH” means that all non-originating materials used in the production of

the good have undergone a change in tariff classification at the 6-digit
level.

8. Chapter notes within this Annex apply to all headings or subheadings within
the indicated chapter unless there exists a specific exclusion.

Part 2
Product Specific Rules

Column 1 Column 2 Column 3 Column 4

Tariff Tariff Sub- Product Description Product
Heading Heading Specific
Rule
15.07 Soya-bean oil and its fractions, whether or not refined,
but not chemically modified.
1507 1507.90 Other RVC 40%
or CTH
29.33 Heterocyclic c ompounds with n itrogen h etero-atom(s)
only.
2933 2933.69 Compounds containing an unfused triazine ring (whether or RVC 40%
not hydrogenated) in the structure: Other or CTH
38.12 Prepared r ubber ac celerators; co mpound p lasticisers
for rubber o r p lastics, n ot e lsewhere specified o r
included; anti-oxidising preparations and other
compound stabilisers for rubber or plastics.
3812 3812.30 Anti-oxidising preparations and other compound stabilisers RVC 40%
for rubber or plastics or CTH
39.24 Tableware, k itchenware, other h ousehold a rticles a nd
hygienic or toilet articles, of plastics.
3924 3924.90 - Other: RVC 40%
or CTH
44.01 Fuel w ood, in logs, in billets, i n tw igs, in faggots or i n
similar forms; wood in chips or particles; sawdust and
wood waste and scrap, whether or not agglomerated in
logs, briquettes, pellets or similar forms.
4401 4401.10 Fuel wood, in logs, in billets, in twigs, in faggots or in similar CTH
forms
4401 4401.21 Wood in chips or particles, coniferous CTH
4401 4401.22 Wood in chips or particles, non-coniferous CTH
4401 4401.30 Sawdust and wood waste and scrap, whether or not CTH
agglomerated in logs, briquettes, pellets or similar forms
Column 1 Column 2 Column 3 Column 4
Tariff Tariff Sub- Product Description Product
Heading Heading Specific
Rule
44.02 Wood charcoal (i ncluding shell or n ut charcoal),
whether or not agglomerated.
4402 4402.10 - Of bamboo CTH
44.07 Wood s awn o r c hipped lengthwise, s liced o r p eeled,
whether or n ot planed, sanded or end-jointed, of a
thickness exceeding 6 mm.
4407 4407.10 Coniferous: Damar Minyak, Podo, Sempilor and Other CTH
4407 4407.21 - - Mahogany (Swietenia spp): CTH
4407 4407.25 - - Dark Red Meranti, Light Red Meranti and Meranti Bakau: CTH
4407 4407.26 - - White Lauan, White Meranti, White Seraya, Yellow CTH
Meranti and Alan:
4407 4407.29 - - Other: of Kapur, Ramin and Other CTH
4407 4407.91 - - Of Oak (Quercus spp.): CTH
4407 4407.92 - - Of beech (Fagus spp.): CTH
4407 4407.99 - - Other: Heavy hardwoods - Balau, Belian, Bitis etc CTH
44.08 Sheets fo r v eneering (i ncluding th ose o btained b y
slicing l aminated w ood), fo r p lywood o r fo r s imilar
laminated w ood a nd o ther w ood, s awn l engthwise,
sliced o r p eeled, w hether o r n ot p laned, s anded,
spliced o r en d-jointed, o f a th ickness n ot e xceeding 6
mm.
4408 4408.10 - Coniferous: Face veneer sheets CTH
4408 4408.31 - - Dark Red Meranti, Light Red Meranti and Meranti Bakau: CTH
Face veneer sheets
4408 4408.39 - - Other tropical wood: Face veneer sheets CTH
4408 4408.90 - Other wood: Face veneer sheets CTH
44.10 Particle board, oriented strand board (OSB) and similar
board (fo r e xample, wafer board) of wood or o ther
ligneous m aterials, w hether o r n ot a gglomerated w ith
resins or other organic binding substances.
4410 4410.11 - - Of wood: Particle board CTH
4410 4410.12 - - Of wood: Oriented strand board (OSB) CTH
4410 4410.90 - Other CTH
44.11 Fibreboard o f w ood o r o ther l igneous m aterials,
whether o r n ot b onded with r esins o r o ther o rganic
substances.
4411 4411.12 - - Medium density fibreboard (MDF): Of a thickness not CTH
exceeding 5 mm
4411 4411.13 - - Medium density fibreboard (MDF): Of a thickness CTH
exceeding 5 mm but not exceeding 9 mm
4411 4411.14 - - Medium density fibreboard (MDF): Of a thickness CTH
exceeding 9 mm
3
4411 4411.92 - - Other: Of a density exceeding 0.8 g/cm CTH
3
4411 4411.94 - - Other: Of a density not exceeding 0.5 g/cm CTH
44.12 Plywood, veneered panels and similar laminated wood.
4412 4412.10 - Of bamboo RVC 35%
4412 4412.31 - - Other plywood consisting solely of sheets of wood (other RVC 40%
than bamboo), each ply not exceeding 6 mm thickness: or CTSH
With at least one outer ply of tropical wood specified in
subheading Note 1 to this Chapter
Column 1 Column 2 Column 3 Column 4
Tariff Tariff Sub- Product Description Product
Heading Heading Specific
Rule
4412 4412.32 - - Other plywood consisting solely of sheets of wood (other RVC 40%
than bamboo), each ply not exceeding 6 mm thickness: or CTSH
Other, with at least one outer ply of non-coniferous wood:

4412 4412.39 - - Other plywood consisting solely of sheets of wood (other RVC 40%
than bamboo), each ply not exceeding 6 mm thickness: or CTSH
Other
4412 4412.99 - - Other: With at least one outer ply of non-coniferous RVC 35%
wood:
44.20 Wood m arquetry a nd i nlaid w ood; c askets a nd c ases
for j ewellery o r cu tlery, and si milar ar ticles, o f wood;
statuettes a nd o ther o rnaments, o f wood; wooden
articles of furniture not falling in Chapter 94.
4420 4420.10 - Statuettes and other ornaments, of wood: Prayer beads, CTH
of wood
4420 4420.90 - Other: Wood marquetry and inlaid wood: CTH
70.13 Glassware o f a ki nd u sed f or t able, kitchen, toilet,
office, i ndoor decoration o r s imilar p urposes (other
than that of heading 70.10 or 70.18).
7013 7013.49 - - Glassware of a kind used for table (other than drinking RVC 40%
glasses) or kitchen purposes other than of glass-ceramics: or CTH
Other
73.05 Other tubes and pipes (for example, welded, riveted or
similarly closed), having circular cross-sections, the
external diameter of which e xceeds 4 06.4 mm, of i ron
or steel.
7305 7305.11 - - Line pipe of a kind used for oil or gas pipelines: RVC 40%
Longitudinally submerged arc welded or CC
except
from 7208
to 7211
7413 7413.00 Stranded w ire, c ables, p laited b ands a nd th e l ike, o f RVC 40%
copper, not electrically insulated. or CTH
74.18 Table, k itchen o r o ther household a rticles a nd parts
thereof, o f c opper; p ot s courers a nd s couring o r
polishing pads, gloves and the like, of copper; sanitary
ware and parts thereof, of copper.
7418 7418.19 - - Table, kitchen or other household articles and parts RVC 40%
thereof; pot scourers and scouring or polishing pads, gloves or CTH
and the like: Other:
76.04 Aluminium bars, rods and profiles.
7604 7604.10 - Of aluminium, not alloyed RVC 40%
or CTH
82.07 Interchangeable to ols fo r h and to ols, w hether o r n ot
power- operated, or for machine-tools (for example, for
pressing, s tamping, p unching, ta pping, th reading,
drilling, b oring, b roaching, m illing, tu rning o r screw
driving), including dies for drawing or extruding metal,
and rock drilling or earth boring tools.
8207 8207.20 - Dies for drawing or extruding metal RVC 40%
or CTH

Back to List of Annexes

 Annex 3-2
Method of Calculation of FOB Value

1. FOB Value shall be calculated as follows:

(a) FOB Value = Ex-Factory Price + Other Costs

(b) Other Costs in the calculation of the FOB value shall refer to the costs
incurred i n pl acing t he g oods in t he sh ip for ex port, i ncluding b ut no t
limited t o, do mestic transport co sts, st orage and w arehousing, port
handling, brokerage fees, service charges, et cetera.

2. Formula for ex-factory price:

(a) Ex-Factory Price = Production Cost + Profit

(b) Formula for production cost,

(i) Production C ost = Cost of R aw M aterials + La bour C ost +

Overhead Cost

(ii) Cost of Raw Materials shall consist of:

(AA) Cost of raw materials

(BB) Freight and insurance

(iii) Labour Cost shall include:

(AA) Wages

(BB) Remuneration

(CC) Other e mployee benefits associated w ith t he

manufacturing process

(iv) Overhead C osts, (n on-exhaustive l ist) sh all i nclude, bu t not

limited to:

(AA) real property items associated with the production process

(insurance, factory r ent a nd l easing, depreciation on
buildings, r epair a nd m aintenance, t axes, i nterests on
mortgage)

(BB) leasing of and interest payments for plant and equipment

(CC) factory security

(DD) insurance ( plant, equipment a nd materials used i n t he

manufacture of the goods)

(EE) utilities (energy, electricity, water and other utilities directly

attributable to the production of the good)

(FF) research, development, design and engineering

(GG) dies, m oulds, t ooling and t he de preciation, maintenance

and repair of plant and equipment

(HH) royalties or l icenses (in co nnection w ith pat ented

machines or pr ocesses used i n the manufacture o f t he
good or the right to manufacture the good)

(II) inspection and testing of materials and the goods

(JJ) storage and handling in the factory

(KK) disposal of recyclable wastes

(LL) cost elements in computing the value of raw materials, i.e.

port a nd cl earance c harges and i mport d uties paid for
dutiable component.

Back to List of Annexes

 Annex 3-3
Operational Certification Procedures

For t he p urposes of i mplementing C hapter 3 ( Rules of O rigin) o f t his

Agreement, t he following oper ational pr ocedures on t he i ssuance, v erification a nd
other administrative matters relating to the Certificate of Origin (“CO”) shall apply:

Issuing Authorities

1. The CO shall be i ssued by aut horities designated by t he ex porting P arty

(hereinafter r eferred to i ndividually as “Issuing A uthority” or co llectively as “Issuing
Authorities”). The specimen of the CO is as set out in Attachment 3-3-1.

2. Each Party shall provide, electronically or otherwise, original sets of specimen

signatures and specimen of official seals used by their Issuing Authorities, including
their names and addresses for dissemination to the other Party and any subsequent
change in names, addresses, specimen signatures or official seals shall be promptly
informed to the other Party in the same manner.

3. For t he p urpose of d etermining or iginating st atus, an I ssuing A uthority sh all

have t he r ight t o c all for any su pporting doc umentary ev idence or t o ca rry out any
check considered appropriate.

Application for CO

4. The exporter or the producer of the goods satisfying the criteria of preferential
tariff treatment under Chapter 3 (Rules of Origin) shall apply in writing to the relevant
Issuing A uthorities requesting f or pr e-exportation verification o f t he or igin of t he
goods. The r esult o f the v erification, s ubject t o r eview per iodically or whenever
appropriate, shall be acce pted as the supporting ev idence i n v erifying t he origin o f
the sa id g oods to be exported t hereafter. T he pr e-exportation v erification m ay not
apply to the goods of which, by their nature, origin can be easily verified.

5. At t he t ime o f ca rrying out t he formalities f or ex porting t he g oods under

preferential t ariff t reatment, t he ex porter or producer or t heir authorised
representative shall submit a written application for the CO together with appropriate
supporting documents proving that the goods to be exported qualify for the issuance
of a CO.

Pre-Exportation Examination

6. The Issuing Authority shall, to the best of their competence and a bility, carry
out proper examination upon each application for the CO to ensure that:

(a) the ap plication and t he CO are dul y co mpleted and si gned by t he

exporter or producer or their authorised signatory;

(b) the origin of the goods is in conformity with Chapter 3 (Rules of Origin)
of this Agreement;
 (c) the other statements of the CO correspond to supporting documentary
evidence submitted;

(d) description, q uantity and w eight o f g oods, m arks and n umber o f

packages, as specified, conform to the goods to be exported; and

(e) multiple i tems declared o n si ngle i nvoice and si ngle CO shall b e

allowed, pr ovided t hat each i tem q ualifies as an originating good
separately in its own right in accordance with these rules.

Issuance of CO

7. (a) The CO shall be i n a printed format on a n I SO si ze paper or on any

other m edium, including electronic format and sh all be co mpleted i n
English in conformity with the specimen and the instructions contained
therein as set out in the Attachment 3-3-1. The CO shall comprise one
original and one d uplicate copy. E ach CO shall bear a r eference
number given separately by each place or office of issuance.

(b) The Issuing Authorities shall retain the duplicate copy and shall provide
the original t o t he exporter w ho sh all forward i t t o t he i mporter for
submission to the customs authority at the port or place of importation.

(c) In cases where the CO is not accepted by the customs authority of the
importing P arty, the i ssuing aut hority of t he ex porting P arty sh all be
duly notified, within a reasonable period but not exceeding two months
from the date of f iling of i mport d eclaration, o f t he g rounds for t he
denial of preferential tariff treatment.

(d) In ca ses where a CO is not accepted, as st ated i n su bparagraph ( c),

the I ssuing A uthority o f t he exporting par ty sh all se nd detailed
clarification addressing the grounds for non-acceptance of preferential
tariff t reatment r aised by the i mporting P arty, w ithin t wo m onths from
the receipt of notification of such denial of preferential tariff treatment.
The cu stoms au thority of t he i mporting Party sh all r einstate t he
preferential tariff treatment if the clarification is found satisfactory.

8. To i mplement A rticle 3.2 ( Origin C riteria), t he C O i ssued by t he ex porting

Party sh all i ndicate i n Box 8 t he r elevant Article under C hapter 3 ( Rules of O rigin)
under which the good qualifies as originating.

9. Neither er asures nor su perimpositions shall be al lowed o n t he CO. A ny

alteration shall be made by striking out the error and making any addition required.
Such alterations shall be approved and ce rtified by an of ficial authorised to sign the
CO on behalf of the relevant Issuing Authority. Unused spaces shall be cr ossed out
to prevent any subsequent addition.

10. (a) The CO shall be i ssued by t he r elevant I ssuing A uthority of t he

exporting Party at the time of exportation, or within three working days
from the d ate of shipment whenever the goods to be exported can be
 considered or iginating i n t hat P arty w ithin t he meaning o f Chapter 3
(Rules of Origin) of this Agreement.

(b) In ex ceptional ca ses where a CO has not been i ssued a t t he t ime of

exportation or within three working days from the date of shipment due
to i nvoluntary er rors or om issions or other valid reasons, t he CO may
be issued retroactively but not later than nine months from the date of
shipment.

11. In the event of theft, loss or destruction of a CO, the exporter or producer or
their au thorised r epresentative may appl y i n w riting t o t he I ssuing A uthority which
issued i t, for t he ce rtified t rue co py of t he or iginal on t he basi s of t he ex port
documents in t heir p ossession. T he co py so i ssued sh all be ar t he en dorsement
“CERTIFIED T RUE C OPY” in B ox 12 and bear t he date o f t he original CO. T he
certified t rue c opy o f a CO shall b e i ssued within t he v alidity per iod of t he original
CO.

Presentation of CO

12. The original CO shall be submitted to the customs authority of the importing
Party at the time of filing the import declaration for the goods concerned.

Validity of the CO

13. The following time limit for the presentation of the CO shall be observed:

(a) the v alidity of t he CO shall b e t welve m onths from t he d ate of i ts

issuance;

(b) the CO shall be su bmitted t o t he customs authority of t he i mporting

Party within its validity period;

(c) where t he CO is submitted t o the r elevant customs authority o f th e

importing Party after the expiration of its validity period, such CO is still
to be accepted when failure to observe the time limit results from force
majeure or other valid reasons beyond the control of the exporter; and

(d) in all cases, the relevant customs authority in the importing Party may
accept s uch CO provided t hat t he g oods have been i mported be fore
the expiry of the validity period of the said CO.

Discrepancies in the CO

14. (a) Where t he or igin o f goods is not i n do ubt, t he di scovery of m inor

discrepancies between t he st atements made i n t he CO and t hose
made i n t he d ocuments submitted t o t he customs authority of t he
importing P arty for t he p urpose o f c arrying out t he formalities for
importing the goods shall not ipso facto invalidate the CO, if it does in
fact correspond to the said goods.
 (b) For m ultiple g oods decl ared u nder t he sa me CO, a pr oblem
encountered w ith o ne of t he g oods listed sh all not a ffect or del ay t he
granting of preferential t ariff treatment a nd customs clearance of t he
remaining goods listed in that CO. Subparagraph (a)(iii) of paragraph
15 may be applied to the problematic items.

Origin Verification

15. (a) The i mporting P arty m ay r equest a r etroactive ch eck at r andom or

when it has reasonable doubt as to the authenticity of the CO or as to
the accuracy of the information regarding the true origin of the good in
question or o f ce rtain par ts thereof. The Issuing Authority o f t he
exporting P arty sh all co nduct a r etroactive ch eck o n producer’s or
exporter’s cost statement based on the current cost and prices within a
six-month timeframe, specified at the date of exportation subject to the
following procedures:

(i) the r equest for a r etroactive ch eck shall b e acco mpanied w ith
the CO concerned and s hall sp ecify t he r easons and any
additional i nformation suggesting t hat the p articulars given o n
the said CO may be i naccurate, unless the retroactive check is
requested on a random basis;

(ii) the Issuing Authority r eceiving a request f or r etroactive ch eck

shall r espond t o t he request pr omptly and r eply within three
months after receipt of the request;

(iii) in case of reasonable doubt as to the authenticity or accuracy of

the CO the cu stoms aut hority of t he i mporting P arty m ay
suspend pr ovision of preferential t ariff t reatment w hile a waiting
the result of verification. However, it may release the good to the
importer su bject t o any adm inistrative m easures deemed
necessary, pr ovided t hat t hey ar e not held t o b e su bject t o
import prohibition or restriction an d t here is no su spicion of
fraud; and

(iv) the retroactive check process, including the actual p rocess and
the determination of whether t he su bject g ood i s originating or
not, should be completed and t he r esult should be
communicated t o t he importing P arty w ithin si x months. While
the pr ocess of t he r etroactive check is being und ertaken,
subparagraph (iii) shall be applied.

(b) The customs authority of the importing Party may request an importer
for information or documents relating to the origin of imported good in
accordance w ith i ts domestic laws and r egulations before r equesting
the retroactive check pursuant to paragraph (a).
16. (a) If the importing Party is not satisfied with the outcome of the retroactive
check, i t may, un der ex ceptional circumstances, r equest v erification
visits to the premises of the exporter or producer in the territory of the
exporting Party. Prior to conducting a verification visit:

(i) an i mporting P arty sh all del iver a w ritten not ification o f i ts

intention to conduct the verification visit through a focal customs
authority or any other appropriate authority simultaneously to the
following:

(AA) the producer or t he e xporter whose pr emises are t o b e

visited;

(BB) the Issuing Authority of the exporting Party;

(CC) the f ocal customs authority or a ny ot her ap propriate

authority of the exporting Party; and

(DD) the importer of the good subject to the verification visit;

(ii) the written notification mentioned in subparagraph (i) shall be as

comprehensive as possible and shall include, among others:

(AA) the n ame o f t he focal customs authority or any ot her

appropriate authority issuing the notification;

(BB) the name of the producer or the exporter whose premises

are to be visited;

(CC) the proposed date of the verification visit;

(DD) the co verage, sco pe and pur pose o f t he pr oposed

verification v isit, in cluding r eference t o t he g ood su bject
to the verification; and

(EE) the names and designation of the officials performing the

verification visit;

(iii) the i mporting P arty sh all obt ain t he w ritten co nsent o f the
producer or the exporter whose premises are to be visited;

(iv) when a w ritten consent from the producer or the exporter is not
obtained w ithin t hirty days from t he d ate of r eceipt o f t he
notification pursuant to subparagraph (i), the notifying Party may
deny pr eferential t ariff t reatment t o t he g ood r eferred t o i n t he
said CO that w ould h ave been su bject t o t he v erification v isit;
and
 (v) the Issuing Authority receiving the notification may postpone the
proposed verification visit and not ify the importing Party of such
intention w ithin f ifteen day s from t he dat e o f r eceipt o f t he
notification. Notwithstanding any postponement, any verification
visit shall be ca rried out within sixty days from the date of such
receipt, or such longer period as the Parties may agree.

(b) The i mporting P arty c onducting t he verification v isit sh all pr ovide the
producer or the exporter whose good is subject to the verification and
the relevant Issuing Authority with a written determination of whether or
not the subject good qualifies as an originating good.

(c) The determination of whether the good qualifies as an originating good

shall be not ified t o t he producer or t he e xporter, and t he r elevant
Issuing Authority. A ny suspended preferential tariff treatment shall be
reinstated upon such determination.

(d) The producer or the exporter shall be allowed thirty days from the date
of r eceipt o f t he written de termination t o pr ovide i n writing, co mments
or addi tional i nformation, r egarding t he eligibility of t he g ood for
preferential ta riff tr eatment. If the g ood i s still f ound to be non -
originating, the final written determination issued by the importing Party
shall be communicated to the Issuing Authority within thirty days from
the date of receipt of the comments or additional information from the
producer or the exporter.

(e) The v erification v isit pr ocess, i ncluding the actual v isit and t he
determination of whether the subject good is originating or not, shall be
carried out and its results communicated to the Issuing Authority within
a maximum per iod of si x months from t he date w hen t he v erification
visit was conducted. While t he pr ocess of v erification i s being
undertaken, subparagraph (a)(iii) of paragraph 15 shall be applied.

Record Keeping Requirement

17. (a) The application f or CO and al l doc uments related to su ch a pplication

shall be r etained by the Issuing Authorities for not less than five years
from the date of issuance.

(b) A copy of the CO and all relevant documents shall be retained by the
exporter [or pr oducer] for no t l ess than five y ears from the date of
issue.

(c) An i mporter, ex porter or producer may ch oose t o m aintain r ecords

specified i n subparagraphs (a) and ( b), i n any m edium that al lows for
prompt retrieval, including, but not limited to, digital, electronic, optical,
magnetic or hard copy.

(d) Information r elating t o t he v alidity of t he CO shall be f urnished upo n

request of the importing Party.
 (e) An i mporter, ex porter or pr oducer r equired t o maintain documents
related to origin pursuant to subparagraphs (a) and ( b) shall make the
documents available for i nspection by an o fficer of the cu stoms
authority or I ssuing A uthority of a Party conducting a v erification v isit
and shall provide facilities for inspection thereof.

Special Cases

18. When destination of all or parts of the goods exported to a specified port of a
Party i s changed, be fore or a fter t heir ar rival i n t he i mporting P arty, t he f ollowing
rules shall be observed:

(a) If t he g oods have al ready bee n su bmitted t o t he customs authority in

the specified importing P arty, t he CO shall, by a w ritten application of
the importer, be e ndorsed to this effect for all or parts of goods by the
said authority and the original returned to the importer.

(b) If t he ch anging of d estination occu rs during t ransportation t o the

importing Party as specified in the CO, the exporter [or producer] shall
apply in writing, accompanied with the issued CO, for issuance of new
CO for all or parts of goods.

19. For t he purpose o f i mplementing su bparagraph ( b) o f Article 3.8 (Direct

Consignment) o f C hapter 3 ( Rules of Origin), where t ransportation i s effected
through the territory of one or more non-Parties, the following shall be pr oduced to
the customs authority of the importing Party:

(a) a through bill of lading issued in the exporting Party;

(b) a CO issued by the relevant Issuing Authority of the exporting Party;

(c) a copy of the original commercial invoice in respect of the good; and

(d) other, i f any , r elevant su pporting docu ments in ev idence t hat t he

requirements of subparagraph (b) of Article 3.8 (Direct Consignment) of
Chapter 3 (Rules of Origin) are being complied with.

20. (a) Goods sent from an exporting Party for exhibition in another Party and
sold dur ing or a fter t he ex hibition i nto a P arty sh all bene fit from the
preferential tariff treatment under this Agreement on the condition that
the g oods meet t he r equirements of Chapter 3 (Rules of Origin)
provided it is shown to the satisfaction of the relevant customs authority
of the importing Party that:

(i) an exporter has dispatched those goods from the territory of the
exporting P arty t o t he co untry where t he ex hibition i s held a nd
has exhibited them there;
 (ii) the ex porter has sold t he g oods or t ransferred t hem t o a
consignee in the importing Party; and

(iii) the g oods have be en co nsigned d uring t he ex hibition or

immediately t hereafter t o t he i mporting P arty i n t he st ate i n
which they were sent for exhibition.

(b) For pur poses of i mplementing t he su bparagraph ( a), t he CO must be

produced to the relevant customs authority of the importing Party. The
name and address of the exhibition must be indicated in the CO issued
by the relevant Issuing Authority.

(c) Subparagraph ( a) sh all appl y t o any ex hibition, fair or si milar sh ow or

display i n t he v enue w here t he g oods remain und er customs control
during these events.

Third Party Invoicing

21. The customs authority in the importing Party shall accept CO where the sales
invoice is issued either by a business entity located in a non-Party or by an exporter
for t he acco unt of t he sa id business entity, pr ovided t hat t he good m eets t he
requirements of Chapter 3 (Rules of Origin).

Action against Fraudulent Acts

22. (a) When i t i s suspected t hat fraudulent act s in co nnection w ith t he CO

have bee n co mmitted, t he Parties shall cooperate in t he act ion t o be
taken i n t he t erritory of the r espective P arty ag ainst t he per sons
involved.

(b) Each P arty sh all be r esponsible for providing l egal sa nctions for
fraudulent acts related to the CO.

Consultation

23. In t he ca se o f a di spute c oncerning t he determination of origin, t he Parties

shall consult each other with a v iew to resolving the dispute, and the result shall be
notified to the Parties.

Back to List of Annexes

 Attachment 3-3-1
Original /Duplicate

Reference No.
INDIA-MALAYSIA COMPREHENSIVE ECONOMIC
1. Goods consigned from (Exporter's business name, COOPERATION AGREEMENT
address, country. In the case of third party
invoicing, name and country of the business
entity issuing the invoice) PREFERENTIAL TARIFF TREATMENT
CERTIFICATE OF ORIGIN
(Combined Declaration and Certificate)

2. Goods consigned to (Consignee's name, address, FORM IMCECA

country) Issued in __________________
(Country)
See Notes Overleaf

3. Means of transport and route (as far as known) 4. For Official Use

Departure date Preferential Treatment Given Under India-Malaysia

Comprehensive Economic Cooperation Agreement
Preferential Tariff

Vessel's name/Aircraft etc. Preferential Treatment Not Given (Please

state reason/s)

Port of Discharge

..................................................................................
Signature of Authorised Signatory of the Importing
Country

5. Item 6. Marks and 7. Number and type of 8. Origin criterion 9. Gross 10. Number and
number numbers on packages, description of (see Notes weight or date of
packages goods (including quantity overleaf) other quantity Invoices
where appropriate and HS and value
number of the importing (FOB)
country)

11. Declaration by the exporter 12. Certification

The undersigned hereby declares that the above It is hereby certified, on the basis of control
details and statement are correct; that all the goods carried out, that the declaration by the
were produced in exporter is correct.

.............................................................
(Country)

and that they comply with the origin requirements

specified for these goods in the India-Malaysia
Comprehensive Economic Cooperation Agreement
for the goods exported to

.............................................................
(Importing Country)

............................................................. ................................................................................
Place and date, signature of Place and date, signature and stamp of
authorised signatory certifying authority

13. Where appropriate please tick:

□ Third Party Invoicing □ Exhibition □ Issued Retroactively □ Cumulation
 Attachment 3-3-1
Original /Duplicate

OVERLEAF NOTES

1. Parties which accept this form for the purpose of preferential tariff treatment under
the India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA):

INDIA MALAYSIA

2. CONDITIONS: To enjoy preferential tariff treatment under the IMCECA, goods sent
to any Parties listed above:

(i) must fall within a description of goods eligible for preferential tariff treatment
in the country of destination;

(ii) must comply with the consignment conditions in accordance with Article 3.8
(Direct Consignment) of Chapter 3 (Rules of Origin) of the IMCECA; and

(iii) must comply with the origin criteria in Chapter 3 (Rules of Origin) for the
IMCECA.

3. ORIGIN CRITERIA: For goods that meet the origin criteria, the exporter and/or
producer must indicate in Box 8 of this Form, the origin criteria met, in the manner
shown in the following table:

Circumstances of production or manufacture in Insert in Box 8

the first country named in box 11 of this form
(a) Goods satisfying Article 3.3. (Wholly “WO”
Obtained or Produced Goods) of Chapter 3
(Rules of Origin)
(b) Goods satisfying paragraph 1(a) of Article 3.4 Appropriate qualifying criteria
(Not Wholly Obtained or Produced Goods) of
Chapter 3 (Rules of Origin)
(c) Goods satisfying paragraph 1(b) of Article 3.4 “QVC [ ]% and CTSH”
(Not Wholly Obtained or Produced Goods) of
Chapter 3 (Rules of Origin)
(d) Goods satisfying Article 3.6 (De Minimis) of Appropriate qualifying criteria
Chapter 3 (Rules of Origin)

4. EACH ARTICLE MUST QUALIFY: It should be noted that all the goods in a
consignment must qualify for preferential tariff treatment under this Agreement
separately in their own right. This is of particular relevance when similar articles of
different sizes or spare parts are declared on single invoice and single CO.

5. DESCRIPTION OF GOODS: The description of goods must be sufficiently detailed

to enable the goods to be identified by the customs authority of the importing Party.
Name of producer and any trade mark shall also be specified.

6. HARMONIZED SYSTEM NUMBER: The Harmonized System number shall be that of

the importing Party.

7. EXPORTER: The term “Exporter” in Box 11 may include the producer.

8. FOR OFFICIAL USE: The customs authority of the importing Party must indicate (√)
in the relevant boxes in Box 4 whether or not preferential tariff treatment is accorded.
 Attachment 3-3-1
Original /Duplicate

9. THIRD PARTY INVOICING: In cases where invoices are issued as per paragraph 21
of Annex 3-3 (Operational Certification Procedures), “the Third Party Invoicing” box
should be ticked (√) and such information as name and country of the business entity
issuing the invoice shall be indicated in Box 1.

10. EXHIBITIONS: In cases where goods are sent from the territory of the exporting
Party for exhibition in another country and sold during or after the exhibition for
importation into the territory of a Party, in accordance with paragraph 20 of Annex 3-3
(Operational Certification Procedures), the “Exhibitions” box should be ticked (√) and
the name and address of the exhibition indicated in Box 2.

11. ISSUED RETROACTIVELY: In cases of CO being issued retroactively, in

accordance with paragraph 10 of Annex 3-3 (Operational Certification Procedures),
the “ISSUED RETROACTIVELY” box should be ticked (√).

Back to List of Annexes

 Annex 6-1
(List of Products for Request for Equivalence)

Back to List of Annexes

 Annex 7-1
List of Products for which Equivalence of Technical Regulations
Has Been Accepted

Back to List of Annexes

 Annex 7-2
Mutual Recognition Agreements

Back to List of Annexes

 Annex 8-1
India’s Schedule of Specific Commitments

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
I. HORIZONTAL COMMITMENTS
ALL SECTORS 3) For sectors and sub-sectors scheduled in 3) In case of collaboration with public sector
INCLUDED IN THIS the sectoral section, the policy on foreign direct enterprises or government undertakings as
SCHEDULE investment (“FDI”) as announced by the joint venture partners, preference in access
Government of India from time to time, other will be given to foreign service suppliers or
than those already specified, shall apply. It is entities which offer the best terms for
clarified that with regard to foreign equity and transfer of technology.
other restrictions specified in sectoral
commitments, such restrictions shall prevail
over any provision of the policy on FDI
announced from time to time with regard to
relevant sectoral commitments.

3) Taxation laws for domestic and foreign

service suppliers, as per the provisions of
the Income Tax Act, 1961 or the relevant
applicable law, shall apply.
3) Subsidies, where granted, shall be available
only to domestic service suppliers.

4) Unbound except as per the commitments 4) Unbound except as per the commitments
in the Chapter 9 (Movement of Natural in the Chapter 9 (Movement of Natural
Persons). Persons).

Business Visitors and Intra-Corporate

Transferees will have access in all sectors and
sub-sectors committed unless specified in the
sectoral section.

The category of Installer and Servicer will have

access in sectors and sub-sectors, where
applicable subject to the conditions inscribed in
the Chapter 9 (Movement of Natural Persons).

List of Service Sectors in respect of which

Contractual Service Suppliers and
Independent Professionals will have access is
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
given below:

Contractual Service Suppliers

The service contract has to be obtained in one
of the sectors listed below and subject to the
conditions inscribed in the Chapter 9
(Movement of Natural Persons) and additional
conditions mentioned in the sub-sector :
• Engineering Services (CPC 8672)
• Integrated Engineering Services (CPC
8673)
• Architectural Services (CPC 8671)
• Urban Planning and landscape
Architectural Services (CPC 8674)
• Computer and Related Services (CPC
84)
• Management Consulting Services
(excluding all services relating to legal
consultancy) (CPC 86501, 86502,
86503, 86505, 86506, 86509)

Independent Professionals:
The service contract has to be obtained in one
of the sectors listed below and subject to the
conditions inscribed in the Chapter 9
(Movement of Natural Persons) and additional
conditions mentioned in the sub-sector :
• Accounting and Book-keeping services
(CPC Ex. 862)
• Engineering Services (CPC 8672)
• Integrated Engineering Services (CPC
8673)
• Architectural Services (CPC 8671)
• Urban Planning and landscape
Architectural Services (CPC 8674)
• Computer and Related Services (CPC
84)
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
• Management Consulting Services
(excluding all services relating to legal
consultancy) (CPC 86501, 86502,
86503, 86505, 86506, 86509)

II. SECTOR – SPECIFIC COMMITMENTS

1. BUSINESS
SERVICES

A. Professional
Services

(b) Accounting and 1) None 1) None

Book Keeping Services 2) None 2) None
(CPC 862) 3) Unbound 3) Unbound
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
(excluding Auditing section section and further subject to the requirement
Services) of obtaining professional indemnity insurance
from home country of service provider.

(d) Architectural 1) None 1) None

Services (CPC 8671) 2) None 2) None
3) None except that the establishment would 3) Unbound
be only through incorporation as partnership
firm constituted by Architects with a foreign
equity ceiling of 51 per cent and subject to the
condition that in the case of foreign investors
having prior collaboration in that specific
service sector in India, Foreign Investment
Promotion Board (“FIPB”) approval would be
required. 4) Unbound except as in the horizontal
section
4) Unbound except as in the horizontal
section
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments

(e) Engineering 1) None 1) None

Services 2) None 2) None
(CPC 8672) 3) None except that the establishment would 3) Unbound
be only through incorporation with a foreign
equity ceiling of 51 per cent and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section. horizontal section

(f) Integrated 1) None 1) None

engineering services 2) None 2) None
(CPC 8673) 3) None except that the establishment would 3) Unbound
be only through incorporation with a foreign
equity ceiling of 51 per cent and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required. 4) Unbound except as in the horizontal
4) Unbound except as in the horizontal section
section

(g) Urban planning and 1) None 1) None

landscape 2) None 2) None
architectural services 3) None except that the establishment would 3) Unbound
(CPC 8674) be only through incorporation as
partnership firm constituted by Architects
with a foreign equity ceiling of 51 per cent
and subject to the condition that in the case
of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section section
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(h) Medical and Dental 1) None for provision of services on provider 1) None
Services (CPC 9312) to provider basis such that the transaction
is between established medical institutions
covering areas of second opinion to help in
diagnosis of cases or in the field of
research.
2) None 2) None
3) Only through incorporation with a foreign 3) Unbound.
equity ceiling of 51 per cent subject to the
condition that the latest technology for
treatment will be brought in and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section. None for charitable horizontal section
purposes

(i) Veterinary services 1) None 1) None

(CPC 932) 2) None 2) None
3) None except that in the case of foreign 3) None
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. Section
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(j) Services provided by 1) None for provision of services on provider 1) None.
midwives, nurses, to provider basis such that the transaction
physiotherapists and is between established medical institutions
para-medical covering areas of second opinion to help
personnel in diagnosis of cases or in the field of
(CPC 93191) research.
2) None. 2) None.
3) Only through incorporation with a foreign 3) Unbound.
equity ceiling of 51 per cent subject to the
condition that the latest technology for
treatment will be brought in and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section. horizontal section.

B. Computer and 1) None. 1) None.

Related Services 2) None. 2) None.
(CPC 84) 3) None except that the establishment would 3) None.
be only through incorporation.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section. horizontal section.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
C. Research and 1) Unbound 1) Unbound
Development 2) Unbound* 2) Unbound*
Services 3) Subject to a foreign equity ceiling of 70 per 3) None
cent and that the establishment would be
(a) R&D services on the only through incorporation and subject to
following natural the condition that in the case of foreign
sciences only: investors having prior collaboration in that
specific service sector in India, FIPB
Heat, light, approval would be required.
electromagnetism, 4) Unbound except as indicated in the 4) Unbound except as indicated in the
astronomy, but horizontal section. horizontal section.
excluding atomic
energy and related
matters (CPC
85101)

Engineering and
technology, including
applied science and
technology for
casting, metal,
machinery,
electricity,
communications,
vessels, aircrafts,
civil engineering,
construction,
information, etc.
(CPC 85103)

R&D services in 1) None 1) None

Agricultural Sciences 2) Unbound 2) Unbound
(CPC 85104) 3) Unbound 3) Unbound
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.

(b) R&D services on 1) None 1) None

social sciences and 2) None 2) None
humanities, 3) Subject to a foreign equity ceiling of 70 3) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
excluding law per cent and that the establishment would
(CPC 852**) be only through incorporation and subject
to the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.

D. Real Estate Services

(b) On a fee or contract 1) None 1) None

basis (CPC 822) 2) None 2) None
3) None for Consultancy Services, subject to 3) Unbound
FIPB approval with a foreign equity ceiling
of 51 per cent and also subject to the
condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
E. Rental/Leasing
Services (without
operators)

(b) Rental/ leasing 1) None 1) None

services without 2) None 2) None
operators relating to 3) None subject to the condition that in the 3) None, except that prescribed minimum
aircraft case of foreign investors having prior capitalisation norms must be adhered to.
(CPC 83104) collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section section.
(d) Rental/ leasing 1) Unbound 1) Unbound
services without 2) Unbound 2) Unbound
operators relating to 3) None 3) None, except that prescribed minimum
other machinery capitalisation norms must be adhered to.
and equipment 4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
(CPC 83106 – section. section.
83109)

(e) Rental/ leasing 1) Unbound 1) Unbound

services concerning 2) Unbound 2) Unbound
personal and 3) None, subject to collaboration with Indian 3) None, except that prescribed minimum
household goods partner and also the condition that in the capitalisation norms must be adhered to.
(CPC832) case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section

F. Other Business
Services

(c) Management 1) None 1) None

consulting services 2) None 2) None
excluding all 3) None subject to a foreign equity ceiling of 3) None
services relating to 51 per cent and the condition that in the
legal consultancy case of foreign investors having prior
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(CPC 86501**, collaboration in that specific service sector
86502**, 86503**, in India, FIPB approval would be required.
86505**, 86506**, 4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
86509**) section. section.

(d) Services related to 1) None 1) None

management 2) None 2) None
consulting (CPC 3) None subject to a foreign equity ceiling of 3) None
86601) 51 per cent and the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.

(e) Technical testing 1) None 1) None

and analysis services 2) None 2) None
(CPC 8676) 3) None except that establishment would be 3) None
only through incorporation and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section. horizontal section.

(g) Services incidental to 1) None 1) None

fishing (CPC 882) 2) None 2) None
3) Subject to a foreign equity ceiling of 51 per 3) None
cent and the condition that in the case of
foreign investors having prior collaboration
in that specific service sector in India,
FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.

(k) Placement and 1) None 1) None

supply services of 2) None 2) None
Personnel (CPC 872) 3) None subject to a foreign equity ceiling of 3) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
51 per cent and the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.
(n) Maintenance and 1) None 1) None
repair of equipment 2) None 2) None
(not including 3) Subject to a foreign equity ceiling of 49 per 3) None
maritime vessels, cent and the condition that in the case of
aircraft or other foreign investors having prior collaboration
transport equipment) in that specific service sector in India,
(CPC 633) FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.
(o) Building-cleaning 1) None 1) None
services 2) None 2) None
(CPC 874) 3) Subject to a foreign equity ceiling of 49 per 3) None
cent and the condition that in the case of
foreign investors having prior collaboration
in that specific service sector in India,
FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.
(q) Packaging Services 1) None 1) None
(CPC 876) 2) None 2) None
3) Subject to a foreign equity ceiling of 49 per 3) None
cent and the condition that in the case of
foreign investors having prior collaboration
in that specific service sector in India,
FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section. section.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(s) Convention services 1) None 1) None
(CPC 87909*) 2) None 2) None
3) Subject to a foreign equity ceiling of 51 per 3) None
cent and the condition that in the case of
foreign investors having prior collaboration
in that specific service sector in India,
FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section section
(p) Photographic 1) None 1) None
Services excluding 2) None 2) None
aerial photography, 3) None except that establishment would be 3) None
satellite pictures and only through incorporation with a foreign
satellite enabled equity ceiling of 49 per cent and subject to
photography the condition that in the case of foreign
(CPC 875**) investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
section section

2C. TELECOMMUNI-
CATION SERVICES

a) Voice telephone 1) Unbound 1) Unbound

services (CPC 2) None 2) None
7521**) + Cellular 3) The service will be permitted to be 3) None except the following:
1
mobile telephone provided as per license agreement only
b) Packet switched after the operator gets a licence from the (i) The Chief Officer in charge of
Data Transmission Designated Authority. Technical Network Operations, Chief
Services (CPC Security Officer and officer/officials of
7523**) The operator should be a company the licensee companies dealing with
(i) Radio Paging registered in India with maximum foreign the lawful inception of messages
Services equity direct and/or indirect not exceeding should be resident Indian Citizens.
(ii) Internet Services 51 per cent, subject to FIPB approval. (ii) The Majority Directors on the Board of

1
The License Agreement includes terms and conditions of the license for providing service.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
c) Circuit switched data the licensee shall be Indian Citizens.
transmission Number of licenses, may, however, be (iii) The positions of the Chairman,
services (CPC limited due to scarce resources such as managing Director, Chief Executive
7523**) right of way and spectrum availability Officer and/or Chief Financial Officer,
d) Telex Service (CPC subject to a minimum of two licenses in if held by foreign nationals, would
7523**) each service area. require to be security vetted by
e) Telegraph Services Ministry of Home Affairs in India
(CPC 7522**) Resale of telephone services is not annually.
f) Facsimile Services permitted. (iv) Operation and Maintenance of
(CPC 7521** + telecom network by Indian Engineers
7529**) only.
g) Private Leased (v) Government Public Sector
Circuit Services Undertakings.
(CPC 7522** +
7523**) 4) Unbound except as indicated in the 4) Unbound except as indicated in the
o) Others horizontal commitments. horizontal commitments
(i) V-Sat Services
(ii) Global Mobile
Personal
Communications
Services
Data and Message
transmission services, in
the following:
h) Electronic mail (CPC 1) None except the provision of all services 1) None
7523) is subject to commercial arrangements
i) Voice mail (CPC with licensed Telecom service suppliers.
7523) 2) None 2) None
j) On-line information 3) The service will be permitted to be 3) None
and data base provided as per license agreement only
retrieval (CPC 7523) after the operator gets a licence from the
k) Electronic Data Designated Authority.
Interchange (EDI)
(CPC 7523**) The operator should be a company
l) Enhanced/value registered in India with maximum foreign
added facsimile equity direct and/or indirect not exceeding
services, including 74percent, with FIPB approval.
store and forward,
store and retrieve 4) Unbound except as indicated in the 4) Unbound except as indicated in the
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(CPC 7523) horizontal commitments. Horizontal section.

n) On-line information
and data processing
(CPC 843**)

D. Audiovisual Services 1) Unbound 1) Unbound

2) Unbound* 2) Unbound*
(a) Motion picture or 3) (i) Only through representative offices 3) None.
video distribution which will be allowed to function as
services (CPC branches of companies incorporated
96113) outside India.
(ii) Numerical ceiling in relation to the
import of titles for the India- Malaysia
CECA will out of a worldwide total of
100 titles per year without any special
dispensation to Malaysia and as
provided in the horizontal section.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. horizontal commitments.

3. CONSTRUCTION
AND RELATED
ENGINEERING
SERVICES

A. General construction 1) None 1) None

work for buildings 2) None 2) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(CPC 512) 3) None except that the establishment would 3) Unbound
B. General Construction be only through incorporation with a
work for civil foreign equity ceiling of 74 per cent, and
engineering (CPC subject to the condition that in the case of
513) foreign investors having prior
C. Installation and collaboration in that specific service
assembly work sector in India, FIPB approval would be
(CPC 514+516) required.
D. Building completion 4) Unbound except as indicated in the 4) Unbound except as indicated in the
and finishing work horizontal commitments. horizontal commitments.
(CPC 517)
E. Other
CPC 511+515+518)

4. DISTRIBUTION
SERVICES
(EXCLUDING LIVE
ANIMALS)

A. Commission agents’ 1) None 1) None

services covering 2) None 2) None
sales on a fee or 3) Subject to foreign equity ceiling of 49 per 3) Unbound
contract basis of: cent and approval of Reserve Bank of
India (“RBI”)/FIPB and conformity with
Agricultural raw Foreign Exchange Management Act
materials (“FEMA”) regulations, as applicable and
(CPC 62111**) also subject to the condition that in the
case of foreign investors having prior
Food products collaboration in that specific service
excluding beverages sector in India, FIPB approval would be
and tobacco required.
(CPC 62112**) 4) Unbound, except as in the horizontal 4) Unbound, except as indicated in the
commitments. horizontal commitments.
Machinery, industrial
equipment and
vehicles other than
motor vehicles,
bicycles and
motorcycles
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
(CPC 62114)

Furniture, household
goods, hardware and
iron mongery
(CPC 62115)

Textiles, clothing and

footwear (CPC 62116)
B. Wholesale trade 1) None 1) None
services 2) None 2) None
3) Subject to foreign equity ceiling of 49 per 3) Unbound
Agricultural raw cent and approval of RBI/FIPB and
materials conformity with Foreign Exchange
(CPC 6221**) Management Act(FEMA) regulations, as
applicable and also subject to the
Food excluding condition that in the case of foreign
beverages and investors having prior collaboration in that
tobacco (CPC 6222**) specific service sector in India, FIPB
approval would be required.
Textiles, clothing and 4) Unbound except as in the horizontal 4) Unbound, except as in the horizontal
footwear (CPC 6223) commitments. commitments.

Household
appliances, articles
and equipment (6224)

Miscellaneous
consumer goods
(6226)

Machinery, equipment
and supplies
(CPC 6228)
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
5. EDUCATIONAL
SERVICES

C. Higher Education 1) None subject to the condition that service 1) None

Services (CPC 923) providers would be subject to regulations,
as applicable to domestic providers in the
country of origin.
2) None 2) None
3) Subject to a foreign equity ceiling of 51 per 3) Unbound
cent and the condition that fees to be
charged can be fixed by an appropriate
authority and that such fees do not lead to
charging capitation fees or to profiteering.
Subject further to such regulations, already
in place or to be prescribed by the
appropriate regulatory authority.
In the case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as in the horizontal 4) Unbound except as in the horizontal
commitments. commitments.

6. ENVIRONMENTAL
SERVICES

B. Refuse Disposal 1) None 1) None

Services 2) None 2) None
(CPC 9402) 3) None subject to incorporation and a foreign 3) Unbound
equity ceiling of 49 per cent and the
C. Sanitation and condition that in the case of foreign
Similar Services investors having prior collaboration in that
(CPC 9403) specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. horizontal commitments.

8. HEALTH-RELATED
AND SOCIAL
SERVICES
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments

A. Hospital Services 1) None for provision of services on provider 1) None.

(CPC 9311) to provider basis such that the transaction
is between two established medical
institutions, covering the areas of second
opinion to help in diagnosis of cases or in
the field of research.
2) None 2) None
3) Only through incorporation with a foreign 3) Unbound
equity ceiling of 51 per cent and subject to
the condition that the latest technology for
treatment will be brought in and further
subject to the condition that in the case of
foreign investors having prior collaboration
in that specific service sector in India, FIPB
approval would be required. Publicly
funded services may be available only to
Indian citizens or may be supplied at
differential prices to persons other than
Indian citizens.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. None for horizontal commitments
charitable purposes.

9. TOURISM AND 1) None 1) None

TRAVEL-RELATED 2) None 2) None
SERVICES 3) Only through incorporation with a foreign 3) None
equity ceiling of 51 per cent and subject to
A. Hotels and other the condition that in the case of foreign
lodging services investors having prior collaboration in that
(CPC Ex. 641) specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. horizontal commitments.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
B. Travel Agency and 1) None 1) None
Tour Operator 2) None 2) None
Services 3) Only through incorporation with a foreign 3) None
(CPC 7471) equity ceiling of 51 per cent and subject to
the condition that in the case of foreign
investors having prior collaboration in that
specific service sector in India, FIPB
approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. horizontal commitments.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
10. RECREATIONAL,
CULTURAL AND
SPORTING
SERVICES (other than
audio-visual services)

A. Entertainment 1) Unbound 1) Unbound

Services (including 2) None 2) None
theatre, live bands 3) None and subject to the condition that in 3) None
and circus services) the case of foreign investors having prior
(CPC 9619) collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments. horizontal commitments.

D. Sporting and other 1) None 1) None

recreational services 2) None 2) None
(CPC 964**) 3) None and subject to the condition that in 3) None
(excluding lottery, the case of foreign investors having prior
gambling and betting collaboration in that specific service sector
services) in India, FIPB approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal commitments and subject to horizontal commitments.
reciprocity.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments

11. TRANSPORT
SERVICES
A. Maritime transport
services
The commitments in Maritime Transport are made in accordance with the General Agreement on Trade in Services. All commitments are subject to domestic laws,
entry requirements, rules and regulations and the terms and conditions of the Directorate General of Shipping, Reserve Bank of India and any other competent
authority in India. For supply of Maritime Auxiliary Services through commercial presence under Mode 3, it will be only through Indian registered company under any
Central Act or State Act in India and having its principal place of business in India and subject to the condition that in the case of foreign investors having prior
collaboration in that specific service sector in India, FIPB approval would be required.
International Transport 1) (a) Liner Shipping: None except 1) (a) Liner Shipping: None except Access to and use of Port Facilities
- Preference will be given to Indian - Preference will be given to Indian No measures shall be applied to the
(Freight and Passengers Flag vessels for government Flag vessels for government following services which deny
excluding cabotage and cargoes; and Government owned/ cargoes; and Government owned/ reasonable and non-discriminatory
offshore transport as controlled cargo. controlled cargo access to international maritime
defined in Attachment) - Government policy on FOB/FAS - Government policy on FOB/FAS suppliers:
will hold good. will hold good. 1. Pilotage
- Indian Flag vessels will have the - Indian Flag vessels will have the 2. Towing, tug assistance &
first right of refusal for carrying first right of refusal for carrying pushing
such cargo and only thereafter can such cargo and only thereafter can 3. Provisioning, fuelling & watering
foreign flag ships be allowed to be foreign flag ships be allowed to be 4. Garbage collecting & ballast
in-chartered/ taken on international in-chartered/ taken on international waste disposal
rental basis. rental basis. 5. Port Captain services
6. Navigation aids
7. Shore based operational
services essential to ship
operations, including
communications, water and
electrical supplies
8. Emergency repair facilities
9. Anchorage, berth and berthing
services
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
1) (b) Bulk Shipping: None, Except 1) (b) Bulk Shipping: None, Except

(i) Dry, Liquid and Gas other than (i) Preference will be given to Indian
LNG: Flag Vessels.
- Preference will be given to - Preference will be given to
Indian Flag vessels for Indian Flag vessels for
government cargoes; and government cargoes; and
Government owned/ Government owned/
controlled cargo. controlled cargo.
- Government policy on FOB/ - Government policy on FOB/
FAS imports and export will FAS imports and export will
hold good. hold good.
- Indian Flag vessels will have - Indian Flag vessels will have
the first right of refusal for the first right of refusal for
carrying such cargo and only carrying such cargo and only
thereafter can foreign flag thereafter can foreign flag
ships be allowed to be in- ships be allowed to be in-
chartered/ taken on chartered/ taken on
international rental basis. international rental basis.

(ii) LNG: Unbound (ii) LNG: Unbound

1) (c) Passenger: None 1) (c) Passenger: None

2) None 2) None
3) (a) None, but condition that for operating 3) (a) None, but condition that for operating a
a ship under the Indian flag, a registered ship under the Indian flag, a registered
company, or a cooperative society under company, or a cooperative society under
any Central Act or State Act having its any Central Act or State Act having its
principal place of business in India, must principal place of business in India, must be
be established. A maximum of 49 per cent established.
foreign equity, with FIPB approval, is
allowed.
3) (b) Other forms of commercial presence 3) (b) Unbound
for the supply of International Maritime
Transport Services (as per definitions):
Unbound
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
4) (a) Ships crews: Unbound 4) (a) Ships crews: Unbound
4) (b) key shore personnel: Unbound 4) (b) key shore personnel: Unbound
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
MARITIME AUXILIARY
SERVICES
Maritime Cargo Handling 1) Unbound* 1) Unbound*
services 2) None 2) None
3) None, except as indicated in horizontal 3) None, except as indicated in horizontal
commitments/ Head Note to this Schedule commitment/s Head Note to this Schedule
and subject to the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound 4) Unbound

Storage and 1) Unbound* 1) Unbound*

Warehousing services in 2) None 2) None
Ports 3) None, except as indicated in horizontal 3) None, except as indicated in horizontal
commitments/ Head Note to this Schedule commitments/ Head Note to this Schedule
and subject to the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound 4) Unbound

Maritime Agency 1) Unbound 1) Unbound

Services 2) None 2) None
3) None, except as indicated in horizontal 3) None, except as indicated in horizontal
commitments/ Head Note to this Schedule commitments/Head Note to this Schedule.
and subject to the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound 4) Unbound
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
Maritime Freight 1) Unbound 1) Unbound
Forwarding Services 2) None 2) None
3) None, except as indicated in horizontal 3) None, except as indicated in horizontal
commitments/ Head Note to this Schedule commitments/ Head Note to this Schedule
and subject to the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound 4) Unbound

International rental/ 1) Unbound 1) Unbound

charter of vessels with 2) None except obtaining permission from 2) None, except vessels rented by Indian
crew or on bareboat basis Director General (Shipping) for chartering nationals are considered as foreign
(excluding cabotage and a foreign flag vessel in the absence of vessels.
offshore transport) availability of a suitable Indian vessel and
in the case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
3) Unbound 3) Unbound
4) Unbound 4) Unbound

Maintenance and repairs 1) Unbound 1) Unbound

of seagoing vessels 2) None 2) None
3) None, except as indicated in horizontal 3) None, except as indicated in horizontal
commitments/ Head Note to this Schedule commitments/ Head Note to this Schedule.
and subject to the condition that in the
case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound 4) Unbound
 Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons

Sector or Sub-sector Limitations on Market Access Limitations on National Treatment Additional Commitments
Ship Broking Service 1) Unbound 1) Unbound
(CPC 748**) 2) None 2) None
3) None, except as indicated in the Head 3) None, except as indicated in the Head Note
Note and subject to the condition that in
the case of foreign investors having prior
collaboration in that specific service sector
in India, FIPB approval would be required.
4) Unbound except as indicated in the 4) Unbound except as indicated in horizontal
horizontal commitments. commitments.

(*) Unbound due to lack of technical feasibility

(**) Specific commitment for that code does not extend to the total range of services covered under that code.
 Attachment to India’s Schedule of Specific Commitments:
Definitions Related to Maritime Transport Services

1. “International Transport (Freight and Passenger)”, for the purpose of this Schedule, is to
mean transportation of international Maritime Freight and Passengers by seagoing vessels from
the port of loading in one country to the port of discharge in another country.

2. Cabotage: This Schedule does not include any commitments on “Cabotage” or “Maritime
Transport Services” which are described as transportation of passengers or goods between any
port located in India and any other port also located in India and traffic originating and terminating
in the same port located in the country and further includes transportation of passengers or goods
between a port located in India and installation and structures situated on the continental shelf of
India.

3. Offshore Transport: For the purposes of the Schedule only, “Offshore Transport” refers to
shipping services involving the transportation of passengers or goods between a port located in
India and any location installation or structure associated with or incidental to the exploration or
exploitation of natural resources of the continental shelf of India, the seabed of the Indian coastal
seas and the subsoil of the seabed, or situated on the continental shelf of India.

4. “Other forms of Commercial Presence for the supply of International Transport Services”
means ability for International Maritime Transport Service suppliers to undertake local activities
which are necessary for the supply to their customers of a partially or fully integrated transport
service, within which maritime transport constitutes a substantial element.

These activities include, but are not limited to:

(a) marketing and sales of maritime transport and related services through direct contact
with customers, from quotation to invoicing, these services being those operated or
offered by the service supplier itself or by service suppliers with which the service
seller has established standing business arrangements;
(b) acquisition on their own about or on behalf of their customers (and the resale to their
customers) for any transport and related services, including anchorage, berth and
berth services, and onward transport services by any mode, particularly road and rail,
inland waterways, necessary for the supply of the integrated services;
(c) the preparation of transport documents, customs documents, or other documents
related to the origin and character of goods transported;
(d) the provision of business information, including computerized information systems
and electronic data interchange;
(e) setting up of business arrangements with any locally established shipping agency
and the appointment of personnel recruited locally (or, in the case of foreign
personnel, subject to horizontal commitments on movement of personnel);
(f) organizing any aspect of the call of the vessel or taking control over cargoes;
(g) the provision of Ships Managers’ Services.

NOTE: In order to enforce certain standards and conditions which need to be fulfilled by
shipping service suppliers, particularly those providing ship personnel and crew and
also those engaged in providing ships management services, and to ensure that the
owner, operator, agent or manager has:
 - the capability of implementing international standards as well as IMO stipulations
and recommendations;
- the necessary financial structure so that he is responsible and accountable;
- the capability of implementing, the safety; and marine pollution controls;
- fulfilled requirements of quality management and his operations are transparent,

a system of registration/ licensing of shipping service supplier is under consideration

in India.

5. “Ship Managers” means persons entering India as the agents or representatives of a ship’s
owner or operator for the purposes of assessing requirements, negotiating and authorizing
expenditures necessary to the maintenance and operations of a vessel as well as the Handling of
Cargo.

6. “Maritime Cargo Handling Services” means activities exercised by stevedore companies,

including terminal operators, but not including the direct activities of dock workers, when this
workforce is organized independently of the stevedoring or terminal operator companies. The
activities covered, include the organization and supervision of:

- the loading/discharging of cargo to/from a ship;

- the lashing/unlashing of cargo;
- the reception/delivery and safekeeping of cargoes before shipment or after discharge.

The organization and supervision includes the arrangements for (1) engaging skilled
workers (dockworkers), (2) using all necessary equipment for on board or shore use and
appropriate storage space, whether by ownership, rental or otherwise, (3) the checking of parcels
and markings, the weighing and measuring of cargo, and (4) the administrative duties and
responsibilities related to the services.

7. “Maritime Freight Forwarding Services” means the activity of organizing and monitoring
shipments on behalf of shippers through providing such services as the arrangement of actual
transport and related services, consolidation, aggregation, packing of cargo, preparation of
documentation and provision of business information.

8. “Maritime Agency Services” means activities in representing, within a given geographic

area, the business interests of-one or more shipping lines or shipping companies for the following
purposes:

- marketing and sales of maritime transport and related activities from quotation to
invoicing (cargo booking and canvassing);
- issuance of bills of lading on behalf of the companies;
- acquisition and resale of other necessary related services (settlement of disbursements
and claims) preparation of documentation, and provision of business information;
- acting on behalf of the companies in organizing the call of the ship or taking control of
cargoes;
- to make arrangement in order to get all necessary port services required by the foreign
vessel during its stay in Indian Ports;
- to appoint a stevedoring company for cargo loading and unloading on behalf of its
principal;
- to collect freight on behalf of the principal.
9. “Government Cargo” means cargo originating from other countries (import cargoes
including crude oil), petroleum by products, coal, natural gas, raw materials for fertilizers, food-
grains etc.) purchased by Indian Government Agencies/Departments or based on loan/ credit
agreements with other countries, as well as exports by Indian Government Agencies/ Departments
including Government aid.

10. “Maintenance and Repairs of Vessels” means services such as repairs and management of
vessels, mending, fixing or overhauling of a vessel, management of crew and marine insurance,
provided on behalf of a maritime passenger or cargo transport business, or vessel leasing
business.

11. “International rental of vessels with crew or on bare-boat charter basis” means rental and/
or leasing services of all types of sea-going vessels with crew or on bare-boat basis (whereafter
the ship will be manned by Indian nationals only during the period of rental/ lease) for the
purposes of international trade (like tankers, dry bulk cargo vessels, cargo and freight vessels et
cetera).

Back to List of Annexes

 Annex 8-1

Schedule of Malaysia

Explanatory Notes

1. Alphabets indicated against individual sectors or sub-sectors and numbers in

brackets are references to the Services Sectoral Classification List (GATT Document
MTN.GNS/W/120, dated 10 July 1991) and the Provisional Central Product
Classification (Statistical Papers Series M No. 77, Department of International
Economic and Social Affairs, Statistical Office of the United Nations, New York,
1991). These alphabetical and numerical divisions are indicated to enhance the
clarity in the description of specific commitments, but shall not be construed as being
a part of the specific commitments.

2. The scheduling of specific commitments follows the Guidelines for the

Scheduling of Specific Commitments (WTO Document S/L/92, dated 28 March
2001). The Guidelines shall not, however, be construed as being legally binding.

3. The modes of supply 1), 2), 3) and 4) indicated in this Schedule correspond
respectively to the supply of services defined in subparagraphs(u)(i), (ii), (iii) and (iv)
of Article 8.2 (Definitions) in Chapter 8 (Trade in Services).

4. The entry “Unbound” means unbound due to lack of technical feasibility.

5. The use of “**” against individual CPC codes indicates that the specific
commitment for that code does not extend to the total range of services covered
under that code.

6. Wherever Malaysia has committed “None” for Mode 3 under the specific
commitments, this means that the foreign equity given is at 100%.
 Annex 8-1
Malaysia’s Schedule of Specific Commitments

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
HORIZONTAL SECTION
ALL SECTORS INCLUDED
IN THIS SCHEDULE
UNLESS OTHERWISE
INDICATED
3) Acquisition, Mergers and Take-overs 3) Land, Property and Real Estate
The acquisition of assets or interests of Approval may be denied if the acquisition,
Malaysian companies and businesses, disposal or dealing of land or any interest
mergers or take-overs require approval and in land, property and real estate is
apply to the following: undertaken for speculative or non-
productive purpose or for purposes which
(a) the acquisition of the voting rights of a may conflict with the interest of the State.
Malaysian corporation by any single
foreign interest or associated group of Incentives/Preferences
15 per cent or more, or an aggregate Incentives are limited to eligible
foreign interest of 30 per cent or more or Malaysian-owned corporations engaged
exceeding RM 10 million in value; in service sectors promoted by the
Government.
(b) any proposed acquisition of any assets
or interests by any means which will Any measure and special preference
result in ownership or control passing to granted to Bumiputera, Bumiputera status
foreign interest; and companies, trust companies and
institutions set up to meet the objectives
(c) control of Malaysian corporations of the New Economic Policy (“NEP”) and
through any form of joint-venture the National Development Policy (“NDP”)
agreement, management agreement, shall be unbound.
technical assistance agreement or other
arrangements. Corporations in which the Government
has an interest shall, in acquiring services,
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Approval is normally granted. However give first consideration to service suppliers
it may be denied in circumstances where in which the Government has an interest.
the proposed investment conflicts with the This requirement does not prevent the
interest of the State. acquisition of services from other service
suppliers where their services are
competitive in terms of price, quality and
delivery.

4) Unbound except as per the commitments in 4) Unbound, except for the categories of
the Chapter 9 (Movement of Natural natural persons referred to in the market
Persons). access column.

Business Visitors and Intra-Corporate

Transferees will have access in all sectors and
sub-sectors committed, unless specified in the
sectoral section.

The category of Installer and Servicer will have

access in sectors and sub-sectors, where
relevant or applicable.

List of Service Sectors in respect of which

Contractual Service Suppliers (“CSS”) and
Independent Professionals (“IP”) will have
access is given below:

• Accounting, auditing and bookkeeping

services (CPC 862)
• Architectural Services (CPC 8671)
• Engineering Services (CPC 8672)
• Integrated Engineering Services (CPC
8673)
• Urban Planning Services (CPC 86741)
• Landscaping Services (CPC 86742*)
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
• Specialised Medical Services (CPC
93122)
• Veterinary Services (CPC 932)
• Management Consulting Services (CPC
8650*)
• Computer and Related Services (CPC
841, 842, 843, 844, 845, 84910,
84990** )
• Technical Testing and Analysis
Services (CPC 8676)
• Research and experimental
development services on natural
sciences and engineering (CPC 85101,
85103, 85109)
• Services related to management
consulting (CPC 86601)
• Wastewater Management (CPC 9401)
• Related scientific and technical
consulting services (CPC 8675)

Access shall be available under this category

only in the specific service sector in which
contract has been entered into and subject to
conditions inscribed in the Chapter 9
(Movement of Natural Persons).

List of Professions in respect of which CSS and

IP will have access is given below:

• Quantity Surveyor/Cost Engineer

• Property Valuator
• Dental Specialist (For Institution of Higher
Learning)
 Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
• Pharmacist (Temporary registered
pharmacist with criteria set by guidelines
under Pharmacy Board Malaysia)
• (Specialist) Nurses, Physiotherapist and
Paramedics
• Taxation Professionals
• Lecturer (For Institution of Higher
Learning)
• Town Planner
• Dock and Harbour Construction Engineer
• Information Technology Auditor
• Audio & Video Equipment Engineer
Access shall be available under this category
only in the specific professions in which contract
has been entered into and subject to conditions
inscribed in the Chapter 9 (Movement of Natural
Persons).
1
II. SECTOR SPECIFIC COMMITMENTS

1. BUSINESS SERVICES
A. Professional Services

a. Legal services covering 1) None 1) None

advisory and consultancy
services relating only to 2) None 2) None
home country laws,
international law and 3) Only through a corporation incorporated in 3) None
offshore corporation laws the Federal Territory of Labuan

1
An asterisk against a CPC code number indicates that the corresponding service sub-sector in this schedule covers only a part or parts of the service subsector classified under the
CPC concordance.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
of Malaysia (CPC 8619)
Legal services shall only be supplied to
offshore corporations established in the
Federal Territory of Labuan.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
b. Accounting, auditing and 1) None 1) None
bookkeeping services
(CPC 862) 2) None 2) None

3) Only through a locally registered partnership 3) None

with Malaysian accountants or Malaysian
accounting firms and aggregate foreign
interests shall not exceed 49 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of 4) The qualifying
horizontal section. natural persons referred to in the market examination to
access column. determine the
competence and
ability to supply the
services for the
purposes of
registration with
professional bodies
will be conducted in
the English language

c. Taxation services 1) None 1) None

(CPC 863)
2) None 2) None
 Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
3) Only through a locally registered 3) None
partnership with authorized Malaysian tax
agents or private limited companies and the
aggregate foreign interests in the
partnership or private limited company shall
not exceed 40 per cent.

4) In addition to the conditions as indicated in 4) Unbound, except for the categories of 4) The qualifying
the horizontal section, the specialists/ natural persons referred to in the market examination to
experts are subject to registration as tax access column. determine the
agents under Section 153 of the Income competence and
Tax Act 1967 and/or other requirements by ability to supply the
the domestic regulations as well as services for the
fulfillment of residency requirements. purposes of
registration with
professional bodies
will be conducted in
the English language

d. Architectural services 1) None 1) None

(CPC 8671)
2) None 2) None

3) (a) Architectural services may be supplied 3) (a) None

only by a natural person

(b) For multidisciplinary practices (b) Unbound

(Architecture, Engineering and Quantity
2
Surveying) , foreign equity up to a
maximum of 30 per cent for joint
ventures by professionals who are

2
While a multidisciplinary practice can comprise architects, engineers andquantity surveyors, for the purposes of this offer, it does not include quantity surveying services.
 Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
registered in the country of origin.

4) Unbound except as indicated in the 4) Unbound, except for the categories of 4) The qualifying
horizontal section. In addition, the category natural persons referred to in the market examination to
of IP and CSS is subject to an architect who access column. determine the
is a consultant to a project in collaboration competence and
with a Malaysian Professional Architect for ability to supply the
wholly foreign funded projects. services for the
purposes of
registration with
professional bodies
will be conducted in
the English language

e. Engineering services 1) None 1) None

(CPC 8672)
2) None 2) None

3) (a) Engineering services may be supplied 3) (a) None

only by a natural person.

(b) For multidisciplinary practices (b) Unbound

(Architecture, Engineering and Quantity
3
Surveying) , foreign equity up to a
maximum of 30 per cent for joint
ventures by professionals who are
registered in the country of origin.

4) Unbound except as indicated in the 4) Unbound, except for the categories of 4) The qualifying
horizontal section. In addition, the category natural persons referred to in the market examination to
of IP and CSS is subject to temporary access column. determine the

3
While a multidisciplinary practice can comprise architects, engineers and quantity surveyors, for the purposes of this offer, it does not include quantity surveying services.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
registration for a period of one year per competence and
temporary registration. ability to supply the
services for the
purposes of
registration with
professional bodies
will be conducted in
the English language

f. Integrated engineering 1) None 1) None

services
(CPC 8673) 2) None 2) None

3) Only through a representative office, 3) None

regional office or locally incorporated joint-
venture corporation with Malaysian
individuals or Malaysian-controlled
corporations or both for the purpose of
services contract awarded in Malaysia.

The aggregate foreign shareholding in the

joint-venture corporation shall not exceed
30 per cent.

Establishment of such joint-venture

corporation is only for a duration necessary
to complete the services contract.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. In addition, the category natural persons referred to in the market
of IP and CSS is subject to for a period of access column.
up to one year or the duration necessary to
complete the services contract.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
g. Urban Planning Services 1) None 1) None The Board’s qualifying
requirement for
Covering development 2) None 2) None registration of Body
services programmes Corporate to provide
regarding land use, site 3) Only through a locally incorporated joint 3) Unbound urban planning services
selection, control and organization with Malaysian registered town in Malaysia.
utilisation, road systems planners and the aggregate foreign equity
and servicing of land with shall not exceed 30 per cent. The Board’s qualifying
a view to creating and requirements for
maintaining systematic, Establishment of such joint venture registration to determine
coordinated urban corporation is only for duration necessary to the competency and
planning. complete the services contract. eligibility to provide urban
(CPC 86741) planning services in
4) Unbound except as indicated in the 4) Unbound, except for the categories of Malaysia.
horizontal section. In addition, the category natural persons referred to in the market
of IP and CSS is subject to a town planner access column.
who is a consultant (with recognised
qualifications and subject to registration) for
wholly public funded projects and in
collaboration with a Malaysian urban
planning company.

Landscaping services 1) None 1) None

covering the provision of
advisory, planning and 2) None 2) None
designing services for the
aesthetic landscaping of golf 3) Only through a locally incorporated joint- 3) None
courses and theme parks venture corporation with Malaysian
(CPC 86742*) individuals or Malaysian-controlled
corporations or both and the aggregate
foreign shareholding in the joint-venture
corporation shall not exceed 30 per cent.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
4) Unbound except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
access column.

h. Specialised Medical 1) None 1) None

Services
(CPC 93122) 2) None 2) None

covering forensic 3) Specialised medical services may be 3) None

medicine, nuclear supplied only by a natural person.
medicine, geriatrics,
microvascular surgery, 4) Unbound except as indicated in the 4) None except other than: 4) The qualifying
neurosurgery, horizontal section. - Practice only in private hospitals of at examination to
cardiothoracic surgery, least 70 beds; determine the
plastic surgery, clinical - Practice to be only at a specified competence and
immunology and location and a change in location ability to supply the
oncology, traumatology, requires approval; and the setting up services for the
anesthesiology, intensive of individual or joint group practices is purposes of
care specialist, child not permitted. registration with
psychiatry and physical professional bodies
medicine will be conducted in
the English language

i. Veterinary services 1) None 1) None

(CPC 9320)
2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
B. Computer and Related
Services
1) None 1) None
a. Consultancy services
related to the installation 2) None 2) None
of computer hardware
(CPC 841) 3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

b. Software implementation 1) None 1) None

(CPC 842)
2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

d. Data processing services 1) None 1) None

(CPC 843)
2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

e. Database services 1) None 1) None

(CPC 844)
2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must access column.
be supplied pursuant to a service contract
with a juridical person.

f. Maintenance and Repair 1) None 1) None

Services of Computers
(CPC 845) 2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

g. Other computer services 1) None 1) None

(CPC 849**)
2) None 2) None
- data preparation
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
services for clients not 3) None 3) None
involving data
processing services 4) Unbound except as indicated in the 4) Unbound, except for the categories of
(CPC 84910) horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
- other computer services supplied pursuant to a service contract with
n.e.c. covering training a juridical person.
services for staff of
clients; data recovery
services; and
development of creative
content (CPC 84990**)

C. Research and
Development Services

Research and 1) None 1) None

experimental development
services on social 2) None 2) None
sciences and humanities
(CPC 8520 except 85203 3) Only through a locally incorporated joint- 3) None
and 85204) venture corporation with Malaysian
individuals or Malaysian-controlled
corporation or both and the aggregate
foreign shareholding in the joint-venture
corporation shall not exceed 51 percent

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
a. Research and 1) None 1) None
development services on
natural sciences and 2) None 2) None
engineering
3) Only through a locally incorporated joint- 3) None
(CPC 851** except for venture corporation with Malaysian
research and individuals or Malaysian-controlled
development services corporation or both and the aggregate
involving Malaysia’s foreign shareholding in the joint-venture
natural resources, corporation shall not exceed 70 percent.
biodiversity and genetic
materials and CPC 4) Unbound except as indicated in the 4) Unbound, except for the categories of
85105 research and horizontal section, and, in the case of the natural persons referred to in the market
development services on services of Independent Professionals, such access column.
medical sciences and service must be supplied pursuant to a
pharmacy) service contract with a juridical person.

Limited to industrial
activities and defined as
any systematic or
intensive study carried
out in the field of science
or technology with the
object of using the results
of the study for the
production or
improvement of
materials, devices,
products, produce or
processes but does not
include:
(i) Quality control of
products or routine
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
testing of materials,
devices, products or
produce;
(ii) Research in the social
sciences or
humanities;
(iii) Routine data
collection;
(iv) Efficiency surveys or
management studies;
and
(v) Market research or
sales promotion.

c. Interdisciplinary research 1) None 1) None

and development
services 2) None 2) None

(CPC 853** except for 3) Only for contract research and development 3) None
interdisciplinary research company locally incorporated as a joint
and development venture corporation with Malaysian
services involving individuals or Malaysian-controlled
Malaysia’s natural corporations or both and aggregate foreign
resources, biodiversity equity shall not exceed 70 per cent.
and genetic materials)
4) Unbound except as indicated in the 4) Unbound, except for the categories of
Covering industrial horizontal section. natural persons referred to in the market
activities; all science and access column.
engineering disciplines,
including biotechnology
and information
communication
technology; and defined
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
as any systematic or
intensive study carried
out in the field of science
or technology with the
object of using the results
of the study for the
production or
improvement of
materials, devices,
products, produce or
processes but does not
include:
(i) Quality control of
products or routine
testing of materials,
devices, products or
produce;
(ii) Research in the social
sciences or
humanities;
(iii) Routine data
collection;
(iv) Efficiency surveys or
management studies;
and
(v) Market research or
sales promotion.

E. Rental/Leasing Services
without Operators

a. Relating to ships 1) None 1) None

excluding cabotage and
offshore trades (CPC
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
83103) 2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

b. Relating to aircraft 1) None 1) None

(CPC 83104)
2) None 2) None

3) Only through a representative office,

regional office or Malaysian-controlled 3) None
corporation acting as an agent.

4) Unbound except as indicated in the 4) Unbound except as indicated in the

horizontal section. horizontal section.

c. Relating to construction 1) None 1) None

and mining equipment and
industrial plant and 2) None 2) None
equipment
(CPC 83107*) 3) Only through a representative office, 3) None
regional office or Malaysian-controlled
corporation acting as an agent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
d. Leasing or rental services 1) None 1) None
concerning other
machinery and equipment 2) None 2) None
without operator
(CPC 83109*) 3) Only through a locally incorporated 3) None
company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

e. Other : Leasing or rental 1) None 1) None

services concerning
personal and household 2) None 2) None
goods (CPC 832)
3) Only through a locally incorporated 3) None
company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

F. Other Business
Services

a. Advertising Services 1) None 1) None

(CPC8711,8712,8719)
2) None 2) None

3) Only through a locally incorporated joint- 3) None

venture corporation with Malaysian
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
individuals or Malaysian-controlled
corporation or both and the aggregate
foreign shareholding in the joint-venture
corporation shall not exceed 49 percent.

Advertisement through electronic media

Advertisement must have at least 70 per
cent local content including setting, local
natural persons, etc.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

b. Market research and 1) None 1) None

public opinion polling
services (CPC 864) 2) None 2) None

3) Only through a locally incorporated 3) None

company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Management Consulting 1) None 1) None

Services-general, financial
(excluding business tax), 2) None 2) None
marketing, human
resources, production and 3) None 3) None
public relations services
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
(CPC 8650). 4) Unbound except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
access column.

c. Management consulting 1) None 1) None

services covering
advisory, guidance and 2) None 2) None
operational assistance
services concerning 3) Only through a locally incorporated 3) None
management of the company with foreign equity allowed up to
transmission of non- 51 per cent.
conventional energy
(CPC 8650*) 4) Unbound except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
access column.

c. Management consulting 1) None 1) None

services covering
advisory, guidance and 2) None 2) None
operational assistance on
environmental 3) Only through a locally incorporated 3) None
management services company with foreign equity allowed up to
including risk assessment 49 per cent.
services (CPC 8650*)
4) Unbound except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
access column.

c. Management consulting 1) None 1) None

services covering
advisory and guidance in 2) None 2) None
the field of pharmacy as
follows: 3) Only through a locally incorporated 3) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
- Basic material company with foreign equity allowed up to
Manufacturing 51 per cent.
consultancy in the
manufacture of drugs 4) Unbound except as indicated in the 4) Unbound, except for the categories of
in raw material form; horizontal section. natural persons referred to in the market
- New systems of drug access column.
delivery;
- Biotechnology - new
techniques for
influencing the process
and products of living
cells;
- New techniques in
drug development and
methods of producing
drugs and vaccine;
and
- Vaccine production.
(CPC 8650*)
c. Management consulting 1) None 1) None
services covering
advisory and guidance on 2) None 2) None
International Value-
Added Network Services, 3) Only through a locally incorporated 3) None
rural telecom company with foreign equity allowed up to
development and human 51 per cent.
resource development in
telecommunications 4) Unbound except as indicated in the 4) Unbound, except for the categories of
(CPC 8650*) horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
d. Project management 1) None 1) None
services other than for
construction 2) None 2) None
(CPC 86601)
3) Only through a locally incorporated 3) None
company with foreign equity allowed up to
49 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

e. Technical Testing and 1) None 1) None

Analysis Services (CPC
8676 except 86764). 2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

e. Technical Inspection 1) None 1) None

Services (CPC 86764)
2) None 2) None

3) Only through a locally incorporated 3) None

company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
horizontal section, and, in the case of the natural persons referred to in the market
services of IP, such service must be access column.
supplied pursuant to a service contract with
a juridical person.

Specialty photography 1) None 1) None

services (CPC 87504)
2) None 2) None

3) Only through a locally incorporated 3) None

company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

g. Services incidental to 1) None 1) None

agriculture and fishing
covering only specialised 2) None 2) None
consultancy, advisory
and operational 3) Only through a locally incorporated 3) None
assistance on crop and company with foreign equity allowed up to
fisheries management, 51 per cent.
including, value-added
services such as 4) Unbound except as indicated in the 4) Unbound, except for the categories of
preservation techniques, horizontal section. natural persons referred to in the market
etc. (CPC 881*, 882*) access column.

h. Services incidental to 1) None 1) None

manufacturing
(CPC 884, 885 except 2) None 2) None
88442)
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
3) Only through a locally incorporated 3) None
company with foreign equity allowed up to
51 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Operational Headquarters 1) None 1) None

(OHQ) Services
covering general 2) None 2) None
management and
administration, business 3) Only through a locally incorporated wholly 3) None
planning, procurement of foreign-owned company.
raw materials, technical
support, marketing control A foreign-owned company, a regional office
and sales promotion of a foreign-owned company which
planning, training and transfers its OHQ services to Malaysia, a
personnel management, regional office of a foreign-owned company
provision of treasury and established in Malaysia and a foreign-
fund management owned company which is already
services and research and incorporated in Malaysia may seek to
development carried out qualify as an OHQ.
by a company in Malaysia
for its offices and related OHQ must operate in Malaysia and fulfil the
companies outside following criteria:
Malaysia.
(CPC 87909) (a) carry out at least 3 of the OHQ service
activities;

(b) have a sizeable network of companies

outside Malaysia which includes the
parent company or its head office and
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
related companies;

(c) have a well established foreign-owned

company which is sizeable in terms of
assets and employees;

(d) have a network of companies with

substantial number of qualified
executives, professionals, technical and
other supporting personnel;

(e) be able to make decisions

independently without consultations
with its head office or parent
company located outside Malaysia;

(f) be able to contribute to the Malaysian

economy by:

(i) using services such as legal,

accounting etc. provided by
Malaysians;

(ii) creating job opportunities for

Malaysians;

(iii) enabling greater inflow of foreign

funds.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Regional Distribution Centre 1) None 1) None
(“RDC”) (CPC 87909).
2) None 2) None
(An RDC is a collection and
consolidation centre for 3) None except that an RDC must be locally 3) None
finished goods, components incorporated, conducts its business in
and spare parts produced by Malaysia and fulfils the criteria of an RDC.
its own companies for its
own brand to be distributed 4) Unbound except as indicated in the 4) Unbound, except for the categories of
to dealers, importers or horizontal section. natural persons referred to in the market
subsidiaries or other access column.
unrelated companies within
or outside the country.
Among the activities are bulk
breaking, repackaging and
labelling)

International Procurement 1) None 1) None

Centre (“IPC”) (CPC 87909).
2) None 2) None
(IPC refers to a locally
incorporated company which 3) None except that an IPC must be locally 3) None
carries on the business in incorporated, conducts its business in
Malaysia to undertake Malaysia and fulfils the criteria of an IPC.
procurement and sales of
raw materials, components 4) Unbound except as indicated in the 4) Unbound, except for the categories of
and finished products for its horizontal section. natural persons referred to in the market
group of related and access column.
unrelated companies in
Malaysia and abroad)
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Student placement services 1) None 1) None
covering promoting,
recruiting and facilitating 2) None 2) None
students for studies outside
Malaysia (CPC 87909) 3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Translation and 1) None 1) None

interpretation services
(CPC 87905) 2) None 2) None

3) Translation and interpretation services may 3) None

be supplied only by a natural person

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Translation and/or interpretation from the

English language to the Malay language
or vice-versa is not permitted.

Collection Agency services 1) None 1) None

(CPC 87902)
2) None 2) None

3) Unbound 3) Unbound

4) Unbound 4) Unbound
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Duplicating services (CPC 1) None 1) None
87904)
2) None 2) None

3) Unbound 3) Unbound

4) Unbound 4) Unbound

Specialty design services 1) None 1) None

(CPC 87907**)
2) None 2) None
Covering only interior
designs 3) Unbound 3) Unbound

4) Unbound 4) Unbound

2. COMMUNICATION SERVICES
C. Telecommunication
Services

Basic Telecommunications

1. Voice service (wired or 1) None 1) None

wireless) (CPC 7521)
2) None 2) None
2. Packet-switched data
transmission services, 3) (a) Only through acquisition of shares of 3) None
including frame-relay existing licensed public
services, and internet telecommunications operators.
services (CPC 7523)
(b) Foreign shareholding up to 49 per cent
3. Circuit-switched data in these service providers is allowed.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
transmission services
(CPC 7523) 4) Unbound, except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
4. Facsimile services (CPC access column.
7521**, CPC 7529**)

5. Private leased circuit

services (CPC 7522**
and CPC 7523**)

6. Paging services 1) None 1) None

(CPC 75291)
2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Other telecommunication
services

7. Domestic/ International 1) None 1) None

satellite services and
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
satellite links/capacities 2) None 2) None
(inclusive of mobile
satellite) 3) (a) Only through acquisition of shares of 3) None
existing licensed service providers.
8. Satellite earth station
(b) Foreign shareholding up to 49 per cent
9. International switching in these service providers is allowed.
and other international
gateway 4) Unbound, except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
10. Mobile services access column.
analogue/digital cellular

11. Trunked radio services

12. Video transport services

Data and message 1) None 1) None

transmission services
2) None 2) None
Covering electronic mail,
voice mail, online 3) (a) Only through a locally incorporated JV 3) None
information and database corporation with Malaysian individuals
retrieval, enhanced or Malaysia controlled corporations;
facsimile, code and protocol or
conversion, electronic data Only through acquisition of shares of an
interchange existing licensed service providers.
(CPC 7523)
(b) Foreign shareholding up to 49 per cent
in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
access column.

Voice telephone service 1) None 1) None

(CPC 7521)
2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Mobile telephone service 1) None 1) None

(CPC 75213)
2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Telegraph services (CPC 1) None 1) None

7522)
2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Telex services (CPC 7523) 1) None 1) None

2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Mobile data services (CPC 1) None 1) None

7523)
2) None 2) None

3) (a) Only through a locally incorporated JV 3) None

corporation with Malaysian individuals
or Malaysia controlled corporations;
or
Only through acquisition of shares of an
existing licensed service providers.

(b) Foreign shareholding up to 49 per cent

in these service providers is allowed.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

D. Audiovisual Services

Motion picture, video tape 1) None 1) None

and audio recording
distribution services (CPC 2) None 2) None
96113)
3) Only through a locally incorporated joint- 3) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
venture corporation with Malaysian
individuals or Malaysian-controlled
corporations or both and the aggregate
foreign shareholding shall not exceed 30
per cent.

4) Unbound except as indicated in the 4) Unbound except for the categories of

horizontal section natural persons referred to in the market
access column.

3. CONTRUCTION AND RELATED ENGINEERING SERVICES

Pre-erection Work at 1) None 1) None
Construction Site
(CPC 511) 2) None 2) None

Construction Work for 3) (a) Only through a representative office, 3) (a) None
Buildings regional office, or locally incorporated
(CPC 512) joint venture corporation with Malaysian
individuals or Malaysian-controlled
Construction Work for Civil corporations or both and aggregate
Engineering foreign shareholding in the joint venture
(CPC 513) corporation shall not exceed 51
percent for contactor Grade G7 and
Assembly and Erection of shall not exceed 49 per cent for
Prefabricated Constructions contractor Grade G6 and below.
(CPC 514)
(b) Foreign construction companies that (b) Unbound
Special Trade Construction are not locally incorporated may carry
(CPC 515) out the following construction projects
jointly with local contractors, on project-
Installation Work (CPC 516) by-project basis:
Building Completion and (i) Construction projects wholly
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Finishing Work financed by foreign investment
(CPC 517) and/or grants
(ii) Construction projects financed by
loans of international tendering
according to the terms of loans
(iii) Projects with foreign investment
equal to or more than 50 per cent
where local expertise is not
available;
(iv) 100% Malaysian funded
construction projects where local
expertise is not available
Subject to compulsory sub-contracting
to local sub-contractors.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Renting services related to 1) None 1) None

equipment for construction or
demolition of buildings or civil 2) None 2) None
engineering works, with
operator (CPC 518) 3) Only through a representative office, 3) None
regional office, or locally incorporated joint
venture corporation with Malaysian
individuals or Malaysian-controlled
corporations or both and aggregate foreign
shareholding in the joint venture corporation
shall not exceed 30 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
access column.

4. DISTRIBUTION SERVICES

A. Commission agents’ 1) None 1) None

services covering sales
on a fee or contract basis 2) None 2) None
of machinery, industrial
equipment and vehicles 3) Only through a locally incorporated 3) None
other than motor vehicles, company with foreign equity allowed up to
bicycles and motorcycles 49 per cent.
(CPC 62114)
4) Unbound 4) Unbound

B. Wholesale trade services

Hides and skins and of 1) None 1) None

leather (CPC 62215)
2) None 2) None
Fur articles (CPC 62234)
3) Only through a locally incorporated 3) None
Leather goods and travel company with foreign equity allowed up to
accessories (CPC 62267) 49 per cent.

Machinery and equipment 4) Unbound 4) Unbound

related supplies (CPC
62287)
5. EDUCATIONAL SERVICES
C. Higher Education
1) Unbound except for requirement of 1), 2), 3) Unbound including for grant of
Other Higher Education commercial presence federal or state funding or subsidies such
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Services provided by as but not limited to land grants, tax
privately funded higher 2) None benefits, scholarships and loans limited to
education institutions institutions with Government of Malaysia
excluding private higher 3) Only through a joint venture with foreign equity or citizens/permanent residents.
education institutions with equity not exceeding 49 per cent.
government equity or that
receive government Up to 51% foreign equity will be considered
assistance (CPC 92390) which include among others:

(a) courses deemed important to attain

Malaysia’s educational objectives;

(b) potential to generate export revenues.

4) Unbound except for measures affecting the 4) Unbound, except for the categories of
entry and temporary stay of natural persons natural persons referred to in the market
defined below: access column.

Intra-corporate Transferees
Lecturers and experts

10 lecturers and/or experts but not more

than 30 per cent of lecturers employed in an
educational institution who possess the
necessary qualifications, knowledge,
credentials or experience.

6. ENVIRONMENTAL SERVICES
Wastewater Management 1) None 1) None
(CPC 9401)
2) None 2) None
Covers only removal,
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
treatment of industrial 3) Only through a locally incorporated joint- 3) None
effluents. venture corporation with Malaysian
individuals or Malaysian controlled
(Only for services contracted corporations or both and aggregate foreign
by the private sector. Does shareholdings shall not exceed 49 per cent.
not include public works
functions owned and 4) Unbound except as indicated in the 4) Unbound, except for the categories of
operated by federal, horizontal section natural persons referred to in the market
provincial, district or access column.
municipalities or contracted
out by them)

Cleaning services of exhaust 1) None 1) None

gases (CPC 9404-
corresponds to Cleaning 2) None 2) None
Services of Exhaust Gases)
3) Only through a locally incorporated joint- 3) None
Covers only services venture corporation with Malaysian
provided at industrial individuals or Malaysian controlled
premises to remove air corporations or both and aggregate foreign
pollutants including shareholdings shall not exceed 49 per cent.
monitoring of mobile
emissions and 4) Unbound except as indicated in the 4) Unbound, except for the categories of
implementation of control horizontal section natural persons referred to in the market
systems or reduction access column.
programmed.

(Only for services contracted

by the private sector. Does
not include public works
functions owned and
operated by federal,
provincial, district or
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
municipalities or contracted
out by them).

Noise abatement services 1) None 1) None

(CPC 9405-corresponds to
Noise Abatement Services) 2) None 2) None

Covers only monitoring 3) Only through a locally incorporated joint- 3) None

programmed, and venture corporation with Malaysian
installation of noise individuals or Malaysian controlled
reductions and screens in corporations or both and aggregate foreign
residential, commercial and shareholdings shall not exceed 49 per cent.
industrial premises.
4) Unbound except as indicated in the 4) Unbound, except for the categories of
(Only for services contracted horizontal section natural persons referred to in the market
by the private sector. Does access column.
not include public works
functions owned and
operated by federal,
provincial, district or
municipalities or contracted
out by them).

Nature and Landscape 1) None 1) None

Protection Services –
covering only contaminated 2) None 2) None
soil cleanup and remediation
(part of CPC 94060) 3) Only through a locally incorporated joint- 3) None
venture corporation with Malaysian
individuals or Malaysian controlled
(Only for services contracted corporations or both and aggregate foreign
by the private sector. Does shareholdings shall not exceed 49 per cent.
not include public works
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
functions owned and 4) Unbound except as indicated in the 4) Unbound, except for the categories of
operated by federal, horizontal section natural persons referred to in the market
provincial, district or access column.
municipalities or contracted
out by them).

8. HEALTH RELATED AND SOCIAL SERVICES

A. Hospital Services 1) None 1) None

Private hospital services 2) None 2) None

(CPC 93110*)
3) Only through a locally incorporated joint- 3) Establishment of feeder outpatient clinics
venture corporation with Malaysian is not permitted
individuals or Malaysian-controlled
corporations or both and aggregate foreign
shareholding in the joint venture corporation
shall not exceed 49 percent; and

The joint-venture corporation shall operate

a hospital with a minimum of 100 beds.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section natural persons referred to in the market
access column.

Welfare services delivered 1) None 1) None

through residential
institutions to old person and 2) None 2) None
the handicapped (CPC
93311). 3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
horizontal section. natural persons referred to in the market
access column.

Welfare services delivered 1) None 1) None

through residential
institutions to children (CPC 2) None 2) None
93312).
3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Child day-care services 1) None 1) None

including day-care services
for the handicapped (CPC 2) None 2) None
93321).
3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Vocational rehabilitation 1) None 1) None

services for handicapped
(CPC 93324). 2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
access column.

9. TOURISM AND TRAVEL RELATED SERVICES

Hotel, tourist resort and 1) None 1) None
restaurant services
2) None 2) None
covering the management
and operation of hotels or 3) (a) Only through a locally incorporated 3) None
resorts, including outlets joint-venture corporation with Malaysian
which may not necessarily individuals or Malaysian controlled
include ownership of such corporations or both and aggregate
properties foreign shareholdings shall not exceed
(CPC 641, 642, 643) 51 per cent.

(b) None for 4 & 5 star establishments

only.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

B. Travel agencies and tour 1) None 1) None

operators services
(CPC 7471) 2) None 2) None

3) None for inbound travel only. 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Convention and exhibition 1) None 1) None
management services
(CPC 87909) 2) None 2) None

covering the provision of 3) (a) Only through a locally incorporated 3) None

planning, organizational, joint-venture corporation with Malaysian
management and marketing individuals or Malaysian controlled
services for conventions and corporations or both and aggregate
other similar events foreign shareholdings shall not exceed
51 per cent.

(b) None for seating capacity of above

5,000 only.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Theme Park (CPC 96194) 1) None 1) None

2) None 2) None

3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

10. RECREATIONAL, CULTURAL AND SPORTING SERVICES

Other entertainment services 1) None 1) None
(CPC 96191, 96192, 96194)
2) None 2) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments

3) Entertainment services may be supplied 3) None

only by a natural person

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

Participation of Malaysian
entertainers/artistes may be required
based on guidelines of the relevant
Ministries.

Sporting Services (CPC 1) None 1) None

9641)
2) None 2) None
(Sports event promotion and
organisation services) 3) None 3) None

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

11. TRANSPORT SERVICES

Class C Freight 1) None 1) None
Transportation (Private
Carrier License–to transport 2) None 2) None
own goods) (CPC 7123)
3) Only through a locally incorporated joint- 3) None
venture corporation with Malaysian
individuals or Malaysian-controlled
corporations or both and aggregate foreign
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
shareholding in the joint-venture corporation
shall not exceed 49 per cent.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

horizontal section natural persons referred to in the market
access column.

International Maritime 1) None 1) None Following services at the

Transport Services port are available to
2) None 2) None international maritime
Passenger Transportation transport suppliers:
(CPC 7211) 3) Only through a representative office, 3) None i) Pilotage
regional office or locally-incorporated joint- ii) Towing and tug
Freight Transportation venture corporation with Malaysian assistance
excluding cabotage individuals or Malaysian-controlled iii) Provisions, fuelling
(CPC 7212) corporations or both and aggregate foreign and watering
shareholding in the joint-venture corporation iv) Garbage collection
shall not exceed 49 per cent. and ballast waste
disposal
Malaysian registered vessels v) Port Captain’s
To register a vessel in Malaysia, the services
following conditions must be met: vi) Navigations aids
(i) Owner of that vessel must be a vii) Shore-based
Malaysian citizen or corporation operational services
incorporated in Malaysia; including
(ii) Majority shareholding to be held by communications,
Malaysians; water and electrical
(iii) Majority of the board of directors to be suppliers
Malaysians; and viii) Emergency repair
(iv) Principal place of business to be in ix) Anchorage, berth and
Malaysia. berthing services.

4) Unbound except as indicated in the 4) Unbound, except for the categories of

Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
horizontal section. natural persons referred to in the market
access column.

Maritime Freight Forwarding 1) None 1) None

Services
2) None 2) None
Covering activities consisting
of organizing and monitoring 3) Only through a representative office, 3) None
shipment operations on regional office or locally incorporated joint-
behalf of shippers, through venture corporation with Malaysian
the procurement of transport individuals or Malaysian-controlled
and related services, corporations or both. Foreign equity
preparation of allowable up to maximum of 49 per cent.
documentation and provision
of business information 4) Unbound except as indicated in the 4) Unbound, except for the categories of
horizontal section. natural persons referred to in the market
access column.

Maritime Agency services 1) None 1) None

(CPC 7454)
2) None 2) None
(shipping agent only)
3) None 3) None

4) Unbound except as indicated in the 4) Unbound except as indicated in the

horizontal section horizontal section

Vessel salvage and 1) None 1) None

refloating services
(CPC 7454) 2) None 2) None

3) None 3) None
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
4) Unbound except as indicated in the 4) Unbound except as indicated in the
horizontal section horizontal section

Rental of cargo vessels 1) None 1) None

without crew (Bareboat
Charter) for international 2) None 2) None
shipping (CPC 83103)
3) None 3) None

4) Unbound except as indicated in the 4) Unbound except as indicated in the

horizontal section horizontal section

Maintenance and repairs of 1) None 1) None

sea going vessels.
(CPC 8868**) 2) None 2) None

3) Only through a representative office, 3) None

regional office or locally incorporated joint
venture corporation with Malaysian
individuals or Malaysian controlled
corporation or both. Foreign equity
allowable up to maximum of 49 per cent.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section natural persons referred to in the market
access column.

Storage and warehousing 1) None 1) None

services
2) None 2) None
Covering private bonded
warehousing services only 3) Only through a locally incorporated joint- 3) None
(CPC 742**) venture with Malaysian individuals or
Modes of supply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence of natural persons
Additional
Sector or Sub-sector Limitations on Market Access Limitations on National Treatment
Commitments
Malaysian-control corporations or both and
aggregate foreign shareholding shall not
exceed 51 per cent.

4) Unbound, except as indicated in the 4) Unbound, except for the categories of

horizontal section. natural persons referred to in the market
access column.

12. OTHER SERVICES

Skills training services 1) None 1) None

covering the provision of 2) None 2) None

training for technical,
supervisory and production 3) Only through a locally incorporated joint- 3) None
related functional levels in venture corporation with Malaysian
new and emerging individuals or Malaysian-controlled
technologies as follows: corporations or both and aggregate foreign
1) automated manufacturing shareholding in the joint-venture corporation
technology; shall not exceed 30 per cent; and
2) advanced materials
technology; Establishment of local branches requires
3) biotechnology; additional licenses
4) electronics;
5) information technology; 4) Unbound except as indicated in the 4) Unbound, except for the categories of
and horizontal section. natural persons referred to in the market
6) avionics/aviation access column.
technology
(CPC 97090)

Back to List of Annexes

 Annex 8-2
Telecommunications

1. Scope and Coverage

1.1 This Annex applies to:

(a) measures relating t o access to and use of public telecommunications

services;
(b) measures relating t o o bligations of su ppliers of public
telecommunications services; and
(c) other measures relating t o publ ic telecommunications networks or
services.
1.2 This Annex shall ap ply su bject t o r ules, r egulations an d l icence condition as
applicable within the territory of each Party.

1.3 Except t o ensu re t hat ent erprises operating br oadcast st ations and ca ble
systems have co ntinued acc ess to an d us e o f p ublic telecommunications services,
this Annex does not apply to any measure relating to broadcast or cable distribution
of radio or television programming.

1.4 Nothing in this Annex shall be construed to:

(a) require a P arty t o aut horise a se rvice su pplier of t he o ther P arty t o

establish, co nstruct, acq uire, l ease, oper ate, or su pply
telecommunications transport networks or services;

(b) to require a P arty to est ablish, construct, a cquire, l ease, operate or

supply t elecommunications transport n etworks or se rvices not of fered
to the public generally; or

(c) require a P arty t o co mpel any ent erprise exclusively eng aged i n t he
broadcast or ca ble di stribution o f r adio or t elevision pr ogramming to
make av ailable i ts br oadcast or ca ble f acilities as a publ ic
telecommunications network.

2. Definitions

For purposes of this Annex:

(a) backhaul links means end-to-end transmission links from a submarine

cable landing station to another primary point of access to the Party’s
public telecommunication network;

(b) co-location ( physical) means physical acce ss to sp ace i n or der t o

install, maintain, or repair equipment, at premises owned or controlled
and used by a supplier to supply public telecommunications services;

(c) commercial m obile ser vices means p ublic telecommunications

services supplied through mobile wireless means;
(d) cost-oriented rates means based on c ost, an d m ay i nclude a
reasonable profit, an d m ay i nvolve di fferent co st methodologies f or
different facilities or services;

(e) cross-connect l inks means the l inks in a submarine c able l anding

station used to connect submarine cable capacity to the transmission,
switching, and r outing eq uipment o f di fferent suppliers of p ublic
telecommunications s ervices co -located i n t hat su bmarine ca ble
landing station;

(f) dialling parity means the abi lity of an e nd-user t o use a n eq ual
number o f di gits to acce ss a par ticular p ublic telecommunications
service, r egardless of w hich publ ic telecommunications services
supplier the end-user chooses;

(g) end-user means a final co nsumer o f or su bscriber to a p ublic

telecommunications service, i ncluding a se rvice su pplier ot her t han a
supplier of public telecommunications services;

(h) enterprise means an “ enterprise” as defined i n Article 10.2

(Definitions) and includes a branch of an enterprise;

(i) essential f acilities means facilities of a publ ic telecommunications

network or service that:

(i) are exclusively or predominantly provided by a si ngle or lim ited

number of suppliers; and

(ii) cannot feasibly be eco nomically or t echnically su bstituted i n

order to supply a service;

(j) interconnection means linking w ith su ppliers providing publ ic

telecommunications services in order to allow the users of one supplier
to communicate with users of another supplier and t o access services
provided by another supplier;

(k) leased ci rcuits means telecommunications f acilities between t wo or

more designated points that are set aside for the dedicated use of, or
availability to, a particular customer or service supplier or other user of
the service supplier’s choosing;

(l) major s upplier means a s upplier o f p ublic telecommunications

services that has the abi lity t o m aterially af fect t he t erms of
participation (having regard to price and supply) in the relevant market
for public telecommunications services as a result of:

(i) control over essential facilities; or

(ii) use of its position in the market;

 (m) network el ement means a facility or eq uipment us ed i n su pplying a
public telecommunications service, i ncluding f eatures, functions, and
capabilities provided by means of that facility or equipment;

(n) non-discriminatory means treatment no l ess favourable t han t hat

accorded to any other user of like public telecommunications services
in like circumstances;

(o) mobile num ber por tability means the ability of en d-users of public
telecommunications services to retain, at the same location, the same
telephone nu mbers without i mpairment of q uality, r eliability, or
convenience w hen sw itching bet ween t he s ame c ategory of s uppliers
of public telecommunications services;

(p) public t elecommunications s ervice means any t elecommunications

service that a P arty requires, explicitly or in effect, to be offered to the
public generally. S uch services may include, inter alia, telephone and
data t ransmission typically i nvolving cu stomer-supplied i nformation
between two or more points without any end-to-end change in the form
or content of the customer’s information including value added services
as provided for in the laws and regulations of each Party;

(q) reference i nterconnection o ffer means an i nterconnection offer

extended by a m ajor su pplier and filed with or appr oved by a
telecommunications regulatory body t hat i s sufficiently d etailed t o
enable a su pplier o f public telecommunications services that i s willing
to acce pt i ts rates, t erms and co nditions to obt ain i nterconnection
without having to engage in negotiations with the major supplier;

(r) standard has the m eaning assi gned t o i t i n A nnex 1 to the WTO
Agreement on Technical Barriers to Trade;

(s) technical regulation has the meaning assigned to it in Annex 1 to the

WTO Agreement on Technical Barriers to Trade;

(t) telecommunications means the transmission and reception of signals

by any electromagnetic means, including by photonic means;

(u) telecommunications r egulatory bod y means a national body

responsible for the regulation of telecommunications;1

(v) user means a service consumer or a service supplier; and

(w) value-added ser vices means services that a dd v alue t o

telecommunications services through enhanced functionality.

1
With respect to Malaysia, this regulatory body is the Malaysian Communications and M ultimedia Commission.
With respect to India the regulatory body includes the Department of Telecommunications, Telecommunications
Regulatory Authority of India and Telecommunications Dispute Settlement Appellate Tribunal.
3. Access to and Use of Public Telecommunications Services 2

3.1 Each Party shall ensure that service suppliers of the other Party have access
to a nd use of any p ublic telecommunications service, i ncluding l eased ci rcuits,
offered i n i ts territory or acr oss its borders, on r easonable and n on-discriminatory
terms and conditions, including as set out in paragraphs 3.2 through 3.6.

3.2 Each Party shall ensure that service suppliers of the other Party are permitted
to:

(a) purchase or l ease, and a ttach t erminal or ot her eq uipment that

interfaces with a public telecommunications network;

(b) connect ow ned or l eased ci rcuits with publ ic telecommunications

networks and services with circuits leased or owned by another person;

(c) perform switching, signalling, processing, and conversion functions;

(d) use operating protocols of their choice in the supply of any service; and

(e) provide services to individual or multiple end-users over any leased or

owned circuits to the extent that the scope and type of such services
are consistent with each Party’s domestic laws and regulations.

3.3 Each Party shall ensure that no condition is imposed on access to and use of
public telecommunications networks and services, other than as necessary to:

(a) safeguard public service r esponsibilities o f su ppliers of p ublic

telecommunications transport networks and services, in particular their
ability t o m ake their networks and se rvices available t o t he p ublic
generally; or

(b) protect t he t echnical i ntegrity of pu blic telecommunications transport

networks or services.

3.4 If the cr iteria s et ou t i n paragraph 3.3 are s atisfied, c onditions for acce ss to
and use of public telecommunications networks and services may include:

(a) a requirement to use specified technical interfaces, including interface

protocols, for interconnection with such networks and services;

(b) requirement where necessary, for the inter operability of services;

(c) type approval of terminal or other equipment which interfaces with the
networks and technical requirements relating to the attachment of such
equipment to such networks;

2
For greater certainty, neither this nor any other paragraphs prohibit a Party from requiring a service supplier to
obtain a licence to supply specific services.
 (d) restrictions on interconnection of private leased or owned circuits with
such networks or services or with circuits leased or owned by another
service supplier; or

(e) notification, registration and licensing.

3.5 Each P arty shall ens ure that service su ppliers of the ot her P arty m ay use
public telecommunications services for the movement of information in its territory or
across its borders including f or i ntra-corporate co mmunications of s uch se rvice
suppliers, and for access to information contained in databases or otherwise stored
in m achine-readable form i n t he t erritory of either Party. A ny new or am ended
measure o f a Party si gnificantly af fecting su ch use s hall b e no tified a nd s hall b e
subject to consultation in accordance with the provisions of this chapter.

3.6 Notwithstanding par agraph 3.5, a Party m ay t ake su ch measures as are

necessary to ensure the security and confidentiality of messages, provided that such
measures are not applied in a m anner that would constitute a m eans of arbitrary or
unjustifiable discrimination or disguised restriction on trade in services.

3.7 Notwithstanding the preceding paragraphs, each Party may, consistent with
its level of development, place reasonable conditions on access to and use of public
telecommunications t ransport n etworks and se rvices necessary t o st rengthen i ts
domestic telecommunications infrastructure and se rvice capacity and to increase its
participation i n i nternational t rade i n t elecommunications services. S uch co nditions
shall be specified in each Party’s Schedule of Specific Commitments in Annex 8-1.

4. Obligations R elating t o S uppliers of P ublic Te lecommunications

Services

4.1 (a) Each P arty sh all ens ure t hat su ppliers of public telecommunications
services in its territory provide, di rectly, or i ndirectly within t he sa me
territory, interconnection w ith su ppliers of public telecommunications
services of the other Party at reasonable rates.

(b) In carrying out subparagraph (a), each Party shall ensure that suppliers
of p ublic telecommunications services in i ts territory t ake reasonable
steps to protect the confidentiality of commercially sensitive information
of, or relating to, suppliers and end-users of public telecommunications
services obtained as a result of interconnection arrangements and only
use such information for the purpose of providing these services.

4.2 (a) Each P arty sh all ens ure t hat su ppliers of public telecommunications
services do n ot i mpose u nreasonable or di scriminatory co nditions or
limitations on the resale of services.

(b) Each Party may determine in accordance with its laws and regulations
which public telecommunications services must be offered for resale in
accordance with subparagraph (a), based on t he ne ed t o pr omote
competition or such other factors as the Party considers relevant.
4.3 Each P arty sh all end eavour t o ensu re t hat su ppliers of publ ic
telecommunications services in its territory provide mobile number portability by the
relevant au thority t o t he ex tent t echnically f easible, on timely basi s, an d on
reasonable terms and conditions.

4.4 Each Party shall ensure that the relevant authority is authorized to ensure or
that the s uppliers of a par ticular publ ic telecommunications service i n i ts territory
provide, as the c ase m ay be , di alling p arity t o su ppliers of t he sa me p ublic
telecommunications service of t he o ther P arty, and r equire t he su ppliers of p ublic
telecommunications service to offer or afford as the case may be suppliers of public
telecommunications services of t he o ther P arty non -discriminatory a ccess t o
telephone nu mbers, directory assi stance, and operator se rvices with n o
unreasonable dialling delays.

5. Additional O bligations R elating t o Major S uppliers of P ublic

Telecommunications Services

5.1 Each Party shall ensure that a major supplier in its territory accords suppliers
of pu blic telecommunications services of t he ot her P arty t reatment no l ess
favourable than such major supplier accords to its subsidiaries, its affiliates, or non-
affiliated service suppliers regarding:

(a) the av ailability, pr ovisioning, r ates, or q uality of l ike publ ic

telecommunications services; and

(b) the availability of technical interfaces necessary for interconnection.

5.2 (a) Each P arty sh all m aintain a ppropriate m easures for t he p urpose o f
preventing suppliers that, alone or together, are a major supplier in its
territory from engaging in or continuing anti-competitive practices.

(b) The a nti-competitive pr actices referred t o i n subparagraph ( a) i nclude

in particular:

(i) using i nformation o btained from co mpetitors with ant i-

competitive results; and

(ii) not making av ailable, on a t imely basi s, t o suppliers of public

telecommunications services, technical i nformation ab out
essential facilities and commercially relevant information that are
necessary for them to provide services.

5.3 Each Party shall endeavour to ensure that a major supplier in its territory:

(a) offers for r esale, at r easonable r ates,3 to su ppliers of public

telecommunications services of the other Party; and

3
For pur poses of subparagraph ( a), w holesale r ates set p ursuant t o a P arty’s l aws and r egulations s hall b e
considered reasonable.
 (b) does not i mpose u nreasonable or di scriminatory co nditions or
limitations on the resale of such services.

5.4 Each Party may determine in accordance with its laws and regulations which
public telecommunications services must be offered for resale by major suppliers in
accordance with paragraph 5.3, based on t he need t o promote competition or such
other factors as the Party considers relevant.

5.5 Each Party shall provide its telecommunications regulatory body the authority
to require a major supplier in its territory to offer access to network elements on an
unbundled basi s on t erms and co nditions, and at co st-oriented r ates, t hat ar e
reasonable, no n-discriminatory, and t ransparent f or the supply of publ ic
telecommunications services.

5.6 (a) General Terms and Conditions for Interconnection:

Each Party sh all ens ure t hat a major s upplier i n i ts territory pr ovides
interconnection f or the f acilities and eq uipment o f suppliers of publ ic
telecommunications services of the other Party:

(i) at any technically specified feasible point in the major supplier’s

network or in t he ca se o f poi nts not specified by the
telecommunications regulatory body , as per m utual ag reement
between service suppliers;

(ii) under non-discriminatory terms, conditions, and rates 4;

(iii) of a q uality no l ess favourable t han t hat pr ovided by t he major

supplier for i ts own l ike se rvices, f or l ike se rvices of n on-
affiliated se rvice su ppliers, or f or i ts subsidiaries or ot her
affiliates;

(iv) in a t imely 5 fashion, a nd on t erms and co nditions, and a t co st-

oriented r ates, t hat ar e t ransparent, reasonable, hav ing regard
to ec onomic feasibility, an d su fficiently unb undled so that t he
suppliers need not pay for network components or facilities that
they do not require for the service to be provided; and

(v) on r equest, at p oints i n addi tion t o t he n etwork termination

points offered t o t he m ajority of us ers, su bject t o ch arges that
reflect the cost of construction of necessary additional facilities.

4
The Parties understand that interconnection rates are commercially negotiated between suppliers of public
telecommunications transport networks or services.
5
The Parties understand that timeliness may vary from case to case, depending upon the complexity of each
interconnection negotiation, which may be affected by a r ange of factors. However, interconnection may not be
delayed without justifiable reason.
 (b) Options for Interconnecting with Major Suppliers:

Each P arty sh all ensu re t hat su ppliers of publ ic telecommunications

services of t he ot her P arty m ay interconnect t heir f acilities and
equipment with those of a major supplier in its territory:

(i) pursuant to:

(AA) a r eference i nterconnection o ffer or ot her st andard

interconnection offer containing the terms and conditions
that t he major su pplier o ffers generally t o su ppliers of
public telecommunications services; or

(BB) the terms and conditions of an interconnection agreement

in effect; and

(ii) through negotiation of a new interconnection agreement.

(c) Public Availability of Interconnection Offers and Agreements:

(i) Each Party shall require a major supplier in its territory to make
publicly av ailable any r eference i nterconnection offer or o ther
standard i nterconnection offer t hat t he m ajor su pplier o ffers
generally to suppliers of public telecommunications services.

(ii) Each P arty sh all m ake pu blicly a vailable or ensu re t hat t he

applicable pr ocedures f or i nterconnection n egotiations with a
major supplier in its territory are made publicly available.

(iii) Each Party shall require a m ajor supplier in its territory to file all
interconnection ag reements to w hich i t is party w ith i ts
telecommunications regulatory body.

5.7 (a) Each Party sh all e nsure t hat a m ajor su pplier i n i ts territory pr ovides
service su ppliers of t he ot her Party l eased circuits services on t erms
and c onditions, an d at r ates, that ar e r easonable and non-
discriminatory.

(b) In ca rrying out su bparagraph ( a), each P arty sh all pr ovide i ts

telecommunications regulatory body t he aut hority t o r equire a m ajor
supplier i n i ts t erritory t o o ffer l eased ci rcuits services to se rvice
suppliers of the other Party at capacity-based, cost-oriented rates.

5.8 (a) Subject t o su bparagraphs (b) and ( c), e ach P arty sh all e nsure t hat a
major su pplier i n i ts territory pr ovides to su ppliers of public
telecommunications services of the other P arty physical co-location of
equipment necessary for interconnection on terms and conditions, and
at co st-oriented r ates, t hat are r easonable, n on-discriminatory, an d
transparent.
 (b) Where ph ysical co -location i s not pr actical for t echnical r easons or
because of s pace l imitations, e ach Party sh all e nsure that a major
supplier in its territory:

(i) provides an alternative solution; or

(ii) facilitates virtual co-location,

on t erms and co nditions, a nd a t co st-oriented r ates, t hat are

reasonable, non-discriminatory, and transparent.

(c) Each Party may limit which premises are subject to subparagraphs (a)
and ( b), pr ovided the Party sp ecifies any su ch l imitation i n i ts laws or
regulations.

5.9. (a) Each P arty sh all ens ure t hat a m ajor su pplier i n i ts territory affords
access to poles, ducts, conduits, and rights-of-way owned or controlled
by t he major s upplier to suppliers of p ublic telecommunications
services of the other Party on t erms and conditions, and at rates, that
are reasonable, non-discriminatory, and transparent.

(b) Nothing in this Annex shall prevent a P arty from determining, under its
laws and regulations, which particular structures owned or controlled by
major su ppliers in i ts territory ar e required t o be m ade available i n
accordance w ith subparagraph ( a), pr ovided t hat t his determination i s
based on a c onclusion t hat s uch st ructures cannot feasibly be
economically or technically substituted in order to provide a co mpeting
service.

6. Submarine Cable Systems 6

6.1 Where a Party authorizes a supplier to operate a submarine cable system as

a pu blic telecommunications service, i t sh all ensu re t hat s uch s upplier acco rds the
suppliers of public telecommunication se rvices of the ot her P arty r easonable a nd
non-discriminatory t reatment w ith r espect to acc ess t o su bmarine ca ble sy stems
(including landing facilities) in its territory.

6.2 Where a m ajor su pplier o f public international t elecommunication se rvices

controls cable landing facilities and services for which there are no eco nomically or
technically feasible alternatives, the Party shall ensure that the major supplier:

(a) permits suppliers of publ ic telecommunications services of t he o ther

Party to:

(i) use t he major s upplier’s cross-connect l inks in t he su bmarine

cable l anding st ation to co nnect t heir eq uipment t o b ackhaul

6
For greater certainty, neither this nor any other paragraphs prohibit a Party from requiring a service supplier to
obtain a licence to supply specific services.
 links and s ubmarine ca ble ca pacity o f any su pplier of
telecommunications; and

(ii) co-locate t heir transmission a nd r outing equipment us ed for

accessing su bmarine cable ca pacity and ba ckhaul l inks at t he
submarine cable landing station on terms and conditions, and at
cost-oriented rates, that are reasonable and non-discriminatory;
and

(b) provides suppliers of telecommunications of the other Party submarine

cable c apacity, b ackhaul l inks, a nd cr oss-connect l inks in the
submarine cable landing station on terms and conditions, and at rates,
that are reasonable and non-discriminatory.

7. Supply of Value-Added Services

7.1 Neither P arty m ay r equire an en terprise i n i ts territory t hat i t cl assifies as a

supplier of value-added services to:

(a) supply those services to the public generally;

(b) connect its networks with any particular customer for the supply of
those services; or

(c) conform w ith any p articular st andard or t echnical r egulation for

connecting t o a ny ot her network, ot her t han a p ublic
telecommunications network.

7.2 Notwithstanding par agraph 7.1, a P arty m ay t ake t he act ions described in
paragraph 1 to remedy a practice of a supplier of value-added services that the Party
has found in a particular case to be anti-competitive under its laws or regulations, or
to otherwise promote competition or safeguard the interests of consumers.

8. Independent Regulatory Bodies and Government Ownership

8.1 Each P arty sh all ensu re t hat i ts telecommunications regulatory body i s

separate from, and n ot acc ountable t o, an y su pplier o f p ublic telecommunications
services. With a v iew t o ensu ring t he i ndependence a nd i mpartiality o f
telecommunications regulatory bodi es, each P arty sh all ensure that i ts
telecommunications regulatory body does not hold a financial interest or maintain an
operating r ole i n any su ch su pplier and makes regulatory deci sions, i ncluding
decisions relating t o i nterconnection w ith p ublic telecommunications networks and
services, and assi gnment or al location o f sp ectrum for n on-government pu blic
telecommunications s ervices, i ndependently su bject o nly t o t hat Party’s laws and
regulations.

8.2 Each P arty sh all ensure that t he decisions and pr ocedures of i ts

telecommunications r egulatory body ar e impartial w ith r espect t o al l market
participants. T o t his end, each P arty shall ensu re that any f inancial interest that it
holds in a su pplier of publ ic telecommunications services does not i nfluence t he
decisions and procedures of its telecommunications regulatory body.

8.3 Neither P arty m ay acco rd m ore favourable treatment t o a su pplier of pu blic

telecommunications services or to a s upplier of value-added services in its territory
than that accorded to a like supplier of the other Party on the basis that the supplier
receiving more favourable treatment is owned, wholly or in part, by the Party.

9. Universal Service

Each Party shall adm inister any universal s ervice obligation that it m aintains
in a t ransparent, no n-discriminatory, and c ompetitively neut ral m anner a nd sh all
ensure that its universal service obligation is not more burdensome than necessary
for the kind of universal service that it has defined.

10. Licensing Process

10.1 When a P arty r equires a s upplier o f pu blic telecommunications services to

have a license, the Party shall make publicly available:

(a) all the licensing criteria and procedures it applies;

(b) the p eriod i t normally r equires to r each a deci sion co ncerning an

application for a licence; and

(c) the terms and conditions of all licences it has issued.

10.2 Each P arty sh all ensu re t hat, o n r equest, a n appl icant r eceives the r easons
for its denial of a licence.

11. Allocation and Use of Scarce Resources

11.1 Each Party shall administer its procedures for the allocation and use of scarce
telecommunications resources, including frequencies and numbers, in an o bjective,
timely, transparent, and non-discriminatory manner.

11.2 Each P arty sh all m ake publ icly av ailable t he cu rrent st ate o f al located
frequency bands but r etains the r ight no t t o pr ovide d etailed i dentification of
frequencies allocated for specific government uses.

11.3 A P arty’s measures al locating and assi gning sp ectrum a nd m anaging

frequency ar e not measures that ar e per se inconsistent with A rticle 8.3 (Market
Access). Accordingly, each P arty r etains the r ight t o est ablish and appl y sp ectrum
and frequency management policies that may have the effect of limiting the number
of suppliers of public telecommunications services, provided it does so in a manner
consistent w ith ot her pr ovisions of t his Agreement. T his includes the abi lity t o
allocate frequency bands, taking into account current and future needs and spectrum
availability.

11.4 A P arty sh all not apply t echnical r equirements relating t o t he use of specific
frequency bands by a su pplier of p ublic telecommunications or value-added
services, unless the requirement is designed to prevent interference with authorized
non-government or government users of t he spectrum, pr otect hum an he alth or
safety, or t o facilitate l aw en forcement. I f a P arty i mposes or m aintains su ch
requirements, it shall develop such requirements through a rulemaking that complies
with paragraph 14 (Transparency of Measures Relating to Telecommunications).

12. Enforcement

Each P arty sh all pr ovide i ts relevant co mpetent au thority t he aut hority t o

enforce t he P arty’s measures relating t o t he obl igations set o ut in paragraphs 3
through 6. S uch au thority sh all i nclude t he abi lity t o i mpose e ffective sa nctions,
which may include financial penalties, injunctive relief (on an i nterim or final basis),
or the modification, suspension, or revocation of licences.

13. Resolution of Telecommunications Disputes

13.1 Each Party shall ensure that suppliers of public telecommunications networks
or se rvices of t he o ther P arty hav e t imely r ecourse t o a telecommunications
regulatory body t o c onsider a nd, t o t he extent pr ovided for i n d omestic law, to
resolve di sputes regarding co mpliance w ith do mestic regulations r elating t o t he
obligations contained in this Annex.

13.2 Suppliers of public telecommunications services of the other P arty that have
requested i nterconnection w ith a se rvice su pplier in t he P arty’s territory m ay seek
review, by its telecommunications regulatory body to resolve disputes, regarding the
terms, conditions, and rates for interconnection with such service supplier.

13.3 Each Party sh all e nsure t hat any su pplier o f public telecommunications
networks or se rvices of t he other P arty ag grieved by a regulatory decision has the
opportunity t o ap peal su ch r egulatory de cision t o a n i ndependent j udicial or
administrative aut hority. S uch an app eal shall not co nstitute g rounds for no n-
compliance by t hat s upplier w ith t he r egulatory deci sion u nless an a ppropriate
authority stays such decision.

14. Transparency of Measures Relating to Telecommunications

Further to Article 13.2 (Publication), each Party shall ensure that:

(a) rulemakings, i ncluding t he b asis for s uch r ulemakings, o f i ts

telecommunications regulatory body and end -user t ariffs are pr omptly
published or otherwise made available to all interested persons;

(b) interested per sons are pr ovided w ith adeq uate a dvance pu blic notice
of, a nd the opportunity t o pr ovide m eaningful co mment on, any
rulemaking that its telecommunications regulatory body proposes;

(c) all co mments filed w ith t he t elecommunications regulatory body are

made pu blicly a vailable as soon as practical af ter f iling su bject a t a ll
times to requirements of confidentiality;
 (d) all co mments raising si gnificant a nd r elevant i ssues filed w ith t he
telecommunications regulatory body ar e r esponded t o i n t he
telecommunication regulatory body’s rulemaking; and

(e) its measures relating to public telecommunications services are made

publicly available, including measures relating to:

(i) tariffs and other terms and conditions of service; and

(ii) notification, permit, registration, or licensing requirements, if any.

15. Relationship to Other Chapters

15.1 In t he ev ent o f any i nconsistency bet ween t his Annex and ot her C hapters
under this Agreement, this Annex shall prevail to the extent of the inconsistency.

15.2 On the request by either Party, the Parties shall enter into consultations to:

(a) resolve any technical or interpretative difficulties; and

(b) to address the implications for this Annex arising from technological or
industry developments.

Back to List of Annexes

 ANNEX 9-1

Business Visitors

(a) Malaysia shall, upon application by a business visitor, as defined in Article 9.3
(Definitions), o f t he o ther P arty g rant t emporary ent ry for up t o thirty days, and
multiple entry v isa f or up t o five years. A further ex tension of thirty days can be
granted provided that the total period of stay shall not exceed ninety days.

(b) India s hall, u pon ap plication by a b usiness v isitor as defined i n Article 9.3
(Definitions) of the other Party shall grant temporary entry for up to one hundred and
eighty days, and multiple entry visa for up to two years;

Such business visitors’ v isa under su bparagraphs (a) a nd ( b) shall be g ranted

provided that the business visitor:

(i) complies with immigration measures applicable to temporary entry;

(ii) presents proof of nationality;

(iii) documentation demonstrating t hat the bu siness visitor w ill be s o

engaged and describing the purpose of entry;

(iv) does not r eceive any r emuneration from a so urce l ocated w ithin t he
host Party; and

(v) is otherwise q ualified for entry under a pplicable measures relating t o

public health an d sa fety and nat ional se curity i n acco rdance w ith
Chapter 9 (Movement of Natural Persons).

Intra-Corporate Transferees

(a) Malaysia sh all gr ant t emporary ent ry t o an i ntra-corporate t ransferee of t he

other Party, who otherwise meets its criteria for the grant of an i mmigration visa, for
an initial period of up to two years. The period of stay may be extended for period of
up to two years at a time for a total term not exceeding ten years for senior manager
and not exceeding five years for specialists or experts; and

(b) India shall grant temporary entry to an intra-corporate transferee of the other
Party, who otherwise meets its criteria for the grant of an immigration visa, on year to
year basis for a total term not exceeding five years.

Such intra-corporate transferees’ temporary entry in subparagraphs (a) and (b) shall
be granted, provided that the natural persons:

(i) complies with immigration measures applicable to temporary entry; and

 (ii) proof of nationality of the other Party.

Installer and servicer

(a) Malaysia sh all g rant temporary ent ry t o a n installer a nd servicer of t he other

Party, w ho ot herwise m eets i ts criteria for t he g rant o f an i mmigration v isa, for
duration of three months or the period of contract, whichever is less. T he period of
stay m ay be ex tended for a nother p eriod o f u p t o three months. A ny f urther
extensions may be considered.

(b) India shall grant temporary entry to an installer and servicer of the other Party,
who otherwise meets its criteria for the grant of an i mmigration visa, for duration of
three months or the period of contract, whichever is less.

Such i nstallers’ and s ervicers’ t emporary ent ry sh all be g ranted pr ovided t hat t he
natural persons:

(i) complies with immigration measures applicable to temporary entry;

(ii) proof of nationality of the other Party;

(iii) documentation d emonstrating t hat he or sh e w ill be so eng aged an d

describing t he p urpose o f e ntry, i ncluding bona fide letter o f co ntract
from the entity engaging the services of the natural person in the host
Party; and

(iv) documentation d emonstrating t he attainment o f t he r elevant minimum

educational requirements or alternative credentials.

Contractual Service Suppliers

(a) Malaysia shall grant temporary entry and stay for a period of up to one year or
the duration of contract, whichever is less, to a natural person to supply service as a
contractual service supplier, provided that the professional complies with immigration
measures applicable to temporary entry; and

(b) India shall grant temporary entry and stay for up to one year or the duration of
contract, w hichever i s l ess, t o a natural per son t o su pply se rvice as a c ontractual
service supplier, provided that the professional complies with immigration measures
applicable to temporary entry.

Such contract service suppliers’ temporary entry in subparagraphs (a) and (b) shall
be granted on presentation by the natural person concerned of:

(i) proof of nationality of the other Party;

 (ii) documentation demonstrating t hat he or sh e w ill be so eng aged an d
describing t he p urpose o f e ntry, i ncluding bona fide letter o f co ntract
from the entity engaging the services of the natural person in the host
Party; and
(iii) documentation d emonstrating t he attainment of t he r elevant minimum
educational requirements or alternative credentials.

Independent Professional

(a) Malaysia sh all grant t emporary ent ry and stay f or up t o one year or t he
duration o f co ntract, whichever i s less. T he per iod o f st ay ca n be extended for
another period of one year, to a nat ural person to supply service, provided that the
professional complies with immigration measures applicable to temporary entry; and

(b) India shall grant temporary entry and stay for up to one year or the duration of
contract, whichever is less, to a natural person to supply service, if the professional
otherwise complies with immigration measures applicable to temporary entry.

Such professional’s temporary entry in subparagraphs (a) and (b) shall be granted on
presentation by the natural person concerned of:

(i) proof of nationality of the other Party;

(ii) documentation d emonstrating t hat he or sh e w ill be so eng aged an d

describing t he p urpose o f e ntry, i ncluding bona fide letter o f co ntract
from the entity engaging the services of the natural person in the host
Party; and

(iii) documentation d emonstrating t he attainment o f t he r elevant minimum

educational requirements or alternative credentials and/or has obtained
wherever required registration or license from the relevant professional
body or regulator.

Back to List of Annexes

 Annex 10-1
Indirect Expropriation

1. An action or a se ries of actions by a P arty cannot constitute an ex propriation

unless it interferes with a t angible or intangible property right or property interest in
an investment.

2. Article 10.7(1) addresses two situations:

(a) the first si tuation i s di rect expropriation, w here an i nvestment i s

nationalised or o therwise di rectly ex propriated t hrough formal t ransfer
of title or outright seizure; and

(b) the second situation is indirect expropriation, where an action or series

of act ions by a P arty has an effect eq uivalent t o direct ex propriation
without formal transfer of title or outright seizure.

3. The d etermination o f whether an act ion or series of act ions by a P arty, i n a

specific fact situation, constitutes an indirect expropriation requires a case-by-case,
fact-based inquiry that considers, among other factors:

(a) the eco nomic impact o f t he g overnment act ion, al though t he fact that
an action or series of actions by a P arty has an adv erse effect on the
economic value o f an i nvestment, st anding al one, do es not est ablish
that such an expropriation has occurred;

(b) the extent to which the government’s action interferes with the distinct,
reasonable investment-backed expectations;

(c) whether t he g overnment ac tion breaches the g overnment’s prior

binding written commitment to the investor whether by contract, licence
or other legal document; and

(d) the ch aracter of t he government ac tion, i ncluding, i ts objective and

whether the action is disproportionate to such objective.

4. Non-discriminatory r egulatory act ions as well as actions and awards by

judicial bodies by a P arty that are designed and applied to achieve legitimate public
welfare obj ectives, su ch as the pr otection o f p ublic health, safety, and the
environment do not constitute indirect expropriation as referred to in paragraph 2 (b).

Back to List of Annexes

 Annex 12-1
Security Exceptions

The Parties confirm the following understanding with respect to interpretation

and/or implementation of this Chapter:

(a) the measures referred t o i n par agraph 3 o f Article 12.2 (Security

Exceptions) are m easures where t he intention and obj ective of t he
Party i mposing t he m easures is for t he protection o f i ts essential
security i nterests. T hese m easures shall be i mposed o n a
nondiscriminatory basi s and may be found i n a ny o f i ts laws or
regulations:

(i) In t he ca se o f I ndia, t he appl icable m easures referred t o i n

paragraph 3 of Article 12. 2 ( Security E xceptions) are currently
set out i n t he r egulations framed u nder t he Foreign E xchange
Management Act (FEMA). India shall upon request by Malaysia,
provide information on the measures concerned; and

(ii) In t he ca se o f Malaysia - Malaysia does not pr esently adopt or

maintain any unilateral measures against a non-Party or investor
of a non-Party in its laws or regulations; and

(b) the measures which a Party adopts or maintains with respect to a non-
Party or investors of a non -Party sh all not i mpinge up on t he ot her
Party's sovereign rights to conduct its foreign policy nor shall it prohibit
enterprises of f oreign enterprises that ar e subject t o su ch m easures
from establishing themselves in the other Party.

Back to List of Annexes

 Annex 12-2
Non-Justiciability of Security Exceptions

With r espect t o t he i nterpretation an d/or i mplementation o f this Chapter, t he

Parties confirm t heir understanding that disputes submitted t o ar bitration pursuant
paragraphs 7 and 8 of Article 10.14 (The Settlement of Investment Disputes between
a Party and an Investor of the Other Party), where the disputing Party asserts as a
defence that t he measure al leged t o be a breach i s within t he s cope o f a s ecurity
exception as set o ut i n A rticle 12. 2 ( Security Exceptions), a ny deci sion of t he
disputing Party taken on such security considerations shall be non-justiciable in that
it shall not be open to any arbitral tribunal to review the merits of any such decision,
even w here t he ar bitral pr oceedings concern an assessment of any cl aim f or
damages and/or compensation, or an adjudication of any other issues referred to the
tribunal.

Back to List of Annexes