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ARTICLES

LEGAL RESOURSES

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    • Article 1106: Performance Requirements

    1. No Party may impose or enforce any of the following requirements, or enforce any commitment or undertaking, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory:

  • To export a given level or percentage of goods or services;

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  • To achieve a given level or percentage of domestic content;

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  • To purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from persons in its territory;

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  • To relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment;

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  • To restrict sales of goods or services in its territory that such investment produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings;

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  • To transfer technology, a production process or other proprietary knowledge to a person in its territory, except when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority to remedy an alleged violation of competition laws or to act in a manner not inconsistent with other provisions of this Agreement; or

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  • To act as the exclusive supplier of the goods it produces or services it provides to a specific region or world market.

    • 2. A measure that requires an investment to use a technology to meet generally applicable health, safety or environmental requirements shall not be construed to be inconsistent with paragraph 1(f). For greater certainty, Articles 1102 (TLCAN: Art. 1102) and 1103 (TLCAN: Art. 1103) apply to the measure.

    3. No Party may condition the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with any of the following requirements:

  • To achieve a given level or percentage of domestic content;

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  • To purchase, use or accord a preference to goods produced in its territory, or to purchase goods from producers in its territory;

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  • To relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or

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  • To restrict sales of goods or services in its territory that such investment produces or provides by relating such sales in any way to the volume or value of its exports or foreign exchange earnings.

    • 4. Nothing in paragraph 3 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of a Party or of a non-Party, on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.

    5. Paragraphs 1 and 3 do not apply to any requirement other than the requirements set out in those paragraphs.

    6. Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in paragraph 1(b) or (c) or 3(a) or (b) shall be construed to prevent any Party from adopting or maintaining measures, including environmental measures:

  • Necessary to secure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;

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  • Necessary to protect human, animal or plant life or health; or

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  • Necessary for the conservation of living or non-living exhaustible natural resources.