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ARTICLES

LEGAL RESOURSES

Exchange rate:

$ 17.14

    • Article 2104: Balance of Payments

    1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures that restrict transfers where the Party experiences serious balance of payments difficulties, or the threat thereof, and such restrictions are consistent with paragraphs 2 through 4 and are:

  • Consistent with paragraph 5 to the extent they are imposed on transfers other than Cross-Border trade in financial services; or

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  • Consistent with paragraphs 6 and 7 to the extent they are imposed on Cross-Border trade in financial services.

    • General Rules

    2. As soon as practicable after a Party imposes a measure under this Article, the Party shall:

  • Submit any current account exchange restrictions to the IMF for review under Article VIII of the Articles of Agreement of the IMF;

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  • Enter into good faith consultations with the IMF on economic adjustment measures to address the fundamental underlying economic problems causing the difficulties; and

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  • Adopt or maintain economic policies consistent with such consultations.

    • 3. A measure adopted or maintained under this Article shall:

  • Avoid unnecessary damage to the commercial, economic or financial interests of another Party;

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  • Not be more burdensome than necessary to deal with the balance of payments difficulties or threat thereof;

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  • Be temporary and be phased out progressively as the balance of payments situation improves;

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  • Be consistent with paragraph 2(c) and with the Articles of Agreement of the IMF; and

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  • Be applied on a national treatment or most-favored-nation treatment basis, whichever is better.

    • 4. A Party may adopt or maintain a measure under this Article that gives priority to services that are essential to its economic program, provided that a Party may not impose a measure for the purpose of protecting a specific industry or sector unless the measure is consistent with paragraph 2(c) and with Article VIII(3) of the Articles of Agreement of the IMF.

    Restrictions on Transfers Other than Cross-Border Trade in Financial Services

    5. Restrictions imposed on transfers, other than on cross border trade in financial services:

  • Where imposed on payments for current international transactions, shall be consistent with Article VIII (3) of the Articles of Agreement of the IMF;

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  • Where imposed on international capital transactions, shall be consistent with Article VI of the Articles of Agreement of the IMF and be imposed only in conjunction with measures imposed on current international transactions under paragraph 2(a);

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  • Where imposed on transfers covered by Article 1109 (TLCAN: Art. 1109) (Investment - Transfers) and transfers related to trade in goods, may not substantially impede transfers from being made in a freely usable currency at a market rate of exchange; and

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  • May not take the form of tariff surcharges, quotas, licenses or similar measures.

    • Restrictions on Cross-Border Trade in Financial Services

    6. A Party imposing a restriction on Cross-Border trade in financial services:

  • May not impose more than one measure on any transfer, unless consistent with paragraph 2(c) and with Article VIII(3) of the Articles of Agreement of the IMF; and

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  • Shall promptly notify and consult with the other Parties to assess the balance of payments situation of the Party and the measures it has adopted, taking into account among other elements

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  • The nature and extent of the balance of payments difficulties of the Party,

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  • The external economic and trading environment of the Party, and

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  • Alternative corrective measures that may be available.

    • 7. In consultations under paragraph 6(b), the Parties shall:

  • Consider if measures adopted under this Article comply with paragraph 3, in particular paragraph 3(c); and

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  • Accept all findings of statistical and other facts presented by the IMF relating to foreign exchange, monetary reserves and balance of payments, and shall base their conclusions on the assessment by the IMF of the balance of payments situation the Party adopting the measures.