Consolidated TPP Text – Annex III – Schedule of the United States
Headnotes
1. Commitments in these sub-sectors under Chapter 11 (Financial Services) are undertaken subject to the limitations and conditions set forth in these headnotes and in the Schedule below.
2. National treatment commitments in these sub-sectors are subject to the following limitations:
- (a) National treatment with respect to banking will be provided based upon the foreign bank’s “home state” in the United States, as that term is defined under the International Banking Act, when that Act is applicable. A domestic bank subsidiary of a foreign firm will have its own “home state”, and national treatment will be provided based upon the subsidiary’s home state, as determined under applicable law.Footnote 1
- (b) National treatment with respect to insurance financial institutions will be provided according to a non-U.S. insurance financial institution’s state of domicile, when applicable, in the United States. State of domicile is defined by individual states, and is generally the state in which an insurer either is incorporated, is organised or maintains its principal office in the United States.
3. To clarify the U.S. commitment with respect to Article 11.5 (Market Access for Financial Institutions), juridical persons supplying banking or other financial services (excluding insurance) and constituted under the laws of the United States are subject to non-discriminatory limitations on juridical form.Footnote 2
4. For entries in Section A, in accordance with Article 11.10.1(a) (Non-Conforming Measures), and subject to Article 11.10.1(c) (Non-Conforming Measures), the Articles specified in the Obligations Concerned element of an entry do not apply to the non-conforming aspects of the law, regulation or other measure identified in the Measures element of that entry, except to the extent that such non-conforming aspects are inconsistent with a Specific Commitment in Annex 11-B. In addition, Description provides a general, non-binding description of the measure for which the entry is made.
5. For entries in Section B, in accordance with Article 11.10.2 (Non-Conforming Measures), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the sectors, sub-sectors and activities identified in the Description element of that entry.
6. Article 11.10.1(c) (Non-Conforming Measures) shall not apply to non-conforming measures relating to Article 11.5(b) (Market Access for Financial Institutions).
Annex III - Section A
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: Senior Management and Boards of Directors (Article 11.9)
Level of Government: Central
Measures: 12 U.S.C. 72
Description: All directors of a national bank must be U.S. citizens except that the Comptroller of the Currency may waive the citizenship requirement for not more than a minority of the total number of directors.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 12 U.S.C. 619
Description: Foreign ownership of Edge Act corporations is limited to foreign banks and U.S. subsidiaries of foreign banks, while domestic non-bank firms may own such corporations. Edge Act corporations are international financial vehicles chartered, supervised and examined by the Board of Governors of the Federal Reserve through which U.S. banking organisations may conduct certain activities abroad that are permissible to foreign banks abroad but may not otherwise be permissible to U.S. banks.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 12 U.S.C. 1463 et seq.
12 U.S.C. 1751 et seq.
Description: Federal and state laws do not permit a credit union, savings bank, or savings association (both of the latter two entities may be also called thrift institutions) in the United States to be established through branches of corporations organised under a foreign country’s law.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 12 U.S.C. 3104(d)
Description: In order to accept or maintain domestic retail deposits of less than the standard maximum deposit insurance amount, and requiring deposit insurance protection, a foreign bank must establish an insured banking subsidiary. This requirement does not apply to a foreign bank branch that was engaged in insured deposit-taking activities on December 19, 1991.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Level of Government: Central
Measures: 15 U.S.C. 80b-2 and 80b-3
Description: Foreign banks are required to register as investment advisers under the Investment Advisers Act of 1940 to engage in securities advisory and investment management services in the United States, while domestic banksFootnote 3 (or a separately identifiable department or division of the bank) do not have to register unless they advise registered investment companies. The registration requirement involves record maintenance, inspections, submission of reports and payment of a fee.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Level of Government: Central
Measures: 12 U.S.C. 221, 302 and 321
Description: Foreign banks cannot be members of the Federal Reserve System, and thus may not vote for directors of a Federal Reserve Bank. Foreign-owned bank subsidiaries are not subject to this measure.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 12 U.S.C. 36(g)
12 U.S.C. 1828(d)(4)
12 U.S.C. 1831u
Description: The United States undertakes no commitment with respect to Article 11.5(b) (Market Access for Financial Institutions) in relation to the expansion, by a foreign bank into another state from its “home state,” as that term is defined under applicable law, via:
- (a) the establishment of a “de novo” branch in another state;
- (b) the establishment of branches by merger with a bank in another state; or
- (c) the acquisition of one or more branches of a bank in another state without the acquisition of the entire bank,
if not permitted by the state in which the resulting branch is or would be located. Except as provided elsewhere in this Schedule, such expansion shall be accorded on a national treatment basis in accordance with paragraph 2(a) of the headnote.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 12 U.S.C. 3102(a)(1)
12 U.S.C. 3102(d)
12 U.S.C. 3103(a)
Description: Establishment of a federal branch or agency by a foreign bank is not available in the following states that may prohibit establishment of a branch or agency by a foreign bank:
- (a) branches and agencies may be prohibited in Kansas, Maryland, North Dakota and Wyoming; and
- (b) branches, but not agencies, may be prohibited in Georgia, Missouri and Oklahoma.
Certain restrictions on fiduciary powers apply to federal agencies.
Note: The cited federal measures provide that certain state law restrictions apply to the establishment of federal branches or agencies.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: Most-Favoured-Nation Treatment (Article 11.4)
Market Access for Financial Institutions (Article 11.5)
Cross-Border Trade (Article 11.6)
Level of Government: Central
Measures: 15 U.S.C. 77jjj(a)(1)
Description: The authority to act as a sole trustee of an indenture for a bond offering in the United States is subject to a reciprocity test.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: Most-Favoured-Nation Treatment (Article 11.4)
Market Access for Financial Institutions (Article 11.5)
Level of Government: Central
Measures: 22 U.S.C. 5341 and 5342
Description: Designation as a primary dealer in U.S. government debt securities is conditioned on reciprocity.Footnote 4
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: Most-Favoured-Nation Treatment (Article 11.4)
Level of Government: Central
Measures: 15 U.S.C. 78o(c)
Description: A broker-dealer registered under U.S. law that has its principal place of business in Canada may maintain its required reserves in a bank in Canada subject to the supervision of Canada.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Level of Government: Central
Measures: 12 U.S.C. 1421 et seq. (Federal Home Loan Banks)
12 U.S.C. 1451 et seq. (Federal Home Loan Mortgage Corporation)
12 U.S.C. 1717 et seq. (Federal National Mortgage Association)
12 U.S.C. 2011 et seq. (Farm Credit Banks)
12 U.S.C. 2279aa-1 et seq. (Federal Agricultural Mortgage Corporation)
20 U.S.C. 1087-2 et seq. (Student Loan Marketing Association)
Description: The United States may grant advantages, including but not limited to the following, to one or more of the Government-Sponsored Enterprises (GSEs) listed above:
- (a) Capital, reserves and income of the GSE are exempt from certain taxation.
- (b) Securities issued by the GSE are exempt from registration and periodic reporting requirements under federal securities laws.
- (c) The U.S. Treasury may, in its discretion, purchase obligations issued by the GSE.
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Most-Favoured-Nation Treatment (Article 11.4)
Market Access for Financial Institutions (Article 11.5)
Senior Management and Boards of Directors (Article 11.9)
Level of Government: Regional
Measures: All existing non-conforming measures of all states, the District of Columbia and Puerto Rico
Description: Pursuant to the measures referred to above, some U.S. states may, among other things:
- (a) restrict or fail to provide an explicit mechanism for initial entry for the various juridical forms (for example, subsidiary, branch, agency, representative office) through which foreign banks may obtain a state licence to conduct business activities within their territory;Footnote 5 and
- (b) impose citizenship requirements on some or all members of the boards of directors of state-chartered depository institutions.
Additionally, states may impose restrictions or conditions upon the business activities with respect to juridical form; that is, with respect to a foreign bank operating in the state as a state-licensed or state-chartered incorporated entity, branch, agency or representative office.
Some of the above limitations may reflect state reciprocity requirements.
Sector: Financial Services
Sub-Sector: Insurance
Obligations Concerned: National Treatment (Article 11.3)
Market Access for Financial Institutions (Article 11.5)
Cross-Border Trade (Article 11.6)
Level of Government: Central
Measures: 31 U.S.C. 9304
Description: Branches of foreign insurance companies are not permitted to provide surety bonds for U.S. Government contracts.
Sector: Financial Services
Sub-Sector: Insurance
Obligations Concerned: Cross-Border Trade (Article 11.6)
Level of Government: Central
Measures: 46 C.F.R. 249.9
Description: When more than 50 per cent of the value of a maritime vessel whose hull was built under federally guaranteed mortgage funds is insured by a non-U.S. insurer, the insured must demonstrate that the risk was substantially first offered in the U.S. market.
Sector: Financial Services
Sub-Sector: Insurance
Obligations Concerned: National Treatment (Article 11.3)
Most-Favoured-Nation Treatment (Article 11.4)
Market Access for Financial Institutions (Article 11.5)
Cross-Border Trade (Article 11.6)
Senior Management and Boards of Directors (Article 11.9)
Level of Government: Regional
Measures: All existing non-conforming measures of all states, the District of Columbia and Puerto Rico. For purposes of transparency, Appendix III-B sets out an illustrative, non-binding list of non-conforming measures maintained at the regional level of government.
Appendix III-A - List of Foreign Bank Structures Explicitly Provided for at the Regional Level of GovernmentFootnote 6
| Commercial Bank Ownership | Branches | Agencies | Rep Offices | |
|---|---|---|---|---|
| Alabama | Yes | Yes | Yes | Yes |
| Alaska | Yes | Yes | No | No |
| Arizona | No | No | No | No |
| Arkansas | No | No | No | No |
| California | Yes | Yes | Yes | Yes |
| Colorado | No | No | No | No |
| Connecticut | Yes | Yes | Yes | Yes |
| Delaware | Yes | Yes | Yes | Yes |
| Columbia | Yes | Yes | Yes | Yes |
| Florida | No | Yes | Yes | Yes |
| Georgia | No | No | Yes | Yes |
| Hawaii | Yes | Yes | Yes | Yes |
| Idaho | Yes | Yes | Yes | Yes |
| Illinois | No | Yes | No | Yes |
| Indiana | Yes | No | No | No |
| Iowa | No | No | No | No |
| Kansas | No | No | No | No |
| Kentucky | No | No | No | Yes |
| Louisiana | Yes | Yes | Yes | Yes |
| Maine | Yes | Yes | Yes | Yes |
| Maryland | No | No | No | No |
| Massachusetts | Yes | Yes | Yes | Yes |
| Michigan | Yes | Yes | Yes | Yes |
| Minnesota | Yes | No | No | Yes |
| Mississippi | Yes | Yes | Yes | Yes |
| Missouri | Yes | No | Yes | Yes |
| Montana | Yes | No | No | No |
| Nebraska | No | No | No | No |
| Nevada | Yes | Yes | Yes | Yes |
| New Hampshire | Yes | Yes | Yes | Yes |
| New Jersey | Yes | Yes | Yes | Yes |
| New Mexico | No | No | No | No |
| New York | Yes | Yes | Yes | Yes |
| North Carolina | Yes | Yes | Yes | Yes |
| North Dakota | No | No | No | No |
| Ohio | Yes | Yes | Yes | Yes |
| Oklahoma | No | No | Yes | Yes |
| Oregon | No | Yes | No | No |
| Pennsylvania | Yes | Yes | Yes | Yes |
| Puerto Rico | Yes | Yes | Yes | Yes |
| Rhode Island | Yes | No | No | No |
| South Carolina | No | No | No | No |
| South Dakota | No | No | No | No |
| Tennessee | No | No | No | No |
| Texas | Yes | Yes | Yes | Yes |
| Utah | No | Yes | Yes | Yes |
| Vermont | Yes | Yes | No | No |
| Virginia | No | No | No | No |
| Washington | No | Yes | Yes | Yes |
| West Virginia | Yes | Yes | Yes | Yes |
| Wisconsin | Yes | No | No | No |
| Wyoming | No | No | No | No |
Appendix III-B - Illustrative List of U.S. Regional Non-Conforming Measures Affecting InsuranceFootnote 7
Part I: Measures affecting a commercial presence
| Juridical Form | Senior Management and Boards of Directors | Government Ownership or Control | |
|---|---|---|---|
| Direct insurance | The following states have no mechanism for licensing initial entry of a non-U.S. insurance company as a subsidiary, unless that company is already licensed in some other U.S. state: Minnesota, Mississippi and Tennessee. The following states have no mechanism for licensing initial entry of a non-U.S. insurance company as a branch, unless that company is already licensed in some other U.S. state: Arkansas, Arizona, Connecticut, Georgia, Kansas, Maryland, Minnesota, Nebraska, New Jersey, North Carolina, Tennessee, Vermont and Wyoming. | Citizenship requirement (for board of directors): Louisiana, Washington, Oklahoma, Pennsylvania, California, Florida, Georgia, Idaho, Indiana, Mississippi, Oregon, New York, South Dakota, Wyoming, Tennessee, Illinois and Missouri. Citizenship requirement (for incorporators): Hawaii, Idaho, Indiana, South Dakota, Washington, Georgia, Alaska, Florida, Kansas, Kentucky, Maine, Missouri, Montana, Texas and Wyoming. Residency requirement (for organising members of mutuals): Arkansas, California; Idaho; Kansas; North Dakota, Minnesota, Mississippi, Montana, Vermont and Wyoming. Citizenship/residency requirement (for organisers of fraternal benefit societies): Alaska, Arizona, Arkansas, California, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Dakota, Oklahoma, Oregon, Pennsylvania, South Dakota, Virginia, Vermont, Washington, West Virginia and Wyoming. Residency requirement (for organisers of domestic reciprocal insurers): Arizona, Arkansas, California, Delaware, Georgia, Idaho, Indiana, Kentucky, Maine, Maryland, Mississippi, Montana, Pennsylvania, South Dakota, Tennessee, Virginia, Washington and Wyoming. | Government-owned or -controlled insurance companies are not authorised to conduct business: Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Kansas, Kentucky, Maine, Maryland, Montana, Nevada, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Washington and Wyoming. |
| Reinsurance and retrocession | The following states have no mechanism for licensing initial entry of a non-U.S. insurance company as a subsidiary, unless that company is already licensed in some other U.S. state: Maryland, Minnesota and Mississippi. The following states have no mechanism for licensing initial entry of a non-U.S. insurance company as a branch, unless that company is already licensed in some other U.S. state: Arkansas, Arizona, Connecticut, Georgia, Kansas, Maryland, Minnesota, Nebraska, New Jersey, North Carolina, Pennsylvania, Tennessee, Vermont and Wyoming. | Government-owned or -controlled insurance companies are not authorised to conduct business: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Kansas, Kentucky, Maine, Maryland, Montana, Nevada, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Washington and Wyoming. |
Part II: Measures affecting a natural person
| Residency | Citizenship | Differential licence fees | |
|---|---|---|---|
| Insurance intermediation, and services auxiliary to insurance | Non-resident licences are not issued to individuals not licensed in another U.S. state in: Connecticut, Colorado, California, Delaware, Georgia, Florida, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Mississippi, Montana, Nevada, New Jersey, North Dakota, Nebraska, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Virginia, West Virginia, Texas and Washington. | ||
| Brokerage services | Residency requirement: Alabama, Arkansas, California and Louisiana. Residency requirement (for surplus lines brokers): All states except California, Idaho, Maine, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oregon, South Dakota, Texas, Vermont, West Virginia and Wyoming. | Differential licence fees for non-residents: Alaska, California, Colorado, Georgia, Indiana, Louisiana, Maine, Montana, New Hampshire, North Dakota, Oklahoma, Rhode Island and Vermont. | |
| Agency services | Residency requirement: California, Florida, Kansas, Louisiana, Oregon, Rhode Island and Texas. Residency requirement (for surplus lines brokers): All states except Alaska, Arkansas, Florida, Idaho, Kentucky, Louisiana, Nevada, New Mexico, Ohio, Oregon, South Dakota, Texas, West Virginia and Wyoming. | Differential licence fees for non-residents: Alaska, California, Colorado, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Mississippi, Montana, New Hampshire, New Jersey, North Dakota, Oklahoma, Rhode Island, South Dakota, Tennessee, Vermont, Wisconsin and Wyoming. | |
| Consultancy, actuarial, risk assessment, and claim settlement services | Residency requirement: Alabama, California, Florida, Georgia, Indiana, Illinois, Kentucky, Maryland, Michigan, Mississippi, Montana, Nevada, North Carolina, Oklahoma, Oregon, Pennsylvania and Washington. | Citizenship requirement: Alabama, Missouri, New Mexico and Oklahoma. |
Annex III - Section B
Sector: Financial Services
Sub-Sector: Banking and other financial services (excluding insurance)
Obligations Concerned: National Treatment (Article 11.3)
Level of Government: Central
Description: With regard to the Federal Home Loan Banks, Federal Home Loan Mortgage Corporation and Federal National Mortgage Association, the United States reserves the right to adopt or maintain measures that grant advantages, including those described in the entry on page Annex III – United States – 14 to that entity, or any new, reorganised or transferee entity with similar functions and objectives with respect to housing finance.
Existing Measures: 12 U.S.C. 1421 et seq. (Federal Home Loan Banks)
12 U.S.C. 1451 et seq. (Federal Home Loan Mortgage Corporation)
12 U.S.C. 1717 et seq. (Federal National Mortgage Association)
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