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:

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:

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:

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:

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:

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 OwnershipBranchesAgenciesRep Offices
AlabamaYesYesYesYes
AlaskaYesYesNoNo
ArizonaNoNoNoNo
ArkansasNoNoNoNo
CaliforniaYesYesYesYes
ColoradoNoNoNoNo
ConnecticutYesYesYesYes
DelawareYesYesYesYes
ColumbiaYesYesYesYes
FloridaNoYesYesYes
GeorgiaNoNoYesYes
HawaiiYesYesYesYes
IdahoYesYesYesYes
IllinoisNoYesNoYes
IndianaYesNoNoNo
IowaNoNoNoNo
KansasNoNoNoNo
KentuckyNoNoNoYes
LouisianaYesYesYesYes
MaineYesYesYesYes
MarylandNoNoNoNo
MassachusettsYesYesYesYes
MichiganYesYesYesYes
MinnesotaYesNoNoYes
MississippiYesYesYesYes
MissouriYesNoYesYes
MontanaYesNoNoNo
NebraskaNoNoNoNo
NevadaYesYesYesYes
New HampshireYesYesYesYes
New JerseyYesYesYesYes
New MexicoNoNoNoNo
New YorkYesYesYesYes
North CarolinaYesYesYesYes
North DakotaNoNoNoNo
OhioYesYesYesYes
OklahomaNoNoYesYes
OregonNoYesNoNo
PennsylvaniaYesYesYesYes
Puerto RicoYesYesYesYes
Rhode IslandYesNoNoNo
South CarolinaNoNoNoNo
South DakotaNoNoNoNo
TennesseeNoNoNoNo
TexasYesYesYesYes
UtahNoYesYesYes
VermontYesYesNoNo
VirginiaNoNoNoNo
WashingtonNoYesYesYes
West VirginiaYesYesYesYes
WisconsinYesNoNoNo
WyomingNoNoNoNo

Appendix III-B - Illustrative List of U.S. Regional Non-Conforming Measures Affecting InsuranceFootnote 7

Part I: Measures affecting a commercial presence

 Juridical FormSenior Management and Boards of DirectorsGovernment 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

 ResidencyCitizenshipDifferential licence fees
Insurance intermediation, and services auxiliary to insuranceNon-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 servicesResidency 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)

Date Modified: