U.S.-MOROCCO FREE TRADE AGREEMENT
Services/Investment Non-Conforming Measures
( Formatting Note )
Annex I
SCHEDULE OF THE UNITED STATES
Classified by: Catherine Novelli
Position Title: Assistant USTR for Europe and Mediterranean
Agency: Office of the USTR
Declassification Date: X6
Reason for Classification: 1.5 (b)
1. The Schedule of a Party to this Annex sets out, pursuant to Articles 10.12 (Non-Conforming Measures) and 11.6 (Non-Conforming Measures), a Party's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 10.3 or 11.2 (National Treatment);
(b) Article 10.4 or 11.3 (Most-Favored-Nation Treatment);
(c) Article 11.5 (Local Presence);
(d) Article 10.8 (Performance Requirements);
(e) Article 10.9 (Senior Management and Boards of Directors); or
(f) Article 11.4 (Market Access).
2. Each Schedule entry sets out the following elements:
(a) Sector refers to the sector for which the entry is made;
(b) Obligations Concerned specifies the obligation(s) referred to in paragraph 1 that, pursuant to Articles 10.12.1(a) (Non-Conforming Measures) and 11.6.1(a) (Non-Conforming Measures), do not apply to the listed measure(s);
(c) Level of Government indicates the level of government maintaining the listed measure(s);
(d) Measures identifies the laws, regulations, or other measures for which the entry is made. A measure cited in the Measures element:
( i ) means the measure as amended, continued, or renewed as of the date of entry into force of this Agreement, and
( ii ) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure;
(e) Description , for Morocco , sets out the non-conforming aspects of the measure for which the entry is made; and Description , for the United States , provides a general, nonbinding, description of the Measures .
3. In accordance with Article 10.12.1(a) (Non-Conforming Measures) and 11.6.1(a) (Non-Conforming Measures), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the law, regulation, or other measure identified in the Description (for Morocco) or Measures (for the United States) element of that entry.
4. Where a Party maintains a measure that requires that a service provider be a citizen, permanent resident, or resident of its territory as a condition to the provision of a service in its territory, a Schedule entry for that measure taken with respect to Article 11.2 (National Treatment), 11.3 (Most-Favored-Nation Treatment), or 11.5 (Local Presence) shall operate as a Schedule entry with respect to Article 10.3 (National Treatment), 10.4 (Most-Favored-Nation Treatment), or 10.8 (Performance Requirements) to the extent of that measure.
5. For greater certainty, an annex entry taken with respect to Article 11.4 shall apply to the cross-border supply of a service and to the supply of a service in the Party's territory by an investor of the other Party or a covered investment unless the text of the Description element provides otherwise. It is not necessary to reference “investment” in the heading of the Description element for the annex entry to apply in this manner.
ANNEX I
SERVICES/INVESTMENT NON-CONFORMING MEASURES
SCHEDULE OF THE UNITED STATES
Classified by: Catherine Novelli
Position Title: Assistant USTR for Europe and Mediterranean
Agency: Office of the USTR
Declassification Date: X6
Reason for Classification: 1.5 (b)
Sector: Atomic Energy
Obligations Concerned: National Treatment (Article 10.3)
Level of Government: Central
Measures: Atomic Energy Act of 1954 , 42 U.S.C. §§ 2011 et seq .
Description: Investment
A license issued by the United States Nuclear Regulatory Commission is required for any person in the United States to transfer or receive in interstate commerce, manufacture, produce, transfer, use, import, or export any nuclear “utilization or production facilities” for commercial or industrial purposes. Such a license may not be issued to any entity known or believed to be owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government (42 U.S.C. § 2133(d)). A license issued by the United States Nuclear Regulatory Commission is also required for nuclear “utilization and production facilities,” for use in medical therapy, or for research and development activities. The issuance of such a license to any entity known or believed to be owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government is also prohibited (42 U.S.C. § 2134(d)).
Sector: Business Services
Obligations Concerned: National Treatment (Article 11.2)
Local Presence (Article 11.5)
Level of Government: Central
Measures: Export Trading Company Act of 1982 , 15 U.S.C. §§ 4011-4021
15 C.F.R. Part 325
Description: Cross-Border Services
Title III of the Export Trading Company Act of 1982 authorizes the Secretary of Commerce to issue “certificates of review” with respect to export conduct. The Act provides for the issuance of a certificate of review where the Secretary determines, and the Attorney General concurs, that the export conduct specified in an application will not have the anticompetitive effects proscribed by the Act. A certificate of review limits the liability under federal and state antitrust laws in engaging in the export conduct certified.
Only a “person” as defined by the Act can apply for a certificate of review. “Person” means “an individual who is a resident of the United States; a partnership that is created under and exists pursuant to the laws of any State or of the United States; a State or local government entity; a corporation, whether organized as a profit or nonprofit corporation, that is created under and exists pursuant to the laws of any State or of the United States; or any association or combination, by contract or other arrangement, between such persons.”
A foreign national or enterprise may receive the protection provided by a certificate of review by becoming a “member” of a qualified applicant. The regulations define “member” to mean “an entity ( U.S. or foreign) that is seeking protection under the certificate with the applicant. A member may be a partner in a partnership or a joint venture; a shareholder of a corporation; or a participant in an association, cooperative, or other form of profit or nonprofit organization or relationship, by contract or other arrangement.”
Sector: Business Services
Obligations Concerned: National Treatment (Article 11.2)
Local Presence (Article 11.5)
Level of Government: Central
Measures: Export Administration Act of 1979, as amended , 50 U.S.C. app. 2401-2420
International Emergency Economic Powers Act , 50 U.S.C. §§ 1701-1706
Export Administration Regulations , 15 C.F.R. Parts 730 through 774
Description: Cross-Border Services
With some limited exceptions, exports and reexports of commodities, software, and technology subject to the Export Administration Regulations require a license from the Bureau of Industry and Security, U.S. Department of Commerce (BIS). Certain activities of U.S. persons, wherever located, also require a license from BIS. An application for a license must be made by a person in the United States .
In addition, release of controlled technology to a foreign national in the United States is deemed to be an export to the home country of the foreign national and requires the same written authorization from BIS as an export from the territory of the United States .
Sector: Mining
Obligations Concerned: National Treatment (Article 10.3)
Most-Favored-Nation Treatment (Article 10.4)
Level of Government: Central
Measures: Mineral Lands Leasing Act of 1920 , 30 U.S.C. Chapter 3A
10 U.S.C. § 7435
Description: Investment
Under the Mineral Lands Leasing Act of 1920, aliens and foreign corporations may not acquire rights-of-way for oil or gas pipelines, or pipelines carrying products refined from oil and gas, across on-shore federal lands or acquire leases or interests in certain minerals on on-shore federal lands, such as coal or oil. Non-U.S. citizens may own a 100 percent interest in a domestic corporation that acquires a right-of-way for oil or gas pipelines across on-shore federal lands, or that acquires a lease to develop mineral resources on on-shore federal lands, unless the foreign investor's home country denies similar or like privileges for the mineral or access in question to U.S. citizens or corporations, as compared with the privileges it accords to its own citizens or corporations or to the citizens or corporations of other countries (30 U.S.C. §§ 181, 185(a)).
Nationalization is not considered to be denial of similar or like privileges.
Foreign citizens, or corporations controlled by them, are restricted from obtaining access to federal leases on Naval Petroleum Reserves if the laws, customs, or regulations of their country deny the privilege of leasing public lands to citizens or corporations of the United States (10 U.S.C. § 7435).
Sector: All Sectors
Obligations Concerned: National Treatment (Article 10.3)
Most-Favored-Nation Treatment (Article 10.4)
Level of Government: Central
Measures: 22 U.S.C. §§ 2194 and 2198(c)
Description: Investment
The Overseas Private Investment Corporation insurance and loan guarantees are not available to certain aliens, foreign enterprises, or foreign-controlled domestic enterprises.
Sector: Air Transportation
Obligations Concerned: National Treatment (Article 10.3)
Most-Favored-Nation Treatment (Article 10.4)
Senior Management and Boards of Directors (Article 10.9)
Level of Government: Central
Measures: 49 U.S.C. Subtitle VII, Aviation Programs
14 C.F. R. Part 297 (foreign freight forwarders); 14 C.F.R. Part 380, Subpart E (registration of foreign (passenger) charter operators)
Description: Investment
Only air carriers that are “citizens of the United States ” may operate aircraft in domestic air service ( cabotage ) and may provide international scheduled and non-scheduled air service as U.S. air carriers.
U.S. citizens also have blanket authority to engage in indirect air transportation activities (air freight forwarding and passenger charter activities other than as actual operators of the aircraft). In order to conduct such activities, non-U.S. citizens must obtain authority from the Department of Transportation. Applications for such authority may be rejected for reasons relating to the failure of effective reciprocity, or if the Department of Transportation finds that it is in the public interest to do so.
Under 49 U.S.C. § 40102(15), a “citizen of the United States ” means:
(a) an individual who is a U.S. citizen;
(b) a partnership in which each member is a U.S. citizen; or
(c) a U.S. corporation of which the president and at least two-thirds of the board of directors and other managing officers are U.S. citizens, and at least 75 percent of the voting interest in the corporation is owned or controlled by U.S. citizens.
In addition, this statutory requirement has historically been interpreted by the Department of Transportation (and the Civil Aeronautics Board before it) to require that an air carrier in fact be under the actual control of U.S. citizens. The Department of Transportation makes this determination on a case-by-case basis, and has provided guidance as to certain lines of demarcation. For example, total foreign equity investment of up to 49 percent (with a maximum of 25 percent being voting stock), by itself, is not construed as indicative of foreign control. See Department of Transportation Order 91-1-41, January 23, 1991 .
Sector: Air Transportation
Obligations Concerned: National Treatment (Articles 10.3, 11.2)
Most-Favored-Nation Treatment (Articles 10.4, 11.3)
Local Presence (Article 11.5)
Senior Management and Boards of Directors (Article 10.9)
Level of Government: Central
Measures: 49 U.S.C., Subtitle VII, Aviation Programs
49 U.S.C. § 41703
14 C.F.R. Part 375
As qualified by paragraph 2 of the Description element
Description: Cross-Border Services
1. Authorization from the Department of Transportation is required for the provision of specialty air services in the territory of the United States.*
Investment
2. “Foreign civil aircraft” require authority from the Department of Transportation to conduct specialty air services in the territory of the United States . “Foreign civil aircraft” are aircraft of foreign registry or aircraft of U.S. registry that are owned, controlled, or operated by persons who are not citizens or permanent residents of the United States (14 C.F.R. § 375.1). Under 49 U.S.C. § 40102(15), a “citizen of the United States ” means:
(a) an individual who is a U.S. citizen;
(b) a partnership in which each member is a U.S. citizen; or
(c) a U.S. corporation of which the president and at least two-thirds of the board of directors and other managing officers are U.S. citizens, and at least seventy-five percent of the voting interest in the corporation is owned or controlled by U.S. citizens.
In addition, this statutory requirement has historically been interpreted by the Department of Transportation (and the Civil Aeronautics Board before it) to require that an air carrier in fact be under the actual control of U.S. citizens. The Department of Transportation makes this determination on a case-by-case basis, and has provided guidance as to certain lines of demarcation. For example, total foreign equity investment of up to 49 percent (with a maximum of 25 percent being voting stock), by itself, is not construed as indicative of foreign control. See Department of Transportation Order 91-1-41, January 23, 1991 .
*A person of Morocco will be able to obtain such an authorization given Morocco 's acceptance of the U.S. definition of specialty air for the Cross-Border Services Chapter.
Sector: Transportation Services - Customs Brokers
Obligations Concerned: National Treatment (Articles 10.3, 11.2)
Local Presence (Article 11.5)
Level of Government: Central
Measures: 19 U.S.C. § 1641(b)
Description: Cross-Border Services and Investment
A customs broker's license is required to conduct customs business on behalf of another person. Only U.S. citizens may obtain such a license. A corporation, association, or partnership established under the law of any state may receive a customs broker's license if at least one officer of the corporation or association, or one member of the partnership, holds a valid customs broker's license.
Sector: All Sectors
Obligations Concerned: National Treatment (Article 10.3)
Most-Favored-Nation Treatment (Article 10.4)
Level of Government: Central
Measures: Securities Act of 1933 , 15 U.S.C. §§ 77C( b), 77f, 77g, 77h, 77j, and 77s(a)
17 C.F.R. §§ 230.251 and 230.405
Securities Exchange Act of 1934 , 15 U.S.C. §§ 78 l , 78m, 78o( d), and 78w(a)
17 C.F.R. § 240.12b-2
Description: Investment
Foreign firms, except for certain Canadian issuers, may not use the small business registration forms under the Securities Act of 1933 to register public offerings of securities or the small business registration forms under the Securities Exchange Act of 1934 to register a class of securities or file annual reports.
Sector: Communications - Radiocommunications
Obligations Concerned: National Treatment (Article 10.3)
Level of Government: Central
Measures: 47 U.S.C. § 310
Foreign Participation Order 12 FCC Rcd 23891 (1997)
Description: Investment
The United States reserves the right to restrict ownership of radio licenses in accordance with the above statutory and regulatory provisions. Radiocommunications consists of all communications by radio, including broadcasting.
Sector: Professional Services - Patent Attorneys, Patent Agents, and Other Practice before the Patent and Trademark Office
Obligations Concerned: National Treatment (Article 11.2)
Most-Favored-Nation Treatment (Article 11.3)
Local Presence (Article 11.5)
Level of Government: Central
Measures: 35 U.S.C. Chapter 3 (practice before the U.S. Patent and Trademark Office)
37 C.F.R. Part 10 (representation of others before the U.S. Patent and Trademark Office)
Description: Cross-Border Services
As a condition to be registered to practice for others before the U.S. Patent and Trademark Office (USPTO):
(a) a patent attorney must be a U.S. citizen or an alien lawfully residing in the United States (37 C.F.R. § 10.6(a));
(b) a patent agent must be a U.S. citizen, an alien lawfully residing in the United States, or a non-resident who is registered to practice in a country that permits patent agents registered to practice before the USPTO to practice in that country; the latter is permitted to practice for the limited purpose of presenting and prosecuting patent applications of applicants located in the country in which he or she resides (37 C.F.R. § 10.6(c)); and
(c) a practitioner in trademark and non-patent cases must be an attorney licensed in the United States, a “grandfathered” agent, an attorney licensed to practice in a country that accords equivalent treatment to attorneys licensed in the United States, or an agent registered to practice in such a country; the latter two are permitted to practice for the limited purpose of representing parties located in the country in which he or she resides (37 C.F.R. § 10.14(a)-(c)).
Sector: All Sectors
Obligations Concerned: National Treatment (Articles 10.3, 11.2)
Most-Favored-Nation Treatment (Articles 10.4, 11.3)
Local Presence (Article 11.5)
Performance Requirements (Article 10.8)
Senior Management and Boards of Directors (Article 10.9)
Level of Government: Regional
Measures: All existing non-conforming measures of all states of the United States , the District of Columbia , and Puerto Rico
Description: Cross-Border Services and Investment
