RESTRICTED
WORLD TRADE S/FIN/W/12/Add.10/Rev.1
5December 1997
ORGANIZATION(97-5365)
Original: English Committee onTrade inFinancial Services
COMMUNICATION FROM AUSTRALIA
Revised Draft Schedule onFinancial Services
Revision
Thefollowing communication iscirculated attherequest ofAustralia toMembers ofthe
Committee onTrade inFinancial Services.
_______________
Australia hereby submits itsrevised draftschedule onfinancial services.
Australia reserves therighttomodify orreduce thisrevised draftschedule depending onthe
progress ofthenegotiations.
Australia reserves therighttomake technical amendments tothisrevised draftschedule.
Allcommitments inthisrevised draftschedule aresubject tohorizontal commitments, including
oninvestment, ascontained inAustralia 'sGATS schedule ofspecific commitments.S/FIN/W/12/Add.10/Rev.1
Page2AUSTRALIA
REVISED DRAFT SCHEDULE ONFINANCIAL SERVICES
Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
7.FINANCIAL SERVICES
Australia undertakes itsspecific commitments onfinancial services inaccordance withthe"Understanding onCommitments inFinancial Services" (hereinafter
referred toasthe"Understanding").
Theobligations under theUnderstanding areaddressed inthisdraft Schedule additionally tothose covered bytheprovisions ofPartIIIoftheAgreement and
theAnnex onFinancial Services. Themarket access commitments withrespect to"cross-border supply" and"consumption abroad" (asdescribed in
paragraphs 2(a)and2(b)ofArticle IoftheAgreement) bound inthisSchedule arelimited totheservices indicated inparagraphs B.3andB.4ofthe
Understanding, respectively.
These specific commitments onfinancial services aresubject tothegeneral limitations contained inthe"Horizontal Commitments" section ofAustralia 's
GATS Schedule.
A. Insurance and
insurance-related services3) Approval ofnon-resident lifeinsurers is
restricted tosubsidiaries.
3) Registered foreign lifeinsurance
companies arerequired tohave a
principal officer resident inAustralia.
1),3)Anauthorised insurance company
operating inAustralia asa
non-incorporated entity must appoint an
Australian resident asagent ofthe
insurer.S/FIN/W/12/Add.10/Rev.1
Page3Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
3) Most State andTerritory Governments
maintain restrictions, bywayof
monopolies orlicensing provisions and
associated controls onpremiums andother
terms ofpolicies, inthefollowing areas
ofinsurance:
Compulsory Third Party Motor
Vehicle Accident: VIC, WA, TAS,
NT,ACT (monopolies); NSW,
QLD, SA(licensing, premiums/
policy terms).
Workers Compensation: SA,VIC,
QLD (monopolies); NSW, WA,
TAS (licensing, premiums/ policy
terms).
Comcare isthemonopoly provider of
workers 'compensation insurance to
Commonwealth Government employees.3) Sub-national guarantees areprovided to
some State andTerritory Insurance
Offices.
4) Thetemporary entry ofspecialists inthe
operation ofaninsurance service supplier
established inAustralia ispermitted
subject totheterms stipulated inthe
horizontal section.S/FIN/W/12/Add.10/Rev.1
Page4Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
B. Banking andother financial
services (excluding
insurance)1) Theinvestment atinterest inAustralia of
official reserves byforeign central banks
andforeign government monetary
institutions isapproved bytheReserve
Bank provided thatitobtains assurance
from theinvesting authority thatitwill
aimtobeastable holder oftheAustralian
dollar andthatitwillconsult withthe
Bank intheevent ofsignificant changes
initsAustralian dollar portfolio.
Monetary institutions, responsible for
bothreserve assets andcommercial
investments, arepermitted toinvest in
Australia uptoalimit under thesame
conditions.
1),3)Aforeign bank located overseas is
abletooffer itsservices toAustralian
enterprises, butisnotallowed toraise
deposit funds inAustralia orundertake
business within Australia unless itisan
authorised bank (orestablishes amoney
market corporation, subsidiary etc.).
Foreign banks located overseas may,
however, raise funds inAustralia through
theissue ofdebtsecurities provided that
those securities areoffered/traded in
parcels ofnotlessthan$A500,000 and
thesecurities andanyinformation
memoranda clearly state theissuing bank
isnotauthorised under theBanking Actin
Australia.S/FIN/W/12/Add.10/Rev.1
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
1),3)Dealings inforeign exchange in
Australia must becarried outthrough a
dealer authorised bytheReserve Bank.
Only banks, including branches of
overseas banks, andfinancial institutions
incorporated inAustralia withthe
required minimum capital baseare
eligible toseekauthorization asaforeign
exchange dealer.
3) Foreign banks satisfying prudential
requirements andthatareableto
demonstrate their potential contribution to
competition inAustralia mayconduct
banking inAustralia. Foreign banks may
undertake banking operations inAustralia
through locally incorporated subsidiaries
and/or anauthorised branch. However, a
branch maynotaccept "retail" deposits.
Aforeign bank wishing toaccept "retail"
deposits must seekauthorization asa
locally incorporated subsidiary forthat
purpose. Foreign bank branches may
accept deposits (andother funds) inany
amount from incorporated entities,
non-residents andtheir ownemployees.
Deposits (andother funds) mayonlybe
accepted from other sources where the
initial deposit (orother funds) isgreater
than$A250,000. Deposit-taking outside
ofthisisconsidered tobe"retail" banking
business.3) Commonwealth owned entities which may
conduct financial operations are
guaranteed bytheCommonwealth
Government. While theCommonwealth
solditsremaining shareholding inthe
Commonwealth Bank ofAustralia (CBA)
on19July1996, atransitional
Commonwealth guarantee hasbeen
provided toalloftheliabilities ofthe
CBA. Thelength oftime thatthe
guarantee applies depends onthe
characteristic oftheliability.
Transitional guarantees alsoapply tothe
former Commonwealth-owned Australian
Industry Development Corporation.S/FIN/W/12/Add.10/Rev.1
Page6Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
Anumber ofState andTerritory
Governments operate central financing
authorities through which the
Government 'swholly orpartly-owned
statutory authorities andbusiness
enterprises areobliged toborrow (andin
some cases invest) their funds, or
otherwise obtain certain financial services:
SA-South Australian Government
Financing Authority, Local Government
Finance Authority ofSouth Australia
TAS -Tascorp
NSW -NSW Treasury Corporation
VIC-Treasury Corporation ofVictoria
QLD -Queensland Treasury Corporation,
Queensland Investment Corporation
NT-Northern Territory Treasury
Corporation
WA-Western Australian Treasury
CorporationThefinancial operations ofsome State or
Territory owned entities maybe
guaranteed bytheState orTerritory
Governments. Anumber ofState and
Territory Governments have alsoprovided
transitional guarantees tosome ofthe
assets andliabilities offormer
State-owned orcontrolled banks.
Theprovisions oftheTrust Bank
(Corporatisation) Act1997 dealing with
theTrust Bank ofTasmania mayrequire
ajoint venture arrangement.Theprovisions oftheActrequire thatat
least amajority ofthedirectors ofthe
Trust Bank beresident inTasmania and
thatpolicy andcontrol oftheTrust Bank
beexercised inTasmania.S/FIN/W/12/Add.10/Rev.1
Page7Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
3) TheAustralian Stock Exchange liquid
capital requirements forstockbrokers may
have theeffect offavouring participation
intheExchange bysubsidiaries rather
thanbranches offoreign companies.
Anapplicant must beabody corporate in
order toobtain approval toconduct a
stock exchange orafutures exchange.3) Amajority ofthedirectors ofa
stockbroking organisation participating in
theAustralian Stock Exchange must be
Australian residents.
4) Thetemporary entry ofspecialists inthe
operation ofafinancial service supplier
established inAustralia ispermitted
subject totheterms stipulated inthe
horizontal section.