WORLD TRADE GATS/SC/6/Suppl.4
26February 1998
ORGANIZATION(98-0629)
Trade inServices
AUSTRALIA
Schedule ofSpecific Commitments
Supplement 4
(This isauthentic inEnglish only)
_______________
Thistextreplaces theFinancial Services section contained indocument
GATS/SC/6/Suppl.1/Rev.1.GATS/SC/6/Suppl.4
Page2AUSTRALIA
SCHEDULE OFSPECIFIC COMMITMENTS
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 inthisSchedule additionally tothose covered bytheprovisions ofPartIIIoftheAgreement andthe
Annex onFinancial Services. Themarket access commitments withrespect to"cross-border supply" and"consumption abroad" (asdescribed inparagraphs
2(a)and2(b)ofArticle IoftheAgreement) bound inthisSchedule arelimited totheservices indicated inparagraphs B.3andB.4oftheUnderstanding,
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.GATS/SC/6/Suppl.4
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 and
other terms ofpolicies, inthefollowing
areas ofinsurance:
Compulsory Third Party Motor
Vehicle Accident: VIC, WA,
TAS, NT(monopolies); NSW,
QLD, SA,ACT (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 in
theoperation ofaninsurance service
supplier established inAustralia is
permitted subject totheterms stipulated
inthehorizontal section.GATS/SC/6/Suppl.4
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
ofofficial reserves byforeign central
banks andforeign government monetary
institutions isapproved bytheReserve
Bank provided thatitobtains assurance
from theinvesting authority thatitwill
aimtobeastable holder ofthe
Australian dollar andthatitwillconsult
withtheBank intheevent ofsignificant
changes initsAustralian dollar
portfolio. Monetary institutions,
responsible forbothreserve assets and
commercial investments, arepermitted
toinvest inAustralia 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 thatthose securities are
offered/traded inparcels ofnotless
than$A500,000 andthesecurities and
anyinformation memoranda clearly
state theissuing bank isnotauthorised
under theBanking ActinAustralia.GATS/SC/6/Suppl.4
Page5Modes ofsupply: 1) Cross-border supply 2) Consumption abroad 3) Commercial presence 4) Presence ofnatural persons
Sector orSub-sector Limitations onMarket Access Limitations onNational Treatment Additional
Commitments
1),3)Dealings inforeign exchange in
Australia must becarried outthrough a
dealer authorised bytheReserve Bank.
Only banks, including branches of
overseas banks, andfinancial
institutions incorporated inAustralia
withtherequired minimum capital base
areeligible toseekauthorization asa
foreign exchange dealer.
3) Foreign banks satisfying prudential
requirements andthatareableto
demonstrate their potential contribution
tocompetition inAustralia mayconduct
banking inAustralia. Foreign banks
mayundertake banking operations in
Australia through locally incorporated
subsidiaries and/or anauthorised
branch. However, abranch maynot
accept "retail" deposits. Aforeign
bank wishing toaccept "retail" deposits
must seekauthorization asalocally
incorporated subsidiary forthat
purpose. Foreign bank branches may
accept deposits (andother funds) inany
amount from incorporated entities,
non-residents andtheir ownemployees.
Deposits (andother funds) mayonlybe
accepted from other sources where the
initial deposit (orother funds) isgreater
than$A250,000. Deposit-taking
outside ofthisisconsidered tobe
"retail" banking business.3) Commonwealth owned entities which
mayconduct financial operations are
guaranteed bytheCommonwealth
Government. While the
Commonwealth solditsremaining
shareholding intheCommonwealth
Bank ofAustralia (CBA) on19July
1996, atransitional Commonwealth
guarantee hasbeen provided toallof
theliabilities oftheCBA. Thelength
oftimethattheguarantee applies
depends onthecharacteristic ofthe
liability. Transitional guarantees also
apply totheformer Commonwealth-
owned Australian Industry Development
Corporation.GATS/SC/6/Suppl.4
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
1),3)Anumber ofState andTerritory
Governments operate central financing
authorities through which the
Government 'swholly orpartly-owned
statutory authorities andbusiness
enterprises areobliged toborrow (and
insome 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
Corporation1),3)Thefinancial operations ofsome State
orTerritory owned entities maybe
guaranteed bytheState orTerritory
Governments. Anumber ofState and
Territory Governments have also
provided transitional guarantees tosome
oftheassets andliabilities offormer
State-owned orcontrolled banks.
3) Theprovisions oftheTrust Bank
(Corporatisation) Act1997 dealing with
theTrust Bank ofTasmania may
require ajoint venture arrangement.3) Theprovisions oftheActrequire that
atleast amajority ofthedirectors of
theTrust Bank beresident inTasmania
andthatpolicy andcontrol oftheTrust
Bank beexercised inTasmania.GATS/SC/6/Suppl.4
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
mayhave theeffect offavouring
participation intheExchange by
subsidiaries rather thanbranches of
foreign companies.
Anapplicant must beabody corporate
inorder toobtain approval toconduct a
stock exchange orafutures exchange.3) Amajority ofthedirectors ofa
stockbroking organisation participating
intheAustralian Stock Exchange must
beAustralian residents.
4) Thetemporary entry ofspecialists in
theoperation ofafinancial service
supplier established inAustralia is
permitted subject totheterms stipulated
inthehorizontal section.